SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q/A
Amendment No.2
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(b)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File No. 0-21359
INDUSTRI-MATEMATIK INTERNATIONAL CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 51-0374596
(State of Incorporation) (I.R.S. Employer Identification No.)
Kungsgatan 12-14, Box 7733
103 95 Stockholm, Sweden
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (011)(468) 676-5000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period than the
<PAGE>
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the close of the period covered by this
report.
Class: Outstanding January 31, 1997:
Common Stock ($.01 par value) 15,556,058 shares
Class B Common Stock ($.01 par value) 12,088,200 shares
<PAGE>
<TABLE>
PART I. - FINANCIAL INFORMATION
INDUSTRI-MATEMATIK INTERNATIONAL CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(in thousands, except per share figures)
<CAPTION>
01/31/97 4/30/96
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $18,302 $ 558
Accounts receivable, less allowance
for doubtful accounts of $206
and $321 at January 31, 1997 and
April 30, 1996, respectively 14,290 13,067
Accrued receivables 1,457 1,190
Prepaid expenses 1,553 1,160
Net assets of discontinued operations 0 1,111
Income taxes receivable 25 48
Other current assets 3,124 169
-------- --------
Total current assets 38,751 17,303
Non-current assets:
Property and equipment, net 2,504 1,873
Deferred income taxes 2,334 1,988
Other non-current assets 249 160
-------- --------
Total non-current assets 5,087 4,021
-------- --------
Total Assets $43,838 $21,324
======== ========
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS EQUITY
<S> <C> <C>
Current Liabilities:
Short term borrowings $ 0 $ 7,424
Current portion of capital
lease obligations 395 251
Accounts payable 1,403 1,464
Accrued expenses and other
current liabilities 3,284 3,777
Accrued payroll and employee benefits 2,810 3,365
Deferred revenue 2,825 2,386
-------- --------
Total current liabilities 10,717 18,667
-------- --------
Long-term liabilities:
Capital lease obligations 756 624
Accrued pensions liability 1,734 1,482
Deferred income taxes 9 49
-------- --------
Total long-term liabilities 2,499 2,155
-------- --------
Total liabilities $13,216 $20,882
======== ========
Shareholders' equity:
Convertible Preferred Stock;
$.01 par value; 15,000,000
shares authorized; 0
and 14,630,250 shares issued and
outstanding at January 31, 1997,
and April 30, 1996, respectively $ 0 $ 146
Common Stock; voting, $.01 par
value; 62,500,000 and 35,000,000
shares authorized at January 31,
1997, and April 30, 1996, respec-
tively; 15,556,058 and 9,480,003
shares issued and outstanding at
at January 31, 1997, and
April 30, 1996, respectively 156 94
Class B Common Stock; non-voting,
$.01 par value; 12,500,000 shares
authorized; 12,088,200 and 384,000
shares issued and outstanding at
January 31, 1997, and April 30,
1996, respectively 121 4
Additional paid-in capital 43,331 15,323
Accumulated deficit (8,075) (10,870)
Cumulative translation adjustment (2,385) (1,569)
Note receivable from stockholders (2,526) (2,626)
-------- --------
Total shareholders' equity 30,622 502
-------- --------
Total Liabilities and Shareholders' equity $43,838 $21,324
======== ========
The accompanying notes are an integral part of the condensed consolidated
financial statements.
</TABLE>
PAGE
<PAGE>
<TABLE>
INDUSTRI-MATEMATIK INTERNATIONAL CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share figures)
<CAPTION>
THREE MONTHS ENDED
01/31/97 01/31/96
_____________ ______________
<S> <C> <C>
Revenues
Licenses $ 7,501 $ 6,258
Service and maintenance 7,781 6,149
Other 329 396
-------- --------
Total revenues 15,611 12,803
-------- --------
Cost of revenues:
Licenses 294 629
Service and maintenance 5,691 4,029
Other 245 220
-------- --------
Total cost of revenues 6,230 4,878
-------- --------
Gross profit 9,381 7,925
-------- --------
Operating expenses:
Product development 2,420 1,716
Sales and marketing 4,162 2,508
General and administrative 1,108 886
-------- --------
Total operating expenses 7,690 5,110
-------- --------
Income (loss) from operations 1,691 2,815
Other income (expense):
Interest income 223 5
Interest expense 0 (188)
Miscellaneous expense 167 (259)
-------- --------
Income (loss) from continuing operations
before income taxes 2,081 2,373
Benefit for income taxes (120) 62
-------- --------
Income (loss) from continuing operations 2,201 2,311
Income (loss) from discontinued operations 152 189
Gain on sale of discontinued operations
(net of income tax of $372) 955 0
-------- --------
Net income (loss) $ 3,308 $ 2,500
======== ========
Earnings per share $ 0.12
========
Weighted average number of
shares outstanding 28,442,889
===========
The accompanying notes are an integral part of the condensed consolidated
financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
INDUSTRI-MATEMATIK INTERNATIONAL CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share figures)
<CAPTION>
NINE MONTHS ENDED
01/31/97 01/31/96
__________________ __________________
<S> <C> <C>
Revenues
Licenses $14,633 $ 7,991
Service and maintenance 22,435 16,191
Other 1,264 1,158
-------- --------
Total revenues 38,332 25,340
-------- --------
Cost of revenues:
Licenses 1,047 784
Service and maintenance 16,510 11,516
Other 745 793
-------- --------
Total cost of revenues 18,302 13,093
-------- --------
Gross profit 20,030 12,247
-------- --------
Operating expenses:
Product development 7,000 4,641
Sales and marketing 9,537 5,522
General and administrative 3,178 2,621
-------- --------
Total operating expenses 19,715 12,784
-------- --------
Income (loss) from operations 315 (537)
Other income (expense):
Interest income 324 9
Interest expense (230) (573)
Miscellaneous expense 0 (17)
-------- -------
Income (loss) from continuing operations
before income taxes 409 (1,118)
Benefit for income taxes (912) (803)
-------- -------
Income (loss) from continuing operations 1,321 (315)
Income from discontinued operations 519 245
Gain on sale of discontinued operations
(net of income tax of $372) 955 0
-------- -------
Net income (loss) $ 2,795 $ (70)
======== ========
Earnings per share $ 0.10
========
Weighted average number of
shares outstanding 26,678,699
===========
The accompanying notes are an integral part of the condensed consolidated
financial statements.
</TABLE>
PAGE
<PAGE>
<TABLE>
INDUSTRI-MATEMATIK INTERNATIONAL CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
<CAPTION>
NINE MONTHS ENDED
01/31/97 01/31/96
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net profit (loss) $ 2,795 $ (70)
-------- --------
Adjustments to reconcile net profit
(loss) to net cash provided by operat-
ing activities:
Depreciation and amortization 714 542
Provision for doubtful accounts (111) 68
Deferred income taxes (528) (253)
(Gain) loss on disposal of plant
Property and equipment (2) 0
(Gain) loss on disposal of other shares (97) 0
(Gain) loss on disposal of discontinued
operations (1,327) 0
Write-down on plant and equipment 3 0
Changes in operating assets
and liabilities:
Accounts receivable (923) 1,424
Accrued receivables and
prepaid expenses (738) 344
Income taxes 22 (172)
Other assets (714) (76)
Accounts payable 388 (607)
Accrued expenses and other
current liabilities (948) (110)
Accrued payroll, employee benefits
and deferred revenue (105) 351
Accrued pensions liability 355 44
-------- --------
Net cash provided by continuing
operations (1,216) 1,485
Net assets of discontinued
operations (417) (238)
------- --------
Net cash provided by operating
activities (1,633) 1,247
-------- --------
Cash flows from investing activities:
Additions to property and equipment (932) (324)
Proceeds from sale of property
and equipment 7 7
Proceeds from sale of other equity 138 0
-------- --------
Net cash flows used in investing
activities (787) (317)
-------- --------
Cash flows from financing activities:
Net borrowings (payments) under
lines of credit (7,764) 4,929
(Payments) on short-term borrowings (97) (5,790)
Principal payments on capital
lease obligations (302) (146)
Issuance of shares 28,140 1,225
Other 250 (189)
-------- -------
Net cash flows used in financing
activities 20,227 29
-------- -------
Translation differences on cash and
cash equivalents (63) 6
-------- -------
Net increase (decrease) in cash and
cash equivalents $17,744 $ 965
======== ========
Cash and cash equivalents at beginning
of period $ 558 $ 160
Cash and cash equivalents at end -------- --------
of period $18,302 $ 1,125
-------- --------
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest $ 346 $ 616
------- --------
Income taxes $ 13 $ 3
------- --------
The accompanying notes are an integral part of the condensed consolidated
financial statements.
</TABLE>
<PAGE>
<PAGE>
INDUSTRI-MATEMATIK INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Interim Financial Statements
The unaudited condensed consolidated financial statements included
herein have been prepared by Industri-Matematik International Corp. and its
subsidiaries (collectively, "Company") pursuant to the rules and regulations
of the Securities and Exchange Commission. Accordingly, they do not con-
tain all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, the accompanying condensed consolidated financial statements
reflect all adjustments (consisting of normal recurring adjustments) con-
sidered necessary for a fair presentation of the Company's financial condi-
tion at April 30, 1996 (audited), and January 31, 1997 (unaudited), and the
results of operations and cash flows for the nine months ended January 31,
1996, and 1997. These financial statements should be read in conjunction
with the audited consolidated financial statements of the Company as pre-
sented in the registration statement for the Company's initial public
offering dated September 25, 1996. Results of operations and cash flows
for the period ended January 31, 1997, are not necessarily representative
of the results that may be expected for the fiscal year ending April 30,
1997, or any other future period.
2. Net Income per Share
For the three and nine months ended January 31, 1997, net income per
share was based on the weighted average number of common stock and common
stock equivalents outstanding during the period. Common stock equivalents
are calculated using the treasury stock method and represent shares issu-
able upon the exercise of outstanding stock options. Historical net income
(loss) per share data has not been presented as such information is not
considered to be relevant or meaningful.
3. Other Current Assets
<TABLE>
<CAPTION>
January 31, 1997 April 30, 1996
(unaudited)
(in thousands)
<S> <C> <C>
Receivable from TurnIt AB $2,929 $ 0
Other 195 169
------ ------
$3,124 $ 169
====== ======
</TABLE>
4. Accrued Expenses and Other Current Liabilities
<TABLE>
<CAPTION>
January 31, 1997 April 30, 1996
(unaudited)
(in thousands)
<S> <C> <C>
Accrued purchases $1,411 $1,731
Accrued royalty 1,323 1,372
Accrual for loss contract 0 237
Accruals for contract expenses 96 153
Value-added tax 7 131
Other 447 153
------ ------
$3,284 $3,777
====== ======
</TABLE>
The accrual for loss contract relates to a reserve for obsolete
software that was part of an operating lease contract for computer hard-
ware. The amount accrued represents the software portion of the future
minimum lease payments based on the fair value of the software in relation
to the fair value of both the hardware and software provided under the
total lease contract. Accruals for contract expenses are primarily license
fees to third parties for software included in the sale of System ESS.
5. Accrued Payroll and Employee Benefits
<TABLE>
<CAPTION>
January 31, 1997 April 30, 1996
(unaudited)
(in thousands)
<S> <C> <C>
Accrued commissions $ 638 $ 776
Accrued payroll taxes 594 960
Accrual vacation pay 664 750
Accrued salaries and bonus 914 879
------ ------
$2,810 $3,365
====== ======
</TABLE>
6. Income Taxes
For the three and nine month periods ended January 31, 1997, and
the three month period ended January 31, 1996, a reduction of the deferred
tax asset was partially utilized to offset tax expenses incurred during the
period. For the nine month period ended January 31, 1996, a deferred tax
asset was recognized relating to the Company's net loss for the period. At
January 31, 1997, the Company had approximately $4.3 million of gross
deferred tax assets comprised primarily of net operating loss carryforwards
in Sweden. During the three and nine month periods ended January 31, 1996,
and 1997, the Company reduced its valuation allowance relating to its net
operating loss carryforwards based upon positive evidence indicating an
increased likelihood of the utilization of such net operating loss carry-
forwards in offsetting future tax expense. Estimated future earnings
necessary to fully realize the net deferred tax asset are $8.3 million.
Such earnings are forecasted to be realized within approximately three
years. There can be no assurance that future earnings, if any, will meet
currently forecasted levels, however it is management's opinion that the
realization of such earnings in the future is more likely than not.
7. Stock Options
Under the Industri-Matematik International Corp. Stock Option Plan,
205,000 options were granted during the nine months ended January 31, 1997,
85,000 of which were issued, cancelled, and reissued in the same period.
All options were issued or reissued at an exercise price of $9.00 per share
of Common Stock, which was equal to the estimated fair market value at the
date of grant.
8. Stockholder's Equity
On October 1, 1996, the Company completed an initial public offering
of 3,200,000 shares of Common Stock at an offering price of $10.00 per
share. The net proceeds, after underwriting discounts and offering
expenses payable by the Company, were approximately $28.5 million. A
portion of the proceeds were used to pay off short-term borrowings. Upon
the completion of the Company's initial public offering, in accordance with
the Restated Certificate of Incorporation of the Company then in effect,
all of the Company's Convertible Preferred Stock outstanding as of that
date was converted to Common Stock (20%) and Class B Common Stock (80%).
9. Discontinued Operations
On January 20, 1997, the Company sold its stock representing 55%
ownership of Paragon AB to TurnIt AB for $2.9 million in cash. Paragon AB
operated in two segments constituting the production and sale of
microprocessor compilers and consultancy services for relational data base
management systems. The Company recorded a gain of $1.0 million after tax
on the sale.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on it's behalf by the
undersigned thereunto duly authorized.
INDUSTRI-MATEMATIK INTERNATIONAL CORP.
BY: s/ Stig Durlow
---------------------------
Stig Durlow
Principal Executive Officer
BY: s/ Lars-Goran Peterson
---------------------------
Lars-Goran Peterson
Principal Financial Officer
DATE: May 6, 1997
