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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
November 25, 1997
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Date of Report (Date of earliest event reported)
OMNIS TECHNOLOGY CORPORATION
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(Exact name of Registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
0-16449 94-3046892
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(Commission File No.) (IRS Employer Identification Number)
851 Traeger Avenue #100
San Bruno, CA 94066
(650) 829-6000
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(Address of Principal Executive Offices)
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(Former name or former address, if changed since last report)
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Item 5. OTHER EVENTS
On November 24, 1997, OMNIS Technology Corporation (the "Company") issued
a press release announcing a restructuring and cost reduction program. On
the same day, the Company posted an open letter to the OMNIS community on its
website from Tim Negris, Chairman and Chief Executive Officer of the Company.
The letter describes the Company's executive and company reorganization and
the new pricing and contracts plan.
A copy of the press release is filed herewith as Exhibit 99.1
A copy of the website posting is filed herewith as Exhibit 99.2.
Item 7. EXHIBITS
INDEX TO EXHIBITS
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
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99.1 Press release dated November 24, 1997
99.2 An open letter to the OMNIS Community from Tim
Negris, Chairman and CEO
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SIGNATURES
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 hereunto duly authorized.
OMNIS TECHNOLOGY CORPORATION
By:
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Timothy P. Negris
Chairman and Chief Executive Officer
Dated: November 25, 1997
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OMNIS ANNOUNCES RESTRUCTURING AND COST REDUCTION PROGRAM
REFINED BUSINESS MODEL AND CHANNEL FOCUS EXPECTED
TO IMPROVE COMPANY PERFORMANCE
SAN BRUNO, CA, November 24, 1997 -- OMNIS Technology Corporation (NASDAQ:
"OMNS") today announced a worldwide restructuring and cost reduction program
to cut total company quarterly expenses 35% by the fourth fiscal quarter
ending March 31, 1998. This will be done primarily through reductions in
start-up marketing expenses. The restructured entity is focused on helping
OMNIS solution providers meet market demand for new applications and
leveraging the recent Universal Database DB2 OEM agreement signed with IBM.
The restructuring included a reduction in OMNIS' continuing workforce of
approximately 25% of the company's headcount. Due to the restructuring and
cost reduction program, OMNIS expects to decrease the company's quarterly
revenue break-even point from $5.6 million to approximately $3.9 million by
the end of the fiscal year. "These actions were necessary steps to create a
strong foundation based upon our refocused business strategy. Focusing on our
solution providers through the indirect channel allows us to change our
marketing strategy to a lower cost, more technical approach," said Tim
Negris, Chairman and Chief Executive Officer.
OMNIS has been advanced $1,000,000 by a large shareholder which is expected
to be converted into equity as the first stage of a larger financial plan.
"This advance was designed to allow us to complete negotiations for an equity
placement that will allow the company to move towards profitability," said
Negris.
The newly restructured company has an increased focus on technical product
marketing and channel-oriented selling from which the majority of OMNIS'
revenues have historically been generated. The company will now be organized
under two functional units; the product unit and the distribution unit. The
product unit will be responsible for the defining, building, packaging and
pricing of OMNIS products. The distribution unit will combine sales,
marketing, channel management and services into a single organization.
OMNIS TECHNOLOGY CORPORATION
OMNIS is a leader in developing and deploying component engineering software.
The OMNIS Studio
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and OMNIS 7 product lines support the full life cycle of applications and are
ideal for rapid development and deployment of sophisticated Web and
client/server applications, providing true re-use of software objects and the
unique ability to integrate objects from disparate programming languages.
OMNIS Studio is the first component engineering system to integrate JavaBean
and ActiveX components.
THE STATEMENTS IN THIS PRESS RELEASE MAY CONTAIN FORWARD-LOOKING STATEMENTS
THAT INVOLVE RISK AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO
DIFFER FROM PREDICTED RESULTS. SUCH RISKS INCLUDE, AMONG OTHERS,
SIGNIFICANT VARIABILITY IN OPERATING RESULTS, INCLUDING VARIABILITY IN
PRODUCT REVENUES AND GROSS MARGINS, FLUCTUATING DEMAND FOR NEW AND
ESTABLISHED PRODUCTS, DEPENDENCE ON NEW PRODUCTS, DEPENDENCE ON MARKET
ACCEPTANCE OF NEW PRODUCTS, INCREASING EXPENSES FOR MARKETING AND
DEVELOPMENT OF NEW PRODUCTS, HISTORICAL LACK OF PROFITABILITY, RAPID
TECHNOLOGICAL CHANGE AND RISKS ASSOCIATED WITH GLOBAL OPERATIONS. FURTHER
RISKS ARE DESCRIBED IN THE COMPANY'S FORM 10-K FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION ON JUNE 30, 1997, AND OTHER RISKS DETAILED FROM
TIME TO TIME IN THE COMPANY'S REPORTS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION. THE COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY
RELEASE THE RESULT OF ANY REVISIONS TO THESE FORWARD-LOOKING STATEMENTS
WHICH MAY BE MADE TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF
OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.
Copyright 1997. OMNIS is a registered trademark of OMNIS Software, Inc. OMNIS
Studio and OMNIS 7 are trademarks of OMNIS Software, Inc.
# # #
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AN OPEN LETTER TO THE OMNIS COMMUNITY FROM TIM NEGRIS, CHAIRMAN AND CEO
Subject: State of the business at halftime
OMNIS executive and company reorganization
New pricing and contracts plan
Now that we are part way through the reconstruction of this great company,
I'd like to bring all of you up to date on where we are, and where we are
going in the near and longer term. It has been a dynamic period for the
company, filled with many significant business events that we believe will
contribute to our future success. It has also been a time of great challenge
that the OMNIS team is working harder than ever to meet. OMNIS Software is
regaining its vibrancy and I would like to share the details with you.
The most important thing we've learned over the past few months is that our
current business model is not satisfying the needs of our customers and that
it must be changed. We understand what must be done to make it easier to do
business with us, as well as easier to make or save money using our products.
There is a lot to this, including a stronger focus on TECHNICAL PRODUCT
MARKETING AND PARTNER-ORIENTED SELLING. As the first step in this change, we
will immediately restructure our corporate organization and our executive
team accordingly.
During the first half of the reconstruction, we played with our pricing model
to find the best value points across an increasingly complex product line.
Many of you applauded a number of these moves, but also kindly pointed out
some weaknesses in our strategy. As a result, the collaboration between the
OMNIS team and a long list of partners and customers, I'm confident that our
new pricing plan will meet a wider variety of your business needs. Allow me
to share with you the pricing and the rationale behind it.
STATE OF THE BUSINESS
Currently, much attention has been focused on the financial state of the
company including stock price, cash position and revenue projections. I must
be circumspect in sharing the details on these subjects in such a forum as
this, but I can give you an honest and accurate picture of what is basically
a good, if complicated, business story.
Stock
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The last two quarters have included significant business announcements at
OMNIS. For example, the financially promising relationship with IBM, that
ultimately frustrated OMNIS watchers by not bolstering the stock price for
more than a few days. Furthermore, the recent 1-for-10 reverse stock split
and the quarterly release of mixed financial results combined to weigh on the
share price even more. Those results included good news; double digit revenue
growth overall and 30% growth in product sales, and bad news; higher than
expected marketing and consulting expense contributing to ongoing losses. The
market in our stock cannot go unaffected by such a combination. In individual
discussions with financial analysts, we are often told, "OK, you're growing
again, now show us the money, as in profits!" We are working on it and making
progress, but our stock is certainly a long-term play for experienced
investors.
Cash
The healthy growth we have seen at OMNIS was not for free and it was not
funded by any current profits. In other words, it took our cash position
lower. The good news is that much of this is a non-recurring expense in
marketing and new business development. We are now taking the necessary steps
to enable continued growth and greater financial security through an improved
cash position. Specifically, we have already raised a million dollars as the
first part of a larger financial plan, that includes plans to raise several
million more dollars by the end of the fiscal year. We have also begun a
series of cost cutting innovations throughout the company that will enable us
to focus new funds on new business, rather than operational expense. If all
of this goes as planned, we believe we will be OK on cash until we are in the
black, which we believe we will be in the middle of 1998.
Revenue Projections
We have had two good quarters of revenue growth. OMNIS Studio is starting to
be adopted, partners with shrink-wrapped solutions are reporting very good
growth in installed seats, and we have gained a number of new customers. We
expect the rollout of our new server products to improve our revenue
considerably by the end of the next fiscal year. We expect these products
will raise our ASP and will provide a variety of service and annuity
opportunities going forward.
In the short term, we are focusing on sales opportunities that yield rapid
deployment of our existing embedded database technology, especially in the
exploding fields of database publishing and digital content management. We
have found a very good product fit in this area and we think that this can
have some impact on revenue by the end of this fiscal year.
The outlook for the immediate quarter is mixed. In April, I stood before the
OMNIS Underground and declared that we would be exiting parts of the
consulting and services businesses that conflicted with our indirect channel
partners. We have already taken a number of steps in this regard, but we are
now at the point where we have to walk away from what has been a very
reliable revenue stream. In addition, we are shifting away from a proactive
strategy of moving the OMNIS 7 installed applications base to OMNIS Studio as
a means of growing revenue and focusing, instead of feeding the growth of new
applications with the new products. These are the right things to do but they
will cost us something
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short-term.
In summary, the overall state of the business, while not without its
challenges, is improving and we remain optimistic about our chances for full
recovery and future success.
OMNIS EXECUTIVE AND COMPANY REORGANIZATION
As we change our business model, it is only natural that the structure of our
organization and the composition of our executive team should change as well.
As a part of the strategy I outlined some time ago, the OMNIS business model
is moving from a focus on image marketing and direct corporate account
selling, to product marketing and indirect channel selling.
The world in which we have been living as a company required the rare sales
and marketing skills exemplified by people who have been outstanding members
of the executive team for many months. It was these individuals who helped us
find the problems in our business and define the strategies for dealing with
them. They have played a big role in resetting the company direction. Last
Friday, we made the unfortunate, but necessary decision to let go a number of
valued employees. While a difficult decision, we feel it was an essential
step to make OMNIS a profitable company.
The world in which we will be living is very different from where we have
been. It is a world where the lines between Engineering, Marketing, and Sales
get very blurry. A world where lean, flat, adaptable organizations focused on
solving very specific problems are successful. Thus, we are reorganizing
OMNIS into a new structure to make this strategic shift complete. With our
sincere gratitude and good wishes, Peter Mork and Pat McEntee are leaving the
company to pursue other opportunities and to make way for a new and very
different organizational structure.
I am pleased to announce the promotion of Marc Ferrie from VP of Engineering
to President of OMNIS. In addition to being a world-class engineering
executive, Marc is also an outstanding operational professional and with
experience in many aspects of the international software tools and database
business. I think you will find his direct style refreshing, his intelligence
inspiring, and his responsiveness satisfying. Please join me in welcoming
Marc to this new expanded role and give to him the kind of help and support I
have enjoyed from you for the past year.
Marc will be restructuring most of the company into two functional units, one
for Products and the other for Distribution. I will not steal Marc's thunder,
as I am sure that he would rather explain the details to you himself in the
near future. Broadly though, the OMNIS Product unit will have complete
responsibility for defining, building, packaging, and pricing OMNIS products.
The Distribution unit will combine sales, marketing, channel management, and
services into a single organization. This restructuring will bring about
improved efficiency for OMNIS and improved quality of products and services
for our customers. More on this to come real soon.
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NEW PRICING
The following is a general outline of the new OMNIS product pricing. There
are a number of important changes, some being in direct response to customer
and partner input, and others as part of our overall business strategy. I
will not take the space here to define the pricing to the level of price
breakpoints and specific product numbers, but you will see a more formal
price card in the next few weeks. For now, I would like to give you the basic
numbers and share with you our thinking on each point.
UNLESS OTHERWISE NOTED, ALL PRICES APPLY TO OMNIS 7 AND OMNIS STUDIO PRODUCT
LINES.
OMNIS DATAPLAYER
Read-only OMNIS native database single instance deployment license.
Target: Data publishing and distribution.
BASE QUANTITY PRICE: $15/UNIT
(Royalties-based pricing will be available on larger quantity purchases.)
OMNIS DESKTOP DATABASE
Full-use OMNIS native database workstation deployment license for named
individual users.
Target: Mobile workforce and telecommuting applications.
BASE QUANTITY PRICE: $30/USER
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OMNIS Shared Database
Full-use OMNIS native database file server deployment license for
concurrent users.
Target: Workgroup, departmental, and small business applications.
BASE QUANTITY PRICE: $60/USER
OMNIS 7 TO OMNIS STUDIO CONVERSION
Per-user license for the conversion of databases, runtime, and library files
for currently installed OMNIS 7-based applications to OMNIS Studio.
Target: Add new Studio features to installed applications.
BASE QUANTITY PRICE: $25/USER, NAMED OR CONCURRENT
There are additional pricing issues on the table, such as Run-time and DAM
deployment licensing, but unfortunately we have run out of time to address
them this quarter. For now, all other pricing will remain as it is, but don't
let it break a deal. We are anxious to work directly with active partners to
make business happen.
CONCLUSION
I hope what I have shared with you is helpful in resolving your continued
support for this company and its technology. We have seen good results from
virtually all of the new things we have implemented as part of this ongoing
reinvention of the company. We will continue to change and evolve, making
modest improvements with each step. I know that your expectations of us are
quite high, given the difficulty of what must be done. I would never tell you
to lower your expectations, but I ask you to be patient as we keep things
moving in the right direction, and share with us your comments as it is you
we are trying to make successful.
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Regards and good wishes,
Tim Negris
Chairman and CEO
OMNIS Technology Corporation
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