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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 December 3, 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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UK: 7:30 am GMT Wednesday US: 2:30 am EST Wednesday
December 3, 1997 December 3, 1997
Please contact: Martin C. Waters US: 650-404-7090
President
Chief Executive Officer
Anthony R. Muller US: 650-404-7070
Senior Vice President
Chief Financial Officer
Giles Sanderson/Edward Bridges UK: 0171 831 3113
Financial Dynamics
Micro Focus Announces Increased Revenue Growth for Third Quarter
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London, England and Mountain View, California, December 3, 1997 - Micro Focus
Group Plc (NASDAQ: MIFGY) today announced net revenue for its third quarter
ended October 31, 1997 of $40,992,000 (GBP 25,366,000), as compared to the
$28,285,000 (GBP 18,131,000) reported in last year's third quarter. Net income
for the quarter was $3,831,000 or $.24 per share (GBP 2,708,000 or 17.6 pence
per share), as compared to the $1,080,000 or $.07 per share (GBP 679,000 or 4.5
pence per share) reported for the third quarter of the prior year. Results for
the quarter reflect 10% growth in net revenue from the $37,326,000 (GBP
22,774,000) reported in the second quarter of the current year when the Company
reported net income of $2,975,000 or $0.18 per share (GBP 2,088,000 or 13.8
pence per share).
For the first nine months of the current year Micro Focus reported net revenue
of $108,432,000 (GBP 66,715,000) and net income of $9,093,000 or $0.57 per share
(GBP 6,173,000 or 40.3 pence per share). This net revenue reflects growth of 35%
above the $80,542,000 (GBP 52,271,000) reported for the comparable prior year
period when the Company reported a net loss of $13,222,000 or $0.87 per share
(GBP 8,737,000 or 57.7 pence per share). The prior year's results included a
restructuring charge of $8,000,000 (GBP 5,195,000).
"The third quarter was an important one for new Micro Focus products," said
Martin Waters, President and CEO. "We realized important bookings and revenue
for SmartFind/2000(TM), our advanced detection product for Year 2000 solutions.
We also introduced and shipped NetExpress(TM), our advanced Windows NT(TM)
system for taking enterprise computing systems to the Internet. Delivery of
these products represent important steps in the execution of our strategy of
providing tools and services to users that maximize their return on investment
in their mainframe applications by taking advantage of emerging technologies."
"Our revenue growth and operating margin increased again during the quarter,"
added Anthony R. Muller, Senior Vice President and Chief Financial Officer. "We
are pleased to report to our shareholders that Micro Focus is a growing,
profitable supplier of advanced software products and services."
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Micro Focus also announced the appointment of J. Sidney Webb as a non-executive
director of the Company. Mr. Webb is the Chairman of the Board of The Titan
Corporation, a position he has held since May, 1984. In addition, Mr. Webb
serves as a director of EIP Microwave, Inc., Plantronics, Inc. and Visigenics
Software, Inc. J. Michael Gullard, Chairman of the Board noted, "We are
committed to increasing the number of outside directors with relevant skills and
experience to the Micro Focus Board. Sid Webb will be a valuable addition to the
Board."
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;
- move application development and maintenance off of the mainframe; and
- reengineer systems to handle the millennium date change and the change
to Euro currency.
Micro Focus is located in the US at 701 East Middlefield Road, Mountain View,
California 94043 - telephone 650-938-3700 and in the UK 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 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 net 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 reports for the quarters ended April 30 and July 31, all 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 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 Annual Report for the year ended January 31,
1997 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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MICRO FOCUS GROUP PLC - THIRD QUARTER ENDED OCTOBER 31, 1997
CONSOLIDATED STATEMENTS OF INCOME - IN US FORMAT
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(Unaudited) Three months ended Nine months ended
in thousands of US dollars October 31 October 31
(except per share data) 1997 1996 1997 1996
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Net revenue
Product revenue 26,178 16,435 65,465 45,675
Service revenue 14,814 11,850 42,967 34,867
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Total net revenue 40,992 28,285 108,432 80,542
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Cost of revenue
Cost of product revenue 2,924 2,156 7,785 7,067
Cost of service revenue 7,053 4,527 18,198 14,127
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Total cost of revenue 9,977 6,683 25,983 21,194
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Gross profit 31,015 21,602 82,449 59,348
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Operating expenses
Research and development 8,162 8,167 23,582 26,027
Sales and marketing 15,393 9,935 40,307 33,124
General and administrative 2,756 2,399 7,938 6,805
Non-recurring charges - - - 8,000
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Total operating expenses 26,311 20,501 71,827 73,956
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Income (loss) from operations 4,704 1,101 10,622 (14,608)
Interest income 1,050 626 3,023 1,978
Interest expense (36) (12) (73) (29)
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Income (loss) before taxes 5,718 1,715 13,572 (12,659)
Income taxes (1,887) (635) (4,479) (563)
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Net income (loss) 3,831 1,080 9,093 (13,222)
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Net income (loss) per share
(in US dollars) 0.24 0.07 0.57 (0.87)
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Weighted average number of shares
outstanding (thousands) 16,240 15,162 16,091 15,162
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MICRO FOCUS GROUP PLC - THIRD QUARTER ENDED OCTOBER 31, 1997
CONSOLIDATED BALANCE SHEETS - IN US FORMAT
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in thousands of US dollars October 31 January 31
1997 1997
(unaudited)
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Assets
Current assets:
Cash and cash equivalents 40,096 71,560
Short-term investments 37,710 -
Accounts receivable, net 29,751 20,275
Inventories 577 774
Prepaid expenses and other assets 2,977 2,490
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Total current assets 111,111 95,099
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Fixed assets:
Property, plant and equipment, net 38,669 32,868
Goodwill, net 5,810 -
Software product assets, net 21,482 23,344
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Total assets 177,072 151,311
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Liabilities and shareholders' equity
Current liabilities:
Bank loans 1,718 -
Accounts payable 6,397 4,886
Accrued employee compensation
and commissions 9,387 5,811
Income taxes payable 8,008 4,142
Deferred revenue 26,624 26,635
Other current liabilities 9,087 11,047
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Total current liabilities 61,221 52,521
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Long-term debt and other liabilities 21 24
Deferred income taxes 10,425 9,983
Shareholders' equity:
Ordinary shares 2,440 2,389
Additional paid-in capital 32,705 27,468
Unrealized gain on available-for-sale
securities, net of tax 17 -
Treasury stock (7,822) (8,959)
Cumulative exchange (loss) (1,261) (2,391)
Retained earnings 79,326 70,276
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Total shareholders' equity 105,405 88,783
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Total liabilities and
shareholders' equity 177,072 151,311
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MICRO FOCUS GROUP PLC - THIRD QUARTER ENDED OCTOBER 31, 1997
CONSOLIDATED PROFIT AND LOSS ACCOUNT - IN UK FORMAT
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(Unaudited) Three months ended Nine months ended
in thousands of GB pounds October 31 October 31
(except per share data) 1997 1996 1997 1996
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Revenue
Product revenue 16,200 10,535 40,306 29,611
Service revenue 9,166 7,596 26,409 22,660
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Total revenue 25,366 18,131 66,715 52,271
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Cost of revenue
Cost of product revenue 1,820 1,382 4,737 4,604
Cost of service revenue 4,363 2,902 11,187 9,186
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Total cost of revenue 6,183 4,284 15,924 13,790
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Gross profit 19,183 13,847 50,791 38,481
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Operating expenses
Research and development 5,049 5,231 14,497 18,434
Sales and marketing 9,527 6,369 24,781 22,140
General and administrative 1,395 1,542 4,314 7,538
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Total operating expenses 15,971 13,142 43,592 48,112
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Operating profit / (loss) 3,212 705 7,199 (9,631)
Interest income 650 401 1,857 1,285
Interest expense (22) (8) (45) (19)
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Profit/(loss) before taxation 3,840 1,098 9,011 (8,365)
Taxation (1,132) (419) (2,838) (372)
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Profit/(loss) after taxation 2,708 679 6,173 (8,737)
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Earnings/(loss) per share 17.6p 4.5p 40.3p (57.7p)
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MICRO FOCUS GROUP PLC - THIRD QUARTER ENDED OCTOBER 31, 1997
CONSOLIDATED BALANCE SHEET - IN UK FORMAT
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in thousands of GB pounds October 31 January 31
1997 1997
(unaudited)
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Fixed assets
Intangible fixed assets 12,864 14,590
Tangible fixed assets 23,155 20,543
Investment 4,919 5,634
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Total fixed assets 40,938 40,767
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Current assets
Stock 346 484
Trade debtors 17,815 12,672
Other debtors and prepaid expenses 1,783 1,556
Cash and bank deposits 46,590 44,725
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Total current assets 66,534 59,437
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Creditors: amounts falling due within one year:
Bank loans and overdrafts 1,029 -
Trade creditors 3,733 3,054
Accrued employee compensation
and commissions 5,621 3,632
Current corporation tax 4,855 2,590
Accrued expenses and
other current liabilities 5,539 6,904
Deferred revenue 15,943 16,646
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Total current liabilities 36,720 32,826
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Net current assets 29,814 26,611
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Total assets less current liabilities 70,752 67,378
Creditors: amounts falling due
after more than one year 13 15
Provision for liabilities and charges:
Deferred taxation 6,240 6,239
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Net assets 64,499 61,124
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Capital and reserves
Called up share capital 1,548 1,517
Share premium and other reserves 20,633 18,071
Profit and loss account 42,318 41,536
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Total shareholders' funds 64,499 61,124
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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
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(Registrant)
Date: December 3, 1997 By: /s/ Loren E. Hilllberg
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Loren E. Hillberg, Secretary
