<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 July 31, 1997
[ ] 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 1-8722
THE MACNEAL-SCHWENDLER CORPORATION
----------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 95-2239450
- ------------------------------- -------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
815 COLORADO BOULEVARD, LOS ANGELES, CALIFORNIA 90041
-----------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number (213) 258-9111
-------------------
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 Registrant's Common Stock, par value $.01
per share, was 13,567,530 shares at September 9, 1997.
<PAGE>
THE MACNEAL-SCHWENDLER CORPORATION
INDEX
Page No.
--------
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets - July 31, 1997 (Unaudited)
and January 31, 1997. . . . . . . . . . . . . . . . . . . .3
Consolidated Statements of Income (Unaudited)
Three and Six Months Ended July 31, 1997 and 1996 . . . . .4
Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended July 31, 1997 and 1996 . . . . . . . . . .5
Notes to Consolidated Financial Statements
(Unaudited) . . . . . . . . . . . . . . . . . . . . . . . .6
Item 2.
Management's Discussion and Analysis of Results of Operations
and Financial Condition . . . . . . . . . . . . . . . . . .8
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security-Holders . . . 12
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . 13
<PAGE>
THE MACNEAL-SCHWENDLER CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JULY 31, JANUARY 31,
1997 1997
------------- --------------
ASSETS (UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 20,216,000 $ 24,016,000
Short-term investments 6,042,000 1,052,000
Trade accounts receivable, net 33,502,000 36,328,000
Other current assets 8,041,000 8,884,000
------------- --------------
Total current assets 67,801,000 70,280,000
Property and equipment, net 9,723,000 10,242,000
Capitalized software costs, net 28,377,000 28,173,000
Goodwill and other intangibles, net 15,114,000 16,265,000
Other assets 3,061,000 2,862,000
------------- --------------
$ 124,076,000 $ 127,822,000
------------- --------------
------------- --------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,621,000 $ 2,248,000
Accrued liabilities 20,573,000 25,968,000
Deferred income 8,609,000 9,035,000
------------- --------------
Total current liabilities 30,803,000 37,251,000
Deferred income taxes 9,667,000 10,465,000
Convertible subordinated debentures 56,574,000 56,574,000
Commitments
Shareholders' equity:
Preferred stock, $0.01 par value, 10,000,000
shares authorized; no shares outstanding
at July 31, 1997 or January 31, 1997 -- --
Common stock, $0.01 par value,
100,000,000 shares authorized;
13,557,000 and 13,456,000 issued and
outstanding at July 31, 1997 and
January 31, 1997, respectively 30,953,000 30,250,000
Retained earnings (deficit) 291,000 (4,093,000)
Accumulated translation adjustment (4,212,000) (2,625,000)
------------- --------------
Total shareholders' equity 27,032,000 23,532,000
------------- --------------
$ 124,076,000 $ 127,822,000
------------- --------------
------------- --------------
See accompanying notes.
</TABLE>
3
<PAGE>
THE MACNEAL-SCHWENDLER CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JULY 31, SIX MONTHS ENDED JULY 31,
--------------------------------- ---------------------------------
1997 1996 1997 1996
------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Software licenses $ 24,603,000 $ 26,360,000 $ 50,027,000 $ 53,222,000
Software maintenance and services 7,689,000 6,197,000 14,201,000 11,356,000
------------- ------------- ------------- --------------
Total revenues 32,292,000 32,557,000 64,228,000 64,578,000
Operating expenses:
Cost of revenue 6,042,000 4,780,000 12,027,000 9,709,000
Amortization of goodwill and other intangibles 567,000 545,000 1,134,000 1,134,000
Research and development 2,817,000 6,256,000 6,098,000 11,194,000
Selling, general and administrative 18,103,000 16,875,000 36,102,000 34,597,000
------------- ------------- ------------- --------------
Total operating expenses 27,529,000 28,456,000 55,361,000 56,634,000
Operating income 4,763,000 4,101,000 8,867,000 7,944,000
Debenture interest (1,114,000) (1,114,000) (2,228,000) (2,228,000)
Other income (expense), net 75,000 (246,000) 3,000 (491,000)
------------- ------------- ------------- --------------
Income before income taxes 3,724,000 2,741,000 6,642,000 5,225,000
Provision for income taxes 1,266,000 891,000 2,258,000 1,698,000
------------- ------------- ------------- --------------
Net income $ 2,458,000 $ 1,850,000 $ 4,384,000 $ 3,527,000
------------- ------------- ------------- --------------
------------- ------------- ------------- --------------
Primary earnings per share $ 0.18 $ 0.14 $ 0.32 $ 0.26
------------- ------------- ------------- --------------
------------- ------------- ------------- --------------
Weighted average number of
common shares outstanding 13,641,000 13,477,000 13,591,000 13,522,000
------------- ------------- ------------- --------------
------------- ------------- ------------- --------------
</TABLE>
4
<PAGE>
THE MACNEAL-SCHWENDLER CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JULY 31
-------------------------------
1997 1996
------------ -------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,384,000 $ 3,527,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization of property and equipment 2,885,000 3,127,000
Amortization of goodwill and other intangibles 1,134,000 1,134,000
Amortization of capitalized software costs 5,915,000 3,582,000
Deferred income taxes (798,000) -
Loss on disposal of property and equipment 13,000 8,000
Changes in assets and liabilities:
Accounts receivable, net 2,826,000 549,000
Other current assets 843,000 (125,000)
Accounts payable (627,000) (426,000)
Accrued liabilities (5,396,000) (937,000)
Deferred income (426,000) 499,000
Restructuring reserve - (1,132,000)
Income taxes payable 1,000 (493,000)
------------ ------------
Net cash provided by operating activities 10,754,000 9,313,000
Cash flows from investing activities:
(Increase) decrease in short-term investments (4,990,000) 2,284,000
Acquisition of property and equipment (2,379,000) (2,409,000)
Proceeds from sale of Electronics Business Unit - 5,600,000
Purchase of subsidiary, net of cash acquired - (115,000)
Purchase of software (51,000) -
Capitalized software costs (6,067,000) (4,483,000)
Increase in other assets (183,000) (233,000)
------------ ------------
Net cash (used in) provided by investing activities (13,670,000) 644,000
Cash flows from financing activities:
Proceeds from capital stock issued 703,000 156,000
Payments of long-term debt - (1,000)
Cash dividends paid - (4,303,000)
------------ ------------
Net cash provided by (used in) financing activities 703,000 (4,148,000)
Effect of exchange rate changes on cash (1,587,000) 1,292,000
------------ ------------
Net (decrease) increase in cash and cash equivalents (3,800,000) 7,101,000
Cash and cash equivalents at beginning of period 24,016,000 7,235,000
------------ ------------
Cash and cash equivalents at end of period $ 20,216,000 $ 14,336,000
------------ ------------
------------ ------------
</TABLE>
See accompanying notes.
5
<PAGE>
THE MACNEAL-SCHWENDLER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited consolidated financial information is condensed
from that which would appear in the annual financial statements and should be
read in conjunction with the consolidated financial statements included in The
MacNeal-Schwendler Corporation's Annual Report on Form 10-K for the year ended
January 31, 1997.
Supplemental cash flow information for taxes paid during the six months
ended July 31, 1997 and 1996 were $2,257,000 and $2,159,000, respectively.
Additionally, the Company paid interest of $2,227,000 on its Convertible
Subordinated Debentures due 2004 during both six month periods ended July 31,
1997 and July 31, 1996, respectively.
Fully-diluted earnings per share calculated under the treasury method were
anti-dilutive for the three and six months ended July 31, 1997 and for the same
periods ended July 31, 1996. Fully-diluted earnings per share under the
treasury method are calculated by dividing net income by the weighted average
number of shares of common stock outstanding during the period, adjusted for the
pro forma effects of stock option exercises and debenture conversions.
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share." SFAS
No. 128 establishes a different method of computing earnings per share than is
currently required under the provisions of Accounting Principles Board Opinion
No. 15. Under SFAS No. 128, the Company will be required to present both basic
earnings per share and diluted earnings per share. Basic earnings per share for
the three and six months ended July 31, 1997 would have been $0.18 and $0.32,
respectively, $0.14 and $0.26 for the same periods of 1996. Diluted earnings
per share for the three and six months ended July 31, 1997 and 1996 would have
been anti-dilutive. The Company plans to adopt SFAS No. 128 in its fourth
quarter of the current fiscal year, and at that time all historical earnings per
share data presented will be restated to conform to the provisions of SFAS No.
128.
All interim financial data is unaudited but, in the opinion of management,
reflects all adjustments necessary for a fair presentation thereof. However, it
should be understood that accounting measurements at interim dates may be less
precise than at year end. Operating results for the six months ended July 31,
1997 are not necessarily indicative of the results that may be expected for the
year ended January 31, 1998.
Certain reclassifications have been made to the financial information for
the three months and six months ended July 31, 1996 in order to conform to the
July 31, 1997 presentation.
NOTE 2: CAPITALIZED SOFTWARE
The components of net capitalized software costs were as follows:
<TABLE>
<CAPTION>
Three Months Ended July 31, Six Months Ended July 31,
--------------------------- -------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Software costs capitalized $(3,190,000) $(2,038,000) $(6,067,000) $(4,483,000)
Amortization of capitalized software 3,038,000 1,721,000 5,915,000 3,582,000
--------- --------- --------- ----------
Net capitalized software costs $ (152,000) $ (317,000) $ (152,000) $ (901,000)
------------ ------------ ------------ -----------
------------ ------------ ------------ -----------
</TABLE>
Amortization expense associated with capitalized software costs is reported in
cost of revenue, and capitalization of software costs is reported as a reduction
of research and development expense.
6
<PAGE>
NOTE 3: ACCRUED LIABILITIES
The components of accrued liabilities are as follows:
July 31, January 31,
1997 1997
---- ----
Compensation and related expenses $6,332,000 $6,845,000
Commissions payable 2,297,000 3,958,000
Debenture interest payable 1,688,000 1,687,000
Contribution to profit sharing plan 1,541,000 3,107,000
Post-retirement benefits 1,765,000 1,551,000
Income taxes payable 784,000 783,000
Royalties payable 540,000 911,000
Sales taxes payable 530,000 3,552,000
Incentive compensation 21,000 224,000
Stock purchase plan - 216,000
Other 5,075,000 3,134,000
----------- ------------
$20,573,000 $ 25,968,000
----------- ------------
----------- ------------
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
THREE MONTHS ENDED JULY 31, 1997 VS. THREE MONTHS ENDED JULY 31, 1996
Consolidated revenues were $32,292,000 in the second quarter, compared to
revenues of $32,557,000 in the second quarter of the prior fiscal year.
Current-quarter revenues were adversely affected by the sale of the MSC/EMAS
product line in the second quarter of the prior fiscal year. If MSC/EMAS
revenues were excluded from prior year revenues, consolidated second quarter
revenues would have increased by 4% in the current year. In addition, second
quarter revenues, measured in U.S. dollars, were adversely affected by the
strengthening of the U.S. dollar against the Japanese yen and German mark
compared to the same quarter last year. Had the U.S. dollar remained at the
same foreign exchange levels as the prior year, consolidated second quarter
revenues would have been higher by approximately $1,881,000, or 6%. The amount
of service revenue was not material to total revenues for the quarters ended
July 31, 1997 and July 31, 1996.
Excluding prior year MSC/EMAS revenues, Asia Pacific and European revenues,
measured in local currency, increased by 16% and 10%, respectively, and the
Americas revenues increased by 5%. On a geographical basis, the Americas
represented 44%, Europe represented 28%, and Asia Pacific represented 28% of
total revenues for the quarter.
Cost of revenue increased $1,262,000, or 26%, entirely as a result of an
increase in the amortization of capitalized software costs compared to the
second quarter of the prior fiscal year. Royalty expense is included in cost of
revenue and paid to third parties under various agreements. The Company does
not consider any royalty expense related to individual agreements to be
material. Research and development costs, which are reported net of capitalized
software costs, decreased $3,439,00, or 55%, due to several factors. In the
second quarter, the amount of research and development costs capitalized
increased by $1,152,000 compared to the second quarter of the prior year, due to
the increased level of new product development in the current quarter. The
amount of research and development costs capitalized fluctuates from quarter to
quarter, depending in part on the number of products and their stage of
development. Software capitalization consists primarily of the costs of writing
code and quality assurance testing. Excluding software capitalization, the
decrease in research and development expenses was 28%, due mostly to changes in
development staffing and exchange rate fluctuations that reduced overseas
development expenses measured in dollars. In the second quarter, the amount of
selling, general and administrative costs increased by $1,228,000 worldwide
compared to the same period of the prior year, due to increased staffing
resulting from the build-up of infrastructure and increased related expenses
from that growth. The resulting changes as described above generated an overall
decrease in operating expenses of 3%, to $27,529,000, compared to the same
quarter last year.
The Company's resulting operating income for the quarter ended July 31,
1997 was $4,763,000, a 16% increase from operating income of $4,101,000 during
the second quarter last year. The net effect of the capitalization of software
development costs and the amortization of such capitalized costs was a net
benefit of $152,000 for the three months ended July 31, 1997, compared to a net
benefit of $317,000 for the three months ended July 31, 1996. Excluding net
software capitalization, operating income for the three months ended July 31,
1997 rose 22% compared to the three months ended July 31, 1996.
Other income includes interest income, investment income, foreign exchange
gain/loss and other income. The increase in other income for the quarter
ended July 31, 1997, compared to the same period last year, was
predominantly due to an increase in interest income. The Company did not
experience a material foreign currency transaction gain or loss during the
quarters ended July 31, 1997 and July 31, 1996.
8
<PAGE>
Net income was $2,458,000 compared to net income of $1,850,000 in the prior
year, an increase of 33%. Primary earnings per share for the three months ended
July 31, 1997 were $0.18 compared to $0.14 for the three months ended July 31,
1996. The stronger U.S. dollar had an adverse effect on second quarter
earnings. Had exchange rates for the three months ended July 31, 1997 remained
the same as for the three months ended July 31, 1996, net income and primary
earnings per share would have been higher by $628,000 and $0.04, respectively.
SIX MONTHS ENDED JULY 31, 1997 VS. SIX MONTHS ENDED JULY 31, 1996
Consolidated revenues were $64,228,000 for the six months ended July
31,1997 compared to revenues of $64,578,000 for the same period of the prior
fiscal year. Current year to date revenues were adversely affected by the sale
of the MSC/EMAS product line in the second quarter of the prior fiscal year. If
MSC/EMAS revenues were excluded from prior year revenues, consolidated second
quarter revenues would have increased by 3% in the current year. In addition,
year to date revenues, measured in U.S. dollars, were adversely affected by the
strengthening of the U.S. dollar against the Japanese yen and German mark
compared to the same period last year. Had the U.S. dollar remained at the
same foreign exchange levels as the prior year, consolidated year to date
revenues would have been higher by approximately $4,076,000, or 6%. The amount
of service revenue was not material to total revenues for the six months ended
July 31, 1997 and July 31, 1996.
Excluding prior year MSC/EMAS revenues, Asia Pacific and European revenues,
measured in local currency, increased by 17% and 6%, respectively, and the
Americas revenues increased by 8%. On a geographical basis, the Americas
represented 42%, Europe represented 30%, and Asia Pacific represented 28% of
total revenues for the six month period ended July 31, 1997.
Cost of revenue increased $2,318,000, or 24%, entirely as a result of an
increase in the amortization of capitalized software costs compared to the six
month period of the prior fiscal year. Royalty expense is included in cost of
revenue and paid to third parties under various agreements. The Company does
not consider any royalty expense related to individual agreements to be
material. Research and development costs, which are reported net of capitalized
software costs, decreased $5,096,000, or 46%, due to several factors. In the
six month period, the amount of research and development costs capitalized
increased by $1,584,000 compared to the same period of the prior year, due to
the increased level of new product development in the current six month period.
The amount of research and development costs capitalized fluctuates from period
to period, depending in part on the number of products and their stage of
development. Software capitalization consists primarily of the costs of writing
code and quality assurance testing. Excluding software capitalization, the
decrease in research and development expenses was 22%, due mostly to changes in
development staffing and exchange rate fluctuations that reduced overseas
development expenses measured in dollars. In the six month period, the amount of
selling, general and administrative costs increased by $1,505,000 worldwide
compared to the same period of the prior year, due to increased staffing
resulting from the build-up of infrastructure and increased related expenses
from that growth. The resulting changes as described above generated an overall
decrease in operating expenses of 2%, to $55,361,000, compared to the same
quarter last year.
The Company's resulting operating income for the six months ended July 31,
1997 was $8,867,000, a 12% increase from operating income of $7,944,000 during
the same period of last year. The net effect of the capitalization of software
development costs and the amortization of such capitalized costs was a net
benefit of $152,000 for the six months ended July 31, 1997, compared to a net
benefit of $901,000 for the six months ended July 31, 1996. Excluding net
software capitalization, operating income for the six months ended July 31, 1997
rose 24% compared to the six months ended July 31, 1996.
9
<PAGE>
Other income includes interest income, investment income, foreign exchange
gain/loss and other income. The increase in other income for the six months
ended July 31, 1997, compared to the same period of last year, was predominantly
due to an increase in interest income. The Company did not experience a
material foreign currency transaction gain or loss during the six months ended
July 31, 1997 and July 31, 1996.
Net income was $4,384,000 compared to net income of $3,527,000 in the prior
year, an increase of 24%. Primary earnings per share for the six months ended
July 31, 1997 were $0.32 compared to $0.26 for the six months ended July 31,
1996. The stronger U.S. dollar had an adverse effect on earnings. Had exchange
rates for the six months ended July 31, 1997 remained the same as for the six
months ended July 31, 1996, net income and primary earnings per share would have
been higher by $1,390,000 and $0.10, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Historically, working capital needed to finance the Company's operations
and growth has been provided by cash on hand and cash flow from operations.
Management believes that cash generated from operations will continue to be
sufficient for working capital needs in the foreseeable future. Net cash from
operating activities was $10,754,000 in the six months ended July 31, 1997,
compared with $9,313,000 during the comparable period of the prior year. Cash
and short-term investments were $26,258,000 at July 31, 1997 compared to
$25,068,000 at January 31, 1997. The increase in cash and short-term
equivalents was a composite result of the Company's normal business cycle. The
Company generally experiences an increase in cash during the first six months
of a fiscal year resulting from cash receipts related to strong year-end sales
activity. The Company's working capital was $36,998,000 at July 31, 1997, an
increase from $33,029,000 at January 31, 1997. The Company has an agreement
for a $15,000,000 unsecured line of credit with its principal bank at the
prevailing prime rate. No amounts were outstanding under this agreement at
July 31, 1997.
The Company issued convertible subordinated debentures in connection with
the PDA acquisition in the aggregate amount of approximately $56,608,000. The
debentures bear interest at 7-7/8%, with interest payments due semi-annually in
March and September. A debenture interest payment of $2,226,000 was made in
March 1997. The amount of interest will decrease if the debentures are
converted into common stock. The debentures mature in August 2004.
Management expects to continue to reinvest the Company's revenues in the
research and development of new computer software products and the enhancement
of existing products. Total research and development costs were $12,013,000 and
$14,776,000 for the six months ended July 31, 1997 and July 31, 1996,
respectively, of which $5,915,000 and $3,582,000 were capitalized. Product
development costs and the capitalization rate vary depending in part on the
number of products in process and the stage of development of those products.
During the six months ended July 31, 1997 and July 31, 1996, the Company
acquired $2,379,000 and $2,409,000, respectively, of new property and equipment.
Capital expenditures during the current and prior fiscal years included upgrades
to computer equipment and facilities worldwide. The Company's capital
expenditures vary from year to year as required by business needs. The Company
intends to continue to expand the capabilities of its computer equipment, which
is used in the development and support of its proprietary software products.
Management expects overall expenditures for property and equipment in fiscal
years 1998 and 1999 to be consistent with those for the fiscal year ended
January 31, 1997.
10
<PAGE>
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain information in the Management's Discussion and Analysis of Results
of Operations and Financial Condition contained in this Form 10-Q includes
information that is forward looking. Such forward-looking statements include,
among others, statements concerning the Company's international expansion,
expected trends in revenue and operating expense, capital expenditure plans,
expectations regarding future liquidity, and other statements of expectations,
beliefs, future plans and strategies, anticipated events or trends, and similar
expressions concerning matters that are not historical fact.
The forward-looking statements in this report are based on current
expectations and are subject to risks and uncertainties that could cause actual
results to differ materially from those expressed or implied by those
statements. The risks and uncertainties include but are not limited to: the
timely development and market acceptance of new versions of the Company's
software products; the impact of competitive products and pricing; effective
development and utilization of the Company's offshore projects (currently in
Taiwan and India); successful involvement of international and domestic business
partners in creating mechanical engineering solutions; the level of economic
activity in the U.S. and abroad; fluctuations of the U.S. dollar versus foreign
currencies; timely development of CAE technologies which, among other things,
must accommodate industry trends such as increasing computing power and
increased usage of workstations; the Company's ability to reduce costs without
adversely impacting revenues; the Company's ability to attract, motivate and
retain salespeople, programmers and other key personnel; continued demand for
the Company's products, including MSC/NASTRAN, MSC/PATRAN, MSC/ARIES,
MSC/MVISION, MSC/DYTRAN, MSC/FEA, MSC/SuperModel, MSC/FATIGUE, MSC/NVH_Manager,
MSC/DropTest, MSC/CONSTRUCT, MSC/InCheck and MSC/NASTRAN FOR WINDOWS; and such
risks and uncertainties as are detailed from time to time in the Company's other
Securities and Exchange Commission reports and filings.
Subsequent written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are hereby expressly qualified in their
entirety by the cautionary statements in this section of this Form 10-Q.
11
<PAGE>
THE MACNEAL-SCHWENDLER CORPORATION
PART II: OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders.
(a) On June 11, 1997, the annual meeting to the stockholders of the
Company was held for the purpose of voting on the election of
directors, class III, approval of the Company's 1996 employee
stock purchase plan, shareholder proposal A as set forth and
described in the proxy statement, shareholder proposal B as set
forth and described in the proxy statement and the ratification
of Ernst & Young LLP as independent auditors of the Company.
(b) The following matters were approved by the stockholders of the
Company. The following votes were cast with respect to each
proposal:
(i) Election of Directors(1):
Director Votes Cast
-------- ---------------------------------
For Withheld Abstain
--- -------- -------
Dale D. Myers 11,738,243 939,848 N/A
Arthur H. Reidel 11,775,943 902,148 N/A
(ii) Approval of the Company's 1996 Employee Stock Purchase Plan:
Votes Cast
------------------------------------------------------
For Against Abstain Broker Non-Votes
------------------------------------------------------
9,938,845 491,475 81,061 2,166,710
(iii) Ratification of Independent Auditors:
Votes Cast
------------------------------------------------------
For Against Abstain Broker Non-Votes
------------------------------------------------------
12,310,891 23,514 7,954 335,732
(c) The following matters were not approved by the stockholders of
the Company. The following votes were cast with respect to each
proposal:
(i) Shareholder Proposal A as set forth and described in the
proxy statement:
Votes Cast
------------------------------------------------------
For Against Abstain Broker Non-Votes
------------------------------------------------------
4,089,231 6,278,994 111,345 2,198,521
(ii) Shareholder Proposal B as set forth and described in the
proxy statement:
Votes Cast
------------------------------------------------------
For Against Abstain Broker Non-Votes
------------------------------------------------------
4,368,897 6,008,618 102,055 2,198,521
- --------------------
(1) There were no broker non-votes for this proposal.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibit 27 - Financial Data Schedule
(b) The Company did not file any Current Reports on Form 8-K during the quarter
ended July 31, 1997.
SIGNATURE
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 MACNEAL-SCHWENDLER CORPORATION
----------------------------------
(Registrant)
Date: SEPTEMBER 12, 1997
-------------------
/s/ LOUIS A. GRECO
-------------------------------
Louis A. Greco, Chief Financial Officer
(Mr. Greco is the Principal Financial
and Accounting Officer and has been duly
authorized to sign on behalf of the
registrant.)
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
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0
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