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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 12b-25
NOTIFICATION OF LATE FILING
SEC FILE NUMBER
0-15946
CUSIP NUMBER
247171200
[X] FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 1999
Nothing in this form shall be construed to imply that the Commission has
verified any information contained herein.
PART I - REGISTRANT INFORMATION
Full Name of Registrant DELPHI INFORMATION SYSTEMS, INC.
Former Name if Applicable N/A
Address of Principal Executive Office: 3501 Algonquin Road
City, State and Zip Code: Rolling Meadows, Illinois 60008
PART II - RULES 12-b-25 (b) AND (c)
If the subject report could not be filed without unreasonable effort or expense
and the registrant seeks relief pursuant to Rule 12-25(b), the following should
be completed. (Check box if appropriate)
[X] (a) The reasons described in reasonable detail in Part III of this form
could not be eliminated without unreasonable effort or expense;
[X] (b) The subject annual report, semi-annual report, transition report on
Form 10-K, Form 20-F, 11-K or Form N-SAR, or portion thereof will be filed on or
before the fifteenth calendar day following the prescribed due date; or the
subject quarterly report or transition report on Form 10-Q, or portion thereof
will be filed on or before the fifth calendar day following the prescribed due
date; and
[ ] (c) The accountant's statement or other exhibit required by Rule 12b-25(c)
has been attached if applicable.
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PART III - NARRATIVE
State below in reasonable detail the reasons why Form 10-K and Form 10-KSB,
20-F, 11-K, 10-Q and Form 10-QSB, N-SAR, or the transition report or portion
thereof could not be filed within the prescribed period.
The Company has filed Form 8-K dated May 14, 1999 announcing the dismissal of
its former independent accountant, Arthur Andersen LLP, effective May 10, 1999.
The Company has entered into discussions with another "Big Five" accounting firm
to explore engaging the firm as the Company's independent accountant. The
Company seeks relief pursuant to Rule 12b-25(b) to allow sufficient review of
the financial statements and related disclosures in light of the dismissal of
the Company's independent accountants.
PART IV - OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification.
Max Seybold (CEO) (847) 506-3100
(2) Have all other periodic reports required under section 13 or 15(d) of
the Securities and Exchange Act of 1934 or section 30 of the Investment Company
Act of 1940 during the preceding 12 months or for such shorter period that the
registrant was required to file such report(s) been filed? If the answer is no,
identify report(s).
[X] Yes [ ] No
(3) Is it anticipated that any significant change in results of operations
from the corresponding period for the last fiscal year will be reflected by the
earnings statements to be included in the subject report or portion thereof?
[X] Yes [ ] No
See attached press release dated May 17, 1999 detailing anticipated results of
operations.
Delphi Information Systems, Inc. has caused this notification to be signed on
its behalf by the undersigned thereunto duly authorized.
Date: May 18, 1999 By: /s/ Max Seybold
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Attachment to Form 12b-25, Notification of Late Filing of Form 10-Q
For the Period Ended March 31, 1999.
DELPHI INFORMATION SYSTEMS
3501 ALGONQUIN ROAD
ROLLING MEADOWS, IL 60008
847/506-3100
NASDAQ: DLPH
DELPHI REPORTS FIRST QUARTER COMBINATION OF LEGACY-BASED REVENUE DECLINE AND
ROBUST MOMENTUM IN GROWTH SEGMENTS
HIGHLIGHTS:
- - FIRST QUARTER REVENUE DECLINED 13% VERSUS THE PRIOR YEAR DUE TO DECLINING
SERVICE REVENUE FROM LEGACY SYSTEMS
- - SALES OF THE NEW FLAGSHIP CD.GLOBAL-TM- AND CD.ONE-TM- LINE OF PRODUCTS
INCREASED BY 169% OVER THE PRIOR YEAR
- - THE NET LOSS FOR THE QUARTER WAS $2.3 MILLION OR ($0.28) CENTS PER SHARE
- - THE QUARTER ALSO SAW THE COMPANY LAUNCH EBIX.COM-TM-, AN UNPRECEDENTED
INTERNET-BASED SOLUTION FOR PROCESSING RISK INFORMATION. THE MARKET
REACTION WAS HIGHLY FAVORABLE FOR THE NEW PRODUCT, WHICH HAS BEEN
RE-CHRISTENED EBIX.LINK-TM-. DELPHI NOW WILL USE THE NAME EBIX.COM FOR THE
INSURANCE INDUSTRY'S FIRST-EVER E-COMMERCE PORTAL, WHICH THE COMPANY WILL
LAUNCH IN Q3 OF 1999
ROLLING MEADOWS, IL, MAY 17, 1999 - DELPHI INFORMATION SYSTEMS, INC. (NASDAQ:
DLPH), a leading international provider of integrated business solutions for the
insurance industry, today announced the financial results for the quarter ended
March 31, 1999. Revenue declined by 13 percent versus the prior year due to a
decline in service revenues associated with legacy products. At the same time,
revenue from the company's new flagship products, CD.GLOBAL-TM- and "CD.ONE-TM-
increased by 169 percent over the prior year.
Revenue for the quarter was $5.1 million compared to $5.8 million a year ago.
The net loss for the quarter was $2.3 million or ($0.28) cents per share
compared with a profit of $0.04 cents per share during the prior year.
Overall sales activity, including revenue, deferred revenue, and backlog for the
company's new products continues to be robust, reaching $7.7 million in total
bookings for the quarter. Robin Raina, Delphi's chief operating officer,
commented, "This quarter has seen Delphi continue to spin out of its cocoon and
emerge as the clear-cut technology leader with sales to back up that
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claim. We're staying focused on setting new standards, not only for the relative
sophistication and functionality of our new products, but also for market
responsiveness. Our leadership position is perhaps best reflected in the
building excitement that we're seeing domestically and internationally over the
launch of EBIX.LINK this quarter and the release of Version 2.4 of CD.GLOBAL
next month. We expect the same with Delphi's introduction of the industry's
first e-commerce portal."
Gross margins decreased during the quarter to 30.5 percent of revenue versus
52.4 percent during the prior year. Software margins improved to 38.6 percent
of revenue versus 34.4 percent during the prior year. Excluding capitalized
software amortization, software margins were 79.6 percent of revenue, an
improvement versus 78.1 percent during the prior year. Service margins declined
to 27.1 percent of revenue versus 56.2 percent during the prior year due to
lower service revenues from legacy products and higher personnel costs
associated with the initial rollout of the new "cd" line of products.
The net loss for the quarter of $2.3 million versus a profit of $302,000 during
the prior year was due to lower gross profit and higher operating expenses due
to professional fees; improved employee benefits; and the opening of offices in
London, Singapore, and Atlanta. These losses were partially offset by
efficiencies gained in development and sales and marketing due to the focus on
the new "cd" line of products and away from legacy systems.
Max Seybold, president and chief executive officer, commented, "As we continue
to transition into an e-commerce company, we are pleased with our progress in
every aspect of our business, from new product sales to development to support.
Most importantly, we're seeing two things happen that are critical to future
growth. First, our current customers are happy--for the second straight year
we're seeing 90 percent customer retention rates. Better still, new customers
are happy, as seen in the mushrooming market penetration of CD.GLOBAL and
CD.ONE. As always, our shareholders are looking to see evidence of an improving
financial performance, and we remain convinced that our high growth segment and
new product development are the right places for them to look."
In a related announcement, Mr. Seybold reported that several measures have been
taken to improve the company's financial performance, noting that Delphi is,
"looking closely at the business to identify opportunities for operating
efficiencies and improved working capital management." Mr. Seybold also
reported an immediate change in the company's financial management in the form
of the departure of Edward O'Connell as the company's chief financial officer
and senior vice president. In addition, the company announced that it will be
changing auditors, and currently is in discussions with a Big Five accounting
firm with extensive knowledge of the software industry.
ABOUT DELPHI INFORMATION SYSTEMS:
Founded in 1976, Delphi Information Systems, Inc. is a leading international
supplier of software and Internet solutions to the property & casualty insurance
industry. An independent provider, Delphi delivers next-generation and
next-step products and services to enhance operations for agencies, brokerages
and carriers. Delphi's cutting-edge solutions feature fully customizable and
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scalable software designed to improve the way insurance professionals manage all
aspects of insurance distribution, including: claims and policy management,
marketing, sales, service and accounting.
THIS PRESS RELEASE CONTAINS VARIOUS FORWARD-LOOKING STATEMENTS AND INFORMATION
THAT ARE BASED ON MANAGEMENT'S BELIEFS AS WELL AS ASSUMPTIONS MADE BY AND
INFORMATION CURRENTLY AVAILABLE TO MANAGEMENT. SUCH STATEMENTS ARE SUBJECT TO
VARIOUS RISKS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO VARY
MATERIALLY FROM THOSE STATED SHOULD ONE OR MORE OF THESE RISKS AND UNCERTAINTIES
MATERIALIZE, OR SHOULD UNDERLYING ASSUMPTIONS PROVIDE INCORRECT, ACTUAL RESULTS
COULD VARY MATERIALLY FROM THOSE ANTICIPATED, ESTIMATED OR PROJECTED. CERTAIN
OF THESE RISKS AND UNCERTAINTIES ARE DESCRIBED IN MORE DETAIL IN THE COMPANY'S
REGISTRATION STATEMENT ON FORM S-3 FILED UNDER THE SECURITIES ACT OF 1933,
REGISTRATION NO. 333-12 781, AND THE COMPANY'S PERIODIC FILINGS UNDER THE
SECURITIES EXCHANGE ACT OF 1934. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE
SUCH FACTORS OR TO PUBLICLY ANNOUNCE THE RESULTS OF ANY REVISION TO ANY OF THE
FORWARD-LOOKING STATEMENTS CONTAINED HEREIN TO REFLECT FUTURE EVENTS AND
DEVELOPMENTS.
FOR ADDITIONAL INFORMATION REGARDING DELPHI FREE OF CHARGE VIA FAX, DIAL
1-800-PRO-INFO AND USE THE COMPANY'S STOCK SYMBOL, "DLPH."
For more information on Delphi and its products and services,
Call 8004DELPHI (800) 433-5744 or visit the
Delphi Web site at http://www.dlph.com/
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DELPHI INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
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<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1999 1998
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<S> <C> <C>
REVENUES:
Software $ 1,500 $1,012
Services 3,588 4,817
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TOTAL REVENUES 5,088 5,829
COSTS OF REVENUES:
Software 921 664
Services 2,617 2,110
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TOTAL COST OF REVENUES 3,538 2,774
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GROSS MARGIN 1,550 3,055
OPERATING EXPENSES:
Product development 902 489
Sales and marketing 630 905
General and administrative 2,021 1,288
Amortization of noncompete agreement 48 -
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TOTAL OPERATING EXPENSES 3,601 2,682
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OPERATING INCOME (LOSS) (2,051) 373
Interest expense 107 129
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Income (loss) before income taxes (2,158) 244
Income tax provision (benefit) 7 (58)
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Net income (loss) $ (2,165) $ 302
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Basic net income (loss) per common share $ (0.28) $0.04
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Diluted net income (loss) per common share $ (0.28) $0.04
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DELPHI INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
(UNAUDITED)
MARCH 31 DECEMBER 31,
ASSETS 1999 1998
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<S> <C> <C>
CURRENT ASSETS:
Cash $ 1,081 $ 1,053
Accounts receivable, net 9,084 6,378
Other current assets 371 310
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TOTAL CURRENT ASSETS 10,536 7,741
Property and equipment, net 1,856 1,899
Capitalized and purchased software, net 6,482 6,561
Other assets 345 344
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TOTAL ASSETS $ 19,219 $ 16,545
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $ 1,897 $ 4,032
Accounts payable and accrued liabilities 2,312 2,371
Accrued payroll and related benefits 472 182
Deferred revenue 4,908 3,418
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TOTAL CURRENT LIABILITIES 9,589 10,003
Notes payable-long term 109 210
Other liabilities 130 265
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TOTAL LIABILITIES 9,828 10,478
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Commitments and contingencies
STOCKHOLDERS' EQUITY
Preferred stock, $.10 par value, 2,000,000 shares authorized,
Series D, 221 shares issued and outstanding. 49 49
Common stock, $.10 par value:
Non-designated, 20,000,000 shares authorized,
8,143,811 and 7,395,449 issued and outstanding, respectively. 814 740
Additional paid-in capital 54,062 48,717
Accumulated deficit (45,681) (43,516)
Cumulative foreign currency translation adjustment 147 77
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TOTAL STOCKHOLDERS' EQUITY 9,391 6,067
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 19,219 $ 16,545
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DELPHI INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
1999 1998
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CASH FLOW FROM OPERATING ACTIVITIES:
<S> <S> <S>
Net income (loss) $ (2,165) $ 302
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO NET CASH PROVIDED BY
(USED IN) OPERATING ACTIVITIES:
Depreciation and amortization 192 312
Amortization of capitalized and purchased software 595 442
Amortization of noncompete agreement 48 -
Issuance of common stock as consideration for services provided - 51
CHANGES IN ASSETS AND LIABILITIES:
Accounts receivable, net (2,706) (981)
Other current assets 127 (234)
Accounts payable and accrued liabilities (59) (563)
Accrued payroll and related benefits 290 42
Other liabilities and deferred revenue 1,355 62
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Net cash provided by (used in) operating activities (2,323) (567)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (149) (531)
Purchase of minority interest (50) -
Expenditures for capitalized and purchased software (516) (1,201)
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Net cash used in investing activities (715) (1,732)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on (repayments of) notes payable (2,236) 533
Net proceeds from exercise of common stock warrants 4,874 -
Net proceeds from exercise of stock options 358 -
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Net cash provided by financing activities 2,996 533
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Foreign currency translation adjustment 70 (4)
Net increase (decrease) in cash 28 (1,770)
Cash at the beginning of the year 1,053 2,642
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Cash at the end of the year $ 1,081 $ 872
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SUPPLEMENTAL DISCLOSURE:
Interest paid $ 116 $ 139
Income taxes paid 7 1
NON-CASH TRANSACTIONS:
Common stock issued for purchase of minority interest 187 -
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