<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
- --- Exchange Act of 1934 for the quarterly period ended March 31, 1998
Transition Report Pursuant to Section 13 or 15(d) of the Securities
- --- Exchange Act of 1934 for the transition period from ______ to ______.
Commission File Number: 0-22001
DELTEK SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Virginia 54-1252625
(State of incorporation (I.R.S. Employer Identification No.)
or organization)
8280 Greensboro Drive, McLean, Virginia 22102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 734-8606
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 that 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 latest practicable date:
Class Outstanding at March 31, 1998
Common Stock, $.001 par value 17,066,168
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DELTEK SYSTEMS, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
<S> <C>
PART I FINANCIAL INFORMATION
ITEM 1 - Financial Statements (unaudited)
Balance Sheets as of March 31, 1998 and December 31, 1997 3
Statements of Income for the Three months 4
Ended March 31, 1998 and March 31, 1997
Statements of Cash Flows for the Three Months 6
Ended March 31, 1998 and March 31, 1997
Unaudited Notes to Condensed Financial Statements 7
ITEM 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
PART II OTHER INFORMATION
ITEM 1 - Legal Proceedings 18
ITEM 2 - Changes in Securities and Use of Proceeds 18
ITEM 3 - Defaults upon Senior Securities 18
ITEM 4 - Submission of Matters to a Vote of Security Holder 18
ITEM 5 - Other Information 18
ITEM 6 - Exhibits and Reports on Form 8 - K 18
SIGNATURES 19
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
DELTEK SYSTEMS, INC.
BALANCE SHEETS
(in thousands, except share data)
<TABLE>
<CAPTION>
March 31, December 31,
--------- ------------
1998 1997
---- -----
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,454 $ 10,272
Restricted cash (note 5) 5,554 ---
Marketable securities 17,435 14,949
Accounts receivable, net of allowance for doubtful
accounts of $499 and $422, respectively 11,738 8,825
Inventories 195 95
Deferred income taxes 1,924 1,992
Prepaid expenses and other current assets 1,985 1,267
----- -----
Total current assets 42,285 37,400
------ ------
Furniture, equipment, and leasehold improvements, at
cost, net of accumulated depreciation and amortization
of $3,060 and $2,839, respectively 3,042 2,635
Computer software development costs, at cost, net of
accumulated amortization of $2,684 and $ 2,500,
respectively 2,593 2,579
Other assets 128 110
--- ---
Total assets $ 48,048 $ 42,724
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 4,778 $ 4,043
Accrued dividends payable --- 400
Income taxes payable 1,599 573
Deferred income taxes 2,117 2,177
Deferred revenue 11,373 10,779
------ ------
Total current liabilities 19,867 17,972
------ ------
Commitments
Shareholders' equity:
Preferred stock, $0.001 par value per share, 2,000,000
shares authorized, none issued or outstanding --- ---
Common stock, $0.001 par value per share, 45,000,000
shares authorized, 17,066,168 and 17,019,162 shares
issued and outstanding at March 31, 1998 and
December 31, 1997 respectively 17 17
Paid in capital 18,251 17,924
Retained earnings 10,299 7,263
------ -----
28,567 25,204
Less unearned compensation 386 452
--- ---
Total shareholders' equity 28,181 24,752
------ ------
Total liabilities and shareholders' equity $ 48,048 $ 42,724
--------- ---------
</TABLE>
3
<PAGE> 4
DELTEK SYSTEMS, INC.
STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
1998 1997
-------------------------
Statement of Operations Data: (in thousands, except per share data)
<S> <C> <C>
Revenues:
License fees $4,946 $3,551
Services 9,840 6,575
Third party equipment and software 525 412
--- ---
15,311 10,538
------ ------
Operating expenses:
Cost of software 453 336
Cost of services 4,445 2,557
Cost of third-party equipment
and software 431 340
Software development 2,881 2,253
Sales and marketing 1,646 910
General and administrative 799 587
--- ---
Total operating expenses 10,655 6,983
------ -----
Income from operations 4,656 3,555
Interest income, net 249 59
--- --
Income before income taxes 4,905 3,614
Provision for income taxes 1,900 546
----- ---
Net income $3,005 $3,068
------ ------
Basic net income per share $0.18 $0.19
----- -----
Diluted net income per share $0.17 $0.19
----- -----
Weighted average shares outstanding 17,047 15,838
------ ------
Weighted average shares outstanding, including dilutive effect
of stock options 17,500 16,297
------ ------
Pro forma statement of operations data:
Income before provision for income taxes, as reported $3,614
Income tax provision 1,428
-----
Net income $2,186
------
Pro forma basic net income per share $0.18 $0.14
----- -----
Pro forma diluted net income per share $0.17 $0.13
----- -----
</TABLE>
4
<PAGE> 5
DELTEK SYSTEMS, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
1998 1997
----------------------------
<S> <C> <C>
Cash flow from operating activities:
Net Income $ 3,005 $ 3,068
Adjustments to reconcile net income provided by
operating activities:
Depreciation and amortization 412 311
Compensation, noncash 66 71
Accreted interest on marketable securities (8) (62)
Change in accounts receivable, net (2,913) (584)
Change in prepaid expenses, inventories and other assets (818) 106
Change in deferred income taxes receivable 68 ---
Change in accounts payable and accrued expenses 735 1,175
Change in income taxes payable 1,026 436
Change in deferred income taxes payable (60)
Change in deferred revenue 594 377
--- ---
Net cash provided by operating activities 2,107 4,898
----- -----
Cash flows from investing activities:
Purchase of marketable securities (2,478) (13,037)
Restricted Cash in escrow (note 5) (5,554) ---
Purchase of property and equipment (667) (238)
Capitalization of computer development costs (184) (150)
----- -----
Net cash (used in) provided by investing activities (8,883) (13,425)
------- --------
Cash flow from financing activities:
Cash proceeds from initial public offering --- 16,438
Cash proceeds from issuance of common shares 327 ---
Cash dividends paid to stockholders (369) (11,010)
----- --------
Net cash (used in) provided by financing activities (42) 5,428
---- -----
Net increase (decrease) in cash and equivalents (6,818) (3,099)
Cash and equivalents, beginning of period 10,272 8,333
------ -----
Cash and equivalents, end of period $ 3,454 $ 5,234
-------- ---------
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes $ 865 $ 110
----- -----
</TABLE>
5
<PAGE> 6
DELTEK SYSTEMS, INC.
UNAUDITED NOTES TO FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The condensed financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. However, the Company believes that the disclosures are adequate
to make the information presented not misleading. These condensed financial
statements should be read in conjunction with the financial statements and
notes thereto for the year ended December 31, 1997, included in the Company's
Form 10-K Annual Report (No. 0-22001).
2. INITIAL PUBLIC OFFERING
In the initial public offering effected by the Form S-1 Registration Statement
dated February 24, 1997, the Company sold 1.7 million shares of its Common
Stock, par value $0.001 per share at $11.00 per share. The Company realized
$16.4 million from the offering (after deducting the expenses of the offering
of approximately $2.3 million).
3. TERMINATION OF S-CORPORATION ELECTION
Just prior to the initial public offering, the Company terminated its
S-Corporation election for federal income tax purposes. The provision for
income taxes prior to this termination related to certain states that do not
recognize S-Corporation status. Provision for income taxes after the
revocation reflects the estimated current provision for federal and state
income taxes and deferred income taxes. The Company has recorded $13.6 million
in distributions to S-Corporation shareholders during the twelve months ended
December 31, 1997, of which all except $400,000 was paid in 1997. A final
S-Corporation distribution was made in February 1998 for $369,000.
Pro forma net income is based on the assumption that the Company's
S-Corporation status was terminated at the beginning of each year and reflects
a pro forma income tax provision based on applicable tax rates as if the
Company had not elected S-Corporation status for the periods indicated.
4. PRO FORMA NET INCOME PER COMMON SHARE
Pro forma net income per common share was computed based on the weighted
average number of common and common equivalent shares outstanding during the
period. Common equivalent shares are calculated using the treasury stock method
and represent incremental shares issuable upon the exercise of outstanding
stock options.
6
<PAGE> 7
5. ACQUISITION OF SALESKIT SOFTWARE CORPORATION
In February, 1998 the company agreed to acquire the assets of Saleskit Software
Corporation ("SalesKit"), a provider of sales force automation and customer
management software solutions. The purchase price consists of approximately $6
million in cash and stock warrants to purchase 130,000 shares of Deltek common
stock at an exercise price of $22 per share, exercisable over a three year
period. The acquisition will be accounted for as an asset purchase. The
Company expects to write off a substantial portion of the acquisition costs
relating to SalesKit's in process research and development costs in the second
quarter of 1998. Approximately $5.6 million was placed in escrow with the
company's bank until closing of the acquisition, which occurred on April 30,
1998.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following information should be read in conjunction with the
unaudited Financial Statements and Notes included in Item 1 of this Quarterly
Report. The following information should also be read in conjunction with the
audited Financial Statements and Notes, and Management's Discussion and
Analysis of Financial Condition and Results of Operations for the year ended
December 31, 1997 as contained in the Company's Registration Statement on Form
10-K (No. 0-22001).
Except for historical information, certain statements in this
Management's Discussion and Analysis of Financial Condition and Results of
Operations are forward-looking. These forward-looking statements are subject
to various risks and uncertainties, including the demand for products, the size
and timing of specific sales, the level of product and price competition, the
length of sales cycles, economic conditions and the Company's ability to
develop and market new products and control costs. The Company undertakes no
obligation and does not intend to update, revise or otherwise publicly release
the result of any revisions to these forward-looking statements that may be
made to reflect future events or circumstances.
7
<PAGE> 8
Results of Operations
The following table sets forth, for the periods indicated, certain
statement of operations data expressed as a percentage of total revenues:
Statement of Operations Data (Unaudited) as a percentage of revenues
<TABLE>
<CAPTION>
Three months ended
------------------
3/31/98 3/31/97
<S> <C> <C>
Revenues:
License fees 32.3 % 33.7 %
Services 64.3 62.4
Third party equipment & software 3.4 3.9
--- ---
Total Revenue 100.0 100.0
----- -----
Operating expenses:
Cost of software 3.0 3.2
Cost of services 29.0 24.3
Cost of third-party equipment
and software 2.8 3.2
Software development 18.8 21.4
Sales and marketing 10.8 8.6
General and administrative 5.2 5.6
--- ---
Total operating expenses 69.6 66.3
---- ----
Income from operations 30.4 33.7
Interest income, net 1.6 0.6
--- ---
Income before income taxes 32.0 34.3
Provision for income taxes 12.4 5.2
---- ---
Net income 19.6 % 29.1 %
---- ----
Pro forma Statement of Operations Data:
---------------------------------------
Income before income taxes 32.0 % 34.3 %
Provision for income taxes 12.4 13.6
---- ----
Net income 19.6 % 20.7 %
---- ----
</TABLE>
Three months ended March 31, 1998 as compared with March 31, 1997
License Fees. License fees for the three month period ending March
31, 1998 increased by 39% to $4.9 million from $3.6 million for the same period
in 1997. License fees comprised 32.3% of the Company's total revenues for the
three month period ending March 31, 1998, compared to 33.7% for 1997. The
increase in license fees was principally attributable to Costpoint license fees
which increased 62.9% to $3.5 million for the first quarter of 1998 from $2.1
million for the comparable quarter in 1997, reflecting increases in the number
of modules licensed and the average size of new
8
<PAGE> 9
system installations, offset somewhat by discounts granted to System 1 users
migrating to Costpoint systems. License fees from System 1 products was
approximately $0.5 million and $1.0 million for the first quarter of 1998 and
1997, respectively. License fees for Electronic Timesheet increased by 142.9%
to $814,000 from $335,000 in the first quarter of 1997.
Services. Service revenues for the three month period ending March
31, 1998 increased by 49.7% to $9.8 million from $6.6 million for the same
period in 1997. Service revenues comprised 64.3% of the Company's total
revenues for the first quarter of 1998, compared to 62.4% for the same period
in 1997. The increase in service revenues was principally attributable to
increased consulting services related to new implementations of Costpoint
systems. Consulting service revenues exclusive of travel reimbursements
increased by 93.1% to $4.4 million for the three month period ending March 31,
1998 from $2.3 million for the same period in 1997. Maintenance, support, and
other service revenues increased by 26.6% to $5.4 million from $4.3 million,
principally as a result of the addition of new customers and the sale of
additional software products to existing customers and, to a lesser extent,
increases in service rates.
Third-Party Equipment and Software. Revenue from third-party
equipment and software for the three month period ending March 31, 1998 and
March 31, 1997 was approximately $525,000 and $412,000, respectively. These
revenues comprised 3.4% of total revenues for the first quarter of 1998 and
3.9% for the comparable period in 1997. Third-party Equipment and Software
sales are not a core emphasis of the company, but rather an accommodation to
customers that require system integration during the implementation of their
accounting system. As a result the level of these sales fluctuates
significantly from quarter to quarter.
Cost of Software. Cost of software is comprised primarily of
royalties and maintenance payments to third parties, amortization of software
development costs, and the cost of production and distribution of software and
user manuals. Cost of software for the three month period ending March 31,
1998 was approximately $453,000, a 34.8% increase from the $336,000 for the
same period in 1997. This change was due to an increase in royalty and support
expenses based on the mix of software revenue.
Cost of Services. Cost of services is comprised primarily of
personnel costs for implementation and consulting services, user training and
ongoing maintenance and support. Cost of services for the three month period
ending March 31, 1998 increased by 73.8% to $4.4 million from $2.6 million for
the same period in 1997. The increase in cost of services was primarily due to
increases in personnel costs to support the Costpoint product line. Cost of
services represented 45.2% and 38.9% of service revenues for the three month
period ending March 31, 1998 and 1997, respectively. The increase in cost of
services as a percentage of service revenues as compared to the first quarter
of 1997 reflects the increase in the consulting and support staff to support
the continued growth of Costpoint implementations.
9
<PAGE> 10
Cost of Third-Party Equipment and Software. Cost of third-party
equipment and software consists of the purchased costs of computer and
peripheral equipment and license fees and royalties for third-party software.
Costs of third-party equipment and software for the three month period ending
March 31, 1998 and March 31, 1997 were $431,000 and $340,000, respectively. As
a percentage of related revenues, cost of third-party equipment and software
products represented 82.1% and 82.5% of revenue from third- party equipment and
software for the three month period ending March 31, 1998 and 1997,
respectively. The decrease in these costs as a percentage of related revenue
was the result of changes in the product mix of equipment and software sold.
Software Development. Software development costs consists primarily
of the personnel costs of analysts and programmers to research, develop,
support and maintain the Company's existing software product lines, enhance
existing products and develop new products. Software development costs for the
three month period ending March 31, 1998 increased by 27.9% to $2.9 million
from $2.3 million for the same period in 1997. This increase was due primarily
to increased personnel costs and related benefits and facilities costs.
Software development costs represented 18.8% and 21.4% of total revenues for
the three month period ending March 31, 1998 and 1997, respectively.
Sales and Marketing. Sales and marketing expenses consist primarily
of the personnel costs of the Company's sales and marketing organizations as
well as the costs of advertising, direct mail and other sales and marketing
activities. Sales and marketing expenses for the three month period ending
March 31, 1998 increased by 80.9% to $1.6 million from $0.9 million for the
same period in 1997. This increase was due primarily to increased personnel
and marketing activities. Sales and marketing expenses represented 10.8% of
the Company's total revenues for the three month period ending March 31, 1998,
compared to 8.6% for the same period in 1997.
General and Administrative. General and administrative expenses
consist primarily of the personnel costs of the Company's management,
administrative and finance staffs as well as the costs of insurance programs,
bad debt expenses, professional fees and other infrastructure costs. General
and administrative expenses for the three month period ending March 31, 1998
increased by 36.1% to $0.8 million from $0.6 million for the same period in
1997. This $212,000 increase was due primarily to an increase to the bad debt
reserve of $110,000 and the company's overall growth. General and
administrative expenses represented 5.2% of the Company's total revenue for the
three month period ending March 31, 1998, compared to 5.6% for the same period
in 1997.
Interest Income. Interest income results from investments, and to a
lesser extent, from installment financing. Interest income for the three month
period ending March 31, 1998 increased by 322.0% to $249,000 from $59,000 for
the same period in 1997. The change is due to the increased investments as a
result of the February 1997 initial public offering.
10
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Income Tax Provision. The Company's effective tax rate for the three
month period ending March 31, 1998 was 38.7%, as compared to a 39.5% pro forma
effective tax rate for the same period in 1997. The provision for income taxes
for the three month period ended March 31, 1998 is based upon the Company's
estimate of the effective tax rate for fiscal 1998. Just prior to the initial
public offering in February 1997, the Company terminated its S-Corporation
election for federal income tax purposes. The provision for income taxes for
1997 prior to this termination related to certain states that do not recognize
the S-Corporation status. Provision for income taxes for 1997 after the
termination reflects the estimated current provision for federal and state
income taxes and deferred taxes.
Liquidity and Capital Resources
The Company has financed its operations almost exclusively from cash
flow from its operations. As of March 31, 1998, the Company had cash, cash
equivalents of $3.5 million and investments in marketable securities of $17.4
million, with working capital of $22.4 million. On March 3, 1997, the Company
received proceeds of $16.4 million, net of offering costs, related to the
closing of the Company's initial public offering and sale of 1,700,000 common
shares.
For the three month period ending March 31, 1998, the Company's
operating activities provided net cash of $2.1 million, primarily as a result
of income before depreciation and amortization. In addition, the increase in
accounts receivable was offset by a greater increase in accounts payable and
accrued expenses and deferred revenue. Accounts receivable, net of the
allowance for doubtful accounts, were $11.7 million as of March 31, 1998,
compared to $8.8 million as of December 31, 1997. Accounts receivable days
sales outstanding was 60 days as of March 31, 1998, compared to 56 days as of
March 31, 1997. The increase in deferred revenue reflects increased Costpoint
license fees, for which revenue is recognized upon the expiration of the refund
period. Exclusive of unbilled receivables which were recorded as deferred
revenue, days sales outstanding was 39 days as of March 31, 1998, compared to
26 days as of March 31, 1997. While the Company believes that its allowance
for doubtful accounts as of March 31, 1998 remains adequate, there can be no
assurance that such allowance will be sufficient to cover receivables which are
later determined to be uncollectible.
Cash used in investing activities was $8.9 million for the three
months ended March 31, 1998. This amount included $2.5 million for the
purchase of marketable securities and other investments, $667,000 in purchased
property and equipment and $184,000 of capitalized software production costs
for new Costpoint product modules, and the restricted cash placed in escrow of
$5.6 million related to the Acquisition of SalesKit Software Corporation, which
closed on April 30, 1998.
Financing activities for the three month period ended March 31, 1998
consisted primarily of the net proceeds of $327,000 from the issuance of common
stock, and the
11
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payment of $369,000 in final dividend and tax distributions to the Company's
subchapter "S" Corporation shareholders, based on the filing of the final
subchapter "S" Corporation tax returns. The Company historically has
distributed most of its profits as S-Corporation dividends, but terminated its
S-Corporation status in February, 1997.
The Company maintains a credit facility with a bank for $1 million
operating capital line of credit. The Company believes that existing sources
of liquidity and anticipated cash flow from operations, and proceeds from the
public offering, will satisfy the Company's anticipated working capital and
capital expenditure requirements for the next twelve months. However,
depending on its rate of growth and profitability, the Company may require
additional equity or debt financing to meet its working capital requirements or
capital expenditure needs in the future. There can be no assurance that
additional financing will be available when required or, if available, will be
on terms satisfactory to the Company.
Factors That May Affect Future Results
The Company has experienced, and expects to continue to experience,
significant fluctuations in quarterly operating results. The Company's future
operating results will depend upon a number of factors, including the demand
for its products, the size and timing of specific sales, the delay or deferral
of customer implementations, the level of product and price competition that it
encounters, the length of its sales cycles, the successful expansion of its
direct sales force and customer support organization, the timing of new
products and services sold, the activities of and acquisitions by its
competitors, the timing of new hires and its ability to develop and market new
products and control costs. The Company's operating results could also be
affected by general economic conditions. In addition, the decision to license
and implement an enterprise-level business software system is usually
discretionary, involves a significant commitment of customer resources and is
subject to delays, and to budget cycles and internal authorization procedures
of the Company's customers. The loss or delay of individual orders could have
a significant impact on the Company's operating results, particularly on a
quarterly basis. Furthermore, while the Company's revenue from license fees is
difficult to predict because of the length and variability of the Company's
sales cycles, the Company's operating expenses are based on anticipated revenue
trends. Because a high percentage of these expenses are relatively fixed, a
delay in the recognition of revenue from a limited number of sales could cause
significant variations in operating results from quarter to quarter. To the
extent such expenses precede, or are not subsequently followed by, anticipated
revenues, the Company's operating results could be materially and adversely
affected.
The Company typically grants its customers the right to return its
software products for a refund of the license fee during a refund period which
is generally 60 to 90 days from the date of the license agreement, although the
Company occasionally has provided, and may in the future provide, longer refund
periods for larger, more complex Costpoint installations. The Company
recognizes license fees from its System 1 and
12
<PAGE> 13
Electronic Timesheet products upon delivery, whereas Costpoint license fees are
recognized upon the expiration of the applicable refund period and are recorded
as deferred revenue until recognized. Because of its customers' refund rights
and the varying length of applicable refund periods, deferred revenue at the
end of a quarter does not necessarily reflect revenue which the Company will
recognize in the succeeding quarter.
The Company derives substantially greater profit margins from license
fees than from service revenues or from third-party equipment and software.
The mix of revenues among these three components can fluctuate materially from
quarter to quarter, and such fluctuations can have a significant effect on
margins. Over the past five years, the percentage of the Company's total
revenues represented by service revenues has increased, although such
percentage has remained relatively stable over the past three years. Should
lower margin service revenues or revenue from third-party equipment and
software increase in the future as a percentage of total revenues, the
Company's margins and income from operations could be adversely affected.
Over the last several years, the Company has experienced seasonal
variations in its operating results, partly due to customers' desire to have
their systems operational at the beginning of a calendar year. Accordingly,
these customers typically order their systems in the middle of the preceding
year in order to allow adequate time for implementation, resulting in a
seasonally high level of revenue being recognized in the fourth quarter upon
the expiration of refund periods.
As a result of these and other factors, the Company's operating
results for any quarter are subject to significant variation, and the Company
believes that period-to-period comparisons of its operating results are not
necessarily meaningful and should not be relied upon as indications of future
performance. It is likely that the Company's future quarterly operating
results from time to time will not meet the expectations of market analysts or
investors. In such event, the price of the Company's Common Stock would likely
be materially and adversely affected.
13
<PAGE> 14
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not party to any legal proceeding which would have a
material impact on the Company, its operations or financial results.
Item 2. Changes in Securities and Use of Proceeds
(a-b) Not applicable
(c) None other than pursuant to employee benefit plans.
(d) The net proceeds of the initial public offering (see Note 2
to the Financial Statements) remain temporarily invested and available for
future working capital or other uses. The managing underwriter for the
initial public offering was Montgomery Securities. Approximately $5.6 million
of such proceeds was placed in escrow with the Company's bank during the
quarter until closing of the Company's acquisition of the assets of SalesKit
Software Corporation on April 30, 1998 (see Note 5 to the Financial Statements).
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter ended March
31, 1998.
14
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: May 14, 1998
DELTEK SYSTEMS, INC.
By: s/ Kenneth E. deLaski
----------------------------------
Kenneth E. deLaski
President and Chief Executive Officer
By: s/ Alan R. Stewart
----------------------------------
Alan R. Stewart
Chief Financial Officer
(Principal Financial and Accounting officer)
15
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DELTEK SYSTEMS, INC.
INDEX OF EXHIBITS
EXHIBIT # EXHIBIT TITLE
27 Financial Data Schedule
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM DELTEK
SYSTEMS, INC. FINANCIAL STATEMENTS INCLUDED IN THE COMPANY'S STATEMENT ON FORM
10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
AND NOTES THERETO.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 9,008
<SECURITIES> 17,435
<RECEIVABLES> 12,237
<ALLOWANCES> (499)
<INVENTORY> 195
<CURRENT-ASSETS> 42,285<F1>
<PP&E> 6,102
<DEPRECIATION> (3,060)
<TOTAL-ASSETS> 48,048<F2>
<CURRENT-LIABILITIES> 19,867
<BONDS> 0
0
0
<COMMON> 17
<OTHER-SE> 28,164
<TOTAL-LIABILITY-AND-EQUITY> 48,048
<SALES> 15,311
<TOTAL-REVENUES> 15,311
<CGS> 0
<TOTAL-COSTS> 10,655
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4,905<F3>
<INCOME-TAX> 1,900
<INCOME-CONTINUING> 4,656
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,005
<EPS-PRIMARY> 0.18
<EPS-DILUTED> 0.17
<FN>
<F1>INCLUDES PREPAID EXPENSES AND OTHER CURRENT ASSETS OF 3,909.
<F2>INCLUDES COMPUTER SOFTWARE COSTS-NET OF 2,593. ALSO INCLUDES OTHER ASSETS OF
128.
<F3>INCLUDES INTEREST INCOME OF 237.
</FN>
</TABLE>
