<PAGE>
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 May 15, 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>
ILOG S.A.
FORM 6-K
ILOG S.A. (the "COMPANY") reported its results for the quarter and nine
months ended March 31, 1998 in a press release dated April 23, 1998. Such
press release is attached as EXHIBIT A hereto and is incorporated by
reference herein.
SAP AG signed a letter of intent to purchase 653,062 new shares of the
Company, which would give SAP AG approximately 5% ownership of the Company. The
signing of the letter of intent was announced in a press release dated April 23,
1998. Such press release is attached as EXHIBIT B hereto and is incorporated by
reference herein.
-2-
<PAGE>
EXHIBIT INDEX
Exhibit A Press release, dated April 23, 1998, announcing the results of
ILOG S.A. for the quarter ending March 31, 1998
Exhibit B Press release, dated April 23, 1998, announcing that SAP AG has
signed a letter of intent to purchase 653,062 new shares of ILOG
S.A.
-3-
<PAGE>
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: May 15, 1998
-4-
<PAGE>
EXHIBIT A
ILOG REPORTS 77% REVENUE GROWTH FOR QUARTER ENDED MARCH 31, 1998
Paris, France, April 23, 1998 -- ILOG S.A. (NASDAQ NMS: ILOGY), a leading
provider of advanced software components, today reported revenues of $14.9
million for its third quarter ended March 31, 1998, an increase of 77% compared
to $8.4 million in the March 1997 quarter.
Income from operations was $1.4 million in the March 1998 quarter, excluding the
write-off of acquired intangibles of $1.3 million related to the CPLEX
acquisition, compared to an operating loss of $0.7 million in the March 1997
quarter. Earnings per share (diluted), excluding the write-off of acquired
intangibles, for the March 1998 quarter was $0.10 on 14.4 million shares,
compared to a loss per share of $0.08 on 8.5 million shares in the March 1997
quarter. Earnings per share in the current quarter was $0.01 after including the
write-off of acquired intangibles.
BUSINESS DEVELOPMENTS DURING THE QUARTER
"I am pleased with our revenue growth and operating profitability, which
reflects our success as a high-end library provider for optimization
applications and the telecommunications market" said Pierre Haren, Chairman and
Chief Executive Officer of ILOG. "The growth was achieved despite some softness
and currency weakness in Asia, which we believe may continue into the June
quarter".
ILOG's penetration in the enterprise software market increased during the
quarter as smaller ISVs such as ITLS and Promira, who had embedded ILOG
optimization libraries in their products, were acquired by I2 and Manugistics,
the leading Supply Chain Management vendors. ILOG optimization products were
also selected by about 50 new large end-users in the telecommunications,
manufacturing and transportation industries. This included the first notable
sale of ILOG's new product ILOG Dispatcher for foodstuff distribution. To cater
to the needs of high-end optimization customers, ILOG in the quarter announced
with Sun the release of the parallel version of CPLEX 5.0 which delivers a
30-fold performance improvement for the solution of large linear programming
applications on Sun Ultra HPC 6000 machines.
In the telecommunications market, ILOG enjoyed success in the network management
space, obtained two new partnership agreements with Bull and Digital Equipment
on alarms management, and started winning telecommunications contracts with two
new partners, EDS in France and IBM in Switzerland. "We delivered the commercial
release of Telecom Graphics Objects (TGO) on time to our first customers, as
well as a new major release of our best-selling graphics product ILOG Views
during this quarter" indicated Pierre Haren, "this demonstrates our commitment
to the continuing improvement of our visualization product line."
<PAGE>
During the quarter a reorganization of ILOG's sales force outside of France was
started to transform the organization from a regional sales structure to an
industry-specific structure. In France, an industry-specific structure has
successfully been in operation for a number of years. In connection with the
reorganization Stuart Bagshaw, Chief Operating Officer, is assuming the
additional role of President of ILOG, Inc.
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
390 people in seven countries. Visit www.ilog.com for additional information.
<PAGE>
ILOG S.A.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
-------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
----------------------- -----------------------
MARCH 31 MARCH 31 MARCH 31 MARCH 31
1998 1997 1998 1997
------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
License fees $ 9,422 $5,995 $ 24,020 $16,438
Services 5,479 2,411 14,343 7,318
------- ------ -------- -------
Total revenues 14,901 8,406 38,363 23,756
------- ------ -------- -------
Cost of revenues
License fees 206 208 742 610
Services 3,011 1,456 7,705 4,062
------- ------ -------- -------
Total cost of revenues 3,217 1,664 8,447 4,672
------- ------ -------- -------
Gross profit 11,684 6,742 29,916 19,084
------- ------ -------- -------
Operating expenses
Marketing and selling 6,957 5,190 19,687 15,624
Research and development 1,782 1,156 4,769 3,613
General and administrative 1,574 1,082 4,223 3,169
Write-off of acquired intangibles 1,291 - 30,985 -
------- ------ -------- -------
Total operating expenses 11,604 7,428 59,664 22,406
------- ------ -------- -------
Income (loss) from operations 80 (686) (29,748) (3,322)
Net interest income (expense) and other 61 (17) (21) 970
------- ------ -------- -------
Net income (loss) $ 141 $ (703) $(29,769) $(2,352)
------- ------ -------- -------
Net income (loss) per share - Basic $ 0.01 $(0.08) $ (2.39) $ (0.31)
- Diluted $ 0.01 $(0.08) $ (2.39) $ (0.31)
Share and share equivalents used
in per share calculations - Basic 12,952 8,520 12,477 7,472
- Diluted 14,376 8,520 12,477 7,472
</TABLE>
<PAGE>
ILOG S.A.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
-------------------------------------------------
(IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31 JUNE 30
1998 1997
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<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 8,658 $ 26,037
Accounts receivable 14,181 9,740
Other receivables and prepaid expenses 4,370 2,487
-------- --------
Total current assets 27,209 38,264
Acquired intangible assets 568 -
Property and equipment-net and other assets 3,286 3,044
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Total assets $ 31,063 $ 41,308
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $ 10,240 $ 7,799
Current debt 2,049 2,183
Deferred revenue 5,497 3,165
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Total current liabilities 17,786 13,147
Long-term portion of debt 5,948 1,134
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Total liabilities 23,734 14,281
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Shareholders' equity
Paid-in capital 49,451 38,398
Accumulated deficit and currency translation adjustment (42,122) (11,371)
-------- --------
Total shareholders' equity 7,329 27,027
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Total liabilities and shareholders' equity $ 31,063 $ 41,308
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</TABLE>
<PAGE>
DISCUSSION OF FINANCIAL HIGHLIGHTS
REVENUES AND GROSS MARGIN
Revenues in the quarter grew by 77% with license and service revenues increasing
by 57% and 127% respectively over the same quarter in the preceding year. The
revenue growth was derived from product license fees in Europe and North
America, and from consulting and support activities worldwide.
Overall gross margin for the quarter was 78% compared to 80% for the same period
in the preceding year reflecting an increased mix of services revenue, which in
the quarter was 37% of revenues compared to 29% in the same period of the
preceding year. Gross margin for services revenues in the quarter improved to
45% from 40% in the same period of the preceding year reflecting the strength of
the company's consulting activities.
OPERATING EXPENSES
Marketing and selling expenses for the quarter increased by 34% over the same
period in the prior year reflecting increased expenses associated with the 77%
growth in revenues.
Research and development expenses, net of government funding, for the quarter
increased by 54% over the same period in the prior year reflecting R&D headcount
growth from 49 to 70 between March 31, 1997 and 1998. Government research and
development funding in the quarter was $173,000 compared to $93,000 for the same
period in the preceding year.
General and administrative expenses for the quarter increased by 45% over the
same period in the prior year reflecting increased resources in accounting and
management information systems to support the growth of the company's business
in North America.
OTHER INCOME (EXPENSE)
Net interest and other income (expense) for the quarter increased from $(17,000)
to $61,000 due principally to realized foreign currency exchange gains in the
quarter. However, currency fluctuations generally did not have a material effect
on the company's income from operations, net income or earnings per share for
the quarter ended March 31, 1998.
NINE MONTH RESULTS
The company reported revenues of $38.4 million for the nine months ended March
31, 1998, an increase of 61% compared to $23.8 million in the prior year.
Excluding the write-off of acquired intangibles of $31.0 million the income from
operations for the nine-month period was $1.2 million compared to a $3.3 million
loss in the corresponding period of the prior year. Earnings per share for the
nine-month period, excluding the write-off of acquired intangibles, was $0.10 on
12.5 million shares, compared to a $0.31 loss per share on 7.5 million shares in
the corresponding period of the prior year. The loss per share in the nine-month
period was $2.39 after including the write-off of acquired intangibles.
<PAGE>
BALANCE SHEET
Cash at March 31, 1998 increased to $8.7 million from $6.9 million at December
31, 1997 primarily reflecting the operating profit in the December quarter. Days
sales outstanding of receivables was 86 days at March 31, 1998 compared to 84
days at December 31, 1997. Deferred revenues increased to $5.5 million at March
31, 1998 from $3.9 million at December 31, 1997 due to new and renewed
maintenance contract commitments by customers.
Long-term debt during the nine-month period increased by $4.8 million to $ 5.9
million at March 31, 1998 reflecting the five-year notes payable issued in
connection with the acquisition of the CPLEX business. At March 31, 1998
shareholders' paid-in capital increased to $49.5 million (13.0 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 0.3 million stock options. Shareholders'
equity decreased to $7.3 million, from $27.0 million at June 30, 1997 reflecting
the net loss for the nine-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
economic, political and currency risks associated with the company's European,
North American and Asian operations, the impact of the current sales personnel
reorganization, the timing of significant revenues, and those risks and
uncertainties mentioned under "Risk Factors" in the company's form 20-F for the
year ended June 30, 1997 which is on file with the United States Securities and
Exchange Commission.
ILOG and CPLEX are registered trademarks of ILOG. All other product and company
names are trademarks or registered trademarks of their respective owners.
<PAGE>
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 MARS NEUF MOIS CLOS LE 31 MARS
------------------------- -------------------------
1998 1997 1998 1997
-------- -------- --------- ---------
<S> <C> <C> <C> <C>
Chiffre d'affaires
Logiciels 57,097 33,772 143,611 88,075
Services 33,203 13,582 85,740 39,098
-------- -------- --------- ---------
Total chiffre d'affaires 90,300 47,354 229,351 127,174
-------- -------- --------- ---------
Prix de revient des ventes
Logiciels 1,248 1,172 4,436 3,262
Services 18,247 8,202 46,066 21,753
-------- -------- --------- ---------
Total prix de revient des ventes 19,495 9,374 50,502 25,015
-------- -------- --------- ---------
Marge Brute 70,805 37,980 178,849 102,158
-------- -------- --------- ---------
Frais Generaux et Commerciaux
Frais commerciaux 42,159 29,237 117,761 83,494
Frais de recherche et developpement 10,799 6,512 28,543 19,289
Frais generaux et administratifs 9,538 6,095 25,291 16,948
Amortissements intangibles 7,823 - 186,756 -
-------- -------- --------- ---------
Total frais generaux et commerciaux 70,320 41,844 358,351 119,730
-------- -------- --------- ---------
Resultat operationnel 485 (3,864) (179,501) (17,572)
Produits (charge) financiers et autres 370 (96) (107) 5,037
-------- -------- --------- ---------
Resultat net 854 (3,960) (179,608) (12,535)
-------- -------- --------- ---------
Resultat net par action (francs) 0.07 (0.46) (14.40) (1.68)
Nombres moyen d'actions en circulation 12,952 8,520 12,477 7,472
(En milliers)
</TABLE>
<PAGE>
ILOG S.A.
BILANS CONSOLIDES RESUMES (NON AUDITES)
-------------------------------------------
(EN MILLIERS DE FRANCS FRANCAIS)
<TABLE>
<CAPTION>
31 MARS 30 JUIN
1998 1997
-------- -------
<S> <C> <C>
ACTIF
Actif circulant:
Disponibilites et valeurs mobilieres de placement 53,507 153,096
Clients, nets 87,640 57,271
Autres elements d'actif circulant 27,009 14,623
-------- -------
Total de l'actif circulant 168,156 224,990
Immobilisations corporelles, nettes et autres actifs 20,308 17,898
Immobilisations incorporelles, nettes 3,510
-------- -------
Total de l'actif 191,974 242,888
-------- -------
-------- -------
PASSIF
Passif moins d'un an:
Fournisseurs et comptes rattaches 63,284 45,858
Dette financiere a court terme 12,661 12,836
Produits constates d'avance 33,974 18,610
-------- -------
Total passif a moins d'un an 109,919 77,304
Dette financiere a long terme 36,762 6,668
-------- -------
Total passif a court et long terme 146,681 83,972
Capitaux propres
Capital souscrit et prime d'emission 305,612 225,778
Report a nouveau et ecart de conversion -260,319 -66,862
-------- -------
Total des capitaux propres 45,293 158,916
-------- -------
Total du passif 191,974 242,888
-------- -------
-------- -------
</TABLE>
Pour l'information de nos actionnaires francais, une traduction de cette annonce
sera egalement envoyee nos actionnaires enregistres avec une adresse francaise
et 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>
EXHIBIT B
SAP AG PLANS TO MAKE $10 MILLION INVESTMENT IN ILOG
GENTILLY, France--April 23, 1998--ILOG S.A. (NASDAQ NMS: ILOGY), announced today
that SAP AG market and technology leader in client/server enterprise application
software has decided to make a $10 million investment in ILOG S.A. After this
investment SAP will own approximately 5% of ILOG. SAP has signed a non-binding
letter of intent to purchase 653,062 new shares in ILOG at $15.3125, a 25%
premium over ILOG's closing share price as of April 22, 1998 for a total
consideration of $10,000,012. SAP has agreed to a standstill with respect to
future purchases of ILOG stock. The investment is subject to the parties
concluding a definitive agreement and ILOG shareholder approval.
ABOUT SAP
SAP is a market and technology leader in client/server enterprise application
software. It provides comprehensive solutions for companies of all sizes in all
industry sectors. Building innovative technologies on a solid foundation of
business experience, SAP delivers scalable solutions that enable its customers
to improve continually on best business practices. SAP products empower people
to respond quickly and decisively to dynamic market conditions, which helps
businesses achieve and maintain competitive advantages. Founded in 1972, SAP is
based in Walldorf, Germany, and employs more than 13,000 people at offices in
more than 50 countries. The SAP worldwide web site is located at www.sap.com.
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 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 390 people in seven
countries. Visit www.ilog.com for additional information.
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 receiving the investment from SAP as described above.
ILOG is a registered trademark of ILOG and SAP is a registered trademark of
SAP AG.
