<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 December 31, 1993
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-10625
THE ASK GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-2250034
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification no.)
2880 Scott Boulevard, Santa Clara , CA 95052-8013
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (408) 562-8800
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
The number of shares outstanding of the issuer's common stock as
of February 4, 1994 was 23,285,663.
<PAGE>
THE ASK GROUP, INC.
INDEX
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Operations 4
Condensed Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. OTHER INFORMATION 12
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
THE ASK GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands - except shares)
<CAPTION>
December 31, June 30,
1993 1993
(unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 10,671 $ 18,271
Accounts receivable, less allowances for doubtful
accounts of $9,186 ($7,583 at June 30, 1993) 142,413 146,097
Inventory 1,121 1,184
Prepaid income taxes 3,187 2,067
Other current assets 18,090 15,966
------- -------
Total current assets 175,482 183,585
Capitalized software development costs, net 14,497 11,950
Property, plant and equipment, at cost 100,361 92,895
Less: accumulated depreciation and amortization 55,173 46,906
------- -------
Net property, plant and equipment 45,188 45,989
Goodwill, net 43,695 45,025
Purchased intangibles, net 23,559 25,022
Other long-term assets 2,849 4,200
------- -------
$ 305,270 $ 315,771
======= =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Liabilities and stockholders' equity
Current liabilities:
Current portion of long-term debt $ 33,600 $ 3,121
Accounts payable 19,688 26,786
Accrued payroll and related items 19,015 25,637
Sales and value added taxes payable 5,314 6,670
Other accrued liabilities 22,471 17,218
Current portion of other liabilities 3,232 3,318
Customer deposits 665 849
Deferred revenue 61,910 66,160
------- -------
Total current liabilities 165,895 149,759
Long-term debt, net of current portion - 9,697
Other liabilities, net of current portion 3,966 4,528
Deferred income tax 3,883 3,252
Stockholders' equity:
Common stock, $0.01 par value, 40,000,000 shares
authorized; 23,249,235 outstanding
(22,917,022 at June 30, 1993) 232 229
Additional paid-in-capital 144,062 140,949
Retained earnings (accumulated deficit) (9,909) 10,541
Cumulative translation adjustment (2,859) (3,184)
------- -------
Total stockholders' equity 131,526 148,535
------- -------
$ 305,270 $ 315,771
======= =======
<FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
THE ASK GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts - unaudited)
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
1993 1992 1993 1992
<S> <C> <C> <C> <C>
Net revenue:
Systems $ 56,639 $ 71,529 $ 99,862 $ 116,185
Service 43,964 42,019 84,596 81,095
------- ------- ------- -------
100,603 113,548 184,458 197,280
Costs and expenses:
Cost of systems 10,701 23,517 23,545 39,862
Cost of services 19,995 20,477 38,429 38,706
Product development 12,205 11,691 22,516 22,184
Selling, general and administrative 60,981 49,026 112,207 98,351
Restructuring charge 4,000 - 4,000 -
Amortization of goodwill and
other purchased intangibles 2,047 2,083 4,036 4,166
------- ------- ------- -------
Total costs and expenses 109,929 106,794 204,733 203,269
------- ------- ------- -------
Income (loss) from operations (9,326) 6,754 (20,275) (5,989)
Interest and other income, net 288 42 142 794
Interest expense (900) (753) (1,415) (1,390)
------- ------- ------- -------
Income (loss) before income taxes (9,938) 6,043 (21,548) (6,585)
Provision for (benefit from) income taxes 3,778 2,417 (1,098) (2,634)
------- ------- ------- -------
Net income (loss) $ (13,716) $ 3,626 $ (20,450) $ (3,951)
======= ======= ======= =======
Income (loss) per share $ (0.59) $ 0.16 $ (0.89) $ (0.18)
======= ======= ======= =======
Shares used in per share calculation 23,067 23,251 23,004 21,474
======= ======= ======= =======
<FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
THE ASK GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands - unaudited)
<CAPTION>
Six Months Ended
December 31,
1993 1992
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (20,450) $ (3,951)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 16,899 15,731
Restructuring charge 4,000 -
Changes in assets and liabilities:
Accounts receivable 4,242 16,681
Inventory 61 652
Prepaid income tax (552) -
Accounts payable (7,160) (6,446)
Accrued payroll and related items (6,689) (5,671)
Income taxes payable - 1,261
Sales and valued added taxes payable (1,244) (2,094)
Other accrued liabilities 1,025 (8,790)
Customer deposits (184) 575
Deferred income taxes - (1,148)
Deferred revenue (4,482) (270)
Other, net (847) (1,486)
------- -------
Net cash provided by (used for)
operating activities (15,381) 5,044
Cash flows from investing activities:
Capitalized software development costs (7,146) (3,905)
Purchase of intangible assets (1,243) -
Capital expenditures, net of retirements (5,633) (8,884)
------- -------
Net cash used for investing activities (14,022) (12,789)
Cash flows from financing activities:
Principal payments on bank borrowings and
capital lease obligations (3,079) (6,838)
Bank borrowings 21,700 -
Issuance of stock, net 3,115 5,454
------- -------
Net cash provided by (used for)
financing activities 21,736 (1,384)
Effect of exchange rates on cash 67 (2,084)
------- -------
Net decrease in cash and cash equivalents (7,600) (11,213)
Cash and cash equivalents at beginning of period 18,271 27,743
------- -------
Cash and cash equivalents at end of period $ 10,671 $ 16,530
======= =======
<FN>
See accompanying notes.
</TABLE>
<PAGE>
THE ASK GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Unaudited)
December 31, 1993
1. The condensed consolidated financial statements for the
three months and six months ended December 31, 1993 and 1992
are unaudited, but include all adjustments, which, in the
opinion of management, are necessary for a fair statement of
the results of operations for the interim periods presented.
The interim results are not necessarily indicative of the
results for the full year. Certain prior period amounts
have been reclassified to conform with the current period's
presentation.
2. A summary of the significant accounting policies of the
Company is included in the consolidated financial statements
listed in Item 8 of the Company's Form 10-K for the fiscal
year ended June 30, 1993.
3. The condensed consolidated financial statements include
the accounts of The ASK Group, Inc. and all of its wholly-
owned subsidiaries, after the elimination of intercompany
accounts and transactions.
4. The Company capitalizes software development costs in
accordance with Statement of Financial Accounting Standards
No. 86. Such costs are amortized on a straight-line basis
over the estimated useful life which ranges from one to three
years or the ratio of current revenue to the total current
and anticipated future revenue, whichever is greater.
The capitalization and amortization of software development
costs for the three months and six months ended December 31,
1993 and 1992 follow (in thousands):
<TABLE>
<CAPTION>
Three Months Six Months
Ended Ended
December 31, December 31,
1993 1992 1993 1992
<S> <C> <C> <C> <C>
Balance, beginning of period $13,352 $ 9,654 $11,950 $ 9,383
Software development costs
capitalized 3,470 1,945 7,146 3,905
Amortization of capitalized costs 2,325 2,183 4,599 3,872
------ ------ ------ ------
Balance, end of period $14,497 $ 9,416 $14,497 $ 9,416
====== ====== ====== ======
</TABLE>
<PAGE>
5. The Company's results for the quarter ended December 31,
1993, caused the Company to be in violation of several
covenants under the credit agreement which covers its
$40 million revolving credit line and $10 million term loan
(reduced to $8.5 million on January 15, 1994). The covenants
violated include the net income, tangible net worth and other
financial ratio requirements.
As a result of this and the fact that the Company and the
banks have not reached agreement on an amendment of the
underlying agreement or to a waiver of such violations, the
Company is in default under the Agreement. Accordingly, the
banks have the right to demand immediate repayment of all
amounts outstanding under the agreement. All debt under the
credit agreement has been classified as current debt on the
Condensed Consolidated Balance Sheet as of December 31,
1993. The Company will continue negotiations with the banks
for an acceptable arrangement going forward. If the Company
is unable to negotiate such an arrangement, its operations
will be severely impaired, which in turn will adversely
affect revenue and profitability.
In addition, because the Company is in default under the credit
agreement, it cannot borrow further funds under that facility
without the banks' consent.
6. Effective July 1, 1992, the Company changed its method of
accounting for income taxes to the liability method required
by Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes."
A tax provision of $3,778,000 and a tax benefit of $1,098,000
were recorded for the three and six month periods ended December
31, 1993, respectively. These amounts consist of a provision
for taxes on foreign earnings with no offsetting benefit for
U.S. losses in the quarter.
7. In the three months ended December 31, 1993, the Company
recorded a restructuring charge of $4,000,000. The Company
intends to restructure its organization to reduce costs.
The restructuring charge is principally related to headcount
reductions, primarily in North America, which will affect
approximately 200 employees during the first half of the
Company's third fiscal quarter. Provision has also been made
in the restructuring charge for closing or consolidating
certain of the Company's facilities. Additional cost
containment measures undertaken include salary reductions
for executive management. It is expected that these measures
will result in expense reductions of approximately $4,000,000
to $5,000,000 on a quarterly basis. While these actions will
begin to reduce expenses in the third quarter of fiscal 1994,
their full impact is not expected to be realized until the fourth
quarter of fiscal 1994.
<PAGE>
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations
The ASK Group, Inc. (the Company) develops, markets and sells
computer-based relational database management systems (RDBMS),
data access and connectivity products, manufacturing and
financial applications software and application development tools
and provides related consulting and support services. The
Company is organized by business units which are both independent
and interdependent to take advantage of the synergy among them.
The business units include: Worldwide Distribution, Knowledge
Services and Support, Product Business Units and the
infrastructure to support them.
The Company's products are marketed and sold by its Worldwide
Distribution Business Unit on a regional basis, typically divided
by country. Each regional operation sells and installs all of
the Company's products and trains and supports the end users and
resellers of the Company's products and services in their
territory. This business unit also creates and implements
territory-specific marketing programs. This business unit is in
turn supported by the worldwide Knowledge Services and Support
Business Unit, whose principal functions include developing
service products and internal training of customer support staff.
The Product Business Units are responsible for designing and
developing products as well as designing programs to position
products and creating marketing programs with the Worldwide
Distribution Business Unit. The Product Business Units are:
Database and Connectivity (Database), focused on the ASK INGRES
family of products; Manufacturing Systems, which develops and
markets integrated manufacturing systems software; and
Development Tools (Tools), responsible for application
development and decision support tools software.
RESULTS OF OPERATIONS
The Company's revenue is derived from computer systems sales and
a full range of services. Computer systems sales include
licensing proprietary software and reselling/licensing of third
party computer hardware and software products on a turnkey basis.
Service revenue includes maintenance contracts (including updates
to software products), education, technical support and
application integration and implementation consulting.
The Company had both an operating and an after-tax loss for the
quarter ended December 31, 1993. Lower-than-expected revenue,
due primarily to software license sales which were expected to
occur but which did not close, combined with increased selling,
general and administrative expenses were the key factors in the
Company's net loss for the quarter. In addition, the Company
recorded a restructuring charge of $4,000,000 in the quarter.
The Company intends to restructure its organization to reduce
costs. The restructuring charge is principally related to
headcount reductions, primarily in North America, which will
affect approximately 200 employees during the first half of the
Company's third fiscal quarter. Provision has also been made in
the restructuring charge for closing or consolidating certain of
the Company's facilities. Additional cost containment measures
undertaken include salary reductions for executive management.
It is expected that these measures will have an impact of
approximately $4,000,000 to $5,000,000 on a quarterly basis.
While these actions will begin to reduce expenses in the third
quarter of fiscal 1994, their full impactis not expected to be
realized until the fourth quarter of fiscal 1994.
Total revenue for the three and six months ended December 31,
1993 decreased $12,945,000 (11%) and $12,822,000 (6%),
respectively, from the same periods ended December 31, 1992. A
stronger U.S. dollar in the fiscal 1994 periods compared to the
fiscal 1993 periods had a negative impact on revenue growth rates
in Europe when the revenue denominated in European currencies
was translated to the equivalent amount in U.S. dollars. In
addition, hardware revenue decreased $8,964,000 (66%) and
$12,208,000 (50%) in the three and six month periods,
respectively, as the Company continues to de-emphasize the amount
of third-party hardware resold with applications software due to
the continued trend toward open UNIX-based software applications.
Software license revenue in fiscal 1994 decreased $5,926,000
(10%) in the quarter and $4,115,000 (4%) for the year-to-date
period compared to the same periods of fiscal 1993. In North
America, software license revenue declined 12% in the current
quarter compared to the same quarter in the prior year while
showing revenue growth of 14% in the year-to-date period. The
year-to-date increase reflects the impact of newer products and
additional resources focused on this region. The unanticipated
decrease in the quarter is primarily due to software license
sales which were expected to occur in the quarter, but which did
not close. The Asia-Pacific region continues to show strong
growth in software license revenue (39% and 28% increases for
the three- and six-month periods, respectively, compared to the
same periods of the prior year), principally due to the Company's
increased presence in the region, including a Japanese subsidiary
which was established in fiscal 1994. European software license
revenue declined 16% and 20%, respectively, in the fiscal 1994
periods from the fiscal 1993 periods. European revenue continues
to be negatively affected by the impact of currency exchange
rates as well as by general economic conditions within Europe.
In order to generate growth and momentum, the Company must
continue to capitalize on the trend toward open or UNIX-oriented
software products including those that run on smaller desktop
workstations or personal computers. If the Company is not
successful in expanding its UNIX-based revenue and product line
over the next several quarters, it could adversely impact the
Company's ability to grow and sustain its business.
Additionally, the Company must continue to expand its range of
product offerings, gain more productivity from its sales
organization and improve visibility into its short-term business
trends.
For the three- and six-month periods in fiscal 1994, service
revenue grew by $1,945,000 (5%) and $3,501,000 (4%),
respectively, compared to the same periods of fiscal 1993.
Again, the relative strength of the U.S. dollar against European
currencies negatively impacted the service revenue trends.
Approximately 51% of revenue in the first half of fiscal 1994 was
generated from outside North America compared to 52% in the same
period of fiscal 1993 and 51% for the full year of fiscal 1993.
Because a substantial portion of the Company's international
operations are denominated in foreign currencies (principally the
Pound Sterling), the Company engages in a foreign currency
management program to minimize the effects of exchange rate
fluctuations on foreign cash flows which are converted to U.S.
dollars. This program includes the use of foreign exchange
forward contracts and swaps to hedge its intercompany balances.
The program is not intended to protect any specific area (i.e.,
revenue) as reported in the Condensed Consolidated Statements of
Operations. Instead it is intended to minimize the overall
impact of exchange rate fluctuations on the Company's foreign
currency cash flows converted to U.S. dollars. The effect of
this program is included in interest and other income, net, in
the Condensed Consolidated Statements of Operations.
Cost of systems consists primarily of the cost of resold
hardware, royalties to third parties and amortization of software
development costs capitalized under the provisions of Statement
of Financial Accounting Standards No. 86 (FAS 86). As a
percentage of the related revenue, cost of systems decreased from
33% and 34%, respectively, in the three- and six-month periods of
fiscal 1993 to 19% and 24%, respectively, in the same periods of
fiscal 1994. A substantial portion of this decrease is due to
the lower levels of resold third party hardware.
Cost of service consists of the direct costs of training and
consulting as well as costs of customer support. Cost of service
remained relatively constant in amount for the three- and six-
month periods of fiscal 1993 and 1994. When presented as a
percentage of the related revenue, cost of service declined in
both fiscal 1994 periods from the fiscal 1993 periods due
primarily to the increase in service revenue in fiscal 1994.
Product development expenses, net of software development costs
capitalized under the provisions of FAS 86, were virtually
unchanged in the fiscal 1994 periods from the fiscal 1993
periods. Software development costs capitalized in the three-
and six-month periods of fiscal 1994 were $3,470,000 and
$7,146,000, respectively, compared to $1,945,000 and $3,905,000,
respectively, for the same periods of fiscal 1993. Costs
capitalized under FAS 86 will vary from period to period
depending on the timing and duration of testing of software
products. Before the adjustment related to FAS 86, product
development costs were $15,675,000 and $29,662,000, respectively,
for the periods ended December 31, 1993, compared to $13,636,000
and $26,089,000, respectively, for the same periods ended
December 31, 1992. The increase reflects the Company's
continuing emphasis on investment in both new and existing
products and is due primarily to increased headcount and general
increases in salaries.
Selling, general and administrative expenses increased
$11,955,000 (24%) for the three month period and $13,856,000
(14%) for the six month period in fiscal 1994 compared to the
same period of fiscal 1993. Personnel-related items, including
higher headcount in international locations and general increases
in salaries, account for a substantial portion of these
increases. Increased provisions for bad debts were also a
factor.
Interest and other income, net, consists of interest income,
foreign exchange gains and losses, foreign exchange hedging costs
and miscellaneous income. For the six month periods ended
December 31, 1993 and 1992, the decrease is due primarily to
lower interest income as a result of lower average cash balances
and lower interest rates. The increase in interest expense in
the fiscal 1994 periods when compared to the fiscal 1993 periods
is due to higher average levels of debt in fiscal 1994 partially
offset by lower interest rates.
The second quarter of fiscal 1994 includes a tax provision of
$3,778,000 despite the pre-tax loss. The charge consists of a
provision for taxes on foreign earnings with no offsetting
benefit for U.S. tax losses. The Company will take the benefit
of these U.S. tax losses against future U. S. earnings. This
compares to a tax provision of $2,417,000 in the same quarter of
fiscal 1993 which provided taxes on both U.S. and foreign income
at an estimated annualized tax rate of 40%.
The Company's future revenue and earnings may be subject to
significant volatility, especially on a quarterly basis. A
substantial amount of the Company's quarterly revenue has
typically been recorded in the third month of any fiscal quarter,
with a concentration of such revenue in the last half of that
month. In addition, the timing of the closing of large license
agreements increases the risk of quarter-to-quarter revenue
fluctuations. The Company's operating expenses are based on
anticipated revenue, are relatively fixed in the short term and
are incurred approximately evenly during a quarter. As a result,
if revenue is not realized as expected, the Company's operating
results will be adversely affected.
Any shortfall in revenue or operating results from levels
expected by securities analysts and the timing of the
announcement of such shortfall could have an immediate and
significant effect on the trading price of the Company's stock in
any given period. In addition, the Company participates in a
highly dynamic industry, which often results in significant
volatility in the Company's common stock price.
FINANCIAL CONDITION
Cash and cash equivalents decreased $7.6 million during the first
six months of fiscal 1994. The major source of cash for the
period was bank borrowings of $21.7 million. Funding of
operations ($15.4 million), acquisitions of capital equipment
($5.6 million) and capitalized software costs ($7.1 million) were
the primary uses of cash.
The Company has financed its continuing operations through cash
generated from operations, existing cash balances and available
credit facilities. At December 31, 1993, approximately $11.3
million remained available for future borrowings under a $40
million revolving credit line with two banks. Because of
borrowing base limitations under the related credit agreement,
only $5.4 million was available for borrowing at December 31,
1993 and only $1.4 million was available for borrowing at
February 14, 1994.
The Company's results for the quarter ended December 31, 1993,
caused the Company to be in violation of several covenants under
the credit agreement which covers the revolving credit line and
an $8.5 million term loan. The covenants violated include the
net income, tangible net worth and other financial ratio
requirements. As a result of this and the fact that the Company
and the banks have not reached agreement on an amendment of the
underlying agreement or to a waiver of such violations, the
Company is in default under the Agreement. Accordingly, the
banks have the right to demand immediate repayment of all amounts
outstanding under the agreement. All debt under the credit
agreement has been classified as current debt on the Condensed
Consolidated Balance Sheet as of December 31, 1993. The Company
will continue negotiations with the banks for an acceptable
arrangement going forward. If the Company is unable to negotiate
such an arrangement, its operations will be severely impaired,
which in turn will adversely affect revenue and profitability.
In addition, because the Company is in default under the credit
agreement, it cannot borrow further funds under that facility
without the banks' consent.
At December 31, 1993, the Company's accounts receivable total
$142.4 million, net of allowances for doubtful accounts. The
days sales outstanding (DSO) for these receivables is 127 days
compared to 116 days at December 31, 1992.
Because of the situation with the credit facility and the
extended DSO on receivables, the Company is facing a liquidity
problem. To improve cash flow, the Company has been taking
several actions, including increased collection effort by adding
temporary collection personnel, factoring long-term receivables,
sale of certain real property and the sale and leaseback of
certain assets. The Company is also actively working with its
investment bankers to establish plans to increase the Company's
working capital through possible debt and/or equity offerings as
well as evaluating other strategic alternatives. However, there
can be no assurance that any of these efforts will be successful.
If the Company does not quickly improve its cash flow, it could
cause further delays in payments to suppliers and employees and,
accordingly, delays in the supply of goods and services to the
Company. Delays in the supply of goods and services to the
Company would adversely impact the Company's ability to deliver
its products and services, which in turn would negatively impact
revenue, margins and profitability.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Procedings. Not Applicable
Item 2. Changes in Securities. Not Applicable
Item 3. Defaults upon Senior Securities. Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders.
The Company held its Annual Meeting of Stockholders on
November 22, 1993.
The stockholders voted on proposals to:
1. Elect Directors of the Company.
2. Adopt the 1993 Employee Stock Purchase Plan.
3. Approve a 1,200,000 share increase to the reserve
established under the 1991 Stock Plan.
4. Approve an amendment to the 1991 Stock Plan to
provide for automatic annual increases to the share
reserve starting July 1, 1996.
5. Ratify the appointment of Ernst & Young as the
Company's auditors for the fiscal year ending June 30, 1994.
The proposals were approved by the following votes:
1. Election of Directors
Director For Withheld
Paul C. Ely, Jr. 18,944,929 209,511
Pier Carlo Falotti 18,945,620 208,820
Robert N. Sharpe 18,944,779 209,661
Thomas I. Unterberg 18,943,962 210,478
Robert H. Waterman 18,944,829 209,611
2. Adoption of 1993 Employee Stock Purchase Plan
For Against Abstain No Vote
15,478,606 752,589 105,519 2,817,726
3. 1991 Stock Plan - 1,200,000 share reserve increase
For Against Abstain No Vote
11,650,400 4,567,108 67,403 2,869,529
4. 1991 Stock Plan - Automatic Annual Share Reserve
Increase
For Against Abstain No Vote
11,596,690 4,669,939 70,085 2,817,726
5. Ratify appointment of Ernst & Young
For Against Abstain No Vote
19,093,135 30,607 26,039 4,659
<PAGE>
Item 5. Other Information.
On February 9, 1994, the Company's Board of Directors
accepted the resignation of Pier Carlo Falotti, a
director of the Company and the Company's president and
chief executive officer. Mr. Falotti's resignation was
for personal reasons.
The Board of Directors has begun a search for Mr.
Falotti's replacement. Until a successor chief
executive officer is named, the Board has designated
Leslie E. Wright, executive vice president and chief
financial officer, as acting operating officer to
manage the Company's operating plan and strategy.
Item 6. Exhibits and Reports on Form 8-K
(a) List of Exhibits
Exhibit
Number Description
11.1 Computation of Net Income (Loss)
per Common and Common
Equivalent Share
(b) Reports on Form 8-K
None
<PAGE>
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.
THE ASK GROUP, INC.
Registrant
February 14, 1994
Date LESLIE E. WRIGHT
Leslie E. Wright
Executive Vice President
and Chief Financial and
Administrative Officer,
(Principal Financial and
Accounting Officer)
<PAGE>
<TABLE>
EXHIBIT 11.1
THE ASK GROUP, INC.
COMPUTATION OF NET INCOME (LOSS)
PER COMMON AND COMMON EQUIVALENT SHARE
(In thousands, except per share amount)
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
1993 1992 1993 1992
<S> <C> <C> <C> <C>
Primary
Weighted average number of
common shares outstanding 23,067 21,747 23,004 21,474
Incremental common shares
attributable to shares issuable
under employee stock plans * 1,504 * *
------- ------- ------- -------
Total shares 23,067 23,251 23,004 21,474
======= ======= ======= =======
Net income (loss):
Amount $(13,716) $ 3,626 $(20,450) $ (3,951)
======= ======= ======= =======
Per share $ (0.59) $ 0.16 $ (0.89) $ (0.18)
======= ======= ======= =======
Fully Diluted
Weighted average number of
common shares oustanding 23,067 21,747 23,004 21,474
Incremental common shares
attributable to shares issuable
under employee stock plans * 1,773 * *
------- ------- ------- -------
Total shares 23,067 23,520 23,004 21,474
======= ======= ======= =======
Net income (loss):
Amount $(13,716) $ 3,626 $(20,450) $ (3,951)
======= ======= ======= =======
Per share $ (0.59) $ 0.15** $ (0.89) $ (0.18)
======= ======= ======= =======
<FN>
* Common equivalent shares relating to shares issuable under employee stock
plans are not included due to their antidilutive effect on the loss per
share.
**Before rounding to whole cents, dilution is less than 3%.
</TABLE>
