<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE)
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________________ to ____________________
Commission File Number 0-19024
SYMIX SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
OHIO 31-1083175
---- ----------
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
2800 Corporate Exchange Drive
COLUMBUS, OHIO 43231
--------------------
(Address of principal executive offices)
(Zip Code)
(614) 523-7000
--------------
(Registrant's telephone number, including area code)
N/A
---
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES X NO
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The number of common shares, without par value, of the registrant
outstanding as of November 6, 1998 was 6,542,972.
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
INDEX
<TABLE>
<S> <C>
Consolidated Balance Sheets
September 30, 1998 (unaudited)
June 30, 1998 Filed herein
Consolidated Statements of Operations (unaudited)
Three Months Ended September 30, 1998 and 1997 Filed herein
Consolidated Statements of Cash Flows (unaudited)
Three Months Ended September 30, 1998 and 1997 Filed herein
Notes to Consolidated Financial Statements (unaudited) Filed herein
</TABLE>
2
<PAGE>
SYMIX SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
September 30, June 30,
1998 1998
------------ ----------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $3,421 $6,115
Trade accounts receivable, less allowance for
doubtful accounts of $1,044 at September 30,
1998 and $1,063 at June 30, 1998 33,115 32,925
Inventories 478 489
Prepaid expenses 2,045 1,346
Other receivables 1,153 427
Income taxes recoverable 510 -
Deferred income taxes 581 573
----------- ----------
TOTAL CURRENT ASSETS 41,303 41,875
OTHER ASSETS
Purchased and developed software, net of
accumulated amortization of $8,718 at
September 30, 1998 and $8,164 at
June 30, 1998 11,562 11,012
Deferred income taxes 180 180
Intangibles, net 6,096 5,091
Deposits and other assets 1,563 1,725
----------- ----------
19,401 18,008
EQUIPMENT AND IMPROVEMENTS
Furniture and fixtures 3,013 2,880
Computer and other equipment 12,481 11,573
Leasehold improvements 1,359 1,262
----------- ----------
16,853 15,715
Less allowance for depreciation and amortization 9,973 9,216
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6,880 6,499
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TOTAL ASSETS $67,584 $66,382
----------- ----------
----------- ----------
</TABLE>
See notes to consolidated financial statements
3
<PAGE>
SYMIX SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
(In thousands)
<TABLE>
<CAPTION>
September 30, June 30,
1998 1998
------------- ---------
(unaudited)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $10,508 $13,276
Customer deposits 227 288
Deferred revenue 13,763 13,155
Income taxes payable - 1,304
Current portion of long-term obligations 300 277
----------- ----------
TOTAL CURRENT LIABILITIES 24,798 28,300
LONG-TERM OBLIGATIONS 605 305
BANK CREDIT AGREEMENT 4,395 2,000
DEFERRED INCOME TAXES 2,734 2,476
MINORITY INTEREST 2,056 2,000
SHAREHOLDERS' EQUITY
Common stock, authorized 20,000 shares; issued
6,812 shares at September 30, 1998, and
6,778 at June 30, 1998; at stated capital
amounts of $.01 per share 68 68
Convertible preferred stock of subsidiary 1,031 1,031
Capital in excess of stated value 24,364 23,937
Retained earnings 10,354 9,497
Cumulative translation adjustment (1,501) (1,912)
----------- ----------
34,316 32,621
Less: Cost of common shares in treasury,
304 shares at September 30, 1998
and June 30, 1998, at cost (1,320) (1,320)
----------- ----------
TOTAL SHAREHOLDERS' EQUITY 32,996 31,301
----------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $67,584 $66,382
----------- ----------
----------- ----------
</TABLE>
See notes to consolidated financial statements
4
<PAGE>
SYMIX SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months
Ended September 30,
---------------------
1998 1997
------- ------
<S> <C> <C>
License fees $14,480 $9,549
Service, maintenance and support 12,411 8,016
-------- ------
Net revenue 26,891 17,565
License fees 3,864 2,712
Service, maintenance and support 6,332 4,179
-------- ------
Cost of revenue 10,196 6,891
-------- ------
Gross Margin 16,695 10,674
-------- ------
Selling, general and administrative 13,093 7,741
Research and product development 2,196 2,034
-------- ------
Total operating expenses 15,289 9,775
-------- ------
Operating income 1,406 899
Interest and other income (expense), net 11 (50)
-------- ------
Income before income taxes 1,417 849
Provision for income taxes 560 317
-------- ------
Net income $857 $532
-------- ------
-------- ------
Basic EPS:
Net income per share $0.13 $0.09
-------- ------
-------- ------
Diluted EPS:
Net income per share $0.12 $0.08
-------- ------
-------- ------
Weighted average number of common
shares outstanding 6,622 5,982
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-------- ------
Weighted average number of common
shares outstanding assuming dilution 7,260 6,567
-------- ------
-------- ------
</TABLE>
See notes to consolidated financial statements
5
<PAGE>
SYMIX SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
-------------------------
1998 1997
-------- ------
Increase (decrease) in cash
<S> <C> <C>
OPERATING ACTIVITIES
Net income $857 $532
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 1,775 1,349
Provision for losses on accounts
receivable (19) 105
Provision for deferred income taxes 250 294
Changes in operating assets and
liabilities:
Trade accounts receivable (6) (513)
Prepaid expenses and other receivables (1,374) (238)
Inventory 13 (28)
Deposits 175 (51)
Accounts payable and accrued expenses (2,890) (1,659)
Customer deposits (62) (341)
Deferred revenue 609 201
Income taxes payable/refundable (1,586) (5)
-------- ------
NET CASH USED BY
OPERATING ACTIVITIES (2,258) (354)
</TABLE>
See notes to consolidated financial statements
6
<PAGE>
SYMIX SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(In thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
-------------------------
1998 1997
-------- ------
Increase (decrease) in cash
<S> <C> <C>
INVESTING ACTIVITIES
Purchase of equipment and improvements (1,150) (628)
Additions to purchased and developed
software (1,179) (1,284)
Purchase of subsidiaries, net of cash
acquired (638) -
------- ------
NET CASH USED BY
INVESTING ACTIVITIES (2,967) (1,912)
FINANCING ACTIVITIES
Proceeds from issuance of common
stock and exercise of stock options 215 6
Additions to long-term obligations, net of
payments 2,117 1,767
------- ------
NET CASH PROVIDED
BY FINANCING ACTIVITIES 2,332 1,773
Effect of exchange rate changes on cash 199 (1)
------- ------
Net change in cash (2,694) (494)
Cash at beginning of period 6,115 2,332
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CASH AT END OF PERIOD $ 3,421 $1,838
------- ------
------- ------
</TABLE>
See notes to consolidated financial statements
7
<PAGE>
SYMIX SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note A - Accounting Policies and Presentation
The accompanying consolidated financial statements are unaudited;
however, the information contained herein reflects all adjustments which are,
in the opinion of management, necessary for a fair statement of the results
of operations for the interim periods. All adjustments made were of a normal
recurring nature. These interim results of operations are not necessarily
indicative of the results to be expected for a full year.
The notes to the consolidated financial statements contained in the
Symix Systems, Inc. and Subsidiaries' (the "Company") June 30, 1998 Annual
Report to Shareholders should be read in conjunction with these financial
statements. Certain reclassifications have been made to conform prior quarter
amounts to the current quarter presentation.
In the first quarter of fiscal 1999, the Company adopted Statement of
Position ("SOP") 97-2, "Software Revenue Recognition," as amended by SOP
98-4, which provides guidance on applying generally accepted accounting
principles in recognizing revenue on software transactions. The adoption of
the SOPs, in certain circumstances, has resulted and may in the future result
in the deferral of software license revenues that would have been recognized
upon delivery of the related software under the preceding accounting
standard, SOP 91-1.
Note B - Acquisitions
On November 24, 1997, the Company acquired Pritsker Corporation
("Pritsker"), for $737,000 in cash and 485,000 common shares of the Company.
Pursuant to the acquisition agreement, (i) Pritsker was merged with and into
a wholly-owned subsidiary of the Company incorporated in Ohio, (ii) each
share of Pritsker common stock was converted into the right to receive
0.170108 common shares of the Company and (iii) each share of Pritsker
preferred stock was converted into the right to receive $5.23 in cash plus
accrued and unpaid dividends. Each unexercised employee stock option and
outstanding warrant for Pritsker common stock was assumed by Symix and
converted into the right to acquire that number of common shares of the
Company to which the holder would have been entitled if such holder exercised
the option or warrant immediately prior to the merger. Pritsker markets
advanced planning and scheduling and simulation software to mid-market
manufacturers. The transaction was accounted for as a purchase and resulted
in a one-time, non-recurring charge of approximately $6.5 million relating to
the write-off of acquired in-process technology of Pritsker.
The following proforma information (in $000's) displays revenue and net
income assuming the Company and Pritsker had been combined at the beginning
of the period presented. The one time, non-recurring charge of approximately
$6.5 million is excluded from proforma net income.
8
<PAGE>
<TABLE>
<CAPTION>
Three Months
Ended September 30,
---------------------------
1998 1997
--------- ---------
<S> <C> <C>
Revenue $ 26,891 $ 18,452
--------- ---------
Net Income $ 857 $ 413
--------- ---------
</TABLE>
Note C - Earnings per Share
The Company adopted the provisions of Statement of Financial Accounting
Standard ("SFAS") No. 128, "Earnings Per Share" during the fiscal quarter
ended December 31, 1997. In accordance with the provisions of SFAS No. 128,
earnings per share for 1997 have been restated. The following table sets
forth the computation of basic and diluted earnings per share (in $000's
except per share data):
<TABLE>
<CAPTION>
Three Months
Ended September 30,
------------------------
1998 1997
--------- ---------
<S> <C> <C>
NUMERATOR:
Net income for both basic and diluted
earnings per share $857 $532
--------- ---------
--------- ---------
DENOMINATOR:
Weighted-average shares outstanding 6,497 5,857
Contingently issuable shares 125 125
--------- ---------
Denominator for basic earnings
per share 6,622 5,982
Effect of dilutive securities:
Employee stock options 638 585
--------- ---------
Denominator for diluted earnings
per share 7,260 6,567
--------- ---------
--------- ---------
Basic earnings per share $0.13 $0.09
--------- ---------
--------- ---------
Diluted earnings per share $0.12 $0.08
--------- ---------
--------- ---------
</TABLE>
Note D - Comprehensive Income
The Company adopted SFAS No. 130, "Reporting Comprehensive Income" as of
July 1, 1998. SFAS No. 130 requires disclosure of total non-stockholder
changes in equity in interim periods and additional disclosures of the
components of non-stockholder changes in equity on an
9
<PAGE>
annual basis. Total non-stockholder changes in equity include all changes in
equity during a period except those resulting from investments by and
distributions to stockholders. The Company has restated information for the
prior period reported below to conform to this standard.
<TABLE>
<CAPTION>
Three Months
Ended September 30,
--------------------------
1998 1997
-------- --------
<S> <C> <C>
Net income 857 532
Foreign currency translation adjustment 411 (329)
------- -------
Total comprehensive income $ 1,268 $ 203
------- -------
------- -------
</TABLE>
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
Symix is a global provider of open, client/server manufacturing software
for mid-range discrete manufacturers. Symix designs, develops, markets and
supports a fully integrated manufacturing, planning and financial software
system that addresses the ERP requirements of manufacturers.
REVENUE
The Company's net revenue is derived primarily from (1) licensing Symix
software and providing custom programming services; (2) providing
installation, implementation, training, consulting and systems integration
services; and (3) providing maintenance and support on a subscription basis.
Revenue for fiscal 1998 is accounted for in accordance with AICPA SOP 91-1 on
Software Revenue Recognition. Revenue for fiscal 1999 is accounted for in
accordance with SOP 97-2, as amended by SOP 98-4.
Net revenue was $26.9 million for the three months ended September 30,
1998, an increase of 53% from the same quarter of the previous year. Both
license fee and service, maintenance and support revenues contributed to the
net revenue increase, with 52% and 55% increases respectively.
All three major geographic channels, North America, Europe and Asia
Pacific, contributed to the license fee component of revenue growth. A
combination of factors attributed to the increase in license fee revenue. In
particular, acquisitions, the increased number of sales representatives, and
overall market acceptance of the Company's product line resulted in increased
software sales. International license fee revenue was in line with
expectations and consistent with last year's results, representing
approximately 24% of net revenue.
Service, maintenance and support revenue is derived from installation,
implementation, training, consulting, systems integration and software
product maintenance and support services. Service, maintenance and support
revenue of $12.4 million increased 55% from the quarter-to-quarter comparison
as a result of the increase in software sales that occurred during the past
couple of quarters and the Company's ability to meet the increased demand for
services that resulted from such software sales.
COST OF REVENUE
Total cost of revenue as a percentage of net revenue was 38% for the
quarter ended September 30, 1998, compared to 39% for the quarter ended
September 30, 1997. Both license fee and service, maintenance and support
margins improved slightly.
Cost of license fees includes royalties, amortization of capitalized
software development costs and software delivery expenses. Cost of license
fees decreased to 27% of license fee revenue for the quarter ended September
30, 1998 compared to 28% for the same period last
11
<PAGE>
year. The improved license fee gross margin in the current quarter is
attributable to the increase in the license fee revenue relative to the rate
of amortization on capitalized software.
Cost of service, maintenance and support includes the personnel and
related overhead costs for implementation, training and customer support
services, together with fees paid to third parties for subcontracted
services. Cost of service, maintenance and support decreased to 51% of
service, maintenance and support revenue from 52% for the same time last
year. The service, maintenance and support margin increased as the number of
employees increased compared to the number of subcontracted consultants. The
Company has been successful in hiring additional employees and reducing the
amount of subcontracted work which is more expensive. Additionally, the
increase in service renewals due to the customer base expansion continues to
positively impact this margin.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses consist of personnel and
related overhead costs, including commissions for the sales, marketing,
general and administrative activities of the Company, together with
advertising and promotional costs. Selling, general and administrative
expense increased 69% for the quarter ended September 30, 1998, and as a
percentage of revenue increased from 44% at September 30, 1997 to 49% at
September 30, 1998. The increase in selling, general and administrative
expense is related to the increases in staffing, the spending in
infrastructure to support growth and emerging technologies, and expanding
foreign operations.
RESEARCH AND DEVELOPMENT
Research and development expenses include personnel and related overhead
costs for product development, enhancement, upgrades, quality assurance and
testing. Research and product development expenditures, including amounts
capitalized for the three months ended September 30, 1998, were $3.4 million
compared to $3.3 million for the same period last year. Capitalization of
software development costs was $1.1 million for the quarter ended September
30, 1998, compared to $1.3 million for the comparable period last year. As a
percentage of revenue, net of software capitalized, research and development
expense decreased from 12% a year ago, to 8% at September 30, 1998. In terms
of absolute dollars, research and development expense increased by $162,000
or 8%. The increase in research and development expenditures is the result of
investments in the expanding product offerings as well as a new release of
the Company's core product - SyteLine version 4.0. Additionally, the Company
expects to launch a new product in early calendar year 1999.
PROVISION FOR INCOME TAXES
The effective tax rates for the quarters ended September 30, 1998, and
1997 were 40% and 37% respectively. The increased effective tax rate is
primarily due to (i) the amount of foreign taxable earnings in countries with
higher effective rates and (ii) the non-deductibility of the amortization of
goodwill.
12
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's operating activities used cash of $2.3 million during the
three month period ended September 30, 1998, compared to $0.4 million used in
the same period in 1997. In both periods, cash provided by operating
activities was due principally to earnings and increases in deferred revenues
and non-cash charges. Cash provided by operating activities was more than
offset in the quarter ended September 30, 1998 by the decrease in trade and
tax payables related to year end. The accounts receivable days sales
outstanding was 105 days at September 30, 1997 compared to 104 days at
September 30, 1998. Typically days sales outstanding for the first quarter
of the fiscal year increase as a result of the carryover from the strong
fourth quarter, as well as a general slowdown in the summer months causing
most of the business to close in the first quarter towards the end of the
third month. For both periods presented, cash provided by financing
activities was used to fund software development costs and to purchase
computer equipment.
As of September 30, 1998, the Company had $16.5 million in working
capital, including $3.4 million in cash and cash equivalents. In addition to
its present working capital, the Company has a $15.0 million unsecured
revolving bank line of credit that expires in fiscal 2001. The Company has
accessed the line of credit for $4.4 million as of September 30, 1998. It is
expected that the Company's continued expansion of its operations and
products will result in additional requirements for cash in the future which
will be met through operations and the line of credit.
POSSIBLE ADVERSE IMPACT OF RECENT ACCOUNTING PRONOUNCEMENT
In October 1997 the Accounting Standards Executive committee issued SOP
97-2 "Software Revenue Recognition". SOP 97-2 is effective for transactions
entered into in fiscal years beginning after December 15, 1997. Accordingly
the Company adopted SOP 97-2 beginning this year. The Company believes its
current revenue recognition policies and practices are materially consistent
with the SOP; however, implementation guidelines for this standard have not
yet been issued and a wide range of potential interpretations is being
discussed with the accounting profession. Once available, such
implementation guidance could lead to unanticipated changes in the Company's
current revenue accounting practices, and such changes could materially
adversely affect the Company's future revenue and net income.
In addition, such implementation guidance may necessitate substantial
changes in the Company's business practices in order for the Company to
continue to recognize a substantial portion of its license fee revenue upon
delivery of its software products. Such changes may reduce demand, extend
sales cycles, increase administrative costs and otherwise adversely affect
operations. In addition, the Company could become competitively
disadvantaged relative to foreign-based competitors not subject to U.S.
generally accepted accounting principles.
YEAR 2000 COMPLIANCE
The Company faces "Year 2000 compliance" issues similar to those faced
by other companies in the information technology industry. Year 2000
compliance issues typically arise
13
<PAGE>
with respect to computer software systems and programs that use only two
digits, rather than four digits, to represent a particular year.
Consequently, these systems and programs may not process dates beyond the
year 1999 and may result in miscalculations or system failures. Year 2000
compliance problems also may arise in embedded systems, such as environmental
system controls, elevators and other products that use microprocessors or
computer chips.
The Company's current product and service offerings, including those
products developed and supported by third party software vendors, have been
designed to be Year 2000 compliant. New products also are being designed by
the Company to be Year 2000 compliant. The Company's existing contracts with
active customers (e.g., customers with effective maintenance and support
agreements with the Company) cover recent software products that are Year
2000 compliant or for which a Year 2000 ready upgrade is available, or do not
expressly obligate the Company to furnish an updated release that is Year
2000 compliant. The Company has communicated with its customers regarding
Year 2000 compliance, notifying them of the availability of upgraded or new
releases of the Company's products which are Year 2000 compliant for certain
older software products released by the Company which may still be in use by
them. In certain cases, the Company has warranted that the Company's current
software product offerings are Year 2000 ready when specifically requested by
the customer. Although the software products currently offered by the
Company have been tested for Year 2000 readiness, any failure of the
Company's software products to perform, including the failure to process
dates beyond the year 2000, could have a material adverse effect on the
Company's business, financial condition and results of operations.
The Company is in the process of assessing the Year 2000 readiness of
selected third parties, including key suppliers, subcontractors, business
partners and customers. To the extent that the Company uses third party
products or technology in its computer software products, the Company has
obtained confirmation of Year 2000 compliance from such third party
providers. A failure of one or more of such suppliers, subcontractors,
business partners or customers to sufficiently address their Year 2000
compliance issues could adversely affect the Company's business, financial
condition and results of operations.
The Company also is in the process of reviewing its internal computer
information system and non-computer systems, such as telecommunications
equipment, building elevators, etc., which contain embedded computer
technology, to determine whether such systems are Year 2000 compliant. Most
of the embedded systems on which the Company relies in its daily operations
are owned and managed by the lessors of the facilities in which the Company's
operations are located, or by agents of such lessors. Although the Company's
review of its internal computer information system and non-computer systems
is not expected to be completed until March, 1999, the Company presently
believes that such systems are Year 2000 compliant. The Company is less
certain of the Year 2000 readiness of third parties who provide external
services, such as public utilities, which could adversely impact the
Company's operations. For example, the failure or interruption of electrical
services would disrupt the Company's ability to communicate with its
customers, suppliers, business partners and others. The Company does not
anticipate any material costs associated with Year 2000 compliance relating
to its internal computer information system or non-computer systems.
14
<PAGE>
All costs related to Year 2000 issues are being expensed by the Company.
The Company does not expect that the total costs of evaluation and compliance
with the Company's Year 2000 issues will be material.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
IN ADDITION TO HISTORICAL INFORMATION, THIS QUARTERLY REPORT ON FORM
10-Q CONTAINS "FORWARD-LOOKING STATEMENTS", INCLUDING INFORMATION REGARDING
FUTURE ECONOMIC PERFORMANCE AND PLANS AND OBJECTIVES OF MANAGEMENT, WHICH ARE
SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THOSE REFLECTED IN THE FORWARD-LOOKING STATEMENTS. IN
SOME CASES, INFORMATION REGARDING CERTAIN IMPORTANT FACTORS THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM A FORWARD-LOOKING STATEMENT APPEAR
TOGETHER WITH SUCH STATEMENT. OTHER UNCERTAINTIES AND RISKS INCLUDE, BUT ARE
NOT LIMITED TO, DEMAND FOR AND MARKET ACCEPTANCE OF THE COMPANY'S PRODUCTS;
THE IMPACT OF COMPETITIVE PRODUCTS; THE COMPANY'S ABILITY TO MAINTAIN
EFFICIENT MARKETING AND DISTRIBUTION OPERATIONS DOMESTICALLY AND
INTERNATIONALLY; FUTURE WORLDWIDE ECONOMIC, COMPETITIVE AND MARKET
CONDITIONS; THE COMPANY'S ABILITY TO ATTRACT AND RETAIN HIGHLY SKILLED
TECHNICAL, MANAGERIAL, SALES, MARKETING, SERVICE AND SUPPORT STAFF AND TO
RETAIN KEY TECHNICAL AND MANAGEMENT PERSONNEL; TIMING OF PRODUCT DEVELOPMENT
AND GENERAL RELEASE; THE COMPANY'S ABILITY TO SUCCESSFULLY RESOLVE ANY YEAR
2000 ISSUES; PRODUCT PRICING AND OTHER FACTORS DETAILED IN THIS QUARTERLY
REPORT ON FORM 10-Q AND IN OTHER FILINGS MADE BY THE COMPANY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable.
15
<PAGE>
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is subject to legal proceedings and claims which arise in
the normal course of business. While the outcome of these matters cannot be
predicted with certainty, management does not believe the outcome of any of
these legal matters will have a material adverse effect on the Company's
business, financial condition or results of operations.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 5. OTHER INFORMATION.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a) See Index to Exhibits filed with this Quarterly Report on Form
10-Q following the Signature Page.
b) Reports on Form 8-K: None.
16
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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.
SYMIX SYSTEMS, INC.
Date: November 13, 1998 /s/ Lawrence W. Deleon
----------------------------------
Lawrence W. DeLeon,
Duly Authorized Officer and
Principal Financial Officer
17
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ----------- ----
<S> <C> <C>
3(a)(1) Amended Articles of Incorporated herein by
Incorporation of Symix Systems, reference to Exhibit 3(a)(1)
Inc. (as filed with the Ohio to the Annual Report on Form
Secretary of State on 10-K for the fiscal year
February 8, 1991) ended June 30, 1997
3(a)(2) Certificate of Amendment to the Incorporated herein by
Amended Articles of reference to Exhibit 3(a)(2)
Incorporation of Symix Systems, to the Annual Report on Form
Inc. (as filed with the Ohio 10-K for the fiscal year
Secretary of State on July 16, ended June 30, 1997
1996)
3(a)(3) Amended Articles of Incorporated herein by
Incorporation of Symix Systems, reference to Exhibit 3(a)(3)
Inc. (reflecting amendments to the Annual Report on Form
through July 16, 1996, for 10-K for the fiscal year
purposes of SEC reporting ended June 30, 1997
compliance only)
3(b) Amended Regulations of Symix Incorporated herein by
Systems, Inc. reference to Exhibit 3(b) to
the Registration Statement on
Form S-1 of Registrant filed
on February 12, 1991
(Registration No. 33-38878)
4(a)(1) Amended Articles of Incorporated herein by
Incorporation of Symix Systems, reference to Exhibit 3(a)(1)
Inc. (as filed with the Ohio to the Annual Report on Form
Secretary of State on February 10-K for the fiscal year
8, 1991) ended June 30, 1997
4(a)(2) Certificate of Amendment to the Incorporated herein by
Amended Articles of reference to Exhibit 3(a)(2)
Incorporation of Symix Systems, to the Annual Report on Form
Inc. (as filed with the Ohio 10-K for the fiscal year
Secretary of State on July 16, ended June 30, 1997
1996)
4(a)(3) Amended Articles of Incorporated herein by
Incorporation of Symix Systems, reference to Exhibit 3(a)(3)
Inc. (reflecting amendments to the Annual Report on Form
through July 16, 1996, for 10-K for the fiscal year
purposes of SEC reporting ended June 30, 1997
compliance only)
18
<PAGE>
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ----------- ----
4(b) Amended Regulations of Symix Incorporated herein by
Systems, Inc. reference to Exhibit 3(b) to
the Registration Statement on
Form S-1 of Registrant filed
February 12, 1991
(Registration No. 33-38878)
27 Financial Data Schedule Filed herein
</TABLE>
19
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS IN THE
QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998 FOR SYMIX
SYSTEMS, INC. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 3,421
<SECURITIES> 0
<RECEIVABLES> 34,159
<ALLOWANCES> 1,044
<INVENTORY> 478
<CURRENT-ASSETS> 41,303
<PP&E> 16,853
<DEPRECIATION> 9,973
<TOTAL-ASSETS> 67,584
<CURRENT-LIABILITIES> 24,798
<BONDS> 0
0
1,031
<COMMON> 68
<OTHER-SE> 31,897
<TOTAL-LIABILITY-AND-EQUITY> 67,584
<SALES> 14,480
<TOTAL-REVENUES> 26,891
<CGS> 3,864
<TOTAL-COSTS> 10,196
<OTHER-EXPENSES> 15,289
<LOSS-PROVISION> (19)
<INTEREST-EXPENSE> 95
<INCOME-PRETAX> 1,417
<INCOME-TAX> 560
<INCOME-CONTINUING> 857
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 857
<EPS-PRIMARY> .13
<EPS-DILUTED> .12
</TABLE>
