<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
--------- ---------
Commission File Number: 0-22145
RWD TECHNOLOGIES, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
MARYLAND 52-1552720
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10480 LITTLE PATUXENT PARKWAY
COLUMBIA, MARYLAND 21044-3530
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(410) 730-4377
----------------------------------------------------
(Registrant's telephone number, including area code)
NONE
----------------------------------------------------------------
(Former name, former address and former fiscal year - if changed
since last report)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
--- ---
As of September 30, 1997, 14,236,535 shares of common stock $0.10 par
value ("Common Stock") of the Registrant were outstanding.
<PAGE>
RWD TECHNOLOGIES, INC.
INDEX
FORM 10-Q
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of September 30, 1997 and 1
December 31, 1996
Consolidated Statements of Income for the three months and 2
nine months ended September 30, 1997 and 1996
Consolidated Statements of Cash Flows for the nine months 3
ended September 30, 1997 and 1996
Notes to Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition 6
and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk N/A
PART II - OTHER INFORMATION
Item 1. Legal Proceedings N/A
Item 2. Changes in Securities 10
Item 3. Defaults Upon Senior Securities N/A
Item 4. Submission of Matters to a Vote of Security Holders N/A
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 11
Signatures
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RWD TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
<TABLE>
<CAPTION>
DECEMBER 31, 1996 SEPTEMBER 30, 1997
----------------- ------------------
ASSETS (UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents..................................... $ 3,530,600 $ 7,860,600
Investments................................................... 2,002,900 35,936,900
Contract accounts receivable, net of allowance for doubtful...
accounts of $383,700 and $477,300, respectively............. 11,981,600 13,122,300
Costs and estimated earnings in excess of billings on
uncompleted contracts....................................... 3,331,400 8,214,800
Prepaid expenses and other.................................... 849,500 1,274,700
----------- -----------
Total Current Assets....................................... 21,696,000 66,409,300
----------- -----------
FIXED ASSETS net of accumulated depreciation and
amortization of $4,718,000 and $6,975,000, respectively....... 7,876,900 8,537,700
----------- -----------
OTHER ASSETS.................................................... 285,500 126,100
----------- -----------
Total Assets............................................... $29,858,400 $75,073,700
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses......................... $ 3,111,700 $ 8,392,600
Billings in excess of costs and estimated earnings on
uncompleted contracts...................................... 2,689,300 4,082,800
Deferred tax liability........................................ --- 992,600
S corporation notes........................................... --- 6,500,000
Current portion of capital lease obligation................... 41,600 49,300
Related party debt............................................ 3,800,000 ---
----------- -----------
Total Current Liabilities.................................. 9,642,600 20,017,300
NONCURRENT LIABILITIES:
Capital lease obligation, net of current portion.............. 83,400 45,500
Other liabilities............................................. --- 1,017,600
Deferred tax liability........................................ --- 3,507,600
----------- -----------
Total Liabilities.......................................... 9,726,000 24,588,000
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.10 par value; authorized - 50,000,000
shares, issued and outstanding - 4,859,640 and
14,236,535, respectively.................................... 486,000 1,423,600
Additional paid-in capital.................................... 2,753,800 44,710,200
Unrealized gain on marketable securities...................... --- 11,200
Retained earnings............................................. 16,892,600 4,340,700
----------- -----------
Total Stockholders' Equity................................. 20,132,400 50,485,700
----------- -----------
Total Liabilities and Stockholders' Equity............... $29,858,400 $75,073,700
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
1
<PAGE>
RWD TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------------- ----------------------------
1996 1997 1996 1997
--------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenue...................................... $ 16,606,400 $ 22,015,700 $ 47,236,700 $ 61,821,500
Cost of services............................. 12,381,900 15,767,800 34,961,500 43,453,600
--------------- ------------ ------------ ------------
Gross profit.......................... 4,224,500 6,247,900 12,275,200 18,367,900
General and administrative expenses.......... 2,107,300 2,738,200 5,865,200 8,205,700
--------------- ------------ ------------ ------------
Operating income............................. 2,117,200 3,509,700 6,410,000 10,162,200
Other income (expense)....................... 4,300 483,600 (104,900) 484,500
--------------- ------------ ------------ ------------
Income before taxes................... 2,121,500 3,993,300 6,305,100 10,646,700
Provision for income taxes (including the
$4.5 million deferred tax liability
related to C corp conversion)......... 75,000 1,514,000 215,000 6,503,200
--------------- ------------ ------------ ------------
Net income............................ $ 2,046,500 $ 2,479,300 $ 6,090,100 $ 4,143,500
=============== ============ ============ ============
Earnings per share.................... $ 0.16 $ 0.16 $ 0.47 $ 0.30
=============== ============ ============ ============
Weighted average shares outstanding... 13,030,000 15,724,100 13,030,000 14,024,500
=============== ============ ============ ============
Pro Forma Information:
Income before taxes, as reported............. $ 2,121,500 $ 3,993,300 $ 6,305,100 $ 10,646,700
Pro forma income tax provision............... 848,000 1,514,000 2,521,000 4,175,000
--------------- ------------ ------------ ------------
Pro forma net income.................. $ 1,273,800 $ 2,479,300 $ 3,784,100 $ 6,471,700
=============== ============ ============ ============
Pro forma earnings per share.......... $ 0.10 $ 0.16 $ 0.29 $ 0.46
=============== ============ ============ ============
Weighted average shares outstanding... 13,030,000 15,724,100 13,030,000 14,024,500
=============== ============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
RWD TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
1996 1997
------------- ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income................................................. $ 6,090,100 $ 4,143,500
Adjustments to reconcile net income to net cash from
operating activities--
Depreciation and amortization........................... 1,549,200 2,281,700
Deferred income taxes................................... - 4,500,000
(Increase)/Decrease in contract accounts receivable..... 637,000 (1,140,800)
(Increase)/Decrease in costs and estimated earnings in
excess of billings on uncompleted contracts........... (367,600) (4,883,500)
(Increase)/Decrease in prepaid expense and other........ 347,600 (248,000)
Increase/(Decrease) in accounts payable and accrued
expenses.............................................. 2,506,800 5,093,500
Increase/(Decrease) in other liabilities................ - 1,017,600
Increase/(Decrease) in billings in excess of estimated
earnings on uncompleted contracts and costs........... 533,100 1,393,400
------------ -------------
Net cash flows from operating activities................ 11,296,200 12,157,400
------------ -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (Purchases)/Sale of investments..................... (2,700) (33,922,800)
Purchase of fixed assets................................ (3,361,800) (2,956,500)
(Increase)/Decrease in other assets..................... (228,400) (3,400)
Proceeds from sale of fixed assets...................... 8,200 34,600
------------ -------------
Net cash flows from investing activities................ (3,584,700) (36,848,100)
------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal portion paid on capital lease................. - (30,200)
Net borrowings/(payments) under line of credit.......... (2,700,000) -
Payments on shareholder loans........................... - (3,800,000)
Shareholder distributions............................... (582,100) (9,864,400)
Public offering costs................................... (24,100) (4,028,400)
Issuance of common stock................................ 200 47,563,500
Repurchase of common stock.............................. (103,100) (819,800)
------------ -------------
Net cash flows from financing activities................ (3,409,100) 29,020,700
------------ -------------
NET INCREASE/(DECREASE) IN CASH AND CASH
EQUIVALENTS............................................... 4,302,400 4,330,000
------------ -------------
CASH AND CASH EQUIVALENTS, beginning of period.................. 390,900 3,530,600
------------ -------------
CASH AND CASH EQUIVALENTS, end of period........................ $ 4,693,300 $ 7,860,600
============ =============
SUPPLEMENTAL DISCLOSURE
Income taxes paid....................................... $ 138,800 $ 749,000
============ =============
Interest expense paid................................... $ 287,500 $ 182,500
============ =============
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
RWD TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
(1) Organization and Business
RWD Technologies, Inc. (the "Company") was incorporated on January 22, 1988, in
the state of Maryland. The Company provides a broad range of integrated
solutions designed to improve the productivity and effectiveness of workers in
complex operating environments.
(2) Basis of Presentation
The condensed financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. However, the Company believes that the disclosures are adequate to
make the information presented not misleading. These condensed financial
statements should be read in conjunction with the financial statements and the
notes thereto for the year ended December 31, 1996, included in the Company's
Form S-1 Registration Statement No. 333-21779.
The unaudited condensed financial statements included herein reflect all
adjustments (which include only normal, recurring adjustments) which are, in the
opinion of management, necessary to state fairly the results for the nine month
periods ended September 30, 1997 and 1996. The results for the interim periods
are not necessarily indicative of the results expected for the full fiscal year.
(3) Initial Public Offering
In the initial public offering effected by the Form S-1 Registration Statement
dated June 19, 1997, the Company sold 3.3 million shares of its Common Stock,
par value $0.10 per share. The Company realized $38.9 million from the offering
(after deducting the expenses of the offering).
(4) Termination of S corporation Election
Just prior to the initial public offering, the Company terminated its S
Corporation election for federal income tax purposes and converted to C
Corporation status. The provision for income taxes for periods prior to the
conversion related to certain states that do not recognize S Corporation status.
The provision for income taxes for the period following the conversion reflects
the estimated current provision for federal and state income taxes and the $4.5
million deferred income tax liability resulting from the conversion. In
addition, the Company recorded $16.1 million in distributions to S Corporation
shareholders.
Pro forma net income is based on the assumption that the Company's S
corporation status was terminated at the beginning of each period and reflects a
pro forma income tax provision based on applicable tax rates as if the Company
was a C corporation taxpayer for all periods presented.
4
<PAGE>
(5) Pro Forma Net Income Per Share
Pro forma net income per share was computed based on the weighted average
number of common and common equivalent shares outstanding during the period.
Common equivalent shares are calculated using the treasury stock method and
represent incremental shares issuable upon the exercise of outstanding stock
options. In accordance with SEC Staff Accounting Bulletin No. 1.B.3, weighted
average shares for all periods prior to the initial public offering also include
those shares which would have had to have been issued (at the public offering
price of $13 per share, less the underwriting discount) to generate sufficient
cash to fund the portion of the S corporation distribution that was in excess of
the net income for the year ended December 31, 1996.
(6) New Accounting Standards
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share"
which changes the reporting requirements for earnings per share (EPS) for
publicly traded companies by replacing primary EPS with basic EPS and changing
the disclosures associated with this change. The Company intends to adopt this
standard for use in its financial statements for the year ending December 31,
1997, as required.
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income
(SFAS 130), which is effective for fiscal years beginning after December 15,
1997. The statement establishes standards for reporting and display of
comprehensive income and its components. The Company plans to adopt this
standard for use in its financial statements for the year ending December 31,
1998, as required.
In July 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information" (SFAS 131), which is effective for fiscal
years beginning after December 15, 1997. The statement establishes revised
standards under which an entity must report business segment information in its
financial statements. The Company plans to adopt this standard for use in its
financial statements for the year ending December 31, 1998, as required.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED WITH THREE MONTHS ENDED
SEPTEMBER 30, 1996.
Revenue. Revenue increased by $5.4 million, or 32.6%, from $16.6 million
in the third quarter of 1996 to $22.0 million in the same period of 1997. The
Company experienced growth in all of its service areas in the third quarter of
1997 compared to the same period in 1996, with performance support services
revenue increasing by 33.3%, from $6.2 million to $8.3 million; enterprise
systems implementation support services revenue increasing by 10.7%, from $3.9
million to $4.3 million; information technology services revenue increasing by
27.7%, from $4.4 million to $5.6 million; and lean manufacturing consulting
services revenue increasing by 82.9% from $2.0 million to $3.7 million.
Performance support services, enterprise systems implementation support
services, information technology services and lean manufacturing consulting
generated 37.8%, 19.7%, 25.6% and 16.9% of total revenue, respectively, in the
third quarter of 1997.
Revenue from the Company's largest client, Chrysler, increased by 30.8% in
the third quarter of 1997, from $4.8 million in the third quarter of 1996 to
$6.3 million in the same period in 1997, as a result of increases in information
technology and performance support services provided by the Company. Revenues
from Chrysler and Ford represented 28.7% and 14.6% of total company revenues,
respectively, for the third quarter of 1997 as compared to 29.1% and 9.0 % for
the third quarter of 1996.
Gross Profit. Gross profit increased by $2.0 million, or 47.9%, from $4.2
million in the third quarter of 1996 to $6.2 million in the same period of 1997
and increased from 25.4% of revenue in 1996 to 28.4% in 1997. The increase in
gross profit was attributable primarily to the higher level of revenues. The
increase in gross profit as a percent of revenue resulted primarily from higher
staff utilization, increases in billing rates, and a lower proportion of
reimbursed costs, partially offset by increased trade show expenses, and start-
up costs related to international projects.
General and Administrative Expenses. General and administrative expenses
increased by $630,900, or 29.9%, from $2.1 million in the third quarter of 1996
to $2.7 million in the same period in 1997, decreasing from 12.7% of revenue in
1996 to 12.4% of revenue in 1997. The increase in general and administrative
expenses reflected the general increase in the level of spending necessary to
support the Company's growth in revenues. The decrease in general and
administrative expenses as a percentage of revenue resulted primarily from lower
training costs as a result of a state training grant, partially offset by
increases in professional fees.
Operating Income. As a result of the foregoing, the Company's operating
income increased by $1.4 million, or 65.8%, from $2.1 million in the third
quarter of 1996 to $3.5 million in the same period in 1997 and increased from
12.7% of revenue in 1996 to 15.9% of revenue in 1997.
6
<PAGE>
Other Income (Expense). Other income increased from $4,300 in the third
quarter of 1996 to $483,600 in the third quarter of 1997, primarily due to
interest income on the proceeds from the Company's June 1997 initial public
offering. In 1996, this income consisted primarily of interest income from cash
and investment balances, partially offset by interest expense paid on the
related party debt. In 1997, other income consisted primarily of interest
income from cash and investment balances.
Net Income. Pro forma net income increased by $1.2 million, or 94.7% from
$1.3 million in the third quarter of 1996 to $2.5 million in the third quarter
of 1997. Pro forma results assume the Company was a C corporation for each of
the periods presented.
NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1997.
Revenue. Revenue increased by $14.6 million, or 30.9%, from $47.2 million
in the first nine months of 1996 to $61.8 million in the first nine months of
1997. The Company experienced growth in all of its service areas in the first
nine months of 1997 compared to the same period in 1996, with performance
support services revenue increasing by 18.2%, from $20.1 million to $23.8
million; enterprise systems implementation support services revenue increasing
by 22.9%, from $9.9 million to $12.2 million; information technology services
revenue increasing by 39.5%, from $11.7 million to $16.3 million; and lean
manufacturing consulting services revenue increasing by 83.4% from $5.2 million
to $9.5 million. Performance support services, enterprise systems
implementation support services, information technology services and lean
manufacturing consulting generated 38.5%, 19.7%, 26.3% and 15.4% of total
revenue, respectively, in the first nine months of 1997.
Revenue from the Company's largest client, Chrysler, increased by 27.3%,
from $14.0 million in 1996 to $17.9 million in the first nine months of 1997, as
a result of increases in information technology and performance support
services, partially offset by decreases in lean manufacturing support services
provided by the Company. Revenues from Chrysler and Ford represented 28.9% and
13.3% of total company revenues, respectively, for the first nine months of 1997
as compared to 29.7% and 8.5% for the first nine months of 1996.
Gross Profit. Gross profit increased by $6.1 million, or 49.6%, from $12.3
million in the first nine months of 1996 to $18.4 million in the first nine
months of 1997 and increased from 26.0% of revenue in 1996 to 29.7% in 1997. The
increase in gross profit was attributable primarily to the higher level of
revenues for the period. The increase in gross profit as a percentage of
revenue resulted primarily from higher staff utilization, increases in billing
rates, and improvements in individual project profitability.
General and Administrative Expenses. General and administrative expenses
increased by $2.3 million, or 39.9%, from $5.9 million in the first nine months
of 1996 to $8.2 million in the first nine months of 1997, increasing from 12.4%
of revenue in 1996 to 13.3% of revenue in 1997. The increase in general and
administrative expenses reflected the general increase in the level of spending
necessary to support the growth in revenues. The increase in general and
administrative expenses as a percentage of revenue resulted primarily from
increases in professional fees, rent, and personnel costs, partially offset by
lower training costs as a result of a state training grant.
7
<PAGE>
Operating Income. As a result of the foregoing, the Company's operating
income increased by $3.8 million, or 58.5%, from $6.4 million in the first nine
months of 1996 to $10.2 million in the first nine months of 1997 and increased
from 13.6% of revenue in 1996 to 16.4% of revenue in 1997.
Other Income (Expense). Other income (expense) was ($104,900) in the first
nine months of 1996 and $484,500 in the first nine months of 1997. In 1997,
this income consisted principally of interest income on the proceeds from the
Company's June 1997 initial public offering. In 1996, this expense consisted
primarily of interest expense paid on the related party debt, partially offset
by interest income from cash and investment balances. In 1997, this income
consisted primarily of interest income from cash and investment balances,
partially offset by interest expense paid on the related party debt, the
Company's line of credit and its capital lease. The related party debt was
repaid during the second quarter of 1997.
Net Income. Pro forma net income increased by $2.7 million, or 71.1% from
$3.8 million in the first nine months of 1996 to $6.5 million in the first nine
months of 1997. Pro forma results assume the Company was a C corporation
throughout the periods presented. During the second quarter of 1997, the
Company converted from S Corporation to C Corporation tax status and as a result
recognized a $4.5 million charge to establish a deferred tax liability.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and investments were $43.8 million at September 30,
1997, compared to $5.5 million at December 31, 1996. Increases in cash and
investments at September 30, 1997 were attributable primarily to the proceeds
from the Company's June, 1997 initial public offering. The Company's working
capital was $46.4 million at September 30, 1997, and $12.1 million at December
31, 1996.
The Company's operating activities provided cash of $12.2 million for the
nine months ended September 30, 1997, compared to $11.3 million for the same
period in 1996. The increase in cash provided from operations resulted primarily
from improved operating income, and increases in accounts payable, accrued
expenses, and other liabilities. These increases were partially offset by
differences in the timing of billings and collections.
Investing activities used cash of $36.8 million in the nine months ended
September 30, 1997, compared to the use of $3.6 million for the same period in
1996. Cash used for investing in the nine months ended September 30, 1997,
consisted primarily of the net purchase of investments from the proceeds of the
Company's initial public offering and the purchase of $3.0 million in computer
equipment, furniture, and other fixed assets.
Financing activities provided cash of $29.0 million in the nine months
ended September 30, 1997 compared to the use of $3.4 million for the same period
in 1996. Increases in cash provided from financing activities consisted
primarily of $38.9 million in proceeds from the issuance of common stock from
the Company's initial public offering and $4.7 million in proceeds from the
exercise of options, partially offset by repayments of $3.8 million in
shareholders loans and distributions, prior to the Company's initial public
offering, of approximately $9.9 million in prior period earnings to S
corporation shareholders.
8
<PAGE>
The Company has a $7.5 million unsecured revolving line of credit with a
commercial bank, which bears interest at the 30-day LIBOR rate, plus 1.75%
(5.66% on September 30, 1997). The Company utilizes this line of credit to
finance a portion of its working capital needs. There was no balance outstanding
as of September 30, 1997, or on December 31, 1996.
During the second quarter, the Company converted from S Corporation to C
Corporation tax status and as a result recognized a $4.5 million charge to
establish a deferred tax liability. This tax liability will become due ratably
over the four years beginning with 1997.
During 1997, the Company expects to make between $3.5 million and $4.0
million in capital expenditures, primarily for office furniture, computer and
office equipment and leasehold improvements to support the anticipated growth in
its professional and administrative staff. Capital expenditures in the first
three quarters of 1997 were $3.0 million. Capital expenditures currently are
expected to be funded from available cash, although the Company may consider
alternative financing methods, such as equipment leases or asset based
borrowings.
EFFECTS OF INFLATION
Inflation has not had a significant effect on the Company's business during
the past three years. The Company cannot predict what effect, if any, inflation
may have on its future results of operations.
9
<PAGE>
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES.
(c) Sales of Unregistered Securities
On August 22, 1997, the Company issued 12,000 options having a per share
exercise price of $20.00 and 500 shares of stock to an outside director of the
Corporation in accordance with the Company's policies relating to outside
director compensation. The options vest ratably over a three year period.
Additionally, pursuant to the Corporation's Amended and Restated Equity
Participation Plan (the "Plan"), the Corporation granted options to purchase an
aggregate of 104,950 shares of Common Stock to a total of 91 employees. These
options vest ratably over a five year period and have a per share exercise price
of $20.00 per share. During the third quarter, a total of 13,830 shares were
issued to 10 employees upon their exercises of options granted pursuant to the
Plan. The weighted average exercise price for these shares was approximately
$1.17 per share. Each of these transactions was exempt from the registration
requirements of the Securities Act of 1933 pursuant to Section 4(2) and the
rules promulgated thereunder.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
27. Financial Data Schedule
(b) Current Reports on Form 8-K
1. Dated August 22, 1997; Filed August 28, 1997
Re: Election of Outside Directors.
10
<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.
RWD TECHNOLOGIES, INC.
By: /s/ Ronald E. Holtz
---------------------------------------
Ronald E. Holtz
Vice President, Chief Financial Officer
and Director
Dated: November 7, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME CAPACITY DATE
---- -------- ----
<S> <C> <C>
- ------------------- Chairman of the Board, November 11, 1997
Robert W. Deutsch Chief Executive Officer and Director
- ------------------- Vice President, Chief Financial Officer November 11, 1997
Ronald E. Holtz and Director
</TABLE>
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1997
<PERIOD-START> JAN-01-1996 JAN-01-1997
<PERIOD-END> SEP-30-1996 SEP-20-1997
<CASH> 0 7,860,600
<SECURITIES> 0 35,936,900
<RECEIVABLES> 0 13,122,300
<ALLOWANCES> 0 477,300
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 66,409,300
<PP&E> 0 8,537,700
<DEPRECIATION> 0 6,975,000
<TOTAL-ASSETS> 0 75,073,700
<CURRENT-LIABILITIES> 0 20,017,300
<BONDS> 0 0
0 0
0 0
<COMMON> 0 1,423,600
<OTHER-SE> 0 49,062,100
<TOTAL-LIABILITY-AND-EQUITY> 0 75,073,700
<SALES> 0 0
<TOTAL-REVENUES> 47,236,700 61,821,500
<CGS> 0 0
<TOTAL-COSTS> 34,961,500 43,453,600
<OTHER-EXPENSES> 5,865,200 8,205,700
<LOSS-PROVISION> (21,800) 95,000
<INTEREST-EXPENSE> 287,500 182,500
<INCOME-PRETAX> 6,305,100 10,646,700
<INCOME-TAX> 215,000 6,503,200<F1>
<INCOME-CONTINUING> 6,090,100 4,143,500
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 6,090,100 4,143,500
<EPS-PRIMARY> .47 .30<F1>
<EPS-DILUTED> .47 .30<F1>
<FN>
<F1>Including $4.5 million deferred tax liability related to C-Corporation
Conversion.
</FN>
</TABLE>
