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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Act of 1934
Date of Report (Date of earliest event reported) October 21, 1999
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LHS GROUP INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 0-22409 58-2224883
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(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (IRS EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
6 Concourse Parkway, Suite 2700, Atlanta, Georgia 30328
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code (770)280-3000
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ITEM 5. OTHER EVENTS
On October 21, 1999, LHS Group Inc. announced certain consolidated
financial information as of, and for the quarter and nine month period ended,
September 30, 1999. This information is contained in a press release that is
filed as Exhibit 99.1 to this Report.
ITEM 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Press release dated October 21, 1999
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.
LHS GROUP INC.
(Registrant)
By: /s/ Scott A. Wharton
---------------------------------
Scott A. Wharton
Senior Vice President,
General Counsel and Secretary
Date: October 21, 1999
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
99.1 Press release dated October 21, 1999
</TABLE>
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EXHIBIT-99.1
[LHS LOGO] LHS Group Inc.
NEWS 6 Concourse Parkway
Suite 2700
Atlanta, Georgia 30328
USA
MEDIA CONTACTS: FOR RELEASE 4:15 P.M. EST
Klaus Kleber (770) 280-3461 (USA)
[email protected]
Peter Tasch, Fleishman-Hillard Germany +49 (0) 69-405 702 16
[email protected]
INVESTOR RELATIONS CONTACTS:
Rainer Westermann (770) 290-6360 (USA)
[email protected]
Nikolas Stackelberg +49 (0) 6103-482-456 (Europe)
[email protected]
LHS GROWS NET EARNINGS BY 61%
NINE MONTHS REVENUE UP BY 42%
ATLANTA/FRANKFURT, OCTOBER 21, 1999 -- LHS Group Inc. (NASDAQ: LHSG; NEUER
MARKT: LHI) today announced record revenues and earnings for the third quarter
of 1999. Earnings before interest and taxes increased by 55% to $17.1 million
compared to $11.0 million in the same period of the prior year. Net earnings
rose to $11.7 million from $7.3 million the previous year, an increase of 61%.
This represents fully diluted earnings for the third quarter of $.20 per share
compared to $.12 per share the year before.
Total revenue for the quarter ending September 30, 1999 increased to $68.0
million from $52.1 million for the same quarter last year, which represents a
30% increase. License revenue for the quarter increased to $28.6 million from
$19.5 million for the same quarter last year, which represents a 47% increase.
For the first nine months in 1999, total revenues for LHS Group increased by 42%
from $135.5 million to $192.9 million. In the same period earnings before
interest and taxes more than doubled from $18.4 million to $39.8 million. Net
earnings almost tripled, increasing from $9.7 million in 1998 or $.16 per share
($.30 per share excluding a one-time charge) to $26.1 million or $.44 per share
($.52 per share excluding merger charges).
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[LHS LOGO]
NEWS
"Our move from a largely one product company to a multi product solutions
provider in the OSS market is paying off," commented Hartmut Lademacher, LHS
Chairman of the Board and Chief Executive Officer. "We have seen the expected
positive contribution from our newly acquired ORYX product suite and we are very
pleased with the progress in the integration of Priority Call. The entry into
the enhanced services market, also growing at a fast rate, opens exciting growth
opportunities for our company."
ABOUT LHS
LHS Group is a leading global provider of operating support system software and
services to the telecommunications industry. LHS products range from pre- and
post paid billing and customer care to enhanced services and acquisition
software. They are installed at more than 300 customer sites worldwide. LHS has
18 global and regional partners (system integrators, international operators and
equipment manufacturers) representing one of the largest implementation and
support networks in the global customer care and billing market. In addition to
its Atlanta headquarters, LHS has major offices in Frankfurt, Germany; Kuala
Lumpur, Malaysia; Sao Paulo, Brazil; Boston, USA; and Zurich, Switzerland. LHS
is listed with NASDAQ (LHSG) and on the Frankfurt Neuer Markt Exchange (LHI).
For more information, visit LHS' web site at www.lhsgroup.com.
"Forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995 may be included in this news release. A variety of factors
could cause LHS' actual results to differ from the anticipated results expressed
in such forward-looking statements. These factors are described in greater
detail in LHS' filings with the United States Securities and Exchange
Commission.
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LHS GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THIRD QUARTER ENDED SEPTEMBER 30,
1999 1998
(Unaudited) (Unaudited)
--------------------------------
<S> <C> <C>
Revenues
License revenues $ 28,571 $ 19,457
Service revenues 39,414 32,662
-------- --------
Total revenues 67,985 52,119
Cost of services 22,486 19,928
-------- --------
Gross profit 45,499 32,191
Operating expenses
Sales and marketing 7,794 5,087
Research and development 14,420 10,100
General and administrative 6,189 6,004
-------- --------
28,403 21,191
Earnings before interest and taxes 17,096 11,000
Interest income, net (1,245) (1,120)
-------- --------
Earnings before income taxes 18,341 12,120
Income taxes 6,603 4,827
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Net earnings (loss) $ 11,738 $ 7,293
======== ========
Earnings (loss) Per Share
Basic $ 0.20 $ 0.13
======== ========
Diluted $ 0.20 $ 0.12
======== ========
Weighted Average Shares Outstanding - Basic 57,531 54,825
Weighted Average Shares Outstanding - Diluted 58,696 59,528
</TABLE>
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LHS GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
1999 1998
(Unaudited) (Unaudited)
-------------------------------
<S> <C> <C>
Revenues
License revenues $ 78,209 $ 55,692
Service revenues 114,676 79,795
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Total revenues 192,885 135,487
Cost of services 67,846 52,981
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Gross profit 125,039 82,506
Operating expenses
Sales and marketing 22,080 13,620
Research and development 41,300 27,369
General and administrative 17,579 14,927
Cost of purchased in-process computer
software technology -- 8,200
Merger charges 4,320 --
--------- ---------
85,279 64,116
Earnings before interest and taxes 39,760 18,390
Interest income, net (3,516) (3,260)
--------- ---------
Earnings before income taxes 43,276 21,650
Income taxes 17,135 11,919
--------- ---------
Net earnings $ 26,141 $ 9,731
========= =========
Earnings Per Share
Basic $ 0.46 $ 0.18
========= =========
Diluted $ 0.44 $ 0.16
========= =========
Weighted Average Shares Outstanding - Basic 56,281 54,295
Weighted Average Shares Outstanding - Diluted 59,119 59,012
</TABLE>
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LHS GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
(Unaudited)
---------- ------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 75,738 $ 46,794
Short Term Investments 58,566 62,218
Trade accounts receivable, net 94,598 68,189
Prepaid expenses and other current assets 9,791 8,251
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Total current assets 238,693 185,452
Property, plant & equipment, net 20,083 19,133
Other 5,943 5,739
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Total Assets $264,719 $210,324
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LIABILITIES
Accounts payable and accrued expenses 67,279 44,085
Deferred revenues 12,489 7,712
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Total current liabilities 79,768 51,797
Other long-term obligations 1,161 2,772
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Total Liabilities 80,929 54,569
STOCKHOLDERS' EQUITY 183,790 155,755
-------- --------
Total Liabilities and Stockholders' Equity $264,719 $210,324
======== ========
</TABLE>
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LHS GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
1999 1998
(Unaudited) (Unaudited)
----------- ----------
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings $ 26,141 $ 9,731
Adjustments:
Depreciation and amortization 7,083 4,275
Write-off of purchased in-process computer software -- 8,200
Change in operating assets and liabilities, net of effect
of business acquisition (8,273) (4,597)
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Net cash provided by operating activities 24,951 17,609
INVESTING ACTIVITIES
Additions of leasehold improvements and equipment (7,088) (8,742)
(Purchase)/Sale of short-term investments 3,863 (6,775)
Acquisition of business, net of cash acquired -- (2,955)
Other 815 (723)
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Net cash used in investing activities (2,410) (19,195)
FINANCING ACTIVITIES
Net proceeds from issuance of capital stock 8,967 9,378
Bank borrowings/(repayments) (2,533) 274
Other (31) 194
-------- --------
Net cash provided by financing activities 6,403 9,846
Increase in cash and cash equivalents 28,944 8,260
Cash and cash equivalents at beginning of period 46,794 34,159
-------- --------
Cash and cash equivalents at end of period $ 75,738 $ 42,419
======== ========
</TABLE>
