SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] Annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934 for the fiscal year ended December 31, 1998 or
[ ] Transition report pursuant to Section 15(d) of the Securities Exchange
Act of 1934 for the transition period from ______ to _______
0-26994
(Commission File Number)
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
ADVENT SOFTWARE, INC. PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
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B. Name of isuer of the securities held pursuant to the plan and the address
of its principal executive office.
ADVENT SOFTWARE, INC.
301 Brannan Street, Sixth Floor
San Francisco, CA 94107
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ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
Financial Statements and
Supplemental Schedules
Years ended December 31, 1998 and 1997
Table of Contents
Independent Accountants' Report..............................................1-2
Financial Statements:
Statements of Net Assets Available for Plan Benefits...........................3
Statements of Changes in Net Assets Available for Plan Benefits,
With Fund Information.......................................................4
Notes to Financial Statements..................................................5
Supplemental Schedules as of and for the year ended
December 31, 1998 .........................................................10
27a, Part I - Schedule of Assets Held for Investment Purposes
27d, Part V - Schedule of Reportable Transactions
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To the Participants and
Plan Administrator of the
Advent Software, Inc.
Profit Sharing and Employee Savings Plan
INDEPENDENT ACCOUNTANTS' REPORT
We have audited the financial statements and supplemental schedules of
the Advent Software, Inc. Profit Sharing and Employee Savings Plan (the Plan) as
of December 31, 1998 and 1997, and the related statements of changes in net
assets available for plan benefits, with fund information, for the years then
ended. These financial statements and supplemental 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, 1998 and 1997, and the changes in net
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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 statements 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
June 21, 1999
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<PAGE>
ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31,
---------------------------------
1998 1997
---------------- ---------------
Investments, at fair value $8,689,321 $6,307,272
---------------- ---------------
Assets held for investment purposes 8,689,321 6,307,272
Participants' contribution receivable - 37,184
Employer's contribution receivable 406,235 259,803
Other payable (150,392) -
---------------- ---------------
Net assets available for plan benefits $8,945,164 $6,604,259
================ ===============
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<TABLE>
<CAPTION>
ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
For the years ended December 31, 1998 and 1997
Smith Barney
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Advent
Oppenheimer Software,
Employee Ryan Labs Capital Value Line Templeton Inc. GSA S&P
Benefit Reserve Government Value Small-Cap International Common Socially Equity
Deposit Deposit Bond Index Equity Equity Value Equity Stock Responsible Index
Account II Account Fund Fund IV Fund V Fund IX Fund Fund Fund
--------- -------- ---------- --------- ---------- ----------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net assets available
for plan benefits at
December 31, 1996 $199,076 $47,502 $151,594 $1,176,680 $1,259,309 $1,005,425 $58,745 $120,907
--------- -------- --------- ----------- ---------- ----------- --------- ---------
Employer's contribution 12,273 8,990 65,852 74,031 55,791 6,934
Participants'
contributions/
rollovers 51,067 76,413 521,108 512,671 407,295 41,361 96,391
Withdrawals/
distributions (102,740) (33,639) (6,666) (91,482) (130,745) (90,829) (853) (9,706)
Dividends and interest 3,719
Net appreciation in
fair value of
investments 14,767 350,762 253,806 90,401 1,459 38,285
Administrative fees (1,967) (2,217) (21,862) (21,985) (18,412) (483) (977)
Transfers in (out) 78,849 (11,123) (65,259) 1,743 (38,653) 15,335 16,665
--------- -------- --------- ----------- ---------- --------------------- ---------
Increase (decrease) in
net assets 41,201 (33,639) 80,164 759,119 689,521 405,593 56,819 147,592
--------- -------- --------- ----------- ---------- --------------------- ---------
Net assets available
for plan benefits at
December 31, 1997 240,277 13,863 231,758 1,935,799 1,948,830 1,411,018 115,564 268,499
--------- -------- --------- ----------- ---------- --------------------- ---------
Employer's contribution 18,699 11,428 71,749 69,512 60,917 4,219 22,778
Participants'
contributions/
rollovers 116,788 69,922 533,504 485,424 439,227 58,955 216,437 $83,066
Withdrawals/
distributions (26,158) (13,863) (33,301) (191,265) (151,822) (152,654) (9,246) (49,733) 1,781
Dividends and interest 34 1,256 5,386 3,654 2,976 40 1,406
Net loan activities (457) 2,183 (14,650) (6,718) (13,520) (578) (8,070)
Forfeitures 19,627 (1,193) (8,742) (5,656) (5,353) (3,104) (1,881) (28)
Net appreciation
(depreciation)
in fair value of
investments 13,451 25,113 163,527 (148,920) 16,551 105,392 125,372 43,444
Administrative fees (12) (429) (4,876) (4,799) (3,472) (23)
Transfers in (out) 116,983 15,155 (15,527) (166,945) 8,101 14,993 119,664 164,128
--------- -------- --------- ----------- ---------- ----------- --------- --------- ---------
Increase(decrease)in
net assets 258,955 (13,863) 90,134 539,106 73,730 352,773 170,671 425,950 292,391
--------- -------- --------- ----------- ---------- ----------- --------- --------- ---------
Net assets available
for plan benefits at
December 31, 1998 $499,232 $ - $321,892 $2,474,905 $2,022,560 $1,763,791 $286,235 $694,449 $292,391
========= ======== ========= =========== ========== =========== ========= ========= =========
</TABLE>
Table Continued
Participant Contributions
Loans Receivable Total
-------- ------------ --------
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
-------- --------- -----------
Employer's contribution 146,432 405,734
Participants'
contributions/
rollovers (37,184) 1,966,139
Withdrawals/
distributions (626,261)
Dividends and interest 14,752
Net loan activities 41,810 -
Forfeitures (6,330)
Net appreciation
(depreciation)
in fair value of
investments 343,930
Administrative fees (13,611)
Transfers in (out) 256,552
-------- --------- -----------
Increase(decrease)in
net assets 41,810 109,248 2,340,905
-------- --------- -----------
Net assets available
for plan benefits at
December 31, 1998 $183,474 $406,235 $8,945,164
======== ========= ===========
See independent accountants' report and
accompanying notes to financial statements.
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ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
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,
or 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 1998, the Company purchased MicroEdge, Inc. The former eligible
employees of MicroEdge, Inc. could elect to contribute to the Plan as of July 1,
1998, and the plan assets other than the Index Fund were transferred into the
Plan in August 1998 in the approximate amount of $257,000. Assets in the amount
of $30,980 in the Index Fund were transferred in January 1999.
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. Smith
Barney Corporate Trust Company (Smith Barney) is the Plan's trustee. The Plan
paid for administrative expenses through February 1998; subsequently the Company
paid all administrative expenses of the Plan.
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Investments -
Investments of the Plan are held by Smith Barney and invested based solely
upon instructions received from participants.
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, and
changes therein, and disclosure of contingent assets and liabilities. 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 fluctuations and credit risks. 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.
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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 1998 and 1997, the Company
matched 50% of the first $1,000 of 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 decreased
by certain available forfeitures, if any, during the Plan year. The
discretionary contributions for the years ended December 31, 1998 and 1997 were
approximately $250,000 and $117,000, 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 contribution 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 that do not exceed IRS
regulations.
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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, 1998 and 1997 was as follows:
Number of shares Fair value Cost
1998 6,089 $286,235 $188,628
1997 4,174 $115,564 $106,965
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.
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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:
1998 1997
---- ----
Smith Barney:
Employee Benefit Deposit Account II $ 450,575 $ 240,277
Reserve Deposit Account 237,645 13,863
Ryan Labs Government Bond Index Fund 318,904 231,758
Oppenheimer Capital Value
Equity Fund IV 2,456,591 1,935,799
Value Line Small-Cap Equity Fund V 2,017,857 1,948,830
Templeton International
Value Equity Fund IX 1,753,334 1,411,018
Advent Software, Inc. Common Stock Fund 286,235 115,564
GSA Socially Responsible Fund 692,389 268,499
S&P Equity Index Fund 292,317 -
Participant Loans 183,474 141,664
-------------- --------------
8,689,321 6,307,272
Employer's contribution receivable 406,235 259,803
Participants' contribution receivable - 37,184
Other payable (150,392) -
--------------- --------------
Net assets available for
plan benefits $8,945,164 $6,604,259
========== ==========
The ending balances reported in the statements of changes in net assets
available for plan benefits for the years ended December 31, 1998 and 1997 may
differ from those reported above due to adjustments to present the information
on the accrual basis of accounting.
Note 6 - Year 2000 compliance (unaudited):
As the company primarily uses third-party service providers to administer
the Plan, such providers have represented to the Company that their systems are
year 2000 compliant and do not anticipate any significant problems related to
the year 2000 issue.
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<PAGE>
ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
SUPPLEMENTAL SCHEDULES
DECEMBER 31, 1998
ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
<TABLE>
<CAPTION>
E.I.N.: 94-3065325
Plan #: 001
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1998
(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 $450,575 $450,575
Reserve Deposit Account Cash 236,936 236,936
Ryan Labs Government Bond Index Fund Mutual Fund 282,378 318,904
Oppenheimer Capital Value Equity Fund IV Mutual Fund 1,901,782 2,456,591
Value Line Small-Cap Equity Fund V Mutual Fund 1,820,374 2,017,857
Templeton International Value Equity Fund IX Mutual Fund 1,570,514 1,753,334
* Advent Software, Inc. Common Stock Fund Common Stock 188,628 286,944
GSA Socially Responsible Fund Mutual Fund 493,247 692,389
S&P Equity Index Fund Mutual Fund 249,962 292,317
* Participant loans (8% to 11%) Loan Fund 183,474
---------------
Total assets held for investment
purposes $8,689,321
* Parties-in-interest
</TABLE>
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<TABLE>
<CAPTION>
ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
E.I.N.: 94-3065325
Plan #: 001
SCHEDULE OF REPORTABLE TRANSACTIONS
For the year ended December 31, 1998
(a) (b) (c) (d) (g) (h) (i)
Description of asset Current value
inluding interest rate of asset on
and maturity in case Purchase Selling Cost of transaction Net gain
Identity of party involved of a loan) price price asset date or (loss)
- ----------------------------------------------- -------------------- ----------- ----------- ------------ ------------- ----------
- ----------------------------------------------- -------------------- ----------- ----------- ------------ ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Smith Barney Trust Company:
Reserve Deposit Account Cash $3,326,067 $3,326,067 $3,326,067 $ -
Reserve Deposit Account Cash $3,125,723 3,125,723 3,125,723 -
Value Line Small Cap Equity Fund V Mutual Fund 658,289 658,289 658,289 -
Value Line Small Cap Equity Fund V Mutual Fund 454,546 440,243 454,546 14,303
Oppenheimer Capital Value Equity Fund IV Mutual Fund 762,925 762,925 762,925 -
Oppenheimer Capital Value Equity Fund IV Mutual Fund 421,989 332,042 421,989 89,947
Templeton International Value Equity Fund IX Mutual Fund 643,144 643,144 643,144 -
Templeton International Value Equity Fund IX Mutual Fund 329,995 297,543 329,995 32,452
Employee Benefit Deposit Acct II Money Market Fund 434,053 434,053 434,053 -
Employee Benefit Deposit Acct II Money Market Fund 222,847 222,847 222,847 -
GSA Socially Responsible Fund Mutual Fund 358,404 358,404 358,404 -
GSA Socially Responsible Fund Mutual Fund 57,826 34,696 57,826 23,130
</TABLE>
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
ADVENT SOFTWARE, INC.
PROFIT SHARING AND
EMPLOYEE SAVINGS PLAN
Dated: June 29, 1999 By:/S/ IRV H. LICHTENWALD
----------------------
Irv H. Lichtenwald
Title: on behalf of the Plan
Administrator of the Advent Software, Inc.
Profit Sharing and Employee Savings Plan
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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 June 21, 1999, 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, 1998 and 1997, 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 June 21, 1999, 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, 10998 and 1997, included
in the Annual Report on Form 11-K which is filed electronically with the
Securities and Exchange Commission.
MOHLER, NIXON & WILLIAMS
Accountancy Corporation
Campbell, California
June 21, 1999
