SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20459
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period ended April 2, 1995
or
[ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition operiod to .
Commission File Number 0-15325
INFORMIX CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-3011736
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
4100 Bohannon Drive, Menlo Park, CA 94025
(415) 926-6300
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(Address of Principal Executive Offices, including zip code:
registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securi-
ties 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 ___
At April 28, 1995 66,057,940 shares of the Registrant's Common
Stock were outstanding.
Total number of pages 16.
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
INDEX
Item Page
<S> <C>
(1) Condensed Consolidated Financial Statements (Unaudited):
Condensed Consolidated Statements of Income for the three
month periods ended April 2, 1995 and April 3, 1994 3
Condensed Consolidated Balance Sheets as of April 2, 1995 and
December 31, 1994 4
Condensed Consolidated Statements of Cash Flows for the three
month periods ended April 2, 1995 and April 3, 1994 5
Notes to Condensed Consolidated Financial Statements 6
(2) Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
</TABLE>
<TABLE>
<CAPTION>
INFORMIX CORPORATION and Subsidiaries
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
Three months ended
Apr 02, Apr 03,
1995 1994
-------- --------
<S> <C> <C>
Net revenues:
Licenses $ 110,369 $ 74,779
Services 37,416 21,321
-------- --------
147,785 96,100
Costs and expenses:
Cost of software distribution 7,862 4,992
Cost of services 17,869 9,733
Sales and marketing 64,539 39,948
Research and development 17,534 12,905
General and administrative 11,057 9,526
-------- --------
118,861 77,104
-------- --------
Operating income 28,924 18,996
Interest income 1,554 805
Interest expense (50) ( 65)
Other income / (expense), net 125 (174)
-------- --------
Income before income taxes 30,553 19,562
Income taxes 11,457 7,042
-------- --------
Net income $ 19,096 $ 12,520
======== ========
Net income per common share: $ 0.28 $ 0.19
Weighted average number of common and
common equivalent shares outstanding: 68,462 67,522
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
<TABLE>
<CAPTION>
INFORMIX CORPORATION and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
Apr 02, Dec 31,
1995 1994
--------- ---------
(Unaudited) (Note)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 130,682 $ 131,882
Short-term investments 45,096 59,644
Accounts receivable, net 121,937 131,548
Deferred taxes 9,978 9,978
Other current assets 18,418 14,964
--------- ---------
Total current assets 326,111 348,016
Property and equipment, net 51,389 44,121
Software costs 26,296 24,681
Deferred taxes 7,651 7,651
Long-term investments 8,202 4,477
Intangible assets 45,822 6,089
Other assets 10,845 9,375
--------- ---------
Total assets $ 476,316 $ 444,410
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 21,242 $ 18,737
Accrued expenses 28,162 27,784
Accrued employee compensation 22,715 33,777
Income taxes payable 20,283 17,725
Deferred taxes 1,612 1,612
Deferred revenue 53,258 48,580
Other liabilities 12,513 5,337
--------- ---------
Total current liabilities 159,785 153,552
Deferred taxes 14,692 14,692
Other liabilities 1,369 522
Stockholders' equity:
Common stock 661 655
Additional paid-in capital 144,518 139,897
Retained earnings 155,121 136,025
Unrealized gain on available-for-sale
securities, net of tax 492 665
Foreign currency translation adjustment ( 322) (1,598)
--------- ---------
Total stockholders' equity 300,470 275,644
--------- ---------
Total liabilities and
stockholders' equity $ 476,316 $ 444,410
========= =========
</TABLE>
(Note) Derived from audited financial statements.
See Notes to Condensed Consolidated Financial Statements.
<TABLE>
<CAPTION>
INFORMIX CORPORATION and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Three months ended
April 2, April 3,
1995 1994
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 19,096 $ 12,520
Adjustments to reconcile net income to
cash and cash equivalents provided by
operating activities:
Depreciation and amortization 5,814 3,426
Amortization of capitalized software 3,080 1,735
Deferred tax expense 149 450
Provisions for losses on accounts receivable 1,684 952
Foreign currency transaction gain (6,473) (730)
Changes in operating assets and liabilities:
Accounts receivable 9,277 7,495
Other current assets (1,883) 139
Accounts payable and accrued expenses (6,020) (9,781)
Deferred revenue 2,256 (505)
--------- ---------
Net cash and cash equivalents provided by
operating activities 26,980 15,701
INVESTING ACTIVITIES
Purchases of held-to-maturity securities (34,755) (15,997)
Purchases of available-for-sale securities -- (9,223)
Maturities of held-to-maturity securities 21,888 7,649
Sales of available-for-sale securities 23,690 2,506
Purchase of property and equipment (9,505) (7,224)
Additions to software costs (4,695) (2,697)
Business combinations, net of cash acquired (32,182) --
Other (1,818) (2,505)
--------- ---------
Net cash and cash equivalents used in
investing activities (37,377) (27,491)
FINANCING ACTIVITIES
Proceeds from issuance of stock 4,627 469
Principal payments on capital leases, net (125) (282)
Acquisition of common stock -- (4,735)
Proceeds from reissuance of treasury stock -- 1,642
--------- ---------
Net cash and cash equivalents provided by
(used in) financing activities 4,502 (2,906)
--------- ---------
Effect of exchange rate changes on cash
and cash equivalents 4,695 415
--------- ---------
Decrease in cash and cash equivalents (1,200) (14,281)
Cash and cash equivalents at beginning of period 131,882 67,329
--------- ---------
Cash and cash equivalents at end of period $ 130,682 $ 53,048
========= =========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
INFORMIX CORPORATION and Subsidiaries
Notes to Condensed Consolidated Financial Statements
April 2, 1995
(Unaudited)
Note A - PRESENTATION OF INTERIM FINANCIAL STATEMENTS
All significant adjustments, in the opinion of management, which are
normal, recurring in nature and necessary for a fair presentation of
the financial position and results of the operations of the Company
and its subsidiaries, have been consistently recorded. The operating
results for the interim periods presented are not necessarily
indicative of expected performance for the entire year.
Note B - NET INCOME PER COMMON SHARE
Net income per common share is based on the weighted average number of
common and dilutive common equivalent shares outstanding during each
period. All stock options are considered common stock equivalents and
are included in the weighted average computations when the effect is
dilutive.
<TABLE>
<CAPTION>
Note C - STOCKHOLDERS' EQUITY
<S> <C>
Reconciliation of outstanding shares:
Shares outstanding at December 31, 1994 65,473,889
Shares issued upon exercises of stock options 492,319
Shares sold under terms of the Employee Stock Purchase Plan 66,247
-----------
Shares outstanding at April 2, 1995 66,032,455
===========
</TABLE>
Note D - BUSINESS COMBINATIONS
In January 1995, the Company acquired a 90 percent interest in the
database division of ASCII Corporation, a distributor of its products
in Japan. The Company will acquire the remaining 10 percent in
January 1996. This acquisition has been recorded as a purchase. The
purchase price of this business was approximately $46.0 million, of
which $34.8 million has been allocated to intangible assets acquired
which are being amortized over a weighted average life of seven years.
The operating results of this business have not been material in
relation to those of the Company and are included in the Company's
consolidated results of operations from the date of acquisition.
In April 1995, the Company acquired an 80 percent interest in the
database division of Daou Corporation, a distributor of its products
in Korea. The Company will acquire the remaining 20 percent by
January 1997. The acquisition will be recorded as a purchase. The
purchase price of this business is approximately $4.3 million.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth operating results as a percentage of
net revenues for the three month periods ended April 2, 1995 and April
3, 1994, respectively, and the percent change in the operating results
for three month period ended April 2, 1995 compared to the respective
three month period ended April 3, 1994.
<TABLE>
<CAPTION>
Period-to-Period Percent
Percent of Net Revenues Increase (Decrease)
Three months ended Three months ended
April 2, April 3, April 2, 1995 vs
1995 1994 April 3, 1994
<S> <C> <C> <C>
NET REVENUES:
Licenses 75% 78% 48%
Services 25% 22% 75%
----- -----
Total net revenues 100% 100% 54%
COSTS AND EXPENSES:
Cost of software distribution 5% 5% 57%
Cost of services 12% 10% 84%
Sales and marketing 44% 42% 62%
Research and development 12% 13% 36%
General and administrative 7% 10% 16%
----- -----
Total operating expenses 80% 80% 54%
----- -----
OPERATING INCOME 20% 20% 52%
INTEREST INCOME 1% 1% 93%
INTEREST EXPENSE 0% 0% n.a.
OTHER INCOME/(EXPENSE), NET 0% (1%) n.a.
---- ----
INCOME BEFORE INCOME TAXES 21% 20% 56%
INCOME TAXES 8% 7% 63%
---- ----
NET INCOME 13% 13% 53%
==== ====
</TABLE>
The Company's operating income in the first quarter of 1995 was 20
percent of net revenues, compared to the same percentage in the first
quarter of 1994.
Although the Company's operating margins have equaled or exceeded 20
percent over the last several quarters, the Company's expenses are
relatively fixed in the near term and unexpected variances in planned
revenues, which are difficult to forecast, can result in variations in
operating margins and cost ratios. The Company's revenues have been
increasingly derived from sales contracts directly with end-users and
less from the distributor or OEM sales channels. These end-user sales
contracts can be relatively large in size and are difficult to
forecast both in timing and dollar value. The Company's quarterly
operating margins generally follow a seasonal pattern, with second
half revenues and operating margins generally being higher than those
of the preceding first half. In 1995, the Company will continue to
invest more in customer services, marketing and research and
development, and make personnel additions to the Company's sales force
worldwide, which may adversely affect the Company's operating margin
in 1995 if there are no offsetting increases in revenues or reductions
in other operating expenses.
A key factor in determining the success of the Company will depend on
the ability of the Company's products to interoperate and perform well
with existing and future leading, industry-standard application
software products intended to be used in connection with relational
database management systems. Failure to meet existing or future
interoperability and performance requirements of certain independent
vendors marketing such applications in a timely manner could adversely
affect the market for the Company's products.
As the number of software products and software patents in the
industry increases, the Company believes that software developers may
become increasingly subject to infringement claims. There can be no
assurance that a third party will not assert that its patents or other
proprietary rights are violated by products offered by the Company.
Any such claims, with or without merit, can be time-consuming and
expensive to defend and could have an adverse effect on the Company's
business, results of operations, financial position and cash flows.
The Company's stock price may be subject to significant volatility,
particularly on a quarterly basis. Any shortfall in revenue or
earnings from levels expected by securities analysts or others could
have an immediate and significant adverse effect on the trading price
of the Company's common stock in any given period. Additionally, the
Company may not learn of, or be able to confirm, revenue or earnings
shortfalls until the end of each quarter, which could result in an
even more immediate and adverse effect on the trading price of the
Company's common stock. Finally, the Company participates in a highly
dynamic industry, which often results in significant volatility of the
Company's common stock price.
NET REVENUES
The Company derives revenues principally from licensing its software
and providing technical product support or updates to customers.
License revenues may involve the shipment of product by the Company or
the granting of a license to manufacture products. From time to time
the Company has recognized substantial net revenue from large software
license agreements. These transactions, which are difficult to
predict, have caused fluctuations in net revenues and net income
because of the relatively high gross margin on such revenues. The
Company expects that this sort of transaction and the resulting
fluctuations may continue. Additionally, as is common in the
industry, a disproportionate amount of the Company's license revenue
is derived from transactions that close in the last few weeks of a
quarter which make quarterly revenues difficult to forecast. Although
the Company expects revenues to grow in the remainder of 1995, there
can be no assurance that such growth will be achieved or that growth
rates in the future will be comparable to those in the first quarter
of 1995.
<TABLE>
<CAPTION>
(DOLLARS IN MILLIONS)
First Quarter Percentage First Quarter
1995 Change 1994
<S> <C> <C> <C>
License fees $ 110.4 48% $ 74.8
Percentage of net revenues 75% 78%
Services $ 37.4 75% $ 21.3
Percentage of net revenues 25% 22%
Net revenues $ 147.8 54% $ 96.1
</TABLE>
The increase in service revenue, which consists of customer support,
training and consulting, was primarily attributable to the continued
growth of the installed customer base,the renewal of maintenance
contracts and increased consulting revenue. The Company continues
to emphasize support services as a source of revenue.
The revenue growth in the first quarter of 1995 primarily reflects
continued strong worldwide acceptance for the Company's new and
existing technology. The Company's revenues, along with those of the
relational database management system (RDBMS) industry as a whole,
have shown substantial growth over the last several years. The
industry has benefited from trends to downsize from large proprietary
computer systems and market acceptance of UNIX and other open
operating environments.
The Company has focused on the UNIX, open operating system market
since 1980 and has broadened its open environments by releasing a
Windows and Windows NT version of an Informix database server in 1994.
The Company has also developed and released connectivity products to
allow access to other relational databases, both proprietary and open,
and access to this data through various protocols such as IBM's DRDA
and X/Open's XA. The industry movement to new open operating systems
like Windows NT and access through low-end, desktop machines may cause
downward pressure on prices of database and related products. If such
downward pressure on prices were to occur, margins would be adversely
affected.
The license revenue growth in the first quarter of 1995 reflects
continued strong demand particularly for the Company's new generation
of database servers and connectivity products. In the second half of
1994, the Company released INFORMIX-OnLine Dynamic Server(TM) 7.1 on
eleven symmetric multiprocessing platforms. The Company also
introduced INFORMIX-NewEra(TM) in the second half of 1994, a second-
generation client/server application development tool and anticipates
tools revenue in 1995 to increase in absolute dollars over 1994.
However, there is a significant competition in the tools market from
other companies and their product offerings: graphical, character-
based, and object-oriented. Many of these tools products are "open,"
meaning they will access data stored on virtually any relational
database, including Informix.
The Company's ability to sustain growth depends in part on the timely
release of successful new and updated products, and the success of new
and updated products from its competitors. The Company has experienced
product delays in the past and may have delays in the future.
Over half of the Company's net revenues are derived from its
international operations. In Europe and Asia/Pacific, most revenues
and expenses are now denominated in local currencies. The U.S. dollar
weakened in the first quarter of 1995 against the major European and
Asia/Pacific currencies, which resulted in higher revenue and expenses
recorded when translated into U.S. dollars and compared with the prior
year period. Through 1994, most revenues from Asia/Pacific, Canada,
and Latin America were denominated in U.S. dollars. The translation of
the revenues for these regions was less impacted by fluctuations in
foreign exchange rates. The Company has increased its direct sales
presence in Asia/Pacific by opening offices and acquiring its primary
software distributors in Malaysia in 1994, and Japan and Korea in
early 1995. This increased the proportion of direct sales in local
currency in these regions. The Company has also increased its direct
presence in Latin America, although a significant percentage of the
revenue is still denominated in U.S. dollars. In the future, the
Company expects currency fluctuations in Mexico, and to a lesser
extent, other Latin America countries to continue. The Company's
operating and pricing strategies take into account changes in exchange
rates over time; however, the Company's results of operations may be
significantly affected in the short term by fluctuations in foreign
currency exchange rates.
The Company has a hedging program in place to minimize foreign
exchange gains or losses, where possible, from recorded foreign
denominated transactions resulting from fluctuations in exchange
rates. This program involves the use of forward foreign exchange
contracts in the primary European and Asian currencies. The Company
has limited unhedged transaction exposures in certain secondary
currencies in Latin America and Eastern Europe because there are
limited forward currency exchange markets in these currencies. The
Company does not attempt to hedge translation to U.S. dollars of
foreign denominated revenues and expenses not yet incurred.
The Company's distribution markets were reorganized into three general
markets at the beginning of the second quarter of 1994: North America;
Europe, the Middle East, and Africa; and Intercontinental, consisting
of Latin America and the Asia-Pacific region. The prior organizations
consisted of the Americas; Europe, Middle East and Africa; and Asia-
Pacific. In both the first quarters of 1995 and 1994, the new
organizations contributed 41 percent, 41 percent, and 18 percent of
the Company's net revenues.
COST OF SOFTWARE DISTRIBUTION
<TABLE>
<CAPTION>
(DOLLARS IN MILLIONS)
First Quarter Percentage First Quarter
1995 Change 1994
<S> <C> <C> <C>
Manufactured cost of software
distribution $ 4.8 47% $ 3.3
Percentage of license revenue 4% 5%
Amortization of capitalized
software $ 3.1 78% $ 1.7
Percentage of license revenue 3% 2%
Cost of software distribution $ 7.9 57% $ 5.0
Percentage of license revenue 7% 7%
</TABLE>
Software distribution costs consist primarily of: 1) manufacturing and
related costs such as media, documentation, product assembly and
purchasing costs, freight, customs, and third party royalties; and 2)
amortization of previously capitalized software development costs and
any write-offs of previously capitalized software.
Excluding amortization of previously capitalized software development
costs, cost of software distribution as a percentage of license
revenue declined from 5 percent in the first quarter of 1994 to 4
percent in the same period in 1995. The decrease is the result of
the recording of several large contracts with low associated costs of
software distribution since these customers generally manufacture the
software themselves. In the future, the cost of software distribution
as a percentage of revenue may vary depending upon whether the product
is reproduced by the Company or by customers.
The increase of amortization of capitalized software in the first
quarter of 1995 compared to the first quarter of 1994 is due to the
release of several products in the latter half of 1994. The absolute
value of amortization of capitalized software will vary slightly
quarter to quarter as new products are released and other products
become fully amortized.
COST OF SERVICES
<TABLE>
<CAPTION>
(DOLLARS IN MILLIONS)
First Quarter Percentage First Quarter
1995 Change 1994
<S> <C> <C> <C>
Cost of Services $ 17.9 84% $ 9.7
Percentage of service revenue 48% 46%
</TABLE>
Cost of services consists primarily of maintenance, consulting and
training expenses. The increase in cost of services in the first
quarter of 1995 in absolute dollars and as a percentage of net
revenues compared to the corresponding prior year period is primarily
due to the Company's increased investments in consulting and support
services. In the future, the Company expects that cost of services as
a percentage of net revenues will approximate the rate in the first
quarter of 1995.
SALES AND MARKETING EXPENSES
<TABLE>
<CAPTION>
(DOLLARS IN MILLIONS)
First Quarter Percentage First Quarter
1995 Change 1994
<S> <C> <C> <C>
Sales and marketing expenses $ 64.5 62% $ 40.0
Percentage of net revenue 44% 42%
</TABLE>
The increase in sales and marketing expenses in the first quarter of
1995 in absolute dollars and as a percentage of net revenues compared
to the first quarter of 1994 was a result of the addition of sales
personnel worldwide as the Company expanded its investment in the
worldwide direct sales organizations, opening of new subsidiaries,
acquisition of several foreign distributors, higher commission expense
associated with the increase in revenues, and increased marketing
programs associated with new product launches.
With the continuing expansion throughout 1995 of worldwide operations,
as well as increased sales and marketing expenditures in 1995 aimed at
positioning the Company and its new and existing products in the
marketplace, the Company expects that sales and marketing expenses for
the remainder of 1995, as a percentage of net revenues, will be
similar to those of the first quarter of 1995.
RESEARCH AND DEVELOPMENT EXPENSES
The Company accounts for its product development costs in accordance
with Statement of Financial Accounting Standards No. 86, "Accounting
for the Costs of Computer Software to Be Sold, Leased, or Otherwise
Marketed." This statement requires that once technological feasibility
of a developing product has been established, all subsequent costs
incurred in developing that product to a commercially acceptable level
be capitalized and amortized ratably over the revenue life of the
product. The Company's research and development expenses exclude
capitalized software costs of $3.9 million and $2.3 million in the
first quarters of 1995 and 1994, respectively, and exclude
amortization costs of previously capitalized software. The following
table summarizes research and development costs for the periods ended
April 2, 1995 and April 3, 1994:
<TABLE>
<CAPTION>
(DOLLARS IN MILLIONS)
First Quarter Percentage First Quarter
1995 Change 1994
<S> <C> <C> <C>
Research and development expenses $ 17.5 36% $ 12.9
Expenditures capitalized 3.9 71% 2.3
----- -----
Incurred product development costs $ 21.4 41% $ 15.2
Research and development expenses
as a percentage of net revenues 12% 13%
Expenditures capitalized as a % of
incurred 18% 15%
Amortization $ 3.1 78% $ 1.7
</TABLE>
The increase in research and development expenditures in absolute
dollars in the first quarter of 1995 was attributed to an increase in
staff working on new products and product extensions.
The proportion of capitalized expenditures as a percentage of total
incurred expenses increased in the first quarter of 1995 compared to
the first quarter of 1994 as several major projects in development had
reached technological feasibility. The Company expects the proportion
of work on capitalized projects for the remainder of 1995 to remain
relatively stable compared to the first quarter of 1995 as other major
new products reach technological feasibility, and capitalization of
the related software development costs begins.
Major new programs currently under development in 1995 include new
INFORMIX OnLine Dynamic Servers and connectivity products, and new
versions of the INFORMIX-NewEra tool products. The Company believes
that research and development expenditures are essential to
maintaining its competitive position in its primary markets and
expects the expenditure levels for the remainder of 1995 to increase
in absolute dollars.
GENERAL AND ADMINISTRATIVE EXPENSES
<TABLE>
<CAPTION>
(DOLLARS IN MILLIONS)
First Quarter Percentage First Quarter
1995 Change 1994
<S> <C> <C> <C>
General and administrative expenses $ 11.1 16% $ 9.5
Percentage of net revenue 7% 10%
</TABLE>
The increase in absolute dollars in the first quarter of 1995 compared
to the same prior year period was primarily due to an increase in the
costs of supporting the Company's international operations as new
subsidiaries and branch offices were established and existing
subsidiaries were expanded. The Company expects that general and
administrative expenses as a percentage of net revenues for the
remainder of 1995 will remain relatively stable with the first quarter
of 1995.
PROVISION FOR INCOME TAXES
The Company's effective tax rate increased to 37.5 percent of pretax
income in the first quarter of 1995 from 36.0 percent in the same
period in 1994. The higher effective tax rate for the first quarter of
1995 was primarily due to the scheduled expiration of the U.S. federal
research and development tax credit in 1995.
The Company anticipates its fiscal 1995 effective tax rate to be
approximately 37.5 percent; however, this rate could change based on a
change in the geographic mix of the Company's earnings and the amount
of permanent reinvestment offshore of a portion of the 1995 earnings
of the Company's lower-taxed Irish operations and the potential
reinstatement of the U.S. federal research and development tax credit.
EARNINGS PER SHARE
The percentage increase in earnings per share in the first quarter of
1995 over the first quarter of 1994 resulted from an increase in net
income for reasons mentioned above. Although the Company expects
revenues to continue to grow for the remainder of 1995, there can be
no assurance that such growth can be achieved. The Company anticipates
that headcount and employee-related expenses, including capital
expenditures, will likewise grow.
IMPACT OF INFLATION
The effect of inflation on the Company's financial position has not
been significant.
LIQUIDITY AND CAPITAL RESOURCES
<TABLE>
<CAPTION>
(IN MILLIONS OF DOLLARS)
First Quarter
1995 1994
<S> <C> <C>
Cash, cash equivalents, and investments $ 184.0 $ 144.3
Working capital 166.3 159.2
Cash provided by operations 27.0 15.7
Cash used for investment activities, excluding
investments of excess cash 48.2 12.4
Cash provided by (used in) financing activities 4.5 (2.9)
</TABLE>
Cash generated by operations provided sufficient resources to fund the
Company's headcount growth and capital asset needs in all periods
presented.
The increase in net cash and cash equivalents provided by operations
in the first quarter of 1995 compared with the same period in 1994 was
primarily attributable to higher net income before depreciation and
amortization charges.
Accounts receivable decreased by $9.3 million in the first quarter of
1995 as compared to the fourth quarter of 1994, principally as a
result of slightly lower sales, strong collections and the use of
third party financing programs. Days sales outstanding decreased from
approximately 79 days in the fourth quarter of 1994 to 74 days in the
first quarter of 1995. Commencing in late 1993, the Company instituted
programs to have third-party financial institutions provide financing
for extended credit terms instead of such terms being provided by the
Company. The days sales outstanding ratio is dependent on many factors,
including the mix of contract-based revenue with significant OEMs and large
corporate and government end-users versus revenue recognized on
shipments to application vendors and distributors and the success of
the Company's financing programs . Although a large portion of the
Company's revenues are derived from resellers, the Company's revenues
since 1993, particularly in Europe, have shifted substantially from
distributors to direct end-users. These end-user sales contracts
frequently bear extended payment terms which result in an increase in
days sales outstanding ratios unless the contracts are financed. The
shift in distributor channels is likely to continue as products and
markets mature. The Company is using a variety of activities to
reduce the days sales outstanding ratio. In the future, the Company
expects this ratio to vary within the range which prevailed in the
last several quarters.
Excluding investments of excess cash, net cash and cash equivalents
used in investing activities increased in the first quarter of 1995
compared with the same period in 1994. In the first quarters of 1995
and 1994, the Company acquired $9.5 million and $7.2 million,
respectively, of capital equipment consisting primarily of computer
equipment, computer software and office equipment. The increase of
capital equipment purchases in the first quarter of 1995 resulted from
the Company's growing employee headcount, the replacement of obsolete
equipment and investment in new technology. In the future, the Company
anticipates the actual level of capital spending will be dependent on
a variety of factors, including the Company's business requirements
and general economic conditions.
The Company's investments in software costs were previously discussed
under "Results of Operations."
In January 1995, the Company acquired a 90 percent interest in the
database division of ASCII Corporation, a distributor of its products
in Japan. The Company will acquire the remaining 10 percent interest
in January 1996. The Company accounted for the acquisition as a
purchase. The purchase price of ASCII's database division was
approximately $46.0 million, of which approximately $34.8 million has
been allocated to intangible assets acquired.
In April 1995, the Company acquired an 80 percent interest in the
database division of Daou Corporation, a distributor of its products
in Korea. The Company will acquire the remaining 20 percent by
January 1997. The acquisition will be recorded as a purchase. The
purchase price of this business is approximately $4.3 million.
Net cash and cash equivalents used in or provided by financing
activities was not significant in the first quarter of 1995.
Net cash and cash equivalents used in financing activities in the
first quarter of 1994 included payments on capital leases and
repurchase of the Company's common stock offset by proceeds from the
sale of the Company's common stock to employees.
In 1993 and 1994, the Board of Directors authorized the repurchase of
up to 4 million shares of the Company's common stock in the open
market. Through the first quarter of 1995, the Company had
repurchased 1,790,000 shares with an aggregate cost of approximately
$32.1 million on the open market.
The Company expects current balances of cash, cash equivalents, and
short-term investments will be sufficient to fund anticipated levels
of operations at least through the first quarter of 1996 and may be
used for investments and acquisitions to supplement internal revenue
growth and for other corporate purposes.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A) Exhibits
Exhibit 11 - Statement Regarding Computation of Per Share Earnings.
Exhibit 27 - Financial Data Schedule.
B) Reports on Form 8-K.
The Company filed a Report on Form 8-K on January 25, 1995,
reporting under Item 2 the completion of the acquisition of the assets
of the database system division of ASCII Corporation effective January
11, 1995.
A Report on Form 8K/A amending the Form 8-K referenced above was
filed on March 22, 1995.
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.
INFORMIX CORPORATION
Dated: May 17, 1994 /s/ HOWARD H. GRAHAM
Howard H. Graham
Senior Vice President, Finance
and Chief Financial Officer
Dated: May 17, 1994 /s/ RICHARD C. BLASS
Richard C. Blass
Vice President, Corporate Controller
and Chief Accounting Officer
EXHIBIT 11
<TABLE>
<CAPTION>
INFORMIX CORPORATION
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE PERIODS ENDED
APRIL 2, APRIL 3,
1995 1994
<S> <C> <C>
Net income used for earnings per
share calculation $ 19,096 $ 12,520
Earnings Per Common Share
Weighted average outstanding shares 65,722 64,821
Net effect of outstanding options 2,740 2,701
------- -------
Weighted average common and common
equivalent shares outstanding 68,462 67,522
======= =======
Net income per share $ 0.28 $ 0.19
======= =======
</TABLE>
Fully diluted computation not presented since such amounts differ by
less than 3 percent of the net income per share amounts shown above.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements contained in the Company's Form 10Q for the period
ending April 02, 1995 and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<CIK> 0000799089
<NAME> INFORMIX CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> APR-02-1995
<CASH> 130,682
<SECURITIES> 53,298
<RECEIVABLES> 129,657
<ALLOWANCES> 7,720
<INVENTORY> 2,867
<CURRENT-ASSETS> 326,111
<PP&E> 107,881
<DEPRECIATION> 56,492
<TOTAL-ASSETS> 476,316
<CURRENT-LIABILITIES> 159,785
<BONDS> 0
0
0
<COMMON> 661
<OTHER-SE> 299,809
<TOTAL-LIABILITY-AND-EQUITY> 476,316
<SALES> 110,369
<TOTAL-REVENUES> 147,785
<CGS> 7,862
<TOTAL-COSTS> 118,861
<OTHER-EXPENSES> 125
<LOSS-PROVISION> 1,684
<INTEREST-EXPENSE> 50
<INCOME-PRETAX> 30,553
<INCOME-TAX> 11,457
<INCOME-CONTINUING> 19,096
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,096
<EPS-PRIMARY> 0.28
<EPS-DILUTED> 0.28
</TABLE>
