<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 November 28, 2000
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 KEN SEXTON
CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER
+1 (301) 838 5223 +1 (301) 838 5210
[email protected] [email protected]
LARRY DE'ATH FINANCIAL DYNAMICS
VP, INVESTOR RELATIONS GILES SANDERSON
+1 (301) 838 5228 +44 (0) 20 7831 3113
[email protected] [email protected]
MERANT REPORTS SECOND QUARTER RESULTS
Growth of Egility accelerates, e-business accounts for 64% of revenues
WWW.MERANT.COM -- NOVEMBER 28, 2000 -- MERANT (London Stock Exchange (LSE): MRN;
Nasdaq National Market (NNM): MRNT), a global leader in e-business software
solutions, today reported its results for the second fiscal quarter ended
October 31, 2000. A conference call has been scheduled for investors and
analysts to review results today at 2:30 pm GMT (9:30 am US EST).
SECOND QUARTER SUMMARY (ENDED OCTOBER 31, 2000)
- Revenues were Pound Sterling 55.7 million under U.K. GAAP ($82.2 million
under U.S. GAAP).
- Egility e-business software solutions grew 22% at constant currency
exchange rates, and now make up 64% of business.
- Pre-tax earnings under U.K. GAAP were Pound Sterling 1.7 million (or net
earnings of 0.8 pence per ordinary share) before amortization of
goodwill and exceptional items.
- Under U.S. GAAP, pre-tax earnings were $2.2 million (or net earnings of
$0.05 per American Depositary Share (ADS)) before goodwill amortization.
- During August of 2000, the Company bought back 10% of its outstanding
shares for Pound Sterling 13.7 million ($20.3 million).
- Financial position remains strong: cash totaling Pound Sterling 62.4
million ($90.5 million), days sales outstanding (DSO) down to 81 days
and net capitalized software decreased to Pound Sterling 2.9 million
($4.2 million) at the end of the second fiscal quarter.
- Launch of First 'Development on Demand' ASP for Developers - MERANT
ASaP.
<PAGE> 3
COMMENTING ON THE RESULTS, GARY GREENFIELD, MERANT PRESIDENT AND CHIEF EXECUTIVE
OFFICER, SAID:
"We are encouraged by our overall performance in the second quarter of the
fiscal year, with Egility e-business revenues achieving double-digit growth for
both the quarter and the half, and now represents 64% of the Company's business.
Overall, revenues in North America and Asia-Pacific were particularly strong
with solid e-business growth across all geographies. Our transition to a
solutions-based, customer-centric sales model is continuing to build momentum
and this quarter we have complemented our sales team with the addition of a
number of senior sales executives.
We are excited about the launch and customer acceptance of MERANT ASaP, our new
Application Service Provider (ASP) that gives developers immediate Internet
access to powerful development tools for creating e-business applications.
MERANT ASaP is a new way of delivering Egility solutions to our customers and
represents a fundamental change in the way development will be delivered in the
future, complementing our existing sales channel structure.
With the appropriate sales organization now in place with which to capitalize on
our strong customer relationships, market reputation and e-business solutions we
are confident as we approach the end of this period of transition. We are very
optimistic about the outlook for the remainder of the fiscal year."
KEN SEXTON, CHIEF FINANCIAL OFFICER AT MERANT, ADDED:
"I am pleased to report the Company's return to operating profitability, with
actions that we took to improve execution and reduce costs in low-growth areas
contributing positively to our financial performance. Since the beginning of
this fiscal year, we have reduced our employee base roughly 15%, which is
expected to improve second half operating margins. We will continue to focus on
cost management to further improve our margins during the second half of this
fiscal year.
We have seen a progressive improvement in our accounts receivables, with days
sales outstanding decreasing to 81 days, 15 days lower than a year ago, as we
better manage our working capital. Our cash position remains strong, and we
ended the half year with more than Pound Sterling62 million ($90 million) in
cash, after using Pound Sterling14 million ($20 million) to buy back shares, and
we have a strong financial platform on which to build."
<PAGE> 4
OPERATIONAL HIGHLIGHTS
MERANT's second quarter business developments include:
- MERANT UNVEILS FIRST 'DEVELOPMENT ON DEMAND' ASP FOR DEVELOPERS
- MERANT ASaP is the first ASP tailored to the complex change
and configuration management needs of development teams of all
sizes, offering companies a faster way of building applications,
while minimizing the costs of buying, installing, configuring
and managing complex software and hardware.
- MERANT DRESSES UP BTKIDS.NET WEB SITE WITH B2B E-COMMERCE
CAPABILITIES - Baby Togs, the largest infant clothing
manufacturer and distributor worldwide, launched an innovative,
state-of-the-art B2B Web site for its new upscale clothing
product line, B.T. Kids, developed and implemented by MERANT.
- APARTMENTGUIDE.COM REDESIGNED WITH MERANT EGILITY SOLUTIONS -
through MERANT's Egility Enterprise Information Access solution,
MERANT enabled ApartmentGuide.com to deliver real time data to
the Web with bulletproof reliability and outstanding performance
handling thousands of concurrent users.
- IBM, MICROSOFT, SUN AND COMPAQ JOIN MERANT EGILITY ALLIANCE
PROGRAM - MERANT's Egility Alliance program links MERANT with
world-class vendors that provide complementary, best-in-breed
e-business technologies and solutions.
- EGILITY ENTERPRISE INFORMATION ACCESS EMBEDDING AND LICENSING
AGREEMENTS:
- IBM MQSERIES will have built-in data access and
integration capabilities across industry-leading
databases enabling comprehensive B2B integration
with the inclusion of MERANT technology.
- WEBMETHODS, INC. has embedded MERANT's data
access and integration technology into
webMethods for Trading Networks.
- BLUESTONE SOFTWARE licenses and bundles data
access and integration technology with Bluestone
Java Transaction Service (JTS).
- SAS INSTITUTE will integrate MERANT's data
access technology with SAS' data warehousing
solutions to provide enhanced data access.
FINANCIAL COMMENTARY UNDER U.K. GAAP - FOR PERIOD ENDED OCTOBER 31, 2000 Under
U.K. GAAP, revenues were Pound Sterling 55.7 million for the second fiscal
quarter as compared to Pound Sterling 57.0 million for the period ended October
31, 1999. MERANT's Egility e-business revenues grew 22% at constant currency
exchange rates and made up 64% of MERANT's total revenues for the quarter. Total
revenues from Cobol solutions declined 21% at constant currency rates due to the
expected decline in demand for Cobol and mainframe-related products. Changes in
currency exchange rates increased reported U.K. GAAP revenues by Pound
Sterling 2.9 million compared to the same period last year, primarily because of
strengthening of the U.S. dollar as compared to other major international
<PAGE> 5
currencies. Excluding the effect of goodwill amortization and exceptional items,
pre-tax earnings were Pound Sterling 1.7 million, or 0.8 pence per ordinary
share on a net basis, for the quarter ended October 31, 2000. The above pre-tax
earnings are excluding goodwill charges of Pound Sterling 10.5 million and a
Pound Sterling 2.7 million charge for exceptional items.
For the six months ended October 31, 2000, revenues were Pound Sterling 103.3
million compared to Pound Sterling 111.9 million for the six months ended
October 31, 1999. MERANT's Egility e-business revenues for the first six months
of the fiscal year grew 16% at constant currency rates and made up 63% of total
MERANT revenues. Total revenues from Cobol solutions declined 21% at constant
currency rates, due to lower demand for Cobol and mainframe solutions. Changes
in currency exchange rates increased U.K. GAAP revenues by Pound Sterling 2.7
million, compared with the first half of last year. Pre-tax losses before
amortization of goodwill and exceptional items were Pound Sterling 3.1 million
for the six months ended October 31, 2000. For the first six months, the Company
has recorded charges of Pound Sterling 21.0 million for goodwill amortization
and Pound Sterling 3.3 million for exceptional items.
FINANCIAL COMMENTARY UNDER U.S. GAAP - FOR PERIOD ENDED OCTOBER 31, 2000
For the second fiscal quarter ended October 31, 2000, revenues were $82.2
million compared to $92.2 million for the three months ended October 31, 1999
under U.S. GAAP. MERANT's Egility e-business revenues grew 22% at constant
currency exchange rates and made up 64% of MERANT's total revenues for the
quarter. Total revenues from Cobol solutions declined 21% at constant currency
rates due to the expected decline in demand for Cobol and mainframe-related
products. Changes in currency exchange rates decreased reported U.S. GAAP
revenues by $4.1 million compared to the same period last year, primarily
because of the U.S. dollar strengthening as compared to other major
international currencies. Operating earnings before goodwill charges were $0.1
million. Pre-tax earnings were $2.2 million before goodwill amortization
charges. Net earnings per ADS excluding goodwill amortization were $0.05. The
above pre-tax earnings are excluding a goodwill amortization charge of $3.1
million.
Revenues for the first half of this fiscal year were $155.3 million compared to
$179.8 million for the six months ended October 31, 1999. MERANT's Egility
e-business revenues for the first six months of the fiscal year grew 16% at
constant currency rates and made up 63% of total MERANT revenues. Total revenues
from Cobol solutions declined 21% at constant currency rates, due to lower
demand for Cobol and mainframe solutions. Changes in currency exchange rates
decreased U.S. GAAP revenues by $6.7
<PAGE> 6
million, compared with the first half of last year. Pre-tax losses before
goodwill amortization were $5.4 million. Pre-tax losses for the six months
ended October 31, 2000 are excluding goodwill amortization charges of $6.3
million.
SUMMARY FINANCIAL RESULTS ARE AS FOLLOWS:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
G.B. POUNDS, U.K. GAAP Three months ended
(in millions, except per ordinary share -------------------------------------------------
amounts) October 31, October 31,
2000 1999
------------------------------------------------------------------------------------------------
<S> <C> <C>
Revenues Pound Sterling 55.7m Pound Sterling 57.0m
------------------------------------------------------------------------------------------------
EBITA Pound Sterling 0.2m Pound Sterling 7.7m
------------------------------------------------------------------------------------------------
Pre-tax earnings (loss) - excluding Pound Sterling 1.7m Pound Sterling 5.4m
goodwill amortisation and exceptional items
------------------------------------------------------------------------------------------------
Net earnings (loss) per share - excluding
goodwill amortisation and exceptional items 0.8p 2.5p
------------------------------------------------------------------------------------------------
(Loss) after goodwill & taxation (Pound Sterling 11.5m) (Pound Sterling 6.1m)
------------------------------------------------------------------------------------------------
(Loss) per ordinary share (8.6p) (4.4p)
------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
G.B. POUNDS, U.K. GAAP Six months ended
(in millions, except per ordinary share -------------------------------------------------
amounts) October 31, October 31,
2000 1999
------------------------------------------------------------------------------------------------
<S> <C> <C>
Revenues Pound Sterling 103.3m Pound Sterling 111.9m
------------------------------------------------------------------------------------------------
EBITA (Pound Sterling 5.7m) Pound Sterling 5.5m
------------------------------------------------------------------------------------------------
Pre-tax earnings (loss) - excluding (Pound Sterling 3.1m) Pound Sterling 6.8m
goodwill amortisation and exceptional items
------------------------------------------------------------------------------------------------
Net earnings (loss) per share - excluding
goodwill amortisation and exceptional items (1.5p) 3.2p
------------------------------------------------------------------------------------------------
(Loss) after goodwill & taxation (Pound Sterling 27.4m) (Pound Sterling 14.0m)
------------------------------------------------------------------------------------------------
(Loss) per ordinary share (19.5p) (10.0p)
------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
U.S. DOLLARS, U.S. GAAP Three months ended Six months ended
(in millions, except per ADS amounts) -----------------------------------------------------------------------------
October 31, October 31, October 31, October 31,
2000 1999 2000 1999
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $82.2m $92.2m $155.1m $179.8m
-----------------------------------------------------------------------------------------------------------------------------
EBITA $0.1m $7.7m ($9.1m) $9.0m
-----------------------------------------------------------------------------------------------------------------------------
Pre-tax earnings - excluding goodwill $2.2m $8.4m ($5.4m) $10.7m
-----------------------------------------------------------------------------------------------------------------------------
Net earnings per ADS - excluding goodwill $0.05 $0.18 ($0.12) $0.23
-----------------------------------------------------------------------------------------------------------------------------
Net (loss) income ($1.0m) $4.3m ($11.7m) $5.1m
-----------------------------------------------------------------------------------------------------------------------------
Net earnings (loss) per ADS - diluted ($0.04) $0.14 ($0.40) $0.17
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTES:
- EBITA is earnings before interest, taxes, goodwill amortization and
exceptional items.
- Net earnings (loss) excluding goodwill amortization is calculated based
on an assumed tax rate of 35%. The actual tax rate for the fiscal year
could differ depending on future operating results.
- Exceptional items are provisions for anticipated and incurred losses
resulting from the revaluation of shares of MERANT purchased for the
employee share plans under U.K. GAAP. There are no such charges under
U.S. GAAP.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
GEOGRAPHIC REVENUE BREAKDOWN Fiscal 2001
---------------------------------------
Second First
Quarter Half
---------------------------------------------------------------------------------------------
<S> <C> <C>
North America 63% 63%
---------------------------------------------------------------------------------------------
Europe 30% 31%
---------------------------------------------------------------------------------------------
Asia-Pacific 7% 6%
---------------------------------------------------------------------------------------------
</TABLE>
CONFERENCE CALL UPDATE
A conference call has been scheduled today at 2:30 pm GMT (9:30 am EST) for
investors and analysts to review the second quarter results. For those wishing
to participate on the conference call, the telephone numbers are +1 (800) 249
6572 (US) and 0800 89 3905 (UK). For access to our web presentation, please
refer to the following web site at http://merant.webex.com at least 10 minutes
prior to the call.
<PAGE> 8
ABOUT MERANT
MERANT is a leading global e-business software solutions company. Founded in
1976, MERANT has approximately $350 million in annual revenues, 2,000 employees
and more than 500 technology partners. More than 5 million professionals use
MERANT technology solutions at 35,000 customer sites, including the entire
Fortune 100, the majority of the Global 500 and over 400 leading dotcoms. MERANT
provides Egility solutions, which combine expertise, market-leading technology,
best practices and an extensive network of partners, to help companies develop,
integrate, transform and manage e-business applications. Building on MERANT
Egility, MERANT also develops complete B2B and B2C Internet applications. For
additional information, visit www.merant.com. Investor inquiries can be
forwarded to
[email protected].
# #
MERANT and Egility are trademarks of MERANT. All other trademarks contained in
this announcement are the property of their respective owners.
<PAGE> 9
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 the outlook for the remainder of
the fiscal year, the progression of the transition in MERANT's sales model,
expectations about trends in the delivery of e-business development
applications, and the management of costs and improvement of margins during the
second half of the fiscal year. When used in this document, the words
"anticipate", believe", "estimate", "expect", "plan" and similar expressions, as
they relate to MERANT or its management, are intended to identify these
forward-looking statements. These forward-looking statements involve a number of
risks and uncertainties. Actual results could differ materially from those
anticipated by these forward-looking statements. Future results will be
difficult to predict as MERANT transforms its business strategy to provide
e-business solutions and away from certain of its past primary markets,
including the market for Cobol and mainframe-related products. MERANT's ability
to recruit and retain key personnel, especially in the sales and business units,
could materially alter financial results and plans for the sales and business
units. Other 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 potential for a decrease in revenue
or a slowdown in revenue growth which may be caused by delays in the timing of
sales and the delivery of products or services, the ability of MERANT to
develop, release, market and sell products and services to customers in the
highly dynamic market for enterprise application development and e-business
solutions, the potential need for enterprise application development solutions
and e-business solutions to shift based on changes in technology and customer
needs, the market acceptance of MERANT's e-business solutions and e-business
solutions generally, the effect of competitors' efforts to enter MERANT's
markets and the possible success of existing competitors in those markets, and
MERANT's ability to manage and integrate recently acquired businesses or other
businesses that it may acquire in the future. Further information on potential
factors which could affect MERANT's financial results is included in MERANT's
Annual Report on Form 20-F for the year ended April 30, 2000, and Quarterly
Report on Form 6-K for the quarter ended July 31, 2000, each as submitted to the
SEC and as may be updated and amended with future filings or submissions. MERANT
undertakes no obligation to release publicly any updates or revisions to any
forward-looking statements contained in this announcement that may reflect
events or circumstances occurring after the date of this announcement.
FINANCIAL STATEMENT INFORMATION
The financial information contained in this report does not constitute statutory
accounts as defined in section 240 of the U.K. Companies Act 1985. Prior year
figures are based on the audited financial statements of the Company for the
year ended April 30, 2000, which will be filed with the U.K. Registrar of
Companies promptly after MERANT's annual general meeting on November 29, 2000.
The auditors' reports on both the U.K. and the U.S. financial statements for the
year ended April 30, 2000 were unqualified.
U.S. SECURITIES FILINGS
As a foreign private issuer in the United States, MERANT is not required to file
quarterly reports with the SEC. However, starting in 1997 MERANT began
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 MERANT's Annual Report to Shareholders and Annual
Report on Form 20-F, each for the year ended April 30, 2000, are available upon
request to MERANT's offices in Rockville, Maryland or Newbury, United Kingdom.
(TABLES AND SUPPLEMENTAL ANALYSIS FOLLOW)
<PAGE> 10
MERANT PLC
CONSOLIDATED STATEMENTS OF INCOME - IN U.S. FORMAT
<TABLE>
<CAPTION>
..................................................................................................................................
(in thousands, except per share and ADS data) Three months ended Six months ended
OCTOBER 31, October 31, OCTOBER 31, October 31,
(unaudited)
2000 1999 2000 1999
==================================================================================================================================
<S> <C> <C> <C> <C>
NET REVENUE
License fees $39,885 $46,542 $70,496 $89,068
Maintenance subscriptions 28,054 26,639 56,008 52,019
Training and consulting 14,303 18,986 28,554 38,675
..................................................................................................................................
TOTAL NET REVENUE 82,242 92,167 155,058 179,762
----------------------------------------------------------------------------------------------------------------------------------
COST OF REVENUE
Cost of license fees 1,456 2,273 3,831 4,828
Cost of maintenance subscriptions 5,490 6,010 10,880 11,704
Cost of training and consulting 14,776 14,731 29,871 29,647
..................................................................................................................................
TOTAL COST OF REVENUE 21,722 23,014 44,582 46,179
----------------------------------------------------------------------------------------------------------------------------------
GROSS PROFIT 60,520 69,153 110,476 133,583
==================================================================================================================================
OPERATING EXPENSES
Research and development 15,058 15,417 29,828 29,909
Sales and marketing 38,889 39,268 77,001 80,098
General and administrative 6,496 6,807 12,745 14,619
Goodwill amortization 3,134 1,746 6,255 2,724
..................................................................................................................................
TOTAL OPERATING EXPENSES 63,577 63,238 125,829 127,350
==================================================================================================================================
(LOSS) INCOME FROM OPERATIONS (3,057) 5,915 (15,353) 6,233
Interest income, net 2,074 778 3,657 1,791
..................................................................................................................................
(LOSS) INCOME BEFORE INCOME TAXES (983) 6,693 (11,696) 8,024
Income taxes - (2,410) - (2,889)
..................................................................................................................................
NET (LOSS) INCOME ($983) $4,283 ($11,696) $5,135
==================================================================================================================================
NET (LOSS) INCOME PER SHARE: BASIC ($0.01) $0.03 ($0.08) $0.04
Net (loss) income per ADS: basic ($0.04) $0.15 ($0.40) $0.18
Shares used in computing basic net (loss) income per share 139,744 144,220 144,550 144,006
ADSs used in computing basic net (loss) income per ADS 27,949 28,844 28,910 28,801
NET (LOSS) INCOME PER SHARE: DILUTED ($0.01) $0.03 ($0.08) $0.03
Net (loss) income per ADS: diluted ($0.04) $0.14 ($0.40) $0.17
Shares used in computing diluted net (loss) income per share 139,744 150,554 144,550 149,580
ADSs used in computing diluted net (loss) income per ADS 27,949 30,111 28,910 29,916
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: Each American depositary share, or ADS, represents five ordinary shares.
<PAGE> 11
MERANT PLC
CONSOLIDATED BALANCE SHEET - IN U.S. FORMAT
<TABLE>
<CAPTION>
..................................................................................................
(in thousands) OCTOBER 31, April 30,
2000 2000
(UNAUDITED)
==================================================================================================
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $73,030 $106,140
Short-term investments 17,445 19,538
Accounts receivable, net 73,994 92,840
Prepaid expenses and other assets 10,474 10,127
..................................................................................................
TOTAL CURRENT ASSETS 174,943 228,645
..................................................................................................
FIXED ASSETS:
Property, plant and equipment, net 43,441 47,518
Goodwill, net 38,614 44,297
Software product assets, net 4,223 5,569
Other assets 3,354 2,987
..................................................................................................
TOTAL ASSETS $264,575 $329,016
==================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Borrowings $2,556 $2,785
Accounts payable 6,864 12,208
Accrued employee compensation and commissions 16,465 20,088
Income taxes payable 7,734 7,601
Deferred revenue 62,793 69,830
Other current liabilities 28,002 41,945
..................................................................................................
TOTAL CURRENT LIABILITIES 124,414 154,457
DEFERRED INCOME TAXES 14,513 13,157
..................................................................................................
TOTAL LIABILITIES 138,927 167,614
--------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY:
Ordinary shares 4,448 4,876
Additional paid-in capital and other reserves 152,844 172,892
Treasury stock (14,298) (11,742)
Retained (deficit) earnings (5,254) 6,442
Accumulated other comprehensive loss (12,092) (11,066)
..................................................................................................
TOTAL SHAREHOLDERS' EQUITY 125,648 161,402
==================================================================================================
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $264,575 $329,016
==================================================================================================
</TABLE>
<PAGE> 12
MERANT PLC
CONSOLIDATED STATEMENTS OF CASH FLOW - IN U.S. FORMAT
<TABLE>
<CAPTION>
....................................................................................................................................
(in thousands) Three months ended Six months ended
OCTOBER 31, October 31, OCTOBER 31, October 31,
(unaudited) 2000 1999 2000 1999
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net (loss) income ($983) $4,283 ($11,696) $5,135
ADJUSTMENTS TO RECONCILE NET (LOSS) INCOME TO CASH
PROVIDED BY OPERATIONS:
Depreciation of fixed assets 3,316 1,749 6,786 5,000
Amortisation of software product assets and other intangibles 3,688 5,315 7,305 8,796
Changes in operating assets and liabilities (9,745) (2,999) (12,157) (7,329)
Other items 41 1,731 41 3,129
................................................................................................................................
NET CASH (USED) PROVIDED BY OPERATING ACTIVITIES (3,683) 10,079 (9,721) 14,731
--------------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchases of property, plant & equipment (2,424) (4,333) (5,089) (7,636)
Software product assets and other intangibles - (2,527) (98) (4,044)
Acquisition of subsidiaries - (14,978) - (14,978)
Available-for-sale securities (283) (3,954) 2,093 9,855
Other items - 426 - 426
................................................................................................................................
NET CASH (USED) PROVIDED BY INVESTING ACTIVITIES (2,707) (25,366) (3,094) (16,377)
--------------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Issuance of ordinary shares, net of expenses 17 1,034 3,042 2,173
Own shares (24,911) 159 (25,758) 159
Repayment of borrowings - (2,840) - (1,196)
................................................................................................................................
NET CASH (USED) PROVIDED BY FINANCING ACTIVITIES (24,894) (1,647) (22,716) 1,136
--------------------------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash 2,758 455 2,421 596
................................................................................................................................
(DECREASE) INCREASE IN CASH (28,526) (16,479) (33,110) 86
Cash at beginning of period 101,556 103,145 106,140 86,580
................................................................................................................................
CASH AT END OF PERIOD $73,030 $86,666 $73,030 $86,666
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 13
MERANT PLC
CONSOLIDATED PROFIT & LOSS ACCOUNT - IN U.K. FORMAT
<TABLE>
<CAPTION>
...................................................................................................................................
(unaudited) Three months ended Six months ended
OCTOBER 31, October 31, OCTOBER 31, October 31,
2000 1999 2000 1999
POUND Pound POUND Pound
STERLING'000 Sterling'000 STERLING'000 Sterling'000
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUE
Product revenue 27,079 28,687 47,114 55,436
Maintenance revenue 18,964 16,590 37,212 32,405
Service revenue 9,683 11,753 18,983 24,084
...................................................................................................................................
TOTAL REVENUE 55,726 57,030 103,309 111,925
-----------------------------------------------------------------------------------------------------------------------------------
COST OF REVENUE
Cost of product revenue 988 1,415 2,541 3,012
Cost of maintenance revenue 3,709 3,725 7,223 7,293
Cost of service revenue 9,980 9,180 19,822 18,455
...................................................................................................................................
TOTAL COST OF REVENUE 14,677 14,320 29,586 28,760
---------------------------------------------------------------------------------------------------------------------------------
GROSS PROFIT 41,049 42,710 73,723 83,165
---------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Research and development 10,184 9,504 19,814 18,573
Sales and marketing 26,309 24,422 51,160 49,886
General and administrative 4,346 4,069 8,422 9,205
Amortisation of goodwill 10,516 9,660 21,026 18,414
...................................................................................................................................
TOTAL OPERATING EXPENSES 51,355 47,655 100,422 96,078
---------------------------------------------------------------------------------------------------------------------------------
OPERATING (LOSS) (10,306) (4,945) (26,699) (12,913)
Exceptional items: loss provision for
disposal of fixed assets (2,700) - (3,254) -
...................................................................................................................................
(LOSS) BEFORE INTEREST INCOME (13,006) (4,945) (29,953) (12,913)
Interest income, net 1,461 682 2,543 1,320
...................................................................................................................................
(LOSS) BEFORE TAXATION (11,545) (4,263) (27,410) (11,593)
Taxation - (1,864) - (2,456)
...................................................................................................................................
(LOSS) FOR THE PERIOD AFTER TAXATION (11,545) (6,127) (27,410) (14,049)
---------------------------------------------------------------------------------------------------------------------------------
(Loss) per ordinary share: basic (8.6p) (4.4p) (19.5p) (10.0p)
(Loss) per ordinary share: diluted (8.6p) (4.4p) (19.5p) (10.0p)
---------------------------------------------------------------------------------------------------------------------------------
Ordinary shares - basic 134,174 140,522 140,211 140,254
Ordinary shares - diluted 134,174 140,522 140,211 140,254
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: Exceptional items are provisions for anticipated and incurred losses
from the revaluation of shares of MERANT purchased for the employee
share plans.
<PAGE> 14
MERANT PLC
CONSOLIDATED BALANCE SHEET - U.K. FORMAT
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
OCTOBER 31, April 30,
2000 2000
(UNAUDITED)
POUND Pound
STERLING'000 Sterling'000
=============================================================================================================================
<S> <C> <C>
FIXED ASSETS
Intangible fixed assets 96,989 120,205
Tangible fixed assets 29,960 30,075
Investment 6,429 7,431
.............................................................................................................................
TOTAL FIXED ASSETS 133,378 157,711
=============================================================================================================================
CURRENT ASSETS:
Stock 1,460 1,444
Trade debtors 51,074 58,760
Other debtors and prepaid expenses 8,076 7,101
Cash and bank deposits 62,397 79,543
.............................................................................................................................
TOTAL CURRENT ASSETS 123,007 146,848
.............................................................................................................................
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Bank loans and overdrafts 1,763 1,763
Trade creditors 4,734 7,726
Accrued employee compensation 11,355 12,714
Current corporation tax 5,415 4,801
Accrued expenses and other current liabilities 21,908 15,429
Deferred revenue 37,159 44,196
.............................................................................................................................
TOTAL CURRENT LIABILITIES 82,334 86,629
-----------------------------------------------------------------------------------------------------------------------------
NET CURRENT ASSETS 40,673 60,219
=============================================================================================================================
TOTAL ASSETS LESS CURRENT LIABILITIES 174,051 217,930
Provision for liabilities and charges 19,198 19,446
.............................................................................................................................
NET ASSETS 154,853 198,484
=============================================================================================================================
CAPITAL AND RESERVES
Called up share capital 2,699 2,988
Share premium account and other reserves 193,644 200,421
Capital redemption reserve 6,916 -
Profit and loss account (48,406) (4,925)
.............................................................................................................................
TOTAL SHAREHOLDERS' EQUITY 154,853 198,484
=============================================================================================================================
</TABLE>
<PAGE> 15
MERANT PLC
CONSOLIDATED CASH FLOW STATEMENT - U.K. FORMAT
<TABLE>
<CAPTION>
...................................................................................................................
(unaudited) Three months ended
OCTOBER 31, October 31,
2000 1999
POUND Pound
STERLING'000 Sterling'000
===================================================================================================================
<S> <C> <C>
OPERATING (LOSS) (10,306) (4,945)
Depreciation of fixed assets 2,241 1,557
Amortisation of software product assets and other intangibles 11,296 11,110
Changes in operating assets and liabilities 292 3,009
Restructuring charges (1,075) -
Other 28 -
...................................................................................................................
NET CASH INFLOW FROM OPERATING ACTIVITIES 2,476 10,731
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE 1,461 682
TAXATION - (5,962)
Capital expenditure and financial investment (6,139) (4,329)
Acquisitions and disposals - (9,303)
...................................................................................................................
CASH (OUTFLOW) BEFORE FINANCING (2,202) (8,181)
Financing (13,860) (1,023)
...................................................................................................................
(DECREASE) IN CASH (16,062) (9,204)
-------------------------------------------------------------------------------------------------------------------
RECONCILIATION OF NET CASH FLOW TO MOVEMENTS IN NET FUNDS
===================================================================================================================
(Decrease) in cash (16,062) (9,204)
Cash inflow from increase in loans - 1,764
...................................................................................................................
CHANGE IN CASH RESULTING FROM CASH FLOWS (16,062) (7,440)
Currency translation difference (686) 173
...................................................................................................................
MOVEMENT IN CASH DURING THE PERIOD (16,748) (7,267)
Net funds at beginning of period 77,382 74,398
...................................................................................................................
NET FUNDS AT END OF PERIOD 60,634 67,131
...................................................................................................................
</TABLE>
<TABLE>
<CAPTION>
.............................................................................................................
(unaudited) Six months ended
OCTOBER 31, October 31,
2000 1999
POUND Pound
STERLING'000 Sterling'000
=============================================================================================================
<S> <C> <C>
OPERATING (LOSS) (26,699) (12,913)
Depreciation of fixed assets 4,509 3,115
Amortisation of software product assets and other intangibles 22,378 21,316
Changes in operating assets and liabilities 3,916 818
Restructuring charges (1,712) -
Other 28 -
.............................................................................................................
NET CASH INFLOW FROM OPERATING ACTIVITIES 2,420 12,336
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE 2,543 1,320
TAXATION (48) (5,962)
Capital expenditure and financial investment (9,799) (5,483)
Acquisitions and disposals (9,303)
.............................................................................................................
CASH (OUTFLOW) BEFORE FINANCING (4,884) (7,092)
Financing (11,858) 579
.............................................................................................................
(DECREASE) IN CASH (16,742) (6,513)
-------------------------------------------------------------------------------------------------------------
RECONCILIATION OF NET CASH FLOW TO MOVEMENTS IN NET FUNDS
=============================================================================================================
(Decrease) in cash (16,742) (6,513)
Cash inflow from increase in loans - 752
.............................................................................................................
CHANGE IN CASH RESULTING FROM CASH FLOWS (16,742) (5,761)
Currency translation difference (404) (797)
.............................................................................................................
MOVEMENT IN CASH DURING THE PERIOD (17,146) (6,558)
Net funds at beginning of period 77,780 73,689
.............................................................................................................
NET FUNDS AT END OF PERIOD 60,634 67,131
.............................................................................................................
</TABLE>
<PAGE> 16
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: November 28, 2000 By: /s/ Leo Millstein
--------------------------------------
Leo Millstein
Vice President,General Counsel and
Secretary
