SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1998
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.)
901 Market Street
Wilmington, DE 19801
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (302)777-1608
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
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 July 31, 1998:
Common Stock ($.01 par value) 33,087,431 shares
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<TABLE>
PART I. - FINANCIAL INFORMATION
INDUSTRI-MATEMATIK INTERNATIONAL CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(in thousands, except per share figures)
<CAPTION>
7/31/98 04/30/98
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $34,878 $41,982
Short-term investments 69,384 69,416
Accounts receivable, less allowance
for doubtful accounts of $409
and $210 at July 31, 1998 and
April 30, 1998, respectively 24,416 24,289
Contract receivables 2,822 2,034
Prepaid expenses 2,301 2,824
Income taxes receivable 444 402
Other current assets 929 647
-------- --------
Total current assets 135,174 141,594
-------- --------
Non-current assets:
Property and equipment, net 5,599 5,011
Deferred income taxes 1,724 5
Goodwill 947 1,002
Other non-current assets 1,756 1,717
-------- --------
Total non-current assets 10,026 7,735
-------- --------
Total Assets $145,200 $149,329
======== ========
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS EQUITY
<S> <C> <C>
Current Liabilities:
Current portion of capital
lease obligations 243 274
Current portion of notes payable 473 486
Accounts payable 1,852 2,439
Accrued expenses and other
current liabilities 6,532 6,016
Accrued payroll and employee benefits 4,412 5,938
Deferred revenue 6,595 5,962
-------- --------
Total current liabilities 20,107 21,115
-------- --------
Long-term liabilities:
Capital lease obligations 261 281
Notes payable 734 840
Accrued pension liability 2,209 2,132
Other long-term liabilities 201 388
-------- --------
Total long-term liabilities 3,405 3,641
-------- --------
Total liabilities $23,512 $24,756
======== ========
Shareholders' equity:
Common Stock; voting, $.01 par
value; 62,500,000 shares authorized;
33,087,431 and 32,917,552 shares
issued and outstanding at July 31,
1998, and April 30, 1998, respectively 331 329
Additional paid-in capital 128,938 127,886
Retained earnings 1,505 5,287
Other comprehensive income:
Cumulative translation adjustment (2,583) (2,426)
Note receivable from stockholders (6,503) (6,503)
-------- --------
Total shareholders' equity 121,688 124,573
-------- --------
Total Liabilities and Shareholders' equity $145,200 $149,329
======== ========
The accompanying notes are an integral part of the condensed consolidated
financial statements.
</TABLE>
PAGE
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<TABLE>
INDUSTRI-MATEMATIK INTERNATIONAL CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share figures)
<CAPTION>
THREE MONTHS ENDED
07/31/98 07/31/97
----------- ----------
<S> <C> <C>
Revenues:
Licenses $4,355 $ 5,791
Service and maintenance 18,851 9,784
Other 286 131
------- -------
Total revenues 23,492 15,706
------- -------
Cost of revenues:
Licenses 204 88
Service and maintenance 15,067 7,495
Other 124 85
-------- -------
Total cost of revenues 15,395 7,668
-------- -------
Gross profit 8,097 8,038
-------- -------
Operating expenses:
Product development 5,241 2,516
Sales and marketing 6,312 3,720
General and administrative 3,377 1,390
-------- -------
Total operating expenses 14,930 7,626
-------- -------
Income (loss) from operations (6,833) 412
Other income (expense):
Interest income 1,441 240
Interest expense (40) (15)
Miscellaneous expense (43) (65)
------- -------
Income (loss) before income taxes (5,475) 572
Benefit for income taxes (1,693) (58)
Net income (loss) $ (3,782) $ 630
======= =======
Net income (loss) per share $ (0.11) $ 0.02
======= =======
Net income (loss) - assuming dilution $ (0.11) $ 0.02
======= =======
The accompanying notes are an integral part of the condensed consolidated
financial statements.
</TABLE>
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<PAGE>
<TABLE>
INDUSTRI-MATEMATIK INTERNATIONAL CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
<CAPTION>
THREE MONTHS ENDED
07/31/98 07/31/97
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (3,782) $ 630
Adjustments to reconcile net income
(loss) to net cash provided by operating
activities:
Depreciation and amortization 688 398
Provision for doubtful accounts 199 0
Deferred income taxes (1,724) (73)
Accrued interest on short term investments (366) 0
Loss on disposal of property and equipment 0 15
Changes in operating assets
and liabilities:
Accounts receivable (458) 7,960
Contract receivables and
prepaid expenses (314) 410
Income taxes (45) (64)
Other assets (349) (82)
Accounts payable (607) (238)
Accrued expenses and other
current liabilities 624 302
Accrued payroll, employee benefits,
and deferred revenue (766) (646)
Accrued pension liability 136 124
------- -------
Net cash provided by (used in)
operating activities (6,764) 8,736
======= =======
Cash flows from investing activities:
Purchase of short-term investments (69,018) (9,888)
Proceeds from sale of short-term
investments 69,416 9,952
Additions to property and equipment (1,246) (649)
Payment for Ceratina (178) (1,025)
Proceeds from sale of property and
equipment 0 4
Proceeds from sale of other shares 1 0
Collection of notes receivable 0 211
------- -------
Net cash flows used in investing
activities (1,025) (1,395)
======= =======
Cash flows from financing activities:
Payments on notes payable (118) 0
Principal payments on capital
lease obligations (73) (89)
Issuance of common stock 1,053 547
Other (118) (97)
------- -------
Net cash flows provided by
financing activities 744 361
======= =======
Translation differences on cash and
cash equivalents (59) (64)
------- -------
Net increase (decrease) in cash and
cash equivalents $ (7,104) $ 7,638
Cash and cash equivalents at beginning
of period $ 41,982 $ 9,023
Cash and cash equivalents at end ------- -------
of period $ 34,878 $ 16,661
======= =======
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest $ 62 $ 34
Income taxes $ 77 $ 165
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 regula-
tions of the Securities and Exchange Commission. Accordingly, they do not
contain all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, the accompanying unaudited condensed consolidated financial
statements reflect all adjustments (consisting of normal recurring adjust-
ments) considered necessary for a fair presentation of the Company's
financial condition at April 30, 1998 (audited), and July 31, 1998
(unaudited), and the results of operations and cash flows for the three
months ended July 31, 1997 and 1998. These financial statements should be
read in conjunction with the audited consolidated financial statements of
the Company as presented in its Annual Report on Form 10-K for the fiscal
year ended April 30, 1998. Results of operations and cash flows for the
period ended July 31, 1998, are not necessarily representative of the
results that may be expected for the fiscal year ending April 30, 1999, or
any other future period.
2. Revenue Recognition
In October 1997, the American Institute of Certified Public Accountants
issued Statement of Position 97-2 "Software Revenue Recognition" ("SOP 97-
2"), which provides guidance on when revenue should be recognized and in
what amounts for licensing, selling, leasing, or otherwise marketing
computer software. SOP 97-2 is effective for transactions entered into in
fiscal years beginning after December 15, 1997. The Company has adopted
SOP 97-2 and the adoption has not had an impact on its current revenue
policies.
3. Comprehensive Income (Loss)
Effective May 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS
130"). SFAS 130 establishes standards for reporting and displaying
comprehensive income and its components. Total comprehensive income (loss)
was ($3,939,000) and $486,000 for the three months ended July 31, 1998, and
July 31, 1997, respectively. Total comprehensive income (loss) includes
net income (loss) and currency translation adjustments.
4. Net Income (Loss) per Share
Net income (loss) per share has been computed in accordance with
Statement of Financial Accounting Standards (SFAS) No.128, "Earnings per
Share". For each of the periods presented, net income (loss) per share was
based on the weighted average number of shares of Common Stock outstanding
during the period. Net income (loss) per share-assuming dilution was based
on the weighted average number of shares of Common Stock and potential
shares of Common Stock outstanding during the period. Potential shares of
Common Stock relates to stock options outstanding for which the dilutive
effect is calculated using the treasury stock method. The computation of
net income (loss) per share-assuming dilution for the three months ended
July 31, 1998, does not assume the exercise of stock options since the
effect would be antidilutive as a result of the loss for that period.
For each of the periods presented, net income (loss) available to
common shareholders (the numerator) used in the computation of net income
(loss) per share was the same as the numerator used in the computation of
net income (loss) per share-assuming dilution. A reconciliation of the
denominators used in the computations of net income (loss) per share and
net income (loss) per share-assuming dilution is a follows:
Three months ended
July 31,
--------------------------
1998 1997
----------- ----------
Weighted average shares
outstanding 32,975,576 27,763,972
Effect of dilutive stock options - 681,803
---------- ----------
Adjusted weighted average
shares outstanding assuming dilution 32,975,576 28,445,775
========== ==========
5. Accrued Expenses and Other Current Liabilities
July 31, 1998 April 30, 1998
---------- ---------
(unaudited)
(in thousands)
Accrued purchases $ 2,322 $ 1,799
Accrued consultancy 1,893 2,133
Accrued pension taxes 517 451
Employee withholding taxes 891 601
Value-added tax 234 431
Income tax payable 115 115
Other 560 486
------ ------
$ 6,532 $ 6,016
====== ======
6. Accrued Payroll and Employee Benefits
July 31, 1998 April 30, 1998
---------- ---------
(unaudited)
(in thousands)
Accrued commissions $ 242 $ 636
Accrued payroll taxes 1,068 1,030
Accrued vacation pay 1,379 1,528
Accrued salaries and bonus 1,101 1,708
Accrued pension expenses 357 365
Accrued expenses ESPP 265 671
------ ------
$ 4,412 $ 5,938
====== ======
7. Income Taxes
For the three month periods ended July 31, 1997 and 1998, a deferred
tax asset was recognized relating to the Company's net operating loss for
the period. At July 31, 1998, the Company had approximately $2.2 million
of gross deferred tax assets. During the three month periods ended July
31, 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 $7.1 million.
Such earnings are forecasted to be realized by the next fiscal year. 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.
8. Stock Plans
Under the Industri-Matematik International Corp. Stock Option Plan,
463,000 options were granted during the three months ended July 31, 1998
(Of these options, 275,000 were issued in replacement of options which had
been granted in a prior period at a higher exercise price.) All options
were issued at an exercise price equal to the closing market price on the
date of grant. During the same period, 158,879 shares were issued pursuant
to the Employee Stock Purchase Plan.
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INDUSTRI-MATEMATIK INTERNATIONAL CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This report 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, that involve certain risks
and uncertainties. Discussions containing such forward-looking statements
may be found in the material set forth below as well as in this Report
generally. Without limiting the foregoing, the words "believes,"
"anticipates," "plans," "expects," and similar expressions are intended to
identify forward-looking statements. The Company's actual results could
differ materially from those anticipated in such forward-looking statements
as a result of certain factors, including those set forth under "Risk
Factors" in the Company's Annual Report on Form 10-K for the fiscal year
ended April 30, 1998, which is incorporated herein by reference. These
forward-looking statements are made as of the date of this Report and the
Company assumes no obligation to update such forward-looking statements or
to update the reasons why actual results could differ materially from those
anticipated in such forward-looking statements.
OVERVIEW
The Company develops, markets, and supports client/server application
software that enables manufacturers, distributors, wholesalers, and third-
party logistics companies to manage more effectively the supply chain.
Supply chain management encompasses the execution of multiple customer-
centric order fulfillment processes, including order management, pricing
and sourcing, warehouse management, transportation management, and demand
chain planning. The Company's principal product, System ESS, has been
designed specifically to meet complex or high-volume supply chain manage-
ment requirements of medium and large manufacturers, distributors, whole-
salers, and third-party logistics companies. System ESS allows customers
to leverage the value of their existing systems by integrating with legacy
and new client/server manufacturing, advanced planning, and financial
management systems.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, the percentages
that selected items in the unaudited Condensed Consolidated Statements of
Operations bear to total revenues. The period to period comparisons of
financial results are not necessarily indicative of future results.
Three Months Ended
July 31,
1998 1997
------ ------
Revenue
Licenses 18.6% 36.9%
Services and maintenance 80.2 62.3
Other 1.2 0.8
----- -----
Total revenues 100.0 100.0
----- -----
Cost of revenues:
Licenses 0.9 0.6
Services and maintenance 64.1 47.7
Other 0.5 0.5
----- -----
Total Cost of revenues 65.5 48.8
----- -----
Gross profit 34.5 51.2
----- -----
Operating expenses:
Product Development 22.3 16.0
Sales and marketing 26.9 23.7
General and administrative 14.4 8.9
----- -----
Total Operating expenses 63.6 48.6
----- -----
Income (loss) from operations (29.1) 2.6
----- -----
Other income (expenses):
Interest income 6.2 1.5
Interest expense (0.2) (0.1)
Miscellaneous expense (0.2) (0.4)
----- -----
Income (loss) before income taxes (23.3) 3.6
Benefit for income taxes (7.2) (0.4)
----- -----
Net income (loss) (16.1)% 4.0%
===== =====
REVENUES
The Company's revenues consist of software license revenues, service and
maintenance revenues, and other revenues. Software license revenues
consist of sales of software licenses which are recognized upon execution
of a contract and shipment of the software, provided that no significant
vendor obligations remain outstanding, amounts are due within one year, and
collection is considered probable by management. Service revenues are
derived from fees for consulting, training, and client-specific development
services and are recognized as services are performed. Maintenance
revenues are derived from customer support agreements generally entered
into in connection with the initial license sales and subsequently renewed.
Maintenance revenues are recognized ratably over the term of the main-
tenance period. Payments for maintenance fees are generally made in
advance. Other revenues are primarily third-party hardware sales necessary
to help certain customers implement System ESS.
Total revenues increased 49.6% to $23.5 million in the quarter ended
July 31, 1998, from $15.7 million in the quarter ended July 31, 1997. The
Company currently derives substantially all of its revenues from System ESS
licenses and related service and maintenance. As a result of the Company's
dependence on the continued market acceptance of System ESS, there can be
no assurance that total revenues will continue to grow at the rates
experienced in prior periods, if at all.
SOFTWARE LICENSE REVENUES. Revenues from software licenses decreased 24.8%
to $4.4 million in the quarter ended July 31, 1998, from $5.8 million in
the quarter ended July 31, 1997. The decrease in software license revenues
was due primarily to sales delays associated with rebuilding the Company's
United States sales force.
SERVICE AND MAINTENANCE REVENUES. Revenues from service and maintenance
increased 92.7% to $18.9 million in the quarter ended July 31, 1998, from
$9.8 million in the quarter ended July 31, 1997. The increase in the
absolute dollar amount of service and maintenance revenues was related
primarily to an increase in the number of System ESS licenses sold during
fiscal 1998 and a significant expansion of the Company's consulting
organization in the United States and Europe. Service and maintenance
revenues as a percentage of total revenues increased to 80.2% in the
quarter ended July 31, 1998, from 62.3% in the quarter ended July 31, 1997,
as a result of the decrease in software license revenues.
OTHER REVENUES. Other revenues are primarily third-party hardware sales to
the Company's Scandinavian customer base. Other revenues increased 118.3%
to $286,000 in the quarter ended July 31, 1998, from $131,000 in the
quarter ended July 31, 1997. Other revenues as a percentage of total
revenues increased to 1.2% in the quarter ended July 31, 1998, from 0.8% in
the quarter ended July 31, 1997.
COST OF REVENUES
COST OF SOFTWARE LICENSE REVENUES. Cost of license revenues consists
primarily of license fees paid with respect to third-party software
included with the licenses of System ESS, and, occasionally, the cost of
third-party complementary software that is licensed together with System
ESS without being an integral part of System ESS. Cost of software license
revenues was $204,000 and $88,000 in the quarters ended July 31, 1998 and
July 31, 1997, representing 4.7% and 1.5% of software license revenues,
respectively. The increase in cost of software license revenues for the
quarter ended July 31, 1998, compared to the same quarter in 1997 both in
absolute dollar amount and as a percentage of software license revenues was
due primarily to the increasing use of embedded third-party software sub-
licensed as part of System ESS.
COST OF SERVICE AND MAINTENANCE REVENUES. Cost of services and maintenance
revenues consists primarily of costs associated with consulting, implemen-
tation, and training services and, occasionally, the use by the Company of
third-party consultants to perform implementation services for the
Company's customers. Cost of service and maintenance revenues also
includes the cost of providing software maintenance to customers, such as
telephone hotline support.
Cost of service and maintenance revenues was $15.1 million and $7.5 million
in the quarters ended July 31, 1998, and July 31, 1997, representing 79.9%
and 76.6% of service and maintenance revenues, respectively. The increase
in cost of services and maintenance revenues in absolute dollar amounts was
primarily due to the extensive build-up of the Company's consulting
organization, and the increase in the cost of service and maintenance
revenues as a percentage of service and maintenance revenues was mainly
attributable to extended use of subcontractors.
COST OF OTHER REVENUES. Cost of other revenues consists primarily of the
cost of third-party hardware supplied to certain customers. Cost of other
revenues was $124,000 and $85,000 in the quarters ended July 31, 1998, and
July 31, 1997, representing 43.4% and 64.9% of other revenues,
respectively.
PRODUCT DEVELOPMENT. Product development expenses were $5.2 million and
$2.5 million in the quarters ended July 31, 1998, and July 31, 1997,
representing 22.3% and 16.0% of total revenues, respectively. The increase
in product development expenses was primarily due to an increase in the
number of product development personnel and other related costs incurred in
connection with a considerable expansion of the Company's product
development department and the extensive use of subcontractors in the
development of version 5.2 of System ESS which was completed in August
1998. The Company expects that the dollar amount of product development
expenses will continue at the current level as the Company continues to
invest in developing new applications, product enhancements, and
localization and translation of System ESS, although subcontractors will be
used to a lesser extent.
In accordance with Statement of Financial Accounting Standards No. 86,
software development expenses are expensed as incurred until technological
feasibility has been established, at which time such costs are capitalized
until the product is available for general release to customers. To date,
the establishment of technological feasibility of the Company's products
and general release of such software have substantially coincided. As a
result, software development costs qualifying for capitalization have been
insignificant, and, therefore, the Company has not capitalized any software
development costs.
SALES AND MARKETING. Sales and marketing expenses include personnel costs,
commissions, and related costs for sales and marketing personnel, as well
as the cost of office facilities, travel, promotional events, and public
relations programs. Sales and marketing expenses were $6.3 million and
$3.7 million in the quarters ended July 31, 1998, and July 31, 1997,
representing 26.9% and 23.7% of total revenues, respectively. The increase
in sales and marketing expenses in absolute dollar amount and as a
percentage of total revenues was primarily due to increased staffing as the
Company has expanded its partner, marketing, and product development
organization as well as its direct sales force. The Company expects to
continue to increase its sales and marketing expenses in absolute dollar
amounts in order to expand its international sales operations and to enter
into new vertical markets.
GENERAL AND ADMINISTRATIVE. Ongoing general and administrative expenses
consist primarily of salaries and costs of the Company's finance, human
resources, information systems, administrative, and executive staff and the
fees and expenses associated with legal, accounting, and other require-
ments. General and administrative expenses were $3.4 million and 1.4
million in the quarters ended July 31, 1998, and July 31, 1997,
representing 14.4% and 8.9% of total revenues, respectively. The increase
in the absolute dollar amount of general and administrative expenses was
primarily the result of increased staffing of human resources and internal
systems administration associated with the growth of the Company's
business. Additionally, the Company expensed an amount equal to one years'
rent relating to two United Kingdom offices that the Company vacated in
order to consolidate its United Kingdom operations in a single location.
The Company expects that general and administrative expenses both in
absolute dollars and as a percentage of total revenue will decrease for the
remainder of fiscal 1999.
OTHER INCOME (EXPENSE)
Other income (expense) comprises interest income, interest expenses, and
miscellaneous income and expenses. Interest income was $1.4 million and
$240,000 in the quarters ended July 31, 1998, and July 31, 1997,
representing 6.2% and 1.5% of total revenues, respectively. The increase
was due to the Company's investment of a portion of the proceeds of its
secondary public offering in short-term investments and interest-bearing
accounts. Interest expenses were $40,000 and $15,000 in the quarters ended
July 31, 1998, and July 31, 1997, representing 0.2% and 0.1% of total
revenues, respectively.
LIQUIDITY AND CAPITAL RESOURCES
As of July 31, 1998, the Company had $115.1 million of working capital,
including $34.9 million in cash and cash equivalents and $69.4 million in
short-term investments, as compared to $120.5 million of working capital as
of April 30, 1998, including $42.0 million of cash and cash equivalents and
$69.4 in short-term investments.
Accounts receivable increased to $24.4 million at July 31, 1998, from $24.3
million at April 30, 1998, and the average days' sales outstanding, includ-
ing contract receivables, was 104 days for the quarter ended July 31, 1998,
as compared to 78 days for the year ended April 30, 1998. The increase in
average days' sales outstanding was primarily due to certain license agree-
ments being closed late in the quarter or subject to payment plans.
The Company believes that existing cash and cash equivalent balances,
short-term investments, available borrowings under the revolving credit
agreement, and potential cash flow from operations will satisfy the
Company's working capital and capital expenditure requirements for at least
the next 12 months.
YEAR 2000
The Company's System ESS is Year 2000 compliant; when used before as
well as for a significant period after January 1, 2000, System ESS can with
retained functionality store, process, and receive date and time data for
periods before and after the turn of the century if correct date and time
data are inputted. In addition, the Company has taken steps required to
make its internal management information systems Year 2000 compliant.
The Company does not anticipate any material adverse affect upon its
business, operating results, or financial condition with respect to a Year
2000 issue.
<PAGE>
<PAGE>
PART II. - OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K.
a. Exhibits
Exhibit 27. Financial Data Schedule
b. Reports on Form 8-K
No reports have been filed on Form 8-K during the quarter
ended July 31, 1998.
<PAGE>
<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: September 14, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENTS OF EARNINGS AND BALANCE SHEETS OF
INDUSTRI-MATEMATIK INTERNATIONAL CORP. AND SUBSIDIARIES ANNEXED HERETO AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001016243
<NAME> INDUSTRI-MATEMATIK INTERNATIONAL CORP.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1999
<PERIOD-START> MAY-1-1998
<PERIOD-END> JUL-31-1998
<CASH> 34,878,000
<SECURITIES> 69,384,000
<RECEIVABLES> 24,825,000
<ALLOWANCES> 409,000
<INVENTORY> 0
<CURRENT-ASSETS> 135,174,000
<PP&E> 11,186,000
<DEPRECIATION> 5,587,000
<TOTAL-ASSETS> 145,200,000
<CURRENT-LIABILITIES> 20,107,000
<BONDS> 0
<COMMON> 331,000
0
0
<OTHER-SE> 121,357,000
<TOTAL-LIABILITY-AND-EQUITY> 121,688,000
<SALES> 23,206,000
<TOTAL-REVENUES> 23,492,000
<CGS> 15,271,000
<TOTAL-COSTS> 15,395,000
<OTHER-EXPENSES> 14,930,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 40,000
<INCOME-PRETAX> (5,475,000)
<INCOME-TAX> (1,693,000)
<INCOME-CONTINUING> (3,782,000)
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<NET-INCOME> (3,782,000)
<EPS-PRIMARY> (0.11)
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</TABLE>
