UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the period ended June 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission file number 0-16230
STRUCTURAL DYNAMICS RESEARCH CORPORATION
(Exact name of registrant as specified in its charter)
Ohio 31-0733928
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2000 Eastman Drive, Milford, Ohio 45150
(Address of principal executive offices)
(Zip Code)
(513) 576-2400
(Registrant's telephone number, including area code)
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 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes [X] No [ ]
As of July 31, 1994 there were 28,876,535 shares of the
Registrant's Common Stock without par value issued and outstanding.
The Registrant hereby amends the following items and financial
statements of its Quarterly Report on Form 10-Q for the quarter
ended June 30, 1994 as set forth below. Items not referenced below
are not amended. Items referenced below are amended in their
entirety as set forth below:
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Consolidated Statement of Operations
For the Three Month and Six Month Periods
Ended June 30, 1994 and 1993
(Unaudited)
(in thousands, except share data)
Three Months Six Months
Ended June 30, Ended June 30,
1994 1993 1994 1993
Revenue:
Software products
and services $28,922 $ 26,666 $52,371 $46,631
Maintenance 8,915 8,340 17,617 16,577
Engineering services 4,872 5,422 9,516 10,726
Net revenue 42,709 40,428 79,504 73,934
Cost and expenses:
Cost of revenue 8,535 12,768 16,545 20,413
Research and
development expenses 7,943 6,580 15,983 12,764
Selling, general and
administrative expenses 22,724 23,536 46,796 43,260
Total cost and expenses 39,202 42,884 79,324 76,437
Operating income (loss) 3,507 (2,456) 180 (2,503)
Equity in losses
of affiliates (2,235) (263) (2,430) (396)
Other income,
principally interest 679 355 1,090 775
Income (loss) before
income taxes and
cumulative effect
of accounting
change 1,951 (2,364) (1,160) (2,124)
Income taxes 359 1,293 1,562 2,169
Income (loss) after
income taxes and
before cumulative
effect of
accounting change 1,592 (3,657) (2,722) (4,293)
Cumulative effect
of accounting change -- -- (3,896) --
Net income (loss) $1,592 $(3,657) $(6,618) $(4,293)
Earnings (loss) per share:
Before cumulative effect
of accounting change $ .05 $ (.12) $ (.09) $ (.14)
Cumulative effect
of accounting change -- -- (.13) --
Earnings (loss)
per share $ .05 $ (.12) $ (.22) $ (.14)
Average number of
shares of common
stock and common stock
equivalents outstanding 29,702 29,719 29,862 30,267
See accompanying notes to consolidated financial statements.
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheet
June 30, 1994 and December 31, 1993
(Unaudited)
(in thousands)
June 30, December 31,
Assets 1994 1993
Current assets:
Cash and cash equivalents $ 24,481 $ 34,783
Investments 16,179 10,720
Trade accounts receivable, net 28,157 20,567
Other accounts receivable 7,210 5,902
Prepaid expenses 5,985 5,144
Total current assets 82,012 77,116
Long-term investments 11,607 10,547
Property and equipment, at cost:
Computer and other equipment 36,761 36,055
Office furniture and equipment 9,039 9,079
Leasehold improvements 3,682 3,594
49,482 48,728
Less accumulated depreciation and
amortization 34,851 32,897
Net property and equipment 14,631 15,831
Computer software construction
costs, net 29,195 28,457
Other assets 2,251 2,598
Total assets $139,696 $134,549
See accompanying notes to consolidated financial statements.
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheet
June 30, 1994 and December 31, 1993
(Unaudited)
(in thousands, except share data)
June 30, December 31,
1994 1993
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 6,327 $ 6,512
Accrued expenses 28,003 24,699
Accrued income taxes 3,696 5,371
Deferred revenue 18,918 13,060
Total current liabilities 56,944 49,642
Cumulative share of losses
in affiliates 4,131 --
Deferred income taxes and other 317 326
Shareholders' equity:
Common stock, stated value $.0069
per share; 100,000 authorized shares
in 1994 and 1993; 28,843 issued
shares in 1994 and 28,709 issued
shares in 1993 net of 1,632 treasury
shares in 1994 and 1,612 in 1993 200 199
Capital in excess of stated value 46,213 45,376
Retained earnings 33,007 39,625
Unrealized loss on investments (505) --
Foreign currency translation
adjustment (611) (619)
Total shareholders' equity 78,304 84,581
Total liabilities and
shareholders' equity $139,696 $134,549
See accompanying notes to consolidated financial statements.
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statement of Cash Flows
For the Six Month Period Ended June 30, 1994 and 1993
(Unaudited)
(in thousands)
Six Months Ended June 30,
1994 1993
Net cash provided by
operating activities $ 342 $ 8,174
Cash flows from investing activities:
Purchases of investments, net (7,024) 1,393
Additions to property and
equipment, net (2,235) (3,510)
Additions to computer software
construction costs (4,186) (5,357)
Additions to purchased
computer software (85) (175)
Change in joint venture investment 2,239 --
Other, net (199) (185)
Net cash used in
investing activities (11,490) (7,834)
Cash flows from financing activities:
Stock issued under employee
benefit plans 1,039 2,183
Purchases of treasury stock (201) (21)
Net cash provided by (used in)
financing activities 838 2,162
Effect of exchange rate changes
on cash 8 16
Increase (decrease) in cash and
cash equivalents (10,302) 2,518
Cash and cash equivalents:
Beginning of period 34,783 31,661
End of period $24,481 $34,179
See accompanying notes to consolidated financial statements.
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
(in thousands)
(1) Basis of Presentation
The accompanying unaudited consolidated financial statements have
been prepared by the Company pursuant to the rules and regulations
of the Securities and Exchange Commission. As permitted by the
rules of the Securities and Exchange Commission applicable to
quarterly reports on Form 10-Q, these notes are condensed and do
not contain all disclosures required by generally accepted
accounting principles. In the opinion of management, these
financial statements contain all adjustments (consisting of only
normal recurring adjustments, unless otherwise noted) necessary to
present fairly the Company's financial position, results of
operations and cash flows as of the dates and for the periods
indicated.
(2) Restatement of Financial Statements
The financial statements included herein have been restated from
those previously published to reflect corrections of errors in the
accounting for (a) revenue recognition and revenue related
expenses, (b) the write-off of non-recoverable software
construction costs, (c) accrued expenses and losses. Additionally,
the related income tax effects have been adjusted. The financial
statements have also been restated to reflect the equity in losses
of a German investee and the adoption of Statement of Financial
Accounting Standard (SFAS) No. 112.
(3) Change in Accounting Principle
In 1994, the Company adopted Statement of Financial Accounting
Standards SFAS No. 112 "Employers' Accounting for Postemployment
Benefits" for benefits attributable to employees' service
previously rendered. As such, the Company has recognized a one-
time charge of $3,896 net of income tax benefits. The annual
incremental charge for future periods is not anticipated to be
material.
(4) Formation of Central Europe Joint Venture
In March of 1994, the Company formed a Central European joint
venture with Siemens Nixdorf Informationssysteme AG (SNI). The
Company and SNI contributed certain assets, cash and loans to the
venture, known as SDRC Software and Services GmbH (SDRC GmbH),
along with the rights to certain software products owned by SNI.
Although the Company received a 50.1% interest in the venture, it
does not exercise sufficient control to treat SDRC GmbH as a
consolidated subsidiary. Under certain loss sharing provisions of
the venture agreement the Company may be required to make
additional capital investments in SDRC GmbH.
(5) Taxes
The provision for income taxes reflects taxes currently payable.
Deferred tax benefits relating to temporary differences have been
offset by a valuation allowance due to doubt as to their ultimate
realization. These factors have the impact of disturbing the
effective tax rate from the expected statutory rate.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations (in thousands)
Revenue
Consolidated revenue increased by $2,281 (or 6%) and $5,570 (or 8%)
for the three and six months ended June 30, 1994, respectively, as
compared to the corresponding 1993 periods. During the second
quarter and six months ending June 30, 1994, the software segment
revenue increased $2,831 (or 8%) and $6,780 (or 11%) for the
comparable periods over 1993 due to the continuing worldwide demand
for the Company's product line. This growth comparison excludes
the revenue of SDRC GmbH beginning in the second quarter of 1994 as
its results are accounted for under the equity method. Engineering
services segment revenue decreased 10% and 11% for the three and
six months ended June 30, 1994, respectively, as compared to the
corresponding 1993 periods due to a decrease in the Company's
consulting activities.
Expenses
During the second quarter and six months, cost of revenue in 1994
decreased 33% and 19%, respectively, from the comparable prior year
periods. This decrease resulted from a 1993 write-off of
unamortized software construction costs determined to be non-
recoverable upon the release of the I-DEAS Master Series
(Trademark) product. Engineering services costs declined by 22%
during the second quarter and 17% for the six months from the
comparable prior year periods, in alignment with the decline in
engineering services revenue.
Research and development expenses which cannot be capitalized in
accordance with Statement of Financial Accounting Standards No. 86
increased 21% and 25% for the second quarter and six months from
the prior year periods due to the Company's continued commitment to
the technological advancement of its software product line.
Selling, general and administrative expenses decreased 3% for the
second quarter and increased 8% for the six months in 1994 over
1993. These comparisons exclude the German joint venture expenses
beginning in the second quarter of 1994 as its results of
operations are now accounted for under the equity method of
accounting.
Taxes
The provision for income taxes reflects taxes currently payable.
Deferred tax benefits relating to temporary differences have been
offset by a valuation allowance due to doubt as to their ultimate
realization. These factors have the impact of disturbing the
effective tax rate from the expected statutory rate.
Net earnings in the second quarter of 1994 were positively impacted
by the receipt of a federal income tax refund related to foreign
tax credits. The refund increased net income by $1,754 or $.06 per
share in the quarter.
Other
Other income (principally interest) has increased due to the
interest received on the second quarter federal income tax refund.
Quarterly Results
During the second quarter of 1994, the Company shipped a scheduled
maintenance release of the I-DEAS Master Series (Trademark)
software which further enhanced its quality and performance.
However, there can be no assurance that there will not be
additional unforeseen problems with this product, which could have
an adverse effect on the Company's quarterly results. In addition,
quarterly results could not be impacted by factors such as order
deferrals, a slower growth rate in the market, increased
competition or adverse changes in general economic conditions in
any of the countries in which the Company does business. Any
shortfall in revenue or earnings could have an immediate and
significant adverse effect on the trading price of the Company's
stock in any given period.
Liquidity and Capital Resources
At June 30, 1994, the Company had cash and investments of $52,267.
The Company has no current commitments for material capital
expenditures. These existing sources of liquidity and funds
anticipated to be generated from operations are expected to provide
adequate cash to fund the Company's projected needs for the
foreseeable future.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(A) Exhibits filed as part of this report:
11(a) Calculation of Primary Earnings (Loss) Per Common
Share
11(b) Calculation of Fully Diluted Earnings (Loss) Per
Common Share
(B) Reports on Form 8-K filed during the quarter ended June
30, 1994: None
SIGNATURE
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.
STRUCTURAL DYNAMICS RESEARCH CORPORATION
January 13, 1995 By: /s/ Jeffrey J. Vorholt
(Date) (Jeffrey J. Vorholt,
Vice President and Controller)
*Pursuant to the last sentence
of General Instruction G to
Form 10-Q, Jeffrey J. Vorholt
has executed this Quarterly
Report on Form 10-Q both on
behalf of the registrant and
in his capacity as its
principal financial and
accounting officer.
EXHIBIT 11(a)
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Calculation of Primary Earnings (Loss) Per Common Share
(in thousands, except per share data)
Three Months Six Months
Ended June 30, Ended June 30,
1994 1993 1994 1993
Income (loss) after
income taxes and
before cumulative
effect of
accounting change $ 1,592 $ (3,657) $ (2,722) $ (4,293)
Cumulative effect
of accounting
change -- -- (3,896) --
Net income (loss) $ 1,592 $ (3,657) $ (6,618) $ (4,293)
Average Number of
Shares of Common
Stock Outstanding 28,852 28,430 28,809 28,361
Average Number of
Common Stock
Equivalents:
Effect of stock
options outstanding
after application
of the treasury
stock method 850 1,611 1,053 1,906
29,702 30,041 29,862 30,267
Primary Earnings
(loss) Common Share:
Before cumulative
effect of
accounting change $ .05 $ (.12) $ (.09) $ (.14)
Cumulative effect
of accounting
change -- -- (.13) --
Earnings (loss)
per share $ .05 $ (.12) $ (.22) $ (.14)
Exhibit 11(b)
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Calculation of Fully Diluted Earnings Per Common Share
(in thousands, except share data)
Three Months Six Months
Ended June 30, Ended June 30,
1994 1993 1994 1993
Income (loss) after
income taxes and
before cumulative
effect of
accounting change $ 1,592 $ (3,657) $ (2,722) $ (4,293)
Cumulative effect
of accounting
change - - (3,896) -
Net income (loss) $ 1,592 $ (3,657) $ (6,618) $ (4,293)
Average Number of
Shares of Common
Stock Outstanding 28,852 28,430 28,809 28,361
Average Number of
Common Stock
Equivalents:
Effect of stock
options outstanding
after application
of the treasury
stock method 850 1,289 1,053 1,906
29,702 29,719 29,862 30,267
Fully Diluted
Earnings (Loss) Per
Common Share:
Before cumulative
effect of
accounting change $ .05 $ (.12) $ (.09) $ (.14)
Cumulative effect of
accounting change -- -- (.13) --
Earnings (loss)
per share $ .05 $ (.12) $ (.22) $ (.14)
