<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20546
FORM 11-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Fiscal Year Ended December 31, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Delphi Information Systems, Inc.
Cash Option Profit Sharing Plan
DELPHI INFORMATION SYSTEMS, INC.
The principal executive offices of Delphi Information Systems, Inc.
are located at 3501 Algonquin Road, Rolling Meadows, Illinois 60008
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 the
Committee has duly caused this annual Report to be signed by the undersigned
thereunto duly authorized.
DELPHI INFORMATION SYSTEMS, INC.
Cash Option Profit Sharing Plan
Date: August 15, 1999 Signature /s/Richard J. Baum
------------------- ------------------
Richard J. Baum
Senior Vice President - Finance
and Administration, Chief
Financial Officer
<PAGE>
DELPHI INFORMATION SYSTEMS, INC.
Cash Option Profit Sharing Plan
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page(s)
-------
<S> <C> <C>
Independent Auditors' Report.................................. 1
Statements Of Net Assets Available for Benefits............... 2-3
Statement of Changes in Net Assets Available for Benefits,
with Fund Information......................................... 4
Notes to Financial Statements................................. 5-8
Schedule
--------
Item 27a -- Schedule of Assets Held for Investment Purposes
as of December 31, 1998....................................... 1 9
Item 27d - Schedule of Reportable Transactions for the
Year ended December 31, 1998.................................. 2 10
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Trustees of
Delphi Information Systems, Inc.
Cash Option Profit Sharing Plan:
We have audited the accompanying statement of net assets available for benefits
of Delphi Information Systems, Inc. Cash Option Profit Sharing Plan (the Plan)
as of December 31, 1998, and the related statement of changes in net assets
available for benefits for the year then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based upon our audit. The accompanying
financial statements of Delphi Information Systems, Inc. Cash Option Profit
Sharing Plan as of December 31, 1997, were audited by other auditors whose
report thereon dated June 10, 1998, expressed an unqualified opinion on those
statements.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1998, and the changes in net assets available for benefits for the
year then ended in conformity with generally accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements but are supplementary information required
by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. These
supplemental schedules are the responsiblity of the Plan's management. The
supplemental schedules have been subjected to the auditing procedures applied
in the audit of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
The schedule of assets held for investment purposes as of December 31, 1998, and
the schedule of reportable transactions for the year ended December 31, 1998, do
not disclose the historical cost of the Plan's investments. Disclosure of this
information is required by the Department of Labors Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974.
KPMG LLP
Chicago, Illinois
July 7, 1999
1
<PAGE>
DELPHI INFORMATION SYSTEMS, INC.
CASH OPTION PROFIT SHARING PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1998
(EMPLOYER IDENTIFICATION NUMBER 77-0021975, PLAN NUMBER 001)
<TABLE>
<CAPTION>
ASSETS:
Investments:
<S> <C> <C>
Delphi Common Stock $ 51,766
Stable Value Fund 1,095,265
Income Fund 59,130
Pathway Series-Balanced 374,649
Pathway Series-Conservative 31,411
Growth and Income Fund 991,104
Global Fund 151,741
Large Company Growth Fund 2,541,152
Development Fund 100,135
Participant Loans 126,214
-------------------
Net assets available for benefits $ 5,522,567
-------------------
-------------------
</TABLE>
The accompanying notes are an integral part of this statement.
2
<PAGE>
DELPHI INFORMATION SYSTEMS, INC.
CASH OPTION PROFIT SHARING PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1997
(EMPLOYER IDENTIFICATION NUMBER 77-0021975, PLAN NUMBER 001)
<TABLE>
<CAPTION>
ASSETS:
Investments:
<S> <C> <C>
Delphi Common Stock $ 30,700
Stable Value Fund 1,228,922
Income Fund 21,731
Pathway Series-Balanced 556,997
Pathway Series-Conservative 2,149
Growth and Income Fund 813,916
Global Fund 78,456
Large Company Growth Fund 2,137,210
Development Fund 39,049
Participant Loans 78,379
-------------------
Net assets available for benefits $ 4,987,509
-------------------
-------------------
</TABLE>
The accompanying notes are an integral part of this statement.
3
<PAGE>
DELPHI INFORMATION SYSTEMS, INC.
CASH OPTION PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1998
(EMPLOYER IDENTIFICATION NUMBER 77-0021975, PLAN NUMBER 001)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PARTICIPANT DIRECTED
-----------------------------------------------------------------------------
Growth
Delphi Stable Pathway Pathway and
Common Value Income Series- Series- Income Global
Stock Fund Fund Balanced Conservative Fund Fund
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Contributions:
Participants - 28,163 33,341 6,864 3,851 119,308 59,172
Investment Income:
Unrealized gain (loss) on investments 46,056 - (1,508) 3,507 (760) (50,184) (4,552)
Realized gain(loss) on investments (22,862) - (5) 6,191 6 (6,799) 928
Net appreciation (depreciation) in fair value
-----------------------------------------------------------------------------
of investments 23,194 - (1,513) 9,698 (754) (56,983) (3,624)
-----------------------------------------------------------------------------
Interest and dividend income - 69,853 4,200 24,149 1,727 95,156 15,932
-----------------------------------------------------------------------------
Total investment income 23,194 69,853 2,687 33,847 973 38,173 12,308
-----------------------------------------------------------------------------
Total additions 23,194 98,016 36,028 40,711 4,824 157,481 71,480
-----------------------------------------------------------------------------
DEDUCTIONS:
Benefits paid to participants (2,128) (142,216) (24,538) (47,087) (566) (62,597) (36,994)
Other expenses - (288) (69) (37) - - -
-----------------------------------------------------------------------------
Total deductions (2,128) (142,504) (24,607) (47,124) (566) (62,597) (36,994)
-----------------------------------------------------------------------------
LOANS ISSUED TO PARTICIPANTS - (14,762) (7,927) (9,736) - (23,148) (10,617)
LOAN PRINCIPAL REPAYMENTS - 7,384 4,856 5,756 - 896 3,477
TRANSFERS TO THE PLAN - 778 1,762 - - 3,560 1,478
INTERFUND TRANSFERS - (82,569) 27,287 (171,955) 25,004 100,996 44,461
-----------------------------------------------------------------------------
NET INCREASE (DECREASE) 21,066 (133,657) 37,399 (182,348) 29,262 177,188 73,285
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 30,700 1,228,922 21,731 556,997 2,149 813,916 78,456
-----------------------------------------------------------------------------
End of year 51,766 1,095,265 59,130 374,649 31,411 991,104 151,741
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
<CAPTION>
Large
Company
Growth Development Participants
Fund Fund Loans Total
-------------------------------------------------------------
<S> <C> <C> <C> <C>
ADDITIONS:
Contributions: 123,971 18,696 - 393,366
Participants
Investment Income: 482,414 (900) - 474,073
Unrealized gain (loss) on investments 59,836 (2,035) - 35,260
Realized gain(loss) on investments
Net appreciation (depreciation) in fair value
-------------------------------------------------------------
of investments 542,250 (2,935) - 509,333
-------------------------------------------------------------
Interest and dividend income 132,108 9,755 - 352,880
-------------------------------------------------------------
Total investment income 674,358 6,820 - 862,213
-------------------------------------------------------------
Total additions 798,329 25,516 - 1,255,579
-------------------------------------------------------------
DEDUCTIONS:
Benefits paid to participants (383,924) (17,206) (13,574) (730,830)
Other expenses (50) - - (444)
-------------------------------------------------------------
Total deductions (383,974) (17,206) (13,574) (731,274)
-------------------------------------------------------------
LOANS ISSUED TO PARTICIPANTS (27,455) (7,636) 101,281 -
LOAN PRINCIPAL REPAYMENTS 16,472 1,031 (39,872) 0
TRANSFERS TO THE PLAN 1,775 1,400 - 10,753
INTERFUND TRANSFERS (1,205) 57,981 - -
-------------------------------------------------------------
NET INCREASE (DECREASE) 403,942 61,086 47,835 535,058
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 2,137,210 39,049 78,379 4,987,509
-------------------------------------------------------------
End of year 2,541,152 100,135 126,214 5,522,567
-------------------------------------------------------------
-------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of this statement.
4
<PAGE>
DELPHI INFORMATION SYSTEMS, INC.
Cash Option Profit Sharing Plan
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
(Employer Identification Number 77-0021975, Plan Number 001)
1. PLAN DESCRIPTION
The following is a general description of the Delphi Information Systems,
Inc. Cash Option Profit Sharing Plan (the "Plan"). Participants should
refer to the Plan agreement for a more complete description of the Plan's
provisions.
GENERAL
The Plan, which commenced January 1, 1988, is a qualified cash option
profit sharing plan offered to all eligible employees of Delphi
Information Systems, Inc. (the "Company" or "Delphi") when hired.
Enrollment to participate and election changes occur quarterly. The Plan
is subject to the provisions of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") and Section 401 (a) and Section 401 (k)
of the Internal Revenue Code ("IRC") of 1986, as amended.
CONTRIBUTIONS
Participants may elect to contribute an amount equaling from 1% to 20% of
their basic compensation up to a maximum of $10,000 for 1998 and $9,500
for 1997 (salary reduction contributions). This maximum allowable
contribution is adjusted each year for increases in the cost of living as
provided in applicable regulations. This annual amount is an aggregate
limitation that applies to all of an individual's salary reduction
contributions and similar contributions under other plans. The Company may
make an annual discretionary contribution to the Plan. Each plan year, the
Company will decide what portion of its profits, if any, it will
contribute to the Plan. The Company did not make any contribution to the
Plan during 1998 and 1997.
The salary reduction contributions are deposited to the investment funds
as directed by the participant.
PARTICIPANT ACCOUNTS
Each participant's account is adjusted with the participant's
contributions and allocations of (1) the related Company matching
contributions, if any, (2) fund earnings or losses, (3) administrative
expenses, if applicable and (4) forfeitures. Allocations are based on
participant's earnings or account balances, as defined. The benefit to
which a participant is entitled is the benefit that can be provided from
the participant's vested account.
VESTING
Each participant has an immediate, fully vested right to receive all
salary reduction contributions and earnings thereon, upon termination from
the Company, or upon separation caused by death of the participant or
under other special circumstances.
5
<PAGE>
The Company's contributions to the Plan, if any, and the earnings on such
contributions, become vested in accordance with the following schedule:
<TABLE>
<CAPTION>
Years Vested
of Service percentage
-------------------------------------------
<S> <C>
1 but less than 2 25%
2 but less than 3 50%
3 but less than 4 75%
4 or more 100%
</TABLE>
FORFEITURES
If a participant stops working for the Company before their account is
100% vested, they may forfeit the nonvested portion of their account. All
amounts that are forfeited by terminated Participants are added to the
Company's contributions to the Plan and divided up among the accounts of
eligible Participants.
INVESTMENT OPTIONS
Participants may direct their salary reduction contributions and any
earnings thereon may be invested in one or more of the following funds:
a. Delphi Common Stock - Invests in the shares of the Company's
common stock. This account was frozen July 1, 1997 and no
participant's contributions are being allocated to this
investment.
b. Scudder Stable Value Fund - Invests in high-quality instruments,
including guaranteed investment contracts, bank investment
contracts, money market instruments, and synthetic contracts
composed of triple-A-rated securities and high-quality bond
portfolios "wrapped" by insurance companies or banks rated AA or
higher by Standard & Poors or Moodys.
c. Scudder Income Fund - Invests primarily in high-grade corporate
bonds and government securities.
d. Scudder Pathway Series - Balanced - Invests in a mix of Scudder
mutual funds, including stock funds, bond funds, and stable value
investments, that pursue capital appreciation as well as current
income.
e. Scudder Pathway Series - Conservative - Invests in a mix of
Scudder mututal funds, including bonds, stock funds, and stable
value investments, which pursue current income as a primary
objective.
f. Scudder Growth and Income Fund - Investments are income-producing
common and preferred stocks of established companies divided
mainly among the financial, manufacturing, health care, and
consumer staples sectors.
g. Scudder Global Fund - Invests in both U.S. and foreign stocks,
with an emphasis on stocks of established companies of varying
size.
6
<PAGE>
h. Scudder Large Company Growth Fund - Invests primarily in the
stocks of medium-to-large sized U.S. companies with prospects for
maintaining greater-than-average earnings, strong financial
positions, and relatively little debt over time.
i. Scudder Development Fund - Invests in a portfolio of stocks of
small, emerging, or developing companies that show the promise of
increased size and profitability or market recognition.
j. The following are investment options that were available through
July 1, 1997 and since have been closed: CIGNA Guaranteed Long
Term Account, CIGNA Guaranteed Government Securities Account,
Fidelity Income and Growth Account, and Fidelity Growth
Opportunities Account.
LOANS TO PARTICIPANTS
Participants may borrow from their fund accounts a minimum of $1,000 up to
a maximum of the lessor of $50,000 or 50% of their vested account balance.
Participant loans are secured by the balance in the participant's account
and bear interest at a rate commensurate with local prevailing rates as
determined by the Plan Administrator. Principal and interest are paid
ratably through payroll deductions.
PAYMENT OF BENEFITS
For any event which may result in a distribution of benefits, a
participant's benefit is distributed in a single, lump sum payment. The
distribution is made in the form of cash, unless the participant elects to
receive the portion of his account that was invested in the Company's
stock in the form of whole shares of such Company stock.
EXPENSES
Expenses in connection with the purchase or sale of stock or other
securities are charged to the fund for which such purchase or sale is
made. The Trust Agreement stipulates that expenses incurred by the Asset
Custodian in the performance of its duties including legal and audit fees
shall be paid from the Trust Fund unless paid by the Company at its sole
discretion.
TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
Plan termination, participants will become fully vested in any Company
contributions to their accounts.
7
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accompanying financial statements are prepared on the accrual basis of
accounting. The preparation of the financial statements in conformity with
generally accepted accounting principles requires the Plan's management to
use estimates and assumptions that affect the accompanying financial
statements and disclosures. Actual results could differ from these
estimates.
INVESTMENT VALUATION
Investments, other than fully-benefit-responsive investment contracts, are
stated at fair value as determined by quoted market prices. Approximately
93% and 28% of the Scudder Stable Value Fund was invested in
fully-benefit-responsive investment contracts at December 31, 1998 and
December 31, 1997, respectively. These contracts are valued at contract
value, which has been determined by the Fund's Trustee to approximate fair
value. The crediting interest rate at December 31, 1998 and December 31,
1997 for the investment contracts range from 4.63% to 7.77% and 5.15% to
7.67%, respectively. The crediting interest rates are reset upon the
maturity of the contracts.
Purchases and sales of securities are reflected on a trade date basis.
Interest and dividend income from other investments is accrued as earned.
3. INVESTMENTS EXCEEDING 5% OF NET ASSETS
The Plan's investments which exceeded 5% of net assets as of December 31,
1998 and 1997 are as follows:
<TABLE>
<CAPTION>
December 31, December 31,
1998 1997
------------- --------------
<S> <C> <C>
SCUDDER:
Stable Value Fund $1,095,265 $1,228,922
Pathway Series - Balanced 374,649 556,997
Growth and Income Fund 991,104 813,916
Large Company Growth Fund 2,541,152 2,137,210
----------- ----------
Total $5,002,170 $4,737,045
----------- ----------
</TABLE>
4. TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated August 4, 1995, that the Plan and related Trust are designed
in accordance with applicable sections of the IRC. The Plan administrator
believes the Plan is currently designed and being operated in compliance
with the applicable requirements of the IRC and that, therefore, the Plan
was qualified and the related Trust was tax-exempt as of the financial
statement dates.
8
<PAGE>
DELPHI INFORMATION SYSTEMS, INC.
CASH OPTION PROFIT SHARING PLAN
SCHEDULE I - ITEM 27a - - SCHEDULE OF ASSETS
HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
(EMPLOYER IDENTIFICATION NUMBER 77-0021975, PLAN NUMBER 001)
<TABLE>
<CAPTION>
Current
Indentity of Issue/ Description of Investment Cost (a) Value
---------- -------------
<S> <C> <C>
* Scudder Trust Company
Delphi common stock, 6,090 shares,
$0.10 par value, $8.50 per share $51,766
Stable Value Fund
1,095264.820 units, $1.00 per unit 1,095,265
Income Fund
4,466.025 units, $13.24 per unit 59,130
Pathway Series-Balanced
28,686.787 units, $13.06 per unit 374,649
Pathway Series-Conservative
2,467.476 units, $12.73 per unit 31,411
Growth and Income Fund
37,670.250 units, $26.31 per unit 991,104
Global Fund
5,290.823 units, $26.68 per unit 151,741
Large Company Growth Fund
80,011.80 units, $31.76 per unit 2,541,152
Development Fund
2,658.931 units, $37.66 per unit 100,135
* Participant Loans
7.25 to 9.50 percent interest 126,214
-------------
$5,522,567
-------------
-------------
</TABLE>
(a) Historical cost information could not be obtained from the
Plan's custodian.
* Represents a party in interest.
See accompanying independent auditors' report.
9
<PAGE>
DELPHI INFORMATION SYSTEMS, INC.
CASH OPTION PROFIT SHARING PLAN
SCHEDULE II - 27d -- SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(EMPLOYER IDENTIFICATION NUMBER 77-0021975, PLAN NUMBER 001)
<TABLE>
<CAPTION>
Purchases Sales
------------------------ -------------------------------------------------------
Number of Purchase Number of Selling
Indentity of Issue/Description of Investment Purchases Price Sales Price Cost Gain/(Loss)
- ---------------------------------------------------------------------- -------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
* Scudder Trust Company
Stable Value
Fund 95 $252,942 38 $386,598 $386,598 $0
Income Fund 62 $75,752 18 $36,841 $36,847 ($6)
Pathway Series-
Balanced Fund 59 $40,581 27 $232,627 $232,345 $282
Pathway Series-
Conservative Fund 31 $30,704 3 $688 $691 ($3)
Growth and
Income Fund 73 $392,699 19 $158,527 $167,438 ($8,912)
Global Fund 60 $131,378 14 $54,468 $58,471 ($4,003)
Large Company
Growth Fund 67 $370,952 37 $509,260 $447,541 $61,719
Development Fund 63 $88,863 11 $24,842 $28,387 ($3,545)
</TABLE>
* Represents a party in interest.
See accompanying independent auditors' report.
10
<PAGE>
Exhibit 23
Consent of KPMG LLP
The Plan Trustee
Delphi Information Systems, Inc.
Cash Option Profit Sharing Plan:
We consent to incorporation by reference in the registration statement (No.
33-19310) on Form S-8 of Delphi Information Systems, Inc. of our report
dated July 7, 1999, relating to the statement of net assets available for
benefits of the Delphi Information Systems, Inc. Cash Option Profit Sharing
Plan as of December 31, 1998, and the related statement of changes in net
assets available for benefits for the year then ended, which report appears
in the Form 11-K of Delphi Information Systems, Inc. Cash Option Profit
Sharing Plan for the year ended December 31, 1998.
KPMG LLP
October 21, 1999
Chicago, Illinois
