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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
DATED NOVEMBER 9, 1998
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ILOG S.A.
9 rue du Verdun BP 85
94253 Gentilly, France
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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):
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ILOG S.A.
FORM 6-K
ILOG S.A. (the "Company") reported its results for the three months ended
September 30, 1998 in a press release dated October 22, 1998. Such press release
is attached as EXHIBIT 99.1 hereto and is incorporated by reference herein.
EXHIBIT INDEX
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<S> <C>
Exhibit Press release, dated October 22, 1998, announcing the results of ILOG S.A. for
99.1 the three months ended September 30, 1998.
</TABLE>
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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
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Roger Friedberger
CHIEF FINANCIAL OFFICER
Date: November 9, 1998
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EXHIBIT 99.1
ILOG REPORTS 55% REVENUE GROWTH FOR QUARTER ENDED SEPTEMBER 30, 1998
Paris, France, October 22, 1998--ILOG S.A. (NASDAQ NMS: ILOGY), a leading
provider of advanced software components, today reported revenues of $13.3
million for the quarter ended September 30, 1998, an increase of 55% compared to
$8.6 million in the September 1997 quarter. These results reflect higher
revenues from both license fees and services, which grew by 48% and 66%
respectively over the same quarter in the preceding year.
The loss from operations was $0.6 million in the September 1998 quarter,
compared to $1.6 million before the write-off of acquired intangibles of $28.4
million, related to the CPLEX acquisition in the September 1997 quarter. Loss
per share for the September 1998 quarter was $0.07 on 13.9 million shares,
compared to a loss per share of $2.57, or $0.13 before the write-off of acquired
intangibles, on 11.7 million shares in the September 1997 quarter.
BUSINESS DEVELOPMENTS DURING THE QUARTER
"I am pleased to report another successful quarter from ILOG," said Pierre
Haren, ILOG's President and CEO. "We have been able to maintain a high growth
rate and improve our bottom-line in a seasonally weak quarter, and we are
strengthening the position of the Company in terms of both competitiveness and
market share."
During the quarter the Company experienced some impact of the North American
sales reorganization started in the June quarter due to the Company's typical
three to six month selling cycle; the revenue effect of this reorganization was,
however, mitigated by ISV business strength.
During the quarter the Company further consolidated its position in
visualization for telecommunication network management and optimization for
manufacturing, and made significant inroads in the transportation sector.
In the visualization for telecommunication network management business,
existing ISVs such as Atlantech in the UK are migrating from ILOG Views to ILOG
TGO, and the visualization suite has been selected for network management
projects at NEC and Mitsubishi Electric, and is under evaluation at ATT and
Lucent.
After the release of ILOG JTGO, a Java version of ILOG TGO, plus a major new
version of ILOG JViews, ILOG's visualization suite is now fully available in
both C++ and Java and is an attractive proposition in this market. Further, the
Company's visualization suite was well received at the recent TeleManagement
World conference in Dallas. Beyond the visualization domain, significant ISV
agreements for incorporating ILOG Rules for alarm correlation and customer
billing in the telecommunication industry were also announced during the quarter
with Bull, Compaq/Digital and LHS.
In manufacturing, the Company strengthened its position in the steel
industry, with orders from Sollac and Nippon Steel. Also second tier supply
chain management vendors such as Dynasys in France are starting to embed ILOG
optimization and visualization technologies in their next generation of
products. Such companies, represent an interesting market for ILOG.
In the transportation industry ILOG components are used successfully to
solve two major problems this industry faces: the real-time monitoring of
systems as well as the optimization of the management of personnel and vehicles.
Sales in the quarter were made to Airbus Industrie, Alitalia, BMW-Rolls Royce,
Malaysian Airways and Qantas for air transportation applications, to CSEE
Transport for subway monitoring, CGEA for bus monitoring, Dalian Port in China
for harbor supervision, Tussam, a Spanish bus company for personnel planning,
Korean Railways for train scheduling and to LG-Caltex Oil in Korea for oil
tanker scheduling. This business brings revenue, but more importantly, these
endorsements position ILOG's offerings as engines for supervision and
optimization systems in the transportation industry.
In order to reach a larger market with its optimization product line, ILOG
has recently unveiled a new modeling environment named ILOG OPL Studio which
simplifies the development of constraint based applications. This product
extends to non-programmers the benefits of constraint programming. The
environment allows a user to simply state the equations describing his or her
problem and delegate to the ILOG OPL Studio environment the task to solve them
using the underlying ILOG Solver, ILOG Scheduler and ILOG Planner software
components.
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ABOUT ILOG
ILOG is a leading provider of advanced C, C++ and Java software components
for advanced 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
440 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)
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<CAPTION>
THREE MONTHS ENDED
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SEPT. 30, SEPT. 30,
1998 1997
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<S> <C> <C>
Revenues
License fees........................................................... $ 7,903 $ 5,329
Services............................................................... 5,396 3,242
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Total revenues....................................................... 13,299 8,571
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Cost of revenues
License fees........................................................... 223 266
Services............................................................... 3,176 1,694
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Total cost of revenues............................................... 3,399 1,960
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Gross profit............................................................. 9,900 6,611
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Operating expenses
Marketing and selling.................................................. 6,271 5,595
Research and development............................................... 2,239 1,323
General and administrative............................................. 1,926 1,295
Write-off of acquired intangibles...................................... 61 28,367
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Total operating expenses............................................. 10,497 36,580
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Loss from operations..................................................... (597) (29,969)
Net interest income (expense) and other.................................. (384) 28
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Net loss................................................................. $ (981) $ (29,941)
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Net loss per share....................................................... $ (0.07) $ (2.57)
Share and share equivalents used in per share calculations............... 13,876 11,661
</TABLE>
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ILOG S.A.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS)
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<CAPTION>
SEPT. 30, JUNE 30,
1998 1998
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<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents................................................................ $ 19,649 $ 20,101
Accounts receivable...................................................................... 15,817 15,328
Other receivables and prepaid expenses................................................... 5,146 4,370
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Total current assets................................................................... 40,612 39,799
Property and equipment-net and other assets................................................ 4,192 3,850
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Total assets........................................................................... $ 44,804 $ 43,649
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses.................................................... $ 10,094 $ 10,772
Current debt............................................................................. 2,106 2,055
Deferred revenue......................................................................... 4,955 5,044
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Total current liabilities.............................................................. 17,155 17,871
Long-term portion of debt.................................................................. 5,987 5,979
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Total liabilities...................................................................... 23,142 23,850
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Shareholders' equity
Paid-in capital.......................................................................... 61,639 60,296
Accumulated deficit and currency translation adjustment.................................. (39,977) (40,497)
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Total shareholders' equity............................................................. 21,662 19,799
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Total liabilities and shareholders' equity............................................. $ 44,804 $ 43,649
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DISCUSSION OF FINANCIAL HIGHLIGHTS
REVENUES AND GROSS MARGIN
Revenues in the quarter grew by 55% over the same quarter in the previous
year reflecting growth in ISV revenues. Overall gross margin for the quarter
decreased to 74% from 77% for the same period in the preceding year due to lower
consulting margins.
OPERATING EXPENSES
Marketing and selling expenses for the quarter increased by 12% over the
same period in the prior year. Research and development expenses, net of
government funding, for the quarter increased by 69% over the same period in the
prior year primarily due to the expansion of the Company's product offerings
over the last year. General and administrative expenses for the quarter
increased by 49% over the same period in the prior year reflecting continuing
augmentation of the Company's reserve for doubtful accounts. The write-off of
acquired intangibles for the quarter decreased from $28.4 million to $61,000
over the same period in the prior year reflecting the one time nature of this
expense in the prior year in connection with the acquisition of CPLEX in August
1997.
OTHER INCOME (EXPENSE)
Net interest and other income (expense) for the quarter decreased from
$28,000 to $(384,000) over the same period in the prior year reflecting an
exchange rate loss of $317,000 on intercompany indebtedness, and interest
expense arising on the $5.0 million of notes payable issued in the prior year in
connection with the CPLEX acquisition.
BALANCE SHEET
Cash at September 30, 1998 decreased to $19.6 million from $20.1 million at
June 30, 1998. Accounts receivable at September 30, 1998 represented 107 days
sales outstanding compared to 96 days in the prior year. The increase reflects
longer payment terms offered to certain strategic customers over the last six
months.
Shareholders' paid-in capital increased by $1.3 million to $61.6 at
September 30, 1998 reflecting the purchase of shares by employees under the
Company's stock option and share purchase plans. At September 30, 1998 the
Company had 14.0 million shares issued and outstanding compared to 13.7 million
at June 30, 1998.
COMPASS ACQUISITION
On August 31, 1998 the Company acquired Compass Modeling Solutions, Inc.
(Compass) for 51,852 ILOG shares, which acquisition has been accounted for as a
pooling of interests. Accordingly ILOG's results of operations for the quarter
ended September 30, 1997 and the balance sheet as of June 30, 1998 have been
restated to include those of Compass. For the quarter ended September 30, 1997
Compass had net revenues of $128,000 and a profit of $3,000.
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
recently completed sales personnel reorganization, the timing and seasonality 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, 1998 which is on
file with the United States Securities and Exchange Commission.
<PAGE>
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.
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ILOG S.A.
DONNEES FINANCIERES CONSOLIDEES CLEFS (NON AUDITEES)
(MONTANTS EN MILLIERS DE FRANCS FRANCAIS, SAUF NOMBRE D'ACTIONS ET DONNEES PAR
ACTION)
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TRIMESTRE CLOS LE
30 SEPT.
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1998 1997
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<S> <C> <C>
Chiffre d'affaires
Logiciels.................................................................................. 47,256 32,151
Services................................................................................... 32,266 19,559
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Total chiffre d'affaires................................................................. 79,522 51,710
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Prix de revient des ventes
Logiciels.................................................................................. 1,333 1,604
Services................................................................................... 18,991 10,222
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Total prix de revient des ventes......................................................... 20,324 11,826
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Marge Brute.................................................................................. 59,198 39,884
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Frais generaux et commerciaux
Frais commerciaux.......................................................................... 37,498 33,756
Frais de recherche et developpement........................................................ 13,388 7,982
Frais generaux et administratifs........................................................... 11,517 7,811
Amortissements Intangibles................................................................. 365 171,148
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Total frais generaux et commerciaux...................................................... 62,768 220,697
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Resultat operationnel........................................................................ (3,570) (180,813)
Produits (charge) financiers et autres....................................................... (2,297) 169
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Resultat net................................................................................. (5,867) (180,644)
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Resultat net par action (francs)............................................................. (0.42) (15.49)
Nombre moyen d'actions en circulation (milliers)............................................. 13,876 11,661
</TABLE>
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ILOG S.A.
BILANS CONSOLIDES RESUMES (NON AUDITES)
(EN MILLIERS DE FRANCS FRANCAIS)
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<CAPTION>
30 SEPT. 30 JUIN
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1998 1998
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ACTIF
Actif circulant:
Disponibilites et valeurs mobilieres de placement..................... 110,425 121,611
Clients, nets......................................................... 88,890 92,733
Autres elements d'actif circulant..................................... 28,922 26,440
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Total de l'actif circulant.......................................... 228,237 240,784
Immobilisations corporelles, nettes et autres actifs.................... 23,558 23,294
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Total de l'actif........................................................ 251,795 264,078
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PASSIF
Passif a moins d'un an:
Fournisseurs et comptes rattaches..................................... 56,727 65,167
Dette financiere a court terme........................................ 11,837 12,433
Produits constates d'avance........................................... 27,848 30,518
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Total passif a moins d'un an........................................ 96,412 108,118
Dette financiere a long terme........................................... 33,644 36,173
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Total passif a court et long terme.................................. 130,056 144,291
Capitaux propres
Capital souscrit et prime d'emission.................................. 346,403 364,793
Report a nouveau et ecart de conversion............................... (224,664) (245,006)
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Total des capitaux propres.......................................... 121,739 119,787
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Total du passif..................................................... 251,795 264,078
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</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 aux normes amercaines (US GAAP) ont ete traduits en francs francais
aux taux moyens historiques des periodes considerees et aux taux de cloture aux
dates de bilan.
