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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 August 14, 1997
Micro Focus 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 the 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: 7:30 am BST Thursday US: 2:30 am EDT Thursday
August 14, 1997 August 14, 1997
Please contact:
Anthony R. Muller US 650-843-7070
Senior Vice President
Chief Financial Officer
Giles Sanderson/Edward Bridges UK 0171-831-3113
Financial Dynamics
Micro Focus Announces Increased Revenue Growth for Second Quarter
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London, England and Palo Alto, Calif., Aug. 14, 1997 - Micro Focus Group Plc
(NASDAQ: MIFGY; London Stock Exchange: MICF) today announced net revenue for its
second quarter ended July 31, 1997, of USD 37,326,000 (GBP 22,774,000) as
compared to USD 28,088,000 (GBP 18,284,000) recorded in the second quarter of
1996, a 33 percent increase. Net income for the quarter was USD 2,975,000 or USD
0.18 per share (GBP 2,088,000 or 13.8 pence per share). In the second quarter of
1996 the Company incurred a net loss of USD 1,207,000 or USD 0.08 per share (GBP
801,000 or 5.3 pence per share). In the first quarter ended April 30, 1997, the
Company reported net revenue of USD 30,114,000 (GBP 18,575,000) and net income
of USD 2,287,000 or USD 0.15 per share (GBP 1,377,000 or 9.1 pence per share).
Results for the quarter include Millennium UK Limited, a Year 2000 consulting
firm, acquired at the end of the first quarter in a transaction accounted for as
a purchase.
For the first six months of 1997 Micro Focus reported net revenue of USD
67,440,000 (GBP 41,349,000) which represented a 29 percent increase above the
USD 52,257,000 (GBP 34,140,000) recorded for the first six months of 1996. Net
income for the period was USD 5,262,000 or USD 0.33 per share (GBP 3,465,000 or
22.7 pence per share) as compared to a net loss of USD 14,302,000 or USD .94 per
share (GBP 9,416,000 or 62.2 pence per share) incurred in 1996. Results for the
prior year period included restructuring charges of Revenue for the quarter was
24 percent above the first quarter, seasonally the Company's lowest quarter.
Product licensing revenue for the quarter was 40 percent above both the first
quarter of 1997 and the second quarter of 1996.
"We are pleased with the progress the Company has made and the growth we are
experiencing," said Martin Waters, President and CEO. "Our investments are
beginning to provide returns and we are pleased with the market reception of
SoftFactory/2000 following its introduction during the quarter. The significant
growth in new license revenue for the quarter demonstrates that our strategy of
providing complete solutions to our customers is being well received."
"Micro Focus' growth and improved financial results follow the changes we have
continued to make in responding to customer needs", added Anthony R. Muller,
Senior Vice President and Chief Financial Officer. "New products, broadening of
our service offerings, the addition of many talented people, and upgrading our
infrastructure have all contributed to our progress. We intend to continue to
invest in moving Micro Focus forward."
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The Company intends to publish its First Half Report on August 21, 1997, and
distribute copies to all shareholders of record as of July 31, 1997. 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 began to furnish to the SEC on a
voluntary basis quarterly reports on Form 6-K which 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 developing and
deploying production systems in distributed environments, moving application
development and maintenance off of the mainframe, and providing solutions for
reengineering systems to handle the millennium date change.
In the U.S. Micro Focus is located at 2465 East Bayshore Road, Palo Alto,
California 94303 - telephone 650-856-4161. In the U.K. the Company is located at
The Lawn, 22-30 Old Bath Road, Newbury, Berkshire, RG14 1QN - telephone 01635
32646. 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 second 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 extent to which recently released products earn rapid market
acceptance with customers, 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, and the Company's Form 6-K, both as filed with
the SEC, as they may be updated or amended with future filings.
The financial information contained in this report does not constitute
statutory accounts as defined in section 240 of the U.K. 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 U.K. Registrar
of Companies; the auditors' reports on both the U.K. and U.S. 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 SECOND QUARTER REPORT
CONSOLIDATED STATEMENTS OF INCOME - IN US FORMAT
<CAPTION>
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(Unaudited) Three months ended Six months ended
in thousands of US dollars July 31 July 31
(except per share data) 1997 1996 1997 1996
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<S>
Net revenue <C> <C> <C> <C>
Product revenue 22,937 16,349 39,287 29,240
Service revenue 14,389 11,739 28,153 23,017
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Total net revenue 37,326 28,088 67,440 52,257
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Cost of revenue
Cost of product revenue 2,457 2,786 4,861 4,911
Cost of service revenue 6,192 4,907 11,145 9,600
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Total cost of revenue 8,649 7,693 16,006 14,511
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Gross profit 28,677 20,395 51,434 37,746
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Operating expenses
Research and development 7,721 8,729 15,420 17,860
Sales and marketing 14,188 11,429 24,914 23,189
General and administrative 3,324 2,200 5,182 4,406
Non-recurring charges - - - 8,000
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Total operating expenses 25,233 22,358 45,516 53,455
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Income (loss) from operations 3,444 (1,963) 5,918 (15,709)
Investment income 1,031 688 1,973 1,352
Interest expense (34) (4) (37) (17)
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Income (loss) before taxes 4,441 (1,279) 7,854 (14,374)
Income taxes (1,466) 72 (2,592) 72
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Net income (loss) 2,975 (1,207) 5,262 (14,302)
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Net income (loss) per share
(in US dollars) 0.18 (0.08) 0.33 (0.94)
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Weighted average number of shares
outstanding (thousands) 16,270 15,153 16,017 15,149
======================================================================
</TABLE>
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<TABLE>
MICRO FOCUS GROUP PLC - 1997 SECOND QUARTER REPORT
CONSOLIDATED BALANCE SHEETS - IN US FORMAT
<CAPTION>
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in thousands of US dollars July 31 January 31
1997 1997
(unaudited)
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<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents 40,589 71,560
Short-term investments 35,444 -
Accounts receivable, net 26,616 20,275
Inventories 683 774
Prepaid expenses and other assets 2,047 2,490
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Total current assets 105,379 95,099
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Fixed assets:
Property, plant and equipment, net 34,747 32,868
Goodwill, net 6,315 -
Software product assets, net 21,986 23,344
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Total assets 168,427 151,311
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Liabilities and shareholders' equity Current liabilities:
Bank loans 1,620 -
Accounts payable 6,151 4,886
Accrued employee compensation
and commissions 6,992 5,811
Income taxes payable 6,464 4,142
Deferred revenue 28,509 26,635
Other current liabilities 9,062 11,047
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Total current liabilities 58,798 52,521
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Long-term debt and other liabilities 22 24
Deferred income taxes 10,173 9,983
Shareholders' equity:
Ordinary shares 2,429 2,389
Additional paid-in capital 31,903 27,468
Unrealized gain on available-for-sale
securities, net of tax 22 -
Treasury stock (8,249) (8,959)
Cunulative exchange (loss) (2,208) (2,391)
Retained earnings 75,537 70,276
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Total shareholders' equity 99,434 88,783
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Total liabilities and
shareholders' equity 168,427 151,311
======================================================================
</TABLE>
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<TABLE>
MICRO FOCUS GROUP PLC - 1997 SECOND QUARTER REPORT
CONSOLIDATED PROFIT AND LOSS ACCOUNT - IN UK FORMAT
<CAPTION>
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(Unaudited) Three months ended Six months ended
in thousands of GB pounds July 31 July 31
(except per share data) 1997 1996 1997 1996
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue
Product revenue 14,007 10,625 24,106 19,076
Service revenue 8,767 7,659 17,243 15,064
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Total revenue 22,774 18,284 41,349 34,140
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Cost of revenue
Cost of product revenue 1,433 2,013 2,917 3,222
Cost of service revenue 3,775 3,159 6,824 6,284
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Total cost of revenue 5,208 5,172 9,741 9,506
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Gross profit 17,566 13,112 31,608 24,634
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Operating expenses
Research and development 4,711 5,056 9,448 13,203
Sales and marketing 8,648 7,081 15,254 15,771
General and administrative 1,777 2,344 2,919 5,996
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Total operating expenses 15,136 14,481 27,621 34,970
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Operating profit/(loss) 2,430 (1,369) 3,987 (10,336)
Investment income 707 448 1,207 884
Interest expense (21) (3) (23) (11)
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Profit/(loss) before taxation 3,116 (924) 5,171 (9,463)
Taxation (1,028) 123 (1,706) 47
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Profit/(loss) after taxation 2,088 (801) 3,465 (9,416)
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Earnings/(loss) per share 13.8p (5.3p) 22.7p (62.2p)
======================================================================
</TABLE>
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<TABLE>
MICRO FOCUS GROUP PLC - 1997 SECOND QUARTER REPORT
CONSOLIDATED BALANCE SHEET - IN UK FORMAT
<CAPTION>
- ----------------------------------------------------------------------
in thousands of GB pounds July 31 January 31
1997 1997
(unaudited)
- ----------------------------------------------------------------------
<S> <C> <C>
Fixed assets
Intangible fixed assets 13,488 14,590
Tangible fixed assets 21,317 20,543
Investment 5,188 5,634
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Total fixed assets 39,993 40,767
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Current assets
Stock 419 484
Trade debtors 16,329 12,672
Other debtors and prepaid expenses 1,256 1,556
Cash and bank deposits 46,646 44,725
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Total current assets 64,650 59,437
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Creditors: amounts falling due within one year:
Bank loans and overdrafts 994 -
Trade creditors 3,774 3,054
Accrued employee compensation
and commissions 4,289 3,632
Current corporation tax 4,060 2,590
Accrued expenses and
other current liabilities 5,552 6,904
Deferred revenue 17,491 16,646
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Total current liabilities 36,160 32,826
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Net current assets 28,490 26,611
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Total assets less current liabilities 68,483 67,378
Creditors: amounts falling due
after more than one year 14 15
Provision for liabilities and charges:
Deferred taxation 6,240 6,239
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Net assets 62,229 61,124
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Capital and reserves
Called up share capital 1,541 1,517
Share premium and other reserves 20,777 18,071
Profit and loss account 39,911 41,536
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Total shareholders' funds 62,229 61,124
======================================================================
</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: August 14, 1997 By: /s/ Loren E. Hillberg
---------------------------------
Loren E. Hillberg
Vice President and General Counsel
