-----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, Dv1OOxqHxK3RYDN7AbrGi2vlm76pYZB4ZmE4OxXYCK6GQTLjH/XTK9HJYFR9tGxr LxOBS3RQx16lGSQvKGTarQ== 0000950127-01-000206.txt : 20010316 0000950127-01-000206.hdr.sgml : 20010316 ACCESSION NUMBER: 0000950127-01-000206 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010131 FILED AS OF DATE: 20010315 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JETFORM CORP CENTRAL INDEX KEY: 0000887614 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 000000000 STATE OF INCORPORATION: A1 FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-11898 FILM NUMBER: 1569427 BUSINESS ADDRESS: STREET 1: 560 ROCHESTER ST STE 400 CITY: OTTAWA ONTARIA CANAD STATE: A6 BUSINESS PHONE: 6132303676 MAIL ADDRESS: STREET 1: JETFORM CORP STREET 2: 560 ROCHESTER ST OTTAWA CANADA 10-Q 1 0001.txt FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ____________________ FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended January 31, 2001 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 1-111898 JETFORM CORPORATION (Exact name of registrant as specified in its charter) CANADA N/A - --------------------------- ------------ (state or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 560 Rochester Street Ottawa, Ontario K1S 5K2, Canada ---------------------------------------- (Address of principal executive offices) (613) 230-3676 ----------------------- Registrant's telephone number (including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- APPLICABLE ONLY TO CORPORATE ISSUERS The number of the issuer's Common Shares outstanding on March 7, 2001: 24,831,527 - -------------------------------------------------------------------------------- TABLE OF CONTENTS PART I FINANCIAL INFORMATION Page No. Item 1. Financial Statements Consolidated Balance Sheets as at January 31, 2001 3 and April 30, 2000 Consolidated Statements of Operations for the three 4 and nine month periods ended January 31, 2001 and January 31, 2000 Consolidated Statements of Comprehensive Income for 5 the three and nine month periods ended January 31, 2001 and January 31, 2000 Consolidated Statements of Cash Flows for the three 6 and nine month periods ended January 31, 2001 and January 31, 2000 Notes to Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial 15 Condition and Results of Operations Item 3. Quantitative and Qualitative Disclosures about 23 Market Risks PART II OTHER INFORMATION Item 1. Legal Proceedings 24 Item 6. Exhibits and Reports on Form 8-K 24 SIGNATURES 25 This Quarterly Report on Form 10-Q ("Report"), contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933. Discussions containing such forward-looking statements may be found in Item 2 of Part I and Item 1 of Part II hereof, as well as within this Report generally. In addition, when used in the Report, the words "believes", "anticipates", "expects", and similar expressions are intended to identify forward-looking statements. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ materially from those described in the forward-looking statements as a result of changes in technology, changes in industry standards, new product introduction by competitors, increased participation in the enterprise software market by major corporations and other matters set forth in this Report. The Company does not undertake any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances. JETFORM CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands of Canadian dollars except share amounts)
January 31, April 30, 2001 2000 ------------- ------------ Current assets Cash and cash equivalents................................ $ 47,734 $ 42,092 Accounts receivable (Note 2)............................. 25,483 21,416 Term accounts receivable (Note 2)........................ 4,674 5,224 Unbilled receivables..................................... 3,141 4,492 Inventory................................................ 1,087 1,084 Prepaid expenses and deferred charges.................... 3,415 2,956 -------- -------- 85,534 77,264 Term accounts receivable (Note 2)........................ -- 242 Deferred income tax assets (Note 5)...................... 5,604 5,604 Fixed assets (Note 3).................................... 21,829 16,556 Other assets (Note 3).................................... 21,199 21,670 -------- -------- $ 134,166 $ 121,336 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable......................................... $6,520 $7,423 Accrued liabilities...................................... 8,193 10,685 Unearned revenue......................................... 14,621 15,588 Term loan (Note 4)....................................... -- 10,000 Obligation under capital lease........................... 772 -- -------- -------- 30,106 43,696 Term loan (Note 4)....................................... 10,000 -- Accrued liabilities (Note 6) ............................ 1,047 1,338 Obligation under capital lease .......................... 1,103 -- -------- -------- 42,256 45,034 -------- -------- Shareholders' equity Capital stock (Issued and outstanding -- 24,831,527 Common Shares at January 31, 2001; 19,592,314 Common Shares and 450,448 Preference Shares at April 30, 2000) (Note 9) ............................... 272,937 248,210 Cumulative translation adjustment........................ (3,831) (2,670) Deficit.................................................. (177,196) (169,238) --------- --------- 91,910 76,302 --------- --------- $134,166 $ 121,336 ========= ==========
(the accompanying notes are an integral part of these consolidated financial statements) JETFORM CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands of Canadian dollars except share and per share amounts)
Three months ended Nine months ended January 31, January 31, ------------------------------ ----------------------------- 2001 2000 2001 2000 --------------- -------------- ------------- -------------- Revenues Product $ 13,188 $ 10,630 $43,101 $37,255 Service 10,164 10,489 28,992 31,985 -------- -------- ------- ------- 23,352 21,119 72,093 69,240 -------- -------- ------- ------- Costs and expenses Cost of product 1,910 2,828 6,042 7,600 Cost of service 2,766 3,037 8,052 9,694 Sales and marketing 13,107 10,700 38,509 33,242 General and administrative 2,569 4,843 7,301 10,011 Research and development 4,227 4,305 12,233 11,973 Depreciation and amortization 2,709 2,544 7,770 7,641 Gain on sale of assets -- -- -- (1,813) -------- -------- ------- ------- 27,288 28,257 79,907 78,348 -------- -------- ------- ------- Operating loss (3,936) (7,138) (7,814) (9,108) Net investment income 264 311 716 1,148 -------- -------- ------- ------- Loss before taxes (3,672) (6,827) (7,098) (7,960) Provision for income taxes (Note 5) (201) (221) (860) (605) -------- -------- ------- ------- Net loss $(3,873) $(7,048) $(7,958) $(8,565) ========= ========= ======== ======== Basic loss per share Net loss per share $ (0.16) $ (0.35) $ (0.36) $ (0.43) Weighted average number of shares 24,688,946 19,908,264 21,901,600 19,897,414 Fully diluted loss per share Net loss per share $ (0.16) $ (0.35) $ (0.36) $ (0.43) Weighted average number of shares 24,688,946 19,908,264 21,901,600 19,897,414
(the accompanying notes are an integral part of these consolidated financial statements) JETFORM CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (in thousands of Canadian dollars)
Three months ended Nine months ended January 31, January 31, ------------------------------ ----------------------------- 2001 2000 2001 2000 --------------- -------------- ------------- -------------- Net loss........................................ $ (3,873) $ (7,048) $ (7,958) $ (8,565) Other comprehensive loss: Cumulative translation adjustment.......... (274) (1,609) (1,161) (1,121) --------- ---------- --------- --------- Comprehensive loss.................. $ (4,147) $ (8,657) $ (9,119) $ (9,686) ========= ========== ========= =========
(the accompanying notes are an integral part of these consolidated financial statements) JETFORM CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands of Canadian dollars)
Three months ended Nine months ended January 31, January 31, ---------------------------- ----------------------------- 2001 2000 2001 2000 ------------- ------------- ------------- -------------- Cash provided from (used in): Operating activities Net loss $(3,873) $(7,048) $(7,958) $(8,565) Items not involving cash: Depreciation and amortization 3,630 3,496 10,498 10,240 Net change in operating components of working capital 1,275 7,835 (8,497) 13,847 -------- -------- -------- -------- 1,032 4,283 (5,957) 15,522 -------- -------- -------- -------- Investing activities Purchase of fixed assets (4,084) (1,881) (8,698) (3,964) Increase in other assets (1,572) 221 (3,267) (3,650) Acquisition of business (151) -- (151) -- -------- -------- -------- -------- (5,807) (1,660) (12,116) (7,614) -------- -------- -------- -------- Financing activities Proceeds from issuance of shares 2,980 155 24,090 333 Repayment of debt (397) (4,765) (397) (19,597) Capital lease repayments (10) -- (10) -- -------- --------- -------- -------- 2,573 (4,610) 23,683 (19,264) -------- --------- -------- -------- Effects of exchange rate changes on cash 249 (962) 32 123 -------- --------- -------- -------- Increase (decrease) in cash and cash equivalents (1,953) (2,949) 5,642 (11,233) Cash and cash equivalents, beginning of period 49,687 38,978 42,092 47,262 -------- --------- -------- -------- Cash and cash equivalents, end of period $47,734 $36,029 $47,734 $36,029 ======== ========= ======== ========
(the accompanying notes are an integral part of these consolidated financial statements) JETFORM CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. BASIS OF PRESENTATION These consolidated financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"), and include all assets, liabilities, revenues and expenses of JetForm Corporation ("JetForm") and its wholly-owned subsidiaries: JetForm Corporation (a Delaware corporation), JF A'Asia Pty. Limited ("JetForm Pacific"), JetForm Scandinavia AB ("JetForm Nordic"), JetForm France SA ("JetForm France"), JetForm UK Limited ("JetForm UK"), JetForm Deutschland GmbH ("JetForm Germany"), JetForm Japan K.K. ("JetForm Japan") and JetForm Technologies Limited ("JetForm Ireland"). JetForm and its wholly-owned subsidiaries are collectively referred to herein as the "Company" The unaudited interim consolidated financial statements reflect all adjustments which are, in the opinion of the Company's management, necessary for a fair statement of results for these interim periods. 2. ACCOUNTS RECEIVABLE Accounts receivable and term accounts receivable are net of an allowance for doubtful accounts of $3.1 million at January 31, 2001 and $2.4 million at April 30, 2000. The Company records revenues from irrevocable commitments to purchase products which do not conform to the Company's customary trade terms at the amount receivable less deemed interest ("Term Accounts Receivable"). The Company uses a discount rate equal to its current net cost of borrowing at the time the revenue is recorded. Under an irrevocable commitment to purchase product the customer commits to pay a minimum amount over a specified period of time in return for the right to use or resell up to a specific number of copies of a delivered product. The Company records Term Accounts Receivable as non-current to the extent that management estimates payment will be received more than one year from the balance sheet date. Payment of these Term Accounts Receivable is generally due the earlier of: (i) delivery of the Company's products by the customer to its customers or end users; and (ii) specific dates in the license agreement ("Minimum Payment Dates"). As at January 31, 2001 and April 30, 2000 total Term Accounts Receivable with Minimum Payment Dates exceeding one year were approximately nil and $242,000, respectively. The Company's customer base consists of large numbers of geographically diverse customers dispersed across many industries. As a result, concentration of credit risk with respect to trade receivables is not significant. 3. FIXED ASSETS AND OTHER ASSETS The Consolidated Balance Sheets include the following amounts: January 31, 2001 April 30, 2000 ---------------- -------------- (in thousands of Canadian dollars) Accumulated depreciation and amortization included in fixed assets $ 27,495 $ 22,400 ======== ======== Accumulated amortization included in other assets $ 27,952 $ 22,826 ======== ======== 4. FINANCIAL INSTRUMENTS AND CREDIT FACILITIES For certain of the Company's financial instruments, including accounts receivable, unbilled receivables, accounts payable, and short-term accrued liabilities, the carrying amount approximates the fair value due to their short maturities. The carrying amount of term accounts receivable, after applying an appropriate discount rate, approximates their fair value. Cash and cash equivalents, term loan and long-term accrued liabilities are carried at cost, which approximates their fair value. The Company has entered into receivables purchase agreements with third party purchasers. Under the agreements, the Company has the option to sell certain accounts receivable on a recourse basis. The purchasers have recourse in the event of a trade dispute as defined in the receivables purchase agreements and upon the occurrence of other specified events. As at January 31, 2001 and April 30, 2000, the outstanding balance of accounts receivable sold under these agreements were approximately US$2.7 million and US$9.7 million, respectively. The Company believes that none of the receivables sold are at risk of recourse or that any receivables possibly at risk of recourse are recoverable from third party insurance policies. These sales meet all of the requirements of SFAS 125 "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities," for off balance sheet reporting. The Company has a committed $20 million credit facility with the Royal Bank of Canada. The credit facility is made up of (i) a $10 million term loan facility which bears interest at a rate of 1.5% over the bankers acceptance rate of the Bank from time to time and is payable on May 1, 2002; and (ii) a $10 million revolving line of credit which bears interest at the prime rate of the Bank from time to time. As at January 31, 2001, the Company had drawn down the $10 million term loan facility and fixed the interest rate until April 16, 2001 at 5.46%. The Company had no borrowings against its revolving line of credit as at January 31, 2001. The Company has granted as collateral for the $20 million credit facility a general security agreement over JetForm's assets, including a pledge of the shares of certain subsidiaries. JetForm uses certain financial instruments to manage exposures to foreign exchange. The Company's objective is to minimize risk using the most effective methods to eliminate or reduce the impacts of this exposure. JetForm does not enter into financial instruments for speculative or trading purposes. For the three months ended January 31, 2001, investment income included a net unrealized non-cash loss of $60,000 for changes in the fair value of a forward option. 5. INCOME TAXES As at January 31, 2001, the Company had net deferred tax assets of $58.5 million, the principal components of which were temporary differences associated with the acquisition of in process research and development and operating loss carry forwards. The Company has provided for a valuation allowance of $52.9 million. 6. PROVISION FOR RESTRUCTURING COSTS On March 17, 1999, the Corporation announced a restructuring plan and recorded a provision for restructuring costs of $30.5 million directed at reducing costs. The key restructuring actions included: o Consolidation of management responsibilities and reduction in headcount. o Closure of redundant facilities. o Reduction in the carrying value of certain capital assets primarily related to past acquisitions. o Cancellation of certain commitments and other costs. The following table summarizes the activity in the provision for restructuring costs during the nine months ended January 31, 2001:
Employee Total Termination Facilities Other Provision ------------ ------------ ------- ----------- Balance, April 30, 2000........... $ 590 $1,246 $395 $ 2,231 Cash payments...................... (249) (74) -- (323) ------ ------- ---- -------- Balance, July 31, 2000............. 341 1,172 395 1,908 Cash payments...................... (89) (50) (79) (218) ------ ------- ---- -------- Balance, October 31, 2000....... 252 1,122 316 1,690 Cash payments...................... (92) (39) (60) (191) ------ ------- ---- -------- Balance, January 31, 2001....... $ 160 $1,083 $256 $ 1,499 ====== ======= ==== ======== Long-term balance.................. $ -- $ 970 $ 77 $ 1,047 ====== ======= ==== ========
During the three months ended January 31, 2001 the Company made cash payments of approximately $191,000 relating to the provision for restructuring costs recorded in fiscal year 1999. This included $92,000 in salary continuance for terminated employees, $39,000 in rent for the Company's vacant office space in the United Kingdom, and $60,000 in other miscellaneous costs. The long-term balances primarily relate to facility leases in the United Kingdom. 7. SEGMENTED INFORMATION Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Company's chief decision-maker in deciding how to allocate resources and assessing performance. The Company's chief decision-maker is the Chief Executive Officer. The Company's Chief Executive Officer primarily evaluates the Company on a geographic basis. The geographic evaluation is further segmented into Product, Consulting, and Customer Support components. The Product segment engages in business activities from which it earns license revenues from the Company's software products. The Consulting segment earns revenues from assisting customers in configuring, implementing and integrating the Company's products and when required, customizing products and designing automated processes to meet the customers specific business needs as well as providing all necessary training. The Customer Support segment earns revenues through after sale support for software products as well as providing software upgrades under the Company's maintenance and support programs. The following table sets forth, on a comparative basis for the periods indicated, the Company's segmented information: Three months ended January 31, 2001 (in thousands of Canadian dollars) --------------------------------------------------
Product Consulting Customer Support Total ------------- ------------ ----------- ----------- North America Revenue $7,024 $1,486 $4,948 $13,458 Costs 6,262 744 1,051 8,057 -------- ------- ----------- ------- Margin $762 $742 $3,897 $5,401 -------- ------- ----------- ------- Europe Revenue $4,992 $1,473 $1,887 $8,352 Costs 3,307 524 447 4,278 -------- ------- ----------- ------- Margin $1,685 $949 $1,440 $4,074 -------- ------- ----------- ------- Asia Pacific Revenue $1,172 $77 $293 $1,542 Costs 1,130 - - 1,130 -------- ------- ----------- ------- Margin $42 $77 $293 $412 -------- ------- ----------- ------- Total Revenue $13,188 $3,036 $7,128 $23,352 Costs 10,699 1,268 1,498 13,465 -------- ------- ----------- -------- Margin $2,489 $1,768 $5,630 $9,887 -------- ------- ----------- -------- Cost of product 1,910 Corporate marketing 2,408 Research and development 4,227 General and administration 2,569 Depreciation and amortization 2,709 --------- 13,823 --------- Operating loss (3,936) Net investment income 264 --------- Loss before taxes (3,672) Provision for income taxes (201) -------- Net loss ($3,873) ========
Three months ended January 31, 2000 (in thousands of Canadian dollars) --------------------------------------------------
Product Consulting Customer Support Total ------------- ------------ ----------- ----------- North America Revenue $6,256 $3,722 $4,173 $14,151 Costs 4,367 1,681 647 6,695 -------- -------- ------- -------- Margin $1,889 $2,041 $3,526 $7,456 -------- -------- ------- -------- Europe Revenue $4,233 $854 $1,684 $6,771 Costs 2,840 289 420 3,549 -------- -------- ------- -------- Margin $1,393 $565 $1,264 $3,222 -------- -------- ------- -------- Asia Pacific Revenue $141 - $56 $197 Costs 1,366 - - 1,366 -------- -------- ------- --------- Margin ($1,225) - $56 ($1,169) -------- -------- ------- --------- Total Revenue $10,630 $4,576 $5,913 $21,119 Costs 8,573 1,970 1,067 11,610 -------- -------- ------- -------- Margin $2,057 $2,606 $4,846 $9,509 -------- -------- ------- -------- Cost of product 2,828 Corporate marketing 2,127 Research and development 4,305 General and administration 4,843 Depreciation and amortization 2,544 -------- 16,647 -------- Operating loss (7,138) Net investment income 311 --------- Loss before taxes (6,827) Provision for income taxes (221) --------- Net loss ($7,048) =========
Nine months ended January 31, 2001
(in thousands of Canadian dollars) -------------------------------------------------- Product Consulting Customer Support Total ------------- ------------ ----------- ----------- North America Revenue $22,664 $4,262 $14,422 $41,348 Costs 18,064 2,133 3,120 23,317 -------- -------- ------- -------- Margin $4,600 $2,129 $11,302 $18,031 -------- -------- ------- -------- Europe Revenue $14,370 $4,031 $5,350 $23,751 Costs 9,420 1,509 1,290 12,219 -------- -------- ------- -------- Margin $4,950 $2,522 $4,060 $11,532 -------- -------- ------- -------- Asia Pacific Revenue $6,067 $352 $575 $6,994 Costs 3,533 - - 3,533 -------- -------- ------- -------- Margin $2,534 $352 $575 $3,461 -------- -------- ------- -------- Total Revenue $43,101 $8,645 $20,347 $72,093 Costs 31,017 3,642 4,410 39,069 -------- -------- ------- -------- Margin $12,084 $5,003 $15,937 $33,024 -------- -------- ------- -------- Cost of product 6,042 Corporate marketing 7,492 Research and development 12,233 General and administration 7,301 Depreciation and amortization 7,770 -------- 40,838 -------- Operating loss (7,814) Net investment income 716 --------- Loss before taxes (7,098) Provision for income taxes (860) --------- Net loss ($7,958) =========
Nine months ended January 31, 2000 (in thousands of Canadian dollars) -------------------------------------------------- Product Consulting Customer Support Total ------------- ------------ ----------- ----------- North America Revenue $22,717 $12,075 $12,579 $47,371 Costs 15,484 4,543 2,630 22,657 -------- -------- ------- ------- Margin $7,233 $7,532 $9,949 $24,714 -------- -------- ------- ------- Europe Revenue $12,129 $2,565 $4,270 $18,964 Costs 7,956 1,056 1,289 10,301 -------- -------- ------- ------- Margin $4,173 $1,509 $2,981 $8,663 -------- -------- ------- ------- Asia Pacific Revenue $2,409 $11 $485 $2,905 Costs 3,423 - 176 3,599 -------- -------- ------- ------- Margin ($1,014) $11 $309 ($694) -------- -------- ------- -------- Total Revenue $37,255 $14,651 $17,334 $69,240 Costs 26,863 5,599 4,095 36,557 -------- -------- ------- -------- Margin $10,392 $9,052 $13,239 $32,683 -------- -------- ------- -------- Cost of product 7,600 Corporate marketing 6,379 Research and development 11,973 General and administration 10,011 Depreciation and amortization 7,641 Gain on sale of assets (1,813) --------- 41,791 --------- Operating loss (9,108) Net investment income 1,148 --------- Loss before taxes (7,960) Provision for income taxes (605) --------- Net loss ($8,565) =========
8. RECENT ACCOUNTING PRONOUNCEMENTS In June 1998, the Financial Accounting Standards Board ("FASB") issued the Statement of Financial Accounting Standard ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"). This statement establishes accounting and reporting standards for derivative instruments and hedging activities and is effective for all fiscal quarters of fiscal years beginning after June 15, 1999. In June 1999, FASB issued SFAS No.137 which delays the effective date of SFAS 133 until fiscal years beginning after June 15, 2000. The Company will adopt the Statement's disclosure requirements in the quarterly and annual financial statements for the year ending April 30, 2002. The Company is currently assessing the potential impact that SFAS 133 will have on its financial statements. On March 31, 2000, FASB issued Interpretation No. 44, Accounting for Certain Transactions involving Stock Compensation - an interpretation of APB Opinion No. 25 (FIN 44), providing new accounting rules for stock-based Compensation under APB Opinion No. 25, Accounting for Stock Issued to Employees (APB 25). FIN 44 does not change FASB Statement No. 123, Accounting for Stock based compensation (FAS 123). The new rules are significant and will result in compensation expense in several situations in which no expense is typically recorded under current practice, including option repricing, purchase business combinations and plans that permit tax withholdings. FIN 44 is generally effective for transactions occurring after July 1, 2000, but applies to repricings and some other transactions after December 15, 1998. The adoption of this Interpretation did not have a material impact on the Company's results of operations or financial position. In December 1999, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 101, Revenue Recognition in Financial Statements, which was amended in March 2000 by SAB 101A. The SAB summarizes certain of the SEC staff views in applying generally accepted accounting principles to revenue recognition in financial statements. On June 26, 2000, the SEC issued SAB 101B to provide registrants with additional time to implement guidance contained in SAB 101. SAB 101B delays the implementation date of SAB 101 until no later than the fourth fiscal quarter of fiscal years beginning after December 15, 1999. This SAB is effective beginning the Company's fourth quarter of fiscal 2001. The Company does not expect the adoption of this SAB to have a material impact on its results of operations or financial position except that the adoption of SAB 101 may impact where certain items currently recorded under the caption "costs and expenses" will be recorded in the consolidated statement of operations. In September 2000, the FASB issued SFAS No. 140, "Accounting for Transfers and Servicing of Assets and Extinguishments of Liabilities" ("SFAS 140"). This statement replaces FASB Statement No. 125, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities" ("SFAS 125"). It revises the standards for accounting for securitizations and other transfers of financial assets and collateral and requires certain disclosures, but it carries over most of SFAS 125's provisions without reconsideration. SFAS 140 is effective for transfers and servicing of financial assets and extinguishments of liabilities occurring after March 31, 2001 which is during the Company's fourth quarter of fiscal 2001. The Company does not expect the adoption of SFAS 140 will have a material impact on its results of operations or financial position. 9. CAPITAL STOCK During the quarter ended January 31, 2001 the Company's underwriters exercised an over-allotment option, related to the Company's issuance of 4.0 million common shares during the quarter ended October 31, 2000. The underwriters purchased an additional 600,000 common shares from the Company at a price of $5.60 per share, the net proceeds of which after deducting underwriting discounts, fees and expenses were approximately $2.8 million. Proceeds from an employee stock purchase plan were approximately $200,000. Also during the quarter ended January 31, 2001, Moore Corporation Limited converted its 450,448 Convertible Preference Shares into an equal number of Common Shares. The Company also issued 100,000 common shares for the purchase of Joey Technologies Inc., at a fair value of $5.75 per share. The following discussion of the Company's results of operations and of its liquidity and capital resources should be read in conjunction with the information contained in the accompanying Unaudited Consolidated Financial Statements and related Notes thereto, together with management's discussion and analysis of financial condition and results of operations contained in the Company's Report on Form 10-K for the fiscal year ended April 30, 2000. The following discussion provides a comparative analysis of material changes for the three and nine month periods ended January 31, 2001 and 2000, in the financial condition and results of operations of the parent company ("JetForm") and its wholly-owned subsidiaries: JetForm Corporation (a Delaware corporation), JF A'Asia Pty Limited ("JetForm Pacific"), JetForm Scandinavia AB ("JetForm Nordic"), JetForm France SA ("JetForm France"), JetForm UK Limited ("JetForm UK"), JetForm Deutschland GmbH ("JetForm Germany"), JetForm Technologies Limited ("JetForm Ireland"), JetForm Japan K.K. ("JetForm Japan") and JetForm PTE Ltd ("JetForm Singapore"). JetForm and its wholly-owned subsidiaries are collectively referred to herein as the "Company". Results of Operations The Company's revenues and operating results have varied substantially from period to period. With the exception of its consulting services operation, the Company has historically operated with little backlog of orders because its software products are generally shipped as orders are received. The Company records product revenue from packaged software and irrevocable commitments to purchase products when persuasive evidence of an arrangement exists, the software product has been shipped, there are no significant uncertainties surrounding product acceptance, the fees are fixed and determinable and collection is considered probable. As a result, product revenue in any period is substantially dependent on orders booked and shipped in that period and on the receipt of irrevocable commitment license agreements. Product revenue is difficult to forecast due to the fact that the Company's sales cycle, from initial trial to multiple copy licenses, varies substantially from customer to customer. As a result, variations in the timing of product sales can cause significant variations in operating results from period to period. Product revenue represented 56% of total revenue for the quarter ended January 31, 2001. Service revenue primarily consists of consulting services, training and technical support. Consulting services include assisting customers to configure, implement and integrate the Company's products and, when required, customize products and design automated processes to meet customers' specific business needs. Service revenue represented 44% of total revenue for the quarter ended January 31, 2001. Costs and expenses are comprised of cost of product, cost of service, sales and marketing, general and administrative, research and development, depreciation and amortization and other expenses. Cost of product consists of third party commissions, the cost of disks, manuals, packaging, freight, royalty payments to vendors whose software is bundled with certain products, amortization of deferred product development costs and provisions for bad debts. Cost of service includes all costs of providing technical support, training, consulting, custom forms development, application development services and provisions for bad debts. Sales and marketing expenses are principally related to salaries and commissions paid to sales and marketing personnel and the cost of marketing programs. Research and development expenses include personnel and occupancy costs as well as the costs of software development, testing, product management, quality assurance and documentation. General and Administrative expenses include personnel and occupancy costs related to administrative personnel. Depreciation and amortization includes depreciation and amortization of fixed assets and amortization of other assets, goodwill and distribution rights relating to various acquisitions. The Company amortizes goodwill and distribution rights over their expected useful lives. The Company periodically reviews the carrying value of its capital assets. Any impairments in the carrying value are recognized at that time. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following table sets forth, on a comparative basis for the periods indicated, the components of the Company's product margin, service margin, and product and service margin:
THREE MONTHS ENDED JANUARY 31, NINE MONTHS ENDED JANUARY 31, ----------------------------------------------------- ----------------------------------------------------- 2001 2000 2001 2000 ------------------------ ------------------------ ------------------------ ------------------------ (in thousands of Canadian dollars) Product revenue $ 13,188 100% $ 10,630 100% $ 43,101 100% $ 37,255 100% Cost of product 1,910 14% 2,828 27% 6,042 14% 7,600 20% ---------- --------- ---------- --------- ---------- --------- ---------- --------- Product margin $ 11,278 86% $ 7,802 73% $ 37,059 86% $ 29,655 80% ========== ========= ========== ========= ========== ========= ========== ========= Service revenue $ 10,164 100% $ 10,489 100% $ 28,992 100% $ 31,985 100% Cost of service 2,766 27% 3,037 29% 8,052 28% 9,694 30% ---------- --------- ---------- --------- ---------- --------- ---------- --------- Service margin $ 7,398 73% $ 7,452 71% $ 20,940 72% $ 22,291 70% ========== ========= ========== ========= ========== ========= ========== ========= Total revenues $ 23,352 100% $ 21,119 100% $ 72,093 100% $ 69,240 100% Cost of product and service 4,676 20% 5,865 28% 14,094 20% 17,294 25% ---------- --------- ---------- --------- ---------- --------- ---------- --------- Product and service margin $ 18,676 80% $ 15,254 72% $ 57,999 80% $ 51,946 75% ========== ========= ========== ========= ========== ========= ========== =========
The following table presents, for the periods indicated, consolidated statements of operations data expressed as a percentage of total revenues:
Three months ended January 31, Nine months ended January 31, ------------------------------ ----------------------------- 2001 2000 2001 2000 ------------ ------------- ------------ ------------ Revenues Product 56% 50% 60% 54% Service 44% 50% 40% 46% ------- -------- ------ ------ 100% 100% 100% 100% ------- -------- ------ ------ Costs and expenses Cost of product 8% 13% 8% 11% Cost of service 12% 14% 11% 14% Sales and marketing 56% 51% 53% 48% General and administrative 11% 23% 10% 14% Research and development 18% 20% 17% 17% Depreciation and amortization 12% 12% 11% 11% Gain on sale of assets -- -- -- -3% ------- -------- ------ ------ 117% 134% 111% 113% ------- -------- ------ ------ Operating loss -17% -34% -11% -13% Net investment income 1% 1% 1% 2% ------- -------- ------ ------ Loss before taxes -16% -33% -10% -11% Provision for income taxes -1% -1% -1% -1% ------- -------- ------ ------ Net loss -17% -34% -11% -12% ======= ======== ====== ======
The following table provides details of product revenue by geographic segment and within North America, by distribution channel:
Three months ended January 31, Nine months ended January 31, ---------------------------------------- ------------------------------------------ Increase Increase 2001 2000 (Decrease) 2001 2000 (Decrease) ---------- ---------- ------------ ------------ ----------- ----------- (in thousands of Canadian dollars) Product revenue by region North America $ 7,024 $ 6,256 12% $22,664 $22,717 0% Europe 4,992 4,233 18% 14,370 12,129 18% Rest of World 1,172 141 731% 6,067 2,409 152% ---------- ---------- ------------ ----------- $13,188 $10,630 24% $43,101 $37,255 16% ========== ========== ============ =========== North American Product revenue by channel Direct sales $ 5,165 $ 4,281 21% $ 13,718 $ 9,664 42% Reseller and OEM 1,859 1,975 -6% 8,946 13,053 -31% ---------- ---------- ------------ ----------- $ 7,024 $ 6,256 12% $22,664 $22,717 0% ========== ========== ============ ===========
Three Months Ended January 31, 2001 Compared to Three Months Ended January 31, 2000 Revenues Total Revenues. Total revenues increased 11% to $23.4 million for the three months ended January 31, 2001 from $21.1 million for the three months ended January 31, 2000 due primarily to increased revenues in Australia and Japan. Total revenues consisted of 56% product revenue and 44% service revenue for the three months ended January 31, 2001. Product Revenue. Product revenue increased 24% to $13.2 million for the three months ended January 31, 2001 from $10.6 million for the three months ended January 31, 2000. Product revenue derived from North America, Europe and Rest of World represented 53%, 38%, and 9%, respectively, of product revenue for the three months ended January 31, 2001, as compared to 59%, 40% and 1%, respectively, of product revenue for the three months ended January 31, 2000. Product revenue derived from North America increased 12% to $7.0 million for the three months ended January 31, 2001 from $6.3 million for the three months ended January 31, 2000 due primarily to increased sales in Canada. Product revenue from direct sales, which represented 74% of North American product revenue, increased 21% to $5.2 million for the three months ended January 31, 2001 from $4.3 million for the three months ended January 31, 2000. Reseller and OEM sales, which represented 26% of North American product revenue, decreased 6% to $1.9 million for the three months ended January 31, 2001 from $2.0 million for the three months ended January 31, 2000. Product revenue derived from Europe increased 18% to $5.0 million for the three months ended January 31, 2001 from $4.2 million for the three months ended January 31, 2000 due primarily to increased product sales in Germany and Sweden. Product revenue derived from Rest of World increased 731% to $1.2 million for the three months ended January 31, 2001 from $141,000 for the three months ended January 31, 2000 due primarily to increased product sales in Japan and Australia. Service Revenue. Service revenue decreased 3% to $10.2 million for the three months ended January 31, 2001 from $10.5 million for the three months ended January 31, 2000. Maintenance and support revenue increased 21% to $7.1 million for the three months ended January 31, 2001 from $5.9 million for the three months ended January 31, 2000. The Company's consulting revenue decreased 34% to $3.0 million for the three months ended January 31, 2001 from $4.6 million for the three months ended January 31, 2000. The decrease in consulting revenue occurred in North America and was primarily due to the redeployment of services resources to pre-sales activities. Total Costs and Expenses. Total costs and expenses were $27.3 million for the three months ended January 31, 2001, a decrease of 3% from $28.3 million for the three months ended January 31, 2000. Cost of Product. Cost of product decreased 32% to $1.9 million for the three months ended January 31, 2001 from $2.8 million for the three months ended January 31, 2000 primarily due to lower bad debt write-offs. For the three months ended January 31, 2001, total deferred costs charged to cost of product decreased to $921,000 from $952,000 for the three months ended January 31, 2000. The product margin increased to 86% for the three months ended January 31, 2001 from 73% for the three months ended January 31, 2000. Cost of Service. Cost of service decreased 9% to $2.8 million for the three months ended January 31, 2001 from $3.0 million for the three months ended January 31, 2000 due primarily to decreased consulting revenue and reduced numbers of employees in this area. The service margin increased to 73% for the three months ended January 31, 2001 from 71% for the three months ended January 31, 2000. Sales and Marketing. Sales and marketing expenses increased 22% to $13.1 million for the three months ended January 31, 2001 from $10.7 million for the three months ended January 31, 2000, primarily due to an initiative to increase the direct and indirect sales force. General and Administrative. General and administrative expenses decreased 47% to $2.6 million for the three months ended January 31, 2001 from $4.8 million for the three months ended January 31, 2000. The Company incurred charges of approximately $2.3 million in the three months ended January 31, 2000 for the write off of a non core technology investment and expenses related to the departure of the Company's former Chief Executive Officer and one other executive. As a percentage of total revenues, general and administrative expenses decreased 12% to 11% for the three months ended January 31, 2001 from 23% for the three months ended January 31, 2000. Research and Development. Research and development expenses decreased 2% to $4.2 million for the three months ended January 31, 2001 from $4.3 million for the three months ended January 31, 2000. For the three months ended January 31, 2001 the Company capitalized $971,000 of software development costs as compared to $900,000 for the three months ended January 31, 2000. Research and development expense was 32% and 40% of product revenue for the three months ended January 31, 2001 and 2000, respectively. Depreciation and Amortization. Depreciation and amortization increased 6% to $2.7 million for the three months ended January 31, 2001 from $2.5 million for the three months ended January 31, 2000. Operating Loss. Operating loss decreased 45% to an operating loss of $3.9 million for the three months ended January 31, 2001 from an operating loss of $7.1 million for the three months ended January 31, 2000. Net Investment Income. Interest and other income decreased to $264,000 for the three months ended January 31, 2001 from $311,000 for the three months ended January 31, 2000, primarily due to a decrease in interest rates on cash and cash equivalents. Provisions for Income Taxes. The Company recorded a provision for taxes of $201,000 for the three months ended January 31, 2001, compared to $221,000 for the three months ended January 31, 2000. Nine Months Ended January 31, 2001 Compared to Nine Months Ended January 31, 2000 Revenues Total Revenues. Total revenues increased 4% to $72.1 million for the nine months ended January 31, 2001 from $69.2 million for the nine months ended January 31, 2000 primarily due to increased sales in Europe and Rest of World. Total revenues consisted of 60% product revenue and 40% service revenue for the nine months ended January 31, 2001. Product Revenue. Product revenue increased 16% to $43.1 million for the nine months ended January 31, 2001 from $37.3 million for the nine months ended January 31, 2000 primarily due to increased product sales in Europe and Rest of World. Product revenue derived from North America, Europe and Rest of World represented 53%, 33%, and 14%, respectively, of product revenue for the nine months ended January 31, 2001, as compared to 61%, 33% and 6%, respectively, of product revenue for the nine months ended January 31, 2000. Product revenue derived from North America remained consistent at $22.7 million for the nine months ended January 31, 2001 and for the nine months ended January 31, 2000. Product revenue from direct sales, which represented 61% of North American product revenue, increased 42% to $13.7 million for the nine months ended January 31, 2001 from $9.7 million for the nine months ended January 31, 2000. Reseller and OEM sales, which represented 39% of North American product revenue, decreased 31% to $8.9 million for the nine months ended January 31, 2000 from $13.1 million for the nine months ended January 31, 2000 primarily due to reduced sales to US Government customers. Product revenue derived from Europe increased 18% to $14.4 million for the nine months ended January 31, 2001 from $12.1 million for the nine months ended January 31, 2000 due primarily to increased product sales in Sweden and the United Kingdom. Product revenue derived from Rest of World increased 152% to $6.1 million for the nine months ended January 31, 2001 from $2.4 million for the nine months ended January 31, 2000 due primarily to increased sales in Japan and Australia. Service Revenue. Service revenue decreased 9% to $29.0 million for the nine months ended January 31, 2001 from $32.0 million for the nine months ended January 31, 2000. For the nine months ended January 31, 2001, maintenance and support revenue increased 17% to $20.3 million from $17.3 million for the nine months ended January 31, 2000. The Company's consulting revenue decreased 41% to $8.6 million for the nine months ended January 31, 2001 from $14.6 million for the nine months ended January 31, 2000. The decrease in consulting revenue occurred in North America and was primarily due to the redeployment of services resources to pre-sales activities. Costs and Expenses Total Costs and Expenses. Total costs and expenses were $79.9 million for the nine months ended January 31, 2001, an increase of 2% from $78.3 million for the nine months ended January 31, 2000. Cost of Product. Cost of product decreased 21% to $6.0 million for the nine months ended January 31, 2001 from $7.6 million for the nine months ended January 31, 2000 primarily due to lower bad debt write-offs. For the nine months ended January 31, 2001, total deferred costs charged to cost of product increased to $2.7 million from $2.6 million for the nine months ended January 31, 2000. The product margin increased to 86% for the nine months ended January 31, 2001 from 80% for the nine months ended January 31, 2000. Cost of Service. Cost of service decreased 17% to $8.1 million for the nine months ended January 31, 2001 from $9.7 million for the nine months ended January 31, 2000. The service margin increased to 72% for the nine months ended January 31, 2001 from 70% for the nine months ended January 31, 2000 due primarily to lower consulting revenue. Sales and Marketing. Sales and marketing expenses increased 16% to $38.5 million for the nine months ended January 31, 2001 from $33.2 million for the nine months ended January 31, 2000, due primarily to an initiative to increase the direct and indirect sales force. General and Administrative. General and administrative expenses decreased 27% to $7.3 million for the nine months ended January 31, 2001 from $10.0 million for the nine months ended January 31, 2000. The Company incurred charges of approximately $2.3 million in the three months ended January 31, 2000 for the write off of a non core technology investment and expenses related to the departure of the Company's former Chief Executive Officer and one other executive. As a percentage of total revenues, general and administrative expenses decreased to 10% for the nine months ended January 31, 2001 from 14% for the nine months ended January 31, 2000. Research and Development. Research and development expenses increased 2% to $12.2 million for the nine months ended January 31, 2001 from $12.0 million for the nine months ended January 31. During both the nine months ended January 31, 2001 and 2000, the Company capitalized approximately $2.7 million of software development costs. Research and development expense was 28% of product revenue for the nine months ended January 31, 2001 compared to 32% for the nine months ended January 31, 2000. Depreciation and Amortization. Depreciation and amortization expense increased 2% to $7.8 million for the nine months ended January 31, 2001 from $7.6 million for the nine months ended January 31, 2000. Operating Loss. Operating loss decreased 14% to a loss of $7.8 million for the nine months ended January 31, 2001 from an operating loss of $9.1 million for the nine months ended January 31, 2000. Net Investment Income. Interest and other income decreased to $716,000 for the nine months ended January 31, 2001 from $1.1 million for the nine months ended January 31, 2000, primarily due to a decrease in interest rates on cash and cash equivalents. Provisions for Income Taxes. The Company recorded a provision for taxes of $860,000 for the nine months ended January 31, 2001, compared to $605,000 for the nine months ended January 31, 2000. Liquidity and Capital Resources As at January 31, 2001 and April 30, 2000, the Company had $47.7 million and $42.1 million of cash and cash equivalents respectively. During the three months ended January 31, 2001, the Company's cash and cash equivalents decreased by $2.0 million. Operations The Company increased its investment in the non-cash operating components of working capital during the nine months ended January 31, 2001, by approximately $8.4 million, primarily due to increases in accounts receivable and prepaid charges and offset by a decrease in accounts payable and accrued liabilities. The Company purchased approximately $8.7 million of fixed assets (excluding assets under capital leases of $1.9 million) in the nine months ended January 31, 2001. The purchases of fixed assets included computer hardware and software, office equipment and furniture, and leasehold improvements. During the nine months ended January 31, 2001, the Company increased its investment in other assets by $3.3 million related primarily to capitalized development costs. During the nine months ended January 31, 2001, the Company generated cash of approximately $24.1 million relating to the Company's share offering, stock purchase plan, and the exercise of stock options by employees. Accounts Receivable and Term Accounts Receivable Total accounts receivable and term accounts receivable increased $3.3 million to $30.2 million at January 31, 2001 from $26.9 million at April 30, 2000. Accounts receivable increased to $25.5 million at January 31, 2001 from $21.4 million at April 30, 2000. Term accounts receivable, which are accounts receivable with payment dates exceeding the Company's customary trade terms, decreased by $550,000 to $4.7 million as at January 31, 2001 from $5.2 million on April 30, 2000. Term accounts receivable, primarily arise from the recording of revenue from irrevocable commitments to purchase licenses ("Irrevocable Commitment Licenses"). As at January 31, 2001 all term accounts receivable have expected payment dates of less than one year. Acquisitions During the quarter ended January 31, 2001 the Company acquired certain assets and liabilities of Joey Technologies Inc. ("Joey") and Pummill Business Forms Inc. ("Pummill"). The purchase price for Joey was $1.2 million paid through the issuance of 100,000 common shares, and the forgiveness and the assumption of debt. The purchase price of the Pummill assets was $270,000 and was satisfied in cash and by issuance of a note payable. The acquisitions were accounted for under the purchase method of accounting, and, accordingly, the purchase price was allocated to the fair value of the assets and liabilities acquired, with the remainder allocated to goodwill. Other assets of $1.4 million were recorded as a result of these acquisitions. Financial Instruments and Credit Facility The Company has entered into receivables purchase agreements with third party purchasers. Under the agreements, the Company has the option to sell certain accounts receivable on a recourse basis. The purchasers have recourse in the event of a trade dispute as defined in the receivables purchase agreements and upon the occurrence of other specified events. As at January 31, 2001 and April 30, 2000, the outstanding balances of accounts receivable sold under these agreements were approximately US$2.7 million and US$9.7 million, respectively. The Company believes that none of the receivables sold are at risk of recourse or that any receivables possibly at risk of recourse are recoverable from third party insurance policies. These sales meet all of the requirements of SFAS 125, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities," for off balance sheet reporting. The Company did not sell any receivables during the nine month period ended January 31, 2001. The Company has a committed $20 million credit facility with the Royal Bank of Canada. The credit facility is made up of (i) a $10 million term loan facility which bears interest at a rate of 1.5% over the bankers acceptance rate of the Bank from time to time and is payable on May 1, 2002; and (ii) a $10 million revolving line of credit which bears interest at the prime rate of the Bank from time to time. As at January 31, 2001, the Company had drawn down the $10 million term loan facility and fixed the interest rate until April 16, 2001 at 5.46%. The Company had no borrowings against its revolving line of credit as at January 31, 2001. The Company has granted as collateral for the $20 million credit facility a general security agreement over JetForm's assets, including a pledge of the shares of certain subsidiaries. The Company believes that its existing cash and cash equivalents will provide sufficient liquidity to meet the Company's business requirements in the foreseeable future. However, should the Company incur operating losses, its ability to meet its liquidity requirements and to raise additional capital through debt or equity financing may be compromised. JetForm uses certain financial instruments to manage exposures to foreign exchange. The Company's objective is to minimize risk using the most effective methods to eliminate or reduce the impacts of this exposure. JetForm does not enter into financial instruments for speculative or trading purposes. For the three months ended January 31, 2001, investment income included a net unrealized non-cash loss of $60,000 for changes in the fair value of a forward option. Provision for Restructuring Costs On March 17, 1999, the Corporation announced a restructuring plan and recorded a provision for restructuring costs of $30.5 million directed at reducing costs. The key restructuring actions included: o Consolidation of management responsibilities and reduction in headcount. o Closure of redundant facilities. o Reduction in the carrying value of certain capital assets primarily related to past acquisitions. o Cancellation of certain commitments and other costs. The following table summarizes the activity in the provision for restructuring costs during the three months ended January 31, 2001:
Employee Total Termination Facilities Other Provision ---------------- ------------ --------- --------------- Balance, April 30, 2000........... $ 590 $1,246 $395 $ 2,231 Cash payments...................... (249) (74) -- (323) ------ ------- ----- -------- Balance, July 31, 2000............. 341 1,172 395 1,908 Cash payments...................... (89) (50) (79) (218) ------ ------- ----- -------- Balance, October 31, 2000....... 252 1,122 316 1,690 Cash payments...................... (92) (39) (60) (191) ------ ------- ----- -------- Balance, January 31, 2001....... $ 160 $1,083 $256 $ 1,499 ====== ======= ===== ======== Long-term balance.................. $ -- $ 970 $ 77 $ 1,047 ====== ======= ===== ========
During the three months ended January 31, 2001 the Company made cash payments of approximately $191,000 relating to the provision for restructuring costs recorded in fiscal year 1999. This included $92,000 in salary continuance for terminated employees, $39,000 in rent for the Company's vacant office space in the United Kingdom, and $60,000 in other miscellaneous costs. The long-term balances primarily relate to facility leases in the United Kingdom. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS The Company is primarily exposed to market risks associated with fluctuations in interest rates and foreign currency exchange rates. Interest rate risks The Company's exposure to interest rate fluctuations relates primarily to its investment portfolio and its credit facility with its bank. The Company primarily invests its cash in short-term high-quality securities with reputable financial institutions. The interest income from these investments is subject to interest rate fluctuations which management believes would not have a material impact on the financial position of the Company. Foreign Currency Risk The Company has net monetary asset and liability balances in foreign currencies other than the Canadian Dollar, including the U.S. Dollar ("US$"), the Pound Sterling ("GBP"), the Australian dollar ("AUD"), the Swedish Krona ("SEK"), the German Mark ("DEM"), the French Franc ("FRF"), the Irish Punt ("IEP"), the Euro ("EUR"), and the Japanese Yen ("JPY"). The Company's cash and cash equivalents are primarily held in Canadian and U.S. dollars. As a result, fluctuations in the exchange rate of the U.S. dollar will have an impact on the Company's reported cash position. PART II -- OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is not a party to any material legal proceeding. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K During the three months ended January 31, 2001, the Company did not file any reports on Form 8-K. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. JetForm Corporation February 28, 2001 By: /s/ A. Kevin Francis - ------------------------------- ------------------------------------- Date A. Kevin Francis Chief Executive Officer and Director February 28, 2001 By: /s/ Jeffrey McMullen - ------------------------------- ------------------------------------- Date Jeffrey McMullen Senior Vice President, Finance and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----