SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
Commission File number: 0-28202
WALSH INTERNATIONAL INC.
------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 51-0309207
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
105 Terry Drive, Suite 118, Newtown, Pennsylvania 18940
- -------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code 215-860-4949
----------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 to 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days Yes x No
-- --
As of April 22, 1998 there were outstanding 10,616,187 shares of Common
Stock of Walsh International Inc.
<PAGE>
WALSH INTERNATIONAL INC. AND SUBSIDIARIES
INDEX TO FORM 10-Q
Page Number
PART I FINANCIAL INFORMATION
Item 1. Financial statements
Consolidated Statements of Operations (unaudited) for the
Three and Nine Months Ended March 31, 1998 and 1997 ..................3
Consolidated Balance Sheets (unaudited)as of March 31, 1998
and June 30, 1997.....................................................4
Consolidated Statements of Cash Flows (unaudited) for the
Nine Months Ended March 31, 1998 and 1997...........................5
Notes to Consolidated Financial Statements............................6
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition..................................10
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.....................................13
Signatures...........................................................14
Index to Exhibits....................................................15
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
WALSH INTERNATIONAL INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Dollars in thousands, except per share amounts, unaudited
<TABLE>
<CAPTION>
---------------------------------------- --- ----------------------------------------
Three Months Ended Nine Months Ended
March 31, March 31, March 31, March 31,
1998 1997 1998 1997
----------------- ----------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Revenue $ 16,358 $ 13,704 $ 45,632 $ 39,815
----------------- ----------------- ------------------ ----------------
Costs and expenses:
Production costs 6,453 5,269 17,453 15,043
Selling, general and
administrative expenses 6,518 5,892 19,165 18,087
Research and development costs 1,028 893 2,757 2,812
In process research and
development write-off - - 2,000 -
Amortization of intangible assets 96 36 214 108
----------------- ----------------- ------------------ ----------------
Total costs and expenses 14,095 12,090 41,589 36,050
----------------- ----------------- ------------------ ----------------
Operating profit 2,263 1,614 4,043 3,765
Interest income 168 159 436 578
Interest expense (56) (58) (194) (191)
Minority Interest (77) (34) (122) 78
Other Income 424 - 424 -
----------------- ----------------- ------------------ ----------------
Income before income taxes 2,722 1,681 4,587 4,230
Income tax provision (611) (380) (1,655) (1,004)
----------------- ----------------- ------------------ ----------------
Net income $ 2,111 $ 1,301 $ 2,932 $ 3,226
================ ================= ================== ================
Basic earnings per share $ 0.20 $ 0.12 $ 0.28 $ 0.31
================= ================= ================== ================
Diluted earnings per share $ 0.20 $ 0.12 $ 0.27 $ 0.30
================= ================= ================== ================
Shares used in computing basic 10,587,356 10,502,185 10,556,579 10,498,369
earnings per share ================= ================= ================== ================
Shares used in computing diluted 10,821,604 10,633,650 10,784,409 10,595,987
earnings per share ================= ================= ================== ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
WALSH INTERNATIONAL INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Dollars in thousands, unaudited
<TABLE>
<CAPTION>
-------------------- --- --------------------
March 31 June 30
1998 1997
-------------------- --------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 10,553 $ 5,784
Marketable securities - 6,803
Accounts receivable, principally trade 17,569 14,227
Prepaid expenses and other current assets 1,010 702
-------------------- --------------------
Total current assets 29,132 27,516
Property and equipment, net 4,147 4,169
Goodwill, net 5,087 3,439
Marketable securities - 1,437
Other assets, net 4,483 3,727
==================== ====================
Total assets $ 42,849 $ 40,288
==================== ====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 112 $ 17
Current portion of capital lease obligations 531 509
Accounts payable 6,692 6,896
Accrued liabilities 10,927 11,166
Unearned income 4,532 4,103
-------------------- --------------------
Total current liabilities 22,794 22,691
-------------------- --------------------
Long-term debt 1,151 1,260
Capital lease obligations 1,548 1,407
Other liabilities 4,176 5,145
Minority interest 250 128
Commitments
Stockholders' equity:
Common stock, $0.01 par value, 20,000,000
shares authorized and 10,630,937 and 10,533,960
shares issued, respectively 106 105
Paid-in capital 120,097 119,475
Accumulated deficit (107,226) (110,158)
Cumulative translation adjustment 410 657
Unrealized gain on "available for sale" securities, net of tax - 35
Treasury stock, at cost, 20,750 shares (457) (457)
-------------------- --------------------
Total stockholders' equity 12,930 9,657
==================== ====================
Total liabilities and stockholders' equity $ 42,849 $ 40,288
==================== ====================
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
WALSH INTERNATIONAL INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Dollars in thousands, unaudited
<TABLE>
<CAPTION>
----------------------------------------
Nine Months Ended
March 31
----------------------------------------
1998 1997
---------------- -----------------
<S> <C> <C>
Net cash flows provided by (used in) operating activities $ 2,582 $ (1,221)
---------------- -----------------
Cash flows provided by (used in) investing activities:
Sale of marketable securities 8,399 1,489
Acquisition of PMS Pty Ltd (4,027) -
Capital expenditures (634) (618)
Capitalized software (787) (665)
---------------- -----------------
Net cash provided by investing activities 2,951 206
---------------- -----------------
Cash flows provided by (used in) financing activities:
Common stock issuance costs - (1,086)
Proceeds from issuance of bank loan 3,337 -
Options exercised 623 274
Repayment of long-term debt/capital leases (3,275) (269)
Loan proceeds received from minority interest - 111
Other 95 -
---------------- -----------------
Net cash provided by (used in) financing activities 780 (970)
---------------- -----------------
Effect of exchange rate movements (1,544) 189
Net increase/(decrease) in cash and cash equivalents 4,769 (1,796)
Cash and cash equivalents at beginning of period 5,784 8,629
================ =================
Cash and cash equivalents at end of period $ 10,553 $ 6,833
================ =================
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
WALSH INTERNATIONAL INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. INTERIM UNAUDITED FINANCIAL INFORMATION
The consolidated financial statements include the accounts of Walsh
International Inc. (the "Company") and all of its majority-owned
subsidiaries.
The accompanying consolidated statements of operations for the three and
nine months ended March 31, 1998 and 1997, the consolidated statements of
cash flows for the nine months, the consolidated balance sheet as of March
31, 1998 and the related information of Walsh International Inc. included
in these notes to the consolidated financial statements are unaudited. In
the opinion of management, the interim financial information reflects all
adjustments (consisting only of items of a normal recurring nature)
necessary for the fair presentation of the financial position, results of
operations and cash flows for the periods presented. Results of operations
for the three months and nine months ended March 31, 1998 are not
necessarily indicative of the results to be expected for the entire year.
The June 30, 1997 balance sheet was derived from the Company's June 30,
1997 audited consolidated financial statements, but does not include all
disclosures required by generally accepted accounting principles.
These interim financial statements should be read in conjunction with the
audited consolidated financial statements and related notes thereto
included in the Company's Form 10-K for the year ended June 30, 1997.
2. EARNINGS PER SHARE
The Company has adopted the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standard ("SFAS") No. 128
"Earnings Per Share". Basic earnings per share is computed using the
weighted average number of shares of Common Stock outstanding. Diluted
earnings per share includes common equivalent shares, where dilutive, from
stock options and warrants (using the treasury stock method). All
historical periods presented have been restated applying SFAS 128.
For all periods presented, income used in both basic earnings per share and
the diluted earnings per share calculations is net income as stated in the
consolidated statement of operations. The only common equivalent shares in
the diluted calculations are stock options calculated using the treasury
stock method. These calculations are summarised below:
6
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
March 31, March 31, March 31, March 31,
--------------------------------------- -------------------------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
DILUTED EARNINGS PER SHARE
Weighted average common shares outstanding
(basic) 10,587,356 10,502,185 10,556,579 10,498,369
Assumed exercise of in the money stock
options 771,524 605,839 758,521 417,113
Less assumed buy-back under the treasury
stock method (537,276) (474,374) (530,691) (319,495)
----------------- ----------------- ---------------- ---------------
Shares used in diluted earnings per share 10,821,604 10,633,650 10,784,409 10,595,987
----------------- ----------------- ---------------- ---------------
</TABLE>
Options to purchase 318,250 and 331,025 shares of common stock at prices
ranging from $10.60 to $12.00 were outstanding at March 31, 1998 but were
not included in the computation of diluted earnings per share for the three
and nine months ended March 31, 1998 respectively, because the options'
exercise price was greater than the average market price of the common
shares.
3. INCOME TAXES
For the three and nine months ended March 31, 1998 the effective tax rates
were 22% and 36% respectively compared to 23% and 24% respectively for the
equivalent periods of fiscal 1997. For the nine months to March 31, 1998,
the effective income tax rate was negatively impacted by the non-deductible
charge for the write-off of in process research and development costs
offset, in part, by a reduction of taxes provided in prior years. For 1997
the effective income tax rate was impacted by a reduction of taxes provided
for in prior years.
4. ACQUISITION OF PHARMACEUTICAL MARKETING SOLUTIONS PTY LTD
In July 1997 the Company acquired 100% of the equity of Pharmaceutical
Marketing Solutions Pty Ltd (PMS) a privately held Australian company for
$3.8 million in cash and $0.6 million of associated acquisition costs. PMS
uses a salesforce automation system based on Lotus Notes and an analysis
system which operates as an integration product between a data warehouse
and proprietary salesforce automation system. The acquisition has been
accounted for by the purchase method and the results of operations of PMS
have been included in the income statement from the acquisition date. The
total purchase price of $4.4 million has been allocated as:
In Process Research and Development $2.0
Completed Technology $0.6
Goodwill $1.8
----
$4.4
====
The goodwill is expected to have an economic life of 20 years and the
completed technology a life of between 3 and 5 years. Goodwill and
completed technologies are
7
<PAGE>
being amortised on a straight line basis over their economic lives. The in
process research and development costs have been written off immediately.
Pro-forma results from operations of the Company as if the acquisition of
PMS had occurred on July 1, 1996 for the three and nine months ended March
31, 1997 are:
Three Months Ended Nine Months Ended
March 31, 1997 March 31, 1997
Revenue $14,771 $42,238
Net Income $ 1,356 $ 3,281
Basic Earnings per Share $ 0.13 $ 0.31
For the nine months ended March 31, 1998 the difference between the
pro-forma operating results of the acquisition of PMS on the Company's
actual operating results, had the acquisition occurred on July 1, 1997 was
not material.
On October 14, 1997 the Company obtained an Australian dollar variable rate
commercial loan facility of $3.3 million (Australian $ 4.5 million). The
term of this facility was 5 years with annual principal repayments of
approximately $660,000 commencing in year 2. Interest accrued at a variable
rate (5.25% during the quarter). $3.2 million of the total marketable
securities were pledged as collateral for this loan. In January 1998 the
Company repaid the loan in full for US $2.9 million.
5. STOCKHOLDER RIGHTS PLAN.
On October 14, 1997 the Board of Directors adopted a stockholder rights
plan and declared a dividend of one right (a "Right") for each share of
common stock of the Company. The Rights were payable to holders of record
of the common stock of the Company at the close of business on October 27,
1997. The Rights will automatically trade with the Company's common stock.
Additional rights are issuable upon subsequent issuances of common stock by
the Company so long as the Rights Plan is in effect.
The Rights are not currently exercisable but become exercisable upon the
earlier of i) ten days after the first public announcement that a person or
group, which did not beneficially own 5% of the common stock as of
September 22, 1997, has acquired beneficial ownership of 15 percent or more
of the Company's common stock or ii) ten business days after a person or
group announces an offer the consummation of which would result in such
person or group beneficially owning 15 percent or more of the Company's
common stock. The Stockholder Rights Plan was amended as of March 23, 1998
to exclude Cognizant Corporation and its subsidiaries from being considered
such person or group.
Once exercisable the holder will be entitled to buy from the Company one
one-hundredth of a share of new series B of junior participating preferred
stock, of which 250,000 shares have been authorised, for $55.00 per Right
or in certain circumstances to buy at the Rights exercise price a number of
shares of the Company's common stock having a market value of twice the
exercise price of each Right or, if the Company is acquired in a merger or
a business combination, to buy at the Rights
8
<PAGE>
exercise price a number of shares of common stock of an acquiring Company
having a market value of twice the exercise price of each Right. At the
Company's option the Rights are redeemable prior to becoming exercisable
for $0.001 per Right. The Rights expire on October 14, 2007.
Preferred shares purchasable upon exercise of the Rights will not be
subject to redemption by the Company. Each preferred share will be entitled
to a minimum preferential quarterly dividend payment of $0.01 per share but
will be entitled to an aggregate dividend of 100 multiplied by the dividend
declared per common share. Each holder of preferred stock will be entitled
to 100 votes per share on each matter on which holders of the common stock
are entitled to vote.
6. EMPLOYEE STOCK PURCHASE PLAN
An Employee Stock Purchase Plan (the "ESPP") has been adopted by the
Company and the ESPP was approved on October 23, 1997 at the Company's
Annual Meeting of Stockholders.
Under the ESPP which is intended to qualify as an "employee stock purchase
plan" under Section 423 of the Internal Revenue Code, options to purchase
shares of Common Stock will be granted to eligible employees of the Company
and its subsidiaries at an exercise price of 85% of the fair market value
of the shares of Common Stock subject to such option on the date of grant,
based upon the closing price of the Common Stock on the NASDAQ National
Market.
An aggregate of 100,000 shares of Common Stock have been reserved for
issuance pursuant to the ESPP. To date there have been no grants under the
ESPP.
7. ACQUISITION OF WALSH INTERNATIONAL INC
On March 23, 1998 the Company, Cognizant Corporation and WAC Inc. signed a
definitive agreement for the acquisition of the Company. Under the terms of
the agreement Walsh shareholders will receive 0.3041 shares of Cognizant
common stock per Walsh share or a consideration of approximately $167
million. The number of Cognizant shares received is subject to a collar
adjustment based on the price of Cognizant shares during a period prior to
the closing of the transaction. If the acquisition is consummated after the
spin off by Cognizant Corporation of its subsidiary IMS Health, the
acquisition consideration will be paid in shares of IMS Health. On
completion of the transaction, investment banker fees will be payable
amounting to 1.3% of the total consideration, an amount of approximately
$2.2 million.
9
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
WALSH INTERNATIONAL INC. AND SUBSIDIARIES
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
Revenue for the Company's third quarter of fiscal year ended June 30, 1998 was
$16.4 million, growth of 28% excluding the adverse impact of currency movements.
The main cause of the increase was the growth in the Company's PremiereSM and
Precise products whose combined revenues grew by 29% excluding currency effect.
Direct mail marketing revenues also demonstrated strong growth quarter on
quarter. Growth was most notable in the European and Pacific markets.
Production costs for the quarter were $6.5 million (39.4% of revenue) compared
to $5.3 million (38.4% of revenues) in the comparable quarter of fiscal year
1997. The increase in production costs for the quarter as a percentage of
revenues reflects the inclusion of some low margin third party software revenues
as well as an increase in lower margin direct mail marketing revenues as a
percentage of revenue following the acquisition of Pharmaceutical Marketing
Solutions Pty Ltd (PMS), a privately owned Australian company, in July 1997. The
$1.2 million increase in production costs has arisen for the above reasons plus
continued investment in technical staff for roll-out and support of PremiereSM
installations.
Selling, general and administrative expenses in the third quarter of the year
were $6.5 million (39.8% of revenues) versus $5.9 million (43.0% of revenues)
for the same quarter of the prior year. This increase is primarily due to a
number of new account executives for the higher number of PremiereSM clients.
The decrease in SG&A expenses in the quarter as a percentage of revenues
reflects the Company's operating leverage, whereby such costs do not increase
directly in proportion to the revenues.
Research and development costs were $1.0 million, (6.3% of revenues), $0.1
million higher than the $0.9 million cost (6.5% of revenues) for the three
months ended March 31, 1997. The increase represents the Company's continued
investment in research and development.
Net interest income for the quarter ended March 31, 1998 was $0.1 million, the
same level as the comparable quarter of fiscal 1997.
Other income represents a foreign exchange gain of $0.4 million following the
repayment of an Australian dollar 4.5 million debt taken out to fund the
acquisition of PMS. The Company took advantage of favourable exchange rates and
repaid the debt in full in January 1998.
10
<PAGE>
NINE MONTHS ENDED MARCH 31, 1998 AND 1997
Revenue for the nine months ended March 31, 1998 was $45.6 million, an increase
of 22%, excluding the impact of currency, which comes primarily from the
increase in the Company's technology products (PremiereSM, Precise and Pharbase)
with significant growth in both the Pacific and European markets. Growth in the
Pacific markets comprises a mixture of organic growth and direct mail growth as
a result of the acquisition of PMS.
Production costs for the nine months were $17.5 million (38.2% of revenues)
versus $15.0 million (37.8% of revenues) for the comparable period of fiscal
1997. The increase in production costs reflects the continuing investment in
technical staff for the roll-out and support for PremiereSM and increased lower
margin direct mail revenues resulting from the acquisition of PMS. The increase
as a percentage of revenue reflects the sale of some low margin third party
software plus increased lower margin direct mail revenues as a result of
acquiring PMS.
Selling, general and administrative expenses were $19.2 million (42.0% of
revenues) versus $18.1 million (45.4% of revenues) for the first nine months of
1997. This reflects the Company's continued investment in sales resources and
client service personnel to meet the growing demand for PremiereSM. The
reduction in selling general and administrative expenses as a percentage of
revenue reflects the Company's operating leverage.
Research and development costs for the nine months ended March 31, 1998 were
$2.8 million the same level as the comparable nine months of fiscal 1997.
Research and Development costs are primarily incurred in Belgian Francs and
excluding currency movements research and development costs were 13% higher than
the previous nine months. In the earlier part of the year some research staff
were reassigned to work on support for the delivered product.
An in process research and development write-off totalling $2.0 million has
arisen as a result of the acquisition of PMS. The $2.0 million is the value
attributable to acquired technology products which are to be integrated within
the Company's own salesforce management information system, PremiereSM.
Net interest income for the nine months to March 31, 1998 is $0.2 million versus
$0.4 million in the nine months to March 31, 1997. The decrease in interest
income is due to the initial payment out of Company funds of the purchase
consideration of PMS in fiscal 1998 prior to putting in place debt finance.
Other income of $0.4 million for the nine months ended March 31, 1998 reflects a
gain on the repayment of a loan of Australian dollars 4.5 million in January
1998.
11
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1998, the Company's cash and cash equivalents totalled $10.6
million, an increase of $4.8 million from the $5.8 million balance at June 30,
1997. The Company generated $2.6 million of cash from operating activities in
the nine months ended March 31, 1998 due to improved profitability and working
capital management.
In January 1998 to take advantage of the Australian dollar exchange rate the
Company repaid debt and liquidated its professionally managed portfolio of
marketable securities.
The Company believes that the anticipated cash flow from operations and existing
cash balances will satisfy the Company's projected working capital and capital
expenditure requirements through at least the end of fiscal 1999.
RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income"
which is effective for financial statements issued for fiscal years commencing
on or after December 15, 1997. Comprehensive income represents the change in net
assets of a company as a result of non-owner transactions. The Company is
currently evaluating the new standard and does not believe that it will have a
significant impact.
In October 1997 the AICPA issued Statement of Position 97-2, "Software Revenue
Recognition" which is effective for transactions entered into by the Company
commencing July 1, 1998. The Company is currently evaluating the new standard
and does not believe that it will have a significant impact on the Company's
current revenue recognition policy.
12
<PAGE>
PART II OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits Exhibit Number
2.1 Agreement and Plan of Merger dated as of March 23, 1998, among Cognizant
Corporation. WAC Inc and Walsh International Inc. (incorporated by
reference to Exhibit 2.1 to the Company's Current Report on Form 8-K dated
March 23, 1998)
2.2 Stock Option Agreement, dated as of March 23, 1998, by and between Walsh
International Inc. and Cognizant Corporation (incorporated by reference to
Exhibit 2.2 to the Company's Current Report on Form 8-K dated March 23,
1998).
2.3 Amendment to Agreement, dated as of March 23, 1998, by and between Walsh
International Inc and Harris Trust Company of New York, as Rights Agent.
3.1 Restated Certificate of incorporation of Walsh International Inc.,
incorporated by reference to Exhibit 3.1 to the Registration Statement on
Form S-1 of the Company (file no. 333-316).
3.2 By-laws of Walsh International Inc., as amended, incorporated by reference
to Exhibit 3.2 to the Registration Statement on Form S-1 of the Company
(file no. 333-316).
27 Financial Data Schedule
b) Reports on Form 8-K
The Company filed a current report on Form 8-K reporting the execution of
the Agreement and Plan of Merger among Cognizant Corporation WAC Inc and
the Company, dated March 23, 1998.
13
<PAGE>
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.
DATE: May 6, 1998 WALSH INTERNATIONAL INC.
By /s/ Martyn D. Williams
--------------------------------------
Martyn D. Williams
Chief Financial Officer
On behalf of the registrant and as
principal financial officer
14
<PAGE>
INDEX TO EXHIBITS
Exhibit Description
2.1 Agreement and Plan of Merger dated as of March 23, 1998, among Cognizant
Corporation. WAC Inc and Walsh International Inc. (incorporated by
reference to Exhibit 2.1 to the Company's Current Report on Form 8-K dated
March 23, 1998)
2.2 Stock Option Agreement, dated as of March 23, 1998, by and between Walsh
International Inc. and Cognizant Corporation (incorporated by reference to
Exhibit 2.2 to the Company's Current Report on Form 8-K dated March 23,
1998).
2.3 Amendment to Agreement, dated as of March 23, 1998, by and between Walsh
International Inc and Harris Trust Company of New York, as Rights Agent.
3.1 Restated Certificate of Incorporation of Walsh International Inc.,
incorporated by reference to Exhibit 3.1 to the Registration Statement on
Form S-1 of the Company (file no. 333-316).
3.2 By-laws of Walsh International Inc., as amended, incorporated by reference
to Exhibit 3.2 to the Registration statement on Form S-1 of the Company
(file no. 333-316).
27 Financial Data Schedule
15
EXHIBIT 2.3
AMENDMENT TO AGREEMENT
THIS AMENDMENT (the "Amendment") dated as of March 23, 1998, is by and
between Walsh International Inc., a Delaware corporation (the "Company") and
Harris Trust Company of New York, as Rights Agents (the "Rights Agent").
WITNESSETH:
WHEREAS, the Company and the Rights Agent entered into an Agreement
dated as of October 14, 1997, (the "Agreement");
WHEREAS, the Company by action of its Board of Directors has decided to
amend the definition of "Acquiring Person" in the Agreement as set forth more
fully below and in accordance with the terms of the Agreement has so directed
the Rights Agent.
AGREEMENT
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Unless otherwise defined herein, terms used herein are as defined in
the Agreement.
2. The Agreement is hereby amended by inserting the following provision
at the end of the definition of "Acquisition Person" in Section 1:
Notwithstanding the foregoing, Cognizant Corporation and any
of its direct or indirect wholly-owned subsidiaries shall not
be deemed to be an Acquiring Person if any one or more of such
companies become a Beneficial Owner of 15 percent or more of
the Common Shares of the Company pursuant to either the Merger
Agreement of even date herewith among Cognizant Corporation,
WAC Inc. and the Company or the Stock Option Agreement of even
date herewith between Cognizant Corporation and the Company.
3. From and after March 23, 1998, all references in the Agreement shall
be deemed to be references to the Agreement as amended hereby.
4. Except as modified or supplemented in connection herewith, the
Agreement shall continue in full force and effect.
17
<PAGE>
5. This Amendment may be executed in any manner of counterparts, all of
which taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, this Amendment is executed as of the date first set
forth above.
WALSH INTERNATIONAL, INC.
By: /s/ Leonard R. Benjamin
----------------------------------
Name: Leonard R. Benjamin
Title: Vice President
HARRIS TRUST COMPANY OF NEW YORK,
AS RIGHTS AGENT
By: /s/ Brian R. Sahlin
----------------------------------
Name: Brian R. Sahlin
Title: Assistant Vice President
18
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 10,553
<SECURITIES> 0
<RECEIVABLES> 18,239
<ALLOWANCES> 670
<INVENTORY> 54
<CURRENT-ASSETS> 29,132
<PP&E> 14,589
<DEPRECIATION> 10,442
<TOTAL-ASSETS> 42,849
<CURRENT-LIABILITIES> 22,794
<BONDS> 0
0
0
<COMMON> 106
<OTHER-SE> 12,823
<TOTAL-LIABILITY-AND-EQUITY> 42,849
<SALES> 45632
<TOTAL-REVENUES> 45632
<CGS> 17453
<TOTAL-COSTS> 41589
<OTHER-EXPENSES> (424)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 194
<INCOME-PRETAX> 4587
<INCOME-TAX> 1655
<INCOME-CONTINUING> 2932
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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</TABLE>
