SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
__________
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 September 29, 1996
OR
_ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-7760/0-20290
Computervision Corporation
(Exact name of registrant as specified in its charter)
Delaware 04-2491912
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
100 Crosby Drive, Bedford, Massachusetts 01730
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 275-1800
Former name, former address and former fiscal year, if changed since
last report.)
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 twelve months (or such shorter period that
the registrant was required to file such reports), and (2) has been subject
to the filing requirements for the past 90 days.
Yes X No
At November 12, 1996 the registrant had outstanding an aggregate of 63,429,056
shares of its Common Stock, $.01 par value.
1
<PAGE>
Computervision Corporation
<TABLE>
<CAPTION>
INDEX
PART I. FINANCIAL INFORMATION Page
<S> <C>
Consolidated Balance Sheets at December 31, 1995 and
September 29, 1996 (Unaudited) 3
Consolidated Statements of Operations (Unaudited) for the Three
and Nine Months Ended October 1, 1995 and September 29, 1996 4
Consolidated Statements of Cash Flows (Unaudited) for the Nine
Months Ended October 1, 1995 and September 29, 1996 5
Notes to Consolidated Financial Statements (Unaudited) 6-7
Management's Discussion and Analysis of Financial Condition
and Results of Operations 8-10
Review by Independent Public Accountants 11
Report on Review by Independent Public Accountants 12
PART II. OTHER INFORMATION 13
Signatures 14
EXHIBIT INDEX 15
</TABLE>
2
<PAGE>
COMPUTERVISION CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
(Unaudited)
December 31, September 29,
ASSETS 1995 1996
---------- -----------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $50,979 $23,487
Accounts receivable, less allowance for doubtful
accounts of $3,623 and $2,763, respectively 92,271 113,964
Current deferred income taxes 16,444 16,319
Prepaid expenses and other current assets 18,003 22,463
-------- --------
TOTAL CURRENT ASSETS 177,697 176,233
PROPERTY AND EQUIPMENT, NET 49,026 38,079
DEFERRED INCOME TAX ASSETS 10,766 10,645
CAPITALIZED SOFTWARE 2,105 623
DEFERRED FINANCE COSTS 5,344 4,136
OTHER ASSETS 4,597 3,915
-------- --------
$249,535 $233,631
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable $27,259 $23,422
Notes payable and current portion of long-term debt 8,211 7,980
Accrued compensation, severance and related costs 61,722 43,521
Deferred revenue and customer advances 39,148 37,938
Accrued and deferred income taxes 31,910 35,318
Other current liabilities and accrued expenses 90,977 74,495
-------- --------
TOTAL CURRENT LIABILITIES 259,227 222,674
DEFERRED INCOME TAXES 27,284 27,311
LONG-TERM DEBT, LESS CURRENT PORTION 223,616 223,470
OTHER LONG-TERM LIABILITIES 77,134 66,024
STOCKHOLDERS' DEFICIT
Preferred stock, $0.01 par value; 5,000,000 shares
authorized; none issued and outstanding
Common stock, $0.01 par value; 100,000,000 shares
authorized; 62,815,017 and 63,425,597 shares,
respectively, issued and outstanding 628 634
Capital in excess of par value 1,183,056 1,185,606
Retained deficit (1,533,351) (1,501,436)
Cumulative translation adjustment 11,941 9,348
--------- ---------
TOTAL STOCKHOLDERS' DEFICIT (337,726) (305,848)
--------- ---------
$249,535 $233,631
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
3
<PAGE>
COMPUTERVISION CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
Oct. 1, Sept. 29, Oct. 1, Sept. 29,
1995 1996 1995 1996
------- ------- ------- -------
<S> <C> <C> <C> <C>
SOFTWARE REVENUE
Product $39,625 $55,028 $115,703 $138,918
Services 29,423 26,090 88,987 80,738
------- ------- ------- -------
TOTAL SOFTWARE REVENUE 69,048 81,118 204,690 219,656
Other Services Revenue 56,339 42,135 171,534 135,789
------- ------- ------- -------
TOTAL REVENUE 125,387 123,253 376,224 355,445
COST OF SALES
Software
Product 3,445 4,092 12,716 11,828
Services 17,030 16,278 52,264 48,362
Other services 39,698 34,969 119,822 102,607
------- ------- ------- -------
TOTAL COST OF SALES 60,173 55,339 184,802 162,797
------- ------- ------- -------
GROSS PROFIT 65,214 67,914 191,422 192,648
SELLING AND ADMINISTRATIVE EXPENSE 33,454 35,364 103,508 102,807
RESEARCH, DEVELOPMENT AND
ENGINEERING EXPENSE 10,539 9,797 31,937 30,537
------- ------- ------- -------
OPERATING INCOME 21,221 22,753 55,977 59,304
INTEREST INCOME (162) (461) (627) (1,262)
INTEREST EXPENSE 11,500 8,347 35,073 24,372
OTHER (INCOME) EXPENSE, NET 444 (12) 259 (70)
------- ------- ------- -------
EARNINGS BEFORE INCOME TAXES 9,439 14,879 21,272 36,264
PROVISION FOR INCOME TAXES 1,416 1,785 3,176 4,349
------- ------- ------- -------
NET INCOME $8,023 $13,094 $18,096 $31,915
======= ======= ======= =======
EARNINGS PER SHARE $0.16 $0.20 $0.36 $0.49
======= ======= ======= =======
WEIGHTED AVERAGE SHARES OUTSTANDING 50,794 64,478 49,776 64,782
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
4
<PAGE>
COMPUTERVISION CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Nine Months Ended
October 1, September 29,
CASH FLOWS FROM (USED FOR) OPERATIONS 1995 1996
--------- -----------
<S> <C> <C>
Net earnings $18,096 $31,915
Add items not requiring cash:
Depreciation of property and equipment 19,317 16,037
Amortization of intangibles 4,874 1,482
Amortization of finance costs and debt discounts 2,567 2,185
Provision for doubtful accounts 190 (31)
Changes in assets and liabilities:
Accounts receivable 18,128 (23,180)
Prepaid expenses and other current assets (992) (3,228)
Accounts payable, accrued expenses and
income taxes (43,780) (45,267)
------- -------
Cash flows from (used for) continuing
operations 18,400 (20,087)
Cash flows from discontinued operations 1,514 0
------- -------
Total cash flows from (used for) operations 19,914 (20,087)
------- -------
INVESTING ACTIVITIES
Expenditures for property and equipment (7,191) (7,929)
Decrease in other assets 3,728 464
------- -------
Total cash flows used for investments (3,463) (7,465)
------- -------
FINANCING ACTIVITIES
Increase (decrease) in notes payable (4,792) 260
Payments on long-term borrowings (1,207) (1,615)
Issuance of common stock under Employee Stock
Purchase Plan 265 308
Issuance of common stock under Stock Option Plan 1,026 2,248
------- -------
Total cash from financing activities (4,708) 1,201
------- -------
Foreign exchange impact on cash 4,931 (1,141)
------- -------
Net increase (decrease) in cash and cash equivalents 16,674 (27,492)
Cash and cash equivalents at beginning of period 15,240 50,979
------- -------
Cash and cash equivalents at end of period $31,914 $23,487
======= =======
Supplementary data requirements:
Cash interest paid $40,779 $25,271
Cash taxes paid (refunded) ($559) $625
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
5
<PAGE>
The accompanying unaudited financial statements have been prepared by the
Company pursuant to the rules and regulations of the Securities and Exchange
Commission, and reflect all adjustments (all of which are of a normal
recurring nature) which, in the opinion of management, are necessary for a
fair statement of the results of the interim periods presented. The unaudited
results of operations for the quarter and nine month period ended September
29, 1996 are not necessarily an indication of the results of operations for
the full year. These financial statements do not include all disclosures
associated with annual financial statements and, accordingly, should be read
in conjunction with the financial statements and footnotes for the year ended
December 31, 1995 included in the Company's Form 10-K where certain terms
have been defined.
(1) Notes Payable and Long-Term Debt (In Thousands)
<TABLE>
<CAPTION>
December 31, September 29,
1995 1996
--------- ---------
<S> <C> <C>
Notes Payable:
Notes Payable to Banks $2,812 $3,072
Revolving Credit Arrangement - -
-------- -------
Total Notes Payable $2,812 $3,072
======== =======
Long-Term Debt:
8% Convertible Subordinated Debentures, due 2009 36,066 37,000
11 3/8% Senior Subordinated Notes, due 1999 175,000 175,000
Other Long-Term Debt, less current portion
of $5,399 and $4,908 12,550 11,470
-------- --------
Total Long-Term Debt, less current portion $223,616 $223,470
======== ========
</TABLE>
Notes Payable to Banks
Notes payable to banks consist of borrowings by the Company's international
subsidiaries under certain of the Company's lines of credit. Borrowings under
such lines bear interest at prevailing or negotiated rates.
Revolving Credit Arrangement
The Company has a revolving credit facility with a bank, which expires in
1998. There were no borrowings outstanding against the facility at December
31, 1995 or September 29, 1996.
(2) Litigation
The Company is currently involved in lawsuits which could have an adverse
impact upon the Company's short-term liquidity and results of operations if
unfavorable judgments are rendered against the Company. With respect to the
lawsuit brought against the Company by Joseph and Josephine Dieter, the trial
has occurred and the Company is in the process of filing post-trial briefs.
Post-trial briefing is scheduled to conclude in February, 1997.
On July 31, 1996 the United States Court of Appeals for the First Circuit
approved the decision of the United States District Court in Boston to dismiss
the securities class action lawsuit filed against the Company, certain
officers and directors arising out of the Company's 1992 public equity and
debt offerings. The case had been originally filed in September 1992 and was
amended several times.
Other than as described above, there have been no significant changes to the
Company's outstanding litigation since the filing of the Company's Form 10-Q
for the three months ended June 30, 1996.
6
<PAGE>
(3) Related Party Transaction
The Company recognized $11,200 of software product revenue from Peugeot SA
during the quarter ended March 31, 1996. A member of senior management of
Peugeot SA is also a director of the Company.
(4) Earnings Per Share
Fully diluted earnings per share for the three and nine months ended October
1, 1995 and September 29, 1996 would have been the same as primary earnings
per share and, therefore, have not been presented separately.
(5) Reclassifications
Certain prior year balances in the financial statements have been reclassified
to conform to the current year financial statement presentation.
(6) Sale of Open Service Solutions Business
On September 25, 1996, the Company signed a definitive Asset Purchase
Agreement to sell the Open Service Solutions (OSS) business to an affiliate
(the Purchaser) of J.F. Lehman & Co. for $100 million in cash, $25 million
(face value) of nonconvertible redeemable preferred stock of the Purchaser
and a warrant to purchase 19% of the common equity of the Purchaser.
7
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations (In Thousands, Except Per Share Data)
This Management's Discussion and Analysis of Financial Condition and
Results of Operations should be read in conjunction with the financial
statements and footnotes contained in the Company's Form 10-Q for the nine
months ended September 29, 1996 and the Form 10-K, including the Factors That
May Affect Future Results section of Management's Discussion and Analysis
of Financial Condition and Results of Operations, for the year ended
December 31, 1995, filed with the Securities and Exchange Commission.
Software Revenue and Gross Margins
Total software revenue for the third quarter of 1996 increased $12,070 or 17%,
as product revenue increased $15,403 or 39% and service revenue decreased
$3,333 or 11% from the corresponding period in 1995. For the nine month
period ended September 29, 1996, total software revenue increased $14,966, or
7%, as product revenue increased $23,215 or 20% and service revenue decreased
$8,249 or 9% from the corresponding period in 1995. Total software revenue
for the 1996 nine month period included $27,000 related to a third quarter
contract with Electronic Data Systems for product to the Rolls-Royce Aerospace
Group and Allison Engine Company and $11,200 related to a first quarter
contract with Peugeot SA, including Automobiles Peugeot and Citroen, while
total software revenue for the comparable year ago period included $11,900
related to third quarter contracts with the Airbus Consortium (British
Aerospace Airbus Limited, Aerospatiale S.N.I. and Daimler Benz Aerospace
Airbus GmbH). Total software revenue for both the third quarter and first nine
months of 1996 included unfavorable foreign exchange impacts during the
periods of $300 and $3,100, respectively, attributable to product revenue,
and $800 and $2,800, respectively, attributable to service revenue.
For the three month and nine month periods ended September 29, 1996, revenue
from the Company's product data management software products increased $2,600
and $9,700, or 27% and 47%, respectively, and revenue from CADDS software
products increased $14,000 and $17,100, or 57% and 23%, respectively. Revenue
from several older mechanical CAD software products, however, continued to
decline year over year, as planned.
The decrease in software service revenue for the three and nine month periods
ended September 29, 1996 was due to reduced maintenance revenue and lower
training revenue. The maintenance revenue decrease reflected primarily the
impact of lower pricing on new products and upgrades within the existing
customer base.
Software product margins for both the third quarter and first nine months
of 1996 were 92.6% and 91.5% compared to 91.3% and 89%, respectively, for
the corresponding periods in 1995. The improvement in software product
margins primarily resulted from a decrease in amortization of previously
capitalized software costs. Software service margins for the third quarter
and first nine months of 1996 were 37% and 40% compared to 42% and 41%,
respectively, for the corresponding periods in 1995. The decline in software
service margin for the third quarter of 1996 primarily resulted from
decreased maintenance and training margins offset in part by increases in
consulting margins.
Other Revenue and Gross Margins
Other services revenue for the third quarter and first nine months of 1996
decreased $14,204 and $35,745, or 25% and 21% from the corresponding periods
in 1995 and included unfavorable period over period foreign exchange impacts
of $700 and $2,800, respectively. The decrease in other services revenue was
primarily due to the expected continuing reduction in hardware services,
which declined $14,250 and $40,089, or 41% and 37%, respectively. These
decreases were partially offset by increases in value added services revenue.
Other services margins for the third quarter and first nine months of 1996
were 17% and 24%, respectively, compared to 30% for the corresponding periods
in 1995. The decrease in margins was attributable to several factors,
including unabsorbed fixed costs as a result of a declining service base,
certain inventory reserve provisions and increased value added services
which contribute a lower margin.
On September 25, 1996, the Company signed a definitive Asset Purchase
Agreement to sell the Open Service Solutions (OSS) business to an affiliate
(the Purchaser) of J.F. Lehman & Co. for $100 million in cash, $25 million
(face value) of nonconvertible redeemable preferred stock of the Purchaser
and a warrant to purchase 19% of the common equity of the Purchaser.
8
<PAGE>
Selling and Administrative Expense
Total selling and administrative expense for the third quarter of 1996
increased $1,910 or 6% and for the first nine months of 1996 decreased $701
or 1% from the corresponding periods in 1995 and included favorable foreign
exchange impacts of $600 and $2,100, respectively. The increase in the third
quarter was primarily due to increased selling and marketing expenditures.
Research, Development and Engineering Expense
Total research, development and engineering expense for the third quarter
and first nine months of 1996 decreased $742 and $1,400, or 7% and 4%,
respectively, from the corresponding periods in 1995. The decrease was
primarily due to continued reductions in operating costs resulting from
reallocation of development projects to the Company's development facility
in India.
Interest and Other
Interest expense for the third quarter and first nine months of 1996
decreased $3,153 and $10,701, or 27% and 31%, respectively, compared to
the corresponding periods in 1995. This decrease was primarily due to
the repayment in the fourth quarter of 1995 of the 10 7/8% Senior Notes,
due in 1997. Interest income increased $635 for the first nine months
of 1996 over the corresponding period in 1995, due to higher average
invested cash balances. Other (income) expense for the first nine months
of 1996 and the corresponding period of 1995 primarily relates to the
Company's foreign currency hedging program.
Short-term Liquidity and Capital Resources
The Company expects that cash generated from operations and from factoring
arrangements which may be entered into from time to time, as well as
borrowings under its Revolving Credit Arrangement will be sufficient to
fund its principal short-term liquidity requirements, including debt service,
restructuring payments, normal working capital and other cash requirements.
On November 17, 1995, the Company entered into a three-year, $50,000 credit
facility (the "New Credit Facility") with Bankers Trust Company (Fleet Bank
of Massachusetts later became a co-agent). The New Credit Facility provides
for a revolving line of credit (the "Revolving Credit Line") of $50,000 for
working capital and for sinking fund payments on the Company's 8% Convertible
Subordinated Debentures, of which $20,000 is available for letters of credit.
Letters of credit outstanding at September 29, 1996 were $7,176. Pursuant to
the terms of the New Credit Facility, the Company has granted the lenders a
security interest in all of the Company's U.S. assets. The New Credit Facility
is not subject to any borrowing base restrictions. The New Credit Facility
requires the Company to satisfy certain financial and other covenants. Loans
under the New Credit Facility will bear interest at a Base Rate or Eurodollar
rate, as selected by the Company, plus an Applicable Margin. On September 29,
1996, the rates ranged from 7.41% to 9.25%.
Despite a significant reduction in the Company's long term indebtedness in
1995, the Company remains highly leveraged and has a stockholders' deficit.
This indebtedness requires the Company to dedicate a significant portion of
its cash flow from operations to service its indebtedness and makes the
Company more vulnerable to unfavorable changes in general economic conditions.
A substantial portion of the Company's orders and shipments typically occur
in the last two weeks of each quarter. Therefore, the timing of orders and
shipments, including unexpected delays in receiving large orders or
competitors introducing new competitive products, could result in significant
quarterly fluctuations in the Company's operating results and cash flow.
Historically, the Company has experienced a seasonal decline in revenue in
the first and third quarters of each fiscal year, primarily due to capital
budgeting cycles and the European holiday schedule, respectively.
Long-term Liquidity
The Company's principal long-term liquidity requirements are payments for
interest, previously accrued restructuring obligations, capital expenditures
and the repayment of the Senior Subordinated Notes which mature in 1999. The
Company expects to meet its long-term liquidity requirements, including
repayment of its Senior Subordinated Notes, primarily
9
<PAGE>
through funds generated from operations, net proceeds from the sale of the
OSS business, bank borrowings or sales of equity and/or debt securities. The
Company believes that it may require additional funds in 1999 to satisfy
these obligations, in which event it would seek to obtain such funds through
a further sale of equity and/or debt securities or other financing
arrangements. However, no assurances can be given that such funds will be
available when required or on terms favorable to the Company.
Operations and Investments
Cash and cash equivalents were $23,487 at September 29, 1996 compared with
$50,979 at December 31, 1995. The decrease of $27,492 in cash and cash
equivalents is primarily due to cash used for operations ($20,087) and cash
used for the purchase of property and equipment ($7,929). Cash used for
operations was significantly impacted by an increase in net accounts
receivable during the first nine months of 1996. The increase in net accounts
receivable was primarily the result of a shift in the mix of revenues toward
more software product and value added services revenues, which typically have
a longer collection cycle than services or annuity based revenues.
Legal
The Company is currently involved in lawsuits which could have an adverse
impact upon the Company's short-term liquidity and results of operations if
unfavorable judgments are rendered against the Company. With respect to the
lawsuit brought against the Company by Joseph and Josephine Dieter, the trial
has occurred and the Company is in the process of filing post-trial briefs.
Post-trial briefing is scheduled to conclude in February, 1997.
On July 31, 1996 the United States Court of Appeals for the First Circuit
approved the decision of the United States District Court in Boston to dismiss
the securities class action lawsuit filed against the Company, certain
officers and directors arising out of the Company's 1992 public equity and
debt offerings. The case had been originally filed in September 1992 and was
amended several times.
Other than as described above, there have been no significant changes to the
Company's outstanding litigation since the filing of the Company's Form 10-Q
for the three months ended June 30, 1996.
10
<PAGE>
Report on Review by Independent Public Accountants
The financial statements included in this filing on Form 10-Q, as listed in
the accompanying index, have been reviewed by Arthur Andersen LLP, independent
public accountants, in accordance with established professional standards and
procedures for such a review. Their report on the review is included on page
12 of the Form 10-Q.
11
<PAGE>
(Arthur Andersen LLP letterhead)
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Computervision Corporation:
We have reviewed the accompanying condensed consolidated balance sheet of
Computervision Corporation and subsidiaries as of September 29, 1996, and the
related consolidated statements of operations for the three- and nine-month
periods ended September 29, 1996 and October 1, 1995 and the consolidated
statements of cash flows for the nine-month periods ended September 29, 1996
and October 1, 1995. These financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the financial statements referred to above for them to
be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Computervision Corporation and
subsidiaries as of December 31, 1995 and the related consolidated statements
of operations, stockholders' equity (deficit) and cash flows for the year then
ended (not presented separately herein), and in our report dated January 22,
1996, we expressed an unqualified opinion on those financial statements. In
our opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of December 31, 1995 is fairly stated, in all
material respects, in relation to the consolidated balance sheet from which
it has been derived.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
October 23, 1996
12
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is currently involved in lawsuits which could have an adverse
impact upon the Company's short-term liquidity and results of operations if
unfavorable judgments are rendered against the Company. With respect to the
lawsuit brought against the Company by Joseph and Josephine Dieter, the trial
has occurred and the Company is in the process of filing post-trial briefs.
Post-trial briefing is scheduled to conclude in February, 1997.
On July 31, 1996 the United States Court of Appeals for the First Circuit
approved the decision of the United States District Court in Boston to dismiss
the securities class action lawsuit filed against the Company, certain
officers and directors arising out of the Company's 1992 public equity and
debt offerings. The case had been originally filed in September 1992 and was
amended several times.
Other than as described above, there have been no significant changes to the
Company's outstanding litigation since the filing of the Company's Form 10-Q
for the three months ended June 30, 1996.
Item 6. Exhibits and reports on Form 8-K
(a) Exhibits.
Exhibit 11 - Calculation of Shares Used in Determining Earnings Per Share.
Exhibit 15 - Letter re: Unaudited Interim Financial Information.
(b) Reports on Form 8-K.
A report on Form 8-K was filed on August 7, 1996 to announce that the United
States Court of Appeals for the First Circuit affirmed the decision of the
United States District Court in Boston, Massachusetts to dismiss a securities
class action lawsuit filed against the Company, certain officers and
directors, and underwriters arising out of the Company's 1992 public equity
and debt offerings.
A report on Form 8-K was filed on October 1, 1996 to announce the sale of the
Company's Open Service Solutions (OSS) business for $125 million.
A report on Form 8-K was filed on October 31, 1996 to report the Company's
financial results for the third quarter of 1996.
13
<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.
Computervision Corporation
(Registrant)
Date: November 12, 1996
/S/ William A. Foniri
William A. Foniri
Vice-President, Finance
Chief Financial Officer, and Treasurer
14
<PAGE>
<TABLE>
<CAPTION>
Exhibit Index
Page
<S> <C>
11(a) - Computervision Corporation - Calculation of Shares
Used in Determining Earnings Per Share 16
15 - Letter re: Unaudited Interim Financial Information 17
15
<PAGE>
Computervision Corporation
Calculation of Shares Used in Determining Earnings Per Share
For the Three and Nine Months Ended October 1, 1995 and September 29,1996
(In Thousands)
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
Oct. 1, Sept. 29, Oct. 1, Sept. 29,
Primary Earnings Per Share 1995 1996 1995 1996
------- ------- ------- -------
<S> <C> <C> <C> <C>
Weighted average number of common
shares outstanding during the period 48,704 63,418 48,545 63,228
Common stock equivalents 2,090 1,060 1,231 1,554
------- ------- ------- -------
Total 50,794 64,478 49,776 64,782
======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
Oct. 1, Sept. 29, Oct. 1, Sept. 29,
Fully Diluted Earnings Per Share 1995 1996 1995 1996
------ ------- ------- -------
<S> <C> <C> <C> <C>
Weighted average number of common
shares outstanding during the period 48,705 63,419 48,545 63,228
Common stock equivalents 2,165 1,441 1,383 1,679
------- ------- ------- -------
Total 50,870 64,860 49,928 64,907
======= ======= ======= =======
</TABLE>
16
<PAGE>
(Arthur Andersen LLP letterhead)
November 11, 1996
Computervision Corporation
100 Crosby Drive
Bedford, MA 01730
To Computervision Corporation:
We are aware that Computervision Corporation has incorporated by reference in
its registration statements filed on Forms S-8 and S-3 its Form 10-Q for the
three month period ended September 29, 1996, which includes our report dated
October 23, 1996, covering the unaudited interim financial information
contained therein. Pursuant to Regulation C of the Securities Act of 1933,
this report is not considered a part of the registration statements on Forms
S-8 and S-3 prepared or certified by our firm or a report prepared or
certified by our firm within the meaning of Sections 7 and 11 of the Act.
Very truly yours,
ARTHUR ANDERSEN LLP
17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from the financial statements included in the Form 10-Q for the
quarter ended September 29, 1996 and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-29-1996
<CASH> 23,487
<SECURITIES> 0
<RECEIVABLES> 116,727
<ALLOWANCES> 2,763
<INVENTORY> 0
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0
0
<COMMON> 634
<OTHER-SE> (306,482)
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<CGS> 11,828
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<LOSS-PROVISION> (31)
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<INCOME-TAX> 4,349
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 31,915
<EPS-PRIMARY> 0.49
<EPS-DILUTED> 0.49
</TABLE>
