SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): July 6, 1999
ENGINEERING ANIMATION, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 000-27670 42-1323712
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
2321 North Loop Drive
Ames, Iowa 50010
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (515) 296-9908
None
--------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On July 6, 1999, Engineering Animation, Inc. (the "Company") announced that
it would streamline its operations by exiting its Interactive Games and Science
and Technology business. The Company's exit from the business will be accounted
for as discontinued operations and reflected as such in the Company's future
financial reporting. A reserve for discontinued operations will be created in
the second quarter to cover the costs of exiting those businesses. The Company's
press release describing this event is filed as Exhibit 99.1 to this Report and
is incorporated herein 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 hereunto duly authorized.
Date: July 9, 1999 ENGINEERING ANIMATION, INC.
------------- (Registrant)
/s/ Jamie A. Wade
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Jamie A. Wade
Vice President of Administration
<PAGE>
INDEX TO EXHIBITS
Exhibit Description
99.1 Press release issued
CONTACT: Barry French
(515) 296-8920
[email protected]
EAI TO STREAMLINE OPERATIONS BY EXITING NON-CORE BUSINESSES
Second quarter Software Division revenues expected to be in line with
consensus street expectations for software
AMES, Iowa - (July 6, 1999) - Engineering Animation, Inc. announced today that
it would streamline its operations by exiting its Interactive Games and Science
and Technology businesses. At the same time, the Company announced that it
expects its Software Division revenues for the second quarter to be in line with
consensus street expectations for the Software Division.
"We expect that our Software Division revenues will be on track in the second
quarter," said Matthew Rizai, EAI president and CEO. "We continue to see strong
demand for our enterprise communication, collaboration and analysis solutions as
well as a great deal of excitement about our recently launched e-Vis(TM)
solution for real-time collaboration over the Internet. In the Games and Science
and Technology businesses, our strategy has been to limit our risk by providing
multimedia product development - an EAI core competency - to distributors and
publishers. Today, however, the games and publishing businesses are going
through a period of dramatic change as a result of intense competition,
consolidation, changing platform preferences and adapting to the Internet. As a
developer, we have been feeling the impact of those changes. Given this market
instability, we took a hard look at the future of our Games and Science and
Technology businesses and made the tough decision to exit those operations and
focus our resources on our high-potential enterprise solutions business."
EAI's exit from the Interactive Games and Science and Technology businesses will
be accounted for as discontinued operations and reflected as such in the
Company's future financial reporting. A reserve for discontinued operations will
be created in the second quarter to cover the costs of exiting those businesses.
Over the next nine months, EAI's exit from its Interactive Games and Science and
Technology businesses is expected to result in the reduction of approximately
100 full-time and 30 part-time positions primarily from the Company's Ames, Salt
Lake City and New York City offices. At the same time, EAI is continuing to add
positions in the Company's e-Vis and VisEPM(TM) solution areas, and some of the
displaced employees may be able to transfer to these areas. Employees who are
not able to find new positions within EAI will be offered severance packages and
a variety of support services to aid their transition to new employment.
"This is a hard day for many of us at EAI as this action will impact friends and
colleagues," said Marty Vanderploeg, executive vice president and chief
technology officer of EAI. "We are confident, however, this is the right
decision. EAI's enterprise solutions business - which constituted approximately
80 percent of the Company's 1998 revenues - has grown rapidly in recent years
and now has more than 1,000 customers, including half of the Industry Week top
100 global manufacturing companies. By focusing on our enterprise solutions
business, we can best position EAI for future growth and performance."
Prior to today's announcement, EAI Interactive had three business units - Games,
Science and Technology and Litigation Services. As part of the changes announced
today, EAI will complete current projects and exit fully from the Games and
Science and Technology businesses, while Litigation Services will continue to
operate as a separate business unit. Some of the people and resources from the
discontinued operations will be refocused on providing Internet-based training
and other Internet applications. The use of both the EAI Interactive and EAI
Software Division names will be discontinued and the Company will go to market
as EAI, tightly focused on its enterprise solution business.
The foregoing statements regarding the Company's anticipated results of
operations for the second quarter, the discontinuance of the Interactive Games
and Science and Technology businesses, and the impact of that discontinuance on
the Company's employment levels and results of operations in future periods, are
all forward-looking statements, and actual results or implementations could
differ materially. Among the factors that could cause such differences are the
following: final consolidation of the Company's results for the second quarter;
any accounting adjustments made during the second quarter close; a higher than
expected charge resulting from, among other things, the Company's inability to
collect its receivables in the manner expected, greater than expected severance
costs, write-down of assets and other related costs, losses during the wind-down
period and other factors listed from time to time in the Company's filings with
the Securities and Exchange Commission.
About EAI
Engineering Animation, Inc. is the leader in Internet-enabled visual process
management, collaboration, analysis and communication solutions for extended
manufacturing enterprises. EAI's e-Vis and VisEPM solutions help manufacturing
companies reduce costs while improving business practices, efficiency, quality
and time-to-market. The Company, which maintains its corporate headquarters and
technology center in Ames, Iowa, has offices worldwide.
For more information, visit EAI at www.eai.com or call (515) 296-9908.
