SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K
CURRENT REPORT
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): July 23, 1997
Computervision Corporation
(Exact name of registrant as specified in charter)
Delaware 1-7760/0-20290 04-2491912
- - ---------------- -------------- --------------
(State or other (Commission IRS Employer
jurisdiction File Numbers) Identification
of incorporation) Number)
100 Crosby Drive, Bedford, MA 01730
(Address of principal executive offices)
(617) 275-1800
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
- - ---------------------
On July 23, 1997, Computervision Corporation issued three
press releases announcing (1) second quarter results; (2)
settlement of shareholder suit; and (3) acquisition of Knowledge
Integration Center (KIC) (see copies of press releases attached).
Item 7. Financial Statements and Exhibits
- - ------------------------------------------
(a) Financial Statements of business acquired:
Not applicable
(b) Pro Forma financial information
Not applicable
(c) Exhibits:
(99) (a) Press Release dated July 23, 1997
(99) (b) Press Release dated July 23, 1997
(99) (c) Press Release dated July 23, 1997
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and 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)
By /S/ Anthony N. Fiore, Jr.
Anthony N. Fiore, Jr.
Vice President, Business
Operations and General Counsel
Date: July 24, 1997
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Page. No.
- - ---------------------------------------------------------
(99) (a) Press Release dated July 23, 1997 5-10
(99) (b) Press Release dated July 23, 1997 11-12
(99) (c) Press Release dated July 23, 1997 13-14
<PAGE>
For Further Information:
Investor Contact: Media Contact:
Kathryn Cadigan Wayne B. George
Director, Investor Relations Director, Public Relations
617-275-1800, ext. 1871 617-275-1800, ext. 2443
FOR IMMEDIATE RELEASE
Computervision Announces Second Quarter Results
Results Include Restructuring Charge to Achieve
Software Model
BEDFORD, Mass., July 23, 1997 -- Computervision Corporation
(NYSE:CVN) today announced that it is taking a series of actions
that are designed to improve the Company's operating results in
future periods. These actions will result in a $45 million pre-
tax charge in the second quarter, 1997. The Company said that
over the second half of 1997, it plans to effect reductions in its
expense structure that will allow it to enter 1998 with an
annualized expense rate of approximately $100 - $110 million.
Second Quarter operating expenses before the restructuring charge
were $42.4 million which included operating expenses of $5.0
million attributable to the OSS business unit.
On July 18, 1997, the Company closed the sale of its Open Service
Solutions business unit ("OSS") in a transaction which brought
$32.6 million to the Company before transaction expenses.
In a separate news release today, the Company also announced the
settlement of a shareholder lawsuit by issuance of shares of the
Company's stock. The settlement was previously provided for and
there will be no charge to earnings.
Total revenues for the quarter were $88.5 million. The core
software business produced $51.6 million of revenue; $36.9 million
was from the OSS business. Total gross margin was $36.1 million
of which $31.3 million was from the core software business and
$4.8 million was from the OSS business. The net loss for the
period was $59.8 million or $0.94 per share. The net loss before
the restructuring charge was $14.8 million or $0.23 per share.
The operating results have created defaults under certain
financial covenants in the Company's bank credit facility, which
have not been waived. Currently, there are no outstanding
borrowings under this facility. The Company is seeking to enter
into new credit arrangements to meet the needs of its restructured
software business. The Company, however, can give no assurance at
this time that it will be successful in effecting such credit
arrangements.
Computervision president and chief executive officer Kathleen A.
Cote said: "Although we are disappointed to report a net loss for
the quarter, we believe that the actions that we are taking put
the Company in a position to be profitable in the future. The
performance of our base software business met our expectations
for the second quarter. With the sale of our OSS business unit,
we can now focus on our core software business as we prepare to
roll out new Electronic Product Definition (TM) ("EPD(TM)")
products in the third and fourth quarters.
"Excluding the restructuring charge, the principal reason we
didn't achieve profitability in the second quarter was that two
large potential sales did not close. The restructuring charge
reflects changes we are making to achieve our software business
model. Our goal is to move to a new economic model: to operate
with a lower cost structure in our software business that will
allow the Company to reach profitability without depending on the
larger deals the Company has traditionally relied upon and without
reducing our commitment to our research and development efforts."
Cote continued: "With the recent settlement of the shareholder
suit, we have removed a cloud of uncertainty over the Company.
With the sale of the OSS business unit, we have brought cash into
the Company and rationalized our business so we can now direct all
of our attention to our software business, which is developing and
implementing Electronic Product Definition (EPD) software
solutions for a broad range of industries worldwide. We are
pleased to now be in the position of focusing our business efforts
on delivering best-in-class software solutions to our existing and
prospective customers."
Company Background
- - ------------------
Computervision Corporation is the leading international supplier
of Electronic Product Definition (EPD) solutions. EPD is
Computervision's product and process response to the customer need
to concurrently create, manage, share and reuse electronic product
information in a collaborative environment throughout a product's
life cycle and across a distributed value chain. For more than 27
years, the company's product development software solutions have
helped manufacturers improve product quality and reduce time to
market. Computervision is headquartered in Bedford,
Massachusetts.
Except for the historical information contained herein, matters
discussed in this news release may constitute forward-looking
statements that involve risks and uncertainties that could cause
actual results to differ materially from those projected. These
include the ability of the Company to effect the reductions in
its expense structure in the anticipated time period. The Company
also directs the reader to those risks and uncertainties that are
detailed from time to time in reports filed by Computervision with
the Securities and Exchange Commission, including the Company's
most recent reports on Form 10-K and 10-Q.
Computervision and the Computervision logo are registered
trademarks of Computervision Corporation. Electronic Product
Definition, and EPD are trademarks of Computervision Corporation.
All other trademarks are trademarks of their respective owners.
A copy of this release plus financial, product and other company
information is available by dialing 1-800-546-4616. Any questions
concerning the service should be directed to Investor Relations at
Computervision Corporation at 617/275-1800. For more information
on Computervision, please call (617) 275-1800 or visit the
Computervision web site at http://www.cv.com.
FINANCIAL HIGHLIGHTS
- - --------------------
(In millions, except for per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 29, June 30, June 29, June 30,
1997 1996 1997 1996
------------------ -----------------
<S> <C> <C> <C> <C>
Total software revenue $ 51.6 $ 71.6 $ 93.0 $140.3
Other services $ 36.9 $ 47.4 $ 73.3 $ 91.9
Total revenues $ 88.5 $ 119.0 $ 166.3 $232.2
Non-recurring charge
- software $ 45.0 $.0 $ 45.0 $.0
Operating income (loss)
- software $(51.2) $ 13.8 $ (67.5) $ 24.7
Operating income (loss)
- other services $( 0.1) $ 5.7 $ ( 9.9) $ 11.9
Total operating income
(loss) $(51.3) $ 19.5 $ (77.4) $ 36.6
Net income (loss) $(59.8) $ 10.7 $ (93.7) $ 18.8
Net income (loss)
per share $(0.94) $ 0.16 $ (1.47) $ 0.29
Weighted average shares
outstanding 63.6 64.9 63.6 64.9
Total shares outstanding,
end of period 63.6 63.4 63.6 63.4
</TABLE>
COMPUTERVISION CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
(Unaudited)
December 31, June 29,
ASSETS 1996 1997
- - ------------------------------------------------------------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $38,565 $17,052
Accounts receivable, less allowance for
doubtful accounts of $2,929 and
$2,836, respectively 102,509 80,203
Current deferred income taxes 7,448 7,184
Prepaid expenses and other current assets 16,019 15,756
------- ------
TOTAL CURRENT ASSETS 164,541 120,195
PROPERTY AND EQUIPMENT, NET 31,055 19,752
DEFERRED INCOME TAX ASSETS 4,113 3,692
CAPITALIZED SOFTWARE 1,276 3,746
DEFERRED FINANCE COSTS 3,734 2,930
OTHER ASSETS 3,626 3,566
-------- -------
$208,345 $153,881
------- --------
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable $19,776 $28,743
Notes payable and current portion of
long-term debt 9,888 17,203
Accrued compensation, severance and
Related costs 57,482 63,972
Deferred revenue and customer advances 40,503 50,502
Accrued and deferred income taxes 15,019 13,587
Other current liabilities and
accrued expenses 81,822 81,881
-------- --------
TOTAL CURRENT LIABILITIES 224,490 255,888
DEFERRED INCOME TAXES 30,174 30,052
LONG-TERM DEBT, LESS CURRENT PORTION 217,346 217,379
OTHER LONG-TERM LIABILITIES 53,110 62,158
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;
63,509,999 and 63,573,899 shares,
respectively, issued and outstanding 635 636
Capital in excess of par value 1,186,109 1,186,507
Retained deficit (1,511,148) (1,604,860)
Cumulative translation adjustment 7,629 6,121
---------- ---------
TOTAL STOCKHOLDERS' DEFICIT (316,775) (411,596)
---------- ---------
$208,345 $153,881
---------- ---------
</TABLE>
COMPUTERVISION CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 29 June 30, June 29
1996 1997 1996 1997
--------------------------------------
<S> <C> <C> <C> <C>
SOFTWARE REVENUE
Product $43,851 $26,640 $83,890 $43,249
Services 27,759 24,948 56,437 49,700
------- ------- ------- -------
Total Software Revenue 71,610 51,588 140,327 92,949
OTHER SERVICES REVENUE 47,347 36,887 91,865 73,335
------- ------- ------- -------
Total Revenue 118,957 88,475 232,192 166,284
COST OF SALES
Software
Product 3,773 4,056 7,736 6,133
Services 15,630 16,276 32,084 33,065
Other services 35,348 32,020 67,638 65,514
------ ------- ------- ------
Total Cost of Sales 54,751 52,352 107,458 104,712
------- ------- ------- -------
GROSS PROFIT 64,206 36,123 124,734 61,572
SELLING AND ADMINISTRATIVE
EXPENSE
Software 28,383 27,800 55,435 56,386
Other Services 6,115 4,861 12,008 10,443
RESEARCH, DEVELOPMENT AND
ENGINEERING EXPENSE
Software 10,066 9,594 20,390 19,897
Other Services 175 138 350 269
NON-RECURRING CHARGES
Software 0 45,000 0 45,000
Other Services 0 0 0 7,000
------ ------ ------ ------
OPERATING INCOME (LOSS)
Software 13,758 (51,138) 24,682 (67,532)
Other Services 5,709 (132) 11,869 (9,891)
------ ------ ------ ------
Total Operating Income
(Loss) 19,467 (51,270) 36,551 (77,423)
INTEREST AND OTHER EXPENSE,
NET 7,361 8,498 15,166 16,289
------ ------ ------ ------
INCOME (LOSS) BEFORE
INCOME TAXES 12,106 (59,768) 21,385 (93,712)
PROVISION FOR INCOME TAXES 1,453 - 2,564 -
------ ------ ------ -------
NET INCOME (LOSS) $10,653 ($59,768) $18,821 $93,712)
EARNINGS (LOSS) PER SHARE $0.16 ($0.94) $0.29 ($1.47)
------- ------- ------- -------
WEIGHTED AVERAGE SHARES
OUTSTANDING 64,923 63,573 64,933 63,570
------- ------ ------ -------
</TABLE>
COMPUTERVISION CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Six Months Ended
June 30, June 29,
CASH FLOWS FROM (USED FOR) OPERATIONS 1996 1997
---------------------
<S> <C> <C>
Net Income (Loss) $18,821 ($93,712)
Add items not requiring cash:
Depreciation of property and equipment 10,562 8,122
Amortization of intangibles 1,134 179
Amortization of finance costs
and debt discounts 1,455 1,455
Provision for doubtful accounts (121) (16)
Non-cash portion of non-recurring charge 0 6,634
Changes in assets and liabilities:
Accounts receivable (9,438) 16,733
Prepaid expenses and other (2,339) (879)
Accounts payable, accrued expenses
and income taxes (31,230) 40,668
------ ------
Cash flows used for continuing
Operations (11,156) (20,816)
INVESTING ACTIVITIES
Expenditures for property and
Equipment (6,237) (4,643)
(Increase) decrease in other assets 68 (194)
Acquisition 0 (1,600)
------- -------
Total cash flows used for investments (6,169) (6,437)
FINANCING ACTIVITIES
Increase in notes payable 466 7,230
Payments on long-term borrowings (1,342) (533)
Issuance of common stock under
Employee Stock Purchase Plan 308 173
Issuance of common stock under
Stock Option Plan 2,065 226
----- -----
Total cash flows from financing
Activities 1,497 7,096
------ -----
Foreign exchange impact on cash (1,860) (1,356)
------ ------
Net decrease in cash and cash equivalents (17,688) (21,513)
Cash and cash equivalents at beginning of
Period 50,979 38,565
------- ------
Cash and cash equivalents at end of period $33,291 $17,052
------- -------
Supplementary data requirements:
Cash interest paid $14,331 $13,574
Cash taxes paid $297 $1,065
</TABLE>
For Further Information:
Investor Contact: Media Contact:
Kathryn Cadigan Wayne B. George
Director, Investor Relations Director, Public Relations
(617) 275-1800, ext. 1871 (617) 275-1800, ext. 2443
FOR IMMEDIATE RELEASE
Computervision Announces Settlement of Shareholder Lawsuit
BEDFORD, Mass., July 23, 1997 -- Computervision Corporation
(NYSE:CVN) announced today that it has reached an agreement for
settlement of the class action lawsuit commenced in March 1991
against Computervision and certain individual defendants.
As its contribution to the settlement fund, Computervision has
agreed to issue 2,712,500 shares of its common stock valued at $4
per share. The agreement provides for a reduction in the number of
shares to be distributed in the event the average price exceeds $6
during the pre-distribution period. The settlement agreement also
provides for an increase in the number of Computervision shares to
be distributed to the plaintiffs in the event that the average
price of Computervision's common stock is less than $4 during the
period prior to the distribution of the shares to the plaintiffs.
The settlement is subject to the approval of the Delaware Chancery
Court. Distribution of the Computervision shares will be made
after Court approval of the settlement and expiration of the
applicable appeal period, assuming no appeal is made.
As previously reported, the plaintiffs alleged, among other
things, that Computervision's minority stockholders failed to
receive adequate consideration in connection with the merger which
took place on January 30, 1990. The trial of the suit took place
in September 1996, and the parties agreed to the settlement prior
to receiving the Court's decision.
The president and chief executive officer of Computervision,
Kathleen A. Cote, stated, "We are pleased that this lawsuit has
finally been settled. This settlement will end the costly risk
associated with this lawsuit, the dedication of management time
and the substantial litigation expenses incurred over the past six
years in defending against this lawsuit."
Computervision Background
- - -------------------------
Computervision Corporation (NYSE:CVN) is the leading international
supplier of Electronic Product Definition (EPD) solutions. EPD is
Computervision's product and process response to the customer need
to concurrently create, manage, share and reuse electronic product
information in a collaborative environment throughout a product's
life cycle and across a distributed value chain. For more than 27
years, the company's product development software solutions have
helped manufacturers improve product quality and reduce time to
market. Computervision is headquartered in Bedford,
Massachusetts.
Except for the historical information contained herein, matters
discussed in this news release may constitute forward-looking
statements that involve risks and uncertainties that could cause
actual results to differ materially from those projected. These
include risks and uncertainties that are detailed from time to
time in reports filed by Computervision with the Securities and
Exchange Commission, including the Company's most recent reports
on Form 10-K and 10-Q.
Computervision and the Computervision logo are registered
trademarks of Computervision Corporation. Electronic Product
Definition, and EPD are trademarks of Computervision Corporation.
All other trademarks are trademarks of their respective owners.
A copy of this release plus financial, product and other company
information is available by dialing 1-800-546-4616. Any questions
concerning the service should be directed to Investor Relations at
Computervision Corporation at 617/275-1800. For more on
Computervision, please call (617) 275-1800 or visit the
Computervision web site at http://www.cv.com.
For Further Information:
Wayne B. George
Computervision Corporation
(617) 275-1800, ext. 2443
[email protected]
FOR IMMEDIATE RELEASE
Computervision Acquires Knowledge Integration Center,
Associated Workflow Technology from UES, Inc.
Advanced Workflow Technology Central to Electronic
Product Definition
BEDFORD, Mass., July 23, 1997 -- Computervision Corporation
(NYSE:CVN) today announced it has acquired the Knowledge
Integration Center (KIC), a provider of advanced workflow products
and professional consulting services, from UES, Inc., of Dayton,
Ohio. The company, headquartered in Columbus, Ohio, will operate
under the name Concentus Technology Corporation. Terms of the
agreement were not disclosed.
Concentus's key product is its KI Shell advanced workflow
automation software, considered one of the most powerful workflow
engines available today. Its customer base includes manufacturers
such as Caterpillar, Rolls-Royce and Boeing. In addition,
Computervision has incorporated KI Shell as a core capability in
its EPD.Connect(TM) user environment, which is part of
Computervision's Electronic Product Definition(TM) (EPD(TM))
integrated product suite. This acquisition ensures the Company's
ownership of a key technology that has been an integral part of
its EPD strategy since 1996.
"Our EPD strategy is based on the principle that critical product
information should be shared not only among developers but also
with the key business groups inside and outside an organization,
such as finance, product support and suppliers. By facilitating
this information flow, Concentus's best-in-class workflow engine
gives EPD a distinct advantage over other product development
solutions," said Kathleen A. Cote, Computervision president and
chief executive officer.
"Workflow automation is a key enabling technology for companies
looking to innovate their processes in any industry," says Stowe
Boyd, vice president, Modus Operandi, an industry consulting firm.
"KI Shell has long been an industry leader, always advancing
workflow features and performance."
"Our strategic partnership with Computervision adds a much needed
marketing capability to a strong technology group," comments Jay
Ramanathan, chief technology officer of Concentus.
Concentus Technology Corporation is a member of the NIIIP
(National Industry Information Infrastructure Protocol) and NCMS
(National Center for Manufacturing Sciences) consortiums, which
are investigating new technologies for electronic commerce and
collaborative applications, as well as proposals for commercial
workflow standards. UES specializes in research and development
of advanced materials, manufacturing processes and related
engineering software. UES is a leading provider of casting and
forging simulation tools.
Computervision Corporation Background
- - -------------------------------------
Computervision Corporation (NYSE:CVN) is the leading international
supplier of Electronic Product Definition (EPD) solutions. EPD is
Computervision's product and process response to the customer need
to concurrently create, manage, share and reuse electronic product
information in a collaborative environment throughout a product's
life cycle and across a distributed value chain. For more than 27
years, the company's product development software solutions have
helped manufacturers improve product quality and reduce time to
market. Computervision is headquartered in Bedford,
Massachusetts.
Computervision and the Computervision logo are registered
trademarks of Computervision Corporation. KI Shell is a
registered trademark, and Concentus is a trademark of Concentus
Technology Corporation. Electronic Product Definition, EPD, and
EPD.Connect are trademarks of Computervision Corporation. All
other trademarks are trademarks of their respective owners.
A copy of this release plus financial, product and other company
information is available by dialing 1-800-546-4616. Any questions
concerning the service should be directed to Investor Relations at
Computervision Corporation at 617/275-1800. For more on
Computervision, please call (617) 275-1800 or visit
