SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] Annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934 for the fiscal year ended December 31, 1997 or
[ ] Transition report pursuant to Section 15(d) of the Securities Exchange
Act of 1934 for the transition period from ______ to _______
Commission File Number: 0-26994
A. Full title of the plan and address of the plan, if different from that of
issuer named below:
ADVENT SOFTWARE, INC. PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
B: Name of issuer of the securities held pursuant to the plan and address of its
principal executive office:
ADVENT SOFTWARE, INC.
301 Brannan Street, Sixth Floor
San Francisco, CA 94107
<PAGE>
ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
Financial Statements and
Additional Information
December 31, 1997 and 1996
<PAGE>
ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
Financial Statements and
Supplemental Schedules
Years ended December 31, 1997 and 1996
Table of Contents
Independent Accountants' Report ..............................................4
Financial Statements:
Statements of Net Assets Available for Plan Benefits .........................5
Statements of Changes in Net Assets Available for Plan Benefits,
With Fund Information......................................................6
Notes to Financial Statements.................................................7
Supplemental Schedules as of and for the year ended
December 31, 1997:
Schedule of Assets Held for Investment Purposes..............................13
Schedule of Reportable Transactions..........................................14
<PAGE>
To the Participants and
Plan Administrator of the
Advent Software, Inc.
Profit Sharing and Employee Savings Plan
INDEPENDENT ACCOUNTANTS' REPORT
We have audited the statements of net assets available for plan
benefits of the Advent Software, Inc. Profit Sharing and Employee Savings Plan
(the Plan) as of December 31, 1997 and 1996, and the related statements of
changes in net assets available for plan benefits for the years then ended.
These financial statements and schedules are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Plan's management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan benefits of
the Plan as of December 31, 1997 and 1996, and the changes in net assets
available for plan benefits for the years then ended in conformity with
generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental information is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements but is supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. This supplemental
information is the responsibility of the Plan's management. The fund information
in the statement of changes in net assets available for plan benefits is
presented for purposes of additional analysis rather than to present the changes
in net assets available for plan benefits for each fund. The supplemental
information and fund information have been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
MOHLER, NIXON & WILLIAMS
Accountancy Corporation
Campbell, California
May 5, 1998
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<PAGE>
ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
SUPPLEMENTAL SCHEDULES
DECEMBER 31, 1997
ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31,
-------------------------
1997 1996
---------- ----------
Investments, at fair value ......................... $6,307,272 $4,144,656
---------- ----------
Assets held for investment purposes ...... 6,307,272 4,144,656
Participants' contribution receivable .............. 37,184
Employer's contribution receivable ................. 259,803 223,871
---------- ----------
Net assets available for plan benefits ... $6,604,259 $4,368,527
========== ==========
See independent accountants' report and
accompanying notes to financial statements.
-5-
<PAGE>
ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE
FOR PLAN BENEFITS, WITH FUND INFORMATION
For the years ended December 31, 1997 and 1996
<CAPTION>
Charles Schwab Smith Barney
-------------------------------------------------------- ---------------------------
Vanguard Vanguard
Long-term Vanguard World Intl Employee
Money Corporate Index TR 500 Growth Benefit Reserve
Market Bond Portfolio Portfolio Deposit Deposit
Fund Fund Fund Fund Account II Account
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net assets available for plan
benefits at December 31, 1995 .... $ 144,120 $ 274,760 $ 1,129,653 $ 843,841 $ 0 $ 0
----------- ----------- ----------- ----------- ----------- -----------
Employer's contribution ............. 11,390 18,295 75,198 55,557 -- --
Participants' contributions/rollovers 23,147 53,070 318,114 230,321 6,443 46,945
Withdrawals/distributions ........... (231) (15,558) (57,220) (36,916) (32,314) --
Dividends and interest .............. 2,955 13,023 11,825 1,078 2,956 --
Net appreciation (depreciation) in
fair value of investments ........ -- (27,636) 24,805 51,628 -- --
Administrative fees ................. (833) (1,933) (8,544) (6,316) (18) --
Transfers in (out) .................. (180,548) (314,021) (1,493,831) (1,139,193) 222,009 557
----------- ----------- ----------- ----------- ----------- -----------
Increase (decrease) in net assets ... (144,120) (274,760) (1,129,653) (843,841) 199,076 47,502
----------- ----------- ----------- ----------- ----------- -----------
Net assets available for plan
benefits at December 31, 1996 .... -- -- -- -- 199,076 47,502
----------- ----------- ----------- ----------- ----------- -----------
Employer's contribution ............. -- -- -- -- 12,273 --
Participants' contributions/rollovers -- -- -- -- 51,067 --
Withdrawals/distributions ........... -- -- -- -- (102,740) (33,639)
Dividends and interest .............. -- -- -- -- 3,719 --
Net appreciation in fair value
of investments ................... -- -- -- -- -- --
Administrative fees ................. -- -- -- -- (1,967) --
Transfers in (out) .................. -- -- -- -- 78,849 --
----------- ----------- ----------- ----------- ----------- -----------
Increase (decrease) in net assets ... -- -- -- -- 41,201 (33,639)
----------- ----------- ----------- ----------- ----------- -----------
Net assets available for plan
benefits at December 31, 1997 .... $ -- $ -- $ -- $ -- $ 240,277 $ 13,863
=========== =========== =========== =========== =========== ===========
Smith Barney (Continued)
--------------------------------------------------------
Advent GSA
Government Value Small-Cap International Software, Socially
Bond Index Equity Equity Value Equity Inc. Common Responsible
Fund Fund IV Fund V Fund IX Stock Fund Fund
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net assets available for plan
benefits at December 31, 1995 .... $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
----------- ----------- ----------- ----------- ----------- -----------
Employer's contribution ............. -- -- -- -- -- --
Participants' contributions/rollovers 23,204 180,205 236,056 145,642 10,685 19,072
Withdrawals/distributions ........... (7,745) (9,025) (12,679) (76,497) (3,106) (4,635)
Dividends and interest .............. -- -- -- -- -- --
Net appreciation (depreciation) in
fair value of investments ........ 5,791 152,230 108,295 129,213 11,524 11,999
Administrative fees ................. (6) (62) (43) (40) -- (24)
Transfers in (out) .................. 130,350 853,332 927,680 807,107 39,642 94,495
----------- ----------- ----------- ----------- ----------- -----------
Increase (decrease) in net assets ... 151,594 1,176,680 1,259,309 1,005,425 58,745 120,907
----------- ----------- ----------- ----------- ----------- -----------
Net assets available for plan
benefits at December 31, 1996 .... 151,594 1,176,680 1,259,309 1,005,425 58,745 120,907
----------- ----------- ----------- ----------- ----------- -----------
Employer's contribution ............. 8,990 65,852 74,031 55,791 -- 6,934
Participants' contributions/rollovers 76,413 521,108 512,671 407,295 41,361 96,391
Withdrawals/distributions ........... (6,666) (91,482) (130,745) (90,829) (853) (9,706)
Dividends and interest .............. -- -- -- -- -- --
Net appreciation in fair value
of investments ................... 14,767 350,762 253,806 90,401 1,459 38,285
Administrative fees ................. (2,217) (21,862) (21,985) (18,412) (483) (977)
Transfers in (out) .................. (11,123) (65,259) 1,743 (38,653) 15,335 16,665
----------- ----------- ----------- ----------- ----------- -----------
Increase (decrease) in net assets ... 80,164 759,119 689,521 405,593 56,819 147,592
----------- ----------- ----------- ----------- ----------- -----------
Net assets available for plan
benefits at December 31, 1997 .... $ 231,758 $ 1,935,799 $ 1,948,830 $ 1,411,018 $ 115,564 $ 268,499
=========== =========== =========== =========== =========== ===========
Participant Contributions
Loans Receivable Total
----------- ----------- -----------
<S> <C> <C> <C>
Net assets available for plan
benefits at December 31, 1995 .... $ 72,517 $ 168,353 $ 2,633,244
----------- ----------- -----------
Employer's contribution ............. -- 55,518 215,958
Participants' contributions/rollovers -- -- 1,292,904
Withdrawals/distributions ........... (11,519) -- (267,445)
Dividends and interest .............. 11,999 -- 43,836
Net appreciation (depreciation) in
fair value of investments ........ -- -- 467,849
Administrative fees ................. -- -- (17,819)
Transfers in (out) .................. 52,421 -- --
----------- ----------- -----------
Increase (decrease) in net assets ... 52,901 55,518 1,735,283
----------- ----------- -----------
Net assets available for plan
benefits at December 31, 1996 .... 125,418 223,871 4,368,527
----------- ----------- -----------
Employer's contribution ............. -- 35,932 259,803
Participants' contributions/rollovers -- 37,184 1,743,490
Withdrawals/distributions ........... -- -- (466,660)
Dividends and interest .............. 13,803 -- 17,522
Net appreciation in fair value
of investments ................... -- -- 749,480
Administrative fees ................. -- -- (67,903)
Transfers in (out) .................. 2,443 -- --
----------- ----------- -----------
Increase (decrease) in net assets ... 16,246 73,116 2,235,732
----------- ----------- -----------
Net assets available for plan
benefits at December 31, 1997 .... $ 141,664 $ 296,987 $ 6,604,259
=========== =========== ===========
</TABLE>
See independent accountants' report and
accompanying notes to financial statements.
-6-
<PAGE>
ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1996
Note 1 - The Plan and its significant accounting policies:
The following description of the Advent Software, Inc. (the Company)
Profit Sharing and Employee Savings Plan (the Plan) provides only general
information. Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
The Plan is a defined contribution plan that was established in 1988 by the
Company to provide benefits to eligible employees. The Plan covers all employees
of the Company who are not: 1) otherwise covered by a collective bargaining
agreement, 2) employees of affiliated employers who have not adopted the Plan,
and 3) independent contractors. Plan entry dates are the first day of the Plan
year and the first day of the seventh month of the Plan year.
During 1996, the Company purchased Data Exchange, Inc. The former eligible
employees of Date Exchange, Inc. could elect to contribute in the Plan as of
July 1, 1996.
The Plan administrator intends that the Plan is currently designed and
operated in compliance with the applicable requirements of the Internal Revenue
Code (Code) and the provisions of the Employee Retirement Income Security Act of
1974 (ERISA).
Administration -
The Company has appointed an Administrative Committee (the Committee)
to manage the day-to-day operation and administration of the Plan. A third-party
administrator processes and maintains the records of participant data. The
Company had contracted with The Charles Schwab Trust Company (Charles Schwab) to
act as the trustee. Effective July 1, 1996, Smith Barney Corporate Trust Company
(Smith Barney) was appointed trustee of the Plan. A portion of the expenses
incurred for administering the Plan are paid by the Company.
Investments -
Investments of the Plan are held by Smith Barney and Charles Schwab and
invested based solely upon instructions received from participants. During 1996,
Company common stock became an investment option.
-7-
<PAGE>
The Plan's investment in mutual funds, money market funds and the
Company stock fund are valued at fair value as of the last day of the Plan year,
as measured by quoted market prices.
Vesting -
Participants are immediately vested in their salary deferral, employer
matching, and rollover contributions and related earnings. Participants vest
ratably and are fully vested in the employer's profit sharing contribution
allocated to their accounts after six years of credited service. Participants
become fully vested upon death, attainment of normal retirement age, disability
and separation of service.
Income taxes -
The Plan has been amended since receiving its latest favorable
determination letter dated December 1, 1993. However, the Company intends that
the Plan continue to qualify under the applicable requirements of the Code and
related state statutes, and remains exempt from federal income and state
franchise taxes.
Estimates -
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Risks and uncertainties -
The Plan provides for various investment options in any combination of
stocks, bonds, fixed income securities, mutual funds and other investment
securities. Investment securities are exposed to various risks, such as interest
rate, market and credit. Due to the level of risk associated with certain
investment securities, it is at least reasonably possible that changes in risks
in the near term would materially affect participants' account balances and the
amounts reported in the statements of net assets available for plan benefits and
the statements of changes in net assets available for plan benefits.
-8-
<PAGE>
Note 2 - Participation and benefits:
Participant contributions -
Participants may elect to have the Company contribute a percentage, up
to 15%, of their eligible pre-tax compensation up to the amount allowable under
the Code. Participants who elect to have the Company contribute a portion of
their compensation to the Plan agree to accept an equivalent reduction in
taxable compensation. Contributions withheld are invested in accordance with the
participant=s direction and are allocated to funds in 1% increments.
Participants are also allowed to make rollover contributions of amounts
received from other tax-qualified employer-sponsored retirement plans. Such
contributions are deposited in the appropriate investment funds in accordance
with the participant=s direction and the Plan's provisions.
Employer contributions -
The Company is allowed to make matching contributions as defined in the
Plan and as approved by the Board of Directors. In 1997 and 1996, the Company
matched 50% of the first $1,000 of the eligible participant's deferrals, up to a
maximum of $500. The Plan also allows for a discretionary profit sharing
contribution. The Company's actual profit sharing contribution may be increased
by certain available forfeitures, if any, during the Plan year. The
discretionary contributions for the years ended December 31, 1997 and 1996 were
approximately $117,000 and $121,000, respectively.
Participant accounts -
Each participant's account is credited with the participant's
contribution, Plan earnings or losses, and an allocation of the Company's
contribution, if any. Allocation of the Company's contributions is based on
participant contributions or employee eligible compensation, as defined in the
Plan.
Payment of benefits -
Upon termination, the participant or beneficiary will receive the
benefits in a lump-sum amount or in annual, semiannual, quarterly, or monthly
installments for a period which shall not extend beyond a participant's, or
participant and designated beneficiary's life expectancy. The Plan allows for
automatic lump-sum distribution of account balances which do not exceed $3,500.
-9-
<PAGE>
Loans to participants -
The Plan allows participants to borrow up to the lesser of $50,000 or
50% of their vested account balances. The loans are secured by the participants'
vested balances. Such loans bear interest at the available market financing
rates and must be repaid to the Plan within a five year period, unless the loan
is used for the purchase of a residence in which case the maximum repayment
period may be longer than five years. The specific terms and conditions of such
loans are established by the Committee.
Note 3 - Party in interest transactions:
As allowed by the Plan, participants may elect to invest a portion of
their accounts in the common stock of the Company. Aggregate investment in
Company common stock at December 31, 1997 and 1996 was as follows:
Number of shares Fair value Cost
---------------- ---------- ----
1997 4,174 $115,564 $106,965
1996 1,934 $58,745 $48,220
Note 4 - Plan termination and/or modification:
The Company intends to continue the Plan indefinitely for the benefit
of its participants and their beneficiaries; however, it reserves the right to
terminate and/or modify the Plan at any time by resolution of its Board of
Directors and subject to the provisions of ERISA. In the event the Plan is
terminated in the future, participants would become fully vested in their
accounts.
-10-
<PAGE>
Note 5 - Investments:
The following table includes the fair values of investments and
investment funds that represent 5% or more of the Plan's net assets at December
31:
1997 1996
---- ----
Smith Barney:
Employee Benefit Deposit Account II $ 240,277 $ 199,076
Reserve Deposit Account 13,863 47,502
Government Bond Index Fund 231,758 151,594
Value Equity Fund IV 1,935,799 1,176,680
Small-Cap Equity Fund V 1,948,830 1,259,309
International Value Equity Fund IX 1,411,018 1,005,425
Advent Software, Inc. Common Stock Fund 115,564 58,745
GSA Socially Responsible Fund 268,499 120,907
Participant Loans 141,664 125,418
---------- ----------
6,307,272 4,144,656
Participants' Contribution Receivable 37,184
Employer's Contribution Receivable 259,803 223,871
---------- ----------
Net assets available for
plan benefits $6,604,259 $4,368,527
========== ==========
-11-
<PAGE>
ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
- --------------------------------------------------------------------------------
ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
SUPPLEMENTAL SCHEDULES
DECEMBER 31, 1997
-12-
<PAGE>
ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
E.I.N.: 94-3065325
Plan #: 001
<TABLE>
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1997
<CAPTION>
(a) (b) (c) (d) (e)
Description of investment including
Identity of issue, borrower, lessor, maturity date, rate of interest, Current
or similar party collateral, par or maturity value Cost Value
- ------ ----------------------------------------- ----------------------------------- ---------- ------------
<S> <C> <C> <C> <C>
Smith Barney Trust Company:
Employee Benefit Deposit Account II Money Market Fund $240,277 $240,277
Reserve Deposit Account Cash 13,863 13,863
Government Bond Index Fund Mutual Fund 211,775 231,758
Value Equity Fund IV Mutual Fund 1,470,899 1,935,799
Small-Cap Equity Fund V Mutual Fund 1,602,328 1,948,830
International Value Equity Fund IX Mutual Fund 1,224,913 1,411,018
Advent Software, Inc. Common Stock Fund Common Stock 106,965 115,564
GSA Socially Responsible Fund Mutual Fund 220,095 268,499
* Participant loans (8% to 11%) Loan Fund -- 141,664
-----------
Total assets held for investment
purposes $6,307,272
===========
</TABLE>
* Parties-in-interest
-13-
<PAGE>
ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
E.I.N.: 94-3065325
Plan #: 001
<TABLE>
SCHEDULE OF REPORTABLE TRANSACTIONS
For the year ended December 31, 1997
<CAPTION>
(a) (b) (c) (d) (g) (h) (i)
Description of Current
asset (including value of
interest rate asset on
and maturity in Purchase Selling Cost of transaction Net gain
Identity of party involved case of a loan) price price asset date or (loss)
- ----------------------------------------------- ----------------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Smith Barney Trust Company:
Reserve Deposit Account Cash $2,054,404 $2,054,404 $2,054,404 $ -
Reserve Deposit Account Cash $2,088,042 2,088,042 2,088,042 -
Small Cap Equity Fund V Mutual Fund 621,987 621,987 621,987 -
Small Cap Equity Fund V Mutual Fund 190,737 166,260 190,737 24,477
Value Equity Fund IV Mutual Fund 625,045 625,045 625,045 -
Value Equity Fund IV Mutual Fund 221,149 175,648 221,149 45,501
Int'l Value Equity Fund IX Mutual Fund 499,292 499,292 499,292 -
Int'l Value Equity Fund IX Mutual Fund 186,795 152,301 186,795 34,494
Emp Benefit Deposit Acct II Money Market Fund 191,564 191,564 191,564 -
Emp Benefit Deposit Acct II Money Market Fund 151,272 151,272 151,272 -
GSA Socially Responsible Fund Mutual Fund 121,923 121,923 121,923 -
GSA Socially Responsible Fund Mutual Fund 12,765 10,735 12,765 2,030
</TABLE>
-14-
<PAGE>
ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
- --------------------------------------------------------------------------------
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the Advent Software, Inc.
Profit Sharing and Employee Savings Plan) have duly caused this annual report on
Form 11-K to be signed on its behalf by the undersigned hereunto duly
authorized.
ADVENT SOFTWARE, INC. PROFIT
SHARING AND EMPLOYEE SAVINGS PLAN
Dated: June 30, 1998 By: /S/ IRV H. LICHTENWALD
--------------------------
Irv H. Lichtenwald,
Title: on behalf of the Plan
Adminstrator of the Advent Software, Inc.
Profit Sharing and Employee Savings Plan
-15-
<PAGE>
ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
- --------------------------------------------------------------------------------
EXHIBIT INDEX
EXHIBIT PAGE
NUMBER NUMBER
- ------ ------
23.1 Consent of Independent Accountants 17
-16-
<PAGE>
ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
- --------------------------------------------------------------------------------
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement
of Advent Software, Inc. on Form S-8 of our report dated May 5, 1998, with
respect to the financial statements and schedules of the Advent Software, Inc.
Profit Sharing and Employee Savings Plan included in the Annual Report for the
Plan for the plan years ended December 31, 1997 and 1996, as filed on Form 11-K
with the Securities and Exchange Commission. We also consent to the use of our
name on our report, dated May 5, 1998, with respect to the financial statements
and schedules of the Advent Software, Inc. Profit Sharing and Employee Savings
Plan for the years ended December 31, 1997 and 1996, included in the Annual
Report on Form 11-K which is filed electronically with the Securities and
Exchange Commission.
Campbell, California MOHLER, NIXON & WILLIAMS
May 5, 1998 Accountancy Corporation
-17-
