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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
SIMULATION SCIENCES INC.
(NAME OF SUBJECT COMPANY)
SIMULATION SCIENCES INC.
(NAME OF PERSON FILING STATEMENT)
COMMON STOCK, PAR VALUE $.001 PER SHARE
(TITLE OF CLASS OF SECURITIES)
829213 10 7
(CUSIP NUMBER OF CLASS OF SECURITIES)
CHARLES R. HARRIS
CHIEF EXECUTIVE OFFICER
601 VALENCIA AVENUE, SUITE 100
BREA, CALIFORNIA 92823
(714) 579-0412
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS
ON BEHALF OF THE PERSON FILING STATEMENT)
------------------------
COPIES TO:
JEFFREY D. SAPER, ESQ.
BARRY E. TAYLOR, ESQ.
MARTIN W. KORMAN, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304
(650)493-9300
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INTRODUCTION
This Amendment No. 2 amends the Solicitation/Recommendation Statement on
Schedule 14D-9 (the "Schedule 14D-9") filed by Simulation Sciences Inc. (the
"Company") relating to an offer by S Acquisition Corp., a Delaware corporation
("Offeror") and an indirect wholly owned subsidiary of Siebe plc, a United
Kingdom public limited company ("Parent" or "Siebe"), to purchase all of the
Shares of Simulation Sciences Inc., a Delaware corporation. Capitalized terms
used herein and not otherwise defined herein shall have the meaning assigned to
them in the Schedule 14D-9.
The information provided in the Schedule 14D-9 under "Item 8. Additional
Information to be Furnished" is amended in full to read in its entirety as set
forth below.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
On May 7, 1998 the Company issued a press release, a copy of which is
attached hereto as Exhibit 99.20, announcing the Company's results for the
quarter ended March 31, 1998 and the filing of Amendment No. 1 to the Schedule
14D-9.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
99.1* Form of Mutual Nondisclosure Agreement between Simulation
Sciences Inc. and Siebe plc dated April 7, 1998.
99.2* Press releases issued by the Company and Siebe plc on April
15, 1998.
99.3* Letter of Transmittal.
99.4* Letter to Stockholders dated April 21, 1998 from Charles R.
Harris, President and Chief Executive the Company.
99.5* Opinion of Dain Rauscher Wessels, a division of Dain
Rauscher Incorporated, dated April 15, 1998.
99.6* Offer to Purchase dated April 21, 1997.
99.7* Agreement and Plan of Merger dated as of April 15, 1998,
among the Company, Siebe plc, S Acquisition Corp. and S Sub
Corp.
99.8* Stock Option Agreement dated as of April 15, 1998 between
the Company and Siebe plc.
99.9* Certificate of Incorporation of the Company, as amended to
date.
99.10* Certificate of Designations of Rights, Preferences and
Privileges of Series A Participating Preferred Stock.
99.11* The Bylaws of the Company.
99.12* Form of Indemnification Agreement.
99.13* Form of Separation Agreement.
99.14* 1994 Stock Option Plan and related agreements.
99.15* 1996 Stock Plan and related agreements.
99.16* Employee Stock Purchase Plan for U.S. Employees and related
agreements.
99.17* Employee Stock Purchase Plan for Non-U.S. Employees and
related agreements.
99.18* Director Option Plan and related agreements.
99.19* The Company's Information Statement pursuant to Section
14(f) of the Exchange Act and Rule 14f-1 thereunder.
99.20 Press release issued by the Company on May 7, 1998.
</TABLE>
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* Previously filed.
1
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After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
accurate.
SIMULATION SCIENCES INC.
By: /s/ CHARLES R. HARRIS
------------------------------------
Charles R. Harris
Chief Executive Officer
Dated: May 7, 1998
2
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
99.1* Form of Mutual Nondisclosure Agreement between Simulation
Sciences Inc. and Siebe plc dated April 7, 1998.
99.2* Press releases issued by the Company and Siebe plc on April
15, 1998.
99.3* Letter of Transmittal.
99.4* Letter to Stockholders dated April 21, 1998 from Charles R.
Harris, President and Chief Executive the Company.
99.5* Opinion of Dain Rauscher Wessels, a division of Dain
Rauscher Incorporated, dated April 15, 1998.
99.6* Offer to Purchase dated April 21, 1997.
99.7* Agreement and Plan of Merger dated as of April 15, 1998,
among the Company, Siebe plc, S Acquisition Corp. and S Sub
Corp.
99.8* Stock Option Agreement dated as of April 15, 1998 between
the Company and Siebe plc.
99.9* Certificate of Incorporation of the Company, as amended to
date.
99.10* Certificate of Designations of Rights, Preferences and
Privileges of Series A Participating Preferred Stock.
99.11* The Bylaws of the Company.
99.12* Form of Indemnification Agreement.
99.13* Form of Separation Agreement.
99.14* 1994 Stock Option Plan and related agreements.
99.15* 1996 Stock Plan and related agreements.
99.16* Employee Stock Purchase Plan for U.S. Employees and related
agreements.
99.17* Employee Stock Purchase Plan for Non-U.S. Employees and
related agreements.
99.18* Director Option Plan and related agreements.
99.19* The Company's Information Statement pursuant to Section
14(f) of the Exchange Act and Rule 14f-1 thereunder.
99.20 Press release issued by the Company on May 7, 1998.
</TABLE>
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* Previously filed.
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EXHIBIT 99.20
CONTACT: Robert E. Grice, Jr. Eileen Morcos
Chief Financial Officer Investor Contact
(714) 579-0412 Financial Relations Board
(310) 442-0599
FOR IMMEDIATE RELEASE
SIMULATION SCIENCES INC.
ANNOUNCES FIRST QUARTER 1998 RESULTS
SCHEDULE 14D-9 RELATING TO SIEBE TENDER OFFER AMENDED
BREA, CALIFORNIA, MAY 7, 1998 - Simulation Sciences Inc. (Nasdaq:
SMCI), a worldwide supplier of software and services to the process industries,
today reported total revenue of $9.6 million and a net loss of $6.4 million, or
$(0.45) per diluted share, for its quarter ended March 31, 1998, which were
significantly below the Company's expectations. In the first quarter of 1997,
SIMSCI reported total revenue of $13.6 million and net income (excluding a $5.2
million acquisition related charge for in-process research and development
costs) of $1.5 million, or $0.13 per share.
Commenting on the results, Charles R. Harris, president and chief
executive officer said, "We were disappointed with first quarter revenue, which
was far below our expectations, primarily due to economic conditions in the
petroleum and petrochemical industries and longer sales cycles associated with
larger contracts that resulted in delays and deferrals of plant expansion in
those industries.
ROMeo, our new optimization software planned for commercial release in
mid 1998, has recently gone into beta testing. We believe ROMeo's advanced
technology will provide a powerful tool to help our customers operate more
efficiently and profitably." Harris continued, "AIM\AT Version 2.0, our next
generation process information management software, has also entered beta
testing and is on track for release in mid 1998 as planned." Harris added,
"During the quarter, we completed the acquisition of Biles & Associates NV which
expands SIMSCI's presence in Europe."
(more)
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Simulation Sciences Inc.
Announces First Quarter 1998 Results
2-2-2
SIMSCI recently announced that it has entered into an Agreement and Plan
of Merger (the "Merger Agreement") with Siebe plc ("Siebe"), S Acquisition
Corp., an indirect wholly-owned subsidiary of Siebe ("Offeror"), and S Sub
Corp., a wholly-owned subsidiary of Offeror ("Merger Sub"), pursuant to which
Offeror has commenced a cash tender offer to purchase all of the outstanding
shares of SIMSCI for $10.00 per share (the "Offer"). Under the Merger Agreement,
the Offer, if consummated, will be followed by a merger of Merger Sub into
SIMSCI in which any remaining shares (other than shares as to which appraisal
rights have been properly exercised and perfected, shares held in treasury by
SIMSCI or shares owned by Offeror or its affiliates) will be converted into the
right to receive $10.00 per share in cash, without interest (the "Merger").
Additional information regarding the Offer and the Merger is set forth in
SIMSCI's Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule
14D-9") filed with the Securities and Exchange Commission ("the Commission") on
April 21, 1998. The Schedule 14D-9 was amended on April 29, 1998 to, among other
things, amplify the discussion contained therein of the factors that the SIMSCI
Board considered in approving the Offer and the Merger and in recommending that
SIMSCI stockholders tender their shares in the Offer. A copy of the amended
Schedule 14D-9 may be obtained at the offices of the Commission or through its
web site at www.sec.gov, or may be obtained without charge from the Investor
Relations office of SIMSCI at SIMSCI headquarters in Brea, California.
Simulation Sciences Inc. (SIMSCI) is a leading provider of application
software and related services to the petroleum, petrochemical, and industrial
chemical process industries as well as the engineering and construction firms
that support those industries. SIMSCI's Windows-based graphical user interface
and simulation software products are designed to increase profitability by
reducing capital investment costs, improving yields, and enhancing management
decision making. SIMSCI maintains offices in Belgium, Brazil, Egypt, Germany,
Japan, Singapore, the United Kingdom, the United States, and Venezuela and
provides support and service to more than 650 customers in over 65 countries.
For more information about SIMSCI, visit the SIMSCI Website at
http://www.simsci.com.
This press release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, including statements with respect
to the completion of the acquisition by Siebe plc, the anticipated commercial
release of ROMeo and the potential results customers may derive, if any, from
the use of ROMeo. Actual results could differ materially from those projected in
the forward-looking statements as a result of the need to satisfy closing
conditions and obtain regulatory approval for the acquisition, the impact of the
economic conditions in the petroleum and petrochemical industries on the
Company's customers, the length of the Company's sales cycles for the Company's
customers, the size and timing of customer orders, delays in renewals or failure
of existing customers to renew their licenses with the Company, the Company's
ability to control and reduce costs and operating expenses, market acceptance of
the Company's products and service offerings, timing of new product
announcements and introductions by the Company, competition, and the impact, if
any, of the announcement of the acquisition on the Company's business; and
fluctuating economic conditions. For additional information regarding factors
that could affect the Company's future financial performance, see the Company's
prospectus and periodic reports on file with the Securities and Exchange
Commission.
(more)
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Simulation Sciences Inc.
Announces First Quarter 1998 Results
3-3-3
Simulation Sciences Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
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1997 1998
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(UNAUDITED)
<S> <C> <C>
Revenue
Software license revenue $ 12,697 $ 8,632
Services and other revenue 938 958
-------- --------
Total revenue 13,635 9,590
Cost of revenue
Cost of software license revenue 905 1,119
Cost of services and other revenue 846 1,143
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Total cost of revenue 1,751 2,262
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Gross profit 11,884 7,328
Operating expenses
Sales and marketing 4,202 5,505
Research and development 3,420 5,144
General and administrative 2,162 3,528
In-process research and development and other 5,200
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Total operating expenses 14,984 14,177
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Loss from operations (3,100) (6,849)
Interest and other income 445 585
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Loss before provision for income taxes (2,655) (6,264)
Provision for income taxes 1,069 120
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Net loss $ (3,724) $ (6,384)
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Basic net loss per share $ (0.37) $ (0.45)
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Basic weighted average common shares 10,142 14,141
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Diluted net loss per share $ (0.37) $ (0.45)
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Diluted weighted average common shares 10,142 14,141
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PRO FORMA INFORMATION EXCLUDING IN-PROCESS R & D AND OTHER
Net income (loss) $ 1,476 $ (6,384)
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Basic pro forma and net income (loss) per share $ 0.15 $ (0.45)
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Basic pro forma and weighted average common shares 10,142 14,141
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Diluted pro forma and net income (loss) per share $ 0.13 $ (0.45)
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Diluted pro forma and weighted average common shares 11,075 14,141
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</TABLE>
(more)
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Simulation Sciences Inc.
Announces First Quarter 1998 Results
4-4-4
Simulation Sciences Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
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<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
-------- --------
(unaudited)
<S> <C> <C>
Assets
Cash and investments $ 46,295 $ 46,739
Accounts receivable, net 14,184 13,436
Unbilled accounts receivable, net 26,584 18,985
Property and equipment, net 4,962 6,147
Other assets 14,728 14,979
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Total assets $106,753 $100,286
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Liabilities and stockholders' equity
Liabilities $ 20,993 $ 20,876
Stockholders' equity 85,760 79,410
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Total liabilities and stockholders' equity $106,753 $100,286
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</TABLE>
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