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 March 31, 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 April 29, 1994 there were 28,851,931 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 March 31, 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 Periods Ended March 31, 1994 and 1993
(Unaudited)
(in thousands, except share data)
Three Months Ended March 31,
1994 1993
Revenue:
Software products and services $ 23,449 $ 19,965
Maintenance 8,702 8,237
Engineering services 4,644 5,304
Net revenue 36,795 33,506
Cost and expenses:
Cost of revenue 8,010 7,645
Research and development expenses 8,040 6,184
Selling, general and
administrative expenses 24,072 19,724
Total cost and expenses 40,122 33,553
Operating (loss) (3,327) (47)
Equity in losses of affiliates (195) (133)
Other income, principally interest 411 420
Income (loss) before income taxes
and cumulative effect of accounting
change (3,111) 240
Income taxes 1,203 876
Income (loss) after income taxes
and before cumulative effect of
accounting change (4,314) (636)
Cumulative effect of accounting
change (3,896) --
Net income (loss) $(8,210) $ (636)
Earnings (loss) per share:
Before cumulative effect of
accounting change $ (.14) $ (.02)
Cumulative effect of
accounting change (.13) --
Earnings (loss) per share $ (.27) $ (.02)
Average number of shares of
common stock and common stock
equivalents outstanding 30,154 29,586
See accompanying notes to consolidated financial statements.
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheet
March 31, 1994 and December 31, 1993
(Unaudited)
(in thousands)
March 31, December 31,
1994 1993
Assets
Current assets:
Cash and cash equivalents $ 28,139 $ 34,783
Investments 14,975 10,720
Trade accounts receivable, net 20,249 20,567
Other accounts receivable 7,805 5,902
Prepaid expenses 6,408 5,144
Total current assets 77,576 77,116
Long-term investments 11,335 10,547
Property and equipment, at cost:
Computer and other equipment 36,220 36,055
Office furniture and equipment 9,155 9,079
Leasehold improvements 3,628 3,594
49,003 48,728
Less accumulated depreciation and
amortization 34,033 32,897
Net property and equipment 14,970 15,831
Computer software construction
costs, net 28,311 28,457
Other assets 2,524 2,598
Total assets $134,716 $134,549
See accompanying notes to consolidated financial statements.
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheet
March 31, 1994 and December 31, 1993
(Unaudited)
(in thousands, except share data)
March 31, December 31,
1994 1993
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 5,653 $ 6,512
Accrued expenses 26,336 24,699
Accrued income taxes 4,958 5,371
Deferred revenue 17,414 13,060
Total current liabilities 54,361 49,642
Cumulative share of losses in affiliate 3,000 --
Deferred income taxes and other 322 326
Shareholders' equity:
Common stock, stated value $.0069
per share; 100,000 authorized
shares in 1994 and 1993; 28,847
issued shares in 1994 and 28,709
issued shares in 1993, net of
1,612 treasury shares in 1994
and 1,612 in 1993 200 199
Capital in excess of stated value 46,237 45,376
Retained earnings 31,415 39,625
Unrealized loss on investments (198) --
Foreign currency translation
adjustment (621) (619)
Total shareholders' equity 77,033 84,581
Total liabilities
and shareholders' equity $134,716 $134,549
See accompanying notes to consolidated financial statements.
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statement of Cash Flows
For the Three Month Periods Ended March 31, 1994 and 1993
(Unaudited)
(in thousands)
Three Months Ended March 31,
1994 1993
Net cash provided by (used in)
operating activities ($ 2,700) $ 4,663
Cash flows from investing activities:
Purchases of investments, net (5,241) (3,966)
Additions to property and
equipment, net (913) (1,767)
Additions to computer software
construction costs (1,450) (2,408)
Additions to purchased
computer software (73) (75)
Change in joint venture investment 3,000 --
Other, net (127) (146)
Net cash used in
investing activities (4,804) (8,362)
Cash flows from financing activities:
Stock issued under employee
benefit plans 863 1,488
Purchases of treasury stock (1) (21)
Net cash provided by
financing activities 862 1,467
Effect of exchange rate changes
on cash (2) (104)
Decrease in cash and
cash equivalents (6,644) (2,336)
Cash and cash equivalents:
Beginning of period 34,783 31,661
End of period $28,139 $29,325
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, and (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 SFAS No.
112.
(3) Change in Accounting Principle
In 1994, the Company adopted Statement of Financial Accounting
Standard (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 European Joint Venture
In March 1994, the Company formed a 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.
(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. Managements Discussion and Analysis of Financial Condition
and Results of Operations.
Results of Operations (in thousands)
Revenue
Consolidated revenue increased by $3,289 (or 10%) for the three
months ended March 31, 1994 as compared to the corresponding 1993
period. Software segment's revenue increased 14% over the
corresponding quarter in 1993. License revenue increased by 31% as
compared to prior year's quarter due in part to the growing
acceptance of the I-DEAS Master Series in the marketplace. This
increase was partially offset by a decline in revenue from a
significant customer. Maintenance revenue increased 6% over prior
year's quarter, primarily due to the Company's expanding customer
base. Engineering services segment revenue decreased 12% from
decreased consulting activities.
Expenses
Cost of revenue in 1994 increased 5% as compared to the prior year
quarter primarily due to increased amortization of capitalized
software and other variable cost increases directly associated with
software revenue. Amortization of software development costs
increased $1,030 over the prior year's quarter. Third-party author
fees increased by $548 to 33% over the prior year's quarter due to
increased software revenues, particularly from product data
management (PDM) software licenses. Engineering services' cost
decreased by 12% due to lower resource requirements as a result of
declining revenue.
Research and development expense, which cannot be capitalized in
accordance with Statement of Financial Accounting Standards No. 86,
increased by 30% as compared to prior year's level. Capitalized
software construction costs decreased $958 from the prior year's
quarter, as significant non-capitalizable development resources
were expended. The Company continues to commit significant
resources to the technological advancement of its software product
line.
Selling, general and administrative expenses increased by 22% in
1994 over 1993 due to continued expansion of the field sales and
support organization, as well as increased general corporate
expenses. Management's expectation was that the 1994 revenue
growth would increase more than performance ultimately achieved.
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.
Other
Other income (principally interest income) has decreased slightly
due to declining interest earned from lower interest percentage
rates on cash and short-term investments.
In 1994, the Company adopted SFAS 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.
Quarterly Results
Future quarterly results could 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.
Item 5. Other Information
In March of 1994, the Company and Siemens Nixdorf
Informationssysteme AG (SNI) formed a joint venture, SDRC Software
and Services GmbH, to supply mechanical CAE/CAD/CAM software and
services in Central Europe. SDRC has a 50.1% interest in the joint
venture company which is headquartered in Frankfurt, Germany and
will serve customers in Germany, Switzerland and Austria. This
investment in which the Company has significant influence, but not
control, is accounted for under the equity method.
Liquidity and Capital Resources
At March 31, 1994, the Company had cash and investments of $54,449.
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 Loss Per Common Share
11(b) Calculation of Fully Diluted Loss Per Common Share
(B) Reports on Form 8-K filed during the quarter ended March
31, 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 Loss Common Share
(in thousands, except share data)
Three Months Ended March 31,
1994 1993
Loss after income
taxes and before cumulative
effect of accounting change $ (4,314) $ (636)
Cumulative effect of accounting change (3,896) --
Net loss $ (8,210) $ (636)
Average Number of Shares of
Common Stock Outstanding 28,766 28,290
Average Number of Common Stock
Equivalents:
Effect of stock options
outstanding after
application of the
treasury stock method 1,388 1,296
30,154 29,586
Primary Loss Per Common Share:
Before cumulative effect of
accounting change $ (.14) $ (.02)
Cumulative effect of accounting
change (.13) --
Loss per share $ (.27) $ (.02)
Exhibit 11(b)
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Calculation of Fully Diluted Loss Per Common Share
(in thousands, except share data)
Three Months Ended March 31,
1994 1993
Loss after income taxes
and before cumulative effect
of accounting change $ (4,314) $ (636)
Cumulative effect of accounting
change (3,896) --
Net loss $ (8,210) $ (636)
Average Number of Shares of
Common Stock Outstanding 28,766 28,290
Average Number of Common Stock
Equivalents:
Effect of stock options
outstanding after
application of the
treasury stock method 1,388 1,832
30,154 30,122
Fully Diluted Loss Per Common Share:
Before cumulative effect of
accounting change $ (.14) $ (.02)
Cumulative effect of accounting
change (.13) --
Loss per share $ (.27) $ (.02)
