<PAGE> 1
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition Period from ______ to ______.
Commission file number 0-18511
---------------------
MOSAIX, INC.
(Exact name of registrant as specified in its charter)
WASHINGTON 91-1273645
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
6464 185TH AVE. N.E.
REDMOND, WASHINGTON 98052
(Address of principal executive offices) (Zip Code)
(425) 881-7544
(Registrant's telephone number including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
Common stock, par value $0.01 per share:
12,726,939 shares outstanding as of October 31, 1997.
Page 1 of 15 sequentially numbered pages.
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<PAGE> 2
MOSAIX, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
TABLE OF CONTENTS
---------------------
<TABLE>
<CAPTION>
PAGE NO.
<S> <C> <C>
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosure about Market Risk 12
PART II: OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities and Use of Proceeds 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on form 8-K 13
</TABLE>
<PAGE> 3
PART I:
ITEM 1. FINANCIAL STATEMENTS
MOSAIX, INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(IN THOUSANDS) SEPT. 30, 1997 DEC. 31, 1996
- ----------------------------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash, cash equivalents and short-term investments $44,130 $42,809
Trade accounts receivable, net 26,996 29,566
Inventories 2,701 2,814
Current installments of contracts receivable, net 1,771 1,764
Other current assets 5,616 5,837
------- -------
Total current assets 81,214 82,790
Furniture, equipment and leasehold improvements, net 7,591 7,393
Contracts receivable, less current installments 19 670
Capitalized software costs, net 1,118 1,993
Other assets 1,163 1,422
------- -------
Total assets $91,105 $94,268
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations $ 592 $ 934
Accounts payable 4,007 5,064
Accrued compensation 8,923 6,614
Other accrued expenses 7,269 9,755
Customer deposits and unearned revenue 7,245 13,619
------- -------
Total current liabilities 28,036 35,986
Long-term liabilities 315 939
------- -------
Total liabilities 28,351 36,925
------- -------
Shareholders' equity 62,754 57,343
------- -------
Total liabilities and shareholders' equity $91,105 $94,268
======= =======
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
Page 3
<PAGE> 4
MOSAIX, INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------
CONDENSED CONSOLIDATED INCOME STATEMENTS
<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE DATA) THREE MONTHS ENDED SEPT. 30, NINE MONTHS ENDED SEPT. 30,
- --------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996
------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenue:
Systems sales $10,792 $13,973 $35,771 $39,535
Software licenses 4,753 5,752 18,348 15,238
Service and miscellaneous 12,498 10,477 36,212 31,011
------- ------- ------- -------
28,043 30,202 90,331 85,784
------- ------- ------- -------
Cost of Revenues:
Cost of systems 4,602 4,502 13,931 13,881
Cost of software licenses 502 373 1,760 1,032
Cost of service and miscellaneous 5,967 5,621 18,038 15,436
------- ------- ------- -------
11,071 10,496 33,729 30,349
------- ------- ------- -------
Gross profit 16,972 19,706 56,602 55,435
------- ------- ------- -------
Operating expenses:
Selling, general and administrative 11,218 12,005 35,267 33,210
Research and development 3,815 3,618 11,384 11,390
Write-off of capitalized software costs -- -- -- 705
Purchase of in-process research
and development -- -- -- 4,307
Restructuring charge 948 -- 948 --
------- ------- ------- -------
Total operating expenses 15,981 15,623 47,599 49,612
------- ------- ------- -------
Operating income 991 4,083 9,003 5,823
Other income, net 651 396 1,608 1,190
------- ------- ------- -------
Income before income taxes 1,642 4,479 10,611 7,013
Income tax expense 493 1,187 3,208 3,491
------- ------- ------- -------
Net Income $ 1,149 $ 3,292 $ 7,403 $ 3,522
======= ======= ======= =======
Net income per share $ 0.08 $ 0.24 $ 0.54 $ 0.26
======= ======= ======= =======
Weighted average common shares and common
equivalent shares outstanding 13,901 13,921 13,831 13,342
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
Page 4
<PAGE> 5
MOSAIX, INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(IN THOUSANDS) NINE MONTHS ENDED SEPT. 30,
- --------------------------------------------------------------------------------------------------
1997 1996
-------- --------
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 7,403 $ 3,522
Depreciation and amortization 4,645 5,202
Trade and other accounts receivable 3,214 (1,992)
Other assets 579 (309)
Accounts payable and accrued liabilities (933) (711)
Unearned revenue and customer deposits (6,635) (7,511)
-------- --------
Net cash provided by (used in) operating activities 8,273 (1,799)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of short-term investments (35,978) (32,373)
Proceeds from maturities of short-term investments 29,482 38,686
Purchases of furniture, equipment and leasehold improvements (3,719) (2,867)
Increase in capitalized software costs (256) (902)
Other 21 (634)
-------- --------
Net cash provided by (used in) investing activities (10,450) 1,910
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term obligations (705) (919)
Repurchase of common stock (3,712) (1,226)
Proceeds from issuance of preferred and common stock 1,142 2,649
Other 311 --
-------- --------
Net cash provided by (used in) financing activities (2,964) 504
-------- --------
Effect of exchange rate changes on cash (33) 82
-------- --------
Increase (decrease) in cash and cash equivalents (5,174) 697
Cash and cash equivalents, beginning of period 10,984 7,746
-------- --------
Cash and cash equivalents, end of period 5,810 8,443
Short-term investments 38,320 27,535
-------- --------
Cash, cash equivalents and short-term investments
at end of period $ 44,130 $ 35,978
======== ========
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
Page 5
<PAGE> 6
MOSAIX, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements include the
accounts of Mosaix, Inc. and its wholly owned subsidiaries, collectively
referred to as the "Company". The unaudited interim condensed
consolidated financial statements and related notes thereto have been
prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Accordingly, certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles, have been
omitted pursuant to such rules and regulations. The accompanying interim
condensed consolidated financial statements and related notes thereto,
should be read in conjunction with the audited consolidated financial
statements and notes thereto included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1996.
The information furnished reflects, in the opinion of management, all
adjustments, consisting of only normal recurring items, necessary for a
fair presentation of the results for the interim periods presented.
Interim results are not necessarily indicative of results for a full
year.
2. NET EARNINGS PER SHARE
Net earnings per share is computed using the weighted average number of
common shares outstanding plus dilutive common equivalent shares
outstanding during the period, using the treasury stock method. Common
equivalent shares consist of employee stock options, common stock
warrants and convertible preferred stock. The dilutive effect of
convertible preferred stock is calculated on an "as-if-converted" basis.
Fully diluted earnings per share was not materially different from
primary earnings per share.
3. NEW ACCOUNTING STANDARD
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings Per Share
(Statement 128). This statement establishes standards for the
computation, presentation, and disclosure of earnings per share (EPS),
replacing the presentation of currently required Primary EPS with a
presentation of Basic EPS. It also requires dual presentation of Basic
EPS and Diluted EPS on the face of the income statement for entities
with complex capital structures. Basic EPS, unlike Primary EPS, excludes
all dilution while Diluted EPS, like the current Fully Diluted EPS,
reflects the potential dilution that could occur from the exercise or
conversion of securities into common stock or from other contracts to
issue common stock. Statement 128 is effective for financial statements
for periods ending after December 15, 1997, including interim periods,
and earlier application is not permitted. When adopted, the Company will
be required to restate its EPS data for all prior periods presented. The
Company does not expect the adoption of this statement to have a
material impact on previously reported EPS amounts.
In June 1997, the Financial Accounting Standards Board issued SFAS
No.130, "Reporting Comprehensive Income." SFAS No.130 establishes
standards for reporting and displaying comprehensive income and its
components in the financial statements. It does not, however,
Page 6
<PAGE> 7
require a specific format for the statement, but requires the Company to
display an amount representing total comprehensive income for the period
in that financial statement. This statement is effective for fiscal
years beginning after December 15, 1997. The Company will make any
required additional disclosures in 1998.
In June 1997, the Financial Accounting Standards Board issued SFAS No.
131, "Disclosures about Segments of an Enterprise and Related
Information." SFAS No.131 establishes standards for the manner in which
public business enterprises report information about operating segments
in annual financial statements and requires those enterprises to report
selected information about operating segments in interim financial
reports issued to stockholders. This Statement is effective for
financial statements for periods beginning after December 15, 1997. The
Company will make any required additional disclosures in 1998.
In October 1997, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued "Statement of
Position on Software Revenue Recognition 97-2". This new statement
supersedes SOP 91-1 and is effective for fiscal years beginning after
December 15, 1997. SOP 97-2 provides guidance on software revenue
recognition and the allocation of revenue when multiple products and
services are bundled. The new statement requires accounting in
conformity with ARB No. 45, Long-Term Construction-Type Contracts and
SOP 81-1, Accounting for Performance of Construction-Type and Certain
Production-Type Contracts when bundled services are essential to the
functionality of any other element of the transaction. In the past, the
Company has not delivered software that required more than minor
modifications and therefore has recorded revenue on shipment of the
software licenses. In the event that bundled products and services can
no longer be separated, the Company will be required to recognize
revenue using the percentage of completion method instead of upon
shipment of the software. The Company intends to continue to separate
software licenses from professional service contracts and accordingly
the impact on the consolidated financial statements is not expected to
be material.
4. RECLASSIFICATIONS
Certain reclassifications have been made to the prior period financial
statements to conform with the current period presentation.
As stated in the Company's Annual Report on Form 10-K, the Company
completed a merger with ViewStar Corporation in December of 1996. This
merger was accounted for as a pooling-of-interests and, as such, all
previous periods have been restated to reflect the operations of the
combined companies; including the three and nine month periods ended
September 30, 1996 presented herein.
Page 7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
REVENUE
Revenue for the third quarter of 1997 was $28.0 million, a 7% decrease
from $30.2 million reported in the comparable quarter of the prior year.
Systems sales were $10.8 million, a decrease of 23% compared to $14.0
million in the third quarter of 1996. The decrease was due to lower
repeat sales of systems to established customers in the domestic market.
Also, the Company sold fewer large formal call center systems as
compared to the prior year. This was to a small degree offset by an
increase in smaller systems and upgrades.
Software license revenue was $4.8 million, a decrease of 17% compared to
$5.8 million in 1996. Traditionally, customers who purchase large formal
call center systems also purchase additional accompanying software. With
fewer of these systems sold, there were less sales of the companion
software products. Workflow software sales were also less than a year
ago.
Service and miscellaneous revenue was $12.5 million, an increase of 19%
from $10.5 million in the third quarter of 1996. The increase was
primarily related to professional services in connection with a major
contract, which was substantially completed during the quarter.
International revenue increased to $7.8 million in the third quarter of
1997 from $5.3 million in the comparable quarter of 1996 primarily due
to increased product sales and professional services revenue in the
United Kingdom. The increase in professional services in the United
Kingdom relates to the major contract discussed above.
As discussed in the Company's 1996 Annual Report on Form 10-K, the
Company may from time to time experience quarterly fluctuations in
revenue due to a small number of contracts in any one quarter, no
material backlog, changes in customer budgets and general economic
conditions.
GROSS MARGIN
Total gross margin decreased to 61% of revenue in the third quarter of
1997, from 65% in the third quarter of 1996. Systems gross margin
decreased to 57% compared to 68% in the same period of the prior year.
This decrease was primarily due to the sale during the third quarter of
1996 of a high proportion of large formal call center systems which
generally have a higher gross margins. Gross margin for software
licenses declined to 89% in the third quarter of 1997 from 94% in the
third quarter of 1996 mainly due to a fixed amount of software
amortization spread over lower sales. Gross margin for service and
miscellaneous increased to 52% in the third quarter of 1997 compared to
46% in the comparable period of the prior year primarily due to the
service revenue from the major contract referred to above.
Page 8
<PAGE> 9
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses were $11.2 million in the
third quarter of 1997, compared to $12.0 million in the comparable
period of the prior year and remained at 40% of revenue. The decrease in
the total amount spent primarily relates to lower commission and bonus
expense due to lower sales.
OTHER CHARGES
During the third quarter of 1997, the Company reported a restructuring
charge of $948,000, consisting primarily of compensation related costs
due to the consolidation of the Company's sales, support and service
operations. Once the consolidation is fully implemented, the Company
anticipates annual operating expense savings of approximately $750,000
to $1.0 million. Excluding the restructuring charge, net income for the
third quarter would have been $1.8 million or $0.13 per share.
RESEARCH AND DEVELOPMENT
Research and development expense, net of amounts capitalized as software
development costs, was $3.8 million or 14% of revenue in the third
quarter of 1997, compared to $3.6 million or 12% of revenue in the
comparable quarter of the prior year.
During the third quarter of 1997, the Company did not capitalize a
significant amount of software development costs compared to
approximately $300,000 of capitalized costs in the third quarter of
1996. The net capitalized software costs remaining on the balance sheet
as of September 30, 1997, was $1.1 million, down from $2.0 million at
December 31, 1996.
The Company remains committed to the ongoing development of new products
and improvements to existing products as a key source of future revenue.
The Company expects to invest approximately 12-14% of revenue in
research and development.
OTHER INCOME, NET
Other income, net is comprised primarily of interest income and
increased to approximately $700,000 in the third quarter of 1997
compared with approximately $400,000 for the same period of the prior
year. The increase is primarily due to higher invested balances and a
shift to taxable securities which typically earn a higher interest rate.
INCOME TAXES
The effective tax rate for the third quarter of 1997 was 30% compared to
the statutory rate of 34%. The lower rate is primarily due to the use of
the maximum amount of ViewStar net operating loss carryforwards allowed
by the Internal Revenue Code.
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
REVENUE
Revenue for the first nine months of 1997 was $90.3 million, an increase
of 5% from $85.8 million reported in the comparable period of the prior
year. Systems sales were $35.8 million in 1997, down 10% from $39.5
million in 1996 due to the decrease in the second and third quarters.
Historically, domestic system sales have come from the large formal call
Page 9
<PAGE> 10
center market segment, and a high percentage of sales have represented
repeat business from established customers. Overall growth in this
segment has slowed in 1997 compared to prior years, and the established
customer base has purchased fewer systems than in 1996.
Software license revenue was $18.3 million, during the first nine months
of 1997 an increase of 20% compared to $15.2 million in 1996. The
increase is primarily due to a large software contract with a single
customer. Service and miscellaneous revenue was $36.2 million in 1997,
an increase of 17% from $31.0 million in 1996. The increase is mainly
due to a large integration project in 1997. International revenue
increased to $23.9 million in 1997 from $15.3 million in the comparable
period for 1996 due to increased product sales and professional services
revenue in the United Kingdom.
GROSS MARGIN
Total gross margin was 63% of revenue for the first nine months of 1997,
down from 65% for the same period of the prior year. Systems gross
margin decreased to 61% for the first nine months of 1997, from 65% in
1996. This decrease is attributable to fewer sales of high margin large
systems in the current year as compared to the prior year. Software
license gross margin declined slightly to 90% from 93% a year ago due to
a higher software amortization expense. Service and miscellaneous gross
margin remained at 50% compared to the same period of the prior year.
During the first quarter of 1997, the Company completed the outsourcing
of all manufacturing activities. The Company now uses a third party
vendor for assembly of systems. The Company will continue to maintain an
inventory of certain components and finished goods.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses were $35.3 million in the
first nine months of 1997, compared to $33.2 million in the comparable
period of the prior year and remained at 39% of revenue. The increase in
spending is primarily due to the growth in sales related compensation
expenses and increased marketing costs.
RESEARCH AND DEVELOPMENT
Research and development expense, net of amounts capitalized as software
development costs, remained at $11.4 million or 13% of revenue in the
first nine months of 1997, compared to $11.4 million or 13% of revenue
for the same period of the prior year. Software costs capitalized were
approximately $300,000 in the first nine months of 1997 compared to $1.0
million in the comparable period of 1996. Total spending has decreased
because of lower depreciation charges in the current year and higher
than normal third party software development fees incurred in the second
quarter of 1996.
OTHER CHARGES
In February 1996, the Company acquired Caleo Software, Inc. and expensed
$4.3 million of in-process research and development costs associated
with the acquisition. In addition, the Company wrote-off $0.7 million of
previously capitalized software costs in the first quarter of 1996 due
to rapidly changing technology. Excluding these charges, net income for
the nine months ended September 30, 1996 would have been $8.3 million,
or $0.62 per share.
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The 1997 results also include a restructuring charge of $948,000 as
discussed earlier. Excluding this charge net income for the nine months
ended September 30, 1997 would have been $8.1 million or $0.58 per
share.
OTHER INCOME, NET
Other income, net consists primarily of interest income which increased
to $1.6 million in the first nine months of 1997 from $1.2 million in
the comparable period in 1996. The increase is primarily due to higher
invested balances and a shift in the investment portfolio to higher
yielding taxable securities.
INCOME TAXES
The effective tax rate for the nine months ended September 30, 1997 was
30% compared to the statutory rate of 34%. The lower rate is primarily
due to the use of the maximum amount of ViewStar net operating loss
carryforwards allowed by the Internal Revenue Code.
FINANCIAL CONDITION
LIQUIDITY & CAPITAL RESOURCES
The Company's combined cash, cash equivalents and short-term investments
were $44.1 million at September 30, 1997 versus $42.8 million at
December 31, 1996. The short-term investment portfolio is invested in
municipal securities, corporate notes and bonds, and commercial paper,
and is diversified among security types and issuers. The portfolio does
not include any derivative products. At September 30, 1997, the
Company's working capital was $53.2 million compared to $46.8 million at
December 31, 1996.
During the first nine months of 1997, the Company generated $8.3 million
in cash from operations compared to a $1.8 million use of cash in the
comparable period of 1996. The 1997 cash from operations was primarily
generated by earnings and a decrease in receivables. A decrease in
unearned revenue and customer deposits partially offset this increase.
The use of cash from operating activities in 1996 was due primarily to
the purchase of Caleo Software, Inc. for $4.8 million in February 1996,
as well as a decrease in customer deposits and an increase in accounts
receivable. Without the purchase of Caleo, the Company would have
generated $3.0 million in cash from operations.
In addition to its cash and short term investment balances, the Company
has available a $10 million domestic line of credit. Management believes
that existing cash and short-term investments and cash flow from
operations, together with its available credit line, will continue to be
sufficient to meet ongoing operating requirements as well as the
Company's planned future investments in capital additions and research
and development activities. In connection with research and development
and market expansion, cash may be used to acquire technology or to fund
strategic ventures.
On July 16, 1997, the Board of Directors authorized, subject to certain
terms and conditions, the repurchase of up to 1,700,000 shares of common
stock. As of September 30, 1997 the Company had repurchased 358,100
shares at a total cost of $3.7 million. The shares repurchased may be
used to service the Company's employee benefit plans and for other
general corporate purposes. The Company continues to repurchase
additional shares and as
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of November 7, 1997 a total of 840,000 shares have been repurchased at a
total cost of $8.7 million
The Company does not currently hedge against changes in foreign currency
exchange rates. The majority of the Company's sales are denominated in
US dollars with customers assuming foreign currency exchange rate risks.
The Company's United Kingdom subsidiaries' sales are denominated in
British Pounds. As of September 30, 1997, outstanding receivables at the
UK subsidiaries totaled $4.7 million dollars or 17% of total accounts
receivable.
FORWARD LOOKING STATEMENTS-RISK FACTORS REGARDING FUTURE PERFORMANCE
Certain statements in this Form 10-Q contain "forward-looking"
information (as defined in the Private Securities Litigation Reform Act
of 1995) that involve risks and uncertainties, which may cause the
actual results, performance or achievements of the Company or industry
results to be significantly different from any future results,
performance or achievement expressed or implied by such forward-looking
information. Such risks and uncertainties include, among other things:
uncertainties relating to the integration of ViewStar operations,
fluctuations in operating results, seasonality, lengthy sales and
implementation cycle, complex service requirements, competition,
technological change and new products, limited source of supply,
dependence on Windows NT and other core Microsoft technologies, lack of
product revenue diversification, international sales, dependence on
proprietary rights, infringement claims, uncertainty of obtaining
licenses, risk of product defects, and governmental regulation.
Reference is made to the Company's Annual Report on Form 10-K for the
year ended December 31, 1996 filed with the SEC on March 12, 1997 for a
more detailed description of such risks and uncertainties.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
Not applicable.
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PART II: OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
Mosaix is subject to various legal proceedings that arise in the
ordinary course of its business. While the outcome of these
proceedings cannot be predicted with certainty, the Company
believes that none of such proceedings, individually or in the
aggregate will have a material adverse effect on the Company's
business or financial condition.
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 11. Computation of Earnings Per Share
Exhibit 27. Financial Data Schedule
(b) Reports on Form 8-K.
None
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MOSAIX, INC.
(Registrant)
DATE: November 12, 1997 BY: /s/ John J. Flavio
------------------------------------
John J. Flavio
Chief Financial Officer
(Principal Financial Officer)
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<PAGE> 15
EXHIBITS INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- ------------
<S> <C>
Exhibit 11. Computation of Earnings Per Share
Exhibit 27. Financial Data Schedule
</TABLE>
<PAGE> 1
MOSAIX, INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------
EXHIBIT 11: COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED SEPT. 30, ENDED SEPT. 30,
(IN THOUSANDS, EXCEPT PER SHARE DATA) 1997 1996 1997 1996
- --------------------------------------------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Weighted average number of common shares outstanding 13,418 13,107 13,341 12,514
Dilutive common equivalent shares from outstanding
stock options using the treasury stock method 483 814 490 828
-------------------- --------------------
Weighted average common shares and common
share equivalents outstanding 13,901 13,921 13,831 13,342
==================== ====================
Net earnings $ 1,149 $ 3,292 $ 7,403 $ 3,522
==================== ====================
Net earnings per share $ 0.08 $ 0.24 $ 0.54 $ 0.26
==================== ====================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 5,811
<SECURITIES> 38,319
<RECEIVABLES> 28,925
<ALLOWANCES> 1,929
<INVENTORY> 2,701
<CURRENT-ASSETS> 81,214
<PP&E> 30,555
<DEPRECIATION> 22,964
<TOTAL-ASSETS> 91,105
<CURRENT-LIABILITIES> 28,036
<BONDS> 0
0
0
<COMMON> 98
<OTHER-SE> 62,656
<TOTAL-LIABILITY-AND-EQUITY> 91,105
<SALES> 15,545
<TOTAL-REVENUES> 28,043
<CGS> 5,104
<TOTAL-COSTS> 11,071
<OTHER-EXPENSES> 15,981
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,642
<INCOME-TAX> 493
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,149
<EPS-PRIMARY> 0.08
<EPS-DILUTED> 0
</TABLE>
