<PAGE>
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of September, 2000
Sopheon plc
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(Translation of registrant's name into English)
Stirling House, Surrey Research Park
Guildford Surrey GU2 5RF
United Kingdom
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(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-_____________.
<PAGE>
FOR IMMEDIATE RELEASE 18 September 2000
SOPHEON PLC
INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2000
Sopheon plc ("Sopheon"), the international knowledge management software,
services and content group, announces its unaudited interim results for the six
months to 30 June 2000. Sopheon has operations in the UK, USA and the
Netherlands; its shares are traded on AIM in London and on the Euro.NM in
Amsterdam.
HIGHLIGHTS :
- Revenues increase six-fold to L3.1m (1999: L506,000). EBITDA losses for
the period were L2.4m (1999: L649,000).
- Completion of the $35m (L24m) acquisition of Teltech Resource Network
Corporation, a leading US business-to-business research portal and
provider of knowledge management services.
- L20 million share placing to support acquisition strategy and
accelerate business development on both sides of the Atlantic.
- Full contribution to revenue and successful integration of AppliedNet
which was acquired in late November 1999.
- Major teaching hospitals go live with Sopheon healthcare solution and
place order to enhance system further with the development of Evidence
Monitor software.
- Good commercial progress with UK public sector and media clients with
substantial orders to supply, develop and implement knowledge portal
software.
- Strategic partnership with Product Development Institute to create
leading-edge Stage-Gate-TM- new product development process software
solution.
- Management organisation strengthened including the appointment of Andy
Michuda as CEO.
- Share listing strategy review includes an objective of obtaining a
listing in North America.
- ON OUTLOOK, CHAIRMAN, BARRY MENCE SAID;
"DURING THE PAST 10 MONTHS WE HAVE BROUGHT TOGETHER THREE COMPANIES AND
RAISED WORKING CAPITAL TO SUPPORT THE DEVELOPMENT OF SOPHEON'S BUSINESS
IN NORTH AMERICA, THE UK AND CONTINENTAL EUROPE. WE RECOGNISE THE
CHALLENGES THAT LIE AHEAD FOR SOPHEON AND FIRMLY BELIEVE THAT THE GROUP
IS WELL POSITIONED AND EQUIPPED TO MEET THEM. WE VIEW THE FUTURE WITH
CONFIDENCE AND OPTIMISM."
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FOR FURTHER INFORMATION CONTACT :
<TABLE>
<S> <C> <C>
BARRY MENCE, CHAIRMAN SOPHEON PLC TEL : + 44 (0)1483-883000
ARIF KARIMJEE, CFO SOPHEON PLC TEL : + 44 (0)1483-883000
STEVE LIEBMANN BUCHANAN COMMUNICATIONS TEL : + 44 (0)207-466-5000
TERRY DAVIDSON EUROCOMMUNICATIONS GROUP TEL : + 32 (0)2 640 92 07
</TABLE>
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SOPHEON INTERIM RESULTS 2000 / PAGE 2
CHAIRMAN'S STATEMENT
INTRODUCTION
The year to date has been eventful with substantial progress made towards our
objective of becoming a major global company in the emerging knowledge
management market. During the first half year, AppliedNet, acquired in late
November 1999, has been successfully integrated into the group. In early March,
the proposed acquisition of Teltech Resource Network Corporation ("Teltech") was
announced; following registration of Sopheon's shares with the Securities
Exchange Commission at the end of August, this acquisition was completed on 15
September 2000.
RESULTS AND FINANCE
In line with expectations, revenue for the six months to 30 June 2000 showed an
increase of 600% to L3.1 million (1999: L506,000) and included a full
contribution from AppliedNet. The loss on an EBITDA basis (earnings before
interest, tax, depreciation and amortisation) was L2.4 million (1999: L649,000).
The loss per share was 9.9p (1999 : 3.4p).
On an illustrative combined basis, the revenue for the enlarged group of Sopheon
including Teltech for the same period would have been L8.6 million.
In March L20 million was raised through the placing of 2,500,000 new ordinary
shares to support our acquisition strategy in the USA and to further strengthen
our working capital base, primarily to accelerate our sales and marketing effort
on both sides of the Atlantic. This successful fund raising has resulted in a
number of existing investors enlarging their holding in Sopheon and in a further
number of institutions becoming new shareholders in the Group. Accordingly, cash
and short term deposits were L23.3 million at 30 June.
BUSINESS DEVELOPMENT
Following the recent completion of the Teltech acquisition, Sopheon has
significant operations in each of the UK, USA and the Netherlands with over 250
employees worldwide. Teltech brings complementary products and services as a
knowledge management and research services company based in Minneapolis, USA.
Teltech was founded in 1984, with the current management being appointed in
1997. Teltech has made a substantial investment in the development of its
knowledge portal technologies, used to deliver its products and services to
customers and launched into the market as Teltech.com in 1999. Teltech has a
`blue chip' client base which includes half of the Fortune 500 companies.
The final net consideration payable for the Teltech acquisition is $35 million
(L24 million) using a price per Sopheon share of $7.95, a computed average based
on a formula in the merger agreement. $15 million (L10 million) of the total
consideration is in cash with the remainder to be satisfied by the allotment of
2.1 million ordinary 5p shares, and the grant of 0.75 million options over
ordinary 5p shares with a combined exercise price of $2.4 million (L1.6
million).
Having successfully integrated AppliedNet, the period between announcing and
completing the acquisition of Teltech has been used to plan its integration
within the enlarged group. We expect these plans to be implemented smoothly and
quickly.
<PAGE>
SOPHEON INTERIM RESULTS 2000 / PAGE 3
The commercial development of the business has continued to progress with a
number of achievements in the period. Our customer group of major teaching
hospitals in the Netherlands have gone live with Sopheon's healthcare solution
and we are also pleased to announce further business to enhance the system with
the development of Evidence Monitor software, an automated agent to read and
forward relevant information to support evidence-based medicine. The production
of content is well under way and should be available to other hospitals during
this October; we expect further hospitals to take our system in the near future.
Our prospect list includes healthcare organisations in Holland, Germany, the UK
and North America.
Good commercial success has also been achieved within parts of the UK public
sector and with a number of substantial media clients to supply, develop and
implement the knowledge portal software for which Sopheon is recognised
increasingly.
TELTECH RECENT DEVELOPMENTS
In recent months, Teltech has invested heavily in the expansion of its sales
organisation to support solutions-selling strategies aimed at selected vertical
markets, doubling the company's sales coverage across North America. Meanwhile,
the market continues to show good acceptance of Teltech's research and
consulting services. Earlier this year, one of the world's largest `high-tech'
industrial and consumer product manufacturers adopted Teltech's research portal
as its corporate information-services solution. More recently, both a leading
chemical company and a multi-national food manufacturer deployed the portal for
organisation-wide use. In June, Teltech's research solution was awarded CHIEF
INFORMATION OFFICER magazine's prestigious international Web Business 50/50
award as a premier online site. In another development, Teltech will soon begin
market testing an Internet site that enables open, transactional access to the
company's renowned network of technical and industry experts by potential users
around the globe. The service is due to be introduced later this year.
Teltech's consulting group continues to be acknowledged for its industry-leading
best practices in the design and development of knowledge management solutions.
The company's panel of experts recently completed a sophisticated content
taxonomy that will serve as a structural framework for the extranet of one of
the world's top IT research firms. Teltech was recognized in July by KM World
magazine as one of the "100 Companies That Matter" in knowledge management.
PRODUCT DEVELOPMENT
Our product development efforts are focused on bringing the next generation of
our industry-specific knowledge management business solutions to market in the
Healthcare, High Technology Manufacturing and Life Sciences sectors.
In the future, Sopheon's business solutions will draw upon the foundation of our
integrated set of software and technology comprising Sopheon Composer, Modeler,
Terms, Agents and Publisher as well as Teltech's portal technology with its
e-business credentials. Our strategy remains the development and sale of
packaged business solutions, based on our software foundation, geared to
enabling companies to make better decisions and improve their business processes
by helping them structure, capture and share information. These knowledge
management solutions will be tailored to vertical markets with industry specific
content; our improved expertise in knowledge management services will enrich the
pre-sales, specification and implementation processes.
New versions and enhancements to our healthcare solution will be released by
year-end and the first release of our Stage-Gate Manager product (see below) is
scheduled for the first quarter of 2001.
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SOPHEON INTERIM RESULTS 2000 / PAGE 4
BUSINESS PARTNERSHIPS
We are committed to developing a number of long term, strong and profitable
business partnerships, and we are confident that our recently announced
partnership with the Ontario-based Product Development Institute ("PDI") will
fulfil this potential.
The partnership will focus initially on the development of a complete,
integrated set of tools, research capabilities and knowledge management software
solutions that will serve as the backbone of a company's product development
process and dramatically boost new product success rates. The solution will be
based on PDI's world-renowned Stage-Gate process, which is presently used in
some form by an estimated 70% of technology-driven companies in North America
and many companies in Europe, and will be built and delivered using Sopheon's
software technologies together with its research and knowledge management
capabilities. For companies already using the Stage-Gate process, or for those
without an established product development process, the Sopheon/PDI offering
will constitute an easily adoptable, turnkey solution which will convert the
process from paper to computer.
This strategic relationship between Sopheon and PDI is important for a number of
reasons including the significant business opportunity this relationship
represents. It is also an excellent illustration of the potential power of the
synergy between Sopheon's software technologies and Teltech's research and
knowledge management competencies that typifies the benefits we perceive from
the merger of the two organisations.
Other business partnerships and potential strategic alignments are under
discussion and progress should be reported in due course.
BOARD OF DIRECTORS AND EXECUTIVE MANAGEMENT TEAM
The completion of the acquisition of Teltech marks a substantial increase in the
size of the business. We have taken this opportunity to change the structure of
the group's management to provide for future growth and to accelerate progress
towards standards of corporate governance appropriate to an international quoted
company. This new structure comprises a Sopheon plc Board with at least half its
directors being non-executive together with an Executive Management Board
responsible for operations.
To this end it gives me great pleasure to announce that Andy Michuda, until now
CEO of Teltech, will be appointed as Chief Executive Officer of the enlarged
Group and will also be joining the Board as an executive director with immediate
effect. Joe Shuster, the founder and Chairman of Teltech, will be joining the
Board of Sopheon as a non-executive director at the same time. These two North
American appointments reflect the importance placed upon the development of our
business in the United States. Our longer-term objective is to have a balanced
group of non-executives from both sides of the Atlantic.
Jack Johnson, the Chief Operating Officer and Vice President of Teltech, is
becoming CEO and President of Sopheon Corporation in the United States; Craig
Robinson, currently Sales Director of Sopheon in Europe, is becoming the COO and
Vice President of European operations. Huub Rutten, Director of Research and
Design, and James Macfarlane, Business Development Director, will be stepping
off the Board to allow them to focus on their expanded roles within the
executive management team.
On the completion of the merger with Teltech, Richard Maddocks, COO and Managing
Director of Sopheon, and Hans Coltof, non-executive Director, will stand down
from the board. I would like to thank both Hans and Richard for their
significant contributions during the early phase of Sopheon's development.
<PAGE>
SOPHEON INTERIM RESULTS 2000 / PAGE 5
Sopheon's Board of Directors will therefore become :
Barry Mence Chairman
Andy Michuda Chief Executive Officer
Arif Karimjee Chief Financial Officer and Secretary
Mike Brooke (UK) non-executive director
Stuart Silcock (UK) non-executive director
Joe Shuster (USA) non-executive director
OUTLOOK FOR 2000 AND BEYOND
During the past 10 months we have brought together three companies and raised
the working capital with which we will develop Sopheon's business in North
America, the UK and continental Europe. The enlarged Group, with its combined
offering of software, expertise and content, has much to prove before it can
claim that it has really arrived. We aim to complete rapidly the integration of
our technologies in the coming months, at the same time as marshalling our
enlarged sales force with the objective of achieving a substantial volume of
sales during 2001. Profitability will then become the major objective and we
expect to make progress towards that goal during 2001.
As these volume sales begin to take shape during 2001 we plan to make further
acquisitions, as previously indicated, in additional geographic locations. To
further accelerate our progress we are also looking to strategically align
Sopheon with one or two substantial organisations. These developments should
further contribute to the development of Sopheon as we drive toward our
objective of becoming a truly global business in the rapidly developing
Knowledge Management Industry.
We are currently reviewing our overall listing strategy and it remains one of
our key objectives to have a listing in North America in due course. This would
enable us to better service our newly acquired North American shareholder base
as well as giving Sopheon a higher profile in the US, assisting us in
accelerating the development of the business.
The year 2000 has seen extreme volatility in financial markets - especially
within the TMT sector; Sopheon's shares have not escaped this volatility. As a
relatively young company we are well aware of the concern and frustration this
can give to shareholders and I would like to thank everybody for their support
and patience during these times. It remains our number one objective to reward
all of our shareholders in the longer term.
Your Board recognises the challenges that lie ahead for Sopheon and firmly
believes that the Group is well positioned and equipped to meet them. We view
the future with confidence and optimism.
BARRY MENCE 18 SEPTEMBER 2000
EXECUTIVE CHAIRMAN
CAUTIONARY STATEMENT UNDER U.S. SECURITIES LAWS.
Sopheon has made forward-looking statements in this press release, including
statements about the benefits of the acquisition of Teltech; financial results;
product development plans; the potential benefits of business relationships with
third parties and business strategies. These statements about future events are
subject to risks and uncertainties that could cause Sopheon's actual results to
differ materially from those that might be inferred from the forward-looking
statements. Sopheon can make no assurance that any forward-looking statements
will prove correct. A description of the risk factors that could negatively
affect Sopheon's future performance is contained in Sopheon's Form F-4
Registration Statement on file with the U.S. Securities and Exchange Commission.
<PAGE>
SOPHEON INTERIM RESULTS 2000 / PAGE 6
GROUP PROFIT AND LOSS ACCOUNT FOR THE 6 MONTHS TO 30 JUNE 2000
(UNAUDITED)
<TABLE>
<CAPTION>
RESTATED
6 MONTHS 6 MONTHS
TO 30 JUNE TO 30 JUNE
2000 1999
L'000 L'000
<S> <C> <C>
TURNOVER 3,098 506
Cost of sales (1,922) (390)
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GROSS PROFIT 1,176 116
Administrative, research and development, and distribution expenses (3,583) (709)
Amortisation of goodwill (1,414) (8)
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OPERATING LOSS (3,821) (601)
Bank interest receivable 513 12
Interest payable and similar charges (79) (68)
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LOSS ON ORDINARY ACTIVITIES BEFORE AND AFTER TAXATION (3,387) (657)
=============== ===============
Loss per share-basic and diluted (9.9p) (3.4p)
LOSS ON AN EBITDA BASIS (2,407) (649)
=============== ===============
<CAPTION>
STATEMENT OF RECOGNISED GAINS AND LOSSES
RESTATED
6 MONTHS 6 MONTHS
TO 30 JUNE TO 30 JUNE
2000 1999
L'000 L'000
<S> <C> <C>
LOSS FOR THE FINANCIAL YEAR (3,387) (657)
Exchange difference on retranslation of net assets of subsidiary undertakings
59 (80)
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TOTAL RECOGNISED GAINS AND LOSSES RELATING TO THE PERIOD (3,328) (737)
Prior year adjustment - (373)
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TOTAL RECOGNISED GAINS AND LOSSES RECOGNISED SINCE ANNUAL REPORT (3,328) (1,110)
=============== ===============
</TABLE>
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SOPHEON INTERIM RESULTS 2000 / PAGE 7
GROUP BALANCE SHEET AS AT 30 JUNE 2000
(UNAUDITED)
<TABLE>
<CAPTION>
RESTATED
AS AT AS AT
30 JUNE 30 JUNE
2000 1999
L'000 L'000
<S> <C> <C>
FIXED ASSETS
Goodwill 6,968 158
Tangible assets 598 167
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7,566 325
CURRENT ASSETS
Debtors 3,306 314
Cash and short term deposits 23,296 319
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26,602 633
CREDITORS: amounts falling due within one year 3,810 484
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NET CURRENT ASSETS/(LIABILITIES) 22,792 149
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TOTAL ASSETS LESS CURRENT LIABILITIES 30,358 474
CREDITORS: amounts falling due after more than one year 40 1,571
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30,318 (1,097)
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CAPITAL AND RESERVES
Called up share capital 4,648 3,846
Shares to be issued 10 15
Share premium account 37,969 2,643
Profit and loss account (12,309) (7,602)
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SHAREHOLDERS' FUNDS (ALL EQUITY INTERESTS) 30,318 (1,098)
=============== ===============
</TABLE>
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SOPHEON INTERIM RESULTS 2000 / PAGE 8
STATEMENT OF CASH FLOWS FOR THE 6 MONTHS TO 30 JUNE 2000 (UNAUDITED)
<TABLE>
<CAPTION>
RESTATED
6 MONTHS 6 MONTHS
TO 30 JUNE TO 30 JUNE
2000 1999
L'000 L'000
<S> <C> <C>
NET CASH OUTFLOW FROM OPERATING ACTIVITIES (4,197) (770)
Return on investment and servicing of finance 433 (55)
Capital expenditure and financial investment (837) (10)
Management of liquid resources (15,500) 402
Financing 20,146 481
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INCREASE/(DECREASE) IN CASH EXCLUDING SHORT TERM DEPOSITS 45 48
Increase/(decrease) in short term deposits 15,500 (402)
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INCREASE/(DECREASE) IN CASH INCLUDING SHORT TERM DEPOSITS 15,545 (354)
=============== ===============
</TABLE>
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SOPHEON INTERIM RESULTS 2000 / PAGE 9
NOTES
EARNINGS PER SHARE
The calculation of basic loss per ordinary share is based on a loss of
L3,387,000 (1998 L657,000 as adjusted), and 34,097,689 (1998: 19,081,962)
ordinary shares, being the weighted average number of ordinary shares in issue
during the period. The effect of all potential ordinary shares is antidilutive
in 1998 and 1999.
PRIOR YEAR ADJUSTMENT
Historically, development expenditure incurred for specific products was
capitalised when its future recoverability could reasonably have been regarded
as assured, and amortised in line with the expected future sales from the
related product, to a maximum of 5 years. Following the acquisition of
Appliednet Limited in 1999 and subsequent harmonisation of group accounting
policies, all such expenditure is now written off as incurred. The effect of
changing this policy has been reflected by way of a prior year adjustment to the
1998 financial statements of the group.
ACQUISITION OF TELTECH
Included within debtors is L1,264,000 due from Teltech Resource Network
Corporation (Teltech), a US based company which the group is in the process of
acquiring. Included within revenues is approximately L218,000 relating to
pre-acquisition sales to Teltech. The cash consideration and costs arising on
completion of this acquisition are anticipated to be of the order of
L10,000,000.
CONVERTIBLE LOAN STOCK
Included within creditors due within one year is L1,571,000 of Convertible Loan
Stock held by three of the company's shareholders. This loan stock was converted
into ordinary shares on 31 July 2000.
INTERIM REPORT
The Interim Report will be posted to shareholders shortly and will also be
available from Sopheon's registered office at Stirling House, Surrey Research
Park, Guildford, Surrey GU2 5RF.
<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, thereto duly authorized.
Arif Karimjee
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(Registrant)
Sept. 18, 2000 /s/ Arif Karimjee
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Date (Signature)*
Group Finance Director
* Print the name and title of the signing officer under his/her signature.
