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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 May 21, 1997
Micro Focus Group Public Limited Company
(Translation of Registrant's Name Into English)
The Lawn, Old Bath Road, Newbury, 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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Release time:
UK: 12:45pm BST Wednesday US: 7:45 am EDT Wednesday
May 21, 1997 May 21, 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 Revenue Growth and Profits for First Quarter
London, England and Palo Alto, California, May 21, 1997 - Micro Focus Group Plc
(NASDAQ: MIFGY) today announced net revenue for its first quarter ended April
30, 1997 of USD 30,114,000 (GBP 18,575,000) as compared to USD 24,169,000 (GBP
15,856,000) reported in the first quarter of the prior fiscal year, a 25%
increase. Net income for the quarter was USD 2,287,000 or USD 0.15 per share
(GBP 1,377,000 or 9.1 pence per share). In the first quarter of fiscal 1996 the
Company incurred a net loss of USD 13,210,000 or USD 0.87 per share (GBP
8,615,000 or 56.9 pence per share) following restructuring charges of USD
8,000,000 (GBP 5,195,000). In the quarter ended January 31, 1997 the Company
reported net income of USD 2,715,000 or USD 0.18 per share (GBP 1,456,000 or 9.6
pence per share) on net revenue of USD 34,867,000 (GBP 20,818,000).
The turnaround in Micro Focus continued to produce profitable results for the
third consecutive quarter. The comparison of results with the first quarter of
the prior fiscal year reflects higher sales across several product lines
including UNIX tools, software maintenance services, and tools for providing
Year 2000 solutions. Expense levels throughout the Company were lower than in
the prior calendar quarter, except those related to professional services where
Micro Focus has been investing to expand its capacity. The Company noted that in
prior years its first quarter has been seasonally its lowest. In addition, the
Company previously announced that it had completed the acquisition of Millennium
(UK) Limited, a Year 2000 consulting firm, at the end of the first quarter for a
consideration of USD 6.4m (GBP 4.0m) paid in a combination of cash and shares.
"We are now shifting our emphasis from fixing problems to capturing the many
opportunities in our markets," said Marcelo Gumucio, CEO. "We have made
considerable progress in focusing our efforts on our most promising markets,
making key additions to our management team, and controlling costs. For the
first time, our new management team can report strong revenue growth over the
same quarter a year ago. Our strategies are in place for the legacy and
distributed computing businesses as well as the expanding Year 2000 opportunity,
and we anticipate making important new product releases in coming months."
"We believe we are now positioned to invest for future growth," noted Anthony R.
Muller, Chief Financial Officer. "We have begun to make these investments by
attracting talented people to Micro Focus, continuing to upgrade our
infrastructure, and moving to exploit the many opportunities we see, including
but not limited to providing Year 2000 solutions."
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As a foreign private issuer in the United States, Micro Focus is not required to
file quarterly reports with the U.S. Securities and Exchange Commission ("SEC").
However, beginning in June 1997, the Company plans to furnish to the SEC on a
voluntary basis quarterly reports on Form 6-K which will include the Company's
results for the applicable quarter in a format similar to that of a Form 10-Q.
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, G14 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 first 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 include, among
others, the ability of Micro Focus 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 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, 1997 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 based on the audited
financial statements which have been filed with the UK Registrar of
Companies; the auditors' reports on both the UK and US financial statements
for the year ended January 31, 1997 were unqualified. Copies of the 1996
Annual Report are available upon request to the Company Secretary of Micro
Focus at the Registered Office, The Lawn, 22-30 Old Bath Road, Newbury,
Berkshire, England, RG14 1QN, or on the Securities and Exchange Commission
Internet web site www.sec.gov. Following established Micro Focus practice,
the directors do not intend to recommend the payment of a dividend.
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<TABLE>
MICRO FOCUS GROUP PLC - 1997 FIRST QUARTER REPORT
CONSOLIDATED STATEMENTS OF INCOME - IN US FORMAT
<CAPTION>
- ----------------------------------------------------------------------
(Unaudited) Three months ended
in thousands of US dollars April 30
(except per share data) 1997 1996
- ----------------------------------------------------------------------
<S> <C> <C>
Net revenue
Product revenue 16,350 12,891
Service revenue 13,764 11,278
- ----------------------------------------------------------------------
Total net revenue 30,114 24,169
- ----------------------------------------------------------------------
Costs and expenses
Cost of product revenue 2,404 2,125
Cost of service revenue 4,953 4,693
Research and development 7,699 9,131
Sales and marketing 10,726 11,760
General and administrative 1,858 2,206
Non-recurring charges - 8,000
- ----------------------------------------------------------------------
Total costs and expenses 27,640 37,915
- ----------------------------------------------------------------------
Income (loss) from operations 2,474 (13,746)
Investment income 942 664
Interest expense (3) (13)
- ----------------------------------------------------------------------
Income (loss) before taxes 3,413 (13,095)
Income taxes (1,126) (115)
- ----------------------------------------------------------------------
Net income (loss) 2,287 (13,210)
- ----------------------------------------------------------------------
Net income (loss) per share
(in US dollars) 0.15 (0.87)
- ----------------------------------------------------------------------
Weighted average number of shares
outstanding (thousands) 15,763 15,145
</TABLE>
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<TABLE>
MICRO FOCUS GROUP PLC - 1997 FIRST QUARTER REPORT
CONSOLIDATED BALANCE SHEETS - IN US FORMAT
<CAPTION>
- ----------------------------------------------------------------------
in thousands of US dollars April 30 January 31
1997 1997
(unaudited)
- ----------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents 36,567 71,560
Short-term investments 37,050 -
Accounts receivable, net 21,250 20,275
Inventories 669 774
Prepaid expenses and other assets 3,447 2,490
- ----------------------------------------------------------------------
Total current assets 98,983 95,099
- ----------------------------------------------------------------------
Fixed assets:
Property, plant and equipment, net 32,480 32,868
Goodwill, net 6,629 -
Software product assets, net 22,609 23,344
- ----------------------------------------------------------------------
Total assets 160,701 151,311
- ----------------------------------------------------------------------
Liabilities and shareholders' equity Current liabilities:
Bank loans 1,763 -
Accounts payable 5,244 4,886
Accrued employee compensation
and commissions 6,041 5,811
Income taxes payable 5,377 4,142
Deferred revenue 28,430 26,635
Other current liabilities 9,054 11,047
- ----------------------------------------------------------------------
Total current liabilities 55,909 52,521
- ----------------------------------------------------------------------
Long-term debt and other liabilities 23 24
Deferred income taxes 10,109 9,983
Shareholders' equity:
Ordinary shares 2,418 2,389
Additional paid-in capital 31,034 27,468
Unrealized loss on available-for-sale
securities, net of tax (87) -
Treasury stock (8,959) (8,959)
Cunulative exchange (loss) (2,309) (2,391)
Retained earnings 72,563 70,276
- ----------------------------------------------------------------------
Total shareholders' equity 94,660 88,783
- ----------------------------------------------------------------------
Total liabilities and
shareholders' equity 160,701 151,311
</TABLE>
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<TABLE>
MICRO FOCUS GROUP PLC - 1997 FIRST QUARTER REPORT
CONSOLIDATED PROFIT AND LOSS ACCOUNT - IN UK FORMAT
<CAPTION>
- ----------------------------------------------------------------------
(Unaudited) Three months ended
in thousands of GB pounds April 30
(except per share data) 1997 1996
- ----------------------------------------------------------------------
<S> <C> <C>
Revenue
Product revenue 10,099 8,451
Service revenue 8,476 7,405
- ----------------------------------------------------------------------
Total revenue 18,575 15,856
- ----------------------------------------------------------------------
Costs and expenses
Cost of product revenue 1,484 1,409
Cost of service revenue 3,049 3,125
Research and development 4,737 7,947
Sales and marketing 6,606 8,690
General and administrative 1,142 3,652
- ----------------------------------------------------------------------
Total costs and expenses 17,018 24,823
- ----------------------------------------------------------------------
Operating profit / (loss) 1,557 (8,967)
Investment income 500 436
Interest expense (2) (8)
- ----------------------------------------------------------------------
Profit/(loss) before taxation 2,055 (8,539)
Taxation (678) (76)
- ----------------------------------------------------------------------
Profit/(loss) after taxation 1,377 (8,615)
- ----------------------------------------------------------------------
Earnings/(loss) per share 9.1p (56.9p)
</TABLE>
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<TABLE>
MICRO FOCUS GROUP PLC - 1997 FIRST QUARTER REPORT
CONSOLIDATED BALANCE SHEET - IN UK FORMAT
<CAPTION>
- ----------------------------------------------------------------------
in thousands of GB pounds April 30 January 31
1997 1997
(unaudited)
- ----------------------------------------------------------------------
<S> <C> <C>
Fixed assets
Intangible fixed assets 13,956 14,590
Tangible fixed assets 20,050 20,543
Investment 5,634 5,634
- ----------------------------------------------------------------------
Total fixed assets 39,640 40,767
- ----------------------------------------------------------------------
Current assets
Stock 413 484
Trade debtors 13,117 12,672
Other debtors and prepaid expenses 2,128 1,556
Cash and bank deposits 45,443 44,725
- ----------------------------------------------------------------------
Total current assets 61,101 59,437
- ----------------------------------------------------------------------
Creditors: amounts falling due within one year:
Bank loans and overdrafts 1,088 -
Trade creditors 3,237 3,054
Accrued employee compensation
and commissions 3,729 3,632
Current corporation tax 3,330 2,590
Accrued expenses and
other current liabilities 5,588 6,904
Deferred revenue 17,550 16,646
- ----------------------------------------------------------------------
Net current assets 26,579 26,611
- ----------------------------------------------------------------------
Total assets less current liabilities 66,219 67,378
Creditors: amounts falling due
after more than one year 14 15
Provision for liabilities and charges:
Deferred taxation 6,241 6,239
- ----------------------------------------------------------------------
Net assets 59,964 61,124
- ----------------------------------------------------------------------
Capital and reserves
Called up share capital 1,534 1,517
Share premium and other reserves 20,246 18,071
Profit and loss account 38,184 41,536
- ----------------------------------------------------------------------
Total shareholders' funds 59,964 61,124
</TABLE>
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*** 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: May 22, 1997 By: /s/ Loren E. Hillberg
--------------------------
Loren E. Hillberg
Vice President and General Counsel
