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Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C> <C>
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</TABLE>
SPATIAL TECHNOLOGY INC.
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FOR IMMEDIATE RELEASE
SPATIAL INC. CONTACT:
BRUCE MORGAN, PRESIDENT AND CEO
1 888 319 0871
SPATIAL INC. INVESTOR RELATIONS CONTACT:
Geoff High, Pfeiffer PR
303 393 7044, [email protected]
PRESS RELEASE
SPATIAL INC. REPORTS THIRD QUARTER FINANCIAL RESULTS
BOULDER, CO: November 7, 2000. Spatial Inc. (AMEX-STY), a leading developer of
Web-hosted engineering application services and solutions and component 3D
modeling technology, today announced financial results for the third quarter of
fiscal 2000.
Spatial reported third quarter revenue of $3,188,000 compared with $3,775,000 in
the comparable quarter a year ago. Service revenue increased 21% to $1,427,000
compared to $1,176,000 in the third quarter of 1999. Royalty revenue was
$604,000 versus $1,047,000 last year. New License revenue was $1,157,000, a
decline from $1,552,000 for the comparable quarter in 1999. Revenue for the
third quarter includes $1,343,000 of revenue related to the PlanetCAD(TM)
Division and $1,845,000 attributed to the Component Software Division. In the
prior year period, all revenue was attributed to the Component Software
Division.
The decline in revenue for the Component Software Division was attributed in
part to increased resistance to upfront license fees by software developers in
an increasingly competitive market, as well as from previously announced changes
to the Spatial's pricing model for its component software products. Under the
new pricing model, component licensees pay only recurring fixed and variable
partner fees upon the release and shipment of a software application that
incorporates Spatial's component software.
Spatial reported an overall third quarter net loss of $5,538,000, or 47 cents
per share, compared with a net loss of $510,000, or 5 cents per share, in the
third quarter last year. Operating expenses for the Component Software Division
were approximately $3.7 million in the quarter compared to $3.2 million in the
comparable quarter of 1999. The Component Software Division lost $2.2 million in
the third quarter 2000.
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Spatial's PlanetCAD Division had total operating expenses in the quarter of
approximately $4.2 million and a loss of $3.3 million. These expenses included a
charge of $332,000 related to acquired in-process research and development
associated with Spatial's third quarter acquisition of Prescient Technologies,
Inc., and expenses of approximately $700,000 for outside consulting services
related to development of PlanetCAD's proprietary JAVA ASP Web framework.
Spatial believes its proprietary Web Framework, which is designed specifically
to support computationally intensive engineering software applications in a
network environment, is key to its strategy of offering interoperability
services as both Enterprise Solutions behind a corporate firewall and as
Web-based services on its PlanetCAD.com Web site. Excluding the approximately $1
million charge for in-process research and development and outside consulting
fees, the PlanetCAD Division posted a loss of approximately $2.3 million in the
quarter.
"The PlanetCAD Division slightly exceeded its revenue goal for the quarter by
focusing on its newly acquired PrescientQA product lines and through selling
interoperability services to the Prescient customer base," said Bruce Morgan,
President and CEO of Spatial. "Quarterly expenses and losses for PlanetCAD,
excluding the one time outside consulting fees and the charge for in process
R&D, were in line with management's expectations."
During the quarter, the PlanetCAD Division realized significant achievements
including:
o Open beta test of its Bits2PARTS.com(TM) Web-based service for rapid
creation of requests for quotation (RFQs) between custom manufacturers
and their customers.
o Open beta test of the quote-a-part.com(TM) service for automated cost
estimation and process planning, created in partnership with Tecnomatix
Technologies Ltd.
o More than 9,000 total PlanetCAD member registrations, with more than
4,000 3D CAD models processed on the public 3Dshare.com(TM)
interoperability web service.
o The successful release of DesignQA version 4, the newest release in the
PrescientQA product line.
o A first design win for an Enterprise Installation of its 3Dshare
service with a major Japanese manufacturer.
PlanetCAD announced five co-branding and co-marketing agreements in the quarter
with noteworthy industry vendors including: Autodesk Point A, Information
Services International - Dentsu Ltd., Cadkey Corp., Cadalog.com and ANX
ebusiness, a subsidiary of SAIC. The Company believes these agreements will be
important drivers in building traffic and usage of PlanetCAD services including
3Dshare.com and Bits2PARTS.
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PROPOSED ACQUISITION
As previously announced, Dassault Systemes signed an agreement to acquire the
Component Software Division of Spatial for $25 million and related marketing,
distribution and technology agreements, subject to stockholder approval at the
Annual Meeting of Stockholders scheduled for November 9, 2000 in Boulder, CO. If
approved, the Component Software Division will become a wholly owned subsidiary
of Dassault Systemes or one of its affiliated companies. Dassault Systemes has
indicated to Spatial's management that it fully supports the adoption of the new
pricing plan, and understands that the move to the new pricing model is required
for the long-term viability and health of the Component Software Division. While
Management expects there will be a transition period to adjust to the new
business model, the acceptance of such a change has been received positively by
the software development market, thereby validating the benefits of this
recurring revenue model.
"Adoption of the new pricing model eliminating up front charges in favor of
back-end recurring revenues is the natural evolution of a process that had been
impacting the component business since the second quarter of 1999,"commented
Morgan. "In response to the new pricing structure, Spatial has had the most
successful quarter in its history in terms of new component design wins, with
over 40 agreements signed. Management believes that it will take a company with
the financial and technical resources comparable to Dassault Systemes to return
the component business to long term health and profitability in light of the
fierce price competition Spatial faced in the sector from much larger and more
diversified competitors."
NINE MONTH FINANCIAL RESULTS
For the nine month period ended September 30, 2000, the Company reported a loss
of $10,588,000, or 94 cents per share, compared to a loss of $1,055,000, or 11
cents per share, in 1999. Revenue decreased to $10,440,000 compared with
$11,429,000 for the comparable period last year.
<PAGE> 5
INCOME STATEMENT RECAP
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue:
License fee $ 3,317,000 $ 4,508,000 $ 1,157,000 $ 1,552,000
Royalties 3,001,000 3,406,000 604,000 1,047,000
Services 4,122,000 3,515,000 1,427,000 1,176,000
------------------ ---------------- ----------------- ---------------
Total revenue 10,440,000 11,429,000 3,188,000 3,775,000
Cost of revenue 2,193,000 840,000 900,000 305,000
------------------ ---------------- ----------------- ---------------
Gross profit 8,247,000 10,589,000 2,288,000 3,470,000
Operating expenses excluding
acquired in-process R&D 18,461,000 11,052,000 7,485,000 3,981,000
Acquired in-process R&D 332,000 500,000 332,000 -
------------------ ---------------- ----------------- ---------------
Total operating expense 18,793,000 11,552,000 7,817,000 3,981,000
Earnings (loss) from operations (10,546,000) (963,000) (5,529,000) (511,000)
Other income (expense), net (42,000) (92,000) (9,000) 1,000
------------------ ---------------- ------------------ ---------------
Net earnings (loss) $ (10,588,000) $ (1,055,000) $ (5,538,000) $ (510,000)
================== =============== ================= ==============
Earnings (loss) per share
Basic and diluted $ (0.94) $ (0.11) $ (0.47) $ (0.05)
Weighted average shares outstanding
Basic and diluted 11,206,000 9,323,000 11,784,000 9,400,000
BALANCE SHEET DATA
<CAPTION>
SEPTEMBER 30, December 31,
2000 1999
<S> <C> <C>
Working capital $ (2,188,000) $ 1,977,000
Total assets $ 13,006,000 $ 10,072,000
Stockholders' equity $ 3,568,000 $ 5,878,000
</TABLE>
ABOUT SPATIAL INC.
Spatial's Component Software Division provides the world's most widely used 3D
solid modeling, visualization, 3D data translation and healing interoperability
solutions that enhance software functionality and shorten product
time-to-market.
Spatial's flagship product, the ACIS 3D modeling kernel is the de facto 3D solid
modeling standard, which dominates the CAD/CAM/CAE market worldwide. ACIS has
been adopted by more than 592 licensees and is the foundation of over 224
applications used by engineers and designers worldwide. Spatial's IntraVISION
Software Developer's Kit is an OEM version of its industry-leading commercial
IntraVISION enterprise-wide 2D/3D viewing solution offering access to view,
markup, measure and convert over 300 2D and 3D product data file formats. The
combination of products and services developed by Spatial allow licensees and
end-users to capitalize on the
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improved integrity, advanced interoperability and rapid distribution of their
design data, dramatically improving time-to-market and product development
cycles across the digital manufacturing supply chain.
Spatial Inc. is headquartered in Boulder, Colorado, USA and has offices in
California, Germany, France, Japan and the United Kingdom. For more information,
visit Spatial's Web site at http://www.spatial.com or call (303) 544-2900.
ABOUT PLANETCAD
Spatial's PlanetCAD Division develops and delivers Web-hosted and
enterprise-based application services, e-commerce sites and portals for
streamlining engineering data interchange throughout the digital manufacturing
supply chain. PlanetCAD's application services include: the PrescientQA
design-quality engineering software suite, which reduces costly design errors,
accelerates time-to-market, and improves the product development process;
3Dshare(TM) (www.3dshare.com), which provides online translation and repair of
3D CAD models to streamline the flow of engineering data between organizations
regardless of the installed CAD systems; Bits2PARTS(TM) (www.bits2parts.com), an
e-commerce service that streamlines the communication and data transmission
process between manufacturers and custom manufacturing providers across the Web;
and quote-a-part (www.quote-a-part.com), a third-party hosted application which
streamlines the manufacturing costing process . For more information, visit
www.planetcad.com, or call (888) 319-0871.
On July 4, 2000, Dassault Systemes signed an agreement to acquire the Component
Software Division of Spatial. If the stockholders of Spatial approve the sale of
the Component Software Division to Dassault Systemes at the 2000 Annual Meeting
of Spatial, and if the transaction is consummated, the Component Software
Division will become part of a new wholly owned subsidiary of Dassault Systemes
or one of its affiliated companies. The Component Software Division will
represent the foundation of Dassault Systemes' new technology company. It will
leverage both the current expertise of Spatial in 3D components for solid
modeling with its flagship ACIS 3D geometrical modeler, visualization, and
interoperability with its 3D data translation and healing tools and services,
and the technological excellence of the Dassault Systemes group in 3D
technologies.
Spatial's 2000 Annual Meeting of Stockholders is scheduled to be held on
Thursday, November 9, 2000, at 10.00 a.m. At the 2000 Annual Meeting, Spatial's
stockholders will be asked, among other things, to vote on approving the sale of
Spatial's Component Software Division to Dassault Systemes. Spatial has filed a
definitive proxy statement with the Securities and Exchange Commission that
details all of the proposals for stockholder action scheduled to come before the
2000 Annual Meeting. Additionally, Spatial has mailed a copy of the definitive
proxy statement to all of the stockholders of Spatial entitled to vote on the
proposals scheduled to be considered at the 2000 Annual Meeting. When received,
stockholders should read the proxy statement in its entirety because it contains
important information about the sale of the Component Software Division and the
2000 Annual Meeting. Security holders may obtain copies of the definitive proxy
statement from the Securities and Exchange Commission free of charge at its
Internet Website (www.sec.gov) or from Spatial by request to Spatial Technology
Inc. Investor Relations: Geoff High, Pfeiffer Public Relations (303) 393-7044,
[email protected].
Statements made in this news release that are not historical facts may be
forward-looking statements. Actual results may differ materially from those
projected in any forward-looking statement, and any projections related to
3Dshare.com and PlanetCAD.com may be significantly different than those
predicted by Spatial. There are a number of important factors that could cause
actual results to differ materially from those anticipated by any
forward-looking information, including, without limitation, the possibility that
Spatial may not obtain the requisite number of stockholder votes to approve the
sale of the Component Software Division to Dassault Systemes. A description of
risks and uncertainties attendant to Spatial Technology Inc. and its industry,
and other factors which could affect Spatial's financial results, are included
in Spatial's Securities and Exchange Commission filings, including but not
limited to Spatial's annual report on Form 10-KSB for the year ended December
31, 1999.
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Spatial Technology Inc., 3Dshare.com, 3Dpublish.com, Bits2Parts.com, DesignQA
and PlanetCAD are trademarks. PrescientQA, SAT, ACIS and IntraVISION are
registered trademarks of Spatial Technology Inc. All other products are
trademarks of their respective owners.
