-----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, K9Gu3mvTO7G0iz/pj831TBMezHZGTTWijhcvA2wwxN9G3PvwnWUQ8d4/XC+FC0bR 2fwW7meDAWdjsfRGcRRQnQ== 0000950116-03-002393.txt : 20030429 0000950116-03-002393.hdr.sgml : 20030429 20030429162740 ACCESSION NUMBER: 0000950116-03-002393 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030429 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030429 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEOWARE SYSTEMS INC CENTRAL INDEX KEY: 0000894743 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 232705700 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-21240 FILM NUMBER: 03669856 BUSINESS ADDRESS: STREET 1: 400 FEHELEY DR CITY: KING OF PRUSSIA STATE: PA ZIP: 19406 BUSINESS PHONE: 6102778300 MAIL ADDRESS: STREET 1: 400 FEHELEY DR CITY: KING OF PRUSSIA STATE: PA ZIP: 19406 FORMER COMPANY: FORMER CONFORMED NAME: INFORMATION SYSTEMS ACQUISITION CORP DATE OF NAME CHANGE: 19930108 FORMER COMPANY: FORMER CONFORMED NAME: HDS NETWORK SYSTEMS INC DATE OF NAME CHANGE: 19950313 8-K 1 eightk.txt 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): April 29, 2003 -------------- NEOWARE SYSTEMS, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 000-21240 23-2705700 - ------------------------------- --------------------- -------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File No.) Identification No.) 400 Feheley Drive King of Prussia, Pennsylvania 19406 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Registrant's telephone number including area code) (610) 277-8300 ----------------- . Item 5. Other Events. See Item 9 regarding a press release issued on April 29, 2003 announcing the Company's fiscal third quarter earnings attached as Exhibit 99.1. On April 29, 2003, the Company issued a press release, attached as Exhibit 99.2 announcing the appointment of Keith Schneck as Executive Vice President and Chief Financial Officer. Item 7. Financial Statements, Pro forma Financial Information and Exhibits. (c) Exhibits. Exhibit No. Description of Exhibits ----------- ----------------------- 99.1 Press release announcing third quarter earnings dated April 29, 2003 99.2 Press release announcing appointment of CFO dated April 29, 2003 Item 9. Regulation FD Disclosure The following Information is provided under Item 12 of Form 8-K in accordance with Release No. 33-8216. On April 29, 2003, Neoware Systems, Inc. (the "Company") issued a press release announcing its results for the fiscal quarter ended March 31, 2003. The full text of the press release is set forth in Exhibit 99.1 hereto. Pursuant to General Instruction B.6 of Form 8-K, the last paragraph under "Financial Highlights" and the last two paragraphs under "Customer Wins and Market Data" of the press release are not filed for purposes of Section 18 of the Securities Exchange Act of 1934 but are instead furnished as provided by that instruction and incorporated herein by reference. The balance of the press release is filed in accordance with Item 5 and incorporated therein by reference. 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 duly authorized. NEOWARE SYSTEMS, INC. Dated: April 29, 2003 By: /s/ Vincent T. Dolan, ----------------------------------- Vincent T. Dolan, Vice President of Finance EX-99 3 ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 [LOGOC OMITTED] PRESS RELEASE Neoware Reports Fiscal Q3 Operating Results Revenues Increased 61%, Net Income Increased 82% Over Prior Year Period KING OF PRUSSIA, Pa., April 29, 2003 -- Neoware Systems, Inc. (Nasdaq: NWRE), the leading supplier of award-winning software, services, and managed thin client appliances, today reported revenues and earnings for its fiscal 2003 third quarter and nine months ended March 31, 2003. FINANCIAL HIGHLIGHTS o Revenues for the quarter ended March 31, 2003 increased 61% to $13,468,117, from $8,368,580 in the prior year quarter. o Operating income increased 244% to $2,218,136, from $645,013 in the prior year quarter. o Net income increased 82% to $1,280,821, or $0.09 per fully diluted share, from $705,058, or $0.06 per fully diluted share, in the prior year quarter. This increase in net income was achieved despite a $300,000 non-cash, non-operating impairment charge for the write-off of an investment in Boundless Corporation, which filed for Chapter 11 bankruptcy protection in March 2003. The current year quarter also had a $720,461 income tax provision, while there was no income tax provision in the prior year quarter. o Revenues for the nine months ended March 31, 2003 were $41,698,573, up 106% from $20,228,442 in the prior year. o Net income for the nine months ended March 31, 2003 was $4,611,537, up 193% from $1,575,299 in the prior year. o Gross margin for the quarter increased to a record 46% from 40% in the prior year, well above the Company's guidance of 40% to 42% plus or minus a point or two. Gross margin for the quarter increased primarily as a result of our ability to reduce product costs while increasing revenues and maintaining average selling prices, as well as a favorable product mix including increased revenues from software sales. "Neoware's business is healthy and is growing," commented Michael Kantrowitz, Neoware's Chairman and CEO. "In the first nine months of our fiscal year we have more than doubled revenues, and increased operating income more than five-fold. Our gross margins hit a new record in Q3 and were well above our plan." ADDITIONAL FINANCIAL HIGHLIGHTS o Cash flow from operations for the quarter ended March 31, 2003 was $2,539,126 compared to $247,775 in the prior year quarter. o Cash increased to $26,829,821 from $17,031,422 at June 30, 2002, primarily as a result of positive cash flow from operations and the fact that no federal income taxes were payable as a result of tax loss carryforwards and current deductions from the exercise of options by employees. o Operating margin for the quarter ended March 31, 2003 was 16%, compared to 8% in the prior year quarter as a result of increased sales, increased gross margins, and our ability to control operating expenses as we grew revenues. CUSTOMER WINS AND MARKET DATA o Specific customers sold during the quarter included Air France, Aventis, City of Wichita, Cook County, Dane County, Dufferin Peale Schools, Electrolux, Emory University Hospitals, ESPN, Federated Stores, Fenwick-Linde, Goodyear Tire and Rubber, Haverty's Furniture, HMV, IKEA, Jamestown Community College, Keystone Automotive, Lee Memorial Health System, Panalpina, State of California Dept of Human Services, Sunbelt Rentals, SuperValu Stores, UK Ministry of Defense, University of Glasgow and University of North Carolina Hospitals. o According to the most recent IDC report on the thin client market, Neoware gained more market share in 2002 than any other supplier, more than doubled its market share compared to one year ago, and grew at more than nine times the market's rate to become the number two supplier of thin client appliances and software in the US, Europe, and worldwide. "As demonstrated by these results, Neoware has a strong, profitable business," Mr. Kantrowitz commented. "While we're not immune from the economic environment or capital equipment investment trends, it is clear from our performance that Neoware's products and business model will enable us to grow revenues while generating cash flow that can be invested in our business to drive additional growth." "As demonstrated by this quarter, our operating results in any single quarter may vary as a result of the timing of individual transactions; however we believe that we are well positioned to continue to increase revenues and earnings into fiscal 2004. The fact that we deliver demonstrable cost savings to our customers - both up-front and in total ownership cost - gives us the right message for the current cost-constrained IT spending climate." Mr. Kantrowitz concluded. About Neoware Neoware provides software, services, and solutions to enable Appliance Computing, a proven Internet-based computing architecture targeted at business customers, that is designed to be simpler and easier than traditional PC-based computing. Neoware's software and management tools power and manage a new generation of smart computing appliances that utilize the benefits of open, industry-standard technologies to create new alternatives to personal computers used in business and a wide variety of proprietary business devices. Neoware's products are designed to run local applications for specific vertical markets, plus allow access across a network to multi-user Windows servers, Linux servers, mainframes, minicomputers, and the Internet. Computing appliances that run and are managed by Neoware's software offer the cost benefits of industry-standard hardware and software, easier installation, and have lower up-front, maintenance, and administrative costs than proprietary or PC-based alternatives. More information about Neoware can be found on the Web at www.neoware.com or via email at invest@neoware.com. Neoware is based in King of Prussia, PA. # # # This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding: the growth of our business; our products and business model enabling us to increase revenues and cash flow; our expectation of increases in revenues and earnings in fiscal 2004; our position as the leading supplier of software, products, services and solutions for the Appliance Computing market; the benefits of our business model; and our competitive advantage. These forward-looking statements involve risks and uncertainties. Factors that could cause actual results to differ materially from those predicted in any such forward-looking statement include our ability to continue to lower our costs, our timely development and customers' acceptance of our Appliance Computing products, including acceptance by IBM and NCD customers, NCD's creditworthiness as a distributor of our products in Europe, pricing pressures, rapid technological changes in the industry, growth of the Appliance Computing market, increased competition, our ability to attract and retain qualified personnel, our ability to identify and successfully consummate future acquisitions; adverse changes in customer order patterns, adverse changes in general economic conditions in the U.S. and internationally, risks associated with foreign operations and political and economic uncertainties associated with current world events. These and other risks are detailed from time to time in Neoware's periodic reports filed with the Securities and Exchange Commission, including, but not limited to, its report on Form 10-K for its fiscal year ended June 30, 2002 and Form 10-Q for the quarter ended December 31, 2002. Neoware is a registered trademark of Neoware Systems, Inc. All other names products and services are trademarks or registered trademarks of their respective holders. CONTACT: Vince Dolan, VP-Finance Neoware Systems, Inc. 610-277-8300 invest@neoware.com NEOWARE SYSTEMS, INC. CONSOLIDATED BALANCE SHEETS
ASSETS March 31, 2003 June 30, 2002 (Unaudited) ------------------- ---------------- CURRENT ASSETS: Cash and cash equivalents $26,829,821 $17,031,422 Marketable securities - 183,333 Accounts receivable, net 9,315,627 9,520,558 Inventories 1,127,061 1,040,851 Prepaid expenses and other 954,156 551,598 Deferred income taxes 570,455 1,394,864 ----------- ----------- Total current assets 38,797,120 29,722,626 Property and equipment, net 562,542 622,235 Goodwill and other intangibles 11,240,494 11,568,940 Note receivable 254,269 263,732 Deferred income taxes 387,651 173,648 Capitalized software, net 25,679 47,779 ----------- ----------- $51,267,755 $42,398,960 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $3,430,942 $3,111,164 Accrued expenses 2,149,628 2,136,776 Capital lease obligations 67,065 63,037 Deferred revenue 628,331 582,290 ----------- ----------- Total current liabilities 6,275,966 5,893,267 ----------- ----------- Capital lease obligations, non-current portion 151,368 204,131 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Preferred stock - - Common stock 13,870 12,936 Additional paid-in capital 44,114,915 40,291,861 Treasury stock (100,000) (100,000) Accumulated other comprehensive income (13,338) (116,672) Retained earnings (deficit) 824,974 (3,786,563) ----------- ----------- Total stockholders' equity 44,840,421 36,301,562 ----------- ----------- $51,267,755 $42,398,960 =========== ===========
NEOWARE SYSTEMS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Nine Months Ended ------------------------------------ -------------------------------------- March 31, March 31, March 31, March 31, 2003 2002 2003 2002 --------------- --------------- ----------------- --------------- Net revenues $13,468,117 $8,368,580 $41,698,573 $20,228,442 Cost of revenues 7,227,380 5,061,893 23,216,958 11,862,736 ----------- ---------- ----------- ----------- Gross profit 6,240,737 3,306,687 18,481,615 8,365,706 ----------- ---------- ----------- ----------- Sales and marketing 2,410,840 1,547,448 6,937,260 4,072,802 Research and development 491,981 352,570 1,300,430 1,027,421 General and administrative 1,119,780 761,656 3,002,480 1,945,930 ----------- ---------- ----------- ----------- Operating expenses 4,022,601 2,661,674 11,240,170 7,046,153 ----------- ---------- ----------- ----------- Operating income 2,218,136 645,013 7,241,445 1,319,553 Impairment charge (300,000) - (300,000) - Interest income, net 83,146 60,045 264,081 255,746 ----------- ---------- ----------- ----------- Income before income taxes 2,001,282 705,058 7,205,526 $1,575,299 Income tax expense (720,461) - (2,593,989) - ----------- ---------- ----------- ----------- Net income $1,280,821 $705,058 $4,611,537 $1,575,299 =========== ========== =========== =========== Basic income per share $0.09 $0.06 $0.34 $0.15 =========== ========== =========== =========== Diluted income per share $0.09 $0.06 $0.31 $0.14 =========== ========== =========== =========== Weighted average number of common shares used in basic earnings per share computation 13,724,625 11,175,240 13,485,220 10,573,863 =========== ========== =========== =========== Weighted average number of common shares used in diluted earnings per share computation 14,704,171 12,509,099 14,712,321 11,326,706 =========== ========== =========== ===========
NEOWARE SYSTEMS, INC CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Nine Months Ended Ended March 31, 2003 March 31, 2003 -------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $1,280,821 $4,611,537 Adjustments to reconcile net income to net cash provided by (used in) operating activities- Loss on investment 300,000 300,000 Deferred income taxes 720,461 2,578,950 Depreciation and amortization 187,892 563,399 Changes in operating assets and liabilities- (Increase) decrease in: Accounts receivable 1,378,182 204,931 Inventories (333,640) (86,210) Prepaid expenses and other (418,428) (415,891) Increase (decrease) in: Accounts payable (842,455) 319,778 Accrued expenses 324,039 12,852 Deferred revenue (57,746) 46,041 ----------- ----------- Net cash provided by operating activities 2,539,126 8,135,387 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of intangible assets (2,114) (46,538) Purchases of property and equipment, net (27,973) (106,623) ----------- ----------- Net cash used in investing activities (30,087) (153,161) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Repayments of capital leases (18,013) (48,735) Expenses for prior issuance of common stock - (122,409) Exercise of stock options and warrants 343,342 1,977,854 Decrease in note receivable - 9,463 ----------- ----------- Net cash provided by financing activities 325,329 1,816,173 ----------- ----------- INCREASE IN CASH AND CASH EQUIVALENTS 2,834,368 9,798,399 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 23,995,453 17,031,422 ----------- ----------- CASH AND CASH EQUIVALENTS, END OF PERIOD $26,829,821 $26,829,821 =========== =========== SUPPLEMENTAL DISCLOSURES: Cash paid for income taxes $- $79,947 Cash paid for interest 8,774 25,963 Cash received for interest 34,364 195,340
EX-99 4 ex99-2.txt EXHIBIT 99.2 Exhibit 99.2 [LOGO OMITTED] PRESS RELEASE Neoware Appoints Keith Schneck Executive Vice President and CFO KING OF PRUSSIA, Pa., April 29, 2003 -- Neoware Systems, Inc. (Nasdaq: NWRE), the leading supplier of award-winning software, services, and managed thin client appliances, today announced that it has appointed Keith Schneck as Executive Vice President and Chief Financial Officer. Mr. Schneck joins Neoware with over 25 years of senior financial and executive management expertise in high growth technology companies and public accounting. Mr. Schneck has held positions as President and Chief Financial Officer for AM Communications and as Chief Operating Officer and Chief Financial Officer of Integrated Circuit Systems. He most recently served as Chief Financial Officer of T-Networks, a venture capital-funded start up company that provides next generation fiber optical components and sub-systems to the telecommunications market. Mr. Schneck is a CPA with over 10 years of public accounting experience with KPMG. During his career, Mr. Schneck has been responsible for a variety of financial and general management functions, including investor relations, finance, operations, acquisitions and integration of acquired operations. In his position as Executive Vice President and Chief Financial Officer for Neoware, Mr. Schneck will be responsible for corporate development, investor relations, financial reporting and financial operations for Neoware. "As Neoware continues to grow, it's critical that we attract the best possible talent to our team, as we believe that our success is the direct result of the dedication and efforts of our people," commented Michael Kantrowitz, Neoware's Chairman and CEO. "Keith brings us significant operational experience in acquisitions and the integration of businesses, as well as in finance, and we look forward to his contributions to the Company." Vince Dolan, Neoware's current Vice President of Finance, will continue in his existing role as Vice President of Finance for approximately six months to assist in the transition, after which he intends to leave the Company to pursue consulting opportunities. "The Board and I have enjoyed working with Vince and appreciate his professionalism and dedication. His contributions to the Company through a period of rapid growth were considerable, and we wish him the best in his future endeavors. "I am very excited to join Neoware, and believe that I can add significant value to the Company," commented Keith Schneck, Neoware's new Executive Vice President and Chief Financial Officer. "With a leadership position in a strong and growing market, superior products and significant financial resources, I believe that Neoware is poised to build on its strong record of success." About Neoware Neoware provides software, services, and solutions to enable Appliance Computing, a proven Internet-based computing architecture targeted at business customers, that is designed to be simpler and easier than traditional PC-based computing. Neoware's software and management tools power and manage a new generation of smart computing appliances that utilize the benefits of open, industry-standard technologies to create new alternatives to personal computers used in business and a wide variety of proprietary business devices. Neoware's products are designed to run local applications for specific vertical markets, plus allow access across a network to multi-user Windows servers, Linux servers, mainframes, minicomputers, and the Internet. Computing appliances that run and are managed by Neoware's software offer the cost benefits of industry-standard hardware and software, easier installation, and have lower up-front, maintenance, and administrative costs than proprietary or PC-based alternatives. More information about Neoware can be found on the Web at www.neoware.com or via email at invest@neoware.com. Neoware is based in King of Prussia, PA. # # # This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding: our CFO's contributions to our company; the strong and growing market for Appliance Computing; Neoware's future success; our position as the leading supplier of software, products, services and solutions for the Appliance Computing market; the benefits of our business model; and our competitive advantage. These forward-looking statements involve risks and uncertainties. Factors that could cause actual results to differ materially from those predicted in any such forward-looking statement include our ability to continue to lower our costs, our timely development and customers' acceptance of our Appliance Computing products, including acceptance by IBM and NCD customers, NCD's creditworthiness as a distributor of our products in Europe, pricing pressures, rapid technological changes in the industry, growth of the Appliance Computing market, increased competition, our ability to attract and retain qualified personnel, our ability to identify and successfully consummate future acquisitions; adverse changes in customer order patterns, adverse changes in general economic conditions in the U.S. and internationally, risks associated with foreign operations and political and economic uncertainties associated with current world events. These and other risks are detailed from time to time in Neoware's periodic reports filed with the Securities and Exchange Commission, including, but not limited to, its report on Form 10-K for its fiscal year ended June 30, 2002 and Form 10-Q for the quarter ended December 31, 2002. Neoware is a registered trademark of Neoware Systems, Inc. All other names products and services are trademarks or registered trademarks of their respective holders. CONTACT: Michael Kantrowitz, Chairman and CEO Neoware Systems, Inc. 610-277-8300 invest@neoware.com -----END PRIVACY-ENHANCED MESSAGE-----