<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 24, 1999
MERANT plc
(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.)
<PAGE> 2
FOR IMMEDIATE RELEASE
CONTACTS:
VMW Corporate & Investor Relations
MERANT Vicki Weiner/Sylvia Dresner
Ken Sexton United States
Chief Financial Officer 1-212-616-6161
1-301-838-5210 [email protected]
[email protected]
Financial Dynamics
Larry De'Ath Giles Sanderson/Edward Bridges
VP, Investor Relations United Kingdom
1-301-838-5228 44 (0) 171 813 3113
[email protected] [email protected]
MERANT'S FIRST QUARTER RESULTS EXCEED PROFIT EXPECTATIONS
Company Strengthens e-Business Position
MOUNTAIN VIEW, Calif. and NEWBURY, England - August 24, 1999 - MERANT (London
Stock Exchange (LSE): MRN; NASDAQ National Market (NNM): MRNT), a global leader
in the fast-growing marketplace for enterprise application development software
and services, today reported results for the first fiscal quarter ended July 31,
1999.
For the first fiscal quarter, revenues were $87.6 million, under U.S. generally
accepted accounting principles (or "GAAP"). Net earnings were $0.9 million and
diluted earnings per American Depository Share (ADS) were $0.03. Cash increased
sequentially by $3 million since the beginning of the quarter to $124.1 million
at July 31, 1999.
Under U.K. GAAP, revenues for the first fiscal quarter were GBP 54.9 million.
Pre-tax earnings excluding goodwill amortization were GBP 1.4 million for the
quarter ended July 31, 1999. After goodwill amortization and taxes, net losses
were GBP 7.9 million or 5.7 pence per share. Cash balances totalled GBP 77.1
million at the end of the most recent quarter.
"We are very pleased with the results of the first fiscal quarter," said MERANT
President and CEO Gary Greenfield. "Over the past nine months, our management
team has implemented the internal changes that provide a framework to leverage
MERANT's expertise into traditional and web-based applications. From a business
perspective, legacy to web applications are playing an increasingly important
role in many organizations' e-business strategies. Consistent with our long-term
strategy of providing solutions that address e-business, we completed the
acquisition of The Marathon Group, a premier Internet professional services
firm. Marathon forms the core of MERANT Interactive Services and is
complementary to, and will help accelerate, MERANT's existing e-business
solutions."
"Our customers' desire to grow and transform their business to exploit the
rapidly expanding e-business marketplace has created a strong demand for our
application development management and enterprise data connectivity solutions,"
Mr. Greenfield said. "In fact, International Data Corporation (IDC) named MERANT
the industry leader in the market for data access middleware, and indicate we
are well positioned to address the new e-business requirements of our
customers."
<PAGE> 3
Commenting on the Company's financial position, Ken Sexton, MERANT's chief
financial officer, said, "The benefits of the INTERSOLV - Micro Focus merger
consolidation program are beginning to be realized, with first quarter spending
down compared to the fourth quarter of fiscal 1999. In addition, our financial
position was again strengthened as our business operations continued to generate
cash."
Highlights of MERANT's first quarter include:
* MERANT Expands Ability to Deliver Best-in-Class Enterprise e-Business
Solutions MERANT Interactive Services was formed with the recent
acquisition of privately-held The Marathon Group, a premiere Internet
professional services firm, providing creative, development, marketing and
e-business strategy, as well as an impressive client list. This move is a
fundamental part of MERANT's long-term strategy to better support
customers' increasing requirements to "e"-enable their enterprises.
* Towers Perrin Invests in MERANT e-Business Solutions - One of the world's
largest management and human resources consulting firms, Towers Perrin,
chose MERANT products and consulting services to help transform its pension
administration system into a robust e-business application, and expedite
its deployment via the Web and other distributed platforms.
* MERANT Unveils Most Comprehensive Solution for Process-Based Configuration
Management - Extending its lead in process-based configuration management,
MERANT introduced PVCS Dimensions(TM) 5.0, the industry's leading solution
for automating the management of software change, protecting enterprise
software assets and accelerating time-to-market.
* MERANT Delivers Robust Data Integration for Microsoft Transaction Server -
Meeting the needs of today's demanding application server market, MERANT
announced industry-leading DataDirect(R)solutions for Microsoft Transaction
Server (MTS) and Distributed Transaction Coordinator.
* MERANT Delivers Enterprise Data Access for Red Hat Linux - Addressing
customer and CIO concerns about the establishment of standards for the
industry's fastest-growing server operating environment, MERANT introduced
DataDirect solution for Red Hat Linux, enabling organizations to rapidly
build and deploy Linux applications.
About MERANT
Founded in 1976, MERANT is a leader in Enterprise Application Development,
providing the products, people and processes to accelerate the customer's
business through the application of innovative information technology. MERANT
empowers organizations to transform their enterprise applications for the
changing technology and business requirements of the e-Business environment,
manage the application development process, and provide integrated data
connectivity across the enterprise, from the mainframe to the Internet. A global
organization with more than $370 million in annual revenues and more than 2,000
employees, MERANT has approximately 500 technology partners and more than 5
million licenses at over 35,000 customer sites - including the entire Fortune
100 and the majority of the Global 500. For additional information on MERANT and
its solutions, visit the MERANT web site at http://www.merant.com. Investor
inquiries can be forwarded to [email protected].
(Tables and Supplemental Analysis Follow)
<PAGE> 4
US GAAP RESULTS
The acquisition of INTERSOLV, Inc. ("INTERSOLV") completed in September 1998 was
accounted for as a pooling-of-interests under U.S. generally accepted accounting
principles (GAAP). Accordingly, all U.S. financial data presented herein,
including the results announced above, include the results of INTERSOLV.
Revenue for the three months ended July 31, 1999 was $87.6 million, down $7.7
million or 8% from last year's comparable quarter. The decrease was mostly the
result of lower demand for products focused on fixing the Year 2000 (or "Y2K")
software problem. For the three months ended July 31, 1999, revenue from the Y2K
area represented 2% of license fees and 12% of overall revenue, down
substantially from the prior year's comparable quarter.
Gross margins were $64.4 million or 74% of revenue for the most recent quarter,
compared with $69.0 million or 72% of revenue for the quarter ended July 31,
1998. Operating expenses for the July 31, 1999 quarter were $63.1 million, up 8%
compared with last year's comparable quarter. Most of the increase in operating
expenses was the result of additional investments in sales and marketing as
planned for the current fiscal year. Pre tax earnings before goodwill
amortization charges, interest income and taxes were $1.3 million compared with
$10.4 million for the quarter ended July 31, 1998. Earnings per American
Depositary Share (or "ADS") were $0.03 compared with $0.24 per ADS for last
year's comparable quarter.
Summary financial results are as follows:
<TABLE>
US Dollars, US GAAP Three months ended
(in millions, except per ADS amounts) July 31
1999 1998
---- ----
<S> <C> <C>
Revenue $87.6m $95.3m
EBITDA $1.3m $10.4m
Net income $0.9m $7.2m
Earnings per ADS - Diluted $0.03 $0.24
Notes:
* Basis of presentation: under US GAAP, the INTERSOLV acquisition has
been accounted for as a pooling-of-interests, and accordingly all periods
presented in US format disclose the combined results of MERANT and
INTERSOLV
* EBITDA is earnings before interest, taxes and goodwill amortization
charges.
</TABLE>
<PAGE> 5
UK GAAP RESULTS
In accordance with UK GAAP, the INTERSOLV transaction has been accounted for as
an acquisition. Accordingly, the UK format results incorporate the results of
INTERSOLV from September 24, 1998, the date of the completion of its
acquisition. Goodwill arising from the acquisition, which totalled GBP 140.1
million, will be charged against income over a four-year term.
Revenue for the quarter increased 88% to GBP 54.9 million, from GBP 29.3 million
for the quarter ended July 31, 1998. This increase in revenue is primarily the
result of the acquisition of INTERSOLV. Operating expenses increased in a like
amount also because of the INTERSOLV acquisition. Goodwill charges of GBP 8.8
million in the July 31, 1999 quarter are primarily related to the INTERSOLV
acquisition. Pre-tax earnings excluding charges associated with the amortization
of goodwill were GBP 1.4 million compared with GBP 5.1 million in the comparable
prior year period. Including the effect of goodwill charges, loss after taxation
was GBP 7.9 million and loss per share was 5.7 pence, compared to a profit after
taxation of GBP 3.4 million and diluted earnings per share of 4.2 pence for the
corresponding prior year period.
Summary financial results are as follows:
<TABLE>
GB Pounds, UK GAAP Three months ended
(amounts in millions, except per share amounts) July 31
1999 1998
---- ----
<S> <C> <C>
Revenue GBP 54.9m GBP 29.3m
EBITDA GBP 0.8m GBP 4.4m
(Loss) profit before taxation (GBP 7.3)m GBP 5.0m
(Loss) profit after taxation (GBP 7.9)m GBP 3.4m
EPS: Diluted (5.7)p 4.2p
Notes:
* Basis of presentation: under UK GAAP, the INTERSOLV transaction has
been accounted for as an acquisition, and accordingly the UK format results
include the results of INTERSOLV from September 24, 1998, the date of its
acquisition
* EBITDA is earnings before interest, taxes and goodwill amortization
charges.
</TABLE>
<PAGE> 6
Trademarks
MERANT and Dimensions are trademarks, and DataDirect, Micro Focus and
PVCS are registered trademarks, of MERANT. All other trademarks as they appear
in this announcement are the property of their respective owners.
Securities Exchanges
As a foreign private issuer in the United States, MERANT is not required to file
quarterly reports with the U.S. Securities and Exchange Commission ("SEC").
However, beginning in 1997, MERANT commenced furnishing to the SEC on a
voluntary basis quarterly reports on Form 6-K which include MERANT's results for
the applicable quarter in a format similar to that of a Form 10-Q. These
materials are available on the SEC web site located at http://www.sec.gov.
Copies of the Annual Report for the year ended January 31, 1998 are available
upon request to MERANT's offices in Mountain View, California, and Newbury,
United Kingdom.
Forward-Looking Statements
The following statement is made in accordance with the U.S. Private Securities
Litigation Reform Act of 1995: This announcement contains forward-looking
statements that include statements regarding expectations for revenue and profit
growth, future demand for MERANT's application development management solutions
and data connectivity solutions, features and benefits of MERANT's products and
services, and expectations for MERANT's Interactive Services and e-commerce
business, including the integration of The Marathon Group. These forward-looking
statements involve a number of risks and uncertainties. Actual results could
differ materially from those anticipated by the forward-looking statements made
herein. Factors that could cause actual results to differ materially include,
among others, the ability of MERANT to effectively manage its costs against
uncertain revenue expectations, the ability to manage and integrate recently
acquired businesses or other businesses that it may acquire in the future, 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 ability of MERANT to
develop, release and sell products and services to customers in the highly
dynamic market for enterprise application development solutions, the potential
need for enterprise application development solutions to shift based on changes
in underlying technology standards coming into use, and the effect of
competitors' efforts to enter MERANT's markets. Further information on potential
factors which could affect MERANT's financial results is included in the
Registration Statement on Form F-4 relating to the INTERSOLV acquisition,
MERANT's Annual Report on Form 20-F for the year ended January 31, 1998 and
Quarterly Reports on Form 6-K for the quarters ended April 30, 1998, July 31,
1998, October 31, 1998 and January 31, 1999, and INTERSOLV's Annual Report on
Form 10-K for the years ended April 30, 1998, and Quarterly Report on Form 10-Q
for the quarter ended July 31, 1998, each as filed or submitted (as the case may
be) with the SEC, as they may be updated and amended with future filings.
<PAGE> 7
MERANT plc - QUARTER ENDED JULY 31, 1999
CONSOLIDATED STATEMENTS OF INCOME US FORMAT
<TABLE>
- -------------------------------------------------------------------------------
(in thousands - except per share and ADS data) Three Three
months months
ended ended
July 31 July 31
1999 1998
(unaudited) (unaudited)
- -------------------------------------------------------------------------------
<S> <C> <C>
Revenue
License Fees $42,526 $50,726
Maintenance subscriptions 25,380 24,508
Training and consulting 19,689 20,041
- -------------------------------------------------------------------------------
Total revenue 87,595 95,275
- -------------------------------------------------------------------------------
Cost of revenue
Cost of product revenue 2,555 2,762
Cost of maintenance revenue 5,694 6,203
Cost of service revenue 14,916 17,316
- -------------------------------------------------------------------------------
Total cost of revenue 23,165 26,281
- -------------------------------------------------------------------------------
Gross profit 64,430 68,994
- -------------------------------------------------------------------------------
Operating expenses
Research and development 14,492 15,480
Sales and marketing 40,830 36,076
General and administrative 7,812 7,078
- -------------------------------------------------------------------------------
Total operating expenses 63,134 58,634
- -------------------------------------------------------------------------------
Income before goodwill amortization 1,296 10,360
Goodwill amortization 978 769
- -------------------------------------------------------------------------------
Income from operations 318 9,591
Interest income, net 1,013 1,410
- -------------------------------------------------------------------------------
Income before income taxes 1,331 11,001
Income taxes 479 3,772
- -------------------------------------------------------------------------------
Net income $ 852 $ 7,229
===============================================================================
Net income per share: basic $0.01 $0.05
Net income per ADS: basic $0.03 $0.26
Shares used in computing basic net income per share 143,792 137,823
ADS's used in computing basic net income per ADS 28,758 27,565
- -------------------------------------------------------------------------------
Net income per share: diluted $0.01 $0.05
Net income per ADS: diluted $0.03 $0.24
Shares used in computing diluted net income per share 148,606 145,618
ADS's used in computing diluted net income per ADS 29,721 29,124
- -------------------------------------------------------------------------------
Note:. Each American Depositary Share ("ADS") represents five ordinary shares.
</TABLE>
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MERANT plc - QUARTER ENDED JULY 31, 1999
CONSOLIDATED BALANCE SHEETS US FORMAT
<TABLE>
- -------------------------------------------------------------------------------
(in thousands) July 31 April 30
1999 1999
(unaudited) (unaudited)
- -------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $103,145 $86,580
Short-term investments 20,995 34,804
Accounts receivable, net 99,819 111,317
Prepaid expenses and other asset 11,139 13,485
- -------------------------------------------------------------------------------
Total current assets 235,098 246,186
- -------------------------------------------------------------------------------
Fixed Assets:
Property, plant and equipment, net 46,142 46,090
Goodwill, net 9,420 10,239
Software product assets, net 15,862 17,007
Other assets 4,545 3,560
- -------------------------------------------------------------------------------
Total assets $311,067 323,082
- -------------------------------------------------------------------------------
Liabilities and shareholders' equity
Current liabilities:
Bank loans $4,360 $2,716
Accounts payable 10,934 12,150
Accrued employee compensation 16,665 24,352
Income taxes payable 18,805 18,325
Deferred revenue 64,261 69,155
Other current liabilities 26,477 29,869
- -------------------------------------------------------------------------------
Total current liabilities 141,502 156,567
Deferred income taxes 15,222 14,304
- -------------------------------------------------------------------------------
Total liabilities 156,724 170,871
- -------------------------------------------------------------------------------
Shareholders' equity:
Ordinary shares 4,704 4,691
Additional paid-in capital and other reserves 155,994 154,868
Treasury stock (7,453) (7,552)
Retained earnings 9,702 8,850
Accumulated other comprehensive loss (8,604) (8,646)
- -------------------------------------------------------------------------------
Total shareholders' equity 154,343 152,211
- -------------------------------------------------------------------------------
Total liabilities and shareholders' equity $311,067 $323,082
===============================================================================
</TABLE>
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MERANT plc - QUARTER ENDED JULY 31, 1999
CONSOLIDATED PROFIT AND LOSS ACCOUNT UK FORMAT
<TABLE>
- -------------------------------------------------------------------------------
(in thousands - except share, per share data) Three Three
months months
ended ended
July 31 July 31
1999 1998
(unaudited) (unaudited)
GBP'000 GBP'000
- -------------------------------------------------------------------------------
<S> <C> <C>
Revenue
License fees 26,749 18,072
Maintenance subscriptions 15,815 7,841
Training and consulting 12,331 3,360
- -------------------------------------------------------------------------------
Total revenue 54,895 29,273
- -------------------------------------------------------------------------------
Cost of revenue
Cost of product revenue 1,597 1,136
Cost of maintenance revenue 3,568 2,403
Cost of service revenue 9,275 2,877
- -------------------------------------------------------------------------------
Total cost of revenue 14,440 6,416
- -------------------------------------------------------------------------------
Gross profit 40,455 22,857
- -------------------------------------------------------------------------------
Operating expenses
Research and development 9,069 5,142
Sales and marketing 25,464 11,028
General and administrative 5,136 2,289
- -------------------------------------------------------------------------------
Total operating expenses 39,669 18,459
- -------------------------------------------------------------------------------
Operating profit before goodwill amortization 786 4,398
Goodwill amortization, net 8,754 136
- -------------------------------------------------------------------------------
Operating (loss)/profit before interest andtaxation (7,968) 4,262
Interest income, net 638 712
- -------------------------------------------------------------------------------
(Loss)/profit before taxation (7,330) 4,974
Taxation (592 (1,617)
- -------------------------------------------------------------------------------
(Loss)/profit for the period after taxation (7,922) 3,357
===============================================================================
(Loss)/earnings per share: basic (5.7p) 4.4p
(Loss)/earnings per share: diluted (5.7p) 4.2p
- -------------------------------------------------------------------------------
Number of shares: basic 139,982 76,295
Number of shares: diluted 139,982 79,929
</TABLE>
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MERANT plc - QUARTER ENDED JULY 31, 1999
CONSOLIDATED BALANCE SHEET UK FORMAT
<TABLE>
- -------------------------------------------------------------------------------
(in thousands of U.K. pounds) July 31 April 30
1999 1999
(unaudited) (unaudited)
- -------------------------------------------------------------------------------
<S> <C> <C>
Fixed Assets:
Intangible fixed assets 127,056 133,976
Tangible fixed assets 28,660 28,633
Investment 4,629 4,691
- -------------------------------------------------------------------------------
Total fixed assets 160,345 167,300
- -------------------------------------------------------------------------------
Current Assets:
Stock 1,173 1,780
Trade debtors 67,745 77,887
Cash and bank deposits 77,106 75,394
- -------------------------------------------------------------------------------
Total current assets 146,024 155,061
- -------------------------------------------------------------------------------
Creditors: amounts falling due within one year
Bank loans and overdrafts 2,708 1,696
Trade creditors 6,791 7,549
Accrued employee compensation 10,351 15,126
Current corporation tax 13,330 11,534
Accrued expenses and other current liabilities 15,143 13,832
Deferred revenue 38,640 42,954
- -------------------------------------------------------------------------------
Total current liabilities 86,963 92,691
- -------------------------------------------------------------------------------
Net current assets 59,061 62,370
- -------------------------------------------------------------------------------
Total assets less current liabilities 219,406 229,670
Creditors: amounts falling due after more than one year 13 6
Provision for liabilities and charges: deferred taxation 9,442 12,555
- -------------------------------------------------------------------------------
Net assets 209,951 217,109
- -------------------------------------------------------------------------------
Capital and reserves
Called up share capital 2,882 2,873
Share premium account and other reserves 189,949 189,261
Profit and loss account 17,120 24,975
- -------------------------------------------------------------------------------
Total shareholders' equity 209,951 217,109
===============================================================================
</TABLE>
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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.
MERANT plc
(Registrant)
Date: August 24, 1999 By: /s/ Kenneth A. Sexton
---------------------------------------
Kenneth Sexton
Chief Financial Officer
