-----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, GNo6KrCvsNFUVdQLoFkCWEkwZH6Q4fu6vSETPs98PRgyrDYP9w17FGC6qOG5RreK +uTnvOIX2YDiuEz6DaecSg== 0000950124-98-006860.txt : 19981119 0000950124-98-006860.hdr.sgml : 19981119 ACCESSION NUMBER: 0000950124-98-006860 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981117 FILED AS OF DATE: 19981118 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PC DOCS GROUP INTERNATIONAL INC CENTRAL INDEX KEY: 0000916691 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] STATE OF INCORPORATION: A6 FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 6-K SEC ACT: SEC FILE NUMBER: 333-05572 FILM NUMBER: 98754570 BUSINESS ADDRESS: STREET 1: 2005 SHEPPARD AVE EAST STREET 2: SUITE 800 CITY: TORONTO ONTARIO CANA STATE: A6 BUSINESS PHONE: 4164454823 MAIL ADDRESS: STREET 1: 2005 SHEPPARD AVENUE STREET 2: SUITE 800 CITY: TORONTO STATE: A6 FORMER COMPANY: FORMER CONFORMED NAME: QUARTEX CORP DATE OF NAME CHANGE: 19931228 6-K 1 FORM 6-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN ISSUER Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 November 17, 1998 PC DOCS GROUP INTERNATIONAL INC. (Exact name of registrant as specified in its charter) 2005 SHEPPARD AVENUE EAST SUITE 800 TORONTO, ONTARIO, CANADA M2J 5B4 (Address of principal executive offices) (416) 497-7700 (Registrant's telephone number, including area code) [Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F ....X....... Form 40-F ............ [Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes ............ No ......X...... 2 [LETTERHEAD] INTERIM REPORT FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 TO THE SHAREHOLDERS PC DOCS Group International Inc., a leader in enterprise document and knowledge management systems and information management systems for professionals, reports the financial results for its First Quarter ended September 30, 1998. FINANCIAL HIGHLIGHTS (U.S. GAAP, CANADIAN DOLLARS) Revenues for the First Quarter were $37.5 million, a 45% increase over the $25.8 million for the same quarter last year. In particular, software license revenues rose by 39% to $18.3 million this quarter from $13.2 million in the same quarter last year. Net earnings were $0.4 million, compared to $0.6 million for the First Quarter last year. Fully diluted earnings per share were $0.01 compared to $0.03 in the same quarter last year. The Company maintained its strong financial position including cash of approximately $58.4 million, working capital of $69.8 million, shareholders' equity of $82.4 million and total assets of $174.6 million. OPERATING HIGHLIGHTS The Company's DOCS Open Enterprise Suite and Web-enabled CyberDOCS products were selected as the core software components for the national "RDIMS" (Records, Document, Imaging Management Systems) project for the Canadian Federal Government. As a result, all Canadian Government departments will be able to readily acquire the RDIMS solution based on PC DOCS products. This contract is the largest document/knowledge management deal ever signed in the industry and it confirms the strength of our technology and our enterprise solutions. Just after the end of the quarter, Arthur Andersen and Unisys, members of the PC DOCS/Fulcrum Global Enterprise Support Partners program, added PC DOCS/Fulcrum's knowledge management solution to further enhance and complement their current document/knowledge management and workflow solutions for both internal use and client offerings. 3 For the second consecutive year, PC DOCS/Fulcrum won Microsoft's Annual Industry Solution Award in Electronic Document Management Systems (EDMS) for the Best Document Management Solution. This award is co-sponsored by Microsoft Corporation and KM (Knowledge Management) World magazine. DOCS/Fulcrum software also was honored in the ninth annual Giga Excellence Awards competition for Europe, Asia/Pacific Rim and Africa. The application for Australian law firm, Phillips Fox won the silver medal for excellence in innovation and implementation in the Document/Knowledge Management category. The awards are sponsored by Giga Information Group and the Workflow and Reengineering International Association. New customers this quarter included, Columbia Gas Transmission Company, Port Authority of New York and New Jersey, System Software Associates, American Electric Power Services, a major US Bank and one of the world's largest network providers. International wins included British Broadcasting Corporation and Alcatel Australia Limited, a leading telecommunications company. CORPORATE HIGHLIGHTS The Company repurchased a total of 441,500 shares for approximately $2.7 million under its share repurchase plan. The total number of shares that the Company has repurchased since the initial plan was instituted is 955,300 shares. The Company continues to believe that its shares are undervalued and that it may be advantageous to continue its share repurchase plan. The total number of shares the Company will repurchase depends on a number of factors including the price at which the shares can be acquired and other cash requirements of the Company. Craig Wallace was appointed president & chief operating officer of our PC DOCS, Inc. division. Mr. Wallace has held several notable senior management positions at large technology companies as well as being president of PC DOCS' Internet division. The Company announced the acquisition of Globus International Quality Group, which provides research, analysis and internet-based services and programs. Globus also develops and publishes an international database of organizations that have achieved registration to recognized management standards such as ISO 9000 and ISO 14000. Every organization that seeks to achieve and maintain ISO registration must document their business policies and procedures. This presents PC DOCS with a unique opportunity to sell its document/knowledge management solutions. At the end of October, Ben Swirsky was appointed Chairman of PC DOCS Group. Mr. Swirsky has been a Director of the Company since December 1997. He is currently Chairman and Chief Executive Officer of Nextel Group Inc., a telecommunications company and was formerly President and Chief Executive Officer of Slater Steel Inc., a diversified industrial company. Prior to 1994, he was President and Chief Executive Officer of Bramalea Limited, one of North America's largest real estate development companies. Mr. Swirsky is also a Director of The Four Seasons Hotels Inc., and CamVec Inc., as well as several international companies. With the tremendous growth that PC DOCS Group has undergone over the past few years and the 4 opportunities and challenges ahead, Mr. Swirsky's experience with large international growth companies will be invaluable to the Company going forward. COMMENTARY Typically our First Quarter is soft because of the summer months and although our revenues increased over last year, our European and Asian sales were below our expectations. This could be due to the apparent slowdown of the global economy or an aberration for this quarter. We continue to focus on our geographic and vertical market strategies, the integration of PC DOCS/Fulcrum operations and products and other growth opportunities. FORWARD-LOOKING STATEMENTS Certain of the above statements are forward-looking statements that involve risks and uncertainties. Actual results could differ materially as a consequence of a number of factors, including: fluctuations in the Company's operating results due to product demand, length of the sales cycle, size and timing of individual customer transactions and similar matters; changes in the client/server application software market, including technology change, changes in customer requirements, frequent new product introductions by competitors and emerging standards; dependence of the Company on the legal services market; reliance by the Company on its third-party resellers; dependence of the Company on its key management; uncertainties relating to acquisitions, including operational disruptions, unexpected operating expenses and losses, and expenses associated with the integration of such acquisitions; and other factors set forth in the Company's Securities and Exchange Commission and Ontario Securities Commission reports and filings. (signed) Rubin Osten Chief Executive Officer PC DOCS GROUP INTERNATIONAL INC. 2005 Sheppard Avenue East, Suite 800, Toronto, Ontario, Canada Telephone: (416) 497-7700 Fax: (416) 499-7777 Burlington, Massachusetts Ottawa, Ontario Sydney, Australia New York, New York Toronto, Ontario Osaka, Japan San Francisco, California London, England Tokyo, Japan Tallahassee, Florida Paris, France Singapore Washington, DC Frankfurt, Germany Munich, Germany Milan, Italy Rome, Italy
5 PC DOCS GROUP INTERNATIONAL INC. CONSOLIDATED STATEMENTS OF INCOME U.S. GAAP In Accordance with U.S. Generally Accepted Accounting Principles (Canadian dollars, in thousands except per share amounts) for the periods ended September 30
Year % change 1998 % of Rev. 1997 % of Rev. 98 vs. 97 REVENUES Software sales $ 18,398 49% $ 13,241 51% 39% Software support, services and other sales 18,372 49% 11,033 43% 67% Hardware sales 76 0% 783 3% -90% Interest income and other revenues 662 2% 774 3% -14% -------- -------- TOTAL REVENUES 37,508 100% 25,831 100% 45% -------- -------- COST OF SALES 2,445 7% 3,208 12% 24% -------- -------- GROSS PROFIT 35,063 93% 22,623 88% 55% -------- -------- EXPENSES Selling and marketing 11,690 31% 8,059 31% -45% Support and services 7,241 19% 3,496 14% -107% Research and development 7,171 19% 3,582 14% -100% General and administration 4,970 13% 4,121 16% -21% -------- -------- TOTAL EXPENSES 31,072 83% 19,258 75% -61% -------- -------- EARNINGS BEFORE DEPRECIATION AND INTEREST 3,991 11% 3,365 13% 19% Depreciation of fixed assets 1,804 5% 988 4% -83% Amortization of product development costs 41 0% 1,325 5% 97% Amortization of acquired software 621 2% - 0% Amortization of goodwill 139 0% 59 0% -136% Interest on long-term debt 524 1% 17 0% -2982% -------- -------- EARNINGS (LOSS) BEFORE INCOME TAXES AND MINORITY INTEREST 862 2% 976 4% Income taxes 495 1% 393 2% -26% -------- -------- NET EARNINGS (LOSS) $ 367 1% $ 583 2% -37% ======== ======== EARNINGS (LOSS) PER SHARE Basic $ 0.02 $ 0.03 -47% Diluted 0.01 $ 0.03 Average number of shares, basic (000's) 23,577 19,918 18% Average number of shares, diluted (000's) 24,606 21,285 16%
6 PC DOCS GROUP INTERNATIONAL INC. CONSOLIDATED BALANCE SHEETS U.S. GAAP In Accordance with U.S. Generally Accepted Accounting Principles (Canadian dollars, in thousands)
as of SEPTEMBER 30 June 30 1998 1998 UNAUDITED audited ASSETS Current Cash and short-term investments $ 58,448 $ 62,537 Trade receivables 52,664 65,717 Unbilled receivables 13,508 11,146 Prepaid expenses 7,999 8,039 Other assets 7,178 - Loan receivable - - --------- --------- 139,797 147,439 --------- --------- Fixed assets 13,748 13,813 Product development costs 1,859 1,832 Acquired software 2,390 3,011 Deferred income taxes 13,192 12,695 Investment - 2,762 Goodwill 3,602 3,742 --------- --------- $ 174,588 $ 185,294 ========= ========= LIABILITIES Current Accounts payable and accrued liabilities $ 40,316 $ 55,299 Deferred revenues 29,667 25,548 --------- --------- 69,983 80,847 --------- --------- Long-term debt 21,882 22,044 Minority interest 297 297 --------- --------- 92,162 103,188 --------- --------- SHAREHOLDERS' EQUITY Share capital, 23,259,838 shares outstanding (June 30 - 23,644,147) 143,779 146,456 Cumulative translation adjustments 5,001 2,371 Retained earnings (deficit) (66,354) (66,721) --------- --------- 82,426 82,106 --------- --------- $ 174,588 $ 185,294 ========= =========
7 PC DOCS GROUP INTERNATIONAL INC. CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. GAAP In Accordance with U.S. Generally Accepted Accounting Principles (Canadian dollars, in thousands except per share amounts) for the periods ended September 30
Year 1998 1997 UNAUDITED unaudited OPERATING ACTIVITIES Net earnings $ 367 $ 583 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 2,605 2,372 Loss on disposal of fixed assets 9 - Decrease in accounts receivable 13,053 2,003 Increase in unbilled receivables (2,362) (1,537) Decrease (increase) in prepaid expenses 2,803 (187) Increase in other assets (7,178) - Increase in deferred income taxes (497) (60) Decrease in accounts payable and accrued liabilities (14,962) (2,146) Increase in deferred revenues 4,119 684 -------- -------- Net cash provided by (used for) operating activities (2,043) 1,712 -------- -------- INVESTING ACTIVITIES Increase in loan receivable - (386) Additions to fixed assets (1,357) (1,616) Additions to product development costs - (2,210) Increase in investment - (2,778) Cumulative translation adjustments 2,213 45 -------- -------- Net cash provided by (used for) investing activities 856 (6,945) -------- -------- FINANCING ACTIVITIES Decrease in long-term debt (204) (242) Repurchase of common stock (2,749) - Net proceeds from issuance of common stock 51 34 -------- -------- Net cash used for financing activities (2,902) (208) -------- -------- DECREASE IN CASH AND CASH EQUIVALENTS (4,089) (5,441) Cash and cash equivalents Beginning of period 62,537 89,708 -------- -------- END OF PERIOD $ 58,448 $ 84,267 ======== ========
8 PC DOCS GROUP INTERNATIONAL INC. CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) CANADIAN GAAP In Accordance with Canadian Generally Accepted Accounting Principles (Canadian dollars, in thousands except per share amounts) for the periods ended September 30
Year 1998 1997 UNAUDITED unaudited REVENUES Software sales $ 18,398 $ 13,241 Software support, services and other sales 18,372 11,033 Hardware sales 76 783 Interest income and other revenues 662 774 -------- -------- TOTAL REVENUES 37,508 25,831 -------- -------- COST OF SALES 2,445 3,208 -------- -------- GROSS PROFIT 35,063 22,623 -------- -------- EXPENSES Selling and marketing 11,690 8,059 Support and services 7,241 3,496 Research and development 7,171 3,582 General and administration 4,970 4,121 -------- -------- TOTAL EXPENSES 31,072 19,258 -------- -------- EARNINGS BEFORE AMORTIZATION AND INTEREST 3,991 3,365 Amortization 4,399 2,372 Interest on long-term debt 524 17 -------- -------- EARNINGS (LOSS) BEFORE INCOME TAXES (932) 976 Income tax expense 495 393 -------- -------- NET EARNINGS (LOSS) $ (1,427) $ 583 ======== ======== EARNINGS (LOSS) PER SHARE Basic $ (0.06) $ 0.03 Fully diluted Antidilutive $ 0.03 Average number of shares, basic (000's) 23,577 19,918 Average number of shares, fully diluted (000's) 28,104 23,382
9 PC DOCS GROUP INTERNATIONAL INC. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION CANADIAN GAAP In Accordance with Canadian Generally Accepted Accounting Principles (Canadian dollars, in thousands )
as of SEPTEMBER 30 June 30 1998 1998 UNAUDITED unaudited ASSETS Current Cash and short-term investments $ 58,448 $ 62,537 Trade receivables 52,664 65,717 Unbilled receivables 13,508 11,146 Prepaid expenses 7,999 8,039 Other assets 7,178 - Loan receivable - - -------- -------- 139,797 147,439 -------- -------- Fixed assets 13,748 13,813 Product development costs 1,859 1,832 Acquired software 2,390 3,011 Deferred income taxes 13,192 12,695 Investment - 2,762 Goodwill and purchased research and development 49,927 51,860 -------- -------- $220,913 $233,412 ======== ======== LIABILITIES Current Accounts payable and accrued liabilities $ 40,312 $ 55,292 Deferred revenues 29,667 25,548 -------- -------- 69,979 80,840 -------- -------- Long-term debt 21,882 22,044 Minority interest 297 297 -------- -------- 92,158 103,181 -------- -------- SHAREHOLDERS' EQUITY Share capital, 23,259,838 shares outstanding (June 30 - 23,644,147) 142,008 144,688 Cumulative translation adjustments 5,283 2,652 Retained earnings (deficit) (18,536) (17,109) -------- -------- 128,755 130,231 -------- -------- $220,913 $233,412 ======== ========
10 PC DOCS GROUP INTERNATIONAL INC. CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION CANADIAN GAAP In Accordance with Canadian Generally Accepted Accounting Principles (Canadian dollars, in thousands except per share amounts) for the periods ended September 30
Year 1998 1997 UNAUDITED unaudited CASH FROM (FOR) OPERATING ACTIVITIES Net earnings (loss) $ (1,427) $ 583 Items not affecting cash Amortization 4,399 2,372 Loss on disposal of fixed assets 9 - Deferred income taxes (497) (60) -------- -------- 2,484 2,895 Changes in non-cash working capital items relating to operations Trade receivables 13,053 2,003 Unbilled receivables (2,362) (1,537) Prepaid expenses 40 (187) Other assets (7,178) - Accounts payable and accrued liabilities (14,980) (2,146) Deferred revenues 4,119 684 -------- -------- (4,824) 1,712 -------- -------- CASH FROM (FOR) INVESTING ACTIVITIES Loan receivable - (386) Additions to fixed assets (1,357) (1,616) Additions to product development costs - (2,210) Increase in investment 2,762 (2,778) Cumulative translation adjustments 2,214 45 -------- -------- 3,619 (6,945) -------- -------- CASH FROM (FOR) FINANCING ACTIVITIES Decrease in long-term debt (204) (242) Share capital issued for acquisition 18 - Repurchase of common shares (2,749) - Share capital issued for cash, net of expenses 51 34 -------- -------- (2,884) (208) -------- -------- DECREASE IN CASH AND SHORT-TERM INVESTMENTS (4,089) (5,441) CASH AND SHORT-TERM INVESTMENTS Beginning of period 62,537 89,708 -------- -------- End of period $ 58,448 $ 84,267 ======== ========
11 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. PC DOCS GROUP INTERNATIONAL INC. By /s/ Martin Day --------------- Martin Day General Counsel Date November 17, 1998 -----END PRIVACY-ENHANCED MESSAGE-----