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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2000
Commission File Number: 33-64732
SPSS INC.
(Exact name of registrant as specified in its charter)
Delaware 36-2815480
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
233 S. Wacker Drive, Chicago, Illinois 60606
(Address of principal executive offices and zip code)
Registrant's telephone number including area code: (312) 651-3000
Indicate by check mark whether the registrant (1) has filed all reports
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 filing requirements
for the past 90 days. Yes x No
--- ---
As of August 7, 2000, there were 9,841,596 shares of common stock
outstanding, par value $.01, of the registrant.
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SPSS INC.
Form 10-Q
QUARTER ENDED JUNE 30, 2000
INDEX
PART I - FINANCIAL INFORMATION PAGE
----
Item 1. Financial Statements
Independent Auditors' Review Report 3
Consolidated Balance Sheets
as of December 31, 1999 and
June 30, 2000 (unaudited) 4
Consolidated Statements of Income for
the three and six months ended June 30,
1999 (unaudited) and 2000 (unaudited) 5
Consolidated Statements of Comprehensive Income
for the three and six months ended June 30, 1999
(unaudited) and 2000 (unaudited) 6
Consolidated Statements of Cash Flows for the
six months ended June 30, 1999 (unaudited)
and 2000 (unaudited) 7
Notes to Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation 9
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 14
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 4. Submission of Matters to a vote of
Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 15
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ITEM 1. FINANCIAL STATEMENTS
INDEPENDENT AUDITORS' REVIEW REPORT
The Board of Directors
SPSS Inc.:
We have reviewed the consolidated balance sheet of SPSS Inc. and subsidiaries as
of June 30, 2000 and the related consolidated statements of income and
comprehensive income for the three and six-month periods ended June 30, 1999 and
2000 and the related consolidated statements of cash flows for the six months
ended June 30, 1999 and 2000. These consolidated financial statements are the
responsibility of SPSS Inc. management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the consolidated financial statements referred to above for them to
be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of SPSS Inc. and subsidiaries as of
December 31, 1999, and the related consolidated statements of income,
comprehensive income, stockholders' equity, and cash flows for the year then
ended (not presented herein); and in our report dated March 17, 2000, we
expressed an unqualified opinion on those consolidated financial statements. In
our opinion, the information set forth in the accompanying consolidated balance
sheet as of December 31, 1999, is fairly stated, in all material respects, in
relation to the consolidated balance sheet from which it has been derived.
/s/ KPMG LLP
Chicago, Illinois
August 4, 2000
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SPSS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31 JUNE 30,
1999 2000
------------ -------------
ASSETS (unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 16,770 $ 10,155
Accounts receivable, net of allowances 42,901 44,638
Inventories 2,895 3,680
Deferred income taxes 3,042 3,228
Prepaid expenses and other current assets 2,833 4,520
------------ -------------
Total current assets 68,441 66,221
------------ -------------
EQUIPMENT AND LEASEHOLD IMPROVEMENTS, at cost:
Land and building 1,671 1,566
Furniture, fixtures, and office equipment 7,617 7,952
Computer equipment and software 25,982 31,530
Leasehold improvements 6,480 7,065
------------ -------------
41,750 48,113
Less accumulated depreciation and amortization 25,639 27,623
------------ -------------
Net equipment and leasehold improvements 16,111 20,490
------------ -------------
Capitalized software development costs, net of accumulated amortization 13,078 13,507
Goodwill, net of accumulated amortization 5,339 8,788
Other assets 3,746 4,475
------------ -------------
$ 106,715 $ 113,481
============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $ 9,000 $ 9,000
Accounts payable 5,670 6,587
Accrued royalties 488 519
Accrued rent 1,050 1,193
Other accrued liabilities 8,270 7,814
Income taxes and value added taxes payable 3,664 3,607
Customer advances 529 1,055
Deferred revenues 11,098 10,127
------------ -------------
Total current liabilities 39,769 39,902
------------ -------------
Deferred income taxes 3,809 3,809
Other non-current liabilities 1,595 1,427
STOCKHOLDERS' EQUITY:
Common Stock, $.01 par value; 50,000,000 shares authorized; 9,597,641 and
9,753,209 shares issued and outstanding in 1999 and
2000, respectively 96 97
Additional paid-in capital 48,569 50,278
Accumulated other comprehensive loss (119) (3,209)
Retained earnings 12,996 21,177
------------ -------------
Total stockholders' equity 61,542 68,343
------------ -------------
$ 106,715 $ 113,481
============ =============
</TABLE>
See accompanying notes to consolidated financial statements.
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SPSS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------- -------------------------
1999 2000 1999 2000
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net revenues:
Analytical solutions $ 3,597 $ 7,799 $ 7,277 $ 14,873
Market research 7,199 8,429 14,229 15,864
Statistics 22,850 20,927 45,137 44,221
------------ ----------- ----------- -----------
Total net revenues 33,646 37,155 66,643 74,958
Operating expenses:
Cost of revenues 3,126 2,804 5,809 5,978
Sales and marketing 16,357 18,994 33,261 38,822
Product development 6,215 6,692 11,924 12,943
General and administrative 2,985 2,393 5,400 4,298
------------ ----------- ----------- -----------
Operating expenses 28,683 30,833 56,394 62,041
------------ ----------- ----------- -----------
Operating income 4,963 6,272 10,249 12,917
Other income (expense):
Net interest expense (86) (131) (151) (304)
Other income (expense) (204) 959 (319) 582
------------ ----------- ----------- -----------
Other income (expense) (290) 828 (470) 278
------------ ----------- ----------- -----------
Income before income taxes 4,673 7,100 9,779 13,195
Income tax expense 1,774 2,698 3,540 5,014
------------ ----------- ----------- -----------
Net income $ 2,899 $ 4,402 $ 6,239 $ 8,181
============ =========== =========== ===========
Basic net income per share $ 0.30 $ 0.45 $ 0.69 $ 0.84
============ =========== =========== ===========
Shares used in computing basic
net income per share 9,596,151 9,740,040 9,042,530 9,709,517
============ =========== =========== ===========
Diluted net income per share $ 0.29 $ 0.42 $ 0.65 $ 0.77
============ =========== =========== ===========
Shares used in computing diluted
net income per share 10,144,657 10,548,482 9,578,642 10,563,865
============ =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
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SPSS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- ---------------------------
1999 2000 1999 2000
------------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
Net income $ 2,899 $ 4,402 $ 6,239 $ 8,181
Other comprehensive income (loss):
Foreign currency translation adjustment (727) (3,276) (1,009) (3,090)
------------- ------------ ------------ -----------
Comprehensive income $ 2,172 $ 1,126 $ 5,230 $ 5,091
============= ============ ============ ===========
</TABLE>
See accompanying notes to consolidated financial statements.
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SPSS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
------------------------
1999 2000
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 6,239 $ 8,181
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation and amortization 4,297 5,188
Deferred income taxes 38 (186)
Gain on sale of product line -- (1,397)
Income tax benefit from stock option exercise -- 366
Changes in assets and liabilities:
Accounts receivable 585 (1,737)
Inventories 211 (758)
Accounts payable (1,012) 917
Accrued royalties (125) 31
Accrued expenses (1,119) (43)
Accrued income taxes (1,023) (57)
Deferred revenues (2,921) (971)
Other (1,289) (4,875)
--------- ---------
Net cash provided by operating activities 3,881 4,659
--------- ---------
Cash flows from investing activities:
Capital expenditures, net (3,204) (7,018)
Divesture of product line -- 1,700
Purchase cost-based investment -- (1,000)
Capitalized software development costs (2,368) (2,418)
1999 acquisition earn-out payments -- (3,882)
--------- ---------
Net cash used in investing activities (5,572) (12,618)
--------- ---------
Cash flows from financing activities:
Net repayments on notes payable (852) --
Net proceeds from exercise of stock options 328 1,344
--------- ---------
Net cash provided by (used in) financing activities (524) 1,344
--------- ---------
Net change in cash and cash equivalents (2,215) (6,615)
Cash and cash equivalents at beginning of period 16,297 16,770
--------- ---------
Cash and cash equivalents at end of period $ 14,082 $ 10,155
========= =========
Supplemental disclosures of cash flow information:
Interest paid $ 335 $ 513
Income taxes paid 3,849 3,616
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
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SPSS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements reflect all
adjustments which, in the opinion of management, are necessary for a fair
presentation of the results of the interim periods presented. All such
adjustments are of a normal recurring nature.
These consolidated financial statements should be read in conjunction with SPSS'
audited consolidated financial statements and notes thereto for the year ended
December 31, 1999, included in SPSS' Annual Report on Form 10-K filed with the
Securities and Exchange Commission.
NOTE 2 - RECLASSIFICATIONS
Certain operating expenses of prior periods have been reclassified to conform to
the current presentation.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The following table sets forth the percentages that selected items in the
Consolidated Statements of Income bear to net revenues:
<TABLE>
<CAPTION>
PERCENTAGE OF NET REVENUES PERCENTAGE OF NET REVENUES
-------------------------- --------------------------
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------- --------------------------
1999 2000 1999 2000
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Statement of Income Data:
Net revenues:
Analytical solutions 11% 21% 11% 20%
Market research 21% 23% 21% 21%
Statistics 68% 56% 68% 59%
------------ ----------- ------------ -----------
Net revenues 100% 100% 100% 100%
Operating expenses:
Cost of revenues 9% 8% 9% 8%
Sales and marketing 49% 51% 50% 52%
Product development 18% 18% 18% 17%
General and administrative 9% 6% 8% 6%
------------ ----------- ------------ -----------
Operating expenses 85% 83% 85% 83%
------------ ----------- ------------ -----------
Operating income 15% 17% 15% 17%
------------ ----------- ------------ -----------
Other income (expense):
Net interest expense -- -- -- --
Other income (expense) (1%) 2% (1%) 1%
------------ ----------- ------------ -----------
Other income (expense) (1%) 2% (1%) 1%
------------ ----------- ------------ -----------
Income before income taxes 14% 19% 14% 18%
Income tax expense 5% 7% 5% 7%
------------ ----------- ------------ -----------
Net income 9% 12% 9% 11%
============ ============ ============ ===========
</TABLE>
COMPARISON OF THREE MONTHS ENDED JUNE 30, 1999 TO THREE MONTHS ENDED JUNE 30,
2000.
Net Revenues. Net revenues were $33,646,000 in the three months ended June 30,
1999 and $37,155,000 in the three months ended June 30, 2000, an increase of
10%. These increases were primarily due to growth in analytical solutions
revenues of 117% and market research revenues of 17% over the corresponding
period in 1999. Offsetting this revenue growth was a decrease in statistics
revenue of 8%. The statistics revenue decline was primarily due to shifts in
sales and marketing resources toward developing the higher-growth markets for
analytical solutions, as well as reflecting the decline in the overall growth
rate in the market for general-purpose statistical products. Revenues were
adversely effected by changes in foreign currency exchange rates for the periods
described.
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Cost of Revenues. Cost of revenues consists of costs of goods sold, amortization
of capitalized software development costs, and royalties paid to third parties.
Cost of revenues was $3,126,000 in the three months ended June 30, 1999 and
$2,804,000 in the three months ended June 30, 2000, a decrease of 10%. Such
costs decreased due to lower cost of goods sold, primarily shipping costs, and
lower royalty expense on third party products resulting from a decline in the
growth rate in the market for general-purpose statistical products. These
reductions were partially offset by an increase on amortized software
development costs. As a percentage of net revenues, cost of revenues decreased
from 9% to 8%.
Sales and Marketing. Sales and marketing expenses were $16,357,000 in the three
months ended June 30, 1999 and $18,994,000 in the three months ended June 30,
2000, an increase of 16%. This increase reflects the expansion of the Business
Intelligence product sales management, as well as other staff additions,
particularly new sales and professional services personnel. This increase was
partially offset by changes in foreign currency exchange rates. As a percentage
of net revenues, such expenses increased from 49% to 51%.
Product Development. Product development expenses were $6,215,000 (net of
capitalized software development costs of $607,000) in the three months ended
June 30, 1999 and $6,692,000 (net of capitalized software development costs of
$998,000) in the three months ended June 30, 2000, an increase of 8%. SPSS'
expense for amortization of capitalized software and product translations,
included in cost of revenues, was $681,000 in the three months ended March 31,
1999 and $943,000 in the three months ended March 31, 2000. The increase in
product development expenses was primarily due to staff additions and increases
in staff compensation. As a percentage of net revenues, product development
expenses remained constant at 18%.
General and Administrative. General and administrative expenses were $2,985,000
in the three months ended June 30, 1999 and $2,393,000 in the three months ended
June 30, 2000, a decrease of 20%. The decrease was due to reduced costs by
consolidating United States accounting functions offset by the addition of
amortization expense related to Integral Solutions Limited intangibles. As a
percentage of net revenues, general and administrative expenses decreased from
9% to 6%.
Net Interest Expense. Net interest expense was $86,000 in the three months ended
June 30, 1999 and $131,000 in the three months ended June 30, 2000, primarily
due to debt service on borrowings against the line-of-credit.
Other Income (Expense). Other expense was $204,000 in the three months ended
June 30, 1999, consisting mainly of foreign currency transactions. Other income
was $959,000 in the three months ended June 30, 2000 and consisted of the gain
on the sale of the QI Analyst quality product line to Wonderware Corporation of
$1,398,000 offset partially by $439,000 of foreign currency transactions.
Provision for Income Taxes. The provision for income taxes was $1,774,000 in the
three months ended June 30, 1999 and $2,698,000 in the three months ended June
30, 2000. During 1999 the
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provision for income taxes represented an effective tax rate of approximately
34.3%. In 2000, the effective tax rate has increased to approximately 38%.
COMPARISON OF SIX MONTHS ENDED JUNE 30, 1999 TO SIX MONTHS ENDED JUNE 30, 2000.
Net Revenues. Net revenues were $66,643,000 in the six months ended June 30,
1999 and $74,958,000 in the six months ended June 30, 2000, an increase of 12%.
These increases were primarily due to growth in analytical solutions revenues of
104%, an 11% increase in market research and a decrease in statistics revenue of
2%. The market research revenue lower growth rate was lower than anticipated due
to an extremely strong fourth quarter in 1999, which drained the market research
pipeline in the first six months. The statistics revenue decline was primarily
due to shifts in sales and marketing resources toward developing the
higher-growth markets for analytical solutions, as well as reflecting the lower
overall growth rate in the market for general-purpose statistical products.
Revenues were adversely effected by changes in foreign currency exchange rates
for the periods described.
Cost of Revenues. Cost of revenues consists of costs of goods sold, amortization
of capitalized software development costs, and royalties paid to third parties.
Cost of revenues was $5,809,000 in the six months ended June 30, 1999 and
$5,978,000 in the six months ended June 30, 2000, an increase of 3%. Such costs
increased due to higher amortization of capitalized software offset by lower
cost of goods sold and reduced royalty expense. As a percentage of net revenues,
cost of revenues decreased from 9% to 8%.
Sales and Marketing. Sales and marketing expenses were $33,261,000 in the six
months ended June 30, 1999 and $38,822,000 in the six months ended June 30,
2000, an increase of 17%. This increase reflects the expansion of the Business
Intelligence product sales management, as well as other staff additions,
particularly new sales and professional services personnel. This increase was
partially offset by changes in foreign currency exchange rates. As a percentage
of net revenues, such expenses increased from 50% to 52%.
Product Development. Product development expenses were $11,924,000 (net of
capitalized software development costs of $920,000) in the six months ended June
30, 1999 and $12,943,000 (net of capitalized software development costs of
$1,869,000) in the six months ended June 30, 2000, an increase of 9%. SPSS'
expense for amortization of capitalized software and product translations,
included in cost of revenues, was $1,331,000 in the six months ended June 30,
1999 and $1,887,000 in the six months ended June 30, 2000. The increase in
product development expenses was primarily due to staff additions and increases
in staff compensation. As a percentage of net revenues, product development
expenses decreased from 18% to 17%.
General and Administrative. General and administrative expenses were $5,400,000
in the six months ended June 30, 1999 and $4,298,000 in the six months ended
June 30, 2000, a decrease of 20%. The decrease was due to reduced costs by
consolidating United States based accounting functions offset by the addition of
amortization expense related to Integral Solutions Limited intangibles. As a
percentage of net revenues, general and administrative expenses decreased from
8% to 6%.
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Net Interest Expense. Net interest expense was $151,000 in the six months ended
June 30, 1999 and $304,000 in the six months ended June 30, 2000, primarily due
to debt service on borrowings against the line-of-credit.
Other Income (Expense). Other expense was ($319,000) in the six months ended
June 30, 1999, consisting mainly of foreign currency transactions. Other income
was $582,000 in the six months ended June 30, 2000 and consisted of the gain on
the sale of the QI Analyst quality product line to Wonderware Corporation of
$1,398,000 offset partially by $816,000 of foreign currency transactions.
Provision for Income Taxes. The provision for income taxes was $3,540,000 in the
six months ended June 30, 1999 and $5,014,000 in the six months ended June 30,
2000. During 1999 the provision for income taxes represented an effective tax
rate of approximately 34.3%. In 2000, the effective tax rate has increased to
approximately 38%.
LIQUIDITY AND CAPITAL RESOURCES
The Company's long-term debt as of June 30, 2000 is a mortgage on property in
the United Kingdom, and the balance of the purchase price due to DataStat, S.A.
for the acquisition of the VerbaStat product. As of June 30, 2000, SPSS held
approximately $10,155,000 of cash.
Funds in the first six months of 2000 were provided primarily by operations, as
well as exercise of stock options. Capital expenditures included, among other
things, new computer systems for use in internal product development and sales
and expenditures for the Oracle, corporate-wide reporting system.
In June 2000, SPSS revised its loan agreement with American National Bank and
Trust Company of Chicago. Under the new loan agreement, SPSS has an available
$20,000,000 unsecured line of credit with American National, under which
borrowings bear interest at either the prime interest rate or the Eurodollar
Rate, depending on the circumstances. As of June 30, 2000, SPSS had $9,000,000
outstanding under this line of credit. The Company's agreement with American
National requires SPSS to comply with certain specified financial ratios and
tests, and, among other things, restricts the Company's ability to:
- incur additional indebtedness,
- create liens on assets,
- make investments,
- engage in mergers, acquisitions or consolidations where SPSS is not the
surviving entity,
- sell assets,
- engage in certain transactions with affiliates and
- amend its organizational documents or make changes in capital structure.
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SPSS anticipates that amounts available from cash and cash equivalents on hand,
under its line of credit, and cash flows generated from operations, will be
sufficient to fund the Company's operations and capital requirements for the
foreseeable future. However, no assurance can be given that changing business
circumstances will not require additional capital for reasons that are not
currently anticipated or that the necessary additional capital will then be
available to SPSS on favorable terms or at all.
INTERNATIONAL OPERATIONS
Revenues from international operations were 51% of total net revenues in the
three months ended June 30, 1999 and the three months ended June 30, 2000. The
portion of revenues attributable to international operations were negatively
affected by changes in foreign currency exchange rates. Net corporate revenues
increased 10% in the three month period ended June 30, 2000, when compared to
the three month period ended June 30, 1999. Net of the effects of changes in
foreign currency rates, the increase would have been approximately 13% for the
three months ended June 30, 2000 when compared to the three months ended June
30, 1999.
RECENT ACCOUNTING PRONOUNCEMENTS
Financial Accounting Standards Board Interpretation No. 44 (FIN 44), Accounting
for Certain Transactions Involving Stock Compensation, an interpretation of APB
Opinion No. 25, is effective for financial statements beginning after July 1,
2000. The Company has determined that options were granted to an individual that
is deemed to be a non-employee under FIN 44. This will result in compensation
expense charges beginning in the third quarter of fiscal 2000. These options
will be accounted for using variable plan accounting and the amounts of future
compensation expense will be determined based upon the Company's stock price at
each reporting date.
FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements that involve risks and
uncertainties that could cause the results of SPSS Inc. and its subsidiaries to
differ materially from those expressed or implied by such forward-looking
statements. These risks include the timely development, production, and
acceptance of new products and services, market conditions, competition, the
flow of products into third-party distribution channels, and other risks
detailed from time to time in the Company's Securities and Exchange Commission
filings. The words "anticipate," "believe," "estimate," "expect," "plan,"
"intend," "will," and similar expressions, as they relate to SPSS or its
management, may identify forward-looking statements. Such statements reflect the
current views of SPSS with respect to future events and are subject to certain
risks, uncertainties, and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described herein as anticipated,
believed, estimated, or expected. SPSS does not intend to update these
forward-looking statements.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
SPSS' market risk disclosures pursuant to item 3 are not material and
are therefore not required.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Currently there are no material pending legal proceedings to which
SPSS or any of its subsidiaries is a party or to which any of their
property is subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's Annual Meeting of Stockholders was held on June 14,
2000. The following persons were nominated and elected to serve as
Directors of the Company for a term of three years or until their
successors have been duly elected and qualified:
Nominee For Withheld
------- --- --------
Jack Noonan 8,646,152 56,479
Michael D. Blair 8,644,753 57,878
In addition, Merritt Lutz, Norman Nie and Bernard Goldstein remained
as Directors of the Company after the meeting.
Furthermore, the Company's appointment of KPMG LLP to serve as its
independent auditor for fiscal year 2000 was ratified, at the
Meeting, in accordance with the following votes:
For Against Abstain
--- ------- -------
8,698,920 4,861 7,850
ITEM 5. OTHER INFORMATION
Louise Rehling, former Executive Vice President, Product
Development, resigned from SPSS effective July 1, 2000 to pursue
other business and personal interests.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits (Note: Management contracts and compensatory plans or
arrangements are underlined in the following list.)
Incorporation
Exhibit by Reference
Number Description of Document (if applicable)
------ ----------------------- ---------------
2.1 Agreement and Plan of Merger among SPSS Inc., @2.1
SPSS ACSUB, Inc., Clear Software, Inc. and the
shareholders named therein, dated September 23, 1996.
2.2 Agreement and Plan of Merger among SPSS Inc., @@Annex A
SPSS Acquisition Inc. and Jandel Corporation,
dated October 30, 1996.
2.3 Asset Purchase Agreement by and between SPSS Inc. ##2.3
and DeltaPoint, Inc., dated as of May 1, 1997
2.4 Stock Purchase Agreement among the Registrant, @@@2.1
Edward Ross, Richard Kottler, Norman Grunbaum,
Louis Davidson and certain U.K.-Connected Shareholders
or warrant holders of Quantime Limited named therein,
dated as of September 30, 1997, together with a list
briefly identifying the contents of omitted schedules.
2.5 Stock Purchase Agreement among the Registrant, @@@2.2
Edward Ross, Richard Kottler, Norman Grunbaum,
Louis Davidson and certain Non-U.K. Shareholders or
warrant holders of Quantime Limited named therein, dated
as of September 30, 1997, together with a list briefly
identifying the contents of omitted schedules.
2.6 Stock Purchase Agreement by and among SPSS Inc. and @@@@2.1
certain Shareholders of Quantime Limited listed on the
signature pages thereto, dated November 21, 1997.
2.7 Stock Purchase Agreement by and among Jens Nielsen, @@@@2.2
Henrik Rosendahl, Ole Stangegaard, Lars Thinggaard,
Edward O'Hara, Bjorn Haugland, 2M Invest and the
Shareholders listed on Exhibit A thereto, dated
November 21, 1997.
2.8 Stock Purchase Agreement by and among SPSS Inc. and #### 2.1
the Shareholders of Integral Solutions Limited listed
on the signature pages hereof, dated as of
December 31, 1998.
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2.9 Share Purchase Agreement by and among SPSS Inc., $ 2.9
Surveycraft Pty Ltd. and Jens Meinecke and Microtab
Systems Pty Ltd., dated as of November 1, 1998.
2.10 Stock Acquisition Agreement by and among SPSS Inc. $$ 2.1
Vento Software, Inc. and David Blyer, John Gomez and
John Pappajohn, dated as of November 29, 1999.
2.11 Asset Purchase Agreement by and between SPSS Inc. %% 2.11
and DataStat, S.A., dated as of December 23, 1999.
3.1 Certificate of Incorporation of SPSS * 3.2
3.2 By-Laws of SPSS * 3.4
10.1 Employment Agreement with Jack Noonan + 10.1
10.2 Agreement with Valletta ** 10.2
10.3 Agreement between SPSS and Prentice Hall ** 10.5
10.4 Software Distribution Agreement between ** 10.6
SPSS and IBM
10.5 HOOPS Agreement ** 10.7
10.6 Stockholders Agreement * 10.8
10.7 Agreements with CSDC * 10.9
10.8 Amended 1991 Stock Option Plan * 10.10
10.9 SYSTAT Asset Purchase Agreement ++10.9
10.10 1994 Bonus Compensation +++10.11
10.11 Lease for Chicago, Illinois Office +++10.12
10.12 Amendment to Lease for Chicago, Illinois Office +++10.13
10.13 1995 Equity Incentive Plan x 10.14
10.14 1995 Bonus Compensation xx 10.15
10.15 Lease for Chicago, Illinois Office xx 10.16
10.16 Amended and Restated 1995 Equity Incentive Plan xxx 10.17
16
<PAGE> 17
10.17 1996 Bonus Compensation xxxx 10.18
10.18 Software Distribution Agreement between the xxxx 10.19
Company and Banta Global Turnkey
10.19 Lease for Chicago, Illinois in Sears Tower # 10.20
10.20 1997 Bonus Compensation ### 10.21
10.21 Norman H. Nie Consulting L.L.C. Agreement ### 10.22
10.22 Second Amended and Restated 1995 Equity &A
Incentive Plan
10.23 1998 Bonus Compensation $
10.24 Third Amended and Restated 1995 Equity $$$ 10.1
Incentive Plan
10.25 Loan Agreement dated June 1, 1999 between $$$$ 10.1
SPSS and American National Bank and Trust
Company of Chicago
10.26 First Amendment to Loan Agreement dated $$$$ 10.2
June 1, 1999, between SPSS and American
National Bank and Trust Company of Chicago
10.27 1999 Bonus Compensation % 10.27
10.28 Amendment to Sears Tower Lease, Chicago, Illinois %% 10.28
10.29 Amended and Restated Loan Agreement dated June 1, 2000
Between SPSS and American National Bank and Trust
Company of Chicago
10.30 Asset Purchase Agreement by and between SPSS and Wonderwear
Corporation dated as of May 11, 2000
15.1 Acknowledgement of Independent Certified Public Accountants
Regarding Independent Auditors' Review Report
27.1a Financial Data Schedule
27.1b Financial Data Schedule (Restated)
17
<PAGE> 18
-------------------------------
@ Previously filed with SPSS Inc.'s Report on Form 8-K, dated September
26, 1996, filed on October 11, 1996, as amended on Form 8-K/A-1, filed
November 1, 1996. (File No. 000-22194)
@@ Previously filed with Amendment No. 1 to Form S-4 Registration
Statement of SPSS Inc. filed on November 7, 1996. (File No. 333-15427)
@@@ Previously filed with SPSS Inc.'s Report on Form 8-K, dated September
30, 1997, filed on October 15, 1997. (File No. 000-22194)
@@@@ Previously filed with the Form S-3 Registration Statement of SPSS Inc.
filed on November 26, 1997. (File No. 333-41207)
* Previously filed with Amendment No. 2 to Form S-1 Registration
Statement of SPSS Inc. filed on August 4, 1993. (File No. 33-64732)
** Previously filed with Amendment No. 1 to Form S-1 Registration
Statement of SPSS Inc. filed on July 23, 1993. (File No. 33-64732)
*** Previously filed with Form 10-Q Quarterly Report of SPSS Inc. for the
Quarterly period ended September 30, 1993. (File No. 000-22194)
+ Previously filed with the Form S-1 Registration Statement of SPSS Inc.
filed on June 22, 1993. (File No. 33-64732)
++ Previously filed with the Form S-1 Registration Statement of SPSS Inc.
filed on December 5, 1994. (File No. 33-86858)
+++ Previously cited with the Form 10-K Annual Report of SPSS Inc. for the
year ended December 31, 1994. (File No. 000-22194)
x Previously filed with SPSS Inc.'s 1995 Proxy Statement. (File No.
000-22194)
xx Previously filed with the Form 10-K Annual Report of SPSS Inc. for the
year ended December 31, 1995. (File No. 000-22194)
xxx Previously filed with SPSS Inc.'s 1996 Proxy Statement. (File No.
000-22194)
xxxx Previously filed with the Form 10-K Annual Report of SPSS Inc. for the
year ended December 31, 1996. (File No. 000-22194)
# Previously filed with the Form 10-Q Quarterly Report of SPSS Inc. for
the quarterly period ended March 31, 1997. (File No. 000-22194)
18
<PAGE> 19
## Previously filed with the Form 10-Q Quarterly Report of SPSS Inc. for
the quarterly period ended June 30, 1997. (File No. 000-22194)
### Previously filed with Form 10-K Annual Report of SPSS Inc. for the year
ended December 31, 1997. (File No. 000-22194)
#### Previously filed with SPSS Inc.'s Report on Form 8-K, dated December
31, 1998, filed on January 15, 1999, as amended on Form 8-K/A filed
March 12, 1999. (File No. 000-22194)
& Previously filed with SPSS Inc.'s 1998 Proxy Statement. (File No.
000-22194)
$ Previously filed with Forum 10-K Annual Report of SPSS Inc. for the
year ended December 31, 1998. (File No. 000-22194)
$$ Previously filed with SPSS Inc. Report on Form 8-K, dated November 29,
1999, filed December 10, 1999. (File No. 000-22194)
$$$ Previously filed with Form 10-Q Quarterly Report of SPSS Inc. for the
quarterly period ended June 30, 1999. (File No. 000-22194)
$$$$ Previously filed with Form 10-Q Quarterly Report of SPSS Inc. for the
quarterly period ended September 30, 1999. (File No. 000-22194)
% Previously filed with SPSS Inc. Form 10-K Annual Report for year ended
December 31, 1999. (File No. 000-22194)
%% Previously file with SPSS Inc. Form 10-Q Quarterly Report for the
quarterly period ended March 31, 2000. (File No. 000-22194)
(b) Reports on Form 8-K
SPSS filed one report on Form 8-K during the fiscal quarter ended
June 30, 2000. This Report was filed on June 30, 2000 and reported a
complaint filed against SPSS by Marija J. Norusis.
19
<PAGE> 20
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
SPSS INC.
DATE: AUGUST 14, 2000 BY: /S/ JACK NOONAN
---------------------------------------------
JACK NOONAN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THIS REPORT HAS BEEN SIGNED BY THE UNDERSIGNED, IN HIS CAPACITY AS THE PRINCIPAL
FINANCIAL OFFICER OF THE REGISTRANT.
DATE: AUGUST 14, 2000 BY: /S/ EDWARD HAMBURG
---------------------------------------------
EDWARD HAMBURG
EXECUTIVE VICE-PRESIDENT, CORPORATE
OPERATIONS AND CHIEF FINANCIAL OFFICER
20
<PAGE> 21
EXHIBIT INDEX
Exhibit Page
Number Description of Document Number
------ ----------------------- ------
10.29 Amended and Restated Loan Agreement dated
June 1, 2000 between SPSS and American National
Bank and Trust Company of Chicago
10.30 Asset Purchase Agreement by and between Wonderware
Corporation and SPSS dated as of May 11, 2000
15.1 Acknowledgement of Independent Certified Public
Accountants Regarding Independent Auditors' Review Report
27.1a Financial Data Schedule
27.1b Financial Data Schedule (Restated)
21
