<PAGE> 1
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, 1999
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
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Symix Systems, Inc.
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(Exact name of registrant as specified in its charter)
Ohio 31-1083175
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(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
2800 Corporate Exchange Drive
Columbus, Ohio 43231
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(Address of principal executive offices)
(Zip Code)
(614) 523-7000
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(Registrant's telephone number, including area code)
N/A
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(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 4, 1999 was 7,356,857.
<PAGE> 2
<TABLE>
SYMIX SYSTEMS, INC. AND SUBSIDIARIES
<CAPTION>
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets
September 30, 1999 (unaudited) June 30, 1999 3
Consolidated Statements of Operations (unaudited)
Three Months Ended September 30, 1999 and 1998 5
Consolidated Statements of Cash Flows (unaudited)
Three Months Ended September 30, 1999 and 1998 6
Notes to Consolidated Financial Statements (unaudited) 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosures About Market Risk 15
PART II. OTHER INFORMATION
Items 1-6 16
SIGNATURES 17
EXHIBIT INDEX 18
Exhibit 27--Financial Data Schedule 20
</TABLE>
2
<PAGE> 3
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
<TABLE>
SYMIX SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
<CAPTION>
September 30, June 30,
1999 1999
------------- --------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 3,977 $ 5,236
Trade accounts receivable, less allowance for
doubtful accounts of $1,490 at September
30, 1999 and $1,500 at June 30, 1999 44,050 46,251
Inventories 817 767
Prepaid expenses 2,569 2,518
Other receivables 1,292 1,347
Deferred income taxes 812 811
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TOTAL CURRENT ASSETS 53,517 56,930
OTHER ASSETS
Purchased and developed software, net of
accumulated amortization of $11,624 at
September 30, 1999 and $10,833 at June
30, 1999 16,338 16,250
Intangibles, net 6,909 7,190
Deposits and other assets 2,036 2,032
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25,283 25,472
EQUIPMENT AND IMPROVEMENTS
Furniture and fixtures 3,188 3,101
Computer and other equipment 16,790 15,767
Leasehold improvements 1,471 1,472
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21,449 20,340
Less allowance for depreciation and amortization 13,124 12,143
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8,325 8,197
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TOTAL ASSETS $87,125 $90,599
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</TABLE>
See notes to consolidated financial statements
3
<PAGE> 4
<TABLE>
SYMIX SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
<CAPTION>
September 30, June 30,
1999 1999
------------- --------
(unaudited)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $11,424 $16,052
Customer deposits 110 148
Deferred revenue 17,405 17,209
Deferred tax liability 54 --
Income taxes payable 143 470
Current portion of long term obligations 443 1,123
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TOTAL CURRENT LIABILITIES 29,579 35,002
LONG-TERM OBLIGATIONS 73 392
BANK CREDIT AGREEMENT 6,481 5,367
DEFERRED INCOME TAXES 5,267 5,417
MINORITY INTEREST 2,173 2,020
SHAREHOLDERS' EQUITY
Common stock, authorized 20,000 shares,
issued 7,661 shares at September 30, 1999,
and 7,655 at June 30, 1999; at stated capital
amounts of $.01 per share 77 76
Capital in excess of stated value 32,416 32,363
Retained earnings 14,392 13,495
Accumulated other comprehensive loss (2,013) (2,213)
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44,872 43,721
Less: Cost of common shares in treasury,
304 shares at September 30, 1999
and June 30, 1999, at cost (1,320) (1,320)
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TOTAL SHAREHOLDERS' EQUITY 43,552 42,401
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TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $87,125 $90,599
======= =======
</TABLE>
See notes to consolidated financial statements
4
<PAGE> 5
<TABLE>
SYMIX SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
<CAPTION>
Three Months
Ended September 30,
-----------------------
1999 1998
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<S> <C> <C>
License fees $13,392 $14,480
Service, maintenance and support 18,679 12,411
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Net revenue 32,071 26,891
License fees 4,238 3,864
Service, maintenance and support 10,130 6,332
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Cost of revenue 14,368 10,196
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Gross Margin 17,703 16,695
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Selling, general and administrative 11,590 12,607
Research and product development 3,611 2,196
Amortization of intangibles from acquisitions 765 486
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Total operating expenses 15,966 15,289
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Operating income 1,737 1,406
Interest and other income (expense), net (270) 11
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Income before income taxes 1,467 1,417
Provision for income taxes 572 560
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Net income $ 895 $ 857
======= =======
Basic EPS:
Net income per share $ 0.12 $ 0.13
======= =======
Diluted EPS:
Net income per share $ 0.12 $ 0.12
======= =======
Weighted average number of common
shares outstanding 7,354 6,622
======= =======
Weighted average number of common
shares outstanding assuming dilution 7,720 7,260
======= =======
</TABLE>
See notes to consolidated financial statements
5
<PAGE> 6
<TABLE>
SYMIX SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<CAPTION>
Three Months Ended
September 30,
1999 1998
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Increase (decrease) in cash
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 895 $ 857
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 2,551 1,775
Provision for losses on accounts receivable (10) (19)
Provision for deferred income taxes (49) 250
Changes in operating assets and liabilities:
Trade accounts receivable 2,374 (6)
Prepaid expenses and other receivables 42 (1,374)
Inventory (50) 13
Deposits 19 175
Accounts payable and accrued expenses (4,778) (2,890)
Customer deposits (42) (62)
Deferred revenue 199 609
Income taxes payable/refundable (336) (1,586)
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NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES 815 (2,258)
</TABLE>
See notes to consolidated financial statements
6
<PAGE> 7
<TABLE>
SYMIX SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(In thousands)
<CAPTION>
Three Months Ended
September 30,
1999 1998
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Increase (decrease) in cash
<S> <C> <C>
INVESTING ACTIVITIES
Purchase of equipment and improvements (1,166) (1,150)
Additions to purchased and developed software (1,135) (1,179)
Purchase of subsidiaries, net of cash acquired -- (638)
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NET CASH USED BY
INVESTING ACTIVITIES (2,301) (2,967)
FINANCING ACTIVITIES
Proceeds from issuance of common
stock and exercise of stock options 36 215
Additions to long-term obligations, net of
payments 267 2,117
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NET CASH PROVIDED
BY FINANCING ACTIVITIES 303 2,332
Effect of exchange rate changes on cash (76) 199
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Net change in cash (1,259) (2,694)
Cash at beginning of period 5,236 6,115
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CASH AT END OF PERIOD $ 3,977 $ 3,421
======= =======
</TABLE>
See notes to consolidated financial statements
7
<PAGE> 8
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, 1999 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.
In December 1998, SOP 98-9 was issued which modified SOP 97-2 with
respect to certain transactions. The Company adopted SOP 98-9 in the first
quarter of fiscal 2000.
Note B - Acquisitions
On June 10, 1999 the Company acquired Distribution Architects
International, Inc. ("DAI") for 619,000 common shares of the Company and
$813,000 in cash. Pursuant to the acquisition agreement, DAI was merged with and
into a wholly-owned subsidiary of the Company incorporated in Ohio, and each
share of DAI common stock was converted into the right to receive .1313 common
shares of the Company. Each DAI option outstanding immediately prior to the
merger was canceled and terminated. The holder of each option was entitled to
receive that number of Symix shares equal to $2.17 (the per share value of DAI
stock as agreed to by DAI and Symix) less $1.242 (the stock option exercise
price), multiplied by the number of shares of DAI covered by the option, and
divided by $18.50. DAI is a provider of supply chain management applications for
distribution organizations. The transaction was accounted for as a purchase and
resulted in a one-time, non-recurring charge of $835,000 relating to the write
off of acquired in-process technology of DAI.
8
<PAGE> 9
The following proforma information shows revenue, net income, and
earnings per share assuming the Company and DAI had been combined at the
beginning of the period indicated. The one time, non-recurring charge of
approximately $835,000 is excluded from proforma net income.
<TABLE>
<CAPTION>
Three Months
Ended September 30,
1999 1998
---------------------
(In thousands, except
per share data)
<S> <C> <C>
Revenue $32,071 $30,880
Net Income $ 895 $ 1,103
Earnings per Share $ 0.12 $ 0.14
</TABLE>
Note C - Business Segment and Geographic Information
The Company has adopted the provisions of Statement of Financial
Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and
Related Information" ("SFAS 131"). SFAS 131 establishes standards for the way
that companies report information about operating segments, geographic areas,
and major customers.
The Company designs, develops, markets and supports a fully integrated
manufacturing, planning and financial software system. The software was
developed for mid-market, discrete manufacturers. The Company operates
exclusively in this market and therefore only reports on one primary segment.
The amount of net revenue, operating income (loss), and identifiable
assets attributable to each of the Company's geographic areas for the quarter
ended September 30, 1999 and 1998, respectively, were as follows:
<TABLE>
<CAPTION>
NORTH AMERICA ASIA/PACIFIC EUROPE
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(In thousands)
<S> <C> <C> <C> <C> <C> <C>
QUARTER ENDED SEPTEMBER 30, 1999
Net Revenue $25,538 80% $3,328 10% $ 3,205 10%
Operating income (loss) $ 1,939 111% $ 306 18% $ (508) (29%)
Identifiable assets $65,880 76% $8,783 10% $12,462 14%
QUARTER ENDED SEPTEMBER 30, 1998
Net Revenue $21,675 81% $1,622 6% $ 3,594 13%
Operating income (loss) $ 1,914 136% $ (724) (51%) $ 216 15%
Identifiable assets $47,606 70% $8,177 12% $11,801 18%
</TABLE>
9
<PAGE> 10
Note D - Earnings per Share
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,
------------------
1999 1998
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<S> <C> <C>
NUMERATOR:
Net income for both basic and diluted earnings
per share $ 895 $ 857
====== ======
DENOMINATOR:
Weighted-average shares outstanding 7,354 6,497
Contingently issuable shares -- 125
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Denominator for basic earnings per share 7,354 6,622
Effect of dilutive securities:
Employee stock options 366 638
------ ------
Denominator for diluted earnings per share 7,720 7,260
====== ======
Basic earnings per share $ 0.12 $ 0.13
====== ======
Diluted earnings per share $ 0.12 $ 0.12
====== ======
</TABLE>
Note E - 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 annual basis. Total non-stockholder
changes in equity include all changes in equity during the 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.
10
<PAGE> 11
<TABLE>
Three Months
Ended September 30,
-------------------
(In thousands)
1999 1998
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<S> <C> <C>
Net income $ 895 $ 857
Foreign currency translation adjustment 200 412
====== ======
Total comprehensive income $1,095 $1,269
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
Symix Systems, Inc. ("Symix" or the "Company") designs, develops,
markets and supports integrated manufacturing, supply chain management,
financial and e-commerce software solutions that address the enterprise
requirements of mid-size manufacturing and distribution companies and business
units of larger companies.
REVENUE
Symix'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 all
periods presented is accounted for in accordance with AICPA Statement of
Position 97-2 on Software Revenue Recognition.
Net revenue was $32.1 million for the three months ended September 30,
1999, an increase of 19% from the same quarter in the previous year. The overall
increase is attributable to the growth of the service, maintenance and support
revenue for the quarter of $18.7 million, an increase of 51% from the same
period last year; offset by an 8% decline in license fee revenue for the
quarter.
Symix continues to be impacted by the industry-wide trend of delays in
new business system purchases due to the Year 2000 market dynamics. As a result
of this trend, license fee revenue declined 8% from $14.5 million at September
30, 1998 to $13.4 million at September 30, 1999.
Service, maintenance and support revenue increased 51% from $12.4
million at September 30, 1998 to $18.7 million at September 30, 1999. The
significant increase is the result of expansion of the services infrastructure
to meet the increase in new software license customers which occurred during
prior quarters, as well as the expanding product line. Additionally, the
acquisition of Distribution Architects International, Inc. ("DAI"), which
occurred late in the fourth quarter of last year, contributed to the increase in
service, maintenance and support revenue for the current quarter.
11
<PAGE> 12
COST OF REVENUE
Total cost of revenue as a percentage of net revenue was 45% for the
quarter ended September 30, 1999, compared to 38% for the quarter ended
September 30, 1998. The increase is due to the mix of license fee versus
service, maintenance and support revenue. Higher costs are associated with
producing service, maintenance and support revenue. During the quarter ended
September 30, 1999, service, maintenance and support revenue accounted for 58%
of the revenue, compared to 46% for the quarter ended September 30, 1998.
Cost of license fees includes royalties, amortization of capitalized
software development costs and software delivery expenses. Cost of license fees
increased to 32% of license fee revenue for the quarter ended September 30, 1999
from 27% for the same period last year. The percentage increase is attributable
to the increase in the rate of amortization on capitalized software expenses
relative to license fee revenue. Symix began amortizing capitalized software
costs related to the new product initiative, SyteCentre, during the end of the
1999 fiscal year.
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 increased to 54% of service,
maintenance and support revenue from 51% for the same period last year. The
increase in costs is due to the increase in use of subcontractors to supplement
the work performed by Symix employees during the quarter ended September 30,
1999 compared to the same quarter last year. In general, the use of
subcontractors results in lower margins than the use of employees but provides
to Symix increased flexibility in meeting customer demands.
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 Symix, together with advertising and
promotional costs. Selling, general and administrative expense decreased 8% for
the quarter ended September 30, 1999 and, as a percentage of revenue, decreased
from 47% at September 30, 1998 to 36% at September 30, 1999. The decrease in
selling, general and administrative expenses is related to the increase in
percentage of service, maintenance and support revenue versus license fees
revenue in the net revenue mix as well as a reduction of expenses in the sales
distribution channels in response to difficult market conditions.
RESEARCH AND DEVELOPMENT
Research and product 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, 1999, were $4.7 million
compared to $3.3 million for the same period last year. Capitalization of
software development costs was $1.1 million for each quarter ended September 30,
1999 and 1998. As a percentage of revenue, net of software capitalized, research
and product
12
<PAGE> 13
development expense increased from 8% for the quarter ended September 30, 1998,
to 11% for the quarter ended September 30, 1999. In terms of actual dollars,
research and product development expense increased 64%. The increase in research
and development expenditures is the result of investments in the expanding
product offerings, including the integration of DAI's product line into the
Symix product suite.
PROVISION FOR INCOME TAXES
The effective tax rates for the quarters ended September 30, 1999 and
1998 were 39% and 40%, respectively. Historically the increase in the effective
tax rate has been due to the amount of foreign taxable earnings in countries
with higher effective rates and the non-deductibility of the amortization of
intangibles, thereby increasing Symix's overall tax rate. Symix recently has
implemented a tax restructuring plan to lower state income tax rates which is
expected to slightly lower the overall effective tax rate.
LIQUIDITY AND CAPITAL RESOURCES
Symix's operating activities provided cash of $815,000 during the three
month period ended September 30, 1999 compared to the use of $2.3 million in
cash during the same period in 1998. In both periods, cash provided by operating
activities was due principally to earnings and increases in deferred revenues
and non-cash charges, offset by the decrease in trade and tax payables related
to year end. During the quarter ended September 30, 1999, cash also was provided
by a decrease in trade accounts receivable. The accounts receivable days sales
outstanding (DSO) was 104 days at September 30, 1998 compared to 110 days at
September 30, 1999. Typically the DSO's 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 second 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, 1999, the Company had $23.9 million in working
capital, including $4.0 million in cash and cash equivalents. The Company had
accessed its $15.0 million unsecured revolving line of credit for $6.5 million
as of September 30, 1999. It is expected that the continued expansion of the
Company's operations and product line will result in additional requirements for
cash in the future, which will be met through operations and the existing line
of credit.
YEAR 2000 COMPLIANCE
Symix faces "Year 2000 compliance" issues similar to those faced by
other companies in the information technology industry. Year 2000 compliance
issues typically arise 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
13
<PAGE> 14
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 has substantially completed its assessment of selected third
parties, including key suppliers, subcontractors, business partners and
customers regarding their Year 2000 readiness. 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 has substantially completed its review of 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. 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> 15
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. THE COMPANY IS NOT
OBLIGATED TO UPDATE OR REVISE THESE FORWARD-LOOKING STATEMENTS TO REFLECT NEW
EVENTS OR CIRCUMSTANCES.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
A discussion and analysis of foreign exchange risks relating to the
Company is set forth in Item 7A--Quantitative and Qualitative Disclosures About
Market Risk in the Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 1999 under the caption "Foreign Exchange". No material changes in
the information provided under that item have occurred.
15
<PAGE> 16
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 12, 1999 /s/ Lawrence W. DeLeon
----------------------------
Lawrence W. DeLeon
(Duly Authorized Officer and
Principal Financial Officer)
17
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<TABLE>
INDEX TO EXHIBITS
<CAPTION>
Exhibit No. Description Page
- ----------- ----------- ----
<S> <C> <C>
3(a)(1) Amended Articles of Incorporated herein by reference to
Incorporation of Symix Systems, Exhibit 3(a)(1) to the Annual
Inc. (as filed with the Ohio Report on Form 10-K for the fiscal
Secretary of State on February 8, year ended June 30, 1997
1991)
3(a)(2) Certificate of Amendment to the Incorporated herein by reference to
Amended Articles of Exhibit 3(a)(2) to the Annual
Incorporation of Symix Systems, Report on Form 10-K for the fiscal
Inc. (as filed with the Ohio year ended June 30, 1997
Secretary of State on July 16,
1996)
3(a)(3) Amended Articles of Incorporated herein by reference to
Incorporation of Symix Systems, Exhibit 3(a)(3) to the Annual
Inc. (reflecting amendments Report on Form 10-K for the fiscal
through July 16, 1996, for year ended June 30, 1997
purposes of SEC reporting
compliance only)
3(b) Amended Regulations of Symix Incorporated herein by reference to
Systems, Inc. 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 Incorporation Incorporated herein by reference to
of Symix Systems, Inc. (as filed Exhibit 3(a)(1) to the Annual
with the Ohio Secretary of State on Report on Form 10-K for the fiscal
February 8, 1991) year ended June 30, 1997
4(a)(2) Certificate of Amendment to the Incorporated herein by reference to
Amended Articles of Exhibit 3(a)(2) to the Annual
Incorporation of Symix Systems, Report on Form 10-K for the fiscal
Inc. (as filed with the Ohio year ended June 30, 1997
Secretary of State on July 16,
1996)
</TABLE>
18
<PAGE> 19
<TABLE>
<CAPTION>
Exhibit No. Description Page
- ----------- ----------- ----
<S> <C> <C>
4(a)(3) Amended Articles of Incorporated herein by reference to
Incorporation of Symix Systems, Exhibit 3(a)(3) to the Annual
Inc. (reflecting amendments Report on Form 10-K for the fiscal
through July 16, 1996, for year ended June 30, 1997
purposes of SEC reporting
compliance only)
4(b) Amended Regulations of Symix Incorporated herein by reference to
Systems, Inc. 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>
<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
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 3,977
<SECURITIES> 0
<RECEIVABLES> 45,540
<ALLOWANCES> 1,490
<INVENTORY> 817
<CURRENT-ASSETS> 53,517
<PP&E> 21,449
<DEPRECIATION> 13,124
<TOTAL-ASSETS> 87,125
<CURRENT-LIABILITIES> 29,579
<BONDS> 0
0
0
<COMMON> 77
<OTHER-SE> 43,475
<TOTAL-LIABILITY-AND-EQUITY> 87,125
<SALES> 13,392
<TOTAL-REVENUES> 32,071
<CGS> 4,238
<TOTAL-COSTS> 14,368
<OTHER-EXPENSES> 15,966
<LOSS-PROVISION> (10)
<INTEREST-EXPENSE> 132
<INCOME-PRETAX> 1,467
<INCOME-TAX> 572
<INCOME-CONTINUING> 895
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 895
<EPS-BASIC> 0.12
<EPS-DILUTED> 0.12
</TABLE>
