SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
PLANNING SCIENCES INTERNATIONAL PLC
Tuition House
St George's Road
Wimbledon
London SW19 4EU
United Kingdom
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
------ ------
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
---- -----
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):
82- N.A.
Page 1 of 16 Pages
Exhibit Index Appears on Page 12
1
<PAGE>
PLANNING SCIENCES INTERNATIONAL PLC
Form 6-K
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Financial Information:
Condensed Consolidated Balance Sheets as of June 30, 1996 (Unaudited) and December 31, 3
1995 (Audited)
Condensed Consolidated Statements of Income for the three and six months ended June 30, 4
1996 and 1995 (Unaudited)
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 1996 and 5
1995 (Unaudited)
Notes to Condensed Consolidated Financial Statements (Unaudited) 6
Management's Discussion and Analysis of Financial Condition and Results of Operations. 8
Exhibit Index 12
Exhibit A. Second Quarter Press Release 13
</TABLE>
2
<PAGE>
PLANNING SCIENCES INTERNATIONAL PLC
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
(unaudited) (audited)
(in thousands)
US$ US$
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents 29,771 2,280
Accounts receivable, net of allowances 5,981 4,001
for doubtful accounts of $303 at June
30, 1996
(December 31, 1995 - $290)
Prepaid expenses and other current 763 381
assets
------------
------------
Total current assets 36,515 6,662
------------ ------------
Property and equipment, net 1,616 1,093
Goodwill on acquisition 192 -
------------ ------------
Total assets 38,323 7,755
------------ ------------
Liabilities and shareholders' equity
Current liabilities:
Bank overdraft - 391
Current portion of lease obligations 186 84
Accounts payable 2,261 546
Taxes payable 832 310
Accrued liabilities 2,380 1,030
Deferred revenues 2,215 1,967
UK value added tax 159 373
Other accounts payable 199 355
------------ ------------
Total current liabilities 8,232 5,056
Non current liabilities:
Deferred taxation 34 34
Long-term portion of lease 273 175
obligations
------------ ------------
Total liabilities 8,539 5,265
Shareholder's equity:
Ordinary shares 2,018 1,565
Preference shares - -
Additional paid-in capital 26,668 715
Retained earnings 1,178 278
Minority interest (1) -
Cumulative translation adjustment (79) (68)
------------ ------------
Total shareholders' equity 29,784 2,490
------------ ------------
Total liabilities and shareholders' equity 38,323 7,755
------------ ------------
</TABLE>
See accompanying notes
3
<PAGE>
PLANNING SCIENCES INTERNATIONAL PLC
Condensed Consolidated Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, 1996 June 30, 1995 June 30, 1996 June 30, 1995
(in thousands, except per share amounts)
US$ US$ US$ US$
<S> <C> <C> <C> <C>
Revenues:
License 3,966 2,636 7,279 5,206
Services and other 2,138 1,654 4,028 2,899
-------- ---------- ---------- ----------
6,104 4,290 11,307 8,105
-------- ---------- ---------- ----------
Cost of revenues
License 109 17 211 85
Services and other 1,275 841 2,307 1,605
-------- ---------- ---------- ----------
1,384 858 2,518 1,690
-------- ---------- ---------- ----------
Gross profit 4,720 3,432 8,789 6,415
Operating expenses
Sales and marketing 2,314 1,273 4,381 2,773
Research and development 775 409 1,372 788
General and administrative 989 1,302 1,874 1,996
-------- ---------- ---------- ----------
Total operating expenses 4,078 2,984 7,627 5,557
-------- ---------- ---------- ----------
Income from operations 642 448 1,162 858
Other income (expense) 269 (18) 267 (67)
-------- ---------- ---------- ----------
Income before provision for taxes 911 430 1,429 791
Provision for income taxes 337 156 529 293
-------- ---------- ---------- ----------
Net income 574 274 900 498
-------- ---------- ---------- ----------
Net income per share $0.05 $0.03 $0.09 $0.06
Weighted average shares 10,614 8,734 9,755 8,315
outstanding
</TABLE>
See accompanying notes
4
<PAGE>
PLANNING SCIENCES INTERNATIONAL PLC
Condensed Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
June 30, 1996 June 30, 1995
(in thousands)
US$ US$
<S> <C> <C>
Cash flows from operating activities
Net income 900 498
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation 265 76
Minority interest (1) -
Changes in operating assets and liabilities
Accounts receivable (1,995) (2,176)
Provision for bad debts 15 9
Supplies - 43
Prepaid expenses and other receivables (381) 313
Accounts payable 1,715 164
Accrued liabilities and other expenses 1,506 1,421
Deferred revenues 248 293
----------- ----------
Net cash provided by operating activities 2,272 641
----------- ----------
Cash flows from investing activities
Cost of acquisitions (192) -
Purchases of assets (526) (411)
----------- ----------
Net cash used in investing activities (718) (411)
----------- ----------
Cash flows from financing activities
Net proceeds on share issuance 26,406 -
Proceeds (repayment) of capital lease obligations (67) 30
Increase (decrease) in bank overdraft (391) 351
----------- ----------
Net cash (used in) provided by financing activities 25,948 381
Effect of exchange rate changes on cash (11) 106
----------- ----------
Net increase in cash 27,491 717
Cash at beginning of period 2,280 43
----------- ----------
Cash at end of period 29,771 760
=========== ==========
</TABLE>
See accompanying notes
5
<PAGE>
PLANNING SCIENCES INTERNATIONAL PLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business
- --------
Planning Sciences International plc (the "Company") is incorporated in England
and Wales. The Company develops, markets and supports high performance
client/server decision support software for business planning and decision
making. Its principal product is marketed under the name Gentia.
Basis of Presentation
- ---------------------
The consolidated financial statements are stated in United States dollars and
are prepared under United States generally accepted accounting principles.
Interim Financial Information
- -----------------------------
The financial information at June 30, 1996 and for the six months ended June 30,
1996 and 1995 is unaudited but includes all adjustments (consisting only of
normal recurring adjustments) which the Company considers necessary for a fair
presentation of the financial position at such date and the operating results
and cash flows for those periods. Results for the six month period ended June
30, 1996 are not necessarily indicative of results that may be expected for the
entire year. The condensed consolidated balance sheet at December 31, 1995 has
been derived from the audited consolidated financial statements at that date.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with United States generally accepted
accounting principles have been condensed or omitted pursuant to the Securities
and Exchange Commission Rules and Regulations. These condensed consolidated
financial statements should be read in conjunction with the audited consolidated
financial statements and notes for the nine months ended December 31, 1995
included in the Company's Registration Statement filed April 29, 1996.
Principles of Consolidation
- ---------------------------
The accompanying financial statements consolidate the accounts of the Company
and its wholly and majority owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated.
Foreign Exchange
- ----------------
The consolidated balance sheets of the Company and its foreign subsidiaries are
translated from their respective functional currencies to United States dollars
at period-end exchange rates and the statements of operations and cash flows at
average rates for the relevant periods. Gains and losses resulting from
translation are accumulated as a separate component of shareholders' equity. Net
gains and losses resulting from foreign exchange transactions, which are not
material in any of the reporting periods, are included in the consolidated
statement of operations.
6
<PAGE>
PLANNING SCIENCES INTERNATIONAL PLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Per Share Information
- ---------------------
Net income per share information is computed based on the weighted average
number of shares outstanding and dilutive share equivalents of outstanding share
options using the treasury stock method. Net income per share is based upon the
weighted average number of shares and equivalent shares outstanding during the
period. Equivalent shares consist of share options and are excluded for the
computation if their effect is anti-dilutive except that, pursuant to the
Securities and Exchange Commission Staff Account Bulletins, shares and
equivalent shares issued during the twelve month period ended March 12, 1996
have been included in the calculation as if they were outstanding for all
periods through December 31, 1995 (using the treasury stock method for the
options at the initial public offering price).
Reorganization of Share Capital
- -------------------------------
Effective on April 29, 1996 the Company reorganized its authorized and issued
share capital as follows: its Deferred shares of 5p each and its "B" shares of
5p each were converted into "A" shares of 5p each and all of its "A" shares of
5p each were consolidated and redesignated as Ordinary shares of 15p each on the
basis of one Ordinary share for every three "A" shares. All shares and
references thereto in these financial statements have been restated to show the
effect of this reorganization.
2 ACQUISITION
In May 1996, the Company acquired the business goodwill and certain tangible and
intangible assets from its exclusive South African Distributor, and commenced
its own operations via a 100% subsidiary in South Africa. The acquisition was
accounted for under the purchase method and resulted in the recording of
approximately $192,000 in identified intangibles and goodwill. It is Company
policy to amortize intangible assets and goodwill on a straight-line basis over
their useful lives. The goodwill and intangible assets acquired in this
transaction are being amortized over their useful life of 10 years.
3 INITIAL PUBLIC OFFERING
On April 30, 1996 the Company completed its initial public offering of 3,000,000
American Depositary Shares, representing 3,000,000 Ordinary shares at $16.00 per
share, of which 2,000,000 shares were sold by the Company and 1,000,000 shares
were sold by selling shareholders.
4 LITIGATION
The Company is involved in one legal action arising in relation to patents in
the United States. While the outcome of this matter is currently not
determinable, it is management's opinion that this matter will not have a
material adverse effect on the Company's consolidated financial condition or
results of its operations.
7
<PAGE>
PLANNING SCIENCES INTERNATIONAL PLC
Management's Discussion and Analysis of Financial Condition and Results of
Operations for the three months ended June 30, 1996 and 1995, and the six months
ended June 30, 1996 and 1995.
Three months ended June 30, 1996 and 1995.
- ------------------------------------------
Revenues
- --------
Revenues were $6.1 million in the 3 months ended June 30, 1996, an increase of
42% compared to revenues of $4.3 million for the 3 months ended June 30, 1995.
License revenues were $4.0 million in the 3 months ended June 30, 1996, an
increase of 50% over license revenues of $2.6 million for the 3 months ended
June 30, 1995. Services and other revenues were $1.9 million in the 3 months
ended June 30, 1996, an increase of 29% compared to $1.7 million for the 3
months ended June 30, 1995. The increase in revenues reflected both increased
sales of the Company's Gentia product as well as increased consulting and
maintenance services related thereto.
Gross Profit
- ------------
Gross profit was $4.7 million or 77% for the 3 months ended June 30, 1996,
compared to $3.4 million or 80% for the 3 months ended June 30, 1995. The
decrease in Gross Profit was primarily due to a higher proportion of consulting
services in the three months ended June 30, 1996 being subcontracted to third
parties.
Sales and Marketing
- -------------------
Sales and marketing costs were $2.3 million in the 3 months ended June 30, 1996,
an increase of 82% compared to $1.3 million in the 3 months ended June 30, 1995.
The increase in dollar expenditure reflects the Company's increased investment
in its sales and marketing organization. The Company expects these expenses will
continue to increase as a result of its continued investment in its sales and
marketing organization. In particular, the Company is expanding its geographic
coverage and will continue to do so.
Research and Development
- ------------------------
Research and development costs were $775,000 in the 3 months ended June 30,
1996, an increase of 89% compared to $409,000 in the 3 months ended June 30,
1995. The increase is primarily as a result of hiring additional personnel to
continue the Company's development program. It is the Company's intention to
accelerate its expenditure on research and development of new products when it
considers it appropriate to do so. The Company's research and development centre
is located in Ipswich, England and related expenditure was therefore incurred
predominantly in pounds sterling.
General and Administrative
- --------------------------
General and administrative costs were $989,000 in the 3 months ended June 30,
1996, a decrease of 24% compared to $1.3m in the 3 months ended June 30, 1995.
The comparative period in 1995 reflected a provision of $178,000 against bad and
doubtful accounts in respect of old product lines as well as a provision against
its investment in three non-operating subsidiaries.
8
<PAGE>
PLANNING SCIENCES INTERNATIONAL PLC
Management's Discussion and Analysis of Financial Condition and Results of
Operations for the three months ended June 30, 1996 and 1995. (Continued)
Other Income (expenses)
- -----------------------
Other income was $269,000 in the 3 months ended June 30, 1996 compared to an
expense of $18,000 in the 3 months ended June 30, 1995. The additional income
was primarily due to significant interest income received due to the Company's
Initial Public Offering completed on April 30, 1996.
Six months ended June 30, 1996 and 1995
- ---------------------------------------
Revenue
- -------
Revenues were $11.3 million in the six months ended June 30, 1996, an increase
of 40% compared to revenues of $8.1 million for the six months ended June 30,
1995. License revenues were $7.3 million in the six months ended June 30, 1996,
an increase of 40% over license revenues of $5.2 million for the six months
ended June 30, 1995. Services and other revenues were $4.0 million in the 6
months ended June 30, 1996, an increase of 38% compared to $2.9 million for the
six months ended June 30, 1995. The increase in revenues reflected both
increased sales of the Company's Gentia product as well as increased consulting
and maintenance services related thereto.
Gross Profit
- ------------
Gross profit was $8.8 million or 78% for the six months ended June 30, 1996,
compared to $6.4 million or 79% for the six months ended June 30, 1995.
Sales and Marketing
- -------------------
Sales and marketing costs were $4.4 million in the six months ended June 30,
1996, an increase of 57% compared to $2.8 million in the six months ended June
30, 1995. This increase in dollar expenditure reflects the Company's increased
investment in its sales and marketing organization. The Company expects these
expenses will continue to increase as a result of its continued investment in
its sales and marketing organization.
Research and Development
- ------------------------
Research and development costs were $1.37 million in the 6 months ended June 30,
1996, an increase of 74% compared to $788,000 in the six months ended June 30,
1995. The increase is primarily as a result of hiring additional personnel to
continue the Company's development program. The Company's research and
development centre is located in Ipswich, England and related expenditure was
therefore incurred predominantly in pounds sterling.
General and Administrative
- --------------------------
General and administrative costs were $1.9 million in the six months ended June
30, 1996, a decrease of 5% compared to $2.0 million in the six months ended June
30, 1995. The Company expects general and administrative expenditures to
increase in absolute dollar terms in 1996, despite this small reduction in the
first six months.
Other Income (Expenses)
- -----------------------
Other income was $267,000 in the six months ended June 30, 1996 compared to an
expense of $67,000 in the six months ended June 30, 1995. The additional income
was primarily due to additional interest income received from the Company's
Initial Public Offering completed on April 30, 1996.
9
<PAGE>
Liquidity and Capital Resources
- -------------------------------
As of June 30, 1996, the Company had cash and cash equivalents of $29.8m.
Accounts receivable at June 30, 1996 were $5.9m, an increase of 49% compared to
December 31, 1995 reflecting the continuing growth of the Company's business. In
the six months ended June 30, 1996, the Company's operating activities generated
cash of $2.3 million compared to $641,000 in the six months ended June 30, 1995.
The increase was primarily due to increased profitability and an increase in
accounts payable.
Investing activities consumed $718,000 in the six months ended June 30, 1996
compared to $411,000 in the six months ended June 30, 1995. The increase was due
to the acquisition costs of the South African business together with additional
assets purchased.
Financing activities generated $25.9m in the six months ended June 30, 1996
compared to $381,000 in the six months ended June 30, 1995. The increase arising
primarily because of the receipt of the proceeds from the Initial Public
Offering completed on April 30, 1996.
The Company believes that existing cash, cash equivalents and cash generated by
operations will be sufficient to meet the Company's working capital needs and
currently planned capital expenditure requirements for the next twelve months.
10
<PAGE>
The information contained in Exhibit 1 hereto, consisting of the registrant's
unaudited financial statements for the six months ended June 30, 1996, has been
distributed to its security holders and is furnished to the Commission pursuant
to Rule 13a-16 under the Securities Act of 1934, as amended (the "Act"). This
report and the information furnished herewith shall not be deemed to be "filed"
for the purposes of Section 18 of the Act or otherwise subject to the
liabilities of that section.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused the Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PLANNING SCIENCES
INTERNATIONAL PLC
By: [Signature of Anthony K. Fox]
-----------------------------
Anthony K. Fox
Chief Financial Officer
Date: August 1, 1996
11
<PAGE>
EXHIBIT INDEX
Page
Exhibit A Second Quarter Press Release 13
12
EXHIBIT A
Second Quarter Press Release
13
<PAGE>
PLANNING SCIENCES INTERNATIONAL REPORTS STRONG GAINS
BOSTON, August 1, 1996 - Planning Sciences International (Nasdaq: PLNSY), an
international supplier of software for business planning and decision making,
today reported net income of $574,000, or $0.05 per share, on revenue of $6.1
million in the quarter ended June 30, 1996.
This compares with net income of $274,000, or $0.03 per share, and revenues of
$4.3 million a year earlier.
For the first six months of this year, Planning Sciences International had net
income of $900,000, or $0.09 per share, on revenues of $11.3 million, compared
with net income of $498,000, or $0.06 per share, on sales of $8.1 million in the
six months ended on June 30, 1995.
"We are very pleased to be reporting a 109% increase in second-quarter
earnings," said Paul Rolph, chairman and chief executive officer. "This
improvement, and our 42% revenue gain, reflect continuing global demand for our
Gentia software. The new Gentia Version 3.0, which offers customers enough new
capacity to handle multi-terra bytes of information and was introduced in June,
is already proving to be a further stimulus to demand.
"We have been reviewing Version 3 with customers and business partners including
the Baan company," Mr. Rolph continued. "We have been talking with Baan for
several months, and I am confident that we will soon be announcing an agreement
under which Gentia will be utilized within Baan software.
Our customer base has continued to grow, and our global market position is
steadily expanding."
The company completed its initial public offering on April 30, 1996, raising net
proceeds of approximately $26.4 million on the sale of two million shares of
common stock.
In this year's second quarter Planning Sciences International also opened a Hong
Kong office, completed a South East Asian distribution network, and opened a
Johannesburg office in conjunction with acquiring the Gentia business of its
South African distributor.
Planning Sciences International plc, founded in 1983, focuses on the development
of the Enterprise Decision Support System, Gentia. The company has its
headquarters in London and has offices in Boston, Denver, Atlanta, Los Angeles
and San Francisco.
Gentia is a high performance client/server decision support system for complex
business analysis and reporting. Gentia applications are deployed using a
distributed agent based architecture which ensures delivery of key information
to the desktop of decision makers throughout an Organization.
Gentia has more than 250 corporate and public sector clients including News
International, Motorola, Barclays Bank, Volvo and Walt Disney.
Internet users can obtain further information on Planning Sciences via the
Planning Sciences home page: http://www.gentia.com.
This news release contains statements of a forward-looking nature relating to
the financial performance of Planning Sciences International. Such statements
are based upon the information available to management at this time, and they
necessarily involve risk because actual results could differ materially from
current expectations. Among the many factors that could cause actual results to
differ from those set forth in the company's forward-looking statements are
changes in general economic conditions, actions taken by customers or
competitors, and the receipt of more or fewer orders than expected.
14
<PAGE>
PLANNING SCIENCES INTERNATIONAL PLC
Condensed Consolidated Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, 1996 June 30, 1995 June 30, 1996 June 30, 1995
(in thousands, except per share amounts)
US$ US$ US$ US$
<S> <C> <C> <C> <C>
Revenues:
License 3,966 2,636 7,279 5,206
Services and other 2,138 1,654 4,028 2,899
-------- ---------- ---------- ----------
6,104 4,290 11,307 8,105
-------- ---------- ---------- ----------
Cost of revenues
License 109 17 211 85
Services and other 1,275 841 2,307 1,605
-------- ---------- ---------- ----------
1,384 858 2,518 1,690
-------- ---------- ---------- ----------
Gross profit 4,720 3,432 8,789 6,415
Operating expenses
Sales and marketing 2,314 1,273 4,381 2,773
Research and development 775 409 1,372 788
General and administrative 989 1,302 1,874 1,996
-------- ---------- ---------- ----------
Total operating expenses 4,078 2,984 7,627 5,557
-------- ---------- ---------- ----------
Income from operations 642 448 1,162 858
Other income (expense) 269 (18) 267 (67)
-------- ---------- ---------- ----------
Income before provision for taxes 911 430 1,429 791
Provision for income taxes 337 156 529 293
-------- ---------- ---------- ----------
Net income 574 274 900 498
-------- ---------- ---------- ----------
Net income per share $0.05 $0.03 $0.09 $0.06
Weighted average shares 10,614 8,734 9,755 8,315
outstanding
</TABLE>
15
<PAGE>
PLANNING SCIENCES INTERNATIONAL PLC
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
(unaudited) (audited)
(in thousands)
US$ US$
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents 29,771 2,280
Accounts receivable, net of allowances 5,981 4,001
for doubtful accounts of $303 at June
30, 1996 (December 31, 1995 - $290)
Prepaid expenses and other current assets 763 381
------------ ------------
Total current assets 36,515 6,662
------------ ------------
Property and equipment, net 1,616 1,093
Goodwill on acquisition 192 -
------------ ------------
Total assets 38,323 7,755
------------ ------------
Liabilities and shareholders' equity
Current liabilities:
Bank overdraft - 391
Current portion of lease obligations 186 84
Accounts payable 2,261 546
Taxes payable 832 310
Accrued liabilities 2,380 1,030
Deferred revenues 2,215 1,967
UK value added tax 159 373
Other accounts payable 199 355
------------ ------------
Total current liabilities 8,232 5,056
Non current liabilities:
Deferred taxation 34 34
Long-term portion of lease obligations 273 175
------------ ------------
Total liabilities 8,539 5,265
Shareholder's equity:
Ordinary shares 2,018 1,565
Preference shares - -
Additional paid-in capital 26,668 715
Retained earnings 1,178 278
Minority interest (1) -
Cumulative translation adjustment (79) (68)
------------ ------------
Total shareholders' equity 29,784 2,490
------------ ------------
Total liabilities and shareholders' equity 38,323 7,755
------------ ------------
</TABLE>
16
