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): January 28, 1997
Computervision Corporation
(Exact name of registrant as specified in charter)
Delaware 1-7760/0-20290 04-2491912
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(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
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On January 28, 1997, Computervision Corporation issued a
press release reporting on its financial results for the fourth
quarter and full year ending December 31, 1996.
<PAGE>
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 January 28, 1997
<PAGE>
SIGNATURES
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: February 3, 1997
<PAGE>
EXHIBIT INDEX
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Exhibit No. Page. No.
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(99) (a) Press Release dated January 28, 1997 7-12
<PAGE>
For Further Information:
Investor Contact: Media Contact:
Kathryn Cadigan Paula R. Slotkin
Director, Investor Relations Director, Public Relations
(617) 275-1800, ext. 1871 (617) 275-1800, ext. 1838
FOR IMMEDIATE RELEASE
---------------------
Computervision Announces Fourth Quarter & Year End Results
-- Customers Demonstrate Commitment to EPD --
BEDFORD, Mass., January 28, 1997 -- Computervision Corporation
(NYSE:CVN) today reported financial results for the fourth
quarter and full year ending December 31, 1996. The results from
continuing operations reflect the Company's ongoing software
business. The results of the Company's Open Services Solutions
(OSS) business are included as discontinued operations pending
the expected sale of that business to J. F. Lehman & Company.
The Company posted total revenues from continuing operations of
$80.7 million for the quarter as compared to $79.5 million in
last year's fourth quarter. This included $52.8 million of
software license revenue in Q4 of 1996 compared to $48.0 million
in Q4 of 1995, a growth rate of 10 percent over the fourth
quarter of 1995. For the entire year, software license revenue
grew 17 percent, from $163.7 million in 1995 to $191.7 million in
1996. Total software company revenue for 1996 was $302.8 million
vs. $286.6 million in 1995, reflecting the strong growth of new
software license business partially offset by a decline in
software services revenues.
Included in the operating results of the quarter is a non-
recurring charge of $14.5 million, or $0.22 per share. The charge
includes $3 million for purchased R&D associated with the
acquisition of 3rd Angle Ltd., a technology company based in
Cambridge, England, and approximately $11.5 million in
restructuring costs associated with the implementation of ongoing
cost savings. Before the non-recurring charge, the Company
earned $5.9 million of income, or $0.09 per share, from
continuing software business operations in the fourth quarter of
1996, compared to $0.08 per share for the fourth quarter of 1995.
Fourth quarter income from the discontinued OSS operations was
$2.7 million, or $0.04 per share, compared to $8.0 million, or
$0.13 per share, in last year's fourth quarter. For the full
year ended December 31, 1996, income from discontinued operations
was $13.7 million, or $0.21 per share, compared to $31.5 million,
or $0.60 per share in 1995.
Including the non-recurring charge and results from discontinued
operations, the Company reported a net loss of $0.09 per share in
the quarter just ended compared to earnings of $0.08 per share in
the fourth quarter of 1995 after an extraordinary charge
associated with early retirement of long-term debt. Including
the non-recurring charge and results from discontinued
operations, the Company reported net income of $0.40 per share
for 1996 compared to $0.43 per share for 1995.
Computervision president and CEO Kathleen A. Cote commented, "We
continue to be very encouraged by the commitment to Electronic
Product Definition(TM)(EPD(TM) shown by both new and existing
customers. We closed several important EPD contracts in the
fourth quarter, including a contract with CASA, a partner in the
Airbus Consortium, PRI Automation, Boeing Computer Services and
Halliburton Energy Services. In 1996, revenues from our EPD
portfolio of products grew 25% year over year on a worldwide
basis and 50% in North America, a market that has been
traditionally difficult for the Company.
"Over the past year, we took several important steps to
accelerate our transition to a software solutions company.
Looking to 1997, we will focus on bringing EPD to a broader range
of markets and customers and delivering products and services to
extend the EPD solution portfolio."
As previously disclosed, the Company has agreed to revised terms
for the sale of OSS to an investment group headed by J. F. Lehman
& Company, which reduced the cash portion of the purchase price
from $100 million to $65 million. The sale is subject to
Lehman's securing financing and regulatory approval, as is the
normal practice for such transactions.
Assuming the successful completion of the OSS sale in Q1 of 1997,
the resulting gain is expected to be recognized in that quarter
and is expected to be significantly offset by shut-down costs
associated with the transaction. As a result of the actions
associated with the non-recurring charge of Q4 1996 and actions
associated with separating OSS from continuing operations, annual
expenses are expected to be reduced by approximately $20 million
for the software company going forward when all actions are fully
implemented.
The Company's earnings report was prepared assuming that the sale
of the OSS business will be completed in the first quarter of
1997, and does not include the impact of approximately $5 million
of deferred fees and expenses related to the transaction which
have been capitalized. Should the transaction not close, these
deferred costs may need to be expensed in the fourth quarter of
1996.
This press release contains "forward-looking" statements under
the federal securities laws. The Company notes that the actual
results could differ materially from those projected, including:
reliance on significant contracts from large customers that make
quarterly revenue and earnings difficult to predict and the risks
associated with new product introduction and technology
development by the Company. The Company refers the reader to its
filings with the Securities and Exchange Commission for other
risks and uncertainties.
Computervision Background
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Computervision Corporation is a leading international supplier of
Electronic Product Definition solutions for developing,
delivering, and maintaining products throughout their life cycle.
For more than 26 years, the Company's product development
software solutions have helped manufacturers improve product
quality and reduce time to market. Computervision Services(R)
provides best-practices consulting programs to support product
development process reengineering and technology implementation.
Computervision Services also supports applications, systems, and
networks in heterogeneous computing environments. Computervision
is headquartered in Bedford, Massachusetts, and provides sales
and support services to its customers through its offices located
throughout the world.
Computervision and the Computervision logo are USPTO 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 via fax by dialing 1-800-546-4616. Any
questions should be directed to Investor Relations at
Computervision Corporation at (617) 275-1800, ext. 1871. For
more information on Computervision, please call (617) 275-1800 or
visit the Computervision web site at http://www.cv.com.
COMPUTERVISION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED: December 31, 1996 December 31, 1995
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<S> <C> <C>
Software Revenue
Product $52,810,000 $48,013,000
Services 27,867,000 31,498,000
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Total Revenue 80,677,000 79,511,000
Total Gross Profit Margin 56,737,000 56,609,000
Operating Expenses 44,590,000 41,066,000
Non-recurring Charge (1) 14,500,000 -
----------- -----------
Operating Income (2,353,000) 15,543,000
Net Interest Expense and
Other Expense 7,766,000 10,219,000
Provision for Income Taxes (1,499,000) 651,000
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Income From Continuing
Operations (8,620,000) 4,673,000
Income From Discontinued
Operations (net of tax) 2,747,000 7,977,000
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Net Income before
Extraordinary Loss (5,873,000) 12,650,000
Extraordinary Loss - (7,930,000)
----------- ----------
Net Income ($5,873,000) $4,720,000
=========== ==========
Earnings Per Share From
Continuing Operations ($0.13) $0.08
Earnings Per Share From
Discontinued Operation $0.04 $0.13
Extraordinary Loss $0.00 ($0.13)
----- -----
Net Earnings per Share ($0.09) $0.08
========== ==========
Weighted Average Shares
Outstanding 64,789,000 61,039,000
TWELVE MONTHS ENDED: December 31, 1996 December 31, 1995
Software Revenue
Product $191,728,000 $163,716,000
Services 111,087,000 122,885,000
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Total Revenue 302,815,000 286,601,000
Total Gross Profit Margin 218,685,000 198,716,000
Operating Expenses 159,643,000 154,676,000
Non-recurring Charge (1) 14,500,000 -
------------ ------------
Operating Income 44,542,000 44,040,000
Net Interest Expense and
Other Expense 30,806,000 44,924,000
Provision for Income Taxes 1,361,000 (95,000)
------------ -----------
Income From Continuing
Operations 12,375,000 (789,000)
Income From Discontinued
Operations (net of tax) 13,667,000 31,535,000
------------ ------------
Net Income before Extraordinary
Loss 26,042,000 30,746,000
Extraordinary Loss - (7,930,000)
============ ============
Net Income $26,042,000 $22,816,000
Earnings Per Share From
Continuing Operations $0.19 ($0.02)
Earnings Per Share From
Discontinued Operations $0.21 $0.60
Extraordinary Loss $0.00 ($0.15)
----- ------
Net Earnings per Share $0.40 $0.43
========== ==========
Weighted Average Shares
Outstanding 64,784,000 52,591,000
(1) Operating Income for the three and twelve months ended
December 31, 1996 included a pre-tax non-recurring charge for
purchased R&D associated with the purchase of 3rd Angle Ltd., a
UK-based technology company and associated restructuring related
costs.
</TABLE>
COMPUTERVISION CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS December 31, 1996 December 31, 1995
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<S> <C> <C>
Cash and cash equivalents $38,565,000 $50,979,000
Accounts receivable, net 76,563,000 64,332,000
Other current assets 31,016,000 34,447,000
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Total current assets 146,144,000 149,758,000
Property and equipment, net 18,026,000 30,297,000
Other assets 14,952,000 22,812,000
Net assets of discontinued
operations 28,242,000 31,020,000
----------- -----------
Total assets $207,364,000 $233,887,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Notes payable and current
portion of long-term deb $4,388,000 $8,211,000
Accounts payable and
accrued expenses 179,192,000 211,868,000
Deferred revenue and
customer advances 27,152,000 23,500,000
----------- -----------
Total current liabilities 210,732,000 243,579,000
Long-term debt, less
current portion 222,846,000 223,616,000
Other long-term liabilities 86,722,000 104,418,000
Stockholders' deficit (312,936,000) (337,726,000)
----------- -----------
Total liabilities and
stockholders' deficit $207,364,000 $233,887,000
============ ============
</TABLE>
