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 October 31, 1999
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 - Suite 475
Wilmington, Delaware 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 October 31, 1999:
Common Stock ($.01 par value) 31,604,118 shares
<PAGE>
<TABLE>
PART I. - FINANCIAL INFORMATION
INDUSTRI-MATEMATIK INTERNATIONAL CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands, except share and per share data)
<CAPTION>
10/31/99 4/30/99
----------- -----------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 13,851 $ 29,065
Short-term investments 27,742 24,848
Accounts receivable, less allowance
for doubtful accounts of $3,283
and $4,883 at October 31, 1999, and
April 30, 1999, respectively 16,228 23,772
Contract receivables 775 703
Prepaid expenses 2,985 2,742
Income taxes receivable 943 733
Other current assets 813 558
------ ------
Total current assets 63,337 82,421
------ ------
Non-current assets:
Property and equipment, net 6,366 6,682
Deferred income taxes 16,139 16,042
Goodwill and other intangible assets 8,405 9,084
Other non-current assets 2,593 856
------ ------
Total non-current assets 33,503 32,664
------ ------
Total assets $ 96,840 $115,085
======= =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities:
Current portion of capital lease
obligations $ 28 $ 110
Current portion of notes payable 559 534
Accounts payable 2,883 3,177
Accrued expenses and other
current liabilities 9,959 12,853
Accrued payroll and employee benefits 4,391 6,243
Deferred revenue 4,900 5,317
------ ------
Total current liabilities 22,720 28,234
------ ------
Long-term liabilities:
Notes payable 18 303
Accrued pension liability 2,850 2,476
Other long-term liabilities 796 191
------ ------
Total long-term liabilities 3,664 2,970
------ ------
Total liabilities 26,384 31,204
Stockholders' equity:
Common Stock; voting, $.01 par value;
62,500,000 shares authorized;
31,604,118 and 31,499,348 shares
issued and outstanding at
October 31, 1999 and April 30,
1999, respectively 316 315
Additional paid-in capital 124,161 123,945
Accumulated deficit (44,169) (29,972)
Accumulated other comprehensive loss (2,959) (3,514)
Notes receivable from stockholders (6,893) (6,893)
------- -------
Total stockholders' equity 70,456 83,881
------- -------
Total liabilities and stockholders' equity $ 96,840 $115,085
======== =======
The accompanying notes are an integral part of the condensed consolidated
financial statements.
</TABLE>
<PAGE>
<TABLE>
INDUSTRI-MATEMATIK INTERNATIONAL CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share data)
<CAPTION>
THREE MONTHS ENDED
10/31/99 10/31/98
--------------- ----------------
<S> <C> <C>
Revenues:
Licenses $ 1,019 $ 5,984
Services and maintenance 16,856 16,974
Other 413 380
------- -------
Total revenues 18,288 23,338
------- -------
Cost of revenues:
Licenses 184 223
Services and maintenance 12,722 22,447
Other 101 106
------- -------
Total cost of revenues 13,007 22,776
------- -------
Gross profit 5,281 562
------- -------
Operating expenses:
Product development 4,497 8,113
Sales and marketing 5,429 6,987
General and administrative 2,348 3,034
Amortization of goodwill and
other intangible assets 346 28
------- -------
Total operating expenses 12,620 18,162
------- -------
Loss from operations (7,339) (17,600)
------- -------
Other income (expense):
Interest income 568 1,304
Interest expense (13) (35)
Miscellaneous expense, net (66) 72
------- -------
Loss before income taxes (6,850) (16,259)
Benefit for income taxes -- (5,303)
------- -------
Net loss (6,850) (10,956)
======= =======
Net loss per share $ (0.22) $ (0.33)
------- -------
Net loss per share
- assuming dilution $ (0.22) $ (0.33)
======= =======
The accompanying notes are an integral part of the condensed consolidated
financial statements.
</TABLE>
<PAGE>
<TABLE>
INDUSTRI-MATEMATIK INTERNATIONAL CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share data)
<CAPTION>
SIX MONTHS ENDED
10/31/99 10/31/98
--------------- ----------------
<S> <C> <C>
Revenues:
Licenses $ 2,664 $ 10,339
Services and maintenance 31,676 35,825
Other 624 666
------- -------
Total revenues 34,964 46,830
------- -------
Cost of revenues:
Licenses 530 427
Services and maintenance 24,876 37,514
Other 159 230
------- -------
Total cost of revenues 25,565 38,171
------- -------
Gross profit 9,399 8,659
------- -------
Operating expenses:
Product development 8,938 13,354
Sales and marketing 10,516 13,299
General and administrative 4,510 6,383
Amortization of goodwill and
other intangible assets 692 56
------- -------
Total operating expenses 24,656 33,092
------- -------
Loss from operations (15,257) (24,433)
------- -------
Other income (expense):
Interest income 1,200 2,745
Interest expense (41) (75)
Miscellaneous expense, net (99) 29
------- -------
Loss before income taxes (14,197) (21,734)
Benefit for income taxes -- (6,996)
------- -------
Net loss (14,197) (14,738)
======= =======
Net loss per share $ (0.45) $ (0.45)
------- -------
Net loss per share
- assuming dilution $ (0.45) $ (0.45)
======= =======
The accompanying notes are an integral part of the condensed consolidated
financial statements.
</TABLE>
<PAGE>
<TABLE>
INDUSTRI-MATEMATIK INTERNATIONAL CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
<CAPTION>
SIX MONTHS ENDED
10/31/99 10/31/98
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(14,197) $(14,738)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 2,567 1,414
Provision for doubtful accounts 621 935
Deferred income taxes -- (7,092)
Accrued interest on short-term
investments 90 (336)
(Gain) loss on disposal of property
and equipment (3) 6
Changes in operating assets and liabilities:
Accounts receivable 7,403 (10,288)
Contract receivables and
prepaid expenses (218) 248
Income taxes receivable (220) (221)
Other assets (430) (41)
Accounts payable (730) 1,015
Accrued expenses and other
current liabilities (3,908) 7,159
Accrued payroll, employee benefits
and deferred revenue (1,840) 749
Accrued pension liability 327 271
--------- ---------
Net cash used in operating activities (10,538) (20,919)
========= =========
Cash flows from investing activities:
Purchase of short-term investments (84,227) (143,333)
Proceeds from sale of short-term
investments 81,242 138,435
Additions to property and equipment (1,755) (3,522)
Payment for Ceratina (145) (178)
Proceeds from sale of property
and equipment 37 46
Proceeds from sale of other shares -- 1
--------- ---------
Net cash flows used in investing activities (4,848) (8,551)
========= =========
Cash flows from financing activities:
Payments on notes payable -- (239)
Principal payments on capital
lease obligations (299) (196)
Issuance of Common Stock 217 1,053
Repurchase of Common Stock - (4,871)
Other 211 (411)
--------- ---------
Net cash flows provided
by(used in)financing activities 129 (4,664)
========= =========
Translation differences on cash and
cash equivalents 43 1
--------- ---------
Net decrease in cash and cash
equivalents $(15,214) $(34,133)
========= =========
Cash and cash equivalents at beginning
of period $29,065 $41,982
Cash and cash equivalents at end --------- ---------
of period $13,851 $ 7,849
--------- ---------
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest $ 37 $ 120
Income taxes $ 846 $ 481
The accompanying notes are an integral part of the condensed consolidated
financial statements.
</TABLE>
<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 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 adjustments) considered necessary for a fair presentation of the
Company's financial condition at and October 31, 1999, and the results of
operations and cash flows for the six months ended October 31, 1998, and
1999. These financial statements, which include a condensed consolidated
balance sheet as of April 30, 1999 (audited), should be read in conjunction
with the audited consolidated financial statements of the Company as
presented in the Company's Annual Report on Form 10-K for the fiscal year
ended April 30, 1999. Results of operations and cash flows for the periods
ended October 31, 1999, are not necessarily representative of the results
that may be expected for the fiscal year ending April 30, 2000, or any
other future period.
2. Comprehensive Loss
Total comprehensive loss was $(6,529,000) and $(10,900,000) for the
three months ended October 31, 1999 and 1998, respectively. Total
comprehensive loss was $(13,642,000) and $(14,839,000) for the six months
ended October 31, 1999 and 1998, respectively. Total comprehensive loss
includes net loss and currency translation adjustments.
3. Net Loss per Share
Net loss per share has been computed in accordance with
Statement of Financial Accounting Standards No. 128, "Earnings per Share".
For each of the periods presented, net loss per share was based on
the weighted average number of shares of Common Stock outstanding during
the period. Net 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 computations of net loss
per share - assuming dilution for the three and six month periods ended
October 31, 1998 and 1999, do not assume the exercise of stock options
since the effect would be antidilutive as a result of the losses for the
periods.
For each of the periods presented, income available to common
shareholders (the numerator) used in the computation of net loss
per share was the same as the numerator used in the computation of net
loss per share - assuming dilution. A reconciliation of the
denominators used in the computations of net loss per share and
net loss per share - assuming dilution is as follows:
<TABLE>
<CAPTION>
Three months ended Six months ended
October 31, October 31,
----------------------- -----------------------
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C>
Weighted average
shares outstanding 31,604,118 32,873,871 31,569,384 32,924,724
Effect of dilutive
stock options - - - -
--------- --------- --------- ---------
Adjusted weighted
average shares
outstanding assuming
dilution 31,604,118 32,873,871 31,569,384 32,924,724
========== ========== ========== ==========
</TABLE>
4. Accrued Expenses and Other Current Liabilities
<TABLE>
<CAPTION>
October 31, 1999 April 30, 1999
---------------- --------------
(unaudited)
(in thousands)
<S> <C> <C>
Accrued purchases $1,727 $3,768
Project reserves 4,268 2,283
Accrued consultancy 813 1,106
Accrued restructuring costs 595 2,517
Accrued pension taxes 936 616
Restructuring cost Abalon 166 682
Value-added tax 283 674
Employee withholding taxes 742 804
Income tax payable 48 25
Other 381 378
------ ------
$ 9,959 $12,853
====== ======
</TABLE>
Project reserves consist of charges to be incurred bringing projects to
implementation, some of which will not be billed and some of which will be
billed at a discount.
5. Accrued Payroll and Employee Benefits
<TABLE>
<CAPTION>
October 31, 1999 April 30, 1999
---------------- --------------
(unaudited)
(in thousands)
<S> <C> <C>
Accrued commissions $ 69 $ 364
Accrued payroll taxes 1,145 1,398
Accrued vacation pay 1,351 2,052
Accrued salaries and bonus 1,324 1,819
Accrued pension expenses 337 321
Debt for ESPP 165 279
Other -- 10
------ ------
$4,391 $6,243
====== ======
</TABLE>
6. Provision for Income Taxes
Due to its continued negative performance, the Company did not record a
benefit for income taxes for the six month period ended October 31, 1999.
For the six month period ended October 31, 1998, the Company recorded a
benefit for income taxes of $6,996,000. At October 31, 1999, the Company's
deferred tax asset amounted to $26,953,000 and related primarily to net
operating loss carry-forwards incurred in the United States and Sweden.
Net operating loss carry-forwards may be used to offset future income for
up to 15 years in the United States and indefinitely in Sweden. In light
of the fact that future operating results will depend on numerous factors,
including the growth of the supply chain software market generally and
acceptance of the Company's products, management determined that
$10,814,000 was an adequate valuation allowance against the net deferred
tax asset recorded at October 31, 1999. The Company will continue to
measure the deferred tax asset against future performance and the related
carry-forward period and may decide to increase or decrease this valuation
allowance in the future.
7. Stock Option Plans
Under the Industri-Matematik International Corp. Stock Option Plans,
150,000 options were granted during the three months ended October 31,
1999. All options were issued at an exercise price equal to the closing
market price on the date of grant.
8. Segment Information
The Company operates in one industry segment, the design, development,
marketing, licensing, and support of client/server application software.
The Company is managed on a geographic basis and the Company's management
evaluates the performance of its segments and allocates resources to them
based upon income (loss) from operations. Income (loss) from operations for
the geographic segments excludes general corporate expenses and product
development costs. The majority of software development occurs in Sweden
although the Company maintains some development facilities in the United
States. Product development costs and general corporate expenses are
reported in the Corporate segment. Assets by reportable segment are not
disclosed since the Company's management does not review segmented balance
sheet information. The accounting policies of the segments are the same as
those described in the summary of significant accounting policies. Segment
data includes inter-segment revenues.
The table below presents information about the Company's reportable
segments:
Three Months Ended Six Months Ended
October 31, October 31,
1999 1998 1999 1998
-------- -------- -------- --------
(in thousands) (in thousands)
Revenues:
United States .......$ 6,172 $ 12,981 $ 12,282 $ 26,336
Sweden ....... .. 9,489 6,334 16,714 12,872
United Kingdom . 1,545 2,733 3,212 5,526
Netherlands ... .. 316 496 1,243 506
Germany ....... .. 63 247 142 283
France ........ .. -- (203) -- (233)
Australia .... ... 581 512 1,185 1,167
Corporate .... .. 122 238 186 373
-------- -------- -------- --------
$ 18,288 $ 23,338 $ 34,964 $ 46,830
======== ======== ======== ========
Income (loss) from operations:
United States .. $ 432 $(5,101) (832) (3,231)
Sweden ........ . 1,360 1,199 2,414 2,890
United Kingdom . (194) (34) (297) (549)
Netherlands .... (468) (379) (824) (1,186)
Germany ........ (446) (257) (581) (712)
France ........ . (57) (443) (57) (699)
Australia ..... . 204 (279) 381 (137)
Canada ......... (6) (56) (22) (104)
Intercompany ... (56) (22) (69) (44)
Corporate ....... (8,108) (12,228) (15,370) (20,661)
-------- -------- -------- --------
$ (7,339) $(17,600) $(15,257) $(24,433)
======== ======== ======== ========
<PAGE>
9. Restructuring
During the fourth quarter of fiscal 1999, the Company incurred a $3,522,000
one-time restructuring charge in connection with a cost realignment plan.
The following table presents the restructuring activity through October 31,
1999:
<TABLE>
<CAPTION>
Accrual Accrual
as of Utilization as of
April 30, of Currency October 31,
1999 Adjustment accrual effect 1999
------- ---------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
Severance benefits $ 1,838 $ (8) $ (1,487) $ 5 $ 348
Lease obligations and terminations 535 (184) (167) -- 184
Other 144 118 (198) (1) 63
------- ---------- --------- -------- --------
Total $ 2,517 $ (74) $ (1,852) $ 4 $ 595
======= ========== ========= ======== ========
</TABLE>
In connection with the Company's acquisition of Abalon in fiscal 1999,
additional purchase liabilities of $982,000 were recorded for anticipated
integration costs which included $549,000 for severance and related costs
and $433,000 for costs associated with the shut down and consolidation of
certain acquired facilities. As of October 31, 1999, the remaining
balance of the accrual was $166,000 including $69,000 for severance and
related costs and $97,000 for costs associated with the shutdown and
consolidation of facilities. The Company expects to complete the
integration during the current fiscal year.
10. Other transactions
During the quarter ended October 31, 1999, the Company entered into a
software license agreement with a United States based start-up corporation
which intends to sell goods directly to consumers and small retailers over
the internet. In exchange for the license, the Company has received a
small equity interest in the licensee consisting of restricted stock. At
October 31, 1999, this licensee had not completed its required financing,
had not commenced operations, and there was no market for its equity
securities. Accordingly, the Company did not recognize revenue or net
asset value relating to these transactions.
ITEM 2.
INDUSTRI-MATEMATIK INTERNATIONAL COPR.
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, but not limited to, uncertainties
regarding continued market acceptance of the Company's products, delays in
the introduction of new product enhancements, the success of the
implementation of the Company's restructuring program, hiring, training,
and retaining employees, and risks associated with managing the Company's
operations, as well as those set forth under "Risk Factors" in the
Company's Annual Report on Form 10-K for the fiscal year ended April 30,
1999, which are 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
Industri-Matematik International Corp. develops, markets, and supports
client/server application software that enables manufacturers,
distributors, and wholesalers to more effectively manage the supply chain.
The Company was founded in 1967 as a custom software development and
consulting services organization. The Company developed and delivered its
first distribution logistics software in 1974, its first UNIX-based version
in 1984, and its first Oracle-based client/server version in 1991. In
1993, the Company introduced System ESS(R), which was designed to meet the
needs of multinational manufacturers, distributors, and wholesalers. In
May, 1999, the Company introduced the VIVALDI(TM) Suite, a suite of open
applications which provide full capabilities for managing and executing the
global fulfillment and customer service process. The VIVALDI Suite
includes System ESS components, the Customer Relationship Management
Software the Company recently acquired in its acquisition of Abalon AB, and
other components.
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.
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
October 31, October 31,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Revenues:
Licenses 7.6 22.1 5.6 25.7
Services and maintenance 90.6 76.5 92.2 72.7
Other 1.8 1.4 2.2 1.6
------- ------- ------- -------
Total revenues 100.0 100.0 100.0 100.0
Cost of revenues:
Licenses 1.5 0.9 1.0 1.0
Services and maintenance 71.1 80.1 69.6 96.2
Other 0.5 0.5 0.6 0.4
------- ------ ------- -------
Total cost of revenue 73.1 81.5 71.2 97.6
------- ------ ------- -------
Gross profit 26.9 18.5 28.8 2.4
------- ------ ------- -------
Operating expenses:
Product Development 25.6 28.5 24.6 34.8
Sales and marketing 30.1 28.4 29.7 29.9
General and administrative 12.9 13.7 12.8 13.0
Amortization of goodwill 2.0 0.1 1.9 0.1
------- ------- ------- -------
Total operating
expenses 70.6 70.7 69.0 77.8
------- ------- ------- -------
Income (loss) from
operations (43.7) (52.2) (40.2) (75.4)
------- ------- ------- -------
Other income (expense):
Interest income 3.4 5.9 3.1 5.6
Interest expense (0.1) (0.2) (0.1) (0.1)
Miscellaneous
income (expense) (0.3) 0.1 (0.4) 0.3
------- ------- ------- -------
Income (loss) before
income taxes (40.7) (46.4) (37.6) (69.6)
Provision (benefit)
for income taxes - (14.9) - (22.7)
------- ------- ------- -------
Net income (loss) (40.7) (31.5) (37.6) (46.9)
======= ======= ======= =======
</TABLE>
REVENUES
The Company's revenues consist of software license revenues, service and
maintenance revenues, and other revenues. Software license revenue is
recognized when persuasive evidence of an arrangement exists and delivery
has occurred, the fee is fixed and determinable, collectibility is
probable, and the arrangement does not require significant customization of
the software. Maintenance and support revenue is deferred and recognized
ratably over the term of the agreement, generally one year. Service revenue
is recognized as the Company performs the services in accordance with a
professional services agreement. Other revenues are primarily third-party
hardware sales necessary to help certain customers implement the Company's
products.
Total revenues decreased 21.6% to $18.3 million in the quarter ended
October 31, 1999, from $23.3 million in the quarter ended October 31, 1998.
In the first six months of fiscal 2000, total revenues decreased 25.3% to
$35.0 million from $46.8 million in the first six months of fiscal 1999.
The Company currently derives substantially all of its revenues from
software licenses and related service and maintenance.
SOFTWARE LICENSE REVENUES. Revenues from software licenses decreased
83.0% to $1.0 million in the quarter ended October 31, 1999, from $6.0
million in the quarter ended October 31, 1998. In the first six months of
fiscal 2000, revenues from software licenses decreased 74.2% to $2.7
million from $10.3 million in the first six months of fiscal 1999. The
decrease in software license revenues was the result of fewer licenses
being sold.
SERVICE AND MAINTENANCE REVENUES. Revenues from service and
maintenance decreased 0.7% to $16.9 million in the quarter ended October
31, 1999, from $17.0 million in the quarter ended October 31, 1998. In the
first six months of fiscal 2000, revenues from service and maintenance
decreased 11.6% to $31.7 million from $35.8 million in the first six months
of fiscal 1999. The decrease in the absolute dollar amount of service and
maintenance revenues was related primarily to the decrease in software
license revenues during fiscal 1999. Service and maintenance revenues as a
percentage of total revenues increased to 92.2% in the quarter ended
October 31, 1999, from 72.7% in the quarter ended October 31, 1998 and
increased to 90.6% in the first six months of fiscal 2000 from 76.5% in the
first six months of fiscal 1999. This increase in percentage of total
revenues is related to the decrease in software license revenues during
fiscal 2000 compared to the prior fiscal year. Generally, increases and
decreases in service and maintenance revenues tend to track software
license revenues in prior periods.
OTHER REVENUES. Other revenues are primarily third-party hardware
sales to the Company's Scandinavian customer base. Other revenues
increased 8.7% to $413,000 in the quarter ended October 31, 1999, from
$380,000 in the quarter ended October 31, 1998. In the first six months of
fiscal 2000, other revenues decreased 6.3% to $624,000 from $666,000 in
the first six months of fiscal 1999. Other revenues as a percentage
of total revenues increased to 2.2% in the quarter ended October 31, 1999,
from 1.6% in the quarter ended October 31, 1998, and increased to 1.8% in
the first six months of fiscal 2000 from 1.4% in the first six months of
fiscal 1999. Other revenues vary over time as a percentage of total
revenues due to the size of specific hardware sales and to fluctuations in
software license revenues.
COST OF REVENUES
COST OF SOFTWARE LICENSE REVENUES. Cost of software license revenues
consists primarily of license fees paid with respect to embedded 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 embedded into System ESS. In addition, cost
of software license revenues may include royalty fees paid to partners that
are directly related to license sales. Cost of software license revenues
was $184,000 and $223,000 in the quarters ended October 31, 1999, and 1998,
representing 18.1% and 3.7% of software license revenues, respectively.
Cost of software license revenues was $530,000 and $427,000 in the first
six months of fiscal 2000 and 1999, representing 19.9% and 4.1% of software
license revenues, respectively. The decrease in cost of software license
revenues in absolute dollar amount compared to the same quarter in the
prior year is due to the decrease in software license revenues. The
increase of cost of software license revenues as a percentage of software
license revenues in the second quarter of fiscal 2000 compared to the same
period in the prior year was primarily due to the allocation of fixed costs
for embedded third party software over a decreased amount of software
license revenue. The increase in cost of software license revenues as a
percentage of software license revenues in the first six months of fiscal
2000 compared to the same period in the prior year was due to the both the
allocation of fixed costs for embedded third party software over a
decreased amount of software license revenue and higher royalty fees paid
to an integration partner in the first quarter of fiscal 2000.
COST OF SERVICE AND MAINTENANCE REVENUES. Cost of service and
maintenance revenues consists primarily of costs associated with
consulting, implementation, and training services and 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 $12.7 million and $22.4
million in the quarters ended October 31, 1999, and 1998, representing
75.5% and 132.2% of service and maintenance revenues, respectively. Cost
of service and maintenance revenues was $24.9 million and $37.5 million in
the first six months of fiscal 2000 and fiscal 1999, representing 78.5%
and 104.7% of service and maintenance revenues, respectively. The
decrease in the cost of service and maintenance revenues in absolute dollar
amounts was due to reductions in the workforce initiated during the fourth
quarter of fiscal 1999 in order to bring the costs in line with an expected
decrease in service and maintenance revenues and to a reduction in the use
of outside consultants. In addition, the comparable period in the prior
year included significant one-time charges related to increases in project
reserves and doubtful accounts reserves.
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 $101,000 and $106,000 in the quarters ended October 31,
1999, and 1998, representing 24.5% and 27.9% of other revenues,
respectively. Cost of other revenues was $159,000 and $230,000 in the
first six months of fiscal 2000 and fiscal 1999, representing 25.5% and
34.5% of other revenues, respectively.
PRODUCT DEVELOPMENT. Product development expenses were $4.5 million
and $8.1 million in the quarters ended October 31, 1999, and 1998,
representing 24.6% and 34.8% of total revenues, respectively. These same
expenses were $8.9 million and $13.4 million in the first six months of
fiscal 2000 and 1999, representing 25.6% and 28.5% of total revenues,
respectively. The decrease in product development expenses in absolute
dollar amount was due to a decrease in the number of product development
personnel and other related costs as part of the restructuring program
initiated in fourth quarter 1999 to adjust expenses to the expected decline
in revenues. In addition, the comparable period in the prior year included
high external costs related to specific product development initiatives
carried out in that period.
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 $5.4 million
and $7.0 million in the quarters ended October 31, 1999, and 1998,
representing 29.7% and 29.9% of total revenues, respectively. These same
expenses were $10.5 million and $13.3 million in the first six months of
fiscal 2000 and 1999, representing 30.1% and 28.4% of total revenues,
respectively. The decrease in sales and marketing expenses in absolute
dollar amount was primarily due to measures initiated in the fourth quarter
of fiscal 1999 to reduce costs in response to the reduction in software
license revenues.
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
services. General and administrative expenses were $2.3 million and
$3.0 million in the quarters ended October 31, 1999, and 1998, representing
12.8% and 13.0% of total revenues, respectively. These same expenses were
$4.5 million and $6.4 million in the first six months of fiscal 2000 and
1999, representing 12.9% and 13.7% of total revenues, respectively. The
decrease in absolute dollar amounts of general and administrative expenses
was primarily the result of decreased staffing of human resources and
internal system administration associated with the restructuring program
initiated in the fourth quarter of fiscal 1999.
AMORTIZATION OF GOODWILL AND OTHER INTANGIBLES. Amortization of
goodwill and other intangibles relates to the fiscal 1998 acquisition of
Ceratina International AB and the fiscal 1999 acquisition of Abalon AB.
Goodwill and other intangibles are amortized over a 5 to 10 year period.
Amortization of goodwill and other intangibles was $346,000 and $28,000 in
the quarters ended October 31, 1999, and 1998, representing 1.9% and 0.1%
of total revenues, respectively. These same expenses were $692,000 and
$56,000 in the first six months of fiscal 2000 and 1999, representing 2.0%
and 0.1% of total revenues, respectively.
OTHER INCOME (EXPENSE)
Other income comprises interest income, interest expenses, and
miscellaneous income and expenses. Interest income was $568,000 and $1.3
million in the quarters ended October 31, 1999, and 1998, representing
3.1% and 5.6% of total revenues, respectively. Interest income was $1.2
million and $2.7 million in the first six months of fiscal 2000 and 1999,
representing 3.4% and 5.9% of total revenues, respectively. The decrease
is due to a decrease in the levels of short-term investments and cash held
in interest-bearing accounts compared to the amounts invested in the same
period in the prior year. Interest expenses were $13,000 and $35,000 in
the quarters ended October 31, 1999, and 1998, representing 0.1% and 0.1%
of total revenues, respectively. These same expenses were $41,000 and
$75,000 in the first six months of fiscal 2000 and 1999, representing 0.1%
and 0.2% of total revenues, respectively. The decrease in the absolute
dollar amounts is due to repayments on a small external credit facility
during fiscal year 1999.
LIQUIDITY AND CAPITAL RESOURCES
As of October 31, 1999, the Company had $40.6 million of working
capital, including $13.9 million in cash and cash equivalents and $27.7
million in short-term investments, as compared to $54.2 million of working
capital as of April 30, 1999, including $29.1 million of cash and cash
equivalents and $24.8 million in short-term investments. Accounts
receivable, net of allowance for doubtful accounts, decreased to $16.2
million at October 31, 1999, from $23.8 million at April 30, 1999, and the
average days' sales outstanding, including contract receivables, was 83
days for the quarter ended October 31, 1999, compared to an average of 114
days for fiscal year 1999. The decrease in average days' sales outstanding
was due primarily to the collection of past due accounts receivable during
the quarter. The allowance for doubtful accounts decreased $3.3 million at
October 31, 1999, from $4.9 million at April 30, 1999. The decrease was
primarily the result of netting certain allowances for doubtful accounts
against the corresponding receivables due to the settlement of various
disputes including an arbitration with a customer. The decrease in
accounts receivable in total dollars is attributable to the decline in
revenues.
The Company believes that existing cash and cash equivalent balances,
short-term investments, 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
"Year 2000" or "Y2k" compliance means the ability to process and receive,
with retained functionality, date and time data for periods before and
after the turn of the century. Certain time-sensitive computer programs
written using only two digits to define a year may recognize a date using
"00" as the year 1900 or some other year than 2000, which could result in
miscalculations and system failures. The Company has recognized that such
computer program problems could affect the Company's software products as
well as the Company's internal systems and has taken steps to address any
potential Year 2000 compliance problems in both areas.
The Company has devoted a substantial amount of time over the last two
years to validate that the standard version of its principal products, the
VIVALDI Suite including System ESS, are Year 2000 compliant and 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. The Company also has assessed the Year 2000 readiness of
the third-party software vendors whose products are licensed in conjunction
with or as part of its standard products and is satisfied that all such
products are Year 2000 compliant.
With respect to customized code developed for specific customers to
address specific customer needs and to interface with legacy and other
software applications, the Company has developed a toolset to assist such
customers in assessing and renovating Year 2000 issues with respect to such
code, and the Company can perform assessment and renovation for the
customer on a time and materials basis. While the Company does not warrant
the Year 2000 compliance of any such customized code, it cannot be sure
that it will not have a dispute with a customer over whether particular
code is standard or customized.
The software used by the Company to manage its internal systems, such as
time and billing, accounting, general ledger, and the like, was developed
by the Company and was not originally Year 2000 compliant. The Company
began a project to update its internal systems to make them Year 2000
compliant during fiscal year 1999 and completed testing of the updated
software during the second quarter of fiscal year 2000. Implementation
of the year 2000 upgrade of the internal accounting systems took place
during November 1999 and did not cause any significant problems. The
Company estimates that the total cost of updating its internal computer
systems, based upon the time expended by the Company's own employees, to be
approximately $175,000, which amount has been paid out of working capital.
The other internal system identified by the Company not to be Year 2000
compliant was the telephone system in its offices in Stockholm. When the
Company moved of its Stockholm office to a new location in September 1999,
the telephone system was upgraded to be Year 2000 compliant. The Company
will continue its efforts to confirm that major third-party businesses and
its public and private providers of infrastructure services, such as
utilities, communications services, and transportation also will be
prepared for the Year 2000. The Company does not currently anticipate that
internal systems failures will result in any material adverse effect to its
operations or financial condition. At this time, the Company believes that
the most likely "worst-case" scenario involves potential disruptions in
areas in which the Company's operations must rely on third parties whose
systems may not work properly after December 31, 1999. While such failures
could affect important operations of the Company, either directly or
indirectly, the Company cannot at present estimate either the likelihood or
the potential cost of such failures.
QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK
The Company does not believe it is exposed to market risks with respect to
any of its investments; the Company does not utilize market rate sensitive
instruments for trading of other purposes. As of October 31, 1999, the
Company had no long-term investments and its short-term investments
consisted of one Federal Agency security with a maturity of less than one
year.
<PAGE>
PART II. - OTHER INFORMATION
ITEM 1. Legal Proceedings.
In September, 1999, the Company settled an arbitration proceeding which had
been commenced against the Company in November, 1998, by a licensee of
System ESS (pursuant to a license agreement with a Company partner).
ITEM 4. Submission of Matters to a Vote of Security Holders.
At the Annual Meeting of the shareholders of the Company held on October 6,
1999, Stig G. Durlow, Jeffrey A. Harris, William H. Janeway, Martin
Leimdorfer, and Geoffrey W. Squire were re-elected as directors of the
Company, the increase in the number of shares authorized for issuance
pursuant to the Company's 1997 Employee Stock Purchase Plan from 600,000 to
1,200,000 shares was approved, and the selection of Ohrlings Coopers &
Lybrand AB as the Company's independent public accountants for the fiscal
year ending April 30, 2000, was ratified. The tabulation of the votes is
as follows:
Votes For Votes Withheld
--------- --------------
Stig G. Durlow 25,545,937 2,503,230
Jeffrey A. Harris 25,620,211 2,428,956
William H. Janeway 25,620,011 2,429,156
Martin Leimdorfer 25,596,791 2,452,376
Geoffrey W. Squire 25,582,756 2,466,411
Votes For Against Abstain
--------- ------- -------
Approval of increase in the
shares authorized for issuance
pursuant to the 1997 Employee
Stock Purchase Plan from
600,000 to 1,200,000 shares 27,753,612 278,392 17,163
Ratification of Selection
of Accountants 27,963,579 59,468 26,120
ITEM 6. Exhibits and Reports on Form 8-K.
a. Exhibits
Exhibit 10.1. Employment Agreement dated December 31, 1999,
between the Company and Per Edstrom.
Exhibit 10.2. Lease Agreement dated August 1, 1999, between
Tranboclarne 11 KB, as Lessor, and Industri-Matematik AB, as Lessee.
Exhibit 27. Financial Data Schedule
b. Reports on Form 8-K
No reports have been filed on Form 8-K during the quarter
ended October 31, 1999.
<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/ Karl Asp
---------------------------
Karl Asp
Principal Financial Officer
DATE: December 14, 1999
AGREEMENT
This Agreement between Industri-Matematik International (IMI) and Per
Edstrom (PEED), personal ID number 570315-0036, has been made and entered
into as follows:
1. Effective from January 1, 1999 a base salary of SEK 68,000 per month
will be paid to PEED
2. The pension-based salary amounts to SEK 829,600 per year effective from
January 1, 1998.
3. Pension premiums shall be cost neutral towards the SPP/ITP plan for
salaried employees.
4. PEED is entitled within the framework of the ITP plan to discuss
alternative pension plan solutions with The Company's insurance agent.
INDUSTRI-MATEMATIK INTERNATIONAL
/s/ Lars-Goran Peterson
- - --------------------------------- 981231
Lars-Goran Peterson Date
The above Agreement is hereby accepted and agreed to:
/s/ Per Edstrom
- - --------------------------------- 981231
Per Edstrom Date
<PAGE>
Bonus Plan FY99
Per Edstrom
This document describes your bonus plan for FY99 (980501-990430)
A guaranteed bonus will be paid out monthly at the amount of SEK 14.225 per
month.
Other terms and conditions:
- - - If Per Edstrom terminates employment during the budget year, no bonus
is payable.
- - - Vacation compensation is not accrued on bonus payments
- - - Should the company's budget be changed, especially as a result of a
business acquisition or divestiture, then the calculations contained herein
shall be changed in the corresponding month for that period for which the
change applies.
For Industri-Matematik International Corp.
/s/ Lars-Goran Peterson
- - ------------------------------------------ 981231
Lars-Goran Peterson Date
The above bonus plan is hereby accepted and agreed to:
/s/ Per Edstrom
- - ------------------------------------------ 981231
Per Edstrom Date
This is a translation into English.
LEASE for non-residential premises.
The undersigned have on this day agreed to the following lease terms:
LESSOR Tranboclarne 11 KB
LESSEE Industri-Matematik AB
Organization No. 556102-7680
ADDRESS OF
PREMISES Municipality: Stockholm
Street address: Stadsgarden 10
Block: Tranbodarne 11
Floor: 6-11
SIZE AND EXTENT
OF PREMISES Office space 9,835 square meters
FURNISHING The premises are let without special fittings
and fixtures intended for the Lessee's
business.
On expiry of this Lease and any previous
agreement concluded between the Lessee and the
Lessor regarding these premises, the Lessee
shall, unless otherwise agreed, remove all
furnishing belonging to him, and restore the
premises to an acceptable condition.
TERM OF LEASE From and including 1999-08-01 To and including
2004-07-31
NOTICE OF TERMINATION
PROLONGATION Notice of termination of this Lease shall be
given in writing at least 12 months prior to
the expiration date agreed upon.
RENT SEK 21,327,500 per year constituting
rent exclusive of surcharges marked below
Index Clause The rent specified above shall be adjusted in
accordance with the index clause appended.
Heating and hot water Heating shall be arranged as necessary by
the Lessor
Hot water shall be provided throughout the year
Electricity The Lessee is responsible for his own
subscription.
Cleaning of Stairway Included in the rent
Refuse and Waste Removal To be arranged and paid for by the Lessee (the
Lessor shall, however, provide waste
receptacles and requisite space for the
collection of refuse and waste.)
Snow clearance and Sanding Included in the rent.
Property Tax Compensation to be paid under a separate
agreement.
Unforseen Costs The following applies to Leases covering more
than three years. If, after this Lease has
been signed, the property is affected by
unforseen costs increases as a result of
a) the introduction of, or an increase in,
special taxes, fees or surcharges applicable to
the property through a decision of Parliament,
the Government, the municipal authority or
other authority
b) general conversion work or other measures
affecting the property and not only the
premises in question and which the Lessor is
obliged to carry out following a decision of
Parliament, the Government, the municipal
authority or other authority.
the Lessee shall compensate the Lessor in an
amount corresponding to the premises' share of
the annual cost increase affecting the property
starting at the time of the cost increase in
question.
The premises' share is 52.1 per cent.
Reference to tax in a) above does not include
VAT nor does it include property tax if
compensation for this tax is paid under
separate agreement stipulated above.
Compensation is paid in accordance with the
rules for payment or rent.
VALUE ADDED TAX (VAT) The property-owner/Lessor is liable to VAT for
letting the premises. In addition to the rent
the Lessee shall on each due date pay the VAT
at the rate then applicable.
The VAT is to be paid at the same time as the
rent and calculated on the rental amount and on
any surcharges, and compensation specified in
the Lease according to the rules for VAT
payment on rent then applicable.
PAYMENT OF RENT Rent shall be paid in advance, without prior
reminder, no later than the last weekday before
the beginning of each calendar quarter
INTEREST REMINDERS In the case of late rental payment the Lessee
shall pay the interest due under The Interest
Act, as well as compensation for written
reminders as set out in The Act concerning
Remuneration for Debt Recovery Costs etc.
Compensation for reminders shall be paid in the
amount then applicable under The Ordinance
concerning Remuneration for Debt Recovery Costs
etc.
MAINTENANCE ETC. The Lessee shall carry out at his expense any
necessary maintenance of interior floor, wall
and ceiling surfaces and of the fittings and
fixtures provided by the Lessor.
The Lessee shall not be entitled to a reduction
in rent for any obstruction to his use and
enjoinment of the premises for the period
during which the Lessor carries out customary
forms of maintenance on the property or the
premises hereby rented. The Lessor shall,
however, notify the Lessee in good time about
the type and extent of the work as well as of
the period during which such work is to be
carried out.
When the Lease is for a shop or handicraft
business that is dependent on a flow of
customers, this clause shall apply only if a
separate agreement to that effect has been
concluded.
It shall be the responsibility of the Lessee at
his own risk and at his own expense, to take
any measures as may be required by an insurance
company, a municipal building committee, a
municipal environmental protection and public
health committee, a fire-fighting authority or
any other authority for the premises to be used
as intended. The Lessee shall consult with the
Lessor before such measures are taken.
If the Lessee makes any changes to the premises
without required building permit, as a
consequence of which the Lessor must pay a
building fee or supplementary charge under the
provisions of the Planning and Building Act,
the Lessee shall pay the Lessor a corresponding
amount in compensation.
SIGNS, AWNINGS, WINDOWS,
DOORS ETC. The Lessee shall be entitled, having consulted
the Lessor, to put up signs customary for the
business in question provided he has obtained
any permits as may be required by the
appropriate authorities and the Lessor has no
reasonable grounds for refusal. Upon vacating
the premises, the Lessee shall undertake to
restore the facade of the building to an
acceptable condition.
Should more extensive maintenance of the
property be required, e.g. renovation of the
facade, the Lessee shall at his own expenses
and without compensation take down and replace
signs, awnings and aerials.
The Lessor undertakes not to put up automatic
dispensers or display cases on the exterior
walls of the premises rented by the Lessee
without the permission of the Lessee and hereby
grants the Lessee the option of himself
installing automatic dispensers and display
cases on such walls.
The Lessee shall be responsible for any damage
due to negligence or malicious intent to
display windows, entrance doors and signs.
LOCKS AND THEFT-
PREVENTION DEVICES The Lessee shall fit the premises with such
locks and theft-prevention devices as may be
required to ensure the validity of the Lessee's
business insurance.
FORCE MAJEURE Circumstances beyond the control of the Lessor
and which the Lessor could not be expected to
foresee, such as war, riot, strike, blockade,
fire, explosion or action by a public
authority, shall release the Lessor from his
obligations under this Lease, provided such
obligations cannot be met at all or only at
abnormally high cost, and from liability to pay
compensation.
SIGNATURE This Lease, which may not be registered without
special permission, has been drawn up in two
identical copies, of which the parties have
each taken one copy. Previous agreements
between the parties relating to the premises
shall lapse as of the date on which this Lease
takes effect.
Place, date Place, date
/s/ /s/
Lessor Lessee
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED 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> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> APR-30-2000 APR-30-2000
<PERIOD-START> AUG-01-1999 MAY-01-1999
<PERIOD-END> OCT-31-1999 OCT-31-1999
<CASH> 13,851,000 13,851,000
<SECURITIES> 27,742,000 27,742,000
<RECEIVABLES> 19,511,000 19,511,000
<ALLOWANCES> 3,283,000 3,283,000
<INVENTORY> 0 0
<CURRENT-ASSETS> 63,337,000 63,337,000
<PP&E> 16,468,000 16,468,000
<DEPRECIATION> 10,102,000 10,102,000
<TOTAL-ASSETS> 96,840,000 96,840,000
<CURRENT-LIABILITIES> 22,720,000 22,720,000
<BONDS> 0 0
<COMMON> 316,000 316,000
0 0
0 0
<OTHER-SE> 70,140,000 70,140,000
<TOTAL-LIABILITY-AND-EQUITY> 96,840,000 96,840,000
<SALES> 18,288,000 34,964,000
<TOTAL-REVENUES> 18,288,000 34,964,000
<CGS> 13,007,000 25,565,000
<TOTAL-COSTS> 13,007,000 25,565,000
<OTHER-EXPENSES> 12,620,000 24,656,000
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 13,000 41,000
<INCOME-PRETAX> (6,850,000) (14,197,000)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (6,850,000) (14,197,000)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (6,850,000) (14,197,000)
<EPS-BASIC> (0.22) (0.45)
<EPS-DILUTED> (0.22) (0.45)
</TABLE>
