UNITED STATES
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 June 30, 1995
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 0-132-58
---------------
BOOLE & BABBAGE, INC.
----------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 94- 1651571
-------- -----------
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
3131 Zanker Road, San Jose, California 95134-1933
-------------------------------------------------
(Address of principal executive offices)
Registrant's Telephone number, including area code: 408-526-3000
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___
7,156,552 shares of common stock of the Registrant were outstanding as of July
31, 1995.
<PAGE>
BOOLE & BABBAGE, INC.
INDEX
Part I FINANCIAL INFORMATION Page No.
Item 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets
June 30, 1995 and September 30, 1994 1
Consolidated Statements of Income
Three and Nine Months Ended June 30, 1995 and 1994 2
Consolidated Statements of Cash Flows
Nine Months Ended June 30, 1995 and 1994 3
Notes to Consolidated Financial Statements 4
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Nine Months Ended June 30, 1995, and 1994
Three Months Ended June 30, 1995 and 1994 5-11
Part II OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K 12
Signatures 13
<PAGE>
<TABLE>
BOOLE & BABBAGE, INC.
Consolidated Balance Sheets
(Amounts in thousands except shares)
(June 30, 1995 unaudited)
<CAPTION>
June 30, September 30,
1995 1994
-------- --------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $38,616 $34,019
Accounts receivable, net 22,520 23,180
Installment and other receivables, net 24,282 18,251
Deferred tax assets 5,099 4,959
Prepaid expenses and other current assets 5,773 3,199
-------- --------
Total current assets 96,290 83,608
Purchased and internally developed software, net 12,948 14,276
Equipment, furniture and leasehold improvements, net 7,924 8,506
Long term installment and other receivables 26,681 20,011
Long term deferred tax assets 2,316 2,284
Costs in excess of net assets of purchased businesses, net 693 713
Other assets 2,156 2,228
-------- --------
Total assets $149,008 $131,626
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $5,874 $6,762
Accrued payroll expense 6,729 6,603
Other accrued liabilities 15,597 16,835
Notes payable due within one year 753 1,171
Capital lease obligations due within one year 1,663 2,045
Deferred maintenance revenue 38,895 34,174
-------- --------
Total current liabilities 69,511 67,590
Notes payable due after one year 675 1,177
Capital lease obligations due after one year 909 1,903
Deferred maintenance revenue due after one year 16,347 12,731
Minority interest - 61
Stockholders' equity:
Preferred stock, 2,000,000 shares authorized, $.001 par value, - -
Common stock, $.001 par value, authorized--15,000,000 shares;
issued 7,593,653 (7,368,378 at September 30, 1994) 7 7
Additional paid-in capital 26,270 23,844
Retained earnings 38,772 28,724
Unrealized (loss) gain on marketable securities (44) 170
Foreign currency translation adjustment 1,046 (96)
Less treasury stock, 455,550 shares, at cost (4,485) (4,485)
-------- --------
Total stockholders' equity 61,566 48,164
-------- --------
Total liabilities and stockholders' equity $149,008 $131,626
======== ========
<FN>
See accompanying notes.
</TABLE>
1
<PAGE>
<TABLE>
BOOLE & BABBAGE, INC.
Consolidated Statements of Income
(Amounts in thousands, except net income per share)
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
------------------- -------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenue:
Product licensing $ 18,755 $ 16,221 $ 58,240 $ 46,765
Maintenance fees 17,888 16,171 52,494 47,421
Services and other 725 637 2,460 1,983
-------- -------- -------- --------
Total revenue 37,368 33,029 113,194 96,169
-------- -------- -------- --------
Costs and expenses:
Cost of sales 4,986 3,659 15,528 12,279
Product development and support 5,872 6,219 17,676 18,118
Sales and marketing 20,145 16,872 57,431 45,701
General and administrative 3,006 3,414 10,975 10,556
Purchased R&D expense -- 3,251 -- 3,251
-------- -------- -------- --------
Total costs and expenses 34,009 33,415 101,610 89,905
-------- -------- -------- --------
Operating income (loss) 3,359 (386) 11,584 6,264
Interest and other income, net 1,037 719 2,784 1,410
-------- -------- -------- --------
Income before provision for income taxes 4,396 333 14,368 7,674
Provision for income taxes 1,230 105 4,320 2,380
-------- -------- -------- --------
Net income $ 3,166 $ 228 $ 10,048 $ 5,294
======== ======== ======== ========
Net income per share $ 0.41 $ 0.03 $ 1.31 $ 0.74
======== ======== ======== ========
Shares used in per share calculations 7,775 7,270 7,650 7,165
======== ======== ======== ========
<FN>
See accompanying notes.
</TABLE>
2
<PAGE>
<TABLE>
BOOLE & BABBAGE, INC.
Consolidated Statements of Cash Flows
(Amounts in thousands) (Unaudited)
<CAPTION>
Nine Months Ended
June 30,
---------------------------
1995 1994
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 10,048 $ 5,294
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, amortization and write-off of capitalized software 7,129 9,531
Stock issued under compensatory stock plans 96 98
Minority interest (61) (90)
Changes in operating assets and liabilities:
Accounts receivable and installment and other receivables (10,238) (12,383)
Prepaid expenses and other assets (2,117) (615)
Accounts payable and accrued expenses (2,958) 8,488
Deferred maintenance revenue 6,970 (888)
-------- --------
Net cash provided by operating activities 8,869 9,435
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in minority interests (344) (746)
Purchases of equipment, furniture and leasehold improvements (2,527) (2,027)
Payments for purchased and internally developed software (2,314) (5,542)
-------- --------
Net cash used for investing activities (5,185) (8,315)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of lease contracts receivable -- 6,376
Proceeds from issuance of common stock 2,329 3,557
Treasury stock purchase -- (705)
Payments on notes payable (936) (1,205)
Payments on capital leases (1,480) (1,497)
-------- --------
Net cash provided by financing activities (87) 6,526
-------- --------
Effect of exchange rate changes on cash 1,000 1,037
-------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS 4,597 8,683
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 34,019 23,726
-------- --------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 38,616 $ 32,409
======== ========
Supplemental disclosures of cash flow information:
Cash paid during the period
for:
Interest $ 900 $ 1,146
Income taxes, net of refunds $ 2,760 $ 1,040
Supplemental disclosures of noncash investing and financing activities:
In April 1995, capital lease obligations of $103,000 were incurred when the
Company entered into a lease for certain computer equipment
<FN>
See accompanying notes.
</TABLE>
3
<PAGE>
BOOLE & BABBAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The accompanying consolidated financial statements include the accounts of
all subsidiaries after the elimination of all significant inter-company
items and transactions.
A summary of the significant accounting policies of the Company is included
in Note 1 of Notes to Consolidated Financial Statements in the Company's
annual report on Form 10-K for the year ended September 30, 1994. These
consolidated financial statements should be read in conjunction with those
notes.
The consolidated financial information at June 30, 1995 and for the three
and nine-month periods ended June 30, 1995 and 1994 is unaudited. The
statements in this report include all adjustments of a normal recurring
nature. In the opinion of management, these adjustments are necessary for a
fair statement of the interim results for the periods presented. The
interim results are not necessarily indicative of the results for the full
year.
<TABLE>
2. Net Income Per Share
Net income per common share is computed by adding to the weighted average
number of common shares outstanding during the period the number of
dilutive common shares that would be issuable upon the exercise of
outstanding options using the treasury stock method of computation. Fully
diluted net income per share is not disclosed because it is not materially
different from primary net income per share.
<CAPTION>
(Amounts in thousands, except 3 mos ended June 30, 9 mos ended June 30,
net income per share) 1995 1994 1995 1994
-------- -------- ---------- -------
<S> <C> <C> <C> <C>
Primary:
Common shares outstanding 7,115 6,763 7,017 6,622
Employee stock option plans 660 507 633 543
------- ------- --------- -------
7,775 7,270 7,650 7,165
======= ======= ========= =======
Net income $ 3,166 $ 228 $ 10,048 $5,294
======= ======= ========= =======
Net income per share $.41 $.03 $1.31 $.74
======= ======= ========= =======
</TABLE>
3. Contingencies
The Company is involved in certain legal actions and claims arising in the
ordinary course of business. Management believes that such litigation and
claims will be resolved without material adverse effect on the Company's
financial position or results of operations.
4
<PAGE>
BOOLE & BABBAGE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS: Nine Months ended June 30, 1995
REVENUES:
The Company derives its revenues primarily from the licensing of computer
software programs and the sales of software maintenance services. The Company
also generates revenue from computer services and other sources, although to a
much lesser degree. Total revenue for the nine months ended June 30, 1995
increased over the same period in the prior year by 17.7%.
% of Revenue
----------------------- Year-to-Year
1995 1994 % Change
-------------------------------------
Product licensing 51.4% 48.6% 24.5%
Maintenance fees 46.4% 49.3% 10.7%
Services and other 2.2% 2.1% 24.1%
-------------------------------------
Total 100.0% 100.0% 17.7%
=====================================
Product licensing:
The Company licenses its products to customers for use on their computer
systems. Product licensing accounted for 51.4% or $58,240,000 of total revenue
in 1995, compared to 48.6% or $46,765,000 in 1994 and increased by 24.5% in 1995
compared to 1994. As is common in the industry, more than 50% of the Company's
license revenue is derived from transactions that close in the last month of a
quarter, which can make quarterly revenues difficult to forecast. And, since
operating expenses are relatively fixed, failure to achieve projected revenues
could materially and adversely affect the Company's operating results. This, in
turn, could result in an immediate and adverse effect on the market price of the
Company's stock.
Products:
The product area with the highest growth rate so far in 1995 is the
client/server group which has grown by 50.5% comprising 11.6% of the total
licensing revenue. The Company anticipates that this group will continue to show
high growth rates for the remainder of fiscal 1995 as new products such as
Ensign and Stage3 begin to produce greater revenue. However, these two new
products have taken longer to rollout than originally planned and the Company
competes with certain firms who have greater resources along with products
already in the marketplace. In addition, the Company is dependent on the
client/server market developing at a rapid rate despite recent reports by
industry analysts that implementation of client/server networks may be more
expensive and time-consuming than users had anticipated, which could potentially
slow the growth of the market. Due to these factors, there can be no assurances
that these new products will
5
<PAGE>
BOOLE & BABBAGE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
achieve significant market acceptance or competitive success and thus contribute
to revenue growth. The Company currently derives approximately 88% of its
licensing revenue from mainframe-based technology. Plex products, which have
grown 9.2% so far in 1995, enable customers to handle large groups of computer
processors, particularly the new parallel processing machines recently
introduced by IBM. The Company's licensing growth rates could be materially and
adversely impacted if these new parallel processors do not gain significant
market acceptance and customer spending shifts away from traditional mainframes
to technology platforms where the Company does not have significant product
acceptance. Traditional mainframe products have grown 27.8% principally as a
result of built-up demand for mainframes combined with customer budget years
ending in December along with the beginning of new budget years in January, both
of which tended to make funds available for higher levels of customer purchases,
including several larger deals, in the first half of 1995. Management does not
expect the growth rate to be this high on traditional mainframe products in the
future.
Markets:
% of Licensing
---------------------- Year-to-Year
1995 1994 % Change
--------------------------------------
Domestic 29.2% 35.6% 2.3%
International 70.8% 64.4% 36.8%
--------------------------------------
100.0% 100.0% 24.5%
--------------------------------------
Domestic:
Total domestic licensing revenues have grown 2.3% in 1995 as the telesales group
grew 9.2% while the field sales group was up 2.5%. There has been solid growth
in client/server and traditional mainframe products mostly offset by a decrease
on plex products. For growth to continue in this geographic market, the Company
is dependent on increased productivity from both the field sales force and the
telesales group.
International:
In 1995 the Company's revenues from its international operations, comprised of
foreign subsidiaries and marketing agents, increased 36.8% due primarily to the
economic recovery in Europe and continued growth in the Far East, particularly
in Japan. Without the effect of favorable currency rate changes, international
licensing grew 23.2% in 1995. Since the majority of new license revenue is
derived from international markets, the Company's operations and financial
results could be significantly and adversely affected by international factors
such as changes in currency exchange rates and specific countries' political and
economic circumstances. The Company has implemented an economic
6
<PAGE>
BOOLE & BABBAGE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
hedging program to attempt to reduce its exposure to currency fluctuations for a
portion of its anticipated intercompany royalty transactions for the next four
quarters. As a result of this strategy, the Company has recognized less benefit
from continued weakness in the U.S. dollar than if no hedging programs were
undertaken.
For growth to continue in both of the above geographic markets, the Company is
dependent on the traditional mainframe products remaining relatively stable with
overall growth resulting from the plex and client/server groups achieving higher
growth rates than shown in the nine months of the year. The Company is also
dependent on closing larger-size transactions as occurred in the first two
quarters of this year.
Maintenance fees:
Maintenance revenue is generated from services the Company provides including
technical support, product enhancements, system updates and user documentation.
Maintenance revenue also includes the first year of maintenance services which
is included in the initial charge when the Company licenses its software
products under a long-term agreement. Thereafter on each anniversary date of the
license, the customer may elect to renew its maintenance contract with the
Company. Customers may also elect to purchase advance maintenance at the time of
product licensing for maintenance periods beyond the first year.
Maintenance revenue has grown 10.7% in 1995 accounting for 46.4% and 49.3% of
total revenues in 1995 and 1994, respectively. Without the effect of currency
rate changes, maintenance revenue grew 4.4%. This increase is mainly the result
of increased product licensing in the previous year combined with high renewal
rates but reduced by higher discounts granted on multiple-year maintenance
packages purchased by customers.
The Company anticipates that maintenance revenues in fiscal 1995 will continue
to increase due to the higher license revenue growth in 1994, although it will
be negatively impacted by reduced revenue associated with site consolidations,
non-CPU specific pricing and multiple-year maintenance package discounts. In
addition, to produce maintenance revenue increases, the Company must continue to
generate new product licensing revenues and continue to provide high quality
maintenance support and upgrades.
Services and Other:
Revenue derived from computer services, educational services and other comprised
2.2% and 2.1% of total revenues for 1995 and 1994, respectively. The increase of
24.1% is attributable primarily to more international consulting revenue
partially offset by decreased computer service revenue as this service is no
longer actively marketed.
7
<PAGE>
BOOLE & BABBAGE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
COSTS AND EXPENSES:
% of Revenue
-------------------- Year-to-Year
1995 1994 % Change
-------------------------------------
Cost of sales 13.7% 12.8% 26.5%
Product development and support 15.6% 18.8% (2.4%)
Sales and marketing 50.8% 47.5% 25.7%
General and administrative 9.7% 11.0% 4.0%
Purchased R&D expense -- 3.4% N/A
-------------------------------------
Total 89.8% 93.5% 13.0%
=====================================
Cost of sales:
Cost of sales consists primarily of royalties paid to independent software
authors, amortization of purchased and internally developed software, the cost
of hardware associated with sales of client/server products and costs related to
operating the computer services division. Cost of sales increased by 26.5% in
1995 and represented 13.7% and 12.8% of revenues for 1995 and 1994,
respectively. Without the effect of currency rate changes, the increase would be
16.5%. The increase in 1995 is primarily attributable to increased royalties on
higher third-party revenue in Europe and Japan which was partially offset by
lower maintenance royalties payable to one of the third-party vendors in Europe.
This decrease resulted from a new contract with that vendor which significantly
reduced the royalty rate on maintenance billings through fiscal 1996. Software
amortization increased from the combination of 1994's Sysnet acquisition, a
large number of product releases at the end of 1994, and the write-down of
certain software products. In general, the relationship of cost of sales to
revenue will fluctuate due primarily to changes in revenue mix, royalty
agreements and amortization of capitalized software.
Product development and support:
Product development and support costs decreased by 2.4% in 1995 and represented
15.6% and 18.8% of revenues for 1995 and 1994, respectively. The decrease in
1995 is primarily attributable to lower personnel costs, as certain replacement
headcount positions have not yet been filled, and lower outside consulting costs
which were partially offset by higher costs related to staff increases from the
Sysnet a.s. acquisition in April 1994. Without the effect of currency rate
changes, the decrease would be 4.2%. The Company capitalizes certain development
costs in accordance with Statement of Financial Accounting Standard No. 86 ("FAS
86"). To the extent the Company capitalizes its product development costs, the
effect is to defer such costs to future periods and match them to the revenue
generated by the products. Product development and support expenses may
fluctuate annually depending in part upon the number and status of internal
software development projects.
8
<PAGE>
BOOLE & BABBAGE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Sales and marketing:
Sales and marketing expenses increased by 25.7% and represented 50.8% of
revenues in 1995 compared to 47.5% in 1994. Without the effect of currency rate
changes, the increase would be 17.8%. Most of the increase in 1995 is due to
higher personnel and marketing costs and increased commission expense on
increased product licensing. Commission rates were comparable to those in 1994.
North America and Europe had higher personnel costs as sales force headcount was
increased in both channels while 1995 has the incremental costs of the Company's
Japanese subsidiary which started sales operations during the third quarter of
1994.
General and Administrative:
General and administrative expenses increased 4.0% in 1995 and represented 9.7%
and 11.0% of revenues for 1995 and 1994. Without the effect of currency rate
changes, general and administrative expenses would have decreased 1.0%. In 1995,
increases in personnel related costs were offset by charges in 1994 related to
the transfer of certain client/server product operations from Mt. Laurel, NJ to
San Jose, CA. In addition, the Company negotiated a lease termination in the
third quarter of 1995 which resulted in the recovery of approximately $350,000
of accrued lease payments on an idle facility.
Interest and other income, net:
Interest and other income consists principally of interest income, interest
expense, and currency gain or loss. The increase in 1995 over 1994 is mainly
comprised of additional net interest income as a result of higher average cash
balances, higher market interest rates, increased installment receivables and
$288,000 related to a refund from the Internal Revenue Service received during
the second quarter of 1995.
Income Taxes:
The effective tax rate was 30.0% and 31.0% for 1995 and 1994, respectively. The
Company's effective tax rate differs from the federal statuary rate due
primarily to permanently invested earnings of foreign subsidiaries being taxed
at rates lower than the federal statutory rate. Management believes future
taxable income will be sufficient to realize the tax benefit of the net deferred
tax asset of $7,415,000.
9
<PAGE>
BOOLE & BABBAGE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES:
The significant sources of cash during 1995 include cash provided by operating
activities of $8,869,000; the exercise of employee stock options of $1,355,000
and stock purchases through the Employee Stock Purchase Plan of $974,000. The
significant uses of cash during 1995 include $2,527,000 for purchases of
furniture, equipment and leasehold improvements; $2,314,000 for internally
developed capitalized software; $1,480,000 for payments on capital leases;
$936,000 for payments on notes payable; and $344,000 for investments in minority
interests. Included in cash is a $1,400,000 certificate of deposit pledged as
collateral for the lease financing of certain computer equipment. Management
believes cash flows from operations and existing cash resources will be adequate
to meet its working capital requirements for the foreseeable future.
RESULTS OF OPERATIONS: Three months ended June 30, 1995
Many of the same explanations and variances from the nine month results
discussion also apply to the third quarter results, and therefore, are not
repeated here. A summary is provided as follows:
REVENUES:
Revenue for the three months ended June 30, 1995 increased 13.1% to $37,368,000
compared to $33,029,000 for the same quarter in fiscal 1994.
Revenue mix/growth: % of Revenue
---------------------- Year-to-Year
1995 1994 % Change
-------------------------------------
Product licensing 50.2% 49.1% 15.6%
Maintenance fees 47.9% 49.0% 10.6%
Services and other 1.9% 1.9% 13.8%
-------------------------------------
Total 100.0% 100.0% 13.1%
=====================================
Licensing mix/growth: % of Licensing
------------------- Year-to-Year
1995 1994 % Change
-------------------------------------
Domestic 24.4% 35.1% (19.5%)
International 75.6% 64.9% 34.7%
-------------------------------------
Total 100.0% 100.0% 15.6%
=====================================
Without the effect of currency rate changes, international licensing growth
would have been 17.4%. The decrease domestically resulted from a decline in the
field sales force, particularly in plex products. The increase internationally
resulted from strong growth in
10
<PAGE>
BOOLE & BABBAGE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
the Company's European operations and sales through marketing agents,
particularly in South America. This was offset slightly by a decrease in sales
in the Japanese and Australian subsidiaries. From a product perspective, the
traditional mainframe products and the plex product group both increased 11% and
the client/server group grew by 47%.
COSTS AND EXPENSES
% of Revenue
------------------- Year-to-Year
1995 1994 % Change
--------------------------------
Cost of sales 13.4% 11.1% 36.3%
Product development and support 15.7% 18.8% (5.6)%
Sales and marketing 53.9% 51.1% 19.4%
General and administrative 8.0% 10.3% (12.0%)
Purchased R&D expense -- 9.9% N/A
--------------------------------
Total 91.0% 101.2% 1.8%
================================
Cost of sales increase was 36.3% for the quarter compared to 26.5% for nine
months primarily due to higher royalty costs from a change in one vendor's rate
from last quarter. Without the effect of currency exchange rates, cost of sales
would have increased 21.1% for the quarter.
Product development and support decreased 5.6% for the quarter versus 2.4% for
nine months as a result of decreased personnel costs in the United States in the
second and third quarters. The Company anticipates that costs in this area will
increase during the fourth quarter of 1995 due to open headcount positions being
filled. Without the effect of currency exchange rates, product development and
support would have decreased 7.9%.
Sales and marketing increased 19.4% for the quarter and 25.7% for nine months
and are a function of increases in product licensing of 15.6% and 24.5% for the
quarter and nine months, respectively. Without the effect of currency rate
changes, the increase for the quarter was 9.0%.
General and administrative decreased 12.0% for the quarter compared to an
increase of 4.0% for nine months due primarily to the Q395 recovery of accrued
lease payments upon the negotiated termination of a lease of a previously idle
facility. In addition, the third quarter had lower increases in personnel cost,
bad debt expense and professional fees. Without the effect of currency rate
changes, the decrease for the quarter was 18.3%.
11
<PAGE>
BOOLE & BABBAGE, INC.
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K - None
12
<PAGE>
BOOLE & BABBAGE, INC. 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.
BOOLE & BABBAGE, INC.
August 10, 1995 \Paul E. Newton\
--------------------------
Paul E. Newton
President and Director
(Principal Executive Officer)
August 10, 1995 \Arthur F. Knapp, Jr.\
---------------------------
Arthur F. Knapp, Jr.
Senior Vice President
Chief Financial Officer
(Principal Financial and
Accounting Officer)
13
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> JUN-30-1995
<CASH> 38,616
<SECURITIES> 0
<RECEIVABLES> 75,215
<ALLOWANCES> 1,732
<INVENTORY> 0
<CURRENT-ASSETS> 96,290
<PP&E> 34,578
<DEPRECIATION> 26,654
<TOTAL-ASSETS> 149,008
<CURRENT-LIABILITIES> 69,511
<BONDS> 0
<COMMON> 7
0
0
<OTHER-SE> 61,559
<TOTAL-LIABILITY-AND-EQUITY> 149,008
<SALES> 113,194
<TOTAL-REVENUES> 113,194
<CGS> 0
<TOTAL-COSTS> 15,528
<OTHER-EXPENSES> 86,082
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 861
<INCOME-PRETAX> 14,368
<INCOME-TAX> 4,320
<INCOME-CONTINUING> 10,048
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,048
<EPS-PRIMARY> 1.31
<EPS-DILUTED> 1.31
</TABLE>
