-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Kw6VyKtYo+mVDBkT3vMt4H8k+T1Nbu8WjrAieXHbVA/ijXSNvO1RRbFGLIp4i0Za k0CaDy1a+59V38/v5tq0LA== 0001047469-98-041064.txt : 19981118 0001047469-98-041064.hdr.sgml : 19981118 ACCESSION NUMBER: 0001047469-98-041064 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981116 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYMIX SYSTEMS INC CENTRAL INDEX KEY: 0000872443 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 311083175 STATE OF INCORPORATION: OH FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-19024 FILM NUMBER: 98750655 BUSINESS ADDRESS: STREET 1: 2800 CORPORATE EXCHANGE DR CITY: COLUMBUS STATE: OH ZIP: 43231 BUSINESS PHONE: 6145237000 MAIL ADDRESS: STREET 1: 2800 CORPORATE EXCHANGE DR CITY: COLUMBUS STATE: OH ZIP: 43231 10-Q 1 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (MARK ONE) /x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1998 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________________ to ____________________ Commission File Number 0-19024 SYMIX SYSTEMS, INC. ----------------------------------------------------- (Exact name of registrant as specified in its charter) OHIO 31-1083175 ---- ---------- (State or other jurisdiction of (IRS Employer Identification Number) incorporation or organization) 2800 Corporate Exchange Drive COLUMBUS, OHIO 43231 -------------------- (Address of principal executive offices) (Zip Code) (614) 523-7000 -------------- (Registrant's telephone number, including area code) N/A --- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ----- ----- The number of common shares, without par value, of the registrant outstanding as of November 6, 1998 was 6,542,972. PART I -- FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. INDEX Consolidated Balance Sheets September 30, 1998 (unaudited) June 30, 1998 Filed herein Consolidated Statements of Operations (unaudited) Three Months Ended September 30, 1998 and 1997 Filed herein Consolidated Statements of Cash Flows (unaudited) Three Months Ended September 30, 1998 and 1997 Filed herein Notes to Consolidated Financial Statements (unaudited) Filed herein
2 SYMIX SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands)
September 30, June 30, 1998 1998 ------------ ---------- (unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $3,421 $6,115 Trade accounts receivable, less allowance for doubtful accounts of $1,044 at September 30, 1998 and $1,063 at June 30, 1998 33,115 32,925 Inventories 478 489 Prepaid expenses 2,045 1,346 Other receivables 1,153 427 Income taxes recoverable 510 - Deferred income taxes 581 573 ----------- ---------- TOTAL CURRENT ASSETS 41,303 41,875 OTHER ASSETS Purchased and developed software, net of accumulated amortization of $8,718 at September 30, 1998 and $8,164 at June 30, 1998 11,562 11,012 Deferred income taxes 180 180 Intangibles, net 6,096 5,091 Deposits and other assets 1,563 1,725 ----------- ---------- 19,401 18,008 EQUIPMENT AND IMPROVEMENTS Furniture and fixtures 3,013 2,880 Computer and other equipment 12,481 11,573 Leasehold improvements 1,359 1,262 ----------- ---------- 16,853 15,715 Less allowance for depreciation and amortization 9,973 9,216 ----------- ---------- 6,880 6,499 ----------- ---------- TOTAL ASSETS $67,584 $66,382 ----------- ---------- ----------- ----------
See notes to consolidated financial statements 3 SYMIX SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Continued) (In thousands)
September 30, June 30, 1998 1998 ------------- --------- (unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses $10,508 $13,276 Customer deposits 227 288 Deferred revenue 13,763 13,155 Income taxes payable - 1,304 Current portion of long-term obligations 300 277 ----------- ---------- TOTAL CURRENT LIABILITIES 24,798 28,300 LONG-TERM OBLIGATIONS 605 305 BANK CREDIT AGREEMENT 4,395 2,000 DEFERRED INCOME TAXES 2,734 2,476 MINORITY INTEREST 2,056 2,000 SHAREHOLDERS' EQUITY Common stock, authorized 20,000 shares; issued 6,812 shares at September 30, 1998, and 6,778 at June 30, 1998; at stated capital amounts of $.01 per share 68 68 Convertible preferred stock of subsidiary 1,031 1,031 Capital in excess of stated value 24,364 23,937 Retained earnings 10,354 9,497 Cumulative translation adjustment (1,501) (1,912) ----------- ---------- 34,316 32,621 Less: Cost of common shares in treasury, 304 shares at September 30, 1998 and June 30, 1998, at cost (1,320) (1,320) ----------- ---------- TOTAL SHAREHOLDERS' EQUITY 32,996 31,301 ----------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $67,584 $66,382 ----------- ---------- ----------- ----------
See notes to consolidated financial statements 4 SYMIX SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (unaudited)
Three Months Ended September 30, --------------------- 1998 1997 ------- ------ License fees $14,480 $9,549 Service, maintenance and support 12,411 8,016 -------- ------ Net revenue 26,891 17,565 License fees 3,864 2,712 Service, maintenance and support 6,332 4,179 -------- ------ Cost of revenue 10,196 6,891 -------- ------ Gross Margin 16,695 10,674 -------- ------ Selling, general and administrative 13,093 7,741 Research and product development 2,196 2,034 -------- ------ Total operating expenses 15,289 9,775 -------- ------ Operating income 1,406 899 Interest and other income (expense), net 11 (50) -------- ------ Income before income taxes 1,417 849 Provision for income taxes 560 317 -------- ------ Net income $857 $532 -------- ------ -------- ------ Basic EPS: Net income per share $0.13 $0.09 -------- ------ -------- ------ Diluted EPS: Net income per share $0.12 $0.08 -------- ------ -------- ------ Weighted average number of common shares outstanding 6,622 5,982 -------- ------ -------- ------ Weighted average number of common shares outstanding assuming dilution 7,260 6,567 -------- ------ -------- ------
See notes to consolidated financial statements 5 SYMIX SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (unaudited)
Three Months Ended September 30, ------------------------- 1998 1997 -------- ------ Increase (decrease) in cash OPERATING ACTIVITIES Net income $857 $532 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,775 1,349 Provision for losses on accounts receivable (19) 105 Provision for deferred income taxes 250 294 Changes in operating assets and liabilities: Trade accounts receivable (6) (513) Prepaid expenses and other receivables (1,374) (238) Inventory 13 (28) Deposits 175 (51) Accounts payable and accrued expenses (2,890) (1,659) Customer deposits (62) (341) Deferred revenue 609 201 Income taxes payable/refundable (1,586) (5) -------- ------ NET CASH USED BY OPERATING ACTIVITIES (2,258) (354)
See notes to consolidated financial statements 6 SYMIX SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (In thousands) (unaudited)
Three Months Ended September 30, ------------------------- 1998 1997 -------- ------ Increase (decrease) in cash INVESTING ACTIVITIES Purchase of equipment and improvements (1,150) (628) Additions to purchased and developed software (1,179) (1,284) Purchase of subsidiaries, net of cash acquired (638) - ------- ------ NET CASH USED BY INVESTING ACTIVITIES (2,967) (1,912) FINANCING ACTIVITIES Proceeds from issuance of common stock and exercise of stock options 215 6 Additions to long-term obligations, net of payments 2,117 1,767 ------- ------ NET CASH PROVIDED BY FINANCING ACTIVITIES 2,332 1,773 Effect of exchange rate changes on cash 199 (1) ------- ------ Net change in cash (2,694) (494) Cash at beginning of period 6,115 2,332 ------- ------ CASH AT END OF PERIOD $ 3,421 $1,838 ------- ------ ------- ------
See notes to consolidated financial statements 7 SYMIX SYSTEMS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note A - Accounting Policies and Presentation The accompanying consolidated financial statements are unaudited; however, the information contained herein reflects all adjustments which are, in the opinion of management, necessary for a fair statement of the results of operations for the interim periods. All adjustments made were of a normal recurring nature. These interim results of operations are not necessarily indicative of the results to be expected for a full year. The notes to the consolidated financial statements contained in the Symix Systems, Inc. and Subsidiaries' (the "Company") June 30, 1998 Annual Report to Shareholders should be read in conjunction with these financial statements. Certain reclassifications have been made to conform prior quarter amounts to the current quarter presentation. In the first quarter of fiscal 1999, the Company adopted Statement of Position ("SOP") 97-2, "Software Revenue Recognition," as amended by SOP 98-4, which provides guidance on applying generally accepted accounting principles in recognizing revenue on software transactions. The adoption of the SOPs, in certain circumstances, has resulted and may in the future result in the deferral of software license revenues that would have been recognized upon delivery of the related software under the preceding accounting standard, SOP 91-1. Note B - Acquisitions On November 24, 1997, the Company acquired Pritsker Corporation ("Pritsker"), for $737,000 in cash and 485,000 common shares of the Company. Pursuant to the acquisition agreement, (i) Pritsker was merged with and into a wholly-owned subsidiary of the Company incorporated in Ohio, (ii) each share of Pritsker common stock was converted into the right to receive 0.170108 common shares of the Company and (iii) each share of Pritsker preferred stock was converted into the right to receive $5.23 in cash plus accrued and unpaid dividends. Each unexercised employee stock option and outstanding warrant for Pritsker common stock was assumed by Symix and converted into the right to acquire that number of common shares of the Company to which the holder would have been entitled if such holder exercised the option or warrant immediately prior to the merger. Pritsker markets advanced planning and scheduling and simulation software to mid-market manufacturers. The transaction was accounted for as a purchase and resulted in a one-time, non-recurring charge of approximately $6.5 million relating to the write-off of acquired in-process technology of Pritsker. The following proforma information (in $000's) displays revenue and net income assuming the Company and Pritsker had been combined at the beginning of the period presented. The one time, non-recurring charge of approximately $6.5 million is excluded from proforma net income. 8
Three Months Ended September 30, --------------------------- 1998 1997 --------- --------- Revenue $ 26,891 $ 18,452 --------- --------- Net Income $ 857 $ 413 --------- ---------
Note C - Earnings per Share The Company adopted the provisions of Statement of Financial Accounting Standard ("SFAS") No. 128, "Earnings Per Share" during the fiscal quarter ended December 31, 1997. In accordance with the provisions of SFAS No. 128, earnings per share for 1997 have been restated. The following table sets forth the computation of basic and diluted earnings per share (in $000's except per share data):
Three Months Ended September 30, ------------------------ 1998 1997 --------- --------- NUMERATOR: Net income for both basic and diluted earnings per share $857 $532 --------- --------- --------- --------- DENOMINATOR: Weighted-average shares outstanding 6,497 5,857 Contingently issuable shares 125 125 --------- --------- Denominator for basic earnings per share 6,622 5,982 Effect of dilutive securities: Employee stock options 638 585 --------- --------- Denominator for diluted earnings per share 7,260 6,567 --------- --------- --------- --------- Basic earnings per share $0.13 $0.09 --------- --------- --------- --------- Diluted earnings per share $0.12 $0.08 --------- --------- --------- ---------
Note D - Comprehensive Income The Company adopted SFAS No. 130, "Reporting Comprehensive Income" as of July 1, 1998. SFAS No. 130 requires disclosure of total non-stockholder changes in equity in interim periods and additional disclosures of the components of non-stockholder changes in equity on an 9 annual basis. Total non-stockholder changes in equity include all changes in equity during a period except those resulting from investments by and distributions to stockholders. The Company has restated information for the prior period reported below to conform to this standard.
Three Months Ended September 30, -------------------------- 1998 1997 -------- -------- Net income 857 532 Foreign currency translation adjustment 411 (329) ------- ------- Total comprehensive income $ 1,268 $ 203 ------- ------- ------- -------
10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Symix is a global provider of open, client/server manufacturing software for mid-range discrete manufacturers. Symix designs, develops, markets and supports a fully integrated manufacturing, planning and financial software system that addresses the ERP requirements of manufacturers. REVENUE The Company's net revenue is derived primarily from (1) licensing Symix software and providing custom programming services; (2) providing installation, implementation, training, consulting and systems integration services; and (3) providing maintenance and support on a subscription basis. Revenue for fiscal 1998 is accounted for in accordance with AICPA SOP 91-1 on Software Revenue Recognition. Revenue for fiscal 1999 is accounted for in accordance with SOP 97-2, as amended by SOP 98-4. Net revenue was $26.9 million for the three months ended September 30, 1998, an increase of 53% from the same quarter of the previous year. Both license fee and service, maintenance and support revenues contributed to the net revenue increase, with 52% and 55% increases respectively. All three major geographic channels, North America, Europe and Asia Pacific, contributed to the license fee component of revenue growth. A combination of factors attributed to the increase in license fee revenue. In particular, acquisitions, the increased number of sales representatives, and overall market acceptance of the Company's product line resulted in increased software sales. International license fee revenue was in line with expectations and consistent with last year's results, representing approximately 24% of net revenue. Service, maintenance and support revenue is derived from installation, implementation, training, consulting, systems integration and software product maintenance and support services. Service, maintenance and support revenue of $12.4 million increased 55% from the quarter-to-quarter comparison as a result of the increase in software sales that occurred during the past couple of quarters and the Company's ability to meet the increased demand for services that resulted from such software sales. COST OF REVENUE Total cost of revenue as a percentage of net revenue was 38% for the quarter ended September 30, 1998, compared to 39% for the quarter ended September 30, 1997. Both license fee and service, maintenance and support margins improved slightly. Cost of license fees includes royalties, amortization of capitalized software development costs and software delivery expenses. Cost of license fees decreased to 27% of license fee revenue for the quarter ended September 30, 1998 compared to 28% for the same period last 11 year. The improved license fee gross margin in the current quarter is attributable to the increase in the license fee revenue relative to the rate of amortization on capitalized software. Cost of service, maintenance and support includes the personnel and related overhead costs for implementation, training and customer support services, together with fees paid to third parties for subcontracted services. Cost of service, maintenance and support decreased to 51% of service, maintenance and support revenue from 52% for the same time last year. The service, maintenance and support margin increased as the number of employees increased compared to the number of subcontracted consultants. The Company has been successful in hiring additional employees and reducing the amount of subcontracted work which is more expensive. Additionally, the increase in service renewals due to the customer base expansion continues to positively impact this margin. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses consist of personnel and related overhead costs, including commissions for the sales, marketing, general and administrative activities of the Company, together with advertising and promotional costs. Selling, general and administrative expense increased 69% for the quarter ended September 30, 1998, and as a percentage of revenue increased from 44% at September 30, 1997 to 49% at September 30, 1998. The increase in selling, general and administrative expense is related to the increases in staffing, the spending in infrastructure to support growth and emerging technologies, and expanding foreign operations. RESEARCH AND DEVELOPMENT Research and development expenses include personnel and related overhead costs for product development, enhancement, upgrades, quality assurance and testing. Research and product development expenditures, including amounts capitalized for the three months ended September 30, 1998, were $3.4 million compared to $3.3 million for the same period last year. Capitalization of software development costs was $1.1 million for the quarter ended September 30, 1998, compared to $1.3 million for the comparable period last year. As a percentage of revenue, net of software capitalized, research and development expense decreased from 12% a year ago, to 8% at September 30, 1998. In terms of absolute dollars, research and development expense increased by $162,000 or 8%. The increase in research and development expenditures is the result of investments in the expanding product offerings as well as a new release of the Company's core product - SyteLine version 4.0. Additionally, the Company expects to launch a new product in early calendar year 1999. PROVISION FOR INCOME TAXES The effective tax rates for the quarters ended September 30, 1998, and 1997 were 40% and 37% respectively. The increased effective tax rate is primarily due to (i) the amount of foreign taxable earnings in countries with higher effective rates and (ii) the non-deductibility of the amortization of goodwill. 12 LIQUIDITY AND CAPITAL RESOURCES The Company's operating activities used cash of $2.3 million during the three month period ended September 30, 1998, compared to $0.4 million used in the same period in 1997. In both periods, cash provided by operating activities was due principally to earnings and increases in deferred revenues and non-cash charges. Cash provided by operating activities was more than offset in the quarter ended September 30, 1998 by the decrease in trade and tax payables related to year end. The accounts receivable days sales outstanding was 105 days at September 30, 1997 compared to 104 days at September 30, 1998. Typically days sales outstanding for the first quarter of the fiscal year increase as a result of the carryover from the strong fourth quarter, as well as a general slowdown in the summer months causing most of the business to close in the first quarter towards the end of the third month. For both periods presented, cash provided by financing activities was used to fund software development costs and to purchase computer equipment. As of September 30, 1998, the Company had $16.5 million in working capital, including $3.4 million in cash and cash equivalents. In addition to its present working capital, the Company has a $15.0 million unsecured revolving bank line of credit that expires in fiscal 2001. The Company has accessed the line of credit for $4.4 million as of September 30, 1998. It is expected that the Company's continued expansion of its operations and products will result in additional requirements for cash in the future which will be met through operations and the line of credit. POSSIBLE ADVERSE IMPACT OF RECENT ACCOUNTING PRONOUNCEMENT In October 1997 the Accounting Standards Executive committee issued SOP 97-2 "Software Revenue Recognition". SOP 97-2 is effective for transactions entered into in fiscal years beginning after December 15, 1997. Accordingly the Company adopted SOP 97-2 beginning this year. The Company believes its current revenue recognition policies and practices are materially consistent with the SOP; however, implementation guidelines for this standard have not yet been issued and a wide range of potential interpretations is being discussed with the accounting profession. Once available, such implementation guidance could lead to unanticipated changes in the Company's current revenue accounting practices, and such changes could materially adversely affect the Company's future revenue and net income. In addition, such implementation guidance may necessitate substantial changes in the Company's business practices in order for the Company to continue to recognize a substantial portion of its license fee revenue upon delivery of its software products. Such changes may reduce demand, extend sales cycles, increase administrative costs and otherwise adversely affect operations. In addition, the Company could become competitively disadvantaged relative to foreign-based competitors not subject to U.S. generally accepted accounting principles. YEAR 2000 COMPLIANCE The Company faces "Year 2000 compliance" issues similar to those faced by other companies in the information technology industry. Year 2000 compliance issues typically arise 13 with respect to computer software systems and programs that use only two digits, rather than four digits, to represent a particular year. Consequently, these systems and programs may not process dates beyond the year 1999 and may result in miscalculations or system failures. Year 2000 compliance problems also may arise in embedded systems, such as environmental system controls, elevators and other products that use microprocessors or computer chips. The Company's current product and service offerings, including those products developed and supported by third party software vendors, have been designed to be Year 2000 compliant. New products also are being designed by the Company to be Year 2000 compliant. The Company's existing contracts with active customers (e.g., customers with effective maintenance and support agreements with the Company) cover recent software products that are Year 2000 compliant or for which a Year 2000 ready upgrade is available, or do not expressly obligate the Company to furnish an updated release that is Year 2000 compliant. The Company has communicated with its customers regarding Year 2000 compliance, notifying them of the availability of upgraded or new releases of the Company's products which are Year 2000 compliant for certain older software products released by the Company which may still be in use by them. In certain cases, the Company has warranted that the Company's current software product offerings are Year 2000 ready when specifically requested by the customer. Although the software products currently offered by the Company have been tested for Year 2000 readiness, any failure of the Company's software products to perform, including the failure to process dates beyond the year 2000, could have a material adverse effect on the Company's business, financial condition and results of operations. The Company is in the process of assessing the Year 2000 readiness of selected third parties, including key suppliers, subcontractors, business partners and customers. To the extent that the Company uses third party products or technology in its computer software products, the Company has obtained confirmation of Year 2000 compliance from such third party providers. A failure of one or more of such suppliers, subcontractors, business partners or customers to sufficiently address their Year 2000 compliance issues could adversely affect the Company's business, financial condition and results of operations. The Company also is in the process of reviewing its internal computer information system and non-computer systems, such as telecommunications equipment, building elevators, etc., which contain embedded computer technology, to determine whether such systems are Year 2000 compliant. Most of the embedded systems on which the Company relies in its daily operations are owned and managed by the lessors of the facilities in which the Company's operations are located, or by agents of such lessors. Although the Company's review of its internal computer information system and non-computer systems is not expected to be completed until March, 1999, the Company presently believes that such systems are Year 2000 compliant. The Company is less certain of the Year 2000 readiness of third parties who provide external services, such as public utilities, which could adversely impact the Company's operations. For example, the failure or interruption of electrical services would disrupt the Company's ability to communicate with its customers, suppliers, business partners and others. The Company does not anticipate any material costs associated with Year 2000 compliance relating to its internal computer information system or non-computer systems. 14 All costs related to Year 2000 issues are being expensed by the Company. The Company does not expect that the total costs of evaluation and compliance with the Company's Year 2000 issues will be material. SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 IN ADDITION TO HISTORICAL INFORMATION, THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS "FORWARD-LOOKING STATEMENTS", INCLUDING INFORMATION REGARDING FUTURE ECONOMIC PERFORMANCE AND PLANS AND OBJECTIVES OF MANAGEMENT, WHICH ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE REFLECTED IN THE FORWARD-LOOKING STATEMENTS. IN SOME CASES, INFORMATION REGARDING CERTAIN IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM A FORWARD-LOOKING STATEMENT APPEAR TOGETHER WITH SUCH STATEMENT. OTHER UNCERTAINTIES AND RISKS INCLUDE, BUT ARE NOT LIMITED TO, DEMAND FOR AND MARKET ACCEPTANCE OF THE COMPANY'S PRODUCTS; THE IMPACT OF COMPETITIVE PRODUCTS; THE COMPANY'S ABILITY TO MAINTAIN EFFICIENT MARKETING AND DISTRIBUTION OPERATIONS DOMESTICALLY AND INTERNATIONALLY; FUTURE WORLDWIDE ECONOMIC, COMPETITIVE AND MARKET CONDITIONS; THE COMPANY'S ABILITY TO ATTRACT AND RETAIN HIGHLY SKILLED TECHNICAL, MANAGERIAL, SALES, MARKETING, SERVICE AND SUPPORT STAFF AND TO RETAIN KEY TECHNICAL AND MANAGEMENT PERSONNEL; TIMING OF PRODUCT DEVELOPMENT AND GENERAL RELEASE; THE COMPANY'S ABILITY TO SUCCESSFULLY RESOLVE ANY YEAR 2000 ISSUES; PRODUCT PRICING AND OTHER FACTORS DETAILED IN THIS QUARTERLY REPORT ON FORM 10-Q AND IN OTHER FILINGS MADE BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not Applicable. 15 PART II -- OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. The Company is subject to legal proceedings and claims which arise in the normal course of business. While the outcome of these matters cannot be predicted with certainty, management does not believe the outcome of any of these legal matters will have a material adverse effect on the Company's business, financial condition or results of operations. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS. None ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None ITEM 5. OTHER INFORMATION. None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. a) See Index to Exhibits filed with this Quarterly Report on Form 10-Q following the Signature Page. b) Reports on Form 8-K: None. 16 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SYMIX SYSTEMS, INC. Date: November 13, 1998 /s/ Lawrence W. Deleon ---------------------------------- Lawrence W. DeLeon, Duly Authorized Officer and Principal Financial Officer 17 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION PAGE - ----------- ----------- ---- 3(a)(1) Amended Articles of Incorporated herein by Incorporation of Symix Systems, reference to Exhibit 3(a)(1) Inc. (as filed with the Ohio to the Annual Report on Form Secretary of State on 10-K for the fiscal year February 8, 1991) ended June 30, 1997 3(a)(2) Certificate of Amendment to the Incorporated herein by Amended Articles of reference to Exhibit 3(a)(2) Incorporation of Symix Systems, to the Annual Report on Form Inc. (as filed with the Ohio 10-K for the fiscal year Secretary of State on July 16, ended June 30, 1997 1996) 3(a)(3) Amended Articles of Incorporated herein by Incorporation of Symix Systems, reference to Exhibit 3(a)(3) Inc. (reflecting amendments to the Annual Report on Form through July 16, 1996, for 10-K for the fiscal year purposes of SEC reporting ended June 30, 1997 compliance only) 3(b) Amended Regulations of Symix Incorporated herein by Systems, Inc. reference to Exhibit 3(b) to the Registration Statement on Form S-1 of Registrant filed on February 12, 1991 (Registration No. 33-38878) 4(a)(1) Amended Articles of Incorporated herein by Incorporation of Symix Systems, reference to Exhibit 3(a)(1) Inc. (as filed with the Ohio to the Annual Report on Form Secretary of State on February 10-K for the fiscal year 8, 1991) ended June 30, 1997 4(a)(2) Certificate of Amendment to the Incorporated herein by Amended Articles of reference to Exhibit 3(a)(2) Incorporation of Symix Systems, to the Annual Report on Form Inc. (as filed with the Ohio 10-K for the fiscal year Secretary of State on July 16, ended June 30, 1997 1996) 4(a)(3) Amended Articles of Incorporated herein by Incorporation of Symix Systems, reference to Exhibit 3(a)(3) Inc. (reflecting amendments to the Annual Report on Form through July 16, 1996, for 10-K for the fiscal year purposes of SEC reporting ended June 30, 1997 compliance only) 18 EXHIBIT NO. DESCRIPTION PAGE - ----------- ----------- ---- 4(b) Amended Regulations of Symix Incorporated herein by Systems, Inc. reference to Exhibit 3(b) to the Registration Statement on Form S-1 of Registrant filed February 12, 1991 (Registration No. 33-38878) 27 Financial Data Schedule Filed herein
19 EX-27 2 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS IN THE QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998 FOR SYMIX SYSTEMS, INC. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS JUN-30-1999 JUL-01-1998 SEP-30-1998 3,421 0 34,159 1,044 478 41,303 16,853 9,973 67,584 24,798 0 0 1,031 68 31,897 67,584 14,480 26,891 3,864 10,196 15,289 (19) 95 1,417 560 857 0 0 0 857 .13 .12
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