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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13A-16 OR 15D-15 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of March 5, 1997
Micro Focus Group Public Limited Company
(Translation of Registrant's Name Into English)
The Lawn, 22-30 Old Bath Road, Newbury, Berkshire, England RG14 1QN
(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.)
Form 20-F X Form 40-F
----- -----
(Indicate by check mark whether the registrant by furnishing the
information contained in this form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
Yes X No
----- ------
(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2 (b): 82-795.)
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UK: 12:45 pm GMT Wednesday US: 7:45 am EST Wednesday
March 5, 1997 March 5, 1997
Please contact:
Marcelo Gumucio US 415-843-7077
Chief Executive Officer
Anthony R. Muller 415-843-7070
Senior Vice President
Chief Financial Officer
Ron Forbes UK 01635-32646
Vice President
International Finance
Micro Focus Announces Profitable Fourth Quarter and
Strong Cash Flow
London, England and Palo Alto, California, March 5, 1997 - Micro Focus (NASDAQ:
MIFGY) today announced net income of USD 2,715,000 or USD 0.18 per share (GBP
1,456,000 or 9.6 pence per share) for the fourth quarter ended January 31, 1997.
These results compare favorably with the fourth quarter of fiscal 1995 when the
Company reported a net loss of USD 2,625,000 or USD 0.17 per share (GBP
1,656,000 or 11.0 pence per share) following restructuring charges of USD
4,438,000 (GBP 2,876,000). Net revenue for the quarter was USD 34,867,000 (GBP
20,818,000) compared with USD 35,285,000 (GBP 22,763,000) reported in the fourth
quarter of 1995. In the third quarter ended October 31, 1996 the Company
reported net income of USD 1,080,000 or USD 0.07 per share (GBP 679,000 or 4.5
pence per share) on net revenue of USD 28,285,000 (GBP 18,131,000).
For the fiscal year 1996 ended January 31, 1997 the Company reported net revenue
of USD 115,409,000 (GBP 73,089,000) and a net loss of USD 10,508,000 or USD 0.69
per share (GBP 7,281,000 or 48.0 pence per share). Fiscal 1996 results included
a restructuring charge of USD 8,000,000 (GBP 5,195,000). In the comparable
period of 1995 the Company reported net revenue of USD 121,956,000 (GBP
77,258,000) and a net loss of USD 10,436,000 or USD 0.69 per share (GBP
6,470,000 or 43.6 pence per share), including restructuring charges of USD
10,502,000 (GBP 6,667,000).
The Company's cash and short term investment balances at January 31, 1997 were
USD 71,560,000 (GBP 44,725,000). This represented an increase of USD 12,833,000
(GBP 8,696,000) from October 31, 1996.
The turnaround in Micro Focus continued to produce profitable results in the
fourth quarter. Earlier in the year, and following a change in senior
management, the Company reduced employment and expense levels while redirecting
marketing and new product development programs. In addition, the Company
provided for the
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aforementioned restructuring. The Company noted that in prior years its fourth
quarter has been seasonally its strongest.
"During 1996 we set certain goals for operating structure, profitability, cash
flow and revenue. We have substantially met those objectives by delivering
profits for the third and fourth quarters, second half revenue equivalent to
that of the prior year, and strong cash flow for the fourth quarter," said
Marcelo Gumucio, CEO. "We look toward 1997 with confidence. We believe Micro
Focus has the people, strategies, products and financial strength to serve the
growing segments of our markets. We are particularly pleased with the revenue
growth we have seen from our Year 2000 solutions."
Anthony R. Muller, Chief Financial Officer added, "We have substantially
improved operations, planning and cost controls at Micro Focus, and this
provides a base from which we can more aggressively pursue the market
opportunities we see. In 1996 we worked on fixing problems; in 1997 we plan to
concentrate our efforts on exploiting the opportunities in our markets."
Micro Focus provides tools and technology for managing enterprise computing
assets. The Company's state-of-the-art programming solutions allow application
developers to manage and extend their enterprise applications for: Distributed
Computing -- developing and deploying production systems in distributed
environments; Legacy Solutions -- moving application development and maintenance
off of the mainframe; and Year 2000 assessment and implementation -- providing
solutions for reengineering systems to handle the millennium date change. Micro
Focus is located in the UK at The Lawn, 22-30 Old Bath Road, Newbury, Berkshire,
RG14 1QN - telephone 01635 32646 and in the US at 2465 East Bayshore Road, Palo
Alto, California 94303 - telephone 415-856-4161. For additional information on
Micro Focus and its products, visit the Micro Focus Web site at
http://www.microfocus.com.
The following statement is made in accordance with the U.S. Private
Securities Litigation Reform Act 1995: This Fourth Quarter Announcement
contains forward-looking statements that involve a number of risks and
uncertainties. There are certain important factors that could cause results
to differ materially from those anticipated by the statements made herein.
Factors that could cause actual results to differ materially are the
following: the ability of the Company to develop and release to the market
products and services that meet the needs of the Company's customers in the
highly dynamic market for application development tools, the potential need
for development tools to shift based on changes in underlying technology
standards coming into use, the potential for a decrease in revenue which may
be caused by delays in the timing of the delivery of products or services,
the effect of
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competitors' efforts to enter the Company's markets, and the ability of the
Company to effectively manage its costs against uncertain revenue
expectations. Further information on potential factors which could affect
the Company's financial results are included on the Company's Form 20-F for
the fiscal year ended January 31, 1996 filed with the SEC, as may be updated
or amended with future filings with the SEC.
The financial information contained in this report does not constitute
statutory accounts as defined in section 240 of the UK Companies Act 1985.
The figures for the year ended January 31, 1997 are unaudited. The auditors'
reports on both the UK and US financial statements for the year ended
January 31, 1996 were unqualified. Copies of the 1996 Annual Report will be
mailed to shareholders and will not be published in newspapers. Copies of
the Report will be available upon request to the Company Secretary at the
Registered Office, The Lawn, 22-30 Old Bath Road, Newbury, Berkshire,
England, RG14 1QN. Following established Micro Focus practice the directors
do not intend to recommend the payment of a dividend.
<TABLE>
<CAPTION>
MICRO FOCUS GROUP PLC - 1996 FOURTH QUARTER REPORT
CONSOLIDATED STATEMENTS OF INCOME - IN US FORMAT
- - - ----------------------------------------------------------------------
(Unaudited) Three months ended Twelve months ended
in thousands of US dollars January 31 January 31
(except per share data) 1997 1996 1997 1996
- - - ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net revenue
Product revenue 20,791 21,946 66,466 69,399
Service revenue 14,076 13,339 48,943 52,557
- - - ----------------------------------------------------------------------
Total net revenue 34,867 35,285 115,409 121,956
- - - ----------------------------------------------------------------------
Costs and expenses
Cost of product revenue 2,949 4,517 10,016 13,709
Cost of service revenue 4,453 4,961 18,580 19,520
Research and development 8,517 9,557 34,544 35,337
Sales and marketing 12,759 13,001 45,884 49,429
General and administrative 2,637 2,355 9,442 8,343
Restructuring charges - 4,438 8,000 9,469
- - - ----------------------------------------------------------------------
Total costs and expenses 31,315 38,829 126,466 135,807
- - - ----------------------------------------------------------------------
Income (loss) from operations 3,552 (3,544) (11,057) (13,851)
Interest income 728 749 2,706 3,432
Interest expense (3) (7) (32) (117)
- - - ----------------------------------------------------------------------
Income (loss) before taxes 4,277 (2,802) (8,383) (10,536)
Income taxes (1,562) 177 (2,125) 100
- - - ----------------------------------------------------------------------
Net income (loss) 2,715 (2,625) (10,508) (10,436)
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C>
Net income (loss) per share
(in US dollars) 0.18 (0.17) (0.69) (0.69)
- - - ----------------------------------------------------------------------
Weighted average number of shares
outstanding (thousands) 15,478 15,156 15,234 15,101
======================================================================
</TABLE>
<TABLE>
<CAPTION>
MICRO FOCUS GROUP PLC - 1996 FOURTH QUARTER REPORT
CONSOLIDATED BALANCE SHEETS - IN US FORMAT
- - - ----------------------------------------------------------------------
in thousands of US dollars January 31 January 31
1997 1996
(unaudited)
- - - ----------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets:
Cash and short-term investments 71,560 58,848
Accounts receivable, net 20,275 30,975
Inventories 774 2,573
Prepaid expenses and other assets 2,490 3,379
- - - ----------------------------------------------------------------------
Total current assets 95,099 95,775
- - - ----------------------------------------------------------------------
Fixed assets:
Property, plant and equipment, net 32,868 37,615
Software product assets, net 23,344 26,964
- - - ----------------------------------------------------------------------
Total assets 151,311 160,354
- - - ----------------------------------------------------------------------
Liabilities and stockholders' equity
Current liabilities:
Accounts payable 4,886 8,038
Accrued employee compensation
and commissions 5,811 6,733
Income taxes payable 4,142 3,022
Customer payments in advance
of delivery 26,635 29,686
Other current liabilities 11,047 7,065
- - - ----------------------------------------------------------------------
Total current liabilities 52,521 54,544
- - - ----------------------------------------------------------------------
Long-term debt and other liabilities 24 100
Deferred income taxes 9,983 8,236
Stockholders' equity:
Ordinary shares 2,389 2,386
Additional paid-in capital
and other reserves 27,468 27,257
Treasury stock (8,959) (8,959)
Retained earnings 67,885 76,790
- - - ----------------------------------------------------------------------
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
Total liabilities and
stockholders' equity 151,311 160,354
======================================================================
</TABLE>
<TABLE>
<CAPTION>
MICRO FOCUS GROUP PLC - 1996 FOURTH QUARTER REPORT
CONSOLIDATED PROFIT AND LOSS ACCOUNT - IN UK FORMAT
- - - ----------------------------------------------------------------------
(Unaudited) Three months ended Twelve months ended
in thousands of GB pounds January 31 January 31
(except per share data) 1997 1996 1997 1996
- - - ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue
Product revenue 12,409 14,157 42,020 43,991
Service revenue 8,409 8,606 31,069 33,267
- - - ----------------------------------------------------------------------
Total revenue 20,818 22,763 73,089 77,258
- - - ----------------------------------------------------------------------
Costs and expenses
Cost of product revenue 1,762 2,910 6,406 8,855
Cost of service revenue 2,662 3,193 11,892 12,343
Research and development 5,086 9,679 24,299 26,851
Sales and marketing 7,608 8,378 30,146 32,857
General and administrative 1,577 854 7,854 4,986
- - - ----------------------------------------------------------------------
Total costs and expenses 18,695 25,014 80,597 85,892
- - - ----------------------------------------------------------------------
Operating profit / (loss) 2,123 (2,251) (7,508) (8,634)
Interest income 435 483 1,720 2,166
Interest expense (2) (5) (21) (74)
- - - ----------------------------------------------------------------------
Profit/(loss) before taxation 2,556 (1,773) (5,809) (6,542)
Taxation (1,100) 117 (1,472) 72
- - - ----------------------------------------------------------------------
Profit/(loss) after taxation 1,456 (1,656) (7,281) (6,470)
- - - ----------------------------------------------------------------------
Earnings/(loss) per share 9.6p (11.0p) (48.0p) (43.6p)
======================================================================
</TABLE>
<TABLE>
<CAPTION>
MICRO FOCUS GROUP PLC - 1996 FOURTH QUARTER REPORT
CONSOLIDATED BALANCE SHEET - IN UK FORMAT
- - - ----------------------------------------------------------------------
in thousands of GB pounds January 31 January 31
1997 1996
(unaudited)
- - - ----------------------------------------------------------------------
<S> <C> <C>
Fixed assets
Intangible fixed assets 14,590 17,857
Tangible fixed assets 20,543 24,910
Investment 5,634 5,634
- - - ----------------------------------------------------------------------
Total fixed assets 40,767 48,401
</TABLE>
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<TABLE>
<CAPTION>
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Current assets
<S> <C> <C>
Stock 484 1,704
Trade debtors 12,672 20,524
Other debtors and prepaid expenses 1,556 2,238
Cash and bank deposits 44,725 38,972
- - - ----------------------------------------------------------------------
Total current assets 59,437 63,438
- - - ----------------------------------------------------------------------
Creditors: amounts falling due within one year:
Trade creditors 3,054 5,323
Accrued employee compensation
and commissions 3,632 4,459
Current corporation tax 2,590 2,001
Accrued expenses and
other current liabilities 6,904 4,678
Customer payments in
advance of delivery 16,646 19,671
- - - ----------------------------------------------------------------------
Net current assets 26,611 27,306
- - - ----------------------------------------------------------------------
Total assets less current liabilities 67,378 75,707
Creditors: amounts falling due
after more than one year 15 66
Deferred taxation 6,239 5,454
- - - ----------------------------------------------------------------------
Net assets 61,124 70,187
- - - ----------------------------------------------------------------------
Capital and reserves
Called up share capital 1,517 1,514
Share premium and other reserves 18,071 17,936
Profit and loss account 41,536 50,737
- - - ----------------------------------------------------------------------
Total shareholders' funds 61,124 70,187
======================================================================
</TABLE>
*** ENDS ***
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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.
Micro Focus Group Public Limited Company
(Registrant)
Date: March 5, 1997 By: /s/ Loren E. Hillberg
--------------------------------
Loren E. Hillberg, Secretary
