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 September 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 September 30, 1996 (Unaudited) and 3
December 31, 1995 (Audited)
Condensed Consolidated Statements of Income for the three and nine months ended September 4
30, 1996 and 1995 (Unaudited)
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 5
1996 and 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. Third Quarter Press Release 13
</TABLE>
2
<PAGE>
PLANNING SCIENCES INTERNATIONAL PLC
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
(unaudited) (audited)
(in thousands)
US$ US$
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents 26,264 2,280
Accounts receivable, net of allowances 6,486 4,001
for doubtful accounts of $273 at September 30, 1996
(December 31, 1995 - $290)
Prepaid expenses and other current assets 832 381
--------- ---------
Total current assets 33,582 6,662
--------- ---------
Property and equipment, net 1,868 1,093
Goodwill on acquisition 3,407 -
--------- --------
Total assets 38,857 7,755
--------- ---------
Liabilities and shareholders' equity
Current liabilities:
Bank overdraft - 391
Current portion of lease obligations 186 84
Accounts payable 1,281 546
Taxes payable 1,278 310
Accrued liabilities 1,508 1,030
Deferred revenues 2,843 1,967
Other accounts payable 677 728
--------- --------
Total current liabilities 7,773 5,056
Non current liabilities:
Deferred taxation 34 34
Long-term portion of lease obligations 228 175
--------- --------
Total liabilities 8,035 5,265
Shareholder's equity:
Ordinary shares 2,027 1,565
Preference shares - -
Additional paid-in capital 27,085 715
Retained earnings 1,803 278
Minority interest - -
Cumulative translation adjustment (93) (68)
--------- --------
Total shareholders' equity 30,822 2,490
--------- --------
Total liabilities and shareholders' equity 38,857 7,755
--------- --------
</TABLE>
See accompanying notes
3
<PAGE>
PLANNING SCIENCES INTERNATIONAL PLC
Condensed Consolidated Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30, September 30, September 30,
1996 1995 1996 1995
(in thousands, except per share amounts)
US$ US$ US$ US$
<S> <C> <C> <C> <C>
Revenues:
License 4,091 2,151 11,370 7,357
Services and other 2,327 1,728 6,355 4,627
--------- ---------- --------- ----------
6,418 3,879 17,725 11,984
--------- ---------- --------- ----------
Cost of revenues
License 388 63 599 148
Services and other 1,218 1,014 3,525 2,619
--------- ---------- --------- ----------
1,606 1,077 4,124 2,767
--------- ---------- --------- ----------
Gross profit 4,812 2,802 13,601 9,217
Operating expenses
Sales and marketing 2,405 1,310 6,786 4,083
Research and development 794 430 2,166 1,218
General and administrative 962 937 2,836 2,933
--------- ---------- --------- ----------
Total operating expenses 4,161 2,677 11,788 8,234
--------- ---------- --------- ----------
Income from operations 651 125 1,813 983
Other income (expense) 341 (21) 608 (88)
--------- ---------- --------- ----------
Income before provision for taxes 992 104 2,421 895
Provision for income taxes 367 38 896 331
--------- ---------- --------- ----------
Net income 625 66 1,525 564
--------- ---------- --------- ----------
Net income per share $0.06 $0.01 $0.15 $0.07
Weighted average shares outstanding 11,206 8,734 10,238 8,455
</TABLE>
See accompanying notes
4
<PAGE>
PLANNING SCIENCES INTERNATIONAL PLC
Condensed Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30, September 30,
1996 1995
(in thousands)
US$ US$
<S> <C> <C>
Cash flows from operating activities
Net income 1,525 564
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation 431 150
Provision for taxes 896 331
Goodwill 35 -
Changes in operating assets and liabilities
Accounts receivable (2,468) (416)
Provision for bad debts (17) 222
Supplies - 46
Prepaid expenses and other receivables (450) (409)
Accounts payable 735 329
Accrued liabilities and other expenses 500 653
Deferred revenues 876 1,017
-------- ---------
Net cash provided by operating activities 2,063 2,487
-------- ---------
Cash flows from investing activities
Cost of acquisitions (2,852) -
Purchases of assets (936) (541)
-------- ---------
Net cash used in investing activities (3,788) (541)
-------- ---------
Cash flows from financing activities
Net proceeds on share issuance 26,242 -
Repayment of capital lease obligations (117) (5)
Increase (decrease) in bank overdraft (391) 69
-------- ---------
Net cash provided by financing activities 25,734 64
Effect of exchange rate changes on cash (25) 109
-------- ---------
Net increase in cash 23,984 2,119
Cash at beginning of period 2,280 43
-------- ---------
Cash at end of period 26,264 2,162
======== =========
</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 September 30, 1996 and for the nine months ended
September 30, 1996 and 1995 is unaudited but includes all 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 nine month period ended September 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 July 1996 the Company acquired the business goodwill from its exclusive
distributor in Germany and commenced its own operations via a 100% subsidiary in
Germany. In July 1996 the Company acquired the outstanding 10% capital held by
third parties in Planning Sciences International BV, which manages the group
distributors in Continental Europe. In September 1996, the Company acquired the
entire issued capital of its distributors in Belgium, Netherlands and
Luxembourg. The acquisitions above were all accounted for under the purchase
method and resulted in the recording of approximately $ 3.4 million 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 these transactions 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 September 30, 1996 and 1995, and the nine
months ended September 30, 1996 and 1995.
Three months ended September 30, 1996 and 1995.
- -----------------------------------------------
Revenues
- --------
Revenues were $6.4 million in the 3 months ended September 30, 1996, an increase
of 65% compared to revenues of $3.9 million for the 3 months ended September 30,
1995. License revenues were $4.1 million in the 3 months ended September 30,
1996, an increase of 90% over license revenues of $2.2 million for the 3 months
ended September 30, 1995. Services and other revenues were $2.3 million in the 3
months ended September 30, 1996, an increase of 35% compared to $1.7 million for
the 3 months ended September 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 $4.8 million or 75% for the 3 months ended September 30, 1996,
compared to $2.8 million or 72% for the 3 months ended September 30, 1995. The
increase in Gross Profit was primarily due to a higher proportion of license
revenue in the three months ended September 30, 1996.
Sales and Marketing
- -------------------
Sales and marketing costs were $2.4 million in the 3 months ended September 30,
1996, an increase of 84% compared to $1.3 million in the 3 months ended
September 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 $794,000 in the 3 months ended September 30,
1996, an increase of 85% compared to $430,000 in the 3 months ended September
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 $962,000 in the 3 months ended September
30, 1996, an increase of 3% compared to $937,000 in the 3 months ended September
30, 1995.
8
<PAGE>
PLANNING SCIENCES INTERNATIONAL PLC
Management's Discussion and Analysis of Financial Condition and Results of
Operations for the three months ended September 30, 1996 and 1995. (Continued)
Other Income (expenses)
- -----------------------
Other income was $341,000 in the 3 months ended September 30, 1996 compared to
an expense of $21,000 in the 3 months ended September 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.
Nine months ended September 30, 1996 and 1995
- ---------------------------------------------
Revenue
- -------
Revenues were $17.7 million in the nine months ended September 30, 1996, an
increase of 48% compared to revenues of $12.0 million for the nine months ended
September 30, 1995. License revenues were $11.4 million in the nine months ended
September 30, 1996, an increase of 55% over license revenues of $7.4 million for
the nine months ended September 30, 1995. Services and other revenues were $6.4
million in the nine months ended September 30, 1996, an increase of 37% compared
to $4.6 million for the nine months ended September 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 $13.6 million or 77% for the nine months ended September 30,
1996, compared to $9.2 million or 77% for the nine months ended September 30,
1995.
Sales and Marketing
- -------------------
Sales and marketing costs were $6.8 million in the nine months ended September
30, 1996, an increase of 66% compared to $4.1 million in the nine months ended
September 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 $2.2 million in the nine months ended
September 30, 1996, an increase of 78% compared to $1.2 million in the nine
months ended September 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 $2.8 million in the nine months ended
September 30, 1996, a decrease of 3% compared to $2.9 million in the nine months
ended September 30, 1995. The Company expects general and administrative
expenditures to increase in absolute dollar terms in 1996.
Other Income (Expenses)
- -----------------------
Other income was $608,000 in the nine months ended September 30, 1996 compared
to an expense of $88,000 in the nine months ended September 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 September 30, 1996, the Company had cash and cash equivalents of $26.3m.
Accounts receivable at September 30, 1996 were $6.5m, an increase of 62%
compared to December 31, 1995 reflecting the continuing growth of the Company's
business. In the nine months ended September 30, 1996, the Company's operating
activities generated cash of $ 2.1 million compared to $ 2.5 million in the nine
months ended September 30, 1995. The reduction was primarily due to an increase
in accounts receivable.
Investing activities consumed $ 3.8 million in the nine months ended September
30, 1996 compared to $ 541,000 in the nine months ended September 30, 1995. The
increase was due to the acquisition costs of the European and South African
businesses together with additional assets purchased.
Financing activities generated $ 25.7 million in the nine months ended September
30, 1996 compared to $ 64,000 in the nine months ended September 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 nine months ended September 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: November 7, 1996
11
<PAGE>
EXHIBIT INDEX
Page
Exhibit A Third Quarter Press Release 13
12
EXHIBIT A
Third Quarter Press Release
PLANNING SCIENCES INTERNATIONAL REPORTS RECORD REVENUES, TENFOLD INCREASE IN
NET INCOME
LONDON, November 7, 1996 - Planning Sciences International (Nasdaq: PLNSY) the
international supplier of software for business planning and decision making,
today reported record net income of $625,000, or $0.06 per share, and record
revenues of $6.4 million in the third quarter of 1996.
The comparable totals for the third quarter of 1995 were net income of $66,000,
or $0.01 per share, and revenues of $3.9 million. Primarily as the result of an
April 1996 initial public offering, the weighted average number of shares
outstanding was 11.2 million in this year's third quarter, 8.7 million in the
third quarter of 1995.
In the nine months ending on September 30, 1996, Planning Sciences International
had net income of $1.5 million, or $0.15 per share, and revenues of $17.7
million. This compares with net income of $564,000, or $0.07 per share, and
revenues of $12.0 million in the first three quarters of last year.
Paul Rolph, Chairman and Chief Executive Officer, noted that license revenue
associated with the company's Gentia software was 90% higher in this year's
third quarter than in the comparable period of 1995.
"This is particularly gratifying in light of the fact that the summer months are
traditionally the most challenging in our business," Mr Rolph said. "It further
demonstrates the competitive strength of our product and the increased market
penetration that our sales and marketing organization is achieving worldwide."
Third quarter 1996 achievements by Planning Sciences International included:
{bullet} An agreement under which Planning Sciences' on-line analytical
processing (OLAP) technology is being integrated into the enterprise
business software applications of the Baan Company.
{bullet} Acquisition by Planning Sciences of its distributors in Germany
and the Benelux countries.
{bullet} Expansion of the Company's international distributor agreements in
Europe, Asia and South America.
ABOUT THE COMPANY
Planning Sciences International plc, NASDAQ flotation April 30, 1996, focuses on
the development of the Enterprise Decision Support System, Gentia. The global
headquarters of the company is in London. Planning Sciences, Inc., has offices
in Boston, Denver, Atlanta, Los Angeles and San Francisco, in the USA. The group
also has offices in Australia, Hong Kong, South Africa, Belgium and the
Netherlands.
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 300 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.
13
<PAGE>
PLANNING SCIENCES INTERNATIONAL REPORTS RECORD REVENUES,
TENFOLD INCREASE IN NET INCOME
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 Nine months ended
September 30, September 30, September 30, September 30,
1996 1995 1996 1995
(in thousands, except per share amounts)
US$ US$ US$ US$
<S> <C> <C> <C> <C>
Revenues:
License 4,091 2,151 11,370 7,357
Services and other 2,327 1,728 6,355 4,627
--------- ---------- --------- ----------
6,418 3,879 17,725 11,984
--------- ---------- --------- ----------
Cost of revenues
License 388 63 599 148
Services and other 1,218 1,014 3,525 2,619
--------- ---------- --------- ----------
1,606 1,077 4,124 2,767
--------- ---------- --------- ----------
Gross profit 4,812 2,802 13,601 9,217
Operating expenses
Sales and marketing 2,405 1,310 6,786 4,083
Research and development 794 430 2,166 1,218
General and administrative 962 937 2,836 2,933
--------- ---------- --------- ----------
Total operating expenses 4,161 2,677 11,788 8,234
--------- ---------- --------- ----------
Income from operations 651 125 1,813 983
Other income (expense) 341 (21) 608 (88)
--------- ---------- --------- ----------
Income before provision for taxes 992 104 2,421 895
Provision for income taxes 367 38 896 331
--------- ---------- --------- ----------
Net income 625 66 1,525 564
--------- ---------- --------- ----------
Net income per share $0.06 $0.01 $0.15 $0.07
Weighted average shares outstanding 11,206 8,734 10,238 8,455
</TABLE>
See accompanying notes
15
<PAGE>
PLANNING SCIENCES INTERNATIONAL PLC
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
(unaudited) (audited)
(in thousands)
US$ US$
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents 26,264 2,280
Accounts receivable, net of allowances 6,486 4,001
for doubtful accounts of $273 at September 30, 1996
(December 31, 1995 - $290)
Prepaid expenses and other current assets 832 381
----------- ----------
Total current assets 33,582 6,662
----------- ----------
Property and equipment, net 1,868 1,093
Goodwill on acquisition 3,407 -
----------- ----------
Total assets 38,857 7,755
----------- ----------
Liabilities and shareholders' equity
Current liabilities:
Bank overdraft - 391
Current portion of lease obligations 186 84
Accounts payable 1,281 546
Taxes payable 1,278 310
Accrued liabilities 1,508 1,030
Deferred revenues 2,843 1,967
UK value added tax (3) 373
Other accounts payable 680 355
----------- ----------
Total current liabilities 7,773 5,056
Non current liabilities:
Deferred taxation 34 34
Long-term portion of lease obligations 228 175
----------- ----------
Total liabilities 8,035 5,265
Shareholder's equity:
Ordinary shares 2,027 1,565
Preference shares - -
Additional paid-in capital 27,085 715
Retained earnings 1,803 278
Minority interest - -
Cumulative translation adjustment (93) (68)
----------- ----------
Total shareholders' equity 30,822 2,490
----------- ----------
Total liabilities and shareholders' equity 38,857 7,755
----------- ----------
</TABLE>
16
