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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of Earliest Event Reported): September 29, 1998
COMMISSION FILE NUMBER 000-22647
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PERITUS SOFTWARE SERVICES, INC.
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(Exact Name of Registrant as Specified in Its Charter)
Massachusetts 04-3126919
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
Two Federal Street, Billerica, Massachusetts 01821-3540
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(Address of Principal Executive Offices) (Zip Code)
(978) 670-0800
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name, Former Address and Former Fiscal Year,
If Changed Since Last Report)
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Item 5. Other Events
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On September 29, 1998, Peritus Software Services, Inc. (the "Company")
announced a restructuring plan in response to a reduction in its forecasted
revenues. The goal of the plan is to reduce expenses and lessen the impact of
Year 2000 market shifts while focusing the Company back on its core services
business. The restructuring will include primarily a reduction in workforce of
approximately 90 employees, the closing of facilities in Cincinnati and Dayton,
OH, and Lisle, IL and the consolidation of other facilities. The total charge
related to these actions to be recorded in the quarter ending September 30, 1998
is expected to be approximately $3.7 million. In light of the plan to
restructure and developments in the Company's markets and excluded from the
above charge, the Company is also evaluating the net realizability of the
intangible assets originally recorded in connection with the acquisition of
Millennium Dynamics, Inc. in December 1997. Those assets, primarily reflecting
acquired existing technology, today have a net recorded value of approximately
$4.6 million on the Company's balance sheet.
The projected shortfall in third quarter revenue can be attributed to a
number of factors, including the following items.
. Delays in client buying decisions for and decreases in Year 2000 licenses.
. Sharply lower than expected demand for its renovation factory services.
. Despite increases in interest for the Company's independent verification and
validation offering (Renovation Quality Evaluation (RQE)), the Company
experienced slower than expected inflows of actual code for RQE.
The changes being made include the following items.
. A reduction in excess delivery capacity for renovation services.
. A combination of outsourcing and year 2000 services units into one
streamlined group to serve its clients' requirements.
. Realignment of the sales organization into three regions in the northeast,
south and west.
. A shift of research and development resources to focus on specific practice
initiatives including extending the Software Asset Maintenance (SAM)
offerings into new areas.
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: October 9, 1998
PERITUS SOFTWARE SERVICES, INC.
BY: /s/ John D. Giordano
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Name: John D. Giordano
Title: Vice President, Finance
and Chief Financial Officer
