<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant To Section 13 Or 15(d) Of The Securities Exchange
Act Of 1934
Date of Report January 20, 1999
_________________
ASPECT TELECOMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
0-18391
(Commission File Number)
California 94-2974062
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1730 Fox Drive
San Jose, CA 95131-2312
(Address of principal executive offices, with zip code)
(408) 325-2200
(Registrant's telephone number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS
On January 20, 1999 Aspect Telecommunications Corporation, a California
corporation (the "Company") announced its earnings and results of operations for
the quarter and fiscal year ended December 31, 1998. Further details regarding
this announcement are contained in the Company's press release dated January 20,
1999 attached as an exhibit hereto and incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
Exhibit 99 Aspect Telecommunications Corporation Press Release dated
January 20, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ASPECT TELECOMMUNICATIONS CORPORATION
/s/ Eric J. Keller
Date: February 2, 1999 By: _________________________
Eric J. Keller
Vice President, Finance and
Chief Financial Officer
(Duly Authorized and Principal Financial and
Accounting Officer)
<PAGE>
ASPECT TELECOMMUNICATIONS CORPORATION
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
<S> <C>
99 Press Release dated January 20, 1999
</TABLE>
<PAGE>
EXHIBIT 99
ASPECT TELECOMMUNICATIONS ANNOUNCES FINANCIAL RESULTS FOR FOURTH QUARTER AND
FULL YEAR 1998
SAN JOSE, CA, Jan. 20, 1999--Aspect Telecommunications Corporation (Nasdaq:ASPT)
today reported financial results for its fourth quarter and fiscal year ended
December 31, 1998. Revenues for fiscal year 1998 were $512.3 million, a
31 percent increase over fiscal year 1997. For the fourth quarter, revenues were
$134.8 million, a 27 percent increase over the same quarter last year and a two
percent decline from the previous quarter.
Diluted earnings per share for the quarter were $0.11 compared to $0.08 in the
same quarter last year and $0.21 in the previous quarter. Diluted earnings per
share for all of 1998 were $0.61 compared to $0.67 in the previous year. The
diluted earnings per share figures for 1998 and the attached condensed
consolidated financial statements reflect the results of applying new SEC
guidance regarding in-process research and development charges related to the
acquisition of Voicetek in May 1998. Excluding non-recurring items, diluted
earnings per share for all of 1998 were $0.80 compared to $0.91 in the previous
year.
Excluding the impact of amortization expenses resulting from the Voicetek
acquisition as well as non-recurring items, diluted earnings per share were
$0.16 in the fourth quarter of 1998 compared with $0.25 in the same quarter last
year and $0.26 in the prior quarter. Calculated on the same basis, diluted
earnings per share for fiscal year 1998 were $0.93 compared with $0.91 in fiscal
year 1997.
In the fourth quarter, Aspect's Board of Directors authorized a share repurchase
program of up to five million shares of the company's common stock. During the
quarter ended December 31, 1998, the company repurchased approximately two
million shares through this program, utilizing cash of approximately
$31.6 million.
"As previously announced, our North American region did not perform at expected
levels in the most recent quarter," noted James R. Carreker, Aspect's chairman,
president and chief executive officer. "Although there were some bright spots in
the region, we are evaluating the challenges we face in North America and
strategies to improve execution in this region." As part of the sales channel
restructuring, Mr. Carreker has assumed the role of interim executive vice
president, Channels, until a search is completed for a replacement for Dennis L.
Haar, who has left the company. Also, as previously announced, Lin F. Johnstone,
a ten-year company employee and currently vice president of Aspect's Europe,
Middle East and Africa (EMEA) region, has been appointed interim vice president,
North America, succeeding Larry S. Miller, who has also left the company.
Carreker stated, "I am very pleased that Lin Johnstone, a well-admired and
proven channel leader, is now driving our North American sales organization.
During the last two years, Lin has assembled a self-sufficient team in Europe,
which will enable her to focus her time on implementing in North America those
best practices that have contributed to the success in the EMEA region."
Mr. Carreker continued, "We are committed to shifting the company's focus from
telecommunications equipment to becoming a leading supplier of enterprise
software and solutions. As part of our commitment to make this transformation
rapidly, we have begun to put in place a new management team of seasoned
executive talent to lead the company during our next phase of business
expansion. For example, Beatriz V. Infante, who joined the company in October
1998 as executive vice president, Products, is establishing a new market and
product direction designed to position Aspect as an innovative provider of
customer relationship solutions. While implementing this shift in focus, we are
committed to making the investments in our product development and sales
organizations necessary to achieve these objectives."
Aspect also stated that, based on limited information currently available, the
company anticipates that its revenue for the first quarter of 1999 is likely to
be approximately $115 million, plus or minus $10 million, and that revenue
growth rates will begin to return to their historical range in the second half
of 1999. At such revenue levels, again based on currently available information,
the company is likely to report an operating loss for the first quarter of 1999
and may experience losses for an additional one to two quarters.
About Aspect Telecommunications
Aspect Telecommunications provides comprehensive business solutions for mission-
critical call centers worldwide. Aspect integrated call center products and
services help a diverse array of businesses such as airlines, catalog retailing,
financial services and communications enhance productivity, increase revenues
and provide superior customer service. Aspect products include automatic call
distributors, computer-telephony integration solutions, call center management
and reporting software, interactive voice response and automation solutions and
planning and forecasting packages. The company also provides business
applications consulting and systems integration services and around-the-clock
support. Aspect is based in San Jose, California, with offices in North America,
Europe and Asia-Pacific. For more information about Aspect Telecommunications,
call 1-800-226-8441.
Except for historical information contained herein, the matters discussed in
this news release are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, Section 21E of the Securities and
Exchange Act of 1934, as amended, and the Private Securities Litigation Reform
Act of 1995, and are made under the safe-harbor provisions thereof. Included
among other forward looking statements are statements concerning future
revenues, revenue growth rates and operating results. Such forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from those projected including the
following: the ability of the company to successfully shift its emphasis from
telecommunications equipment to enterprise software and solutions; the ability
to improve performance in the company's North American region in a timely
manner; the ability to attract and retain personnel in key sales, technical and
management positions; the impact of intense competition in the company's product
and service markets; customer acceptance and technical performance of new
products and services; the ability to manage the company's consulting and
systems integration business unit in a profitable manner; and the impact of
general macroeconomic uncertainties leading to lower capital spending, as well
as the potential impact of the Year 2000 problem. Other risks that could cause
actual results to differ materially from those projected are discussed in
Aspect's Form 10-K and Annual Report for the fiscal year ended December 31, 1997
and Forms 10-Q for the fiscal quarters ended March 31, 1998, June 30, 1998 and
September 30, 1998, as amended. Readers are cautioned not to place undue
reliance on these forward-looking statements, which reflect management's
analysis only as of the date hereof. Aspect undertakes no obligation to publicly
release the results of any revision to these forward-looking statements which
may be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
Aspect and the Aspect logo are trademarks or registered trademarks of Aspect
Telecommunications Corporation in the United States and/or other countries. All
other product or service names mentioned in this document may be trademarks of
the companies with which they are associated.
<PAGE>
ASPECT TELECOMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data - unaudited)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
------------------ -------------------
December 31, December 31,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues:
Product $ 86,921 $ 74,429 $342,903 $276,471
Customer support 47,895 31,861 169,413 114,171
-------- -------- -------- --------
Total net revenues 134,816 106,290 512,316 390,642
-------- -------- -------- --------
Cost of revenues:
Cost of product
revenues 26,564 24,314 108,397 89,529
Cost of customer
support revenues 36,612 21,094 119,787 79,444
-------- -------- -------- --------
Total cost of
revenues 63,176 45,408 228,184 168,973
-------- -------- -------- --------
Gross margin 71,640 60,882 284,132 221,669
Operating expenses:
Research and
development 19,457 11,759 67,877 45,723
Selling, general
and administrative 43,011 29,224 150,118 104,431
Purchased in-process
technology - - 9,899 4,910
Intellectual
property settlement - 14,000 - 14,000
-------- -------- -------- --------
Total operating
expenses 62,468 54,983 227,894 169,064
-------- -------- -------- --------
Income from operations 9,172 5,899 56,238 52,605
Interest and other
income, net 72 1,207 3,011 7,673
-------- -------- -------- --------
Income before income
taxes 9,244 7,106 59,249 60,278
Provision for income
taxes 3,582 2,735 26,759 25,096
-------- -------- -------- --------
Net income $ 5,662 $ 4,371 $ 32,490 $ 35,182
======== ======== ======== ========
Basic earnings
per share $0.11 $0.09 $0.64 $0.71
Weighted average
shares outstanding 50,046 49,801 50,459 49,302
Diluted earnings
per share $0.11 $0.08 $0.61 $0.67
Weighted average
shares outstanding-
assuming dilution 51,704 52,549 53,146 52,307
</TABLE>
<PAGE>
ASPECT TELECOMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
December 31, December 31,
1998 1997
---- ----
<S> <C> <C>
Assets
Current assets:
Cash, cash equivalents and short-term
investments $196,111 $146,216
Accounts receivable, net 132,818 86,896
Inventories 18,916 12,306
Other current assets 14,820 20,413
-------- --------
Total current assets 362,665 265,831
Property and equipment, net 69,192 58,704
Intangible assets, net 119,052 42,654
Other assets 9,750 3,154
-------- --------
Total assets $560,659 $370,343
======== ========
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 18,239 $ 9,401
Current portion of notes payable 3,300 6,399
Accrued liabilities 55,778 64,591
Customer deposits and deferred revenue 27,171 15,626
-------- --------
Total current liabilities 104,488 96,017
-------- --------
Notes payable - 6,531
Deferred taxes 4,270 -
Convertible subordinated debentures 153,744 -
Shareholders' equity 298,157 267,795
-------- --------
Total liabilities and shareholders' equity $560,659 $370,343
======== ========
</TABLE>
<PAGE>
ASPECT TELECOMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data - unaudited)
<TABLE>
<CAPTION>
Year
Three Months Ended Ended
------------------------------------------ -------
March 31, June 30, Sept. 30, Dec. 31, Dec. 31,
1998 1998 (a) 1998 (a) 1998 1998
--------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
Net revenues:
Product $77,332 $86,654 $91,996 $ 86,921 $342,903
Customer support 36,125 39,437 45,956 47,895 169,413
------- ------- ------- -------- --------
Total net revenues 113,457 126,091 137,952 134,816 512,316
------- ------- ------- ------- -------
Cost of revenues:
Cost of product revenues 24,372 27,944 29,517 26,564 108,397
Cost of customer
support revenues 24,170 28,379 30,626 36,612 119,787
------- ------- ------- ------- -------
Total cost of revenues 48,542 56,323 60,143 63,176 228,184
------- ------- ------- ------- -------
Gross margin 64,915 69,768 77,809 71,640 284,132
Operating expenses:
Research and development 12,830 16,125 19,465 19,457 67,877
Selling, general and
administrative 31,084 35,617 40,406 43,011 150,118
Purchased in-process
technology - 9,899 - - 9,899
------- ------- ------- ------- -------
Total operating expenses 43,914 61,641 59,871 62,468 227,894
------- ------- ------- ------- -------
Income from operations 21,001 8,127 17,938 9,172 56,238
Interest and other
income, net 1,413 1,091 435 72 3,011
------- ------- ------- ------- -------
Income before income taxes 22,414 9,218 18,373 9,244 59,249
Provision for income taxes 8,517 7,529 7,131 3,582 26,759
------- ------- ------- ------- -------
Net income $ 13,897 $ 1,689 $ 11,242 $ 5,662 $ 32,490
======= ======= ======= ======= =======
Basic earnings per share $0.28 $0.03 $0.22 $0.11 $0.64
Weighted average shares
outstanding 50,146 50,437 50,946 50,046 50,459
Diluted earnings per share $0.26 $0.03 $0.21 $0.11 $0.61
Weighted average shares
outstanding-assuming
dilution 53,071 53,584 54,130 51,704 53,146
</TABLE>
(a) Restated for the revised purchase price allocation and amortization of
intangible assets related to the Voicetek acquisition completed in May
1998.
<PAGE>
ASPECT TELECOMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
<TABLE>
<CAPTION>
March 31, June 30, Sept. 30, Dec. 31,
1998 1998 (a) 1998 (a) 1998
---- -------- -------- ----
<S> <C> <C> <C> <C>
Assets
Current assets:
Cash, cash
equivalents
and short-term
investments $146,806 $ 82,941 $205,764 $196,111
Accounts
receivable, net 94,866 106,590 141,407 132,818
Inventories 13,265 12,283 14,221 18,916
Other current assets 16,152 14,715 17,467 14,820
-------- -------- -------- --------
Total current
assets 271,089 216,529 378,859 362,665
Property and
equipment, net 62,161 67,598 69,430 69,192
Intangible assets,
net 41,022 127,425 125,523 119,052
Other assets 3,138 4,302 9,682 9,750
-------- -------- -------- --------
Total assets $377,410 $415,854 $583,494 $560,659
======== ======== ======== ========
Liabilities and
shareholders' equity
Current liabilities:
Accounts payable $ 12,120 $ 16,496 $ 16,162 $ 18,239
Current portion
of notes payable 6,149 6,799 4,500 3,300
Accrued liabilities 45,706 51,199 51,998 55,778
Customer deposits
and deferred revenue 22,637 24,681 28,734 27,171
-------- -------- -------- --------
Total current
liabilities 86,612 99,175 101,394 104,488
Notes payable 6,607 5,782 - -
Deferred taxes - 8,798 8,187 4,270
Convertible
subordinated debentures - - 151,491 153,744
Shareholders' equity 284,191 302,099 322,422 298,157
-------- -------- -------- --------
Total liabilities
and shareholders'
equity $377,410 $415,854 $583,494 $560,659
======== ======== ======== ========
</TABLE>
(a) Restated for the revised purchase price allocation and amortization of
intangible assets related to the Voicetek acquisition completed in May 1998.
