<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
dated February 6, 1998
ILOG S.A.
9 rue du Verdun
94253 Gentilly, FRANCE
and
1901 Landings Drive
Mountain View, California 94043
USA
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F
Form 20-F [X] Form 40-F [ ].
Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934
Yes [ ] No [X].
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b):
82-N.A.
<PAGE> 2
ILOG S.A.
Form 6-K
ILOG S.A. (the "Company") reported its results for the quarter ended
December 31, 1997 in a press release dated as of January 26, 1998. Such press
release is attached as Exhibit A hereto and is incorporated by reference herein.
-2-
<PAGE> 3
EXHIBIT INDEX
Exhibit A Press release, dated as of January 26, 1998, announcing the results
of ILOG S.A. for the quarter ending December 31, 1997
-3-
<PAGE> 4
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.
ILOG S.A.
By: /s/ Roger Friedberger
------------------------------------
Roger Friedberger
Chief Financial Officer
Date: February 6, 1998
-4-
<PAGE> 5
EXHIBIT A
ILOG REPORTS RECORD RESULTS FOR QUARTER ENDED DECEMBER 31, 1997
Paris, France, January 26, 1998 -- ILOG S.A. (NASDAQ NMS: ILOGY), a leading
provider of advanced software components, today reported record revenues of
$15.0 million for its second quarter ended December 31, 1997, an increase of 55%
compared to $9.7 million in the December 1996 quarter.
Income from operations was $1.5 million in the December 1997 quarter, excluding
the write-off of acquired intangibles of $1.3 million related to the CPLEX
acquisition, compared to $3,000 in the December 1996 quarter. Earnings per share
(diluted), excluding the write-off of acquired intangibles, for the December
1997 quarter was $0.10 on 14.2 million shares, compared to $0.09 on 9.1 million
shares in the December 1996 quarter. Earnings per share in the current quarter
was $0.00 after including the write-off of acquired intangibles.
BUSINESS DEVELOPMENTS DURING THE QUARTER
"We are extremely proud of the quarter's results which underscore our leading
position as a library provider for optimization applications and for the
telecommunications market" said Pierre Haren, Chairman and Chief Executive
Officer of ILOG.
During the quarter, ILOG announced that Manugistics, a major independent
software vendor (ISV) renewed its commitment to ILOG's optimization products,
with the integration of the latest version of ILOG's CPLEX Linear Optimizer in
their supply chain management software. This follows ILOG's announcement last
quarter that JD Edwards selected ILOG's optimization products for inclusion in
their enterprise resource planning (ERP) software offering. ILOG during the
quarter has and in the future is continuing to develop its strategy of securing
similar product integration partnerships with other major ISVs in the ERP space.
In addition over 60 new customers selected ILOG optimization software to power
their drive to greater efficiency.
ILOG also announced the commercial availability of a new release of ILOG
Planner, which is the first convergence product integrating the CPLEX algorithms
into the ILOG constraint-based libraries, and a new library called ILOG
Dispatcher, for vehicle routing and technician dispatching.
"These developments are delivering on our promise to become the dominant
provider of optimization engines" added Mr. Haren.
<PAGE> 6
In the telecommunications market, ILOG secured new endorsements from significant
participants such as American Management Systems, British Telecom, Deutsche
Telekom, Hong Kong Telecom, Korea Telecom, Telefonica, as well as renewed
commitments from existing partners such as Alcatel, Hewlett-Packard, and Nortel.
The on-time delivery of the Telecom Graphic Object toolkit to Nortel in the
quarter is ensuring continuing interest from potential future users of the
product, which is currently undergoing beta-testing.
"ILOG software components are an excellent match to the growing
telecommunications need for faster development of powerful network management
applications" explained Mr. Haren. "Whether telecommunication companies need to
design a more flexible and intuitive graphical user interface, a more efficient
alarms management system or even a better network planning application, ILOG has
the right software engine for them" added Mr. Haren.
Consulting revenues showed strong growth during the quarter as a result of
ILOG's commitment to its customers' success. A significant part of ILOG's
consulting was in support of its ISV and value-added reseller (VAR) partners and
is focused on accelerating the time to application deployment and hence
subsequent run-time license fees.
ABOUT ILOG
ILOG is a leading provider of advanced C, C++ and Java software components for
graphics and resource optimization. ILOG products deliver high performance data
visualization for 2D and 3D user interfaces; integer, linear and constraint
solvers for resource optimization, scheduling, logistics and planning
applications; dynamic rule systems for intelligent agents and real time data
flow control, and components for integrating modules with real time and
relational data sources. ILOG was founded in 1987, and now employs approximately
350 people in seven countries. Visit www.ilog.com for additional information.
<PAGE> 7
ILOG S.A.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
-------------------- ---------------------
Dec. 31 Dec. 31 Dec. 31 Dec. 31
------- ------- -------- --------
1997 1996 1997 1996
------- ------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
License fees $ 9,365 $6,879 $ 14,598 $10,443
Services 5,654 2,840 8,864 4,907
------- ------ -------- -------
Total revenues 15,019 9,719 23,462 15,350
------- ------ -------- -------
Cost of revenues
License fees 280 261 536 402
Services 3,006 1,500 4,692 2,606
------- ------ -------- -------
Total cost of revenues 3,286 1,761 5,228 3,008
------- ------ -------- -------
Gross profit 11,733 7,958 18,234 12,342
------- ------ -------- -------
Operating expenses
Marketing and selling 7,217 5,677 12,732 10,434
Research and development 1,664 1,292 2,987 2,457
General and administrative 1,381 986 2,649 2,087
Write-off of acquired intangibles 1,327 -- 29,694 --
------- ------ -------- -------
Total operating expenses 11,589 7,955 48,062 14,978
------- ------ -------- -------
Income (loss) from operations 144 3 (29,828) (2,636)
Net interest income (expense) and other (110) 856 (82) 988
------- ------ -------- -------
Net income (loss) $ 34 $ 859 $(29,910) $(1,648)
------- ------ -------- -------
Net income (loss) per share -- Basic $ 0.00 $ 0.12 $ (2.44) $ (0.23)
-- Diluted $ 0.00 $ 0.09 $ (2.44) $ (0.23)
Share and share equivalents used
in per share calculations -- Basic 12,896 6,948 12,252 7,242
-- Diluted 14,237 9,141 12,252 7,242
</TABLE>
<PAGE> 8
ILOG S.A.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Dec. 31 June 30
------- -------
1997 1997
------- -------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 6,909 $ 26,037
Accounts receivable 14,097 9,740
Other receivables and prepaid expenses 3,427 2,487
-------- --------
Total current assets 24,433 38,264
Acquired intangible assets 1,873 --
Property and equipment-net and other assets 2,992 3,044
-------- --------
Total assets $ 29,298 $ 41,308
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $ 9,823 $ 7,799
Current debt 2,252 2,183
Deferred revenue 3,916 3,165
-------- --------
Total current liabilities 15,991 13,147
Long-term portion of debt 6,245 1,134
-------- --------
Total liabilities 22,236 14,281
-------- --------
Shareholders' equity
Paid-in capital 49,093 38,398
Accumulated deficit and currency translation adjustment (42,031) (11,371)
-------- --------
Total shareholders' equity 7,062 27,027
-------- --------
Total liabilities and shareholders' equity $ 29,298 $ 41,308
-------- --------
</TABLE>
<PAGE> 9
DISCUSSION OF FINANCIAL HIGHLIGHTS
Six Month results
The company reported revenues of $23.5 million for the six months ended December
31, 1997, an increase of 53% compared to $15.3 million in the prior year.
Excluding the write-off of acquired intangibles of $29.7 million the loss from
operations for the six month period was $134,000 compared to a $2.6 million loss
in the corresponding period of the prior year. Loss per share for the six month
period, excluding the write-off of acquired intangibles, was $0.01 on 12.3
million shares, compared to a $0.23 loss per share on 7.2 million shares in the
corresponding period of the prior year. The loss per share in the six month
period was $2.44 after including the write-off of acquired intangibles.
Revenues and Gross Margin
Revenues in the quarter grew by 55% with license and service revenues increasing
by 36% and 99% respectively over the same quarter in the preceding year. The
revenue growth was derived from product license fees in North America and Europe
outside of France, and from consulting and support activities in North America,
France and Asia.
Overall gross margin for the quarter was 78% compared to 82% for the same period
in the preceding year reflecting an increased mix of services revenue, which in
the quarter was 38% of revenues compared to 29% in the same period of the
preceding year. Gross margin for services revenues in the quarter remained
stable at 47%.
Operating Expenses
Marketing and selling expenses for the quarter increased by 27% over the same
period in the prior year reflecting the acquisition of the CPLEX business,
continuing investment in sales organization, and higher sales compensation and
travel costs associated with the growth in revenues.
Research and development expenses, net of government funding, for the quarter
increased by 29% over the same period in the prior year reflecting R&D headcount
growth from 44 to 59 between December 31, 1996 and 1997 which includes 6 from
the acquisition of the CPLEX business. Government research and development
funding in the quarter was $183,000 compared to $70,000 for the same period in
the preceding year.
General and administrative expenses for the quarter increased by 40% over the
same period in the prior year reflecting costs associated with being a public
company, executive recruitment and more resources in management information
systems associated with the growth in North America.
Other Income (expense)
Net interest and other income (expense) for the quarter decreased from $856,000
to $(110,000) over the same period in the prior year due to the non-recurrence
of a $1.1 million grant recognized in the prior year from an agency of the
French government and the absence of material foreign currency exchange losses
in the current quarter. Interest expense arising on the $5.0 million of notes
payable issued in August 1997 in connection with the Company's acquisition of
the CPLEX business and local currency borrowings by subsidiaries offset interest
<PAGE> 10
income earned on the company's cash deposits. Currency fluctuations did not have
a material effect on the company's income from operations, net income or
earnings per share for the quarter ended December 31, 1997.
Balance Sheet
Cash at December 31, 1997 decreased to $6.9 million from $26.0 million at June
30, 1997 reflecting $15 million paid in August 1997 in connection with the CPLEX
acquisition and the timing of operating cash flows. Days sales outstanding of
receivables improved to 84 days at December 31, 1997 from 92 days at June 30,
1997. Intangible assets at December 31, 1997 of $1.9 million represent developed
software and other intangible assets acquired from CPLEX Optimization, Inc.,
$1.3 million of which will be written-off in the quarter ending March 31, 1997
and the remainder over the next 2-3 years.
Long-term debt during the six-month period increased by $5.1 million to $ 6.2
million at December 31, 1997 reflecting the five-year notes payable issued in
connection with the acquisition of the CPLEX business. At December 31, 1997
shareholders' paid-in capital increased to $49.1 million (12.9 million shares),
from $38.4 million (11.0 million shares) at June 30, 1997 reflecting the
issuance of 1.7 million shares in connection with the Company's acquisition of
the CPLEX business and the exercise of 0.2 million stock options. Shareholders'
equity decreased to $7.1 million, from $27.0 million at June 30, 1997 reflecting
the net loss for the six month period and the increase in paid-in capital.
Forward Looking Information
This release contains "forward looking" information within the meaning of the
United States Securities laws that involve risks and uncertainties that could
cause actual results to differ materially from those in the forward looking
statements. Potential risks and uncertainties include, without limitation, the
company's lengthy sales process, the early development stage of the market for
the company's products, the timing of significant revenues, the economic,
political and currency risks associated with the company's European, North
American and Asian operations.
ILOG and CPLEX are registered trademarks of ILOG. All other product and company
names are trademarks or registered trademarks of their respective owners.
<PAGE> 11
RESULTS AND PRESS RELEASE FOR FRENCH SHAREHOLDERS
For the benefit of our French shareholders a translation of this announcement is
also being sent to our shareholders with French addresses of record and to
anyone else upon request. In addition, to facilitate their comprehension of the
Company's financial results the foregoing financial statements, which are
prepared under accounting principles generally accepted in the United States,
have been translated into French Francs at the average historical exchange rates
for the related periods and the exchange rates at the relevant balance sheet
dates. These translated financial statements for the benefit of shareholders
generally follow below.
ILOG S.A.
DONNEES FINANCIERES CONSOLIDEES CLEFS (NON AUDITEES)
(EN MILLIERS DE FRANCS FRANCAIS, SAUF INFORMATIONS DONNEES PAR ACTION)
<TABLE>
<CAPTION>
Trimestre clos le 31 Dec Six mois clos le 31 Dec
------------------------ -----------------------
1997 1996 1997 1996
------ ------ ------- -------
<S> <C> <C> <C> <C>
Chiffre d'affaires
Logiciels 54,941 35,771 86,514 54,304
Services 33,170 14,768 52,537 25,516
------ ------ -------- -------
Total chiffre d'affaires 88,111 50,539 139,051 79,820
------ ------ -------- -------
Prix de revient des ventes
Logiciels 1,643 1,357 3,188 2,090
Services 17,635 7,800 27,807 13,551
------ ------ -------- -------
Total prix de revient des ventes 19,278 9,157 30,995 15,641
------ ------ -------- -------
Marge Brute 68,833 41,382 108,056 64,179
------ ------ -------- -------
Frais generaux et commerciaux
Frais commerciaux 42,340 29,520 75,614 54,256
Frais de recherche et developpement 9,762 6,718 17,744 12,776
Frais generaux et administratifs 8,102 5,127 15,752 10,852
Amortissements Intangibles 7,785 -- 178,933 --
------ ------ -------- -------
Total frais generaux et commerciaux 67,989 41,365 288,043 77,884
------ ------ ------- -------
Resultat operationnel 844 17 (179,987) (13,705)
Produits (charge) financiers et autres (645) 4,451 (476) 5,137
------ ------ -------- -------
Resultat net 199 4,468 (180,463) (8,568)
Resultat net par action (francs) 0.01 0.49 (14.73) (1.18)
Nombre moyen d'actions en circulation 14,237 9,141 12,252 7,242
(en milliers)
</TABLE>
<PAGE> 12
ILOG S.A.
BILANS CONSOLIDES RESUMES (NON AUDITES)
(EN MILLIERS DE FRANCS FRANCAIS)
<TABLE>
<CAPTION>
31 Dec 30 Juin
------ -------
1997 1997
------ ------
<S> <C> <C>
ACTIF
Actif circulant:
Disponibilites et valeurs mobilieres de placement 41,386 153,096
Clients, nets 84,444 57,271
Autres elements d'actif circulant 20,527 14,623
-------- -------
Total de l'actif circulant 146,357 224,990
Immobilisations incorporelles, nettes 11,218 --
Immobilisations corporelles, nettes et autres actifs 17,923 17,898
-------- -------
Total de l'actif 175,498 242,888
======== =======
PASSIF
Passif a moins d'un an:
Fournisseurs et comptes rattaches 58,841 45,858
Dette financiere a court terme 13,490 12,836
Produits constates d'avance 23,456 18,610
-------- -------
Total passif a moins d'un an 95,787 77,304
Dette financiere a long terme 37,409 6,668
-------- -------
Total passif a court et long terme 133,196 83,972
Capitaux propres
Capital souscrit et prime d'emission 294,076 225,778
Report a nouveau et ecart de conversion -251,774 -66,862
-------- -------
Total des capitaux propres 42,302 158,916
-------- -------
Total du passif 175,498 242,888
======== =======
</TABLE>
Pour l'information de nos actionnaires francais, une traduction de cette annonce
sera egalement envoyee a nos actionnaires enregistres avec une adresse
francaise et a toute personne en faisant la demande. De plus, afin de faciliter
la comprehension des resultats financiers de la societe, les comptes consolides
precedents ont ete traduits en francs francais aux taux moyens historiques des
periodes considerees et aux taux de cloture aux dates de bilan.
<PAGE> 13
Contact: Roger Friedberger
ILOG
011-33 1-49-08-35-74
-or-
Taylor Rafferty Associates
212-889-4350
