<PAGE>
- ------------------------------------------------------------
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 QUARTERLY PERIOD ENDED COMMISSION FILE NUMBER
SEPTEMBER 30, 1996 0-19730
- ------------------------------------------------------------
VIEWLOGIC SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 04-2830649
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
293 BOSTON POST ROAD WEST
MARLBORO, MASSACHUSETTS 01752-4615
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (508)480-0881
- ------------------------------------------------------------
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
------------ ------------
The number of shares outstanding of each of the
issuer's classes of common stock, as of:
DATE CLASS OUTSTANDING SHARES
October 31, 1996 Common stock, $.01 par value 16,657,709
1
<PAGE>
VIEWLOGIC SYSTEMS, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. Condensed Consolidated Financial Statements
Condensed Consolidated Statements of Income
for the Quarter and Nine Months Ended
September 30, 1996 and 1995 3
Condensed Consolidated Balance Sheets as of
September 30, 1996 and December 31, 1995 4
Condensed Consolidated Statements of Cash
Flows for the Nine Months Ended September 30,
1996 and 1995 5
Notes to Condensed Consolidated Financial
Statements 6
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K 12
Signatures 13
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
VIEWLOGIC SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
------------- -----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue:
Software $21,023 $22,038 $58,589 $56,628
Services and other 13,404 11,142 37,137 31,878
------- ------- ------- -------
Total revenue 34,427 33,180 95,726 88,506
------- ------- ------- -------
Costs and expenses:
Cost of software 2,943 3,015 8,065 8,381
Cost of services and other 3,353 2,782 9,926 8,298
Selling and marketing 14,406 13,648 42,360 40,566
Research and development 7,081 6,483 20,071 17,524
General and administrative 3,374 2,279 8,578 6,681
------- ------- ------- -------
Total operating expenses 31,157 28,207 89,000 81,450
------- ------- ------- -------
Income from operations 3,270 4,973 6,726 7,056
------- ------- ------- -------
Other income:
Interest income, net 598 417 1,437 1,395
Other income (expense), net 1,212 (104) 1,225 (303)
------- ------- ------- -------
Total other income 1,810 313 2,662 1,092
------- ------- ------- -------
Income before income taxes 5,080 5,286 9,388 8,148
Provision for income taxes 1,956 1,982 3,613 3,026
------- ------- ------- -------
Net income $3,124 $3,304 $5,775 $5,122
======= ======= ======= =======
Income per common share:
Net income $0.18 $0.19 $0.33 $0.30
======= ======= ======= =======
Weighted average number of
common and common
equivalent shares
outstanding 17,403 17,592 17,250 17,218
======= ======= ======= =======
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
3
<PAGE>
VIEWLOGIC SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
----------- -----------
<S> <C> <C>
Assets:
Current assets:
Cash and cash equivalents $39,937 $34,387
Marketable securities 22,393 23,381
Accounts receivable (less allowance
for doubtful accounts, $1,261 and
$1,215, respectively) 28,019 29,054
Prepaid expenses and other 8,678 5,494
Deferred income taxes 322 322
-------- --------
Total current assets 99,349 92,638
-------- --------
Marketable securities - non-current 6,199 3,619
-------- --------
Property and equipment:
Equipment 30,638 26,213
Furniture and fixtures 4,017 3,329
-------- --------
Total 34,655 29,542
Less accumulated depreciation 21,200 17,503
-------- --------
Property and equipment - net 13,455 12,039
-------- --------
Other assets:
Capitalized software costs - net 5,619 5,102
Purchased technology - net 2,475 3,127
Goodwill - net 1,002 1,177
Deposits and other 1,198 1,281
-------- --------
Total other assets 10,294 10,687
-------- --------
Total $129,297 $118,983
======== ========
Liabilities and stockholders' equity:
Current liabilities:
Current portion of capital lease
obligations $43 $77
Accounts payable 3,181 2,926
Accrued compensation 8,852 7,255
Accrued expenses 7,564 4,279
Notes payable to former Silerity
shareholders 2,805
Deferred revenue 19,986 17,447
Deferred income taxes 1,328 1,412
-------- --------
Total current liabilities 40,954 36,201
-------- --------
Deferred income taxes 5,397 5,453
Capital lease obligations 4 38
Stockholders' equity:
Common stock, $.01 par value 174 170
Additional paid-in capital 73,415 70,093
Retained earnings 12,913 7,138
Unrealized holding gains, net of tax 3,428 3,537
Cumulative translation adjustment 43 (82)
-------- --------
89,973 80,856
Less: Treasury stock, at cost (7,031) (3,565)
-------- --------
Total stockholders' equity 82,942 77,291
-------- --------
Total $129,297 $118,983
======== ========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
4
<PAGE>
VIEWLOGIC SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
------------------------------
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $5,775 $5,122
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 3,812 3,514
Gain on sale of Scopus shares (1,173)
Amortization of capitalized software
and purchased technology 2,210 2,082
Amortization of goodwill 175 175
Change in assets and liabilities:
Accounts receivable, net 1,035 (354)
Prepaid expense and other (3,184) 936
Accounts payable 255 (412)
Accrued compensation 1,597 (2,620)
Accrued expenses 3,285 (1,542)
Deferred revenue 2,539 2,689
------- -------
Net cash provided by operating activities 16,326 9,590
------- -------
Cash flows from investing activities:
Purchase of marketable securities (17,674) (19,226)
Proceeds from sale of marketable securities 17,090 17,402
Expenditures for property and equipment (5,336) (3,817)
Capitalized software costs (2,075) (1,728)
Purchased technology (600)
Decrease (increase) in deposits and other 83 (444)
------- -------
Net cash used in investing activities (7,912) (8,413)
------- -------
Cash flows from financing activities:
Proceeds from issuance of common stock 1,533 1,409
Proceeds from exercise of stock options 1,793 334
Repurchase of common stock (3,466)
Principal payment of capital lease obligations (70) (272)
Repayment of notes to former Silerity
shareholders (2,805)
------- -------
Net cash provided by (used in)
financing activities (3,015) 1,471
------- -------
Effect of exchange rate changes on cash 151 263
------- -------
Net increase in cash and cash equivalents 5,550 2,911
Cash and cash equivalents, beginning of
the period 34,387 34,552
------- -------
Cash and cash equivalents, end of the period $39,937 $37,463
======= =======
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
5
<PAGE>
VIEWLOGIC SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Presentation
---------------------
The accompanying unaudited condensed consolidated
financial statements have been prepared by Viewlogic
Systems, Inc. (the "Company") pursuant to the rules and
regulations of the Securities and Exchange Commission
regarding interim financial reporting. Accordingly,
they do not include all of the information and
footnotes required by generally accepted accounting
principles for complete annual financial statements and
should be read in conjunction with the audited
financial statements included in the Company's Annual
Report on Form 10-K for the year ended December 31,
1995.
In the opinion of management the accompanying unaudited
condensed consolidated financial statements have been
prepared on the same basis as the audited financial
statements and include all adjustments, consisting only
of normal recurring adjustments, necessary for a fair
presentation of the interim periods presented. The
operating results for the interim periods presented are
not necessarily indicative of the results expected for
the full fiscal year.
2. Income per Common Share
-----------------------
Income per common share is computed using the weighted
average number of common and common equivalent shares
outstanding during each period presented.
3. Stock-Based Compensation
------------------------
In October 1995, the Financial Accounting Standards
Board issued Statement of Financial Accounting
Standards (SFAS) No. 123, "Accounting for Stock-Based
Compensation," which was effective for the Company
beginning January 1, 1996. SFAS No. 123 requires
expanded disclosures of stock-based compensation
arrangements with employees and encourages (but does
not require) compensation cost to be measured based on
the fair value of the equity instrument awarded.
Companies are permitted, however, to continue to apply
Accounting Principles Board ("APB") Opinion No. 25,
which recognizes compensation cost based on the
intrinsic value of the equity instrument awarded. The
Company will continue to apply APB Opinion No. 25 to
its stock based compensation awards to employees and
will disclose the required pro forma effect on net
income and earnings per share.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
This discussion contains certain forward looking
statements which involve risks and uncertainties, and the
Company's actual results may differ materially from those
discussed. Some of the factors that might cause such a
difference are discussed below. (See "Factors That May
Affect Future Results and Financial Condition.")
Results of Operations
- ---------------------
The Company's revenue and net income increased 3.8% and
decreased 5.4%, respectively, for the three months ended
September 30, 1996 and increased 8.2% and 12.7%,
respectively, for the nine months ended September 30, 1996,
both as compared to the same periods of the previous year.
Net income for the third quarter and first nine months of
1996 includes a $1,173,000 gain on the sale of an
investment. Operating income as a percentage of revenue was
9.5% and 7.0% for the third quarter and first nine months of
1996, as compared to operating income of 15.0% and 8.0% for
the same periods in 1995. This decline in operating income
as a percentage of revenue is largely due to the larger
increase in operating expenses over revenues in the third
quarter and first nine months of 1996.
The third quarter of 1996 was the largest revenue
quarter in the Company's history. The Company continued to
show sequential improvement in product revenues as sales in
the U.S. and Japan were at record levels in the third
quarter. While the Company has made substantial progress in
strengthening its sales infrastructure and the
competitiveness of its product lines, a shortfall in sales
in Europe and, to a lesser extent, delays in the impact of
recently released new products have caused revenues in the
third quarter to be lower than expected. The Company
remains focused on improving revenue growth. While
optimistic about its new product plans and strategies, the
Company is cautious regarding the timing of their impact.
The following table sets forth, for the periods
indicated, the percentage of revenue of certain items in the
Company's Condensed Consolidated Statements of Income.
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
------------- ------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue: 100.0% 100.0% 100.0% 100.0%
Software 61.1 66.4 61.2 64.0
Services and other 38.9 33.6 38.8 36.0
Costs and expenses:
Cost of software 8.5 9.1 8.4 9.5
Cost of services and other 9.7 8.4 10.4 9.4
Selling and marketing 41.9 41.1 44.2 45.8
Research and development 20.6 19.5 21.0 19.8
General and administrative 9.8 6.9 9.0 7.5
----- ----- ----- -----
Total operating expenses 90.5 85.0 93.0 92.0
----- ----- ----- -----
Income from operations 9.5 15.0 7.0 8.0
Total other income 5.3 .9 2.8 1.2
----- ----- ----- -----
Income before income taxes 14.8 15.9 9.8 9.2
Provision for income taxes 5.7 5.9 3.8 3.4
----- ----- ----- -----
Net income 9.1% 10.0% 6.0% 5.8%
===== ===== ===== =====
</TABLE>
7
<PAGE>
Revenue
- -------
The Company's total revenue increased 3.8% to
$34,427,000 in the third quarter of 1996 from $33,180,000 in
the third quarter of 1995 and increased 8.2% to $95,726,000
from $88,506,000 for the nine months ended September 30,
1996 as compared with the same period of 1995. The
Company's percentage of total revenue attributable to
software product licenses decreased to 61.1% and 61.2% for
the quarter and nine months ended September 30, 1996,
respectively, down from 66.4% and 64.0% for the
corresponding periods of the previous year. Software
revenue decreased 4.6% to $21,023,000 and increased 3.5% to
$58,589,000 for the third quarter and first nine months of
1996, respectively, down from $22,038,000 and up from
$56,628,000 for the same periods in 1995. The increase in
year-to-date 1996 product revenue was primarily due to a
greater than 40% increase in year-over-year revenues from
the Company's ASIC design tool suite, including Chronologic
VCS (TM), Quad Design Motive (TM) and Sunrise (TM) products.
The decline in the third quarter 1996 product revenues was
primarily due to a sales shortfall in Europe and, to a lesser
extent, delays in the impact of recently released new products.
The European market has historically been more oriented toward
system design products and offers less opportunity for the
Company's ASIC tool offerings. Services and other revenue
increased 20.3% and 16.5% for the third quarter and first
nine months of 1996, respectively, as compared to the same
periods in 1995. This increase was due to the increase in
maintenance and customer support revenue from a growing
installed base of customers.
International revenue increased slightly as a
percentage of total revenue to 37.5% and 34.9% for the third
quarter and first nine months of 1996, respectively, up from
35.6% and 34.7 %, respectively, for the same periods in
1995. This increase was primarily due to the positive
impact of the Company's direct sales operation in Japan
where revenues for the first nine months of 1996 increased
56.0% from the first nine months of 1995. This increase was
offset by a slowdown in the European market, where revenues
decreased 19.0% from the first nine months of 1995.
Cost of Revenue
- ---------------
Cost of software revenue decreased 2.4% to $2,943,000
and 3.8% to $8,065,000 for the third quarter and nine months
ended September 30, 1996, respectively, as compared to the
same periods of the prior year. The decrease in the first
nine months was primarily due to decreased royalty and
documentation costs, offset by an increase in amortization
of capitalized software. Cost of software as a percentage
of software revenue increased from 13.7% in the third
quarter of 1995 to 14.0% in the third quarter of 1996, and
decreased from 14.8% in the first nine months of 1995 to
13.8% for the same period in 1996.
Cost of services and other revenue increased 20.5% to
$3,353,000 and 19.6% to $9,926,000 for the third quarter and
nine months ended September 30, 1996, respectively, as
compared to the same periods of the prior year. These
increases were primarily due to higher personnel-related
costs and an increase in outside consulting fees required to
support the Company's growing customer base. Cost of
services and other revenue as a percentage of services and
other revenue remained constant at 25.0% from the third
quarter of 1995 to the third quarter of 1996, and increased
from 26.0% in the first nine months of 1995 to 26.7% for the
same period in 1996.
Selling and Marketing Expenses
- ------------------------------
Selling and marketing expenses increased 5.6% to
$14,406,000 in the third quarter of 1996 up from $13,648,000
in the same period of 1995 and increased 4.4% to $42,360,000
for the first nine months of 1996, from $40,566,000 for the
same period of the previous year. The increase in the third
quarter is primarily due to increased advertising and
personnel-related costs, offset by reduced bad debt expense
and commissions in Europe. The increase in the first nine
months is primarily due to higher personnel-related costs
due to an increase in the number of sales and marketing
personnel from 236 in September of 1995 to
8
<PAGE>
271 in September of 1996. Selling and marketing expenses,
as a percentage of revenue, increased from 41.1% in the
third quarter of 1995 to 41.9% in the third quarter of 1996
and decreased from 45.8% for the nine months ended September
30, 1995 to 44.2% for the same period of 1996.
Research and Development Expenses
- ---------------------------------
Research and development costs increased 9.2% to
$7,081,000 and 14.5% to $20,071,000 for the third quarter
and nine months ended September 30, 1996, respectively, as
compared to the same periods of the prior year. The quarter
and year-to-date increases in research and development
expenses primarily reflect higher personnel and outside
consulting costs associated with the development of new
products and enhancement of existing products. Research and
development expenses as a percentage of revenues increased
from 19.5% and 19.8% in the third quarter and first nine
months of 1995 to 20.6% and 21.0% for the same periods of
1996.
The Company capitalized software development costs of
$685,000 and $2,075,000 for the third quarter and first nine
months of 1996, respectively, as compared to $372,000 and
$1,728,000 for the corresponding periods of 1995 in
accordance with Statement of Financial Accounting Standards
No. 86, "Accounting for the Costs of Computer Software to be
Sold, Leased, or Otherwise Marketed." The amounts
capitalized represent 8.8% and 9.4% of total product
development costs for the third quarter and first nine
months of 1996, respectively, as compared to 5.4% and 9.0%
for the same periods of 1995. Capitalized software costs are
amortized over the estimated life of the product (in most
cases four years). The amortization included in cost of
software revenue was $578,000 and $1,558,000 for the third
quarter and first nine months of 1996, respectively,
compared to $664,000 and $1,360,000 for the same periods in
1995.
General and Administrative Expenses
- -----------------------------------
General and administrative expenses increased 48.0% and
28.4% to $3,374,000 and $8,578,000 for the third quarter and
nine month period ended September 30, 1996, respectively, as
compared to $2,279,000 and $6,681,000 for the same periods
of the previous year. Both the quarter and year-to-date
increases in 1996 primarily result from an increase in the
Company's share of start-up losses under equity accounting
associated with an investment in Eagle Design Automation,
Inc. and increases in recruitment and employee relocation
costs. General and administrative expenses as a percentage
of revenue increased from 6.9% and 7.5% for the third
quarter and first nine months of 1995, respectively, to 9.8%
and 9.0% for the same periods in 1996.
Income from Operations
- ----------------------
Income from operations decreased by 34.2% and 4.7% to
$3,270,000 and $6,726,000 for the three months and nine
months ended September 30, 1996, respectively, as compared
to the corresponding periods in 1995. Both decreases in
operating income primarily reflect a larger increase in
operating expenses and a lesser increase in revenues from
1995 to 1996.
Total Other Income
- ------------------
Total other income increased 478.3% and 143.8% to
$1,810,000 and $2,662,000 for the third quarter and nine
month period ended September 30, 1996, respectively, from
$313,000 and $1,092,000 for the same periods of the previous
year. This increase is due primarily to a $1,173,000 gain
on the sale of an investment in the third quarter of 1996.
9
<PAGE>
Income Taxes
- ------------
The provision for income taxes decreased 1.3% and
increased 19.4% for the three months and nine months ended
September 30, 1996, respectively, from the same periods of
the prior year. The effective tax rate increased from 37.5%
and 37.1% in the third quarter and first nine months of
1995, respectively, to 38.5% for the same periods of 1996.
The effective tax rate increase in the third quarter and
first nine months of 1996 primarily reflects higher tax
rates incurred as a result of increased profitability in
Japan.
Net Income
- ----------
Net income in the third quarter of 1996 was $3,124,000,
or $.18 per share, down 5.4% from the net income of
$3,304,000, or $.19 per share, earned in the same period in
1995. For the nine months ended September 30, 1996, net
income was $5,775,000, or $.33 per share, an increase of
12.7% from the $5,122,000, or $.30 per share, net income
earned in the same period of 1995. Net income for the third
quarter and first nine months of 1996 includes a $1,173,000
gain on the sale of an investment.
Factors That May Affect Future Results and Financial Condition
- --------------------------------------------------------------
Future financial results are difficult or impossible to
predict, despite the Company's past financial performance.
Intense competition and rapid technological changes are
inherent in the EDA industry. The Company faces the many
risks and uncertainties posed by that competition and
technological change, including the risks and uncertainties
affecting and relating to success in continuously developing
and marketing new products; protection of its products by
effective utilization of intellectual property laws; product
quality, reliability, ease of use, feature set and price;
diversity of product line; general economic and business
conditions; the ability to hire, retain and motivate highly
qualified personnel; business conditions and growth in the
EDA industry; industry-wide price erosion; and customer
acceptance of the Company's products.
The Company's products are in various stages of their
life cycles. The Company's success is dependent on its
ability to develop complex and competitive new products, to
introduce them to the marketplace ahead of the competition
and to have them selected by customers. The Company is
striving to bring new products to market to meet customer
needs, but there is no assurance that it will succeed in
doing so. Since product life cycles are continually
becoming shorter, if new product introductions are delayed
or if new products do not address market needs then revenues
and profits for current and future products may be affected
as customers may shift to competitors to meet their
requirements. The Company's competitors consist of large
companies, many of which have greater market share and
substantially greater financial and other resources than the
Company; emerging companies with new and innovative
technology; and customers who develop their own EDA tools.
As is common in the software industry, the Company
frequently ships more product in the third month of each
quarter than in either of the first two months of the
quarter, and shipments in the third month are higher at the
end of that month. This pattern is likely to continue. The
concentration of sales in the last month of the quarter
makes the Company's quarterly financial results difficult to
predict. Also, if sufficient business does not materialize
or a disruption in the Company's production or shipping
occurs near the end of a quarter, the Company's revenues for
that quarter may be materially reduced.
A substantial portion of the Company's revenue is
derived from its international operations. As a result, the
Company's operations and financial results could be
significantly affected by international factors, such as
weak economic conditions in foreign markets and differing
technology or product preferences in different countries.
10
<PAGE>
The highly technical nature of the Company's products
and services and the intense competition in the Company's
markets heightens the need and importance of hiring,
retaining and motivating highly qualified technical
personnel. The intense competition in the EDA industry
increases the difficulty in doing so and has created a
shortage of highly qualified engineering and sales
personnel.
Because of these and other factors, past financial
results may not be a useful predictor of future results and
any forward looking statements about the Company's financial
performance, business operations and other factors should be
viewed with caution. Also, the Company's participation in a
highly dynamic industry often results in significant
volatility of the Company's common stock price.
Liquidity and Capital Resources
- -------------------------------
The Company has funded its operations to date primarily
through sales of equity securities, equipment financing
leases and positive cash flow from operations. As of
September 30, 1996, the Company had $68,529,000 of cash and
marketable securities compared to $61,387,000 of cash and
marketable securities as of December 31, 1995, including
$6,199,000 and $3,619,000 of non-current marketable
securities in 1996 and 1995, respectively. Working capital
as of September 30, 1996 was $58,395,000. The Company has
an unsecured line of credit with Silicon Valley Bank under
which up to $12,500,000 may be borrowed. Borrowings bear
interest at the prime rate. As of September 30, 1996, there
was no indebtedness outstanding under this facility. As of
September 30, 1996, the Company had $40,954,000 in current
liabilities and $4,000 of commitments under long-term
capital lease obligations.
In October 1995, the Company's Board of Directors
authorized the Company to repurchase up to 2,000,000 shares
of the Company's common stock from time to time over the
next year as market and business conditions warrant in open
market, negotiated and block transactions. In September of
1996 that authorization was extended until October, 1997.
The repurchased shares will be used in the Company's stock
option plans and employee stock purchase plans and for
general corporate purposes. As of November 8, 1996, the
Company had spent $9,941,000 to repurchase 935,000 shares.
Based on its operating plan, the Company currently
believes that its available cash and cash generated from
operations and existing credit facilities will be sufficient
to fund the Company's operations for the foreseeable future.
11
<PAGE>
PART II. OTHER INFORMATION
ITEMS 1-5. NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 11 - Statement Regarding Computation
of Per Share Earnings
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during
the quarter for which this report is filed.
12
<PAGE>
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.
Viewlogic Systems, Inc.
(Registrant)
Dated: November 12, 1996 /s/ Alain J. Hanover
---------------------------
Alain J. Hanover, Chairman and
Chief Executive Officer
Dated: November 12, 1996 /s/ Ronald R. Benanto
--------------------------
Ronald R. Benanto, Senior Vice
President of Finance, Chief
Financial Officer and Treasurer
13
<PAGE>
VIEWLOGIC SYSTEMS, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
------- ----
<S> <S> <C>
11 - Statement Regarding Computation of Per Share Earnings 15
</TABLE>
14
<PAGE>
EXHIBIT 11
VIEWLOGIC SYSTEMS, INC. AND SUBSIDIARIES
COMPUTATION OF NET INCOME PER COMMON SHARE
(In thousands, except per share data)
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
------------- -------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Weighted average number of
shares outstanding:
Common stock 16,772 17,000 16,911 16,876
Common equivalent shares
resulting from stock
options and warrants
(treasury stock method) 631 592 608 342
Less: Repurchased shares (269)
------ ------ ------ ------
Total 17,403 17,592 17,250 17,218
====== ====== ====== ======
Net income $3,124 $3,304 $5,775 $5,122
====== ====== ====== ======
Net income per common share $ .18 $ .19 $ .33 $ .30
====== ====== ====== ======
</TABLE>
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Condensed Consolidated Statement of Income for the Nine Months Ended September
30, 1996 and the Condensed Consolidated Balance Sheet as of September 30, 1996
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 39,937
<SECURITIES> 28,592
<RECEIVABLES> 29,280
<ALLOWANCES> 1,261
<INVENTORY> 0
<CURRENT-ASSETS> 99,349
<PP&E> 34,655
<DEPRECIATION> 21,200
<TOTAL-ASSETS> 129,297
<CURRENT-LIABILITIES> 40,954
<BONDS> 0
0
0
<COMMON> 174
<OTHER-SE> 82,768
<TOTAL-LIABILITY-AND-EQUITY> 129,297
<SALES> 58,589
<TOTAL-REVENUES> 95,726
<CGS> 8,065
<TOTAL-COSTS> 17,991
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 614
<INTEREST-EXPENSE> 75
<INCOME-PRETAX> 9,388
<INCOME-TAX> 3,613
<INCOME-CONTINUING> 5,775
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,775
<EPS-PRIMARY> .33
<EPS-DILUTED> .33
</TABLE>