<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 February 23, 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:
MERANT
Gary Greenfield
President & Chief Executive Officer
1-301-838-5223
[email protected]
Ken Sexton
Chief Financial Officer
1-301-838-5210
[email protected]
FINANCIAL DYNAMICS
Giles Sanderson/Edward Bridges
United Kingdom
44-171-831-3113
[email protected]
[email protected]
VMW, INC.
Sylvia Dresner/Vicki Weiner
United States
1-212-616-6161
[email protected]
MERANT'S THIRD QUARTER RESULTS SHOW MAJOR IMPROVEMENT OVER SECOND QUARTER
Operational Improvements and Strategic Focus Combine for Growth
NEWBURY, England and MOUNTAIN VIEW, CA -- February 23, 1999 -- MERANT plc
(London Stock Exchange: MRN; Nasdaq: MRNT), a leader in Enterprise Application
Development solutions, today reported results for the third fiscal quarter ended
January 31, 1999. Third quarter revenues were $95.7 million, compared to
revenues of $100.9 million in last year's fiscal third quarter, and up 10
percent over the $87.2 million reported in this fiscal year's second quarter.
Net earnings for the third fiscal quarter were $5.2 million, as compared to
$10.8 million in the third quarter last year, and rose fivefold over the $1.1
million or $0.01 per ordinary share in the second fiscal quarter, excluding the
one-time charges associated with the acquisition of INTERSOLV by MERANT in
September 1998. Diluted earnings per ordinary share for the third quarter this
year were $0.04 compared with $0.07 last year, and diluted earnings per American
Depositary Share (ADS) were $0.18 this year compared with last year's $0.37.
MERANT president and CEO Gary Greenfield said, "With the third quarter
performance, we are beginning to see the positive results of strategic steps we
have taken over the past several months to realign and combine the technology,
distribution and service strengths of the merged organizations of Micro Focus
and INTERSOLV. Those activities were highlighted earlier this month with the
announcement of our name change to MERANT. As a combined company, we are now
expanding our leadership in the Enterprise Application Development market."
<PAGE> 3
"Our overall revenue performance for the quarter was in line with expectations.
International operations were strong across all product lines in the third
quarter, but sales in North America remained at approximately the same level as
the prior quarter," Mr. Greenfield said. "We see signs that the strong economy
is eliminating delays in purchasing by financial institutions that we
experienced earlier in our fiscal year. In addition, our transformation business
activities are expanding well beyond the Y2k requirements to meet current
customer needs including ongoing euro conversions, Web enablement of legacy
systems and enterprise wide solutions."
Commenting on the Company's financial position, Ken Sexton, chief financial
officer, said, "We are pleased that at the end of the third quarter we reported
$119 million in cash and cash equivalents which is $4.14 per American Depositary
Share (ADS). Our operations continue to generate cash, offsetting most of the
merger-related expenditures."
"MERANT will continue to focus on its core market activities and to invest in
products, people and processes on which our customers depend," said Mr.
Greenfield. "At the same time, the Company will also leverage new technology,
new standards and new processes to make our customers more successful and
competitive in the future. These strategic initiatives and important operational
changes that we are implementing place MERANT on a strong course to take
advantage of the rapidly evolving electronic economy."
"We believe the strategic refocus of the Company on core business solutions and
the addition of exciting new product releases during the last several months
will continue to fuel the growth of our international business and revitalize
the North American market in the year ahead," Mr. Greenfield said.
MERANT is a market leader with innovative technology in three key areas of
Enterprise Application Development: creating and transforming enterprise
applications; application development management; and enterprise data
connectivity. "MERANT has the ability to help customers deliver enterprise
applications that accelerate their business and transform their enterprise
through our one stop for solutions," Mr. Greenfield said.
With industry-standard products and services, MERANT's solutions include:
* Application Creation and Transformation to help customers develop, extend
and integrate enterprise applications with Micro Focus(R) products,
* Application Development Management to help customers reduce risk within
the development life cycle and accelerate development of quality software
using PVCS(R) products,
* Enterprise Data Connectivity to help speed the delivery of critical
business information through flexible and reliable data access middle ware
with DataDirect(R) products and,
* Enterprise Solutions providing a broad spectrum of enterprise application
development services with MERANT Consulting.
Recent examples of the breadth and depth of MERANT's innovative technology and
application solutions include DataDirect technology, which now drives E-business
on Infoseek's GO Network; Net Express 3.0(TM), a ground-breaking development
environment for E-COBOL applications that extends core business processes
written in COBOL to the Web and other distributed computing platforms; and PVCS
Dimensions Replicator(TM), a leading distributed development system for
facilitating software development processes in decentralized and distributed
team environments.
<PAGE> 4
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 nearly $400 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.
<PAGE> 5
(Tables and Supplemental Data Follow)
US GAAP Results
- ----------------
The acquisition of 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.
MERANT also previously reported that it has elected to change its fiscal year
end and accounting reference date to April 30 from January 31. Consequently, the
Company is today reporting under US GAAP results for the first nine months of
the fiscal year beginning May 1, 1998 and ending April 30, 1999. Revenue for the
nine month period increased 2% to $278.2 million from $272.0 million for the
comparable nine-month period ended January 31, 1998. Excluding one-time charges,
net income for the nine months was $13.6 million compared with $21.6 million for
the comparable period of fiscal 1998 and diluted earnings per ADS were $0.47
compared with $0.75 in the comparable prior-year period. Diluted earnings per
ordinary share were $0.09 per share compared with $0.15 for the comparable prior
year period.
Summary financial results are as follows:
<TABLE>
US Dollars, US GAAP Three months ended Nine months ended
(excluding one-time charges) January 31 January 31
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenue $95.7m $100.9m $278.2m $272.0m
Net income $ 5.2m $ 10.8m $ 13.6m $ 21.6m
EPS : Basic $0.04 $0.08 $0.09 $0.16
Diluted $0.04 $0.07 $0.09 $0.15
Diluted ADS equivalent $0.18 $0.37 $0.47 $0.75
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 Micro Focus
and INTERSOLV
</TABLE>
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 totaled GBP 140.1
million, will be charged against income over a four-year term. Net revenue for
the quarter increased 89% to GBP 57.3 million, from GBP 30.3 million for the
quarter ended January 31, 1998.
The results of the quarter include a pre-tax charge for amortization of GBP 8.8
million against goodwill arising from the acquisition. Excluding that charge,
profit after taxation was GBP 3.2 million compared with GBP 4.3 million in the
prior year period and diluted earnings per ordinary share were 2.3 pence
compared with 5.4 pence. Including the effect of those charges, loss after
taxation was GBP 5.5 million and loss per share was 3.9 pence compared to a
profit after taxation of GBP 4.2 million and earnings per share of 5.4 pence for
the corresponding prior year period.
Pursuant to the change in the Company's fiscal year-end and accounting reference
date, the UK format financial statements will report the results for the
fifteen-month period ending April 30, 1999. Net revenue for the twelve months
ended January 31, 1999 increased 61% to GBP 156.1 million from GBP 97.0 million
for the comparable prior year period. Profit after taxation, excluding the
non-recurring charges and amortization of goodwill associated with the INTERSOLV
acquisition, increased by 26% to GBP 13.0 million from GBP 10.4 million for the
comparable prior year period; and diluted earnings per share were 12.7 pence for
the twelve-month period compared with 13.3 pence for the comparable prior year
period.
<TABLE>
GB Pounds, UK GAAP Three months ended Twelve Months ended
January 31 January 31
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue GBP 57.3m GBP 30.3m GBP 156.1m GBP 97.0m
Profit before taxation, merger costs and GBP 5.1m GBP 6.3m GBP 19.8m GBP 15.2m
amortization of goodwill
(Loss) profit before taxation & merger costs (GBP 3.7m) GBP 6.3m GBP 7.4m GBP 15.2m
(Loss) profit after taxation, before merger costs (GBP 5.5m) GBP 4.3m GBP 0.6m GBP 10.4m
(Loss) profit after taxation & merger costs (GBP 5.5m) GBP 4.3m (GBP 7.6m) GBP 10.4m
EPS: Basic (3.9p) 5.6p (7.3p) 14.0p
Diluted (3.9p) 5.4p (7.3p) 13.3p
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
</TABLE>
<PAGE> 6
Micro Focus is a registered trademark, and MERANT is a trademark, of MERANT
International Limited. INTERSOLV, DataDirect and PVCS are registered trademarks
of MERANT Solutions Inc. All other trademarks as they appear in this
announcement are the property of their respective owners.
The financial information contained in this report does not constitute statutory
accounts as defined in section 240 of the UK Companies Act 1985. Prior year
figures are based on the audited Financial statements of the Company for the
year ended January 31, 1998, 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, 1998 were unqualified. Copies of the Company's second
Interim Report, which incorporates the results included in this announcement,
will be distributed to all shareholders in March 1999.
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 and Newbury.
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 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 the Company
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 the Company's markets.
Further information on potential factors which could affect the Company'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 and October 31, 1998, and INTERSOLV's Annual
Report on Form 10-K for the year 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 JANUARY 31, 1999
CONSOLIDATED STATEMENTS OF INCOME - IN U.S. FORMAT
(in thousands of U.S. dollars, except share, per share and ADS data)
(unaudited)
<TABLE>
Three Three Nine Nine
months months months months
ended ended ended ended
January 31 January 31 January 31 January 31
1999 1998 1999 1998
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net revenue
Product revenue $48,587 $56,441 $142,191 $149,833
Maintenance revenue 25,363 22,692 75,074 63,811
Service revenue 21,767 21,756 60,886 58,394
Total net revenue 95,717 100,889 278,151 272,038
- ----------------------------------------------------------------------------------------------------------------------
Cost of revenue
Cost of product revenue 4,269 4,519 9,973 10,294
Cost of maintenance revenue 5,904 5,212 18,534 15,459
Cost of service revenue 17,725 16,977 51,558 46,900
Total cost of revenue 27,898 26,708 80,065 72,653
- ----------------------------------------------------------------------------------------------------------------------
Gross profit 67,819 74,181 198,086 199,385
- ----------------------------------------------------------------------------------------------------------------------
Operating expenses
Research and development 15,147 14,972 45,876 45,628
Sales and marketing 36,281 35,073 110,079 101,764
General and administrative 10,287 9,177 26,271 22,412
One time charges - - 49,662 176
Total operating expenses 61,715 59,222 231,888 169,980
- ----------------------------------------------------------------------------------------------------------------------
Income (loss) from operations 6,104 14,959 (33,802) 29,405
Interest income, net 1,908 1,066 4,938 2,897
Income (loss) before income taxes 8,012 16,025 (28,864) 32,302
Income taxes (2,800) (5,266) (998) (10,681)
Net income (loss) $5,212 $10,759 $(29,862) $21,621
- ----------------------------------------------------------------------------------------------------------------------
Net (loss) income per share: basic $0.04 $0.08 ($0.21) $0.16
Net (loss) income per ADS: basic $0.18 $0.39 ($1.04) $0.79
- ----------------------------------------------------------------------------------------------------------------------
Shares used in computing basic net (loss) income per share (thousands) 143,669 137,823 143,310 137,035
Shares used in computing basic net (loss) income per ADS (thousands) 28,734 27,565 28,662 27,407
- ----------------------------------------------------------------------------------------------------------------------
Net income per share: diluted $0.04 $0.07 ($0.21) $0.15
Net income per ADS: diluted $0.18 $0.37 ($1.04) $0.75
- ----------------------------------------------------------------------------------------------------------------------
Shares used in computing diluted net income per share (thousands) 143,726 145,618 143,310 144,149
Shares used in computing diluted net income per ADS (thousands) 28,745 29,124 28,662 28,830
- ----------------------------------------------------------------------------------------------------------------------
Excluding one time charges:
Income before income taxes 8,012 16,025 20,798 32,302
Net income 5,212 10,759 13,564 21,621
Net income per ADS: diluted $0.18 $0.37 $0.47 $0.75
- ----------------------------------------------------------------------------------------------------------------------
Note: Shares and per-share data for all periods presented above reflect the 5-for-1 stock split of the Company's
ordinary shares, which was effective as of close of business on March 13, 1998. Each American Depository
Share ("ADS") represents five ordinary shares.
</TABLE>
<PAGE> 8
MERANT PLC - QUARTER ENDED JANUARY 31, 1999
CONSOLIDATED BALANCE SHEETS - IN U.S. FORMAT
(in thousands of U.S. dollars)
<TABLE>
January 31, April 30,
1999 1998
(Unaudited) (Unaudited)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $82,588 $82,256
Short-term investments 36,376 36,316
Accounts receivable, net 112,220 110,571
Inventories 1,975 1,038
Prepaid expenses and other assets 11,425 9,977
Total current assets 244,584 240,158
Fixed assets:
Property, plant and equipment, net 47,354 51,071
Goodwill, net 8,723 6,983
Software product assets, net 17,242 25,738
Other assets 7,670 9,124
Total assets $325,573 $333,074
- ----------------------------------------------------------------------------------------------------------------------
Liabilities and shareholders' equity
Current liabilities:
Bank loans $4,546 $5,126
Accounts payable 11,539 15,781
Accrued employee compensation 22,262 30,675
Income taxes payable 12,067 13,116
Deferred revenue 67,601 59,117
Other current liabilities 35,593 22,112
Total current liabilities 153,608 145,927
Long-term debt and other liabilities 4 650
Deferred income taxes 15,002 14,423
Total liabilities $168,614 $161,000
- ----------------------------------------------------------------------------------------------------------------------
Shareholders' equity:
Ordinary shares 4,799 4,640
Additional paid-in capital and other reserves 154,726 151,802
Unrealised gain on available-for-sale securities, net of tax 85 44
Treasury stock (7,435) (7,769)
Retained earnings 7,519 32,045
Currency translation adjustment (2,735) (8,688)
Total shareholders' equity $156,959 $172,074
- ----------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $325,573 $333,074
- ----------------------------------------------------------------------------------------------------------------------
Note: Pursuant to U.S. GAAP, balance sheet information at April 30, 1998 is restated to include the balance
sheet of MERANT as of January 31, 1998 and INTERSOLV as of April 30, 1998.
</TABLE>
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MERANT PLC - QUARTER ENDED JANUARY 31, 1999
CONSOLIDATED PROFIT & LOSS ACCOUNT - IN U.K. FORMAT
<TABLE>
Three Three Twelve Twelve
months months months months
ended ended ended ended
January 31 January 31 January 31 January 31
1999 1998 1999 1998
(unaudited) (unaudited) (unaudited)
GBP'000 GBP'000 GBP'000 GBP'000
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue
Product revenue 29,118 20,174 86,739 60,480
Maintenance revenue 15,189 8,123 41,771 28,233
Service revenue 13,034 2,003 27,611 8,302
Total revenue 57,341 30,300 156,121 97,015
- ----------------------------------------------------------------------------------------------------------------------
Cost of revenue
Cost of product revenue 2,555 2,253 6,634 6,990
Cost of maintenance revenue 3,537 1,935 13,345 6,984
Cost of service revenue 10,614 2,723 19,045 8,861
Total cost of revenue 16,706 6,911 39,024 22,835
- ----------------------------------------------------------------------------------------------------------------------
Gross profit 40,635 23,389 117,097 74,180
- ----------------------------------------------------------------------------------------------------------------------
Operating expenses
Research and development 9,076 5,182 25,689 19,679
Sales and marketing 21,728 10,508 60,980 35,289
General and administrative 5,883 2,162 14,085 6,476
Amortisation of goodwill on Intersolv acquisition 8,754 12,399
Total operating expenses 45,441 17,852 113,153 61,444
- ----------------------------------------------------------------------------------------------------------------------
Operating (loss) profit (4,806) 5,537 3,944 12,736
Exceptional items (11,831)
(Loss)/profit before interest and taxation (4,806) 5,537 (7,887) 12,736
Interest income, net 1,142 669 3,428 2,481
(Loss)/profit before taxation (3,664) 6,206 (4,459) 15,217
Taxation charge (1,849) (1,953) (3,093) (4,791)
(Loss)/profit for the period after taxation (5,513) 4,253 (7,552) 10,426
- ----------------------------------------------------------------------------------------------------------------------
(Loss)/earnings per share: basic (3.9p) 5.6p (7.3p) 14.0p
(Loss)/earnings per share: diluted (3.9p) 5.4p (7.3p) 13.3p
- ----------------------------------------------------------------------------------------------------------------------
Number of shares: basic 139,859 75,401 103,214 74,626
Number of shares: diluted 139,859 79,426 103,214 78,526
- ----------------------------------------------------------------------------------------------------------------------
Note: Shares and per-share data for all periods presented above reflect the 5-for-1 stock split of the Company's
ordinary shares, which was effective as of close of business on March 13, 1998.
</TABLE>
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MERANT PLC - QUARTER ENDED JANUARY 31, 1999
CONSOLIDATED BALANCE SHEET - IN U.K. FORMAT
<TABLE>
Jannary 31 January 31
1999 1998
(Unaudited)
GBP'000 GBP'000
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Fixed assets:
Intangible fixed assets 141,603 12,394
Tangible fixed assets 28,704 23,836
Investment 4,425 4,886
Total fixed assets 174,732 41,116
- ----------------------------------------------------------------------------------------------------------------------
Current assets:
Stock 1,197 317
Trade debtors 70,405 29,145
Other debtors and prepaid expenses 9,119 1,728
Cash and bank deposits 72,100 51,518
Total current assets 152,821 82,708
Creditors: amounts falling due within one year
Bank loans and overdrafts 2,755 1,007
Trade creditors 6,994 4,241
Accrued employee compensation 13,493 7,481
Current corporation tax 6,929 6,428
Accrued expenses and other current liabilities 21,105 7,326
Deferred revenue 40,969 20,030
Total current liabilities 92,245 46,513
- ----------------------------------------------------------------------------------------------------------------------
Net current assets 60,576 36,195
- ----------------------------------------------------------------------------------------------------------------------
Total assets less current liabilities 235,308 77,311
Creditors: amounts falling due after more than one year 4 12
Provision for liabilities and charges: deferred taxation 9,093 6,407
Net assets 226,211 70,892
- ----------------------------------------------------------------------------------------------------------------------
Capital and reserves
Called up share capital 2,873 1,588
Share premium account and other reserves 192,387 30,196
Profit and loss account 30,951 39,108
Total shareholders' equity 226,211 70,892
- ----------------------------------------------------------------------------------------------------------------------
</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: February 23, 1999 By: /s/ Kenneth A. Sexton
---------------------------------------
Kenneth Sexton
Chief Financial Officer
