<PAGE>
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 QUARTER ENDED MARCH 31, 1996
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 0-18674
-------
MARCAM CORPORATION
------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-2711580
- - --------------------------------------------- --------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.
95 Wells Avenue, Newton, Massachusetts 02159
- - -------------------------------------- --------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (617) 965-0220
--------------
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 __
-
The number of shares outstanding of the registrant's Common Stock, $.01 Par
Value, as of April 30, 1996, was 11,429,243 shares.
<PAGE>
PART I: FINANCIAL INFORMATION
ITEM 1: Financial Statements
MARCAM CORPORATION
Consolidated Balance Sheets
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
March 31, September 30,
ASSETS 1996 1995
---------- --------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 18,845 $ 27,312
Short-term investments 6,965 2,019
Accounts receivable, net of allowances of $2,176
at March 31, 1996 and $3,005 at September 30, 1995 59,455 60,327
Prepaid expenses and other current assets 7,436 4,834
-------- --------
Total current assets 92,701 94,492
-------- --------
Property and equipment, net 10,762 10,127
Computer software costs, net 32,030 30,183
MAPICS intangible costs, net 5,565 5,965
Other assets 5,104 6,085
-------- --------
Total assets $146,162 $146,852
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 10,415 $ 11,077
Accrued expenses and other current liabilities 42,013 44,542
Deferred revenue 53,900 38,228
-------- --------
Total current liabilities 106,328 93,847
-------- --------
Long-term debt 25,530 25,209
Deferred income taxes 772 1,150
-------- --------
Total liabilities 132,630 120,206
-------- --------
Commitments and contingencies (Note 2)
Stockholders' equity:
Preferred stock, $1.00 par value; 1,000 shares authorized
Series D Convertible Preferred Stock, 225 shares issued and
outstanding at March 31, 1996 and September 30, 1995
(liquidation preference of $22,500) 225 225
Common stock, $.01 par value; 30,000 shares authorized;
11,411 and 11,271 shares issued and outstanding at
March 31, 1996 and September 30, 1995 114 113
Additional paid-in capital 66,594 65,672
Accumulated deficit (50,078) (36,469)
Unamortized deferred compensation (944) (1,100)
Cumulative translation adjustment (2,379) (1,795)
-------- --------
Total stockholders' equity 13,532 26,646
-------- --------
Total liabilities and stockholders' equity $146,162 $146,852
======== ========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
2
<PAGE>
MARCAM CORPORATION
Consolidated Statements of Operations
(In Thousands, Except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
1996 1995 1996 1995
--------- -------- ---------- -----------------
<S> <C> <C> <C> <C>
- - -------------------------------------------------------------------------------------------------------
Revenues:
Licenses $ 18,151 $25,488 $ 41,408 $51,924
Services 29,275 23,905 56,021 45,083
-------- ------- -------- -------
Total revenues 47,426 49,393 97,429 97,007
-------- ------- -------- -------
Operating expenses:
Cost of license revenues 3,781 3,596 8,386 8,149
Cost of services revenues 19,441 15,399 36,538 29,760
Selling and marketing 19,905 20,904 40,773 42,313
Product development 6,954 6,393 13,627 12,325
General and administrative 3,227 1,993 5,421 4,015
-------- ------- -------- -------
Total operating expenses 53,308 48,285 104,745 96,562
-------- ------- -------- -------
Operating income (loss) (5,882) 1,108 (7,316) 445
Litigation settlement (Note 2) (3,250) - (3,250) -
Interest and other income 555 162 935 247
Interest and other expense (969) (746) (1,937) (1,538)
-------- ------- -------- -------
Income (loss) before income tax expense (benefit) (9,546) 524 (11,568) (846)
Income tax expense (benefit) 1,213 178 2,041 (287)
-------- ------- -------- -------
Net income (loss) $(10,759) $ 346 $(13,609) $ (559)
======== ======= ======== =======
Net income (loss) per share $(0.94) $0.03 $(1.20) $(0.05)
======== ======= ======== =======
Weighted average number of shares outstanding 11,407 11,380 11,358 11,460
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
3
<PAGE>
MARCAM CORPORATION
Consolidated Statements of Cash Flows
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
March 31,
1996 1995
----- -----
<S> <C> <C>
Cash flows from operating activities:
Net loss $(13,609) $ (559)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 7,671 5,349
Provision for bad debts 1,114 (97)
Deferred income taxes (378) (66)
Changes in operating assets and liabilities:
Accounts receivable 275 (8,674)
Prepaid expenses and other assets (2,644) (1,670)
Accounts payable (678) (755)
Accrued expenses and other current liabilities (2,350) 4,830
Deferred revenue 15,677 11,602
-------- -------
Net cash provided by operating activities 5,078 9,960
-------- -------
Cash flows from investing activities:
Purchases of property and equipment (2,599) (1,481)
Additions to computer software costs (6,577) (6,572)
Purchases of short-term investments (6,909) -
Proceeds from sale of short-term investments 1,963 -
Other assets 16 (1,039)
-------- -------
Net cash used for investing activities (14,106) (9,092)
-------- -------
Cash flows from financing activities:
Principal payments on debt and capital lease obligations (249) (874)
Proceeds from stock option exercise 553 -
Common stock issued under Employee Stock Purchase Plan 369 422
-------- -------
Net cash provided by (used for) financing activities 673 (452)
Effect of exchange rate changes on cash and cash equivalents (112) 67
-------- -------
Net increase (decrease) in cash and cash equivalents (8,467) 483
Cash and cash equivalents at beginning of the period 27,312 10,463
-------- -------
Cash and cash equivalents at end of the period $ 18,845 $10,946
======== =======
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
4
<PAGE>
MARCAM CORPORATION
Notes to Consolidated Financial Statements
(Unaudited)
(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)
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 presented are adequate to make these
financial statements not misleading, these financial statements should be read
in conjunction with the Company's audited financial statements and related notes
included in the Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1995, as amended.
The results of operations for the three and six months ended March 31, 1996
are not necessarily indicative of the results to be expected for the full year.
Certain amounts have been reclassified to conform with current period
presentation.
(2) Commitments and Contingencies
-----------------------------
The Company has reached an agreement in principle to settle the shareholder
class action litigation brought against the Company and certain of its current
and former officers. The litigation, which was brought in August 1994, alleges
violations of federal securities law. Of the $5,750,000 settlement, the Company
will contribute $2,750,000 from its own funds, with the remainder to be provided
by insurance. The settlement is subject to signing a definitive agreement and
approval by the Federal District Court in Massachusetts. The Company recorded a
charge of $3,250,000 during the current quarter to cover the settlement and
other expenses incurred in connection with the litigation.
The Company settled the Complaint filed by Siemens Medical Systems, Inc. The
Complaint was filed in July 1995 and alleged breach by the Company of the Master
License and Programming Services Agreements and alleged fraud in the delivery of
its MXP software. The settlement amount, which was immaterial, was included in
the results of operations for the quarter ended March 31, 1996.
The Company is also subject to other legal proceedings and claims which arise
in the normal course of business. While the outcome of these matters cannot be
predicted with certainty, management does not believe the outcome of any of
these legal matters will have a material adverse effect on the Company's future
financial position or results of operations.
(3) Supplementary Cash Flow Information
-----------------------------------
Capital lease obligations of approximately $930,000 were incurred in the six
month period ended March 31, 1996, when the Company entered into leases for new
equipment.
5
<PAGE>
PART I.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Overview
- - --------
The Company's revenues are derived from licensing its Protean, PRISM, MAPICS
XA, and MXP products. Each of these product lines support different customers'
technology strategies. PRISM and MAPICS XA support host technology implemented
on the IBM AS/400. MXP supports open client-server computing. Marcam's new
Protean products, which are based on advanced object technology tools and
databases, are platform independent and offer improved user productivity and
return on investment through ease-of-use, advanced functionality and
implementation flexibility.
Marcam also derives revenue from the sale of product support and related
services. Product support is offered to licensed customers, generally based on
agreements that are renewed annually. Related services include assisting with
customer implementation of licensed software, providing custom programming, and
providing educational material and instruction in the use of licensed software.
For the quarter ended March 31, 1996, the Company recorded a loss of
$10,759,000. The loss included approximately $6,250,000 of charges, consisting
of $3,250,000 for costs associated with settlement of the shareholder class
action litigation and $3,000,000 of provisions for estimated services contract
losses and additional legal costs. The principal reason for the loss, excluding
these charges, was the Company's continued investment in the Protean product
line, which has not yet yielded commensurate revenues. While the Company's
AS/400 based businesses were profitable overall, these profits were insufficient
to cover investments made in the Protean business.
Late in the second quarter, management conducted reviews of the delivery
schedule for its Protean products. As a result, a delay in the availability of
certain modules, particularly the customer order management module, has been
announced. The Company is currently working with its customers to address the
impact of this change on their plans and operations. The Company has not yet
determined the financial impact, if any, of these delivery schedule changes.
The Company has initiated reviews of its operating expense structure to assess
the efficiency and effectiveness of its operations and to identify opportunities
to improve the profitability of each of the business units. The actions, if
any, which result from these reviews will be initiated in the third quarter of
1996.
In the quarter ended September 30, 1995, the Company recorded a restructuring
charge of $28,756,000. As of March 31, 1996, a balance of $3,160,000
associated with this charge remains in accrued liabilities. Management believes
that this remaining balance is adequate to cover future expenditures
associated the 1995 restructuring actions.
6
<PAGE>
Results of Operations
- - ---------------------
Total revenues decreased 4.0% to $47,426,000 from $49,393,000, and increased
0.4% to $97,429,000 from $97,007,000 for the three- and six-month periods ended
March 31, 1996, respectively, as compared to the same periods in 1995. License
fee revenue decreased 28.8% to $18,151,000 from $25,488,000, and 20.3% to
$41,408,000 from $51,924,000 for the three- and six-month periods ended March
31, 1996, respectively, as compared to the same periods in 1995. While license
fee revenue for the MAPICS products continued to show growth during these
periods, the decline in license fee revenue for both the PRISM and Protean
products more than offset these gains. The decline in PRISM license revenue
occurred primarily in North America. Since the fall of 1995, the Company has
been working to sharpen its strategic focus on PRISM sales and marketing
efforts.
Services revenue increased 22.5% to $29,275,000 from $23,905,000 and 24.3% to
$56,021,000 from $45,083,000 for the three- and six-month periods ended March
31, 1996, respectively, as compared to the same periods in 1995. All sectors of
the service business, which includes consulting, custom programming, and
customer support, continued to show revenue gains.
Cost of license revenues represented 20.8% and 20.3% of license revenues for
the three- and six-month periods ended March 31, 1996, respectively, as compared
to 14.1% and 15.7% for the same periods in 1995. The increase in costs of
licenses as a percentage of license revenues was due primarily to higher
amortization of software development costs associated with newly-released
products, an increase in third party royalty costs as a percentage of license
revenue, and lower license revenues.
Cost of services revenues represented 66.4% and 65.2% of services revenues for
the three- and six-month periods ended March 31, 1996, respectively, as compared
to 64.4% and 66.0% for the same periods in 1995. The increase during the three-
month period ended March 31, 1996 was due primarily to a provision of
approximately $2,000,000 for estimated services contract losses during such
period. Excluding that charge, cost of services revenues had improved for the
three- and six-month periods ended March 31, 1996 as compared to the same
periods in the prior year, due primarily to price increases and better
utilization rates realized in the services business.
Selling and marketing expense decreased $999,000, or 4.8%, and $1,540,000, or
3.6%, for the three- and six-month periods ended March 31, 1996, respectively,
as compared to the same periods in 1995. These decreases were primarily related
to declines in costs, principally, payroll and marketing programs.
Gross research and product development expenditures for the three- and six-
month periods ended March 31, 1996 were $10,041,000 and $20,204,000,
respectively as compared to $10,430,000 and $18,897,000 for the same periods in
1995. The decrease for the three-month period ended March 31, 1996 as compared
to the same period in 1995 was primarily due to the discontinuance of certain
development projects at the end of fiscal 1995, primarily those related to the
PRISM Client/Server products. The increase for the six-month period ended March
31, 1996 as compared to the same period in 1995 was primarily the result of
increased spending to translate and localize software products for international
sale. The Company continues to invest heavily in the development of its
Protean products.
7
<PAGE>
Computer software costs capitalized were $3,087,000 and $6,577,000 for the
three- and six-month periods ended March 31, 1996, respectively, representing
30.7% and 32.6% of gross research and development expenditures. Computer
software costs capitalized during the three- and six-month periods ended March
31, 1995 were $4,037,000 and $6,572,000, respectively, representing 38.7% and
34.8% of gross research and development expenditures.
Therefore, product development expenses were $6,954,000 and $13,627,000 for
the three- and six-month periods ended March 31, 1996, respectively,
representing 14.7% and 14.0% of total revenues. For the three- and six-month
periods ended March 31, 1995, product development expenses were $6,393,000 and
$12,325,000, respectively, representing 12.9% and 12.7% of total revenues. The
increases for the three- and six-month periods ended March 31, 1996,
respectively, as compared to the same periods in 1995 were primarily related to
the continuing investment in the Protean products and lower amounts of
capitalization.
General and administrative expenses, which include the Company's finance,
accounting and corporate administrative functions, increased by $1,234,000 and
$1,406,000 for the three- and six-month periods ended March 31, 1996,
respectively, as compared to the same periods in 1995. The increases were
primarily the result of a $1,000,000 charge taken in the three-month period
ended March 31, 1996 for additional contract claims and legal costs.
During the quarter ended March 31, 1996, the Company reached an agreement in
principle to settle the shareholder class action litigation which was brought
against the Company in August 1994. Of the $5,750,000 settlement, the Company
will contribute $2,750,000 from its own funds, with the remainder to be provided
by insurance. The Company recorded a charge of $3,250,000 during the quarter
ended March 31, 1996 to cover the settlement and other expenses incurred in
connection with the litigation.
Interest and other income increased $393,000 and $688,000 for the three-and
six-month periods ended March 31, 1996, respectively, as compared to the same
periods in 1995. These increases were primarily related to interest earned on
higher cash balances resulted from the financing activities undertaken during
the quarter ended September 30, 1995.
The income tax expense for the three- and six-month periods ended March 31,
1996 of $1,213,000 and $2,041,000, respectively, was primarily due to foreign
withholding taxes and income taxes on income generated in foreign jurisdictions,
for which U.S. tax credit utilization is currently uncertain. The income tax
expense (benefit) for the three- and six-month periods ended March 31, 1995 of
$178,000 and $(287,000), respectively, was primarily due to carry-back of
operating losses and research and experimentation credits.
Liquidity and Capital Resources
- - -------------------------------
The Company has funded its activities primarily from cash generated from
operations, from borrowings and from equity financings.
Current assets decreased $1,791,000 during the six-month period ended March
31, 1996 to $92,701,000 from $94,492,000 at September 30, 1995. This decrease
was primarily due to lower cash and accounts receivable balances, which was
partially offset by an increase in the prepaid expenses and other current
assets.
8
<PAGE>
Current liabilities increased $12,481,000 during the six-month period ended
March 31, 1996 to $106,328,000 from $93,847,000 at September 30, 1995. The
increase was primarily due to the increase in deferred revenue which resulted
from the annual billing of the majority of the Company's maintenance contracts.
The billing occurs in January, and the revenue is deferred and recognized
ratably during the contract period. As a result, working capital decreased by
$14,272,000 from $645,000 at September 30, 1995 to a working capital deficit of
$13,627,000 at March 31, 1996.
At March 31, 1996, the Company had outstanding $25,000,000 in aggregate
principal amount of 9.82% unsecured subordinated notes due April 30, 2001. The
terms of the subordinated debt contain financial covenants which, among other
things, require the maintenance of certain financial ratios, limit the Company's
ability to incur additional debt, and preclude the payment of dividends. The
Company obtained from the note holders a waiver of certain covenants that
require the maintenance of certain financial ratios, which is in effect until
June 1, 1996. The Company is in the process of negotiating permanent waivers
and/or amendments with the note holders. If the Company is unable to obtain
such waivers and/or amendments, the Company will be in default under the notes
and will be required to seek alternative financing. If the maturity of the
Notes were accelerated upon a default, the Company currently does not have or
expect to have sufficient cash to repay the outstanding indebtedness under the
Notes. There can be no assurances that the Company will be able to obtain the
necessary permanent waivers and/or amendments from the note holders or, in the
alternative, that additional debt or equity financing will be available or
available on terms acceptable to the Company.
In addition, the Company has a revolving credit line of $7,500,000, with
borrowing availability equal to 80% of qualifying accounts receivable.
Borrowings under this facility bear interest at a designated prime rate plus 3%
per annum. This credit facility expires September 30, 1996. Upon completion of
certain filings, the maximum availability will be increased to $12,000,000. The
Company's obligations under this credit facility are secured by liens on
substantially all of the Company's assets. Additionally, this credit facility
contains covenants which, among other things, impose certain limitations or
prohibitions on the Company with respect to additional indebtedness, liens and
capital leases; the payment of dividends on, and the redemption or repurchase of
capital stock, of the Company; investments and acquisitions; the merger or
consolidation of the Company with any person or entity; and the disposition of
any of the Company's property or assets. At March 31, 1996, the Company had the
ability to borrow $7,500,000, but had no borrowings under this credit facility.
The Company has reached an agreement in principle to settle the shareholder
class action litigation brought against the Company and certain of its current
and former officers. The litigation, which was brought in August 1994, alleges
violations of federal securities law. Of the $5,750,000 settlement, the Company
will contribute $2,750,000 from its own funds, with the remainder to be provided
by insurance. The settlement is subject to signing a definitive agreement and
approval by the Federal District Court in Massachusetts. The Company recorded a
charge of $3,250,000 during the current quarter to cover the settlement and
other expenses incurred in connection with the litigation.
In the quarter ended September 30, 1995, the Company recorded a restructuring
charge of $28,756,000. As of March 31, 1996, a balance of $3,160,000
associated with this charge remains in accrued liabilities. Management believes
that this remaining balance is adequate to cover future expenditures
associated with the 1995 restructuring actions.
9
<PAGE>
As a result of lower than expected results and reduced expectations in the
business outlook for certain of the Company's product offerings, the Company
made several strategic decisions in fiscal 1995. These decisions included
taking steps to focus the Company's resources on its Protean, MAPICS and PRISM
host-based product families, ceasing its investment in the PRISM Client Server
product line and establishing the MXP business group as a separate company. The
Company's ability to successfully implement these strategic decisions will
impact its future results from operations and liquidity position. The
successful implementation of these strategic decisions will depend, among other
things, upon its ability to maintain and enhance its three major product lines,
to develop and introduce new products that keep pace with technological
developments, and to satisfy increasingly sophisticated customer requirements.
The Company has used cash during fiscal years 1996, 1995 and 1994 to fund
strategic investments, in particular substantial expenditures for new product
development, and operating losses. For the first two quarters of fiscal 1996
and for fiscal years 1995 and 1994, the Company's product development
expenditures were approximately $20,200,000, $41,100,000 and $36,400,000,
respectively. During the remainder of fiscal year 1996 and for fiscal 1997, the
Company currently intends to continue to make investments in product
development. The Company's objective is to fund these investments primarily
with cash from improved operations. The Company's timely ability to generate
cash from operations depends upon, among other things, revenue growth,
completion and market acceptance of new products, success in enhancing and
selling its current AS/400-based families of products, improvements in operating
productivity, and payment terms and collection of accounts receivable.
There can be no assurances that the Company's operations will generate
sufficient cash to finance these activities. Until operations improve to meet
its cash requirements, the Company will need to rely on cash available from its
September 1995 equity financing and borrowings under its credit facility. If,
however, such sources prove insufficient during 1996 or over the longer term,
the Company will be required to make changes in operations. Further, if such
sources of cash are insufficient or if the Company defaults on its outstanding
subordinated notes, the Company will be required to seek additional debt or
equity financing. There can be no assurances that additional debt or equity
financing will be available or available on terms acceptable to the Company.
10
<PAGE>
PART II.
ITEM 1. Legal Proceedings
The Company has reached an agreement in principle to settle the shareholder
class action litigation brought against the Company and certain of its current
and former officers. The litigation which was brought in August 1994 alleges
violations of federal securities law. Of the $5,750,000 settlement, the Company
will contribute $2,750,000 from its own funds, with the remainder to be provided
by insurance. The settlement is subject to signing a definitive agreement and
approval by the Federal District Court in Massachusetts.
The Company settled the Complaint filed by Siemens Medical Systems, Inc. The
Complaint was filed in July of 1995 and alleged breach by the Company of the
Master License and Programming Services Agreements and alleged fraud in the
delivery of its MXP software. The settlement amount, which was immaterial, was
included in the results of operations for the quarter ended March 31, 1996.
The Company is also subject to other legal proceedings and claims which arise
in the normal course of business. While the outcome of these matters cannot be
predicted with certainty, management does not believe the outcome of any of
these other legal matters will have a material adverse effect on the Company's
future financial position or results of operations.
ITEM 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders was held on February 13, 1996. At such
meeting, Richard Hickok, Dean R. McKay and William O. Grabe were elected as
Class II Directors to the Board of Directors for three-year terms. The voting
for Mr. Hickok was 12,137,344 shares for his election and 138,327 shares
against. There were no abstentions. The voting for Mr. McKay was 12,136,044
shares for his election and 139,627 shares against with no abstentions. The
voting for Mr. Grabe was 12,136,094 for his election and 139,577 against with no
abstentions.
The proposal to amend the 1994 Stock Plan to increase the aggregate number of
shares of Common Stock which may be issued pursuant to said plan from 1,000,000
to 2,000,000 was ratified by the stockholders. The vote was 7,727,597 shares to
amend the Plan with 2,629,153 shares against and 32,175 abstentions.
The proposal to amend the 1991 Non-Employee Director Stock Option Plan (i) to
increase the aggregate number of shares of Common Stock which may be issued
pursuant to said Plan from 50,000 to 210,000; (ii) to provide for an initial
grant of an option to purchase 20,000 shares of Common Stock and an annual grant
to purchase 3,000 shares of Common Stock,; (iii) to provide that each option
issued pursuant to said Plan on or after January 1, 1996 shall vest in equal
annual installments over a five year period; and (iv) to provide that, upon an
optionee's retirement from the Board of Directors, all unvested installments of
such optionee's options shall vest in accordance with their respective schedules
pursuant to the Directors Plan and each option shall be exercisable until the
scheduled expiration date of the option pursuant to the Directors Plan. The
vote was 8,997,977 to amend the Plan with 1,425,082 against and 39,721
abstentions.
11
<PAGE>
The selection of Coopers & Lybrand L.L.P. by the Board of Directors as
auditors for the fiscal year ending September 30, 1996 was ratified by the
stockholders. The vote was 12,253,035 shares for their selection, with 8,014
shares against and 14,622 abstentions.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Letter dated March 29, 1996 to Northwestern Mutual Life Insurance
Company, John Hancock Life Insurance Company of America and Barnett & Co. from
Marcam Corporation regarding the waiver of certain covenants of Marcam
Corporation's 9.82% Subordinated Notes due April 20, 2001.
10.2 Amendment dated as of March 30, 1996 to Loan and Security Agreement dated
as of August 29, 1995 by and between Greyrock Business Credit, a division of
Greyrock Capital Group, and the Registrant
10.3 Letter Agreement dated May 3, 1996 by and between Marcam Corporation and
Paul A. Margolis.
11 Statement re Computation of Per Share Earnings
(b) Reports on Form 8-K
No reports on Form 8-K were filed with the Securities and Exchange
Commission during the quarter ended March 31, 1996.
12
<PAGE>
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, thereunto duly authorized.
MARCAM CORPORATION
______________ ___________________________________
Date George A. Chamberlain, 3d
Chief Financial Officer
(Principal Financial and Accounting
Officer)
13
<PAGE>
EXHIBIT INDEX
- - -------------
Exhibit Page
Number Description Number
- - ------- ----------- ------
10.1 Letter dated March 29, 1996 to Northwestern Mutual Life
Insurance Company, John Hancock Life Insurance Company
of America and Barnett & Co. from Marcam Corporation
regarding the waiver of certain covenants of Marcam
Corporation's 9.82% Subordinated Notes due April 20, 2001.
10.2 Amendment dated as of March 30, 1996 to Loan and
Security Agreement dated as of August 29, 1995 by and
between Greyrock Business Credit, a division of Greyrock
Capital Group, and the Registrant.
10.3 Letter Agreement dated May 3, 1996 by and between
Marcam Corporation and Paul A. Margolis.
11 Statement re Computation of Per Share Earnings
27 Financial Data Schedule
1
<PAGE>
MARCAM CORPORATION
95 Wells Avenue
Newton, Massachusetts 02159
March 29, 1996
Via Telecopier
- - --------------
The Northwestern Mutual Life
Insurance Company
720 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Mr. John E. Schlifske
Securities Department
John Hancock Life Insurance
Company of America
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Attention: Mr. Dana Donovan
Bond and Corporate Finance Department
Barnett & Co.
c/o John Hancock Life Insurance
Company of America
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Attention: Mr. Dana Donovan
Bond and Corporate Finance Department
Ladies and Gentlemen:
You are the holders (the "Holders") of all of the issued and
outstanding 9.82% Subordinated Notes due April 30, 2001 of Marcam Corporation, a
Massachusetts corporation (the "Company"), which were issued and sold by the
Company pursuant to those certain several Note and Warrant Purchase Agreements,
each dated as of May 12, 1994 (as amended, the "Note Agreement"). This letter
sets forth our agreement that, effective as of March 29, 1996, the Holders
hereby waive any and all Defaults and Events of Default (each as defined in the
Note Agreement), if any, existing as of the date hereof or that have occurred or
might occur at any time through June 1, 1996 resulting from the Company's
failure to comply with either Section 6.10 or Section 6.11 of the Note
Agreement; provided, however, the waiver contemplated hereby shall terminate if
-----------------
the Company's Consolidated Net Worth (as defined in the Note Agreement) shall be
less than $5,000,000 at any time during this period.
<PAGE>
March 29, 1996
Page 2
Please confirm your agreement with the foregoing by signing and
returning one copy of this letter agreement to the undersigned, whereupon this
letter agreement shall become a binding agreement between you and the Company.
Very truly yours,
MARCAM CORPORATION
By: /s/ George A. Chamberlain 3d
----------------------------
George A. Chamberlain 3d
Chief Financial Officer
ACCEPTED AND AGREED TO:
THE NORTHWESTERN MUTUAL
LIFE INSURANCE COMPANY
By: /s/ John E. Schlifske
---------------------
Name: John E. Schlifske
Title: Vice President
BARNETT & CO.
By: /s/ Richard McCormick
---------------------
Name: Richard McCormick
Title: Assistant Treasurer
JOHN HANCOCK LIFE INSURANCE
COMPANY OF AMERICA
By: /s/ Stephen A. MacLean
----------------------
Name: Stephen A. MacLean
Title: Investment Vice President
<PAGE>
Greyrock
Business
Credit
A NationBank Company
Amendment to Loan Documents
Borrower: Marcam Corporation
Address: 95 Wells Avenue
Newton, Massachusetts 02159
Date: March 30, 1996
THIS AMENDMENT TO LOAN DOCUMENTS is entered into as of the above date
between GREYROCK BUSINESS CREDIT, a Division of NationsCredit Commercial
Corporation (formerly Greyrock Capital Group Inc.) ("GBC"), whose address is 300
North Continental Blvd., Suite 200, El Segundo, California 90245 and the
borrower named above ("Borrower") with respect to the Loan and Security
Agreement between GBC and Borrower, dated August 29, 1995 (the "Loan
Agreement"). (This Amendment, the Loan Agreement, any prior written amendments
to said agreements signed by GBC and the Borrower, and all other written
documents and agreements between GBC and the Borrower are referred to herein
collectively as the "Loan Documents". Capitalized terms used but not defined in
this Amendment, shall have the meanings set forth in the Loan Agreement.)
The Parties agree as follows
1. Foreign Guarantees and Security Agreements. Section 7.2 of the
Schedule to the Loan Agreement, which presently reads as follows:
"7.2 Guarantees. Within 30 days after the date hereof, Borrower shall
cause its subsidiaries, which are operating in or incorporated in the United
Kingdom or Canada, to execute and deliver to GBC Continuing Guaranties with
respect to all of the Obligations, in such form as GBC shall specify, together
with all documents and instruments GBC shall specify in order to grant GBC a
continuing, first-priority security interest in all of their assets to secure
their obligations under said Continuing Guaranties."
is hereby amended to read as follows:
"7.2 Guarantees. In the event Borrower wishes to request Loans with
respect to Receivables owing to any of Borrower's subsidiaries which
-1-
<PAGE>
Greyrock Business Credit Amendment to Loan Document
------------------------------------------------------------------------
are operating in or incorporated in the United Kingdom or Canada,
or any of Borrower's other subsidiaries, Borrower shall first give
written notice thereof to GBC and Borrower shall first cause the
subsidiary to which such Receivables are owing to execute and
deliver to GBC Continuing Guaranties with respect to all of the
Obligations, in such form as a GBC shall specify in order to grant
GBC a continuing, first-priority perfected security interest in all
of their assets to secure their obligations under said Continuing
Guaranties. Borrower acknowledges that, as with all Receivables,
the determination of whether any such Receivables will be deemed to
be Eligible Receivables is a matter of GBC's reasonable business
judgment."
2. Consent to Transfer of Collateral. GBC hereby consents to the
transfer by the Borrower of the following Collateral to a new wholly-owned
subsidiary of Borrower, Foresight Software, Inc. ("Foresight"), free of the
security interest of GBC (collectively, the "Released Collateral"): (i) all MXP
software and other MXP-related intellectual property, (ii) certain accounts
receivable arising from the sale or licensing of MXP software (having a face
amount not exceeding $3,200,000)(the "MXP Accounts"), with Borrower retaining
certain other accounts receivable arising from the sale or licensing of MXP
software (having a face amount of approximately $2,000,000)(the "Retained
Accounts"), and (iii) all furniture, fixtures and equipment relating to the MXP
software (having a book value not exceeding $500,000) and cash in the amount of
$800,000. Borrower represents and warrants that there are no outstanding Loans
with respect to any of the MXP Accounts. Effective on the date of the foregoing
transfer of the Released Collateral, and with the exception of the Retained
Accounts (which Borrower shall cause to be identifiable in Borrower's accounting
system and reports), GBC agrees that the Released Collateral shall no longer be
deemed "Collateral" for purposes of the Loan Documents and Borrower shall be
under no restrictions whatsoever with respect to further transfers of the
Released Collateral.
3. Consent to Guaranty. GBC hereby consents to Borrower executing and
delivering a Continuing Guaranty in favor of Silicon Valley Bank ("Bank") with
respect to present and future indebtedness of Foresight to the Bank, in a
principal amount not to exceed $750,000.
4. Representations True. GBC acknowledges receipt of a written
litigation update from the Borrower. Borrower represents and warrants to GBC
that as supplemented by such update, all representations and warranties set
forth in the Loan Agreement, as amended hereby, are true and correct.
5. General Provisions. The consents set forth above shall not be deemed
to be a consent to any other transfer of Collateral or guaranty, whether or not
similar to the foregoing. This Amendment, the Loan Agreement, and the other Loan
Documents set forth in full all of the representations and agreements of the
parties with respect to the subject matter hereof and supersede all prior
discussions, representations, agreements
-2-
<PAGE>
Greyrock Business Credit Amendment to Loan Document
------------------------------------------------------------------------
and understandings between the parties with respect to the subject hereof.
Except as herein expressly amended, all of the terms and provisions of the Loan
Agreement and the other Loan Documents shall continue in full force and effect
and the same are hereby ratified and confirmed.
Borrower GBC
MARCAM CORPORATION GREYROCK BUSINESS CREDIT,
a Division of
NationsCredit Commercial Corporation
By [SIGNATURE APPEARS HERE] By [SIGNATURE APPEARS HERE]
---------------------------------- ------------------------------------
President or Vice President Title
-----------------------------------
By [SIGNATURE APPEARS HERE]
----------------------------------
Secretary or Ass't Secretary
3
<PAGE>
May 3, 1996
Mr. Paul A. Margolis
21 Whispering Lane
Weston, MA 02193
Dear Paul:
This letter sets forth our agreement regarding your resignation from Marcam
Corporation (the "Company").
1. You hereby resign as an officer of the Company and as an officer or
director of any subsidiary of the Company effective as of April 30, 1996. You
will remain a director and Chairman of the Board of the Company.
2. Your employment with the Company shall terminate as of April 30, 1996
(the "Resignation Date"). As of the Resignation Date, your salary will cease and
any entitlement you have or might have had under any Company-provided bonus plan
or benefit plan, program or practice will terminate, except as required by
federal or state law or as otherwise described in this letter. The Resignation
Date shall be treated as your "qualifying event" under the Consolidated Omnibus
Budget Reconciliation Act of 1985 ("COBRA"), and you will receive COBRA
information under separate cover. Should you elect continuation of coverage
under the Company's health plans in accordance with COBRA, the Company agrees to
pay COBRA payments through December 31, 1996.
3. On the Resignation DAte, you will receive a lump sum payment which
equates to payment of your salary through December 31, 1996, less applicable
federal, state and local withholding, payroll and other taxes. The gross amount
of this payment is $167.999.80 and after deduction of applicable taxes, the net
amount is $106,066.90.
4. As of the Resignation Date, the stock options (the "Options") granted
under the Incentive Stock Option Agreements (the "Stock Agreement") listed in
Exhibit A attached hereto (a) shall be converted from incentive Stock Options to
Non-Qualified Stock Options (as defined in the respective stock plan under which
such options were granted), (b) shall continue to vest in accordance with the
schedule set forth in the respective Stock Agreements and (c) shall be
exercisable in accordance with their terms (as modified hereby) at any time
before the close of business on April 20, 2001.
<PAGE>
5. Release by You. As a material inducement to the Company to enter into
--------------
this Resignation Agreement, you, for yourself and for your representatives,
agents, servants, executors, administrators, estates, heirs, successors and
assigns, except as otherwise provided herein, hereby fully, forever, irrevocably
and unconditionally release, remise and discharge the Company and its corporate
affiliates, the Company's officers, directors, stockholders, agents and
employees, both individually and in their official capacities, from any and all
claims, charges, complaints, money, costs, accounts, reckonings, covenants,
contracts, agreements, promises, doings, omissions, damages, executions,
obligations, liabilities, and expenses (including attorneys' fees and costs) of
every kind and nature which you ever had or now have against the Company and its
corporate affiliates, the Company's officers, directors, stockholders, agents
and employees, both individually and in their official capacities, whether based
on any federal or state law or regulation regarding either employment or
employment discrimination, including, but not limited to, all claims under Title
VII of the Civil Rights Act of 1964, 42 U.S.C. 12000e et seq.; the Age
Discrimination in Employment Act, 29 U.S.C. 1621 et seq.; M.G.L. c.151B, the
Americans with Disabilities Act, 29 U.S.C. 1706 et seq.; The Massachusetts Equal
Rights Act or the Massachusetts Civil Rights Act; wrongful discharge claims; any
contract claims, whether oral or written, express or implied; any claims for
back wages, salary, draws, commissions, bonuses, vacation pay, expenses,
compensation, or severance pay, or any other statutory or common law claims and
damages. This release does not include any claims under the Indemnity Agreement
between the Company and you made as of April 10, 1987, any agreements made
between the Company and you herein or the letter agreement dated May 1, 1996
regarding your services as director of the Company.
Release by the Company. As a material inducement to you to enter into this
----------------------
Resignation Agreement, the Company, for itself and for its officers, directors,
stockholders, corporate affiliates, agents, employees, successors and assigns,
both individually and in their official capacities, except as otherwise provided
herein, hereby fully, forever, irrevocably and unconditionally releases, remises
and discharges you and your representatives, agents, servants, executors,
administrators, estates, heirs, successors and assigns from any and all claims,
charges complaints, money, costs, accounts, reckonings, covenants, contracts,
agreements, promises, doings, omissions, damages, executions, obligations,
liabilities, and expenses (including attorneys' fees and costs) of every kind
and nature which it or they ever had or now has against you or your
representatives, agents, servants, executors, administrators, estates, heirs,
successors and assigns, whether based on any federal or state law or regulation
or common law including without limitation any claims arising from any of your
acts while you are or were an officer, director or employee of the Company; any
contract claims, whether oral or written, express or implied; any claims for
contribution or indemnification, or any other statutory or common law claims and
damages. This release does not include any agreements made between the Company
and you herein or the letter agreement dated May 1, 1996 regarding your services
as director of the Company.
Page 2
<PAGE>
6. In addition, by your acceptance hereof, you acknowledge and agree that:
(a) You have been informed that, since you are 40 years of age or
older, you have or might have specific rights and/or claims under the Age
Discrimination and Employment Act of 1967. In consideration of the compensation
described in this letter agreement, you specifically waive such rights and/or
claims to the extent such rights and/or claims arose prior to the date this
letter agreement was executed.
(b) You were advised by the Company of your right to consult with an
attorney prior to executing this Agreement.
(c) You were further advised when you were presented by the Company
with the original draft of this Agreement that you had at least 21 days within
which to consider its terms and consult with or seek advice from an attorney or
any other person of your choosing.
(d) By initialing below, you hereby acknowledge that you were
informed and understand that you had at least 21 days within which to consider
this letter agreement have consulted with an attorney regarding this letter
agreement or have chosen not to consult with an attorney, and have considered
carefully every provision of this letter agreement and that after having
engaged in those actions, prefer to and have requested that you enter into this
letter agreement prior to the expiration of the 21-day period discussed above.
__________ __________
Initial Date
7. The Company acknowledges (i) the exculpation and indemnification
granted to you as a director, officer and employee of the Company under the
Indemnity Agreement between the Company and you made as of April 10, 1987 (the
Indemnity Agreement") and the Company's Articles of Organization and (ii) that
the Company agrees to provide you with indemnification against any claims
arising from your employment as an officer or director of the Company as set
forth in the Indemnity Agreement, and, to the extent that they provide increased
or greater indemnification to that provided under the Indemnity Agreement, in
a manner consistent with and to the maximum extent provided by the Company's
Articles of Organization and Article VIII of the Company's By-Laws; and such
indemnification provisions shall survive the termination of your employment with
the Company and after the termination of your service to the Company as an
officer and/or director of the Company or as a fiduciary of an employee benefit
plan to the extent that such indemnification provisions are applicable. The
Company shall provide you with full insurance coverage under such directors and
officers liability insurance policies as the Company shall maintain from time to
time to the extent and for the period of time that you serve or have previously
served as a director and/or officer of the Company.
Page 3
<PAGE>
8. You shall retain the laptop computer provided to you by the Company
for use during your employment. The Company hereby assigns and transfers to you
all of its right, title and interest in and to the laptop computer provided to
you by the Company for use during your employment.
9. You agree that you will not disclose or deliver to anyone, including
employees of the Company, except as authorized by the Company, or use in any way
other than in the Company's business as you are involved as a director of the
Company, any information or material relating to the business of the Company
(including information or materials received by the Company or its subsidiaries
from others) and intended by the Company to be kept in confidence by its
recipients. As used in this Agreement, the term "information" includes all
information concerning technical, administrative, management, financial, or
marketing activities (such as design, manufacturing and procurement
specifications, procedures, manufacturing process, information processing
processes or programs, marketing plans and strategies, plans for future
development, customer and employee names or other data, and cost and financial
data) and the term "material" includes all physical embodiments of information
(such as drawings, specification sheets, recording media for machine information
processing systems, documentation of all types, contracts, reports, customer
lists, manuals, quotations, proposals, correspondence, and samples).
10. (a) You agree that for a period of five years after the Resignation
Date, you will not, manage, operate, control or participate in the management,
operation or control or be connected as a director, officer, partner, employee,
consultant or in any similar capacity with any company listed in a letter of
even date herewith provided to you from the Company (a "Named Company" or
collectively the "Named Companies"), provided however, there shall be no breach
of this provision if you become a director, officer, partner, employee or
consultant of, or act in any similar capacity for, an entity other than one of
the Named Companies (the "New Company") and the New Company either has entered
or later enters into a business relationship with a Named Company to market and
sell a Named Company product(s) and/or service(s) which is (are) competitive
with a Company product(s) or service(s), as long as revenues received by the New
Company from the same of such product(s) and/or service(s) are, in the
aggregate, less than fifty percent (50%) of the New Company' total annual
revenue.
(b) The foregoing restriction shall apply worldwide.
(c) The terms of Paragraphs 10(a) and 10(b) shall cease to apply in the
event of a Change in Control (as hereinafter defined) of the Company.
(d) For purposes of this Agreement, a "Change in Control" shall have
occurred if at any time any of the following events shall occur:
Page 4
<PAGE>
(i) The Company is merged, consolidated or reorganized into or
with another corporation or other legal person, and as a result
of such merger, consolidation or reorganization less than a
majority of the combined voting power of the then-outstanding
securities of the combined corporation or person immediately
after such transaction are held in the aggregate by the holders
of the combined voting power of the then-outstanding securities
entitled to vote generally in the election of directors of the
Company ("Voting Stock") immediately prior to such transaction;
(ii) The Company sells or otherwise transfers all or
substantiallly all of its assets to any other corporation or
other legal person, and less than a majority of the combined
voting power the then-outstanding securities of such corporation
or person immediately after such sale or transfer is held in the
aggregate by the holders of the Voting Stock of the Company
immediately prior to such sale or transfer,
(iii) There is a report filed on Schedule 13D or Schedule 14D-1
(or any successor schedule, form or report), each as promulgated
pursuant to the 1934 Act, disclosing that any person (as the term
"person" is used in Section 13(d)(3) or Section 14(d)(2) or the
1934 Act) has become the beneficial owner (as the term
"beneficial owner" is defined under Rule 13d-3 or any successor
rule or regulation promulgated under the 1934 Act) of securities
representing 25% or more of the Voting Stock;
(iv) The Company files a report or proxy statement with the
Securities and Exchange Commission pursuant to the 1934 Act
disclosing in respnse to Form 8-K or Schedule 14A (or any
successor schedule, form or report or item therein) that a change
in control of the Company has or may have occurred or will or may
occur in the future pursuant to any then-existing contract or
transaction; or
(v) If during any period of two consecutive years, individuals
who at the beginning of any such period constitute the directors
of the Company cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for
election by the Company's stockholders, of each director of the
Company first elected during such period was approved by a vote
of at least two-thirds of the directors then still in office who
were directors of the Company at the beginning of any such
period;
provided, however, that notwithstanding the foregoing provisions of this
subparagraph (d), a "Change in Control" shall not be deemed to have occurred for
purposes of this Agreement solely because (i) the Company, (ii) an entity in
which the Company directly or indirectly beneficially owns 50% or more of the
voting securities, (iii) any Company-sponsored employee stock ownership plan or
any other employee benefit plan of the Company, (iv) any corporation or legal
person approved by the Board prior to the
Page 5
<PAGE>
occurrence of the event that, absent such approval by the Board, would have
constituted a Change in Control, either files or becomes obligated to file a
report or a proxy statement under or in response to Schedule 13D, Schedule
14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or report or
item therein) under the 1934 Act, disclosing beneficial ownership by it of
shares of Voting Stock, whether in excess of 25% or otherwise, or because the
Company reports that a change in control of the Company has or may have occurred
or will or may occur in the future by reason of such beneficial ownership.
11. You acknowledge that irreparable injury might result to the
business and property of the Company in the event your breach of any of the
agreements contained in this Agreement. You recognize further that, in the event
of such a breach, or the substantial likelihood such a breach will occur, the
Company intends to take legal action, and to seek injunctive relief if
available, in accordance with the language and spirit of this Agreement, in
order to protect fully its interest and property.
12. The invalidity or unenforceability of any provision hereby or the
invalidity or unenforceability or any provision hereof as applied to a
particular occurrence or circumstance shall not affect the validity or
enforceability of any other provision hereof or any other application of any
such provision. If one or more of the provisions contained herein shall for any
reason be held to be excessively broad as to scope, activity or subject matter
so as to be unenforceable at law, such provision(s) shall be construed and
reformed by the appropriate judicial body by limiting and reducing it (or them)
so as to be enforceable to the maximum extent compatible with the applicable law
as it shall then appear.
13. This Agreement shall be governed by, and construed in accordance
with the laws of the Commonwealth of Massachusetts of the United States of
America, without giving effect to the principles of conflicts of law thereof.
14. This letter agreement represents the complete and exclusive
agreement and understanding relating to the termination of your employment and
supersedes any and all prior agreement of understanding, written or oral,
between the Company and you with respect to the subject matter.
15. You represent that you have read this letter agreement, fully
understand the terms and conditions of this letter agreement, and are
voluntarily executing this letter agreement. In entering this letter agreement,
you do not rely on any representation, promise or inducement made by the
Company, with the exception of the consideration described in this letter
agreement.
16. This letter agreement may be executed in any number of
counterparts, each of which shall constitute an original, but which taken
together shall constitute one instrument.
Page 6
<PAGE>
17. You may revoke this letter agreement for a period of seven days
following its execution, and this letter agreement shall not become effective or
enforceable until this revocation period has expired.
Sincerely,
MARCAM CORPORATION
By:______________________
Michael J. Quinlan
President and Chief Executive Officer
AGREED TO AND ACCEPTED:
By:_____________________
Paul A. Margolis
Page 7
<PAGE>
Exhibit A
Paul Margolis Stock Options
<TABLE>
<CAPTION>
Date Outstanding
Participant of Grant Number of Shares Price per Share Exerciseable
- - ----------- -------- ---------------- --------------- ------------
<S> <C> <C> <C> <C>
Margolis 09/22/92 200,000 $23.25 0
10/01/92 17,987 $20.50 14,390
02/21/94 100,000 $13.125 0
Total 317,987 . 14,390
</TABLE>
Page 8
<PAGE>
Exhibit 11
- - ----------
MARCAM CORPORATION
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(In Thousands, Except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET INCOME (LOSS) $(10,759) $ 346 $( 13,609) $ (559)
======== ======= ========= =======
PRIMARY EARNINGS PER SHARE
- - --------------------------
Weighted average common shares
outstanding 11,407 11,198 11,358 11,173
Dilutive common equivalent shares - 182 - 146
-------- ------- --------- -------
11,407 11,380 11,358 11,319
======== ======= ========= =======
Net income (loss) per share $ (0.94) $ 0.03 $ (1.20) $ (0.05)
======== ======= ========= =======
FULLY DILUTED EARNINGS PER SHARE
- - --------------------------------
Weighted average common shares
outstanding 11,407 11,198 11,358 11,173
Dilutive common equivalent shares - 290 - 287
-------- ------- --------- -------
11,407 11,488 11,358 11,460
======== ======= ========= =======
Net income (loss) per share $ (0.94) $ 0.03 $ (1.20) $ (0.05)
======== ======= ========= =======
</TABLE>
The calculation of income (loss) per share is based on the weighted average
shares outstanding in the three- and six-months ended March 31, 1996 and 1995.
Dilutive stock options, warrants and convertible preferred stock assumed
converted are based on the treasury stock method using average market price in
calculating primary earnings per share, and the higher of the end of the period
or average market price in computing fully diluted earnings per share.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 18,845
<SECURITIES> 6,965
<RECEIVABLES> 61,631
<ALLOWANCES> 2,176
<INVENTORY> 0
<CURRENT-ASSETS> 92,701
<PP&E> 27,836
<DEPRECIATION> 17,074
<TOTAL-ASSETS> 146,162
<CURRENT-LIABILITIES> 106,328
<BONDS> 25,530
0
225
<COMMON> 114
<OTHER-SE> 13,193
<TOTAL-LIABILITY-AND-EQUITY> 146,162
<SALES> 0
<TOTAL-REVENUES> 97,429
<CGS> 0
<TOTAL-COSTS> 44,924
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,114
<INTEREST-EXPENSE> 1,937
<INCOME-PRETAX> (11,568)
<INCOME-TAX> 2,041
<INCOME-CONTINUING> (13,609)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (13,609)
<EPS-PRIMARY> (1.20)
<EPS-DILUTED> (1.20)
</TABLE>
