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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 7, 2000
ILOG S.A.
9 Rue De Verdun BP 85
94253 Gentilly, France
(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 .
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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 .
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If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):
82- N.A.
ILOG S.A.
FORM 6-K
ILOG S.A. (the "Company") reported its results for the three months and six
months ended December 31, 1999 in a press release dated February 1, 2000. Such
press release is attached as EXHIBIT 99.1 hereto and is incorporated by
reference herein.
EXHIBIT INDEX
Exhibit 99.1 Press release, dated February 1, 2000, announcing the results of
ILOG S.A. for the three months and six months ended December 31, 1999.
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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: February 14, 2000
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[LOGO]
FOR IMMEDIATE RELEASE
Contact: Roger Friedberger, ILOG
(650) 567-8115 (USA)
+33-1-49083574 (Europe)
- or -
Taylor Rafferty Associates
(212) 889-4350 (USA)
+44-207-936-0400 (Europe)
ILOG REPORTS RESULTS FOR SECOND QUARTER
OF FISCAL YEAR 2000
PARIS, FRANCE- Feb. 1, 2000 - ILOG S.A. (NASDAQ: ILOG and EURO.NM: ILOG), the
world's leading provider of software components, today reported revenues of
$18.1 million for its second quarter of fiscal year 2000, ended December 31,
1999, and income from operations of $0.6 million. This compares to revenues of
$18.3 million and a loss from operations of $1.0 million in the previous year's
second quarter. The prior-year loss is after $2.3 million of one-time charges
related to a technology acquisition and expenses incurred in listing the
company's shares on the Paris Nouveau Marche exchange. Earnings per share during
the second quarter of the fiscal year were $.03, compared to a loss of $.08 per
share in the previous year's second quarter.
"The quarter's financial performance was in line with our expectations as we
wrapped up the `90s, but we're glad 1999 is behind us," stated ILOG CEO Pierre
Haren, "Looking forward, we're encouraged by indications of renewed growth in
the supply chain management sector, continued growth in the telecom and
networking markets and rapid growth in e-business software markets for calendar
2000. As we enter the new year, we believe we have the people, products,
partners and customer base to capitalize on these positive market trends."
GROWTH IN ISV SALES AND E-BUSINESS
This quarter, ILOG signed contracts with 20 new ISVs, which increases the
company's ISV and OEM partnerships to more than 150. More than one half of the
$100,000-plus contracts signed during the second quarter were from partners
embedding ILOG products. "Our increasing ISV business reflects the execution of
our strategy to expand royalty revenues as an overall percentage of sales," said
Haren. "We anticipate increasing royalties in calendar 2000 as companies like
Oracle (NASDAQ: ORCL), Siebel Systems (NASDAQ: SEBL), SAP (NYSE:SAP), i2
Technologies (NASDAQ: ITWO) and dozens of others begin to ship new product lines
`powered by ILOG' later this year."
Particularly notable during the quarter was an increase in contracts with
e-business software suppliers and dot.com companies, who contributed
approximately 10% of license fee revenues and accounted for seven of the 20 ISVs
new to ILOG. E-business firms are licensing products such as ILOG JRules and the
recently introduced ILOG Configurator for customer-focused online applications
such as web-based equity lending, corporate e-procurement, product and service
configurations, e-business infrastructure and online employee benefits.
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DEMAND FOR ILOG TELECOM PRODUCTS
The quarter saw new business for ILOG visualization components for network
management applications among telecommunications companies. This included a push
into the fast-growing optical networking market, where many of the companies
pioneering this emerging segment are now ILOG customers.
Within the company's worldwide telecommunications business, the European telecom
team was particularly active, signing the greatest number of large contracts
during the quarter with companies such as TTI - Team Telecom (NASDAQ: TTIL),
Alcatel (NYSE:ALA), Bosch and Siemens. ILOG customers in the U.S. market such as
Lucent (NYSE:LU) and MCI WorldComm (NASDAQ:WCOM) also signed contracts for ILOG
products to be used in network management, network configuration or fault
management applications.
Two new ILOG visualization products were unveiled during the second quarter,
including ILOG Telecom Graphics Framework (TGF), a new turnkey solution for the
user interface of network management applications that was selected by
Hewlett-Packard (NYSE: HWP) for its HP OpenView Communications/Service Assurance
solutions. The ILOG JViews Component Suite also made its debut, adding new
features and new Java Bean packaging that now help it address the need for more
intuitive interfaces for collaborative, web-based applications within the supply
chain.
OTHER HIGHLIGHTS DURING THE QUARTER
ILOG announced during the quarter that it completed the port of its entire
product line to the Red Hat (NASDAQ: RHAT) and SuSE Linux operating systems.
With interest growing in Linux for e-business applications running on powerful,
PC-class servers, ILOG predicts increasing demand from its enterprise ISV
customers for Linux components.
ILOG's Java products business doubled -- to 20% of revenue compared with the
previous year's second quarter. ILOG also saw renewed business with some of the
world's leading airlines, manufacturers and defense contractors, where ILOG
optimization products have long been a mainstay for mission-critical
applications such as production planning and resource scheduling.
ABOUT ILOG
ILOG (NASDAQ: ILOG; EURO.NM: ILOG) is the world's 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 rules 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 470 people in seven countries. Visit www.ilog.com for
additional information.
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ILOG S.A.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
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1999 1998 1999 1998
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<S> <C> <C> <C> <C>
Revenues:
LICENSE FEES $ 11,827 $ 11,983 $ 20,340 $ 19,886
SERVICES 6,251 6,330 12,056 11,726
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TOTAL REVENUES 18,078 18,313 32,396 31,612
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COST OF REVENUES
LICENSE FEES 218 262 523 477
SERVICES 3,439 3,876 6,360 7,059
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TOTAL COST OF REVENUES 3,657 4,138 6,883 7,536
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GROSS PROFIT 14,421 14,175 25,513 24,076
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OPERATING EXPENSES
MARKETING AND SELLING 8,618 8,777 15,986 15,048
RESEARCH AND DEVELOPMENT 3,266 2,524 6,118 4,763
GENERAL AND ADMINISTRATIVE 1,909 1,596 3,916 3,522
WRITE-OFF OF ACQUIRED INTANGIBLES 62 1,847 124 1,908
NOUVEAU MARCHE -- 466 -- 466
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TOTAL OPERATING EXPENSES 13,855 15,210 26,144 25,707
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INCOME (LOSS) FROM OPERATIONS 566 (1,035) (631) (1,631)
NET INTEREST INCOME (EXPENSE) AND OTHER 6 (87) 111 (471)
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NET INCOME (LOSS) $ 572 $ (1,122) $ (520) $ (2,102)
============ ============ ============= ============
NET INCOME (LOSS) PER SHARE
- BASIC $ 0.04 $ (0.08) $ (0.04) $ (0.15)
- DILUTED $ 0.03 $ (0.08) $ (0.04) $ (0.15)
SHARE AND SHARE EQUIVALENTS USED IN PER SHARE
CALCULATIONS
- BASIC 14,279 13,973 14,214 13,927
- DILUTED 16,419 13,973 14,214 13,927
</TABLE>
ILOG S.A.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
DEC 31 JUNE 30
1999 1999
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<S> <C> <C>
ASSETS
CURRENT ASSETS
CASH AND CASH EQUIVALENTS $ 14,790 $ 21,532
ACCOUNTS RECEIVABLE 20,016 14,839
OTHER RECEIVABLES AND PREPAID EXPENSES 3,819 4,106
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TOTAL CURRENT ASSETS 38,625 40,477
PROPERTY AND EQUIPMENT-NET AND OTHER ASSETS 4,229 4,529
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TOTAL ASSETS $ 42,854 $ 45,006
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Liabilities and Shareholders' Equity
CURRENT LIABILITIES
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 12,231 $ 12,796
CURRENT DEBT 4,102 3,531
DEFERRED REVENUE 6,165 6,775
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TOTAL CURRENT LIABILITIES 22,498 23,102
LONG-TERM PORTION OF DEBT 2,008 3,879
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TOTAL LIABILITIES 24,506 26,981
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SHAREHOLDERS' EQUITY
PAID-IN CAPITAL 63,742 62,424
ACCUMULATED DEFICIT AND CURRENCY TRANSLATION ADJUSTMENT (45,394) (44,399)
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TOTAL SHAREHOLDERS' EQUITY 18,348 18,025
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 42,854 $ 45,006
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</TABLE>
DISCUSSION OF FINANCIAL HIGHLIGHTS
SIX-MONTH RESULTS
The company reported revenues of $32.4 million for the six months ended December
31, 1999, an increase of 2% compared to $31.6 million in the prior year. Loss
from operations for the six-month period was $0.6 million compared to a $1.6
million loss in the corresponding period of the prior year, which includes the
one-time write-offs of acquired intangibles and Nouveau Marche listing expenses
totaling $2.4 million. Loss per share for the six-month period was $0.04,
compared to a $0.15 per share loss in the corresponding period of the prior
year.
REVENUES AND GROSS MARGIN
Revenues in the quarter declined by 1%, with license revenues and service
revenues both decreasing by 1% over the same period in the preceding year. The
revenue stability was achieved despite a slowdown in the quarter due to Y2K
spending deferrals. Overall gross margin for the quarter improved from 77% to
80% in the same period of the preceding year due to a greater mix of
higher-margin maintenance revenues.
OPERATING EXPENSES
Marketing and selling expenses for the quarter decreased by 2% over the same
period in the prior year as a result of the rebalancing of resources following
the reorganization in the preceding quarter.
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Research and development expenses for the quarter, net of government funding,
increased by 29% over the same period in the prior year, reflecting continuing
R&D investment on new products such as ILOG Configurator and ILOG TGF and lower
government research and development funding which was $115,000 in the quarter
compared to $274,000 for the same period in the preceding year.
General and administrative expenses for the quarter increased by 20% over the
same period in the prior year related to improving the company's information
systems and Internet infrastructure in association with the Company's Y2K
preparedness program.
OTHER INCOME (EXPENSE)
Net interest and other income (expense) for the quarter decreased from $(87,000)
to $6,000 over the same period in the prior year due to realized and unrealized
currency fluctuations. 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, 1999.
BALANCE SHEET
Cash at December 31, 1999 decreased to $14.8 million from $21.5 million at June
30, 1999, due to the operating loss for the six-month period, repayment of debt
and growth in accounts receivable, which included at December 31, 1999, $5.5
million due from a strategic customer that was collected in January 2000. Days
sales outstanding of receivables was 100 days at December 31, 1999, compared to
82 days at September 30, 1999. The increase reflects the impact of the payment
terms associated with the previously mentioned $5.5 million receivable.
Debt during the six-month period decreased from $7.4 million to $ 6.1 million at
December 31, 1999, reflecting scheduled repayments of loans related to the
Company's acquisition of CPLEX Optimization, Inc. in 1997. Shareholders' paid-in
capital increased in the six-month period by approximately $1.3 million to $63.7
million at December 31, 1999, reflecting the purchase of shares by employees
under the Company's stock option and share purchase plans. At December 31, 1999,
the Company had 14.4 million shares issued and outstanding compared to 14.1
million at June 30, 1999.
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
evolution, growth and profitability of the Company's existing and new products,
including ILOG Configurator, in the e-business software market; the success of
the Company's ISV strategy; the demand for Linux based products; the economic,
political and currency risks associated with the company's European, North
American and Asian operations; 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, 1999, which is on file with
the United States Securities and Exchange Commission.
# # #
ILOG and CPLEX are registered trademarks of ILOG. All other company and product
names are trademarks or
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registered trademarks of their respective owners.
RESULTS AND PRESS RELEASE FOR FRENCH SHAREHOLDERS
A translation of this press release in the French language and with the
financial statements expressed in French Francs is also available.
