As filed with the Securities and Exchange Commission on December 18, 1997.
Filed pursuant to 424(b)(2)
Registration No. 333-41207
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SPSS INC.
(Exact name of registrant as specified in its charter)
DELAWARE 36-2815480
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
444 North Michigan Avenue, Chicago, Illinois 60611
(312) 329-2400
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Edward Hamburg
Executive Vice President, Corporate Operations, Chief Financial Officer,
and Secretary
SPSS Inc.
444 North Michigan Avenue
Chicago, Illinois 60611
(312) 329-2400
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
T. Stephen Dyer, Esq.
Ross & Hardies
150 N. Michigan Avenue
Chicago, Illinois 60601
(312) 558-1000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON
AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box.|X|
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed
Proposed Maximum
Maximum Aggregate Amount of
Title of Each of Amount to be Offering Price Offering Registration Fee
Securities to be Registered Registered Per Unit (1) Price(1)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 1,031,951 $22.6875 $23,412,388 $7,094.66
</TABLE>
(1) Solely for the purpose of calculating the registration fee, the
offering price per share, the aggregate offering price and the amount
of the registration fee have been computed in accordance with Rule
457(c) under the Securities Act of 1933, as amended. Accordingly, the
price per share of Common Stock has been calculated to be equal to the
average of the high and low prices for a share of Common Stock as
reported by the Nasdaq National Market on November 20, 1997, which is a
specified date within five business days prior to the original date of
filing of this Registration Statement.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE>
The information contained herein is subject to completion or amendment. A
Registration Statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the Registration Statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
PROSPECTUS
1,031,951 Shares
SPSS INC.
Common Stock
($.01 Par Value)
This Prospectus relates to the offer and sale of up to 1,031,951 shares
of the common stock, $.01 par value (the "Common Shares" or "Common Stock"), of
SPSS Inc. (the "Company"). The Common Shares may be offered by particular
stockholders of the Company (the "Selling Stockholders") or persons who are
recipients of gifts made by Selling Stockholders ("Donee Stockholders") from
time to time in transactions on the Nasdaq National Market, in negotiated
transactions, or a combination of such methods of sale, at fixed prices that may
be changed, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. The Selling
Stockholders or Donee Stockholders may effect such transactions by the sale of
the Common Shares to or through broker-dealers, and such broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the Selling Stockholders, Donee Stockholders and/or the purchasers of the Common
Shares for whom such broker-dealers may act as agent or to whom they may sell as
principal, or both (which compensation to a particular broker-dealer might be in
excess of customary commissions). The Selling Stockholders, Donee Stockholders
and any broker-dealer who acts in connection with the sale of Common Shares
hereunder may be deemed to be "underwriters" as that term is defined in the
Securities Act of 1933, as amended (the "Securities Act"), and any commission
received by them and profit on any resale of the Common Shares as principal
might be deemed to be underwriting discounts and commissions under the
Securities Act. See "Selling Stockholders" elsewhere in this Prospectus. The
Company will not receive any of the proceeds from the sale of the Common Shares
by the Selling Stockholders or Donee Stockholders.
The Company's Common Stock is traded and quoted on the Nasdaq National
Market under the symbol "SPSS." On November 25, 1997, the last sale price of the
Common Stock, as reported on the Nasdaq National Market, was $23 7/8 per share.
The Company will bear all expenses (other than underwriting discounts
and selling commissions, and fees and expenses of counsel or other advisors to
the Selling Stockholders and Donee Stockholders) in connection with the
registration of the shares of Common Stock being offered hereby, which expenses
are estimated to be approximately $60,000. See "Selling Stockholders" elsewhere
in this Prospectus.
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE
CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is December 18, 1997
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company, and the Registration
Statement of which this Prospectus forms a part, the exhibits and schedules
thereto and amendments thereof, may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Judiciary Plaza, Washington, D.C. 20549, and at the regional offices
of the Commission located at 7 World Trade Center, 13th Floor, New York, New
York 10048 and at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material can also be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549 at prescribed rates. The Commission maintains a
Web site that contains reports, proxy and information statements and other
information regarding registrants, like the Company, that file electronically
with the Commission and the address of that Web site is "http://www.sec.gov".
The Company's Common Stock is quoted on the Nasdaq National Market, and
therefore such reports, proxy statements and other information can also be
inspected at the offices of the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., 3rd Floor, Washington, D.C. 20006.
Additional information regarding the Company and the shares offered
hereby is contained in the Registration Statement on Form S-3 and the exhibits
thereto (collectively, the "Registration Statement") filed with the Commission
under the Securities Act of 1933, as amended (the "Securities Act"). As
permitted by the rules and regulations of the Commission, this Prospectus does
not contain all of the information set forth in the Registration Statement and
the exhibits thereto, to which reference is hereby made. Statements made in this
Prospectus as to the contents of any contract, agreement or other document
referred to are not necessarily complete. With respect to each such contract,
agreement or other document filed as an exhibit to the Registration Statement,
reference is hereby made to the exhibit for a more complete description of the
matter involved, and each such statement will be deemed qualified in its
entirety by such reference. For further information with respect to the Company
and the shares of Common Stock offered hereby, reference is hereby made to the
Registration Statement, and the exhibits thereto.
SPSS, Categories, SYSTAT, Jandel Scientific, SigmaPlot, SigmaStat,
SigmaScan and SigmaGel are registered trademarks of the Company. SPSS/PC(TM)
SPSS Real Stats. Real Easy(TM), BMDP(TM), Jandel(TM), CLEAR(TM), DeltaGraph(TM),
Quancept(TM) and Quantime(TM) are unregistered trademarks of the Company. QI
Analyst(TM) is currently an unregistered trademark of the Company, but the
Company has received notification from the United States Patent and Trademark
Office that the Company may pursue further registration on a showing of use of
the trademark in interstate commerce. This Prospectus also includes trade names
and marks of companies other than SPSS Inc.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference the following documents
previously filed with the Commission:
(a) The Company's Annual Report on Form 10-K, filed March 31, 1997 for
the fiscal year ended December 31, 1996;
(b) The Company's Quarterly Report on Form 10-Q, filed May 15, 1997
for the fiscal quarter ended March 31, 1997;
(c) The Company's Quarterly Report on Form 10-Q filed August 14, 1997
for the fiscal quarter ended June 30, 1997;
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<PAGE>
(d) The Company's Quarterly Report on Form 10-Q filed November 14,
1997 for the fiscal quarter ended September 30, 1997;
(e) The Company's Current Report on Form 8-K and amendments thereto
filed with the Commission on October 15, 1997 (acquisition of Quantime
Limited);
(f) The description of the Company's Common Stock, $.01 par value (the
"Common Stock"), contained in the Company's Registration Statement on Form
8-A filed with Commission on August 4, 1993, pursuant to Section 12 of the
Exchange Act; and
(g) The Company's Proxy Statement, filed with the Commission on May
20, 1997, for its annual meeting of stockholders held on June 18, 1997,
except for the Compensation Committee Report contained therein.
All reports and other documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, subsequent to the date
of this Prospectus and prior to the filing of a post-effective amendment to the
Registration Statement, shall be deemed to be incorporated by reference in the
Registration Statement and to be a part hereof from the date of filing of such
documents. Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein, or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide, without charge, to each person (including any
beneficial owner) to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the information that has been
incorporated by reference in this Prospectus (not including exhibits to such
information unless such exhibits are specifically incorporated by reference into
such information). Such requests should be directed to: Edward Hamburg,
Executive Vice President, Corporate Operations, Chief Financial Officer and
Secretary, at the Company's principal executive offices at 444 North Michigan
Avenue, Chicago, Illinois 60611, telephone (312) 329-2400.
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<PAGE>
UNLESS THE CONTEXT OTHERWISE REQUIRES, REFERENCES IN THIS PROSPECTUS TO "SPSS"
AND THE "COMPANY" SHALL MEAN SPSS INC. A DELAWARE CORPORATION, ITS ILLINOIS
PREDECESSOR AND ITS SUBSIDIARIES, COLLECTIVELY; AND REFERENCES TO THE "COMMON
STOCK" SHALL MEAN SPSS INC.'S COMMON STOCK, PAR VALUE $ .01 PER SHARE.
THE COMPANY
General
SPSS Inc. ("the Company") was incorporated in Illinois in 1975 under
the name "SPSS, Inc." and was reincorporated in Delaware in May 1993 under the
name "SPSS Inc." The Company is a multinational company that delivers reporting,
analysis and modeling software products, and whose primary markets are marketing
research, business analysis/data mining, scientific research and quality
improvement analysis. The Company develops, markets and supports an integrated
line of statistical software and other products that enable users to effectively
bring marketplace and enterprise data to bear on decision-making. The Company's
major products include SPSS for business and general applications, NewView for
analytical reporting, SYSTAT, SigmaPlot and DeltaGraph for scientific research,
QI Analyst for quality improvement and statistical process control, allCLEAR for
process documentation and management and the Quantime family of products for
market research. The primary users of the Company's software are managers and
data analysts in corporate settings, government agencies and academic
institutions. In addition to its widespread use in survey analysis, SPSS
software also performs other types of market research, as well as quality
improvement analyses, scientific and engineering applications and data
reporting. The current generation of SPSS desktop products features a
windows-based point-and-click graphical user interface, sophisticated
statistical procedures, data access and management capabilities, report writing
and integrated graphics. The Company's products provide extensive analytical
capabilities not found in spreadsheets, database management systems or graphics
packages.
In its 22 years of operation, SPSS has become a widely recognized name
in statistical software. The Company plans to leverage its current position to
take advantage of the increased demand for software applications that not only
provide ready access to the data that organizations collect and store, but also
enable users to systematically analyze, interpret and present such information
for use in decision-making. Management believes that ease-of-use of the
Company's current generation products, combined with the greater processing
speed and storage capacity of the latest desktop computers, has substantially
expanded the market for SPSS statistical software.
In summer 1993, the Company completed an initial public offering (the
"IPO") of common stock, $.01 par value (the "Common Stock"). The Common Stock is
listed on the Nasdaq National Market under the symbol "SPSS". In early 1995, the
Company and certain selling stockholders (the "Selling Stockholders") sold
1,865,203 shares of Common Stock in a public offering.
The Company is a Delaware corporation. The Company's principal
executive offices are located at 444 N. Michigan Avenue, Chicago, Illinois
60611, and its telephone number at its principal executive offices is (312)
329-2400.
Safe Harbor
"Safe Harbor" Statement under the Private Securities Litigation Reform
Act of 1995: With the exception of historical information, the matters discussed
in this Prospectus are forward-looking statements that involve risks and
uncertainties including, but not limited to, market conditions, competition and
other risks indicated in the Registration Statement of which this Prospectus
forms a part, and the Company's other filings with the Securities and Exchange
Commission.
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<PAGE>
Recent Developments
The Company appointed Michael Blair as a director on July 24, 1997,
filling in a vacancy on the Board of Directors of the Company.
In September 1997, SPSS acquired approximately 97% of the outstanding
shares of capital stock of Quantime Limited, a corporation organized under the
laws of England ("Quantime"), from certain shareholders and warrant holders of
Quantime, in exchange for 863,049 shares of Common Stock. In November 1997, SPSS
acquired the remaining shares of capital stock of Quantime in exchange for
28,175 shares of Common Stock. The acquisition was accounted for as a pooling of
interests. Quantime is a developer of market research software products. SPSS
will continue to operate the Quantime business principally from the Quantime
offices in London, England.
In November 1997, SPSS acquired the outstanding shares of capital stock
of In2itive Technologies, a corporation organized under the laws of Denmark
("In2itive"), in exchange for 140,727 shares of Common Stock in a merger
accounted for as a pooling of interests. In2itive is a computer software company
specializing in market research software. SPSS will continue to operate the
In2itive business principally from the In2itive headquarters in Copenhagen,
Denmark.
The financial information included herein other than in the Unaudited
Selected Pro Forma Financial Data and share amounts reflect the Company as
combined with Quantime, but does not include the In2itive acquisition, unless
otherwise indicated.
UNAUDITED SELECTED PRO FORMA FINANCIAL DATA
(in thousands, except per share data)
The unaudited selected pro forma financial data is provided as supplementary
information for illustrative purposes to give effect to the acquisitions of
Quantime and In2itive. The unaudited selected pro forma financial data gives
retroactive effect to the acquisitions of Quantime and In2itive, which have been
accounted for as poolings of interests for financial reporting purposes, and as
a result, the financial position and results of operations are presented as if
the combining companies had been consolidated for all periods presented. The
financial data include in the opinion of management, all adjustments (consisting
only of normal recurring adjustments) necessary to present fairly the data for
the periods presented. The unaudited selected pro forma financial data should be
read in conjunction with the other financial information included or
incorporated by reference in this Prospectus. Such financial data are not
necessarily indicative of the results that would have occurred if the
acquisitions had been in effect during the periods presented or which may be
attained in the future.
<TABLE>
<CAPTION>
Nine Months
Year Ended December 31, Ended September 30,
1994 1995 1996 1996 1997
---- ---- ---- ---- ----
Pro Forma Statement of Operations
Data:
<S> <C> <C> <C> <C> <C>
Net revenues $74,760 $87,403 $99,621 $73,023 $80,684
Operating income 7,168 6,396 9,917 8,201 1,695
Net income 4,196(1) 3,180(2) 6,237(3) 5,072(4) 169(5)
Net income per share $0.53(1) $0.35(2) $0.66(3) $0.54(4) $0.02(5)
Shares used in per share calculation 7,926 9,042 9,382 9,321 9,643
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<PAGE>
Pro Forma Balance Sheet Data:
As of December 31, As of September 30,
1995 1996 1997
------ ------ -------
Working capital $4,163 $9,042 $12,944
Total assets 53,096 63,052 57,463
Total stockholders' equity 21,232 29,099 29,191
</TABLE>
(1) Includes a pre-tax write-off of acquired in-process technology and other
acquisition-related charges amounting to $1,928.
(2) Includes a pre-tax write-off of acquired in-process technology and other
acquisition-related charges amounting to $1,051 and a write-off principally
of certain software assets capitalized more than two years ago amounting to
$2,466.
(3) Includes a pre-tax write-off of acquired in-process technology and other
acquisition-related charges amounting to $3,636.
(4) Includes a pre-tax write-off of acquisition-related charges amounting to
$980.
(5) Includes pre-tax charges of $2,413 relating to certain asset write-downs
and acquisition-related costs of $5,985.
RISK FACTORS
In addition to the other information in this Prospectus, the following
risk factors should be considered carefully by potential purchasers in
evaluating a sale of the Common Stock offered hereby.
Fluctuations in Quarterly Operating Results. The Company's quarterly
operating results can be subject to fluctuation due to several factors,
including the number and timing of product updates and new product
introductions, delays in product development and introduction, purchasing
schedules of its customers, changes in foreign currency exchange rates, product
and market development expenditures, the timing of product shipments, changes in
product mix, timing, costs and effects of acquisitions and general economic
conditions. Because the Company's expense levels are to a large extent based on
its forecasts of future revenues, operating results may be adversely affected if
such revenues fall below expectations. Accordingly, the Company believes that
quarter-to-quarter comparisons of its results of operations may not be
meaningful and should not be relied upon as an indication of future performance.
The Company has historically operated with very little backlog because its
products are generally shipped as orders are received. As a result, revenues in
any quarter are dependent on orders shipped and licenses renewed in that
quarter. The Company has experienced a seasonal pattern in its operating results
with the fourth quarter typically having the highest operating income. For
example, excluding acquisition and other non-recurring charges, the percentage
of the Company's operating income realized in the fourth quarter was 33% in
1994, 34% in 1995 and 32% in 1996. In addition, the timing and amount of the
Company's revenues are subject to a number of factors that make estimation of
operating results prior to the end of a quarter uncertain. A significant portion
of the Company's operating expenses are relatively fixed, and planned
expenditures are based primarily on revenue forecasts. More specifically, in the
fourth quarter, the variable profit margins on modest increases in sales volume
at the end of the quarter are significant. Should the Company fail to achieve
such fourth quarter revenue increases, net income for the fourth quarter and the
full year could be materially affected. Generally, if revenues do not meet the
Company's expectations in any given quarter, operating results will be adversely
affected. Although the Company had been profitable in each of the seven quarters
up to and including the quarter ending June 30, 1994, the Company experienced a
net loss of $137,000 in the third quarter of 1994 due to a one-time write-off of
$1,928,000 for acquired and in-process technology and other acquisition-related
charges
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<PAGE>
recorded in connection with the Company's acquisition of SYSTAT, Inc.
("SYSTAT"). The Company was profitable in the seven quarters from December 31,
1994 through June 30, 1997, but had a net loss of $3,401,000 in the third
quarter of 1997 due primarily to one-time acquisition charges of $5,985,000 and
a charge from the revaluation of certain assets of $2,413,000. There can be no
assurance that profitability on a quarterly or annual basis can be achieved or
sustained in the future.
Dependence on a Single Product Category; Declining Sales of Certain
Products. The Company derives the major part of its product revenues from
licenses of statistical software. Accordingly, any decline in revenues from
licenses of the Company's statistical software, or reduction in demand for
statistical software generally, could have a material adverse effect on the
Company.
In recent years, SPSS, excluding the effects of the Quantime and
In2itive acquisitions, has experienced a significant shift in the sources of its
revenues. Historically, the Company derived a large portion of its revenues from
licenses of its mainframe and minicomputer ("Large Systems") products. As a
result of the general shift by computer users from Large Systems to desktop
computers, the Company experienced a decline in revenues from Large Systems
products in the last several years, although in 1996 sales of Large Systems
products stabilized. Revenues from Large Systems licenses declined from
approximately $15.6 million in 1991 to $10.7 million in 1996, while sales of
desktop products increased from $14.7 million in 1991 to $66.2 million in 1996.
Revenues from Large Systems licenses increased slightly from 1995 to 1996, by
$45,000. Management is unable to predict whether the decline in Large Systems
licenses will continue or at what rate such licenses will decline. Revenues from
the Company's products for desktop computers ("Desktop products") now account
for nearly three-quarters of the Company's revenues and this percentage may
continue to increase.
Risk Relating to Business Integration in Europe and Other Acquisitions.
In recent years, SPSS has made a significant number of acquisitions, including
the acquisition of businesses based outside of the United States. See "Recent
Developments." While SPSS has substantial international operations, it faces
challenges and business integration issues with its September, 1997 acquisition
of Quantime Limited, a corporation organized under the laws of the United
Kingdom ("Quantime"). Although persons whom the Company believes are qualified
and trained will continue to work with Quantime after its acquisition by SPSS,
there can be no assurance that Quantime will be able to retain these employees
or hire suitable replacements in the event they should leave the employ of SPSS.
If the Company loses key personnel from Quantime or is unable to integrate
Quantime's business into its own effectively, the Company may experience a
material adverse impact on its financial condition. While SPSS believes that it
has been successful in integrating the acquisitions it has made in the past,
there can be no assurance that the recent acquisitions of Quantime or In2itive
or future acquisitions will be successfully integrated into SPSS.
Rapid Technological Change. The computer software industry is
characterized by rapid technological advances, changes in customer requirements,
frequent product enhancements and new product introductions. The Company's
future success will depend upon its ability to enhance its existing products and
introduce new products that keep pace with technological developments, respond
to evolving customer requirements and achieve market acceptance. In particular,
the Company believes it must continue to respond quickly to users' needs for
greater functionality, improved usability and support for new hardware and
operating systems. Any failure by the Company to respond adequately to
technological developments and customer requirements, or any significant delays
in product development or introduction, could result in loss of revenues. In the
past, the Company has, on occasion, experienced delays in the introduction of
new products and product enhancements, primarily due to difficulties with
particular operating environments and problems with software provided by third
parties. The extent of these delays has varied depending upon the size and scope
of the project and the nature of the problems encountered. Such delays have most
often resulted from "bugs" encountered in working with new and/or beta-stage
versions of operating systems and other third party software, and bugs or
unexpected difficulties in existing third party software which complicate
integration with the Company's software. From time to time, the Company has
discovered bugs in its products which are resolved through maintenance releases
or through periodic updates depending upon the seriousness of the defect. There
can be no assurance that the Company will be successful in developing and
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<PAGE>
marketing new products or product enhancements on a timely basis or that the
Company will not experience significant delays or defects in its products in the
future, which could have a material adverse effect on the Company. In addition,
there can be no assurance that new products or product enhancements developed by
the Company will achieve market acceptance or that developments by others will
not render the Company's products or technologies obsolete or noncompetitive.
International Operations. The Company's revenues from operations
outside of North America accounted for approximately 49%, 52% and 53% of the
Company's net revenues in 1994, 1995 and 1996, respectively. The Company expects
that revenues from international operations will continue to represent a large
percentage of its net revenues and that this percentage may increase,
particularly as the Company further "localizes" the SPSS product line by
translating its products into additional languages and expands its operations
through acquisitions of companies outside the United States. International
revenues are subject to a number of risks, including greater difficulties in
accounts receivable collection, longer payment cycles, exposure to currency
fluctuations, political and economic instability and the burdens of complying
with a wide variety of foreign laws and regulatory requirements. The Company
also believes that it is exposed to greater levels of software piracy in
international markets because of the weaker protection afforded to intellectual
property in some foreign jurisdictions. As the Company expands its international
operations, the risks described above could increase and, in any event, could
have a material adverse effect on the Company.
Potential Volatility of Stock Price. There has been significant
volatility in the market prices of securities of technology companies, including
SPSS, and, in some instances, such volatility has been unrelated to the
operating performance of such companies. Market fluctuations may adversely
affect the price of the Common Stock. The Company also believes factors such as
announcements of new products by the Company or its competitors, quarterly
variations in financial results, recommendations and reports of analysts,
acquisitions and factors beyond the Company's control could cause the market
price of the Common Stock to fluctuate substantially.
Reliance on Relationships with Third Parties. The Company licenses
certain software from third parties. Some of this licensed software is embedded
in the Company's products, and some is offered as add-on products. If such
licenses are discontinued, or become invalid or unenforceable, there can be no
assurance that the Company will be able to develop substitutes for this software
independently or to obtain alternative sources in a timely manner. Any delays in
obtaining or developing substitutes for licensed software could have a material
adverse effect on the Company.
In February 1993, the Company entered into an exclusive, worldwide
agreement (the "Prentice Hall Agreement") with Prentice Hall, Inc. ("Prentice
Hall") under which Prentice Hall publishes and distributes the student version
of the Company's software and all of the Company's publications. As a result,
the Company is dependent on Prentice Hall for the development and support of the
markets for student software and its publications. The failure of Prentice Hall
to perform its obligations under the Prentice Hall Agreement adequately could
have a material adverse effect on the Company.
In January 1997, the Company entered into a Banta Global Turnkey
Software Distribution Agreement (the "Banta Agreement"), under which Banta
Global Turnkey ("Banta") manufactures, packages, and distributes the Company's
software products to the Company's domestic and international customers and
certain international subsidiaries. The Banta Agreement has a three-year term
and automatically renews thereafter for successive periods of one year. Either
party may terminate the Banta Agreement for cause by written notice if the other
materially breaches its obligations. Such a termination notice for cause must
specifically identify the breach (or breaches) upon which it is based and will
be effective 180 days after the notice is received by the other party, unless
the breach(es) is (are) corrected during the 180 days. Either party may also
terminate the Banta Agreement on 180 days' notice for any other reason. If Banta
terminates the Banta Agreement other than for cause, it is required to assist
the Company in finding a new vendor. If Banta fails to perform adequately any of
its obligations under the Banta Agreement, the Company's operating results could
be materially adversely affected.
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<PAGE>
Changes in Public Expenditures and Overall Economic Activity Levels. A
significant portion of the Company's revenues comes from licenses of its
products directly to foreign and domestic government entities. In addition,
significant amounts of the Company's revenues come from licenses to academic
institutions, healthcare organizations and private businesses which contract
with or are funded by government entities. Government appropriations processes
are often slow, unpredictable and subject to factors outside the Company's
control. In addition, proposals are currently being made in certain countries to
reduce government spending. Reductions in government expenditures and
termination or renegotiation of government-funded programs or contracts could
have a material adverse effect on the Company. In addition, declines in overall
levels of economic activity could also have a material adverse impact on the
Company.
Competition. The market for the statistical software is both highly
competitive and fragmented. The Company primarily competes with one general
statistical software provider which is larger and has greater resources than the
Company, as well as with numerous other companies offering statistical
applications software, many of which offer products focused on specific
statistical applications. The Company considers its primary worldwide competitor
to be the larger and better-financed SAS Institute ("SAS"), although the Company
believes that SAS's revenues are derived principally from products that are used
for purposes other than statistics and operate on large systems platforms.
StatSoft Inc., developers of the Statistica product ("Statistica"), Manugistics
Group, Inc., distributors of the Statgraphics Plus product ("Statgraphics"), and
Minitab, Inc. ("Minitab") are also competitors, although their annual revenues
from statistical products are believed to be considerably less than the revenues
of SPSS.
In the future, SPSS may face competition from new entrants into the
statistical software market. The Company could also experience competition from
companies in other sectors of the broader market for data management, analysis
and presentation software, such as providers of spreadsheets, database
management systems, report writers and executive information systems. These
companies have added, or in the future may add, statistical analysis
capabilities to their products. Many of these companies have significant name
recognition, as well as substantially greater capital resources, marketing
experience and research and development capabilities than the Company. There can
be no assurance that the Company will have sufficient resources to make the
necessary investment in research and development and sales and marketing, or
that the Company will otherwise be able to make the technological advances
necessary to maintain or enhance its competitive position. The Company's future
success will also depend significantly upon its ability to continue to sell its
Desktop products, to attract new customers looking for more sophisticated or
powerful software and to introduce additional add-on products to existing
customers. There can be no assurance that the Company will be able to compete
successfully in the future.
Dependence on Key Personnel. The Company is dependent on the efforts of
certain executives and key employees, including its President and Chief
Executive Officer, Jack Noonan. The Company's continued success will depend in
part on its ability to attract and retain highly qualified technical,
managerial, sales, marketing and other personnel. Competition for such personnel
is intense. There can be no assurance that the Company will be able to continue
to attract or retain such highly qualified personnel. No life insurance policies
are maintained on the Company's key personnel.
Intellectual Property; Proprietary Rights. The statistical algorithms
incorporated in the Company's software are not proprietary. The Company believes
that the proprietary technology constituting a portion of the Company's software
determines the speed and quality of displaying the results of computations, the
connectivity of the Company's products with third party software and the ease of
use of its products. The Company's success will depend, in part, on its ability
to protect the proprietary aspects of its products. The Company attempts to
protect its proprietary software with trade secret laws and internal
nondisclosure safeguards, as well as copyright and trademark laws and
contractual restrictions on copying, disclosure and transferability that are
incorporated into its software license agreements. The Company licenses its
software only in the form of executable code, with contractual restrictions on
copying, disclosures and transferability. Except for licenses of its products to
users of Large System products and annual licenses of its Desktop products, the
Company licenses its products to end-users
- 9 -
<PAGE>
by use of a "shrink-wrap" license that is not signed by licensees, as is
customary in the industry. It is uncertain whether such license agreements are
legally enforceable. The source code for all of the Company's products is
protected as a trade secret and as unpublished copyrighted work. In addition,
the Company has entered into confidentiality and nondisclosure agreements with
its key employees. Despite these restrictions, it may be possible for
competitors or users to copy aspects of the Company's products or to obtain
information which the Company regards as a trade secret. The Company has no
patents, and judicial enforcement of copyright laws may be uncertain,
particularly outside of North America. Preventing unauthorized use of computer
software is difficult, and software piracy is expected to be a persistent
problem for the packaged software industry. These problems may be particularly
acute in international markets. In addition, the laws of certain countries in
which the Company's products are or may be licensed do not protect the Company's
products and intellectual property rights to the same extent as the laws of the
United States. Despite the precautions taken by the Company, it may be possible
for unauthorized third parties to reverse engineer or copy the Company's
products or obtain and use information that the Company regards as proprietary.
There can be no assurance that the steps taken by the Company to protect its
proprietary rights will be adequate to prevent misappropriation of its
technology.
Although the Company's products have never been the subject of an
infringement claim, there can be no assurance that third parties will not assert
infringement claims against the Company in the future or that any such assertion
will not result in costly litigation or require the Company to obtain a license
to use the intellectual property of third parties. There can be no assurance
that such licenses will be available on reasonable terms, or at all. There can
also be no assurance that the Company's competitors will not independently
develop technologies that are substantially equivalent or superior to the
Company's technologies.
Control by Existing Stockholders; Antitakeover Effects. As of November
24, 1997, the Company's executive officers and directors owned beneficially
approximately 13% of the outstanding shares of Common Stock. The Norman H. Nie
Revocable Trust Dated March 15, 1991 (the "Nie Trust") and affiliates of the Nie
Trust are entitled to nominate a director for inclusion in the management slate
for election to the Board if the Nie Trust owns no less than 12.5% of the
outstanding shares of Common Stock. As of November 24, 1997, the Nie Trust and
affiliates of the Nie Trust beneficially owned approximately 12.3% of the
outstanding shares of Common Stock. The Company's Certificate of Incorporation
and Bylaws contain a number of provisions, including provisions requiring an 80%
super majority stockholder approval of certain actions and provisions for a
classified Board of Directors, which would make the acquisition of the Company,
by means of an unsolicited tender offer, a proxy contest or otherwise, more
difficult or impossible.
Shares Eligible for Future Sale. The Company is filing the Registration
Statement to permit transactions with respect to the shares of Common Stock
issued in connection with the Quantime and In2itive transactions. These shares
of Common Stock are currently deemed "restricted securities," as defined in Rule
144 under the Securities Act, and may not be resold in the absence of
registration under the Securities Act or pursuant to an exemption from such
registration, including exemptions provided by Rule 144 under the Securities
Act.
In addition to the shares of Common Stock which are outstanding, as of
November 24, 1997, there were vested options outstanding held by management to
purchase approximately an additional 686,971 shares of Common Stock, with an
average exercise price of $8.19 per share, and unvested options to purchase
approximately an additional 169,972 shares of Common Stock. The Company has also
established a stock purchase plan available to employees of the Company, which
permits employees to acquire shares of Common Stock at the end of each quarter
at 85% of the market price of the Common Stock as of the day after the end of
the quarter.
No prediction can be made as to the effect, if any, that future sales,
or the availability of shares of Common Stock for future sales, will have on the
market price prevailing from time to time. Sales of substantial amounts of
Common Stock by the Company or by shareholders who hold "restricted securities,"
or the perception that such sales may occur, could adversely affect prevailing
market prices for the Common Stock.
- 10 -
<PAGE>
Accumulated Deficit. The Company had an accumulated deficit of
$11,597,000 as of December 31, 1996.
SELLING STOCKHOLDERS
The following table sets forth the number of shares of Common Stock
beneficially owned by each Selling Stockholder as of November 24, 1997, the
number of shares of Common Stock that may be offered for the Selling
Stockholder's account and the number of shares of Common Stock and based on the
number of shares of Common Stock beneficially owned as of November 24, 1997, the
percentage of the shares of Common Stock to be beneficially owned by such
Selling Stockholder if they elect to sell all of their Shares of Common Stock
that are available for sale.
<TABLE>
<CAPTION>
Maximum Shares of Common
Number Stock To Be
Shares of of Shares Beneficially Owned
Common Stock Available Assuming Sale of All
Beneficially To Be Sold Shares Available For
Name and Address of Owned As of Pursuant Sale Hereunder
Selling Stockholder November 26, 1997 Hereto Number Percent
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Michael Oestreicher 441,635 441,635 0 *
TR UA DTD 6/30/97
Edward Sherman Ross Trust
312 Walnut Street, Suite 1400
Cincinnati, OH 45202-4029
Joya Charitable Foundation 88,418 88,418 0 *
312 Walnut Street, Suite 1400
Cincinnati, OH 45202-4029
Min Charitable Trust 16,007 16,007 0 *
c/o Richard Cassell
Brown & Wood, Princes Court
7 Princes Street
London EC2R 8AQ UK
M Ross 1,904 1,904 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
J Powell 1,904 1,904 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
- 11 -
<PAGE>
Maximum Shares of Common
Number Stock To Be
Shares of of Shares Beneficially Owned
Common Stock Available Assuming Sale of All
Beneficially To Be Sold Shares Available For
Name and Address of Owned As of Pursuant Sale Hereunder
Selling Stockholder November 26, 1997 Hereto Number Percent
- ---------------------------------------------------------------------------------------------------------------
Norman Grunbaum 115,744 115,744 0 *
TR UA DTD 6/30/97
Norman Grunbaum Discretionary Settlement
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Richard Kottler
TR UA DTD 6/30/97
Richard Kottler Discretionary Settlement 119,522 119,522 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
International Services SA 27,375 27,375 0 *
7-11 Britannia Place
Bath Street
St. Helier, Jersey JE4 8US
Channel Islands
Louis Davidson 2,585 2,585 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
J Marinelli 20,261 20,261 0 *
c/o Quantime Corp.
11 East 26th Street, 16th Fl
New York, NY 10010
Stephanie Gwilliam 13,117 13,117 0 *
1 Redroofs Close, The Avenue
Beckenham, Kent BR3 2YR
Tony Legg 10,297 10,297 10,297 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
- 12 -
<PAGE>
Maximum Shares of Common
Number Stock To Be
Shares of of Shares Beneficially Owned
Common Stock Available Assuming Sale of All
Beneficially To Be Sold Shares Available For
Name and Address of Owned As of Pursuant Sale Hereunder
Selling Stockholder November 26, 1997 Hereto Number Percent
- ---------------------------------------------------------------------------------------------------------------
Mark Katz 9,530 9,530 9,530 0 *
26 Hoop Lane
London NW11 8BU UK
Eva Huzan 4,420 4,420 4,420 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Madeleine Ashbery 3,047 3,047 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Valerie Griffin 2,455 2,455 0 *
c/o Quantime Corp.
100 Merchant Street, Suite 125
Cincinnati, OH 45246
Pete Trotman 2,331 2,331 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Joni Orgel 2,087 2,087 0 *
c/o Quantime Corp.
11 East 26th Street, 16th Fl
New York, NY 10010
Adrian Dewey 1,675 1,675 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Pete Dacosta 761 761 0 *
c/o Quantime Corp.
100 Merchant Street, Suite 125
Cincinnati, OH 45246
- 13 -
<PAGE>
Maximum Shares of Common
Number Stock To Be
Shares of of Shares Beneficially Owned
Common Stock Available Assuming Sale of All
Beneficially To Be Sold Shares Available For
Name and Address of Owned As of Pursuant Sale Hereunder
Selling Stockholder November 26, 1997 Hereto Number Percent
- ---------------------------------------------------------------------------------------------------------------
Nick Brown 761 761 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Jonathan Chody 761 761 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Gail Haslam 609 609 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Annie McGlone 608 608 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Alan Renny 536 536 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Earl Wardally 456 456 0 *
c/o Quantime Ltd.
11 East 26th Street, 16th Floor
New York, NY 10010
Martin Klein 432 432 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
- 14 -
<PAGE>
Maximum Shares of Common
Number Stock To Be
Shares of of Shares Beneficially Owned
Common Stock Available Assuming Sale of All
Beneficially To Be Sold Shares Available For
Name and Address of Owned As of Pursuant Sale Hereunder
Selling Stockholder November 26, 1997 Hereto Number Percent
- ---------------------------------------------------------------------------------------------------------------
Sharon Jordan 334 334 0 *
c/o Quantime Corp.
100 Merchant Street, Suite 125
Cincinnati, OH 45246
Heather Dyer 254 254 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Sue Wooderson 229 229 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Jonathan Rabson 229 229 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Jorge Almonacid 197 197 0 *
c/o Quantime SA de CV
Passeo de la Reforma
90-4 Pisco, Suite 405
Colonia Juarez Mexico
Roger Phillips 152 152 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Louise Weale 152 152 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
- 15 -
<PAGE>
Maximum Shares of Common
Number Stock To Be
Shares of of Shares Beneficially Owned
Common Stock Available Assuming Sale of All
Beneficially To Be Sold Shares Available For
Name and Address of Owned As of Pursuant Sale Hereunder
Selling Stockholder November 26, 1997 Hereto Number Percent
- ---------------------------------------------------------------------------------------------------------------
John Taggart 152 152 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Andi Peretz 152 152 0 *
540 8th Street, Brooklyn
New York, NY 11215
Gwen Smith 75 75 0 *
c/o Quantime Corp.
11 East 26th Street, 16th Fl
New York, NY 10010
Wes Frost 30 30 0 *
c/o Quantime Corp.
100 Merchant Street
Suite 125
Cincinnati, OH 45246
Sue Jordan 30 30 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Jens Nielsen 8,838 8,838 0 *
Ingas Vag 27 PL. 494
28691 Orkelljunga
Sweden
Henrik Rosendahl 8,838 8,838 0 *
Dyrehavevej 27, I
2930 Klampenborg
Denmark
Ole Stangegaard 1,087 1,087 0 *
Tvaerfej 46
2830 Vitum
Denmark
- 16 -
<PAGE>
Maximum Shares of Common
Number Stock To Be
Shares of of Shares Beneficially Owned
Common Stock Available Assuming Sale of All
Beneficially To Be Sold Shares Available For
Name and Address of Owned As of Pursuant Sale Hereunder
Selling Stockholder November 26, 1997 Hereto Number Percent
- ---------------------------------------------------------------------------------------------------------------
Lars Thinggaard 1,087 1,087 0 *
Drosselvej 53 K
2000 Frederiksberg
Denmark
Peter Tottrup 3,020 3,020 0 *
Langelands Plads5, 4th.
2000 Frederiksberg
Denmark
Edward O'Hara 16,827 16,827 0 *
Nattergalevej 16
2970 Horsholm
Denmark
Steen Hansen 314 314 0 *
Snogegardsvej 120
2860 Soborg
Denmark
Magnus Egholm 97 97 0 *
GI. Jernbanevej 26, 1th.
2500 Valby
Denmark
Mikkel Jorgensen 869 869 0 *
Baunehojvej 46, st.tv.
2800 Lyngby
Denmark
Michael Elbaek Bertelsen 194 194 0 *
Lundtofteparken 36, 2th.
2800 Lyngby
Denmark
Bjame Jensen 543 543 0 *
Lilsviervej 81B, 1tv.
2800 Lyngby
Denmark
Thomas Leistiko 431 431 0 *
Arhusgade 10, 1tv.
2100 Kobenhavn O
Denmark
Dansk Erhvervsinvestering 12,944 12,944 0 *
Bredgade 73
1260 Kobenhavn K
Denmark
- 17 -
<PAGE>
Maximum Shares of Common
Number Stock To Be
Shares of of Shares Beneficially Owned
Common Stock Available Assuming Sale of All
Beneficially To Be Sold Shares Available For
Name and Address of Owned As of Pursuant Sale Hereunder
Selling Stockholder November 26, 1997 Hereto Number Percent
- ---------------------------------------------------------------------------------------------------------------
Bjorn Haugland 27,767 27,767 0 *
Camilla Collettesvei 8
9258 Oslo
Norway
2M Invest 47,541 47,541 0 *
Frederiksgade 9
1265 Kobenhavn K
Denmark
Dorte Siggaard Andersen 1,087 1,087 0 *
Malmmosevej 3
2840 Holte
MSP Finans 2ApS 5,438 5,438 0 *
Parkvaenget 2829
2920 Charlottenlund
Hans Chr. Iversen 3,805 3,805 0 *
Rungstedvej 97
2960 Rungsted
</TABLE>
* The percentage of shares beneficially owned does not exceed 1% of the
class.
The Company has agreed to register offers, sales and other distributions
of the shares of Common Stock of the Selling Stockholders and Donee Stockholders
offered hereby under the Securities Act. In this connection, the Selling
Stockholders and Donee Stockholders are required to pay the underwriting
discounts and commissions and transfer taxes, if any, associated with the sale
of their shares of Common Stock, and the Company will pay substantially all of
the expenses directly associated with the registration of such shares of Common
Stock hereunder.
USE OF PROCEEDS
The Company will not receive any proceeds from the registration or
sale of the shares of Common Stock offered hereby.
DIVIDEND POLICY AND RESTRICTIONS
The Company has never declared any cash dividends or distributions on
its capital stock and does not anticipate paying cash dividends in the
foreseeable future. The Company currently intends to retain its future earnings
to fund ongoing operations and future capital requirements of its business.
PLAN OF DISTRIBUTION
The Common Stock may be offered by the Selling Stockholders or Donee
Stockholders from time to time in transactions on the Nasdaq National Market, in
negotiated transactions, or a combination of such methods of sale, at fixed
prices that may be changed, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. The
Selling Stockholders or Donee Stockholders may effect such transactions by the
sale of the Common Stock to or through broker-dealers, and such broker-dealers
may receive compensation in the form of discounts, concessions or commissions
from the Selling Stockholders, Donee Stockholders and/or the purchasers of the
Common Stock for whom such broker-dealers may act as agent or to whom they may
sell as principal, or both (which compensation to a particular broker-dealer
might be in excess of customary commissions). The Selling Stockholders, Donee
Stockholders and any
- 18 -
<PAGE>
broker-dealer who acts in connection with the sale of Common Stock hereunder may
be deemed to be "underwriters" as that term is defined in the Securities Act,
and any commission received by them and profit on any resale of the Common Stock
as principal might be deemed to be underwriting discounts and commissions under
the Securities Act.
No prediction can be made as to the effect, if any, that future sales,
or the availability of shares of Common Stock for future sales, will have on the
market price prevailing from time to time. See "RISK FACTORS -- Shares Eligible
for Future Sale" elsewhere in this Prospectus.
The Company is filing a registration statement to permit transactions
with respect to all of the shares of SPSS Common Stock acquired by former
shareholders of Quantime and In2itive in connection with the acquisitions of
Quantime and In2itive. These shares are currently "restricted securities," as
defined in Rule 144 under the Securities Act, and may not be resold in the
absence of registration under the Securities Act or pursuant to an exemption
from such registration, including exemptions provided by Rule 144 under the
Securities Act.
LEGAL MATTERS
The validity of the shares of Common Stock was passed upon for the
Company by its general counsel, Ross & Hardies, Chicago, Illinois.
EXPERTS
The Consolidated Financial Statements and Schedule of the Company as
of December 31, 1996 and 1995, and for each of the years in the three-year
period ended December 31, 1996, incorporated by reference in this Prospectus and
elsewhere in the Registration Statement, have been audited by KPMG Peat Marwick
LLP, independent certified public accountants, as indicated in their report with
respect thereto, incorporated by reference herein, and are incorporated by
reference herein upon the authority of said firm as experts in accounting and
auditing.
With respect to SPSS Inc.'s unaudited interim financial information
for the periods ended March 31, 1996 and 1997, June 30, 1996 and 1997, and
September 30, 1996 and 1997, incorporated by reference herein, the independent
certified public accountants have reported that they applied limited procedures
in accordance with professional standards for a review of such information.
However, their separate reports included in the Company's quarterly reports on
Form 10-Q for the quarters ended March 31, 1997, June 30, 1997, and September
30, 1997, state that they did not audit and they do not express an opinion on
such interim financial information. Accordingly, the degree of reliance on their
reports on such information should be restricted in light of the limited nature
of the review procedures applied. The accountants are not subject to the
liability provisions of Section 11 of the Securities Act of 1933 for their
reports on the unaudited interim financial information because such reports are
not a "report" or a "part" of the registration statement prepared or certified
by the accountants within the meaning of Sections 7 and 11 of the Securities Act
of 1933.
- 19 -
<PAGE>
- --------------------------------------------------------------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS
BEEN AUTHORIZED TO GIVE ANY INFORMATION 1,031,951 Shares
OR TO MAKE ANY REPRESENTATIONS OTHER
THAN THOSE CONTAINED IN THIS PROSPECTUS
IN CONNECTION WITH THE OFFER MADE BY
THIS PROSPECTUS AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN SPSS INC.
AUTHORIZED BY THE COMPANY. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL UNDER ANY COMMON STOCK
CIRCUMSTANCES CREATE AN IMPLICATION ($.01 PAR VALUE)
THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH _________________
OFFER OR SOLICITATION IS NOT AUTHORIZED Prospectus
OR IN WHICH THE PERSON MAKING SUCH OFFER _________________
OR SOLICITATION IS NOT AUTHORIZED OR IN
WHICH THE PERSON MAKING SUCH OFFER OR
TABLE OF CONTENTS SOLICITATION IS NOT Dated December 18, 1997
QUALIFIED TO DO SO OR TO ANYONE TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
TABLE OF CONTENTS
Page
Available Information........................................ 2
Incorporation of Certain Documents by Reference.............. 2
The Company.................................................. 4
Risk Factors................................................. 6
Selling Stockholders........................................ 11
Plan of Distribution........................................ 17
Use of Proceeds..............................................16
Dividend Policy and Restrictions............................ 17
Legal Matters............................................... 17
Experts..................................................... 17
- 20 -
