<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM 10-Q
------------
(Mark One)
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
- --- Exchange Act of 1934
For the quarterly period ended March 31, 1996.
OR
Transition report pursuant to Section 13 or 15(d) of the Securities
- --- Exchange Act of 1934
For the transition period from ______________ to ______________
COMMISSION FILE NUMBER: 0-27774
PRISM SOLUTIONS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 77-0282704
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1000 HAMLIN COURT
SUNNYVALE, CA 94089
(Address of principal executive offices, including zip code)
TELEPHONE NUMBER (408) 752-1888
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 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 ___ No X
Indicate the number of shares outstanding of each of the issuer's
classes of Common Stock, as of the latest practicable date.
As of May 7, 1996, there were 13,218,626 shares of the Registrant's
Common Stock outstanding.
================================================================================
<PAGE> 2
PRISM SOLUTIONS, INC.
FORM 10-Q
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C> <C>
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated Balance Sheets
December 31, 1995 and March 31, 1996 . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Operations
Three months ended March 31, 1995 and March 31, 1996 . . . . . . . . . . 4
Condensed Consolidated Statements of Cash Flows
Three months ended March 31, 1995 and 1996 . . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . 7
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . . . . . . . . . . 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . . . . . . 14
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
INDEX TO EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
PRISM SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1995 1996
---- ----
ASSETS (AUDITED) (UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,861 $ 33,481
Short-term investments -- 2,994
Accounts receivable, net 6,813 6,880
Other receivables 23 25
Prepaid expenses and other current assets 369 732
-------- --------
Total current assets 9,066 44,112
Property and equipment, net 1,298 1,368
Deposits 129 129
-------- --------
Total assets $ 10,493 $ 45,609
======== ========
LIABILITIES
Current liabilities:
Current portion of long-term debt $ 432 $ --
Accounts payable 632 669
Accounts payable to related party 94 60
Accrued payroll and related 1,306 1,573
Deferred revenue 4,775 4,311
Other accrued liabilities 923 1,392
-------- --------
Total current liabilities 8,162 8,005
Long-term debt, less current portion 271 --
Other liabilities 6 21
-------- --------
Total liabilities 8,439 8,026
-------- --------
STOCKHOLDERS EQUITY
Convertible preferred stock 8 --
Common stock 3 13,229
Additional paid-in capital 13,611 36,113
Receivables from stockholders (129) (102)
Accumulated deficit (11,439) (11,657)
-------- --------
Total stockholders' equity 2,054 37,583
-------- --------
Total liabilities and stockholders' equity $ 10,493 $ 45,609
======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED
FINANCIAL STATEMENTS.
3
<PAGE> 4
PRISM SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------
1995 1996
---- ----
(UNAUDITED)
<S> <C> <C>
Revenues:
License $ 2,594 $ 4,397
Services and other 802 3,010
------------ ------------
Total revenues 3,396 7,407
------------ ------------
Cost of revenues:
License 29 133
Services and other 538 1,624
------------ ------------
Total cost of revenues 567 1,757
------------ ------------
Gross margin 2,829 5,650
------------ ------------
Costs and expenses:
Sales and marketing 2,574 4,221
Research and development 872 1,049
General and administrative 688 638
------------ ------------
Total operating expenses 4,134 5,908
------------ ------------
Loss from operations (1,305) (258)
Interest income (expense), net (11) 61
Other income (expense), net -- (15)
------------ ------------
Loss before income taxes (1,316) (212)
Provision for income taxes 1 6
------------ ------------
Net loss $ (1,317) $ (218)
============ ============
Net loss per share $ (.47) $ (0.04)
============ ============
Shares used in per share calculation 2,820,733 5,126,525
============ ============
Pro forma net loss per share $ (.12) $ (0.02)
============ ============
Pro forma shares used in per share calculation 10,812,000 11,712,364
============ ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED
FINANCIAL STATEMENTS.
4
<PAGE> 5
PRISM SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1995 1996
---- ----
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net cash provided by (used in) operating activities $ 584 $ (66)
-------- --------
Cash flows from investing activities:
Purchases of property and equipment (183) (270)
Purchases of short-term investments -- (2,994)
-------- --------
Net cash used in investing activities (183) (3,264)
-------- --------
Cash flows from financing activities:
Payments received on receivable from stockholder 1,032 --
Proceeds from initial public offering -- 35,634
Repayment on long-term debt -- (703)
Other -- 19
-------- --------
Net cash provided by financing activities 1,032 34,950
-------- --------
Net increase in cash and cash equivalents 1,433 31,620
Cash and cash equivalents at beginning of quarter 3,205 1,861
-------- --------
Cash and cash equivalents at end of quarter $ 4,638 $ 33,481
======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED
FINANCIAL STATEMENTS.
5
<PAGE> 6
PRISM SOLUTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The consolidated financial statements at March 31, 1996 are unaudited and
reflect all adjustments (consisting only of normal recurring adjustments) which
are, in the opinion of management, necessary for a fair presentation of the
financial position and operating results for the interim periods. The
consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto, together with management's
discussion and analysis of financial conditions and results of operations for
the fiscal year ended December 31, 1995. The results of operations for the three
months ended March 31, 1996 are not necessarily indicative of the results for
the entire year ending December 31, 1996.
2. NET LOSS PER SHARE AND PRO FORMA NET LOSS PER SHARE
The net loss per share, on a historical basis, is computed using the weighted
average number of common and dilutive common equivalent shares outstanding
during the period. Common equivalent shares are excluded from the computation as
their effect is antidilutive, except that, pursuant to the Securities and
Exchange Commission Staff Accounting Bulletins, common and common equivalent
shares issued at prices below the public offering price during the 12 months
immediately preceding the initial filing date have been included in the
calculation as if they were outstanding for all periods presented (using the
treasury stock method and the initial public offering price). Pro forma net loss
per share assumes the common shares issued upon conversion of the outstanding
convertible preferred stock had been outstanding during such period.
3. INITIAL PUBLIC OFFERING
In March 1996, the Company completed its initial public offering of Common
Stock. The Company sold 2,325,500 shares of Common Stock at a price to the
public of $17.00 per share, resulting in net proceeds to the Company (after
deducting underwriting discounts and commissions and offering expenses) of
approximately $35.6 million. Proceeds from the offering were invested in cash
equivalents and short-term investments consisting primarily of high grade
commercial paper, with $703,000 used to retire the Company's outstanding
long-term debt.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
In addition to historical information contained herein, this Discussion and
Analysis contains forward-looking statements. The forward-looking statements
contained herein are subject to certain risks and uncertainties that could cause
actual results to differ materially from those reflected in the forward-looking
statements, including those discussed below and in the Company's Prospectus
dated March 14, 1996. Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect management's analysis only as of the
date hereof. The Company undertakes no obligation to publicly release the
results of any revision to these forward-looking statements which may be made to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
OVERVIEW
Prism designs, develops, markets and supports data warehouse management
software that assists customers in developing, managing and maintaining data
warehouses. The Company was incorporated in California in March 1991 and
reincorporated in Delaware in February 1996. The Company began shipping its
principal product, Prism Warehouse Manager, in December 1992, and two subsequent
products, Prism Directory Manager and Prism Change Manager, in April 1995 and
February 1996, respectively.
The following table sets forth operating results as a percentage of total
revenues for the three month periods ended March 31, 1995 and 1996:
<TABLE>
<CAPTION>
PERCENTAGE OF TOTAL REVENUES
----------------------------
THREE MONTHS ENDED
MARCH 31,
---------
1995 1996
---- ----
<S> <C> <C>
Revenues:
License 76% 59%
Services and other 24 41
---- ----
Total revenues 100 100
---- ----
Cost of revenues:
License 1 2
Services and other 16 22
---- ----
Total cost of revenues 17 24
---- ----
Gross margin 83 76
---- ----
Costs and expenses:
Sales and marketing 76 57
Research and development 26 14
General and administrative 20 9
---- ----
Total operating expenses 122 80
---- ----
Loss from operations (39) (4)
Interest income (expense), net 0 1
Other income (expense), net 0 0
---- ----
Loss before income taxes (39) (3)
Provision for income taxes 0 0
---- ----
Net loss (39) (3)
==== ====
</TABLE>
7
<PAGE> 8
The following table sets forth the percent change in operating results for the
three month periods ended March 31, 1995 and 1996:
<TABLE>
<CAPTION>
PERIOD TO PERIOD PERCENT INCREASE (DECREASE)
--------------------------------------------
THREE MONTHS ENDED
MARCH 31, 1995 VS. MARCH 31, 1996
---------------------------------
<S> <C>
Revenues:
License 70%
Services and other 275
----
Total revenues 118
----
Cost of revenues:
License 359
Services and other 202
----
Total cost of revenues 210
----
Gross margin 100
----
Costs and expenses:
Sales and marketing 64
Research and development 20
General and administrative (7)
----
Total operating expenses 43
----
Loss from operations (80)
Interest income (expense), net (655)
Other income (expense), net --
---
Loss before income taxes (84)
Provision for income taxes 500
---
Net loss (83)
====
</TABLE>
8
<PAGE> 9
Revenues
(in thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------
1995 1996 CHANGE
---- ---- ------
<S> <C> <C> <C>
License $2,594 $4,397 70%
Percentage of total revenues 76% 59%
Services and other $ 802 $3,010 275%
Percentage of total revenues 24% 41%
Total revenues $3,396 $7,407 118%
</TABLE>
The Company's revenues are derived from license fees for its software
products and fees for services complementing its products, including software
maintenance and support, implementation, consulting and training.
License Revenues. The increase in license revenues from the first
quarter of 1995 to the same period of 1996 were primarily attributable to
growing acceptance of the Company's products, which led to increases in the
number of units licensed. The average transaction size declined in 1996 compared
to 1995 due to an unusually large dollar transaction booked in 1995. In
addition, license revenues in 1996 were favorably affected by the introduction
of Prism Directory Manager in April 1995.
Services and Other Revenues. The growth from the first quarter of 1995
to the same period of 1996 was the result primarily of an increase in the number
and size of consulting engagements and, to a lesser extent, of increased
licensing activity causing an increase in the maintenance base and maintenance
renewals. A majority of services and other revenues in 1996 came from consulting
revenue.
Cost of Revenues
(in thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------
1995 1996 CHANGE
---- ---- ------
<S> <C> <C> <C>
Cost of license $ 29 $ 133 359%
Percentage of total revenues 1% 2%
Cost of services and other $ 538 $1,624 202%
Percentage of total revenues 16% 22%
Total cost of revenues $ 567 $1,757 210%
</TABLE>
Cost of License Revenues. Cost of license revenues consists primarily
of the costs of royalties paid to third-party vendors, product media and
duplication, shipping expenses, manuals and packaging materials.
The increase from the first quarter of 1995 to the same period of 1996
was due primarily to increased distribution costs and media and duplication
costs as well as payments to marketing partners for their assistance in
consummating licensing transactions. The Company expects that the cost of
license revenues will increase both in absolute dollars and as a percentage of
license revenues as the Company licenses additional technology and products from
third parties for inclusion in its product line.
9
<PAGE> 10
Cost of Services and Other. Cost of services and other revenues
consists primarily of personnel-related costs incurred in providing consulting
and implementation services, telephone support and training to customers. The
dollar amount of cost of services and other revenues increased significantly
from the first quarter of 1995 to the same period of 1996 primarily because of
increased personnel-related costs as the Company continued to expand its
consulting, customer support and training organizations to support an increase
in sales. The percentage increase in cost of services and other revenues from
1995 to 1996 was primarily due to increased consulting personnel costs,
partially offset by economies of scale as additional maintenance and support
services were provided.
Operating Expenses
(in thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------
1995 1996 CHANGE
---- ---- ------
<S> <C> <C> <C>
Sales and marketing $2,574 $4,221 64%
Percentage of total revenues 76% 57%
Research and development $ 872 $1,049 20%
Percentage of total revenues 26% 14%
General and administrative $ 688 $ 638 (7)%
Percentage of total revenues 20% 9%
</TABLE>
The growth in operating expenses occurred primarily as a result of
increases in salaries and benefits, resulting from higher staffing levels, and
the expansion of facilities.
Sales and Marketing. Sales and marketing expenses consist primarily of
salaries, commissions and bonuses paid to sales and marketing personnel and
promotional expenses. The increase in dollar amounts in sales and marketing
expenses from the first quarter of 1995 to the same period of 1996 was primarily
due to the expansion of the Company's sales operations and increased marketing
activities, including trade shows and promotional expenses. The decrease in
sales and marketing expenses as a percentage of total revenues resulted
primarily from increases in productivity as newly hired sales personnel and
system engineers became more experienced. The Company expects that sales and
marketing expenses will continue to increase in absolute dollars but decrease as
a percentage of total revenues if the Company's annual revenues continue to
increase.
Research and Development. Research and development expenses consist
primarily of salaries paid to the engineering staff. The increase in dollar
amounts in research and development expenses from the first quarter of 1995 to
the same period of 1996 are primarily attributable to increased staffing and
associated support for software engineers required to expand and enhance the
Company's product line. Software development costs have been expensed in
accordance with Statement of Financial Accounting Standards No. 86, "Accounting
for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed."
Under this standard, capitalization of software development costs begins upon
the establishment of technological feasibility and ends when a product is
available for general release to customers. To date, costs incurred after
establishment of technological feasibility have been immaterial and, as a
result, all research and development costs have been expensed as incurred. The
Company believes that a significant level of investment for research and
development is required to remain competitive and, accordingly, the Company
anticipates that research and development expenses will increase in absolute
dollars. In addition, the Company expects research and development expenses to
rise as a percentage of revenue in the next twelve months due to anticipated
staffing and third party consulting expenses relating to projects to improve the
supportability, reliability, and maintainability of the products, to increase
integration between products and to support new product development.
10
<PAGE> 11
General and Administrative. General and administrative expenses consist
primarily of salary expenses for administration and executive staff. These
expenses decreased in absolute dollars from the first quarter 1995 to the same
period of 1996 because in 1995 the Company recorded increases to its allowance
for doubtful accounts due to international expansion and increased volume in the
domestic market. The Company expects that its general and administrative
expenses will increase in absolute dollars and decline slightly as a percentage
of revenue if the Company's annual revenues continue to increase.
Liquidity and Capital Resources
The Company's cash and cash equivalents increased to $33,481,000 during
the first quarter of 1996, due to the Company's initial public offering. During
the quarter and after the public offering, the Company repaid its long-term debt
and made $2,994,000 in short-term investments, which are classified as available
for sale.
The Company expects that its capital expenditures will remain constant
or increase in absolute dollars as the Company's employee base grows. As of
March 31, 1996, the Company had no material commitments to make capital
expenditures. The Company's principal commitments consisted of noncancelable
operating leases on its facilities.
To date, the Company has not invested in derivative securities or any
other financial instruments that involve a high level of complexity or risk.
Management expects that, in the future, cash in excess of current requirements
will be invested in short-term, interest-bearing, investment grade securities.
The Company also has available a $2,000,000 revolving bank line of
credit under an agreement that expires in November 1996, which is collateralized
by all of the assets of the Company (other than copyrights) and permits
borrowing of 80% of eligible accounts receivable. Eligible accounts receivable
include accounts receivable that have been outstanding less than 90 days from
the date of invoice (excluding related party, disputed receivables, government,
contra and intercompany accounts). At March 31, 1996, the maximum amount was
available and there were no borrowings outstanding under the line of credit.
The Company believes its current cash balances, cash available under
its line of credit and cash flow from operations, if any, will be sufficient to
meet its working capital and capital expenditure requirements for at least the
next 12 months. Although operating activities may provide cash in certain
periods, to the extent the Company experiences growth in the future, the Company
anticipates that its operating and investing activities may use cash.
Consequently, any such future growth may require the Company to obtain
additional equity or debt financing, which may not be available or may be
dilutive.
ADDITIONAL FACTORS THAT MIGHT AFFECT FUTURE RESULTS
The Company's limited operating history makes the prediction of future
operating results difficult. Although the Company has experienced significant
growth in revenues in recent periods, the Company does not believe that this
growth rate is sustainable or indicative of future operating results. The
Company has never been profitable on an annual basis and currently believes that
it could experience net losses in the second quarter of 1996. Future operating
results will depend on many factors, including the growth of the emerging data
warehousing market, demand for the Company's products, transaction size, the
level of product and price competition, the Company's success in expanding its
direct sales force and indirect distribution channels, the ability of the
Company to support and maintain existing products, develop and market new
products and control costs, general economic conditions and other factors.
11
<PAGE> 12
Substantially all of the Company's revenues to date have been
attributable to licenses for Prism Warehouse Manager and related services. The
Company currently expects that revenues attributable to Prism Warehouse Manager,
including maintenance and consulting services, will continue to account for a
substantial majority of the Company's total revenues in 1996. A decline in
demand for or failure to achieve broad market acceptance of Prism Warehouse
Manager or Prism Directory Manager as a result of competition, technological
change or otherwise, would have a material adverse effect on the business,
operating results and financial condition of the Company. A decline in license
revenues from these products would also have a material adverse effect on sales
of other Company products. The Company's future financial performance will
depend in part on the successful development, introduction and customer
acceptance of new releases of Prism Warehouse Manager and market acceptance of
the Company's meta data architecture and related products, such as Prism
Directory Manager and Prism Change Manager. There can be no assurance that the
Company will continue to be successful in marketing Prism Warehouse Manager
Prism Directory Manager, Prism Change Manager or any new or enhanced products.
The market for the Company's products is highly competitive, and the
Company may experience increasing pricing pressures from its current competitors
and new market entrants. Any material reduction in the price of the Company's
products or in the size of an average transaction would materially adversely
affect the Company's business, operating results and financial condition if the
Company were unable to increase unit sales.
Throughout the remainder of 1996, the Company will continue to invest
more in customer services, marketing and research and development, and make
personnel additions to the Company's sales force worldwide. These additional
expenses may adversely affect the Company's operating margin in 1996 if there
are no offsetting increases in revenues or reductions in other operating
expenses.
The Company's stock price may be subject to significant volatility
particularly on a quarterly basis. Any shortfall in revenue or earnings from
levels expected by securities analysts or others could have an immediate and
significant adverse effect on the trading price of the Company's common stock in
any given period. Additionally, as is common in the industry, a disproportionate
amount of the Company's license revenue is derived from transactions that close
in the last few weeks of a quarter making quarterly revenues difficult to
forecast. The Company may not learn of, or be able to confirm, revenue or
earnings shortfalls until the end of each quarter, which could result in an even
more immediate and adverse effect on the trading price of the Company's common
stock. Finally, the Company participates in a highly dynamic industry, which
often results in significant volatility of the Company's common stock price.
12
<PAGE> 13
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's Annual Meeting of Shareholders held on February 1, 1996, the
following individuals were elected to the Board of Directors:
<TABLE>
<CAPTION>
Shares Eligible Shares in Favor Shares Withheld
--------------- --------------- ---------------
<S> <C> <C> <C>
ELECTED BY SERIES A AND SERIES B
PREFERRED SHAREHOLDERS:
Kevin A. Fong 2,666,667 2,666,667 0
E. Floyd Kvamme 2,666,667 2,666,667 0
Norris van den Berg 2,666,667 2,666,667 0
ELECTED BY SERIES C
PREFERRED SHAREHOLDERS:
Promod Haque 3,704,820 3,695,784 0
Nancy J. Schoendorf 3,704,820 3,695,784 0
ELECTED BY COMMON SHAREHOLDERS:
James W. Ashbrook 2,852,173 2,622,806 8,000
William H. Inmon 2,852,173 2,622,806 8,000
</TABLE>
The following proposals were approved at the Company's Annual Meeting:
<TABLE>
<CAPTION>
Shares in Favor Shares Opposed Shares Withheld
--------------- -------------- ---------------
<S> <C> <C> <C>
1. Change the Company's state of
incorporation from California to
Delaware.
Preferred Shares: 7,965,577 0 0
Common Shares: 2,619,501 0 11,305
2. Adopt the Company's Indemnity
Agreement with its Directors and
Officers. 10,578,578 6,500 11,305
3. Adopt the Company's 1996 Equity
Incentive Plan, reserving 2,000,000
shares thereunder. 10,585,078 0 11,305
4. Adopt the Company's Directors
Stock Option Plan, reserving
300,000 shares thereunder. 10,543,478 32,000 20,905
5. Adopt the Company's 1996 Employee
Stock Purchase Plan, reserving
500,000 shares thereunder. 10,582,453 2,625 11,305
6. Amend the Company's 1992 Stock
Option Plan, increasing the shares
thereunder by 400,000. 10,582,453 2,625 11,305
</TABLE>
13
<PAGE> 14
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits. The following exhibits are filed as part of this Form 10-Q:
11.01 Computation of Net Loss per Share
27.01 Financial Data Schedule (EDGAR version only)
99.01 Report of Independent Accountants
(b) Reports on Form 8-K. No reports were filed during the quarter ended March
31, 1996.
14
<PAGE> 15
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.
DATED: May 14, 1996
PRISM SOLUTIONS, INC.
(Registrant)
By: /s/ JAMES W. ASHBROOK
------------------------------------------
James W. Ashbrook
President and Chief Executive Officer
Chairman of the Board
By: /s/ SAMUEL M. HEDGPETH III
------------------------------------------
Samuel M. Hedgpeth III
Vice President, Finance and Administration
Chief Financial Officer
By: /s/ WILLIAM H. INMON
------------------------------------------
William H. Inmon
Executive Vice President, Technology
By: /s/ KEVIN A. FONG
------------------------------------------
Kevin A. Fong
Director
By: /s/ E. FLOYD KVAMME
------------------------------------------
E. Floyd Kvamme
Director
By: /s/ PROMOD HAQUE
------------------------------------------
Promod Haque
Director
By: /s/ NANCY J. SCHOENDORF
------------------------------------------
Nancy J. Schoendorf
Director
By: /s/ NORRIS VAN DEN BERG
------------------------------------------
Norris van den Berg
Director
15
<PAGE> 16
PRISM SOLUTIONS, INC.
INDEX TO EXHIBITS
EXHIBIT
11.01 COMPUTATION OF NET LOSS PER SHARE
27.01 FINANCIAL DATA SCHEDULE (EDGAR VERSION ONLY)
99.01 REPORT OF INDEPENDENT ACCOUNTANTS
16
<PAGE> 1
EXHIBIT 11.01
PRISM SOLUTIONS, INC.
COMPUTATION OF NET LOSS PER SHARE
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------
1995 1996
---- ----
(UNAUDITED)
<S> <C> <C>
Weighted average shares outstanding 1,574,455 4,113,069
Common equivalent shares pursuant to SAB No. 83 1,246,278 1,013,456
Net effect of dilutive stock options and warrants -- --
----------- -----------
Average common and common stock equivalent
shares outstanding 2,820,733 5,126,525
=========== ===========
Net loss $ (1,137) $ (218)
=========== ===========
Net loss per share $ (0.47) $ (0.04)
=========== ===========
</TABLE>
NOTE: FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996, CONVERSION OF COMMON
STOCK EQUIVALENTS WAS NOT ASSUMED BECAUSE THE EFFECT IS ANTI-DILUTIVE.
17
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 33481
<SECURITIES> 2994
<RECEIVABLES> 6880
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 44112
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13229
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<INTEREST-EXPENSE> (61)
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<PAGE> 1
EXHIBIT 99.01
PRISM SOLUTIONS, INC.
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Directors and Stockholders
Prism Solutions, Inc.
Sunnyvale, California
We have reviewed the accompanying consolidated balance sheet, statement
of operations and cash flows of Prism Solutions, Inc. as of March 31, 1996, and
for the three-month period then ended. These consolidated financial statements
are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the accompanying consolidated financial statements for
them to be in conformity with generally accepted accounting principals.
COOPERS & LYBRAND L.L.P.
San Jose, California
April 12, 1996
18
