UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(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, 1997
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, 1997, there were 33,483,661 shares of the
Registrant's Common Stock without par value issued and outstanding.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
<TABLE>
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Consolidated Statement of Operations
(Unaudited)
(in thousands, except per share data)
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenue:
Software licenses $ 42,237 $36,119 $ 83,395 $ 69,827
Software maintenance and
services 46,441 30,550 86,147 61,891
------- ------ ------- -------
Total revenue 88,678 66,669 169,542 131,718
------- ------ ------- -------
Cost of revenue:
Cost of licenses 8,329 6,117 15,237 12,753
Cost of maintenance and
services 24,339 14,986 47,470 27,487
------- ------ ------- -------
Total cost of
revenue 32,668 21,103 62,707 40,240
------- ------ -------- -------
Gross profit 56,010 45,566 106,835 91,478
Operating expenses:
Selling and marketing 25,555 25,887 49,711 52,289
Research and development 13,877 6,426 25,415 14,281
General and
administrative 4,877 3,929 9,064 8,275
Purchased in-process
research and
development - - 20,850 -
------ ------ ------- -------
Total operating
expenses 44,309 36,242 105,040 74,845
------ ------ ------- ------
Operating income 11,701 9,324 1,795 16,633
Equity in earnings (losses)
of affiliates 80 (454) 80 541
Acquisition costs - (1,102) - (1,102)
Other income, net 1,029 867 1,557 708
------ ------ ------- ------
Income before income taxes 12,810 8,635 3,432 16,780
Income tax expense 2,932 2,028 5,954 3,817
------ ------ ------- ------
Net income (loss) $ 9,878 $ 6,607 $ (2,522) $ 12,963
======= ======= ======= ======
Earnings (loss) per share:
Primary $ .28 $ .19 $ (.08) $ .37
Fully diluted .28 .19 (.08) .37
Common and common
equivalent shares:
Primary 35,010 35,189 33,488 34,850
Fully diluted 35,361 35,189 33,488 34,850
</TABLE>
See accompanying notes to consolidated financial statements.
<TABLE>
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheet
(in thousands)
<CAPTION>
June 30, December 31,
1997 1996
Assets (unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 80,816 $ 71,278
Marketable securities 17,224 18,502
Trade accounts receivable, net 66,284 61,743
Other accounts receivable 13,913 7,464
Prepaid expenses 9,802 7,918
------- -------
Total current assets 188,039 166,905
------- -------
Marketable securities 8,883 10,509
Property and equipment, at cost:
Computer and other equipment 54,719 49,376
Office furniture and equipment 16,295 14,535
Leasehold improvements 6,445 5,695
------ ------
77,459 69,606
Less accumulated depreciation and
amortization 53,707 48,661
------ -------
Net property and equipment 23,752 20,945
Computer software construction
costs, net 31,524 28,614
Other assets 10,318 11,106
------ -------
Total assets $262,516 $238,079
======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
<TABLE>
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheet
(in thousands, except per share data)
<CAPTION>
June 30, December 31,
1997 1996
Liabilities and Shareholders' Equity (unaudited)
<S> <C> <C>
Current liabilities:
Accounts payable $ 13,311 $ 9,695
Accrued expenses 41,314 36,045
Accrued litigation settlement and
related costs 10,104 10,104
Accrued income taxes 8,557 8,082
Deferred revenues 46,845 36,460
------- -------
Total current liabilities 120,131 100,386
Other long-term liabilities 7,679 8,394
Shareholders' equity:
Common stock, stated value $.0069 per
share Authorized 100,000 shares;
outstanding shares -
33,370 and 32,760 net of 1,534 and
1,542 shares in treasury 231 228
Capital in excess of stated value 96,942 87,292
Retained earnings 38,988 41,510
Foreign currency translation
adjustment (1,405) 298
Unrealized holding loss on
investments (50) (29)
------- --------
Total shareholders' equity 134,706 129,299
------- --------
Total liabilities and
shareholders' equity $262,516 $238,079
======= ========
</TABLE>
<TABLE>
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statement of Cash Flows
(Unaudited)
(in thousands)
<CAPTION>
Six Months Ended June 30,
1997 1996
<S> <C> <C>
Net cash provided by operating
activities $ 42,513 $ 16,297
Cash flows from investing activities:
Sales, (purchases) of marketable
securities, net 2,883 (9,530)
Additions to property and equipment,
net (7,116) (6,772)
Additions to computer software
construction costs (4,508) (3,709)
Acquisition of Metaphase
Technology, Inc. (28,050) -
---------- --------
Net cash used in investing
activities (36,791) (20,011)
--------- ----------
Cash flows from financing activities:
Stock issued under employee benefit
plans 6,676 13,406
Purchases of treasury stock (1,157) (2,469)
Repayment of long term debt - (1,648)
--------- --------
Net cash provided by financing
activities 5,519 9,289
--------- ---------
Effect of exchange rate changes on cash (1,703) (174)
--------- ---------
Increase in cash and cash equivalents 9,538 5,401
Cash and cash equivalents:
Beginning of period 71,278 61,848
-------- ---------
End of period $ 80,816 $ 67,249
======== =========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
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.
While the Company believes that the disclosures are adequate to
make the information not misleading, these financial statements
should be read in conjunction with the Consolidated Financial
Statements and related notes included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1996.
(2) Acquisition of Metaphase Technology, Inc.
In 1992, the Company and Control Data Systems, Inc. (CDSI)
established a joint venture company, Metaphase Technology, Inc.,
(Metaphase), to develop and market product data management (PDM)
software worldwide. The Company initially owned a 35% interest and
increased such interest to 50% during 1993. The Company's
investment in Metaphase was accounted for on the equity basis.
In January 1997, the Company acquired the remaining stock of
Metaphase and certain assets of CDSI's global PDM software sales
and support business. The purchase price of approximately $34,000
included cash and a stock warrant. The warrant is exercisable for
750 shares of the Company's common stock without par value at the
exercise price of $28 per share and expires on December 31, 1998.
A value of $3,500 has been assigned to the warrant and recorded
in Shareholders' equity. The excess of purchase price over the
fair values of the net assets acquired is approximately $2,307
and has been recorded as goodwill. Certain other intangibles,
including computer software construction cost, total approximately
$8,555 and have been recorded on the balance sheet. All
intangibles associated with the acquisition are being amortized
over their useful lives, which do not exceed seven years. Also in
connection with the acquisition, the Company recorded a one-time
charge to operations of $20,850 for the write off of in-process
research and development acquired in the transaction that did not
have an alternative future use and had not reached
technological feasibility. The acquisition was accounted for
using the purchase method. The Company's consolidated statement
of operations includes the operating results of Metaphase and
the CDSI assets acquired, beginning January 1, 1997.
(3) Taxes
The provision for income taxes reflects taxes currently
payable. Based on the Company's historical tax position and
estimates of taxable income for the next four years, a
valuation allowance is provided against deferred tax assets when
the Company believes it is more likely than not that the
deferred tax assets will not be realized. These factors cause
the effective tax rate to differ from the expected statutory rate.
(4) New Accounting Pronouncement
In February 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 128
(SFAS 128), "Earnings per Share" which establishes new
methods for the computation, presentation and disclosure of
earnings per share. SFAS 128 will be effective for financial
statements of annual and interim periods ending after December 15,
1997. Had SFAS 128 been used for the periods presented, there
would have been no material effect on the reported earnings per
share.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
(in thousands)
Structural Dynamics Research Corporation is a leading
international supplier of mechanical design automation (MDA)
software, product data management (PDM) software and related
services. The Company provides software and related services to
manufacturers to optimize product performance and reduce
cost, while streamlining the product development process from
concept through manufacturing.
Certain statements in this Form 10Q are forward looking
statements that involve risks and uncertainties, including
the timely availability and acceptance of new products, the
impact of competitive products and pricing, the management of
growth, and the other risks detailed from time to time in the
Company's Securities and Exchange Commission reports. The
Company's results could differ from those results described
herein. Forward looking information should be evaluated in the
context of these and other factors some of which are described in
more detail in Factors That May Affect Future Results.
Acquisition of Metaphase Technology, Inc.
In January 1997, the Company acquired the remaining stock of
Metaphase Technology, Inc., (Metaphase), and certain assets of
Control Data Systems, Inc.'s (CDSI) global PDM software sales and
support business. The purchase price of approximately $34,000
included cash and a stock warrant. The acquisition was accounted
for as a purchase. During the three months ended March 31, 1997
the Company recorded a one-time charge of $20,850 to write off
in-process research and development acquired in the acquisition
that did not have an alternative future use and had not reached
technological feasibility.
Revenue
The Company's consolidated net revenue increased 29% to $169,542
for the six months ended June 30, 1997, compared to $131,718
for the six months ended June 30, 1996. Quarterly revenue
increased 33% to $88,678 for the three months ended June 30, 1997,
compared to $66,669 for the three months ended June 30, 1996.
Software license revenue increased 19% to $83,395 for the six
months ended June 30, 1997, compared to $69,827 for the six months
ended June 30, 1996. Quarterly software license revenue increased
17% to $42,237 for the three months ended June 30, 1996 compared to
$36,119 for the three months ended June 30, 1996. Software
license revenue growth from CAD/CAM/CAE and PDM products was 10%
and 108%, respectively, for the three months ended June 30, 1997
and 11% and 83%, respectively, for the six months ended June 30,
1997 compared to the corresponding periods in 1996. The growth
was lead by sales to major automotive customers and increased PDM
product sales related to the Metaphase acquisition. Software
license revenues increased as a result of continued product
development and
Revenue (continued)
customer acceptance of software enhancements. During the
second quarter of 1997, the Company's ongoing investment in
product development resulted in the releases of I-DEAS Master
Series 5, the latest version of the Company's principal
CAD/CAM/CAE software, and Metaphase 2.3, the latest version of its
PDM software. Master Series 5 has improved performance and new
capabilities for product design analysis. It offers integration
with the Company's suite of manufacturing and machining
software. Metaphase 2.3 has new features to further support
concurrent product development processes, including web based
product data management.
Software maintenance and services revenue increased 39% to $86,147
for the six months ended June 30, 1997, compared to $61,891 for
the six months ended June 30, 1996. Quarterly software
service revenue increased 52% to $46,441 for the three months
ended June 30, 1997, compared to $30,550 for the three months
ended June 30, 1996. Growth in maintenance revenue was due to
the increase in the Company's installed customer base and the
Company's continued efforts, through product development and
marketing, to obtain maintenance contract renewals from its
customers. Software services revenue continued to grow due to
increased work on implementation and related projects for I-DEAS
and Metaphase license customers, including a large contract with
a major automotive customer.
For the three and six month periods ended June 30, 1997 and
1996, revenue in North America accounted for 49% and 53%, Europe
28% and Asia-Pacific 23% and 19%, respectively, of consolidated
revenues. The Company expects the international market to continue
to account for a significant portion of total revenue.
Expenses
Cost of revenue consists principally of the staff and related
costs associated with the generation and support of software
service revenue, amortization of capitalized software
construction costs, royalty fees paid to third parties under
licensing agreements and the cost of distributing software
products. Cost of revenue increased 56% to $62,707 for the six
months ended June 30, 1997, compared to $40,240 for the six months
ended June 30, 1996. Quarterly cost of revenue increased 55% to
$32,668 for the three months ended June 30, 1997, compared to
$21,103 for the three months ended June 30, 1996. Cost of revenue
represented 37% of revenue for the three and six months ended June
30, 1997, compared to 32% and 31% and for the corresponding 1996
periods.
The cost of licenses represented 20% and 18% of license revenue
for the three and six months ended June 30, 1997, compared to 17%
and 18% of license revenue for the corresponding 1996 periods.
Quarterly, the increased cost of licenses, relative to license
sales, is due primarily to increased software amortization from
the recent release of I-DEAS Master Series 5. The cost of
services and maintenance represented 52% and 55% of the
associated revenue for the three and six months ended June 30,
1997, compared to 49% and 45% for the corresponding 1996
periods. Relative to the associated sales, cost of services and
maintenance increased due to the hiring, training and integration
cost associated with expanding the workforce to meet the growing
demand for software implementation, training services and post
license sales support. Also, the cost of services and maintenance
for the 1997 periods included expenses to support, at lower
margins, service commitments transferred to the company as a
result of purchasing certain assets of CDSI in connection with
the Metaphase acquisition. These service operations are being
combined with the company and the existing commitments will be
restructured as they expire.
Expenses (continued)
Selling and marketing expenses consist of the costs associated
with the world-wide sales and marketing staff, advertising and
product localization. Selling and marketing expenses decreased 1%
and 5% for the three and six months ended June 30, 1997 from
the corresponding 1996 periods. Selling and marketing expenses
represented 29% of revenue for the three and six months ended
June 30, 1997 compared to 39% and 40% for the corresponding
periods in 1996. While the Company expanded its sales force and
marketing efforts since June 30, 1996, the net decrease in
selling and marketing expense resulted from certain
non-recurring charges during the six months ended June 30, 1996.
Those charges included significant expense for a corporate
advertising campaign, bad debt expense and special
commission programs. In 1997, the Company allocated less
facility costs to selling and marketing expenses and more to
services and maintenance expenses due to the additional growth of
the services and maintenance workforce. Through the remainder
of 1997, the Company expects continued increases in the number
of sales people.
Research and development expenses consist primarily of
salaries, benefits, computer equipment costs and facilities
associated with the product development staff. It excludes costs
which are capitalized in accordance with Statement of Financial
Accounting Standards No. 86. Research and development expenses
increased to $13,877 and $25,415 for the three and six month
periods ended June 30, 1997, from $6,426, and $14,281 for the
corresponding periods in 1996. These expenses increased to 16%
and 15% of total revenue for the three and six month periods
ending June 30, 1997, from 10% and 11% of total revenue for the
same periods in 1996. The increases were due to additions in the
development staff from the Metaphase acquisition, as well as,
staff increments for I-DEAS product development. Research and
development expenses excluded capitalized internal software costs
of $4,508 for the six months ended June 30, 1997 compared to
$3,709 for the corresponding period in 1996. The increase in
capitalized cost reflected the higher level of development
staff and a timing difference of new product releases compared
to the prior year. The Company expects to continue to devote a
substantial level of resources to product development.
General and administrative expenses consist of costs associated
with the corporate, finance, legal, human resource and
administrative staffs. These expenses increased 10% to $9,064 for
the six months ended June 30, 1997, compared to $8,275 for the six
months ended June 30, 1996. Quarterly general and administrative
expenses increased 24% to $4,877 for the three months ended June
30, 1997, compared to $3,929 for the three months ended June
30, 1996. General and administrative expenses represent 5% of
revenue for the three and six months ended June 30, 1997 and 6%
for the three and six months ended June 30, 1996. The increase
in general and administrative expenses was primarily due to
recruiting and relocation cost associated with changes in the
Company's executive management during the three months ended June
30, 1997 and increases in performance compensation accruals.
Equity in Earnings of Affiliates
For the six months ended June 30, 1997, equity in earnings
represented the Company's share of operating results of its joint
venture, ESTECH. For the six month period ended June 30, 1996,
equity in earnings of affiliates represented the Company's share of
operating results of its joint venture investee, Metaphase. Since
the Company's acquisition of Metaphase in January, 1997, the
operating results of Metaphase are consolidated in the Company's
statement of operations.
Acquisition Cost
In June 1996, the Company completed the acquisition of
Camax Manufacturing Technologies, Inc., (Camax), which was accounted
for as a pooling of interests wherein all historical financial
information was restated to include the results of Camax for
all periods presented. Charges of $1,102 related to the
acquisition were recorded in the second quarter 1996 results.
Other Income, net
Other income, net, consists principally of interest income and
foreign currency losses. For the six months ended June 30, 1997,
other income includes interest income of approximately $2,020 and
foreign exchange losses of approximately $460. The net increase
for the six month period ended June 30, 1997, compared to 1996,
is due to a charge of approximately $950 for the settlement of a
lawsuit in 1996.
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 cause the effective tax
rate to differ from the expected statutory rate.
Liquidity and Capital Resources
At June 30, 1997, the Company had cash and investments of $106,923
as compared to $100,289 at December 31, 1996. During the first
six months of 1997, the Company generated net cash from
operating activities of $42,513; realized cash proceeds of
$6,676 from the issuance of stock; and received $2,883 from the
sale of securities. The cash generated was partially offset by cash
paid for the Metaphase acquisition ($28,050); payments for
equipment purchases ($7,116); computer software construction
($4,508); and the purchase of treasury stock for employee benefit
plans ($1,157) since December 31, 1996. At June 30, 1997, the
Company's working capital was $67,908. In addition, the
Company has an unused, unsecured bank line of credit of $15,000.
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.
Factors That May Affect Future Results
Forward looking statements and the Company's results are subject
to certain risks and uncertainties, including those discussed below,
that could cause actual results to differ from those disclosed.
Any risk and uncertainty posed by competitive, technological
or financial factors could have an immediate and significant
adverse effect on the trading price of the Company's stock in any
given period.
Future quarterly results could be impacted by factors such as
customer order delays, 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. The loss of a major customer or a reduction in
orders from a major customer or distributor could have a
significant impact to the results of operations in any
particular quarter. Historically, a significant portion of the
Company's revenue is generated from shipments in the last month
of a quarter. In addition, higher volumes of orders have been
experienced in the second and fourth quarter. The concentration of
orders makes projections of quarterly financial results difficult.
If customers delay their orders or a disruption in the
Company's distribution occurs, quarterly results of operations in
any particular quarter may be negatively impacted. The Company
Factors That May Affect Future Results (continued)
usually ships the software license orders within one to two
weeks after receipt of a customer order. Typically, orders exist at
the end of a quarter which have not been shipped. The value of such
orders is not indicative of revenue results for any future
period. A significant portion of the Company's revenue
is from the international market. As a result, the Company's
financial results could be impacted by weakened general economic
conditions, differing technological advances or preferences,
volatile foreign exchange rates and government trade restrictions
in any country in which the Company
does business. The Company relies on distributors,
representatives and value added resellers to market its
products. The Company's revenue in any particular quarter may
be negatively impacted by a lower than anticipated performance
of any significant distributor, representative or value added
reseller.
The Company's success is dependent on its ability to continue
to develop, enhance and market new products to meet its
customers' sophisticated needs in a timely manner and which are
consistent with current technological developments.
The Company's success also depends in part on its ability to
attract and retain technical and other key employees who are in
great demand, to protect the intellectual property rights of its
products and to continue key relationships with third party
authors. As development cycles become shorter, product quality,
performance, reliability, ease of use, functionality, breadth and
integration may be impacted. Therefore, customer acceptance of
new products cannot be assured. The CAD/CAE/CAM software
industry is highly competitive. The entire industry may
experience pricing and margin pressure which as a result could
adversely affect the Company's operating results and financial
position.
In addition, the Company's expense levels are based, in part, on
its future revenue expectations. The Company continues to
increase its operating expense levels to meet the growing customer
demand for the Company's products and services. If revenue is
below expectations, operating results could be adversely and
materially affected. Net income may be disproportionately
affected by an unexpected reduction in revenue because the
Company's expense levels are generally committed in advance and
a relatively small portion of the Company's expenses vary with
revenue.
Future results could also be impacted by the integration of
the Company and Metaphase. In addition, the Company is in the
process of upgrading its world-wide information management system.
Such a major undertaking could cause significant disruption as
a result of unexpected delays in the implementation of this
project. There can be no assurance that the project will be
completed within the projected time frame and budget.
The trading price of the Company's stock, like other software
and technology stocks, is subject to significant volatility due to
factors impacting the overall market which are unrelated to the
Company's performance. The historical results of operations
and financial position of the Company are not necessarily
indicative of future financial performance. If revenues or
earnings fail to meet securities analysts' expectations, there
could be an immediate and significant adverse impact on the
trading price of the Company stock.
The Company has not experienced a material adverse impact of
such risks or uncertainties and does not anticipate such an
impact. However, no assurance can be given that such risks and
uncertainties will not affect the Company's future results of
operations or its financial position.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
At the April 29, 1997 Annual Meeting of Shareholders, the Company's
shareholders voted to:
- Elect three Class II directors to serve until the
1999 Annual Meeting. Out of a total 32,906,924 shares eligible
to vote for the appointment, 29,379,867; 29,690,015 and 29,628,158
voted in favor of the three nominees, respectively, 0 voted
against and 548,346; 238,198 and 300,055 withheld, respectively,
with no broker non-votes.
- Amend the Company's Amended Articles of Incorporation
to permit certain internal reorganizations without shareholder
approval. Out of a total 32,906,924 shares eligible to vote for
the amendment, 24,219,073 voted in favor, 897,361 voted against
and 138,451 abstained with no broker non-votes.
- Ratify the appointment of Price Waterhouse LLP as
the independent auditors of the Company for 1997. Out of a
total 32,906,924 shares eligible to vote for the
ratification, 29,828,163 voted in favor, 32,613 voted against
and 67,437 abstained with no broker non-votes.
Item 6. Exhibits and Reports on Form 8-K.
(A) Exhibits filed as part of this report:
11(a) Calculation of Primary Earnings Per Common Share
11(b) Calculation of Fully Diluted Earnings Per Common Share
(B) No report on Form 8-K was filed during the second quarter of
1997.
The information furnished in this report has not been audited.
It reflects all adjustments which are, in the opinion of
management, necessary for a fair statement of the results for the
interim periods reported. The results are not necessarily
indicative of results of operations to be expected for the full
fiscal year.
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
Date: August 11, 1997 By: /s/ Jeffrey J. Vorholt
Jeffrey J. Vorholt,
Vice President,
Chief Financial Officer and
Treasurer
* Pursuant to the last
sentence of General Instruction
G to Form 10-Q, Mr. 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.
<PAGE>
EXHIBIT 11.1
<TABLE>
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Calculation of Primary Earnings Per Common Share
(in thousands, except per share data)
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
PRIMARY
<S> <C> <C> <C> <C>
Average shares outstanding 33,614 32,964 33,488 32,473
Net effect of dilutive stock
options after
application of the
treasury stock method 1,396 2,225 - 2,377
------ ------ ------- -------
Total 35,010 35,189 33,488 34,850
====== ====== ======= =======
Net income (loss) $ 9,878 $ 6,607 $(2,522) $12,963
====== ======= ======= =======
Net income (loss) per
share $ .28 $ .19 $ (.08) $ .37
====== ======= ======= =======
</TABLE>
Exhibit 11.2
<TABLE>
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Calculation of Fully Diluted Earnings Per Common Share
(in thousands, except per share data)
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
FULLY DILUTED
Average shares outstanding 33,614 32,964 33,488 32,473
Net effect of dilutive stock
options after
application of the
treasury stock method 1,747 2,225 - 2,377
------ ------ ------- ------
Total 35,361 35,189 33,488 34,850
====== ====== ======= ======
Net income $ 9,878 $ 6,607 $(2,522) $12,963
======= ====== ======= ======
Net income per share $ .28 $ .19 $ (.08) $ .37
======= ====== ======= ======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 80,816
<SECURITIES> 17,224
<RECEIVABLES> 80,197
<ALLOWANCES> 3,723
<INVENTORY> 0
<CURRENT-ASSETS> 188,039
<PP&E> 77,459
<DEPRECIATION> (53,707)
<TOTAL-ASSETS> 262,516
<CURRENT-LIABILITIES> 120,131
<BONDS> 0
0
0
<COMMON> 231
<OTHER-SE> 134,475
<TOTAL-LIABILITY-AND-EQUITY> 262,516
<SALES> 169,542
<TOTAL-REVENUES> 169,542
<CGS> 62,707
<TOTAL-COSTS> 105,040
<OTHER-EXPENSES> 1,637
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,432
<INCOME-TAX> 5,954
<INCOME-CONTINUING> (2,522)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,522)
<EPS-PRIMARY> (.08)
<EPS-DILUTED> (.08)
</TABLE>
