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Exhibit 99.1
HTE CORRECTS TYLER'S RECENT STATEMENTS
Lake Mary, FL, October 18, 2000 -- HTE Inc. (NASDAQ: HTEI), a leading
provider of enterprise-wide software solutions for public-sector organizations
and utilities worldwide, today stated corrections to several statements in the
Tyler Technologies, Inc. (NYSE: Tyl) press release dated October 20, 2000.
"It is very unfortunate that Tyler has again used the public forum of
press releases to communicate with HTE. Tyler's press releases undermine the
confidence of HTE's employees, customers and shareholders. The number of
inaccurate statements in Tyler's most recent press release particularly disturbs
us. HTE's board of directors and executive management team is determined to set
the record straight. Our dedicated employees, loyal customers and shareholders
should know the truth," said HTE Chairman Bernard B. Markey.
TYLER'S STATEMENT - Tyler confirmed its long-term commitment to
consider, pursue, and attempt to present to HTE management and its stockholders
all opportunities that will maximize value for all HTE stockholders.
HTE'S RESPONSE - Tyler has never presented any proposal to HTE's board
or management. Tyler expressed an interest in making a proposal to HTE but never
made a formal proposal to HTE's board. HTE shareholders should be aware of
Tyler's status as a direct competitor of HTE that aggressively competes against
HTE for new business. As a public company, Tyler's board and its management are
legally obligated to serve the interest of Tyler's shareholders first; HTE's
shareholders are a distant second.
TYLER'S STATEMENT - Tyler said that it has abandoned its previously
announced intention to propose to HTE management a business combination of the
two companies, in light of HTE management's continued refusal to meet with
Tyler.
HTE'S RESPONSE - HTE's chairman, the executive vice president and
general counsel, and representatives of HTE's investment advisory firm,
Broadview International, met with Tyler's chairman, president and other
executive officers in the fall of 1999. At that meeting, Tyler repeated its
previously communicated position that "it had an interest" in proposing a merger
of the two companies, but as noted above, Tyler never presented a proposal for
the HTE board of directors to consider.
HTE's board believes that a combination with Tyler, should one be
proposed, would not be in the best interests of HTE's shareholders for many
reasons, including: the significant business risks associated with Tyler's
multi-year assimilation strategy for its disparate acquisitions, Tyler's history
of losses, Tyler's low-cash position, and the financial risks associated with
Tyler's negative tangible net worth and very significant debt.
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The concern about Tyler's debt was validated recently when Tyler, as
reported in its filings with the SEC, defaulted under the financial covenants of
its credit facility. In connection with remedying the default on its credit
facility, of which there was an approximate outstanding loan balance of $71.8
million as of June 30, 2000, Tyler reported in its SEC filings that it must
reduce its credit line under such facility by approximately $22 million by
November 30, 2000. To do that Tyler intends to sell certain assets. Tyler
recently completed the sale of one business unit. Under the agreement with its
banks, Tyler must pay down its credit facility by an additional $1.5 million on
the last day of each month, starting on December 31, 2000 and continuing through
October 2, 2001. By contrast, HTE has more than $6.5 million in cash and no
significant debt. Because of HTE's much stronger financial position and
undervalued share price, HTE offered to lead a group to buy back Tyler's stake
in HTE when Tyler's bank issues came to light.
The HTE board of directors believes HTE shareholders would be far
better served by having HTE remain independent and allowing Joseph M. Loughry,
HTE's chief executive officer, to lead HTE's dedicated employees in executing
the strategic plan outlined in the third quarter earnings release and conference
call.
TYLER'S STATEMENT - Protection from HTE management's conflict of
interest as to DemandStar.com, Inc. (OTC Bulletin Board: DMND). This statement
raised concerns about inter-company transactions, officer and director ownership
of HTE and DemandStar and potential conflicts of interest between the boards of
the companies.
HTE'S RESPONSE - As documented in HTE's filings with the SEC, since May
2000, HTE does not possess or exercise control over DemandStar.com., Inc. The
principal goal of HTE's spin-off of DemandStar was to position DemandStar as an
independently owned and managed business, so that it could more effectively
pursue its strategic business plan and raise the necessary additional equity
capital. The offering accomplished both of these objectives. In fact, HTE has
not loaned money to nor engaged in any material or significant business or other
transaction with DemandStar since the closing of the rights offering in early
May 2000. DemandStar will most likely have a secondary offering of its capital
stock in the future that will increase the number of shares outstanding and
further reduce the current minority position of HTE and HTE's directors in
DemandStar.
Tyler's press release also inappropriately asserted that HTE's officers
and directors as a group own 2.8% of HTE's outstanding common stock and compared
that ownership to an asserted combined 32.7% ownership and option holdings in
DemandStar. These figures are not correct as of this date. First, Tyler did not
include HTE's options in calculating the HTE percentage but did include options
when calculating the DemandStar figure. The correct current level of HTE stock
holdings and options for HTE executive officers and directors is approximately
9%. HTE shareholders will be pleased to know that
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members of the board of directors have been purchasing HTE's shares in the open
market over the past several months at prices significantly higher than HTE's
current share price. HTE's directors and officers presently own HTE stock
acquired for over $2.5 million in consideration. HTE's management and directors
have a very significant financial stake in HTE and are working hard to ensure
HTE is successful.
Tyler's statement regarding DemandStar ownership by HTE officers and
directors as a group is also inaccurate. First, to be clear, HTE and DemandStar
have separate and independent full-time executive management teams. Second,
options and warrants were issued to acquire "authorized but not yet outstanding"
shares of DemandStar, not to acquire "outstanding shares," as Tyler stated. The
correct figure to use in calculating the potential stock ownership should
include options and warrants outstanding. The conversion of preferred stock is
also generally included in such calculations; therefore, the correct figure for
DemandStar ownership by HTE officers and directors is slightly more than 20%,
not the 32.7% asserted by Tyler.
Nearly half of these DemandStar holdings were purchased in the rights
offering or the open market at prices equal to, or greater than, $1.00 per
share. The HTE directors who serve on DemandStar's board have invested nearly $1
million of their own cash in DemandStar, with approximately half of that
investment made by Mr. O. F. Ramos, DemandStar's chief executive officer. Mr.
Ramos also serves on HTE's board of directors. HTE shareholders can rest assured
that Mr. Ramos has a significant incentive to see HTE succeed, because he owns
more than 200,000 shares of HTE common stock. To conclude on the issue of shares
purchased in both companies by HTE officers and directors, the amount invested
in HTE by those individuals is approximately 2.5 times the amount they have
invested in DemandStar.
Most of the other DemandStar holdings represent options issued to Mr.
O. F. Ramos. The majority of Mr. Ramos' DemandStar options were issued to him as
chief executive officer of DemandStar and will vest only if performance criteria
are met. The DemandStar board of directors believes it is in DemandStar
shareholders' best interest to have Mr. Ramos heavily incentivized to
successfully lead the DemandStar team. Since HTE has an investment in the
capital stock of DemandStar, its shareholders will also benefit if Mr. Ramos and
the DemandStar team are successful.
The HTE and DemandStar boards are very concerned that shareholders of
both companies are treated fairly in the event a conflict arises. The HTE board
has created a conflict of interest committee composed of its two directors who
are not directors or officers of DemandStar. George P. Keeley and Joseph M.
Loughry will address any issue involving DemandStar. DemandStar has also added
an independent director who will represent DemandStar shareholders in the event
a conflict of interest with HTE arises. Both HTE and DemandStar are adding more
independent directors who will not serve on each other's boards. All the new
independent directors will join each respective company's conflict of interest
committee.
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TYLER'S STATEMENT - DemandStar.com (an investment that has
significantly diminished in value). HTE'S RESPONSE - During the past several
months, stock values of most companies, particularly technology and
internet-related stocks, have declined, including DemandStar. As a matter of
fact, since May 15, 2000, the date DemandStar's stock began trading, Tyler's
common stock has fallen approximately 57%. Notwithstanding the depressed stock
market, DemandStar continues to execute successfully in accordance with its
strategic business plan and is the leader in the bid segment of the local
government B2G market. As reported recently, DemandStar has grown rapidly with
more than 175 government agencies under contract for its B2G internet
procurement services. Furthermore, the directors and officers of HTE and
DemandStar have demonstrated their continued confidence in the business
prospects of both companies by purchasing HTE's and DemandStar's common stock in
the open market from time to time. Also, HTE's board has authorized a repurchase
of up to 1,800,000 of its common stock, under which HTE has purchased 124,000
shares and intends to purchase more. In contrast, as indicated by filings with
the SEC, Tyler and members of its executive management have sold Tyler's capital
stock from time to time.
TYLER'S STATEMENT - It intends to vote its shares at the HTE annual
meeting to the fullest extent allowed under Florida law against each of the
recommendations of HTE's board of directors.
HTE'S RESPONSE - HTE reiterates its previously stated position that it
will fully comply with the Florida Control Share Statute. Under the terms of
that statute, the question of whether the Tyler shares should receive voting
rights must be put to a vote of the HTE shareholders once. The vote at this
year's annual meeting will be that one required vote. Tyler will be entitled to
vote its shares in the future, as the statute provides, only if the majority of
the other HTE shareholders vote to restore such right. Unless and until such
event, Tyler's shares will have no vote at all.
"Tyler does not have any influence or say in the operations or strategy
of HTE," said Bernard B. Markey, HTE's chairman.
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