<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
-------------- --------------
Commission file number 0-20034
BROADWAY & SEYMOUR, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 41-1522214
------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
128 SOUTH TRYON STREET
CHARLOTTE, NORTH CAROLINA 28202
------------------------------- ----------------
(Address of principal executive (Zip code)
offices)
(704) 372-4281
----------------------------------------------------
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, $.01 par value
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No .
--- ---
As of April 30, 1997, 9,051,982 shares of Common Stock, $.01 par value,
were outstanding.
================================================================================
Page 1 of 18
<PAGE> 2
BROADWAY & SEYMOUR, INC.
TABLE OF CONTENTS
PAGE
NUMBER
------
PART I FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Balance Sheet -
March 31, 1997 and December 31, 1996 3
Consolidated Statement of Operations -
Three months ended March 31, 1997 and
March 31, 1996 4
Consolidated Statement of Cash Flows -
Three months ended March 31, 1997 and
March 31, 1996 5
Notes to Consolidated Financial Statements 6 - 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8 - 10
PART II OTHER INFORMATION:
SIGNATURE 14
----------------------------
PRODUCTS MENTIONED IN THIS REPORT ARE USED FOR IDENTIFICATION PURPOSES ONLY AND
MAY BE TRADE NAMES OR TRADEMARKS OF BROADWAY & SEYMOUR, INC., ITS SUBSIDIARIES
OR THIRD PARTIES.
----------------------------
- 2 -
<PAGE> 3
BROADWAY & SEYMOUR, INC.
CONSOLIDATED BALANCE SHEET
(In thousands, except share and per share data)
(Unaudited)
<TABLE>
<CAPTION>
Mar. 31, Dec. 31,
1997 1996
-------- --------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 11,714 $ 15,010
Receivables 25,137 25,706
Inventories 751 890
Deferred income taxes 3,999 4,417
Other current assets 764 1,308
-------- --------
Total current assets 42,365 47,331
Property and equipment 6,030 6,291
Software costs 4,477 4,748
Intangible assets 7,025 7,346
Other assets 730 758
-------- --------
$ 60,627 $ 66,474
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable and current portion of long-term debt $ 408 $ 473
Accounts payable-trade 5,129 5,836
Accrued compensation 2,325 2,615
Estimated liabilities for contract losses 2,408 2,922
Other accrued liabilities 3,871 4,554
Deferred revenue 9,005 12,476
Income taxes payable 1,340 2,548
-------- --------
Total current liabilities 24,486 31,424
-------- --------
Long-term debt 81 138
-------- --------
Deferred income taxes 2,491 2,557
-------- --------
Other non-current liabilities 339 165
-------- --------
Stockholders' equity:
Common stock, $.01 par value; Authorized 20,000,000 shares; Issued
9,051,982 shares and 8,933,251 shares, for 1997 and 1996, respectively 91 90
Paid-in capital 36,835 36,276
Accumulated deficit (3,204) (3,684)
-------- --------
33,722 32,682
Less treasury stock, at cost, 38,552 shares (492) (492)
-------- --------
33,230 32,190
-------- --------
$ 60,627 $ 66,474
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 3 -
<PAGE> 4
BROADWAY & SEYMOUR, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
Mar. 31, Mar. 31,
1997 1996
-------- --------
<S> <C> <C>
Net revenue $ 19,659 $ 24,733
-------- --------
Operating expenses:
Cost of revenue 13,600 18,061
Research and development 1,317 1,825
Sales and marketing 2,291 3,270
General and administrative 2,273 2,762
Restructuring charge (credit) (429) (205)
-------- --------
Total operating expenses 19,052 25,713
-------- --------
Operating income (loss) 607 (980)
Gain on disposition of non-strategic units 91
Interest income 199 10
Interest expense (15) (185)
-------- --------
Income (loss) before income taxes 882 (1,155)
Provision (benefit) for income taxes 402 (320)
-------- --------
Net income (loss) $ 480 ($ 835)
======== ========
Weighted average common and common
equivalent shares outstanding 9,135 8,856
Income (loss) per common and common
equivalent share $ 0.05 ($ 0.09)
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 4 -
<PAGE> 5
BROADWAY & SEYMOUR, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
Mar. 31, Mar. 31,
1997 1996
-------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 480 ($ 835)
Adjustments to reconcile net income (loss) to net cash
provided (used) by operating activities:
Depreciation and amortization 1,368 2,511
Deferred income taxes 353 100
Restructuring charge (credit) (429) (205)
Gain on disposition of non-strategic units (91)
Loss on disposal of assets 33 2
Change in assets and liabilities excluding effects of
businesses acquired and divestitures:
Receivables 569 589
Inventories 139 160
Other assets 571 (69)
Accounts payable - trade (707) (2,318)
Accrued compensation (215) (798)
Estimated liabilities for contract losses (514) (729)
Other liabilities 16 (2,046)
Deferred revenue and customer deposits (3,471) (4,402)
Income taxes (1,208) 1,711
-------- -------
Net cash provided (used) by operating activities (3,106) (6,329)
-------- -------
Cash flows from investing activities:
Purchase of property and equipment (548) (866)
Investment in software costs (80) (153)
-------- -------
Net cash used by investing activities (628) (1,019)
-------- -------
Cash flows from financing activities:
Net borrowings under credit facility 5,261
Payments of notes payable and long-term debt (122) (820)
Proceeds from issuance of common stock 560 1,313
-------- -------
Net cash provided by financing activities 438 5,754
-------- -------
Net decrease in cash and cash equivalents (3,296) (1,594)
Cash and cash equivalents, beginning of period 15,010 2,053
-------- -------
Cash and cash equivalents, end of period $ 11,714 $ 459
======== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 5 -
<PAGE> 6
BROADWAY & SEYMOUR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION:
The consolidated financial statements of the Company include all
adjustments of a normal recurring nature which, in the opinion of management,
are necessary for a fair presentation of financial position as of March 31, 1997
and results of operations and cash flows for the interim periods presented. The
results of operations for the three months ended March 31, 1997 are not
necessarily indicative of the results to be expected for the entire year.
The accompanying consolidated financial statements have been prepared
in accordance with the instructions to Form 10-Q and do not include all the
information and footnotes required by generally accepted accounting principles.
These interim financial statements should be read in conjunction with the
consolidated financial statements and notes thereto for the year ended December
31, 1996 as reported by the Company in its Annual Report on Form 10-K.
Certain prior year amounts have been reclassified to conform with
current year presentation.
NOTE 2 - SIGNIFICANT TRANSACTIONS:
In November 1996, the Company sold all of the issued and outstanding
capital stock of its wholly owned subsidiary, Corbel & Co. ("Corbel")(excluding
its interest in National Pension Alliance ("NPA")), pursuant to a Stock
Purchase Agreement. The consideration paid to the Company at closing was
approximately $13.5 million, with an additional $.5 million to be paid to the
Company twenty-four months after closing, subject to certain holdback
provisions for indemnification obligations. Also, the Company may be entitled
to receive an earnout payment of up to a maximum of $3.5 million based on
Corbel's revenue in 1997.
In May 1996, the Company sold substantially all the assets, subject to
certain related liabilities, of its Asset Management Services Group ("AMSG"),
including the Company's wholly owned subsidiary BancCorp Systems, Inc., to
Fidelity Investments Institutional Services Company, Inc. ("Fidelity"), pursuant
to an Asset Purchase Agreement. At closing the Company received cash proceeds of
$17.5 million for the net assets and licensing of certain software, net of
certain fees and expenses. The gain on the sale of the business was $8.7
million. An additional $5.5 million was scheduled to be paid by Fidelity to the
Company, subject to certain holdback provisions for indemnification obligations,
over the twenty-four months following the closing for certain software
maintenance, training, and transition services and professional services. These
service agreements were terminated effective December 31, 1996 and at March 31,
1997, $2 million remained to be received subject to such holdback provisions.
- 6 -
<PAGE> 7
NOTE 3 - RECEIVABLES:
Receivables at March 31, 1997 and December 31, 1996 consisted of the
following:
<TABLE>
<CAPTION>
Mar. 31, Dec. 31,
1997 1996
-------- --------
(In thousands)
<S> <C> <C>
Trade $ 23,514 $ 23,349
Unbilled 1,629 2,584
Other 915 665
-------- --------
26,058 26,598
Less - Allowance for doubtful accounts (921) (892)
-------- --------
$ 25,137 $ 25,706
======== ========
</TABLE>
NOTE 4 - SOFTWARE COSTS:
The Company capitalizes a portion of its costs of developing software
to be licensed, including costs of product enhancements which improve the
marketability of the original product or extend its life. These capitalized
costs are incurred after the establishment of technological feasibility and
prior to the availability of the software for general release. During the three
months ended March 31, 1997 and March 31, 1996, approximately $.1 million and
$.1 million of software development costs were capitalized, respectively.
Software costs in the accompanying balance sheet also include the cost of
purchased software. Software costs are generally amortized over the estimated
economic lives of the products, up to a maximum of six years. Accumulated
amortization was $6.7 million and $8.2 million at March 31, 1997 and March 31,
1996, respectively. Amortization expense was approximately $.4 million and $.7
million for the quarters ended March 31, 1997 and March 31, 1996, respectively.
NOTE 5 - RESTRUCTURING CHARGES:
During the fourth quarter of 1995, the Company reserved approximately
$1.5 million which consisted of approximately $1.0 million for the consolidation
of certain facilities that were expected to be subleased and approximately $.5
million for employee severance costs. During the first quarter of 1996, the
Company utilized cash of approximately $.3 million to satisfy obligations
related to these reserves and revised its estimate of the remaining costs to
complete the restructuring downward by $.2 million. As of March 31, 1997, the
reserve balance was approximately $.2 million, related principally to employee
severance costs.
Also, in 1996, the Company reserved approximately $ 2.5 million
related to the exit costs of NPA including $1.3 million for customer refunds,
$.8 million related to asset write-offs, and $.4 million related to employee
terminations. During 1996, $1.3 million, related principally to customer refunds
and asset write-offs had been charged against the reserve. In the first quarter
of 1997, the Company reduced its estimate of the remaining costs to complete the
exit plan of NPA by $.4 million,. and charged $ .1 million against the accrual,
related principally to employee severance. At March 31, 1997, the remaining
accrual of $.6 million is related principally to employee severance costs and
the disposal of fixed assets.
- 7 -
<PAGE> 8
BROADWAY & SEYMOUR, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Broadway & Seymour, Inc. ("Broadway & Seymour" or the
"Company") is an industry-specialized software and services company providing
integrated, information technology-enabled business solutions for the financial
services and professional services markets.
In May 1996, the Company sold substantially all the assets, subject to
certain related liabilities, of its Asset Management Services Group ("AMSG").
For the quarter ended March 31, 1996, AMSG contributed revenue of $4.4 million
and operating losses were $.9 million. For the quarter ended March 31, 1997, the
Company recorded an additional $.4 million of revenue and $.4 million cost of
revenue for certain professional and transition services provided to the
purchaser of AMSG under agreements entered into at the time of the sale. In
November 1996, the Company sold all of the issued and outstanding capital stock
of its wholly owned subsidiary, Corbel & Co. ("Corbel"). For the quarter ended
March 31, 1996, Corbel contributed revenue of $4.1 million and operating income
of $.2 million. Also, revenue for the quarter ended March 31, 1996 included $.5
million of revenue related to services provided to the purchaser of the
Company's wholly owned subsidiary, Liberty Software, Inc. ("Liberty"), which was
sold in June 1995.
In addition, in August 1996, the Company developed a plan to close its
National Pension Alliance ("NPA") business. In the first quarter of 1997, the
operations of NPA ceased and operating losses were $.4 million. For the
quarter ended March 31, 1996, NPA contributed revenue of $.1 million and
operating losses of $.6 million.
The financial statements included herein reflect the Company's
unaudited results of operations for the three months ended March 31, 1997 and
March 31, 1996.
QUARTER ENDED MARCH 31, 1997 COMPARED TO
QUARTER ENDED MARCH 31, 1996
The Company's results reflect operating income of $.6 million for the
first quarter of 1997 compared with a $1.0 million operating loss for the same
period of 1996. Because of the significant impact of the transactions discussed
above, a comparison of the historical results of operations for the quarter
ending March 31, 1997 to the quarter ending March 31, 1996 may not be
meaningful. The following table has been included to facilitate discussion and
analysis of the results of operations of the Company's ongoing business.
Revenue and Cost of Revenue
<TABLE>
<CAPTION>
March 31, March 31,
1997 1996
--------- ---------
<S> <C> <C>
Net revenue from ongoing business, excluding NPA $19,280 $15,712
Net revenue from NPA -- 108
Non-recurring net revenue from Corbel, AMSG, Liberty 379 8,913
- -------------------------------------------------------------------------------
Consolidated net revenue $19,659 $24,733
- -------------------------------------------------------------------------------
Cost of revenue from ongoing business, excluding NPA $12,851 $10,435
Cost of revenue from NPA 314 481
Non-recurring cost of revenue from Corbel, AMSG, Liberty 435 7,145
- -------------------------------------------------------------------------------
Consolidated cost of revenue $13,600 $18,061
- -------------------------------------------------------------------------------
</TABLE>
- 8 -
<PAGE> 9
Net revenue from the Company's ongoing business, excluding NPA,
increased 23%, from $15.7 million in the first quarter of 1996 to $19.3 million
in the first quarter of 1997. Revenue from the Company's Customer and Financial
Solutions group increased $.4 million in the quarter ended March 31, 1997
compared to the quarter ended March 31, 1996. Increases in the Customer and
Financial Solutions group revenue for the quarter of approximately $.7 million
related to increased licenses from the group's software solutions. In addition,
in the first quarter of 1997, the Company recognized $.3 million of license
revenue related to a software application developed for a specific customer. On
a comparative basis, these increases in the first quarter of 1997 were partially
offset by software license revenue of $4.0 recognized in the first quarter of
1996 from a single significant contract, against which the Company recorded
substantially no expense. In the first quarter of 1997, the Company recorded
revenue for consulting services of $3.3 million related to the same contract.
Revenue from the Company's subsidiary, Elite Information Systems, Inc.
("Elite"), increased $3.0 million from the first quarter of 1996 to the first
quarter of 1997. The increase in Elite revenue in 1997 is principally due to the
high level of new contracts signed in the fourth quarter of 1996 to provide
Elite's Windows based time and billing systems. In addition, customer support
revenue has continued to increase as Elite's customer base expands.
Cost of revenue of the Company's ongoing business, excluding NPA,
increased 23%, or $2.4 million, in the first quarter of 1997 compared to the
first quarter of 1996. Cost of revenue was $12.9 million, or 67% of revenue, and
$10.4 million, or 66% of revenue, for the first quarters of 1997 and 1996,
respectively. The increase in cost of revenue is consistent with the increase in
revenue discussed above and is due to an increase of $1.5 million related to
third-party hardware and software purchased for resale and $.5 million related
to increased personnel costs at Elite.
Research and development expenses in the first quarter of 1997 and 1996
were net of $.1 million and $.1 million of capitalized software development
costs, respectively. Including capitalized costs, research and development costs
decreased to $1.4 million, or 7% of total revenue, in the first quarter of 1997
compared to $1.9 million, or 7.8% of total revenue, in the first quarter of
1996. This decrease in research and development expenditures is principally due
to the sale of Corbel. Research and development costs incurred in 1997 and 1996
relate to the Company's TouchPoint, CRISP, BANCStar, BANCStar Prism,
VisualImpact, and Elite Billing System solutions. In 1996, research and
development costs were also incurred for Corbel's Quantech and AutoDoc products
and NPA's software.
General and administrative expenses decreased 17.7% to $2.3 million, or
11.6% of revenue, for the first quarter of 1997 from $2.8 million, or 11.2% of
revenue, for the first quarter of 1996. This decrease is principally due to the
sale of Corbel and AMSG in 1996. General and administrative expenses
attributable to Corbel and AMSG were $.3 million and $.2 million, respectively
in the first quarter of 1996.
Sales and marketing expenses decreased $1 million to $2.3 million in
the first quarter of 1997 from $3.3 million in the first quarter of 1996. This
decrease is principally due to the sales of Corbel and AMSG in 1996. Corbel and
AMSG incurred sales and marketing expenses of $.6 million and $.7 million,
respectively, of such expenses in the first quarter of 1996.
In the third quarter of 1996, the Company reserved approximately $2.5
million related to the exit costs of NPA, against which $1.3 million had been
charged in 1996. In the first quarter of 1997, the Company reduced its estimate
of the remaining costs to complete the exit plan of NPA by $.4 million and
charged $.1 million against the accrual, related principally to employee
severance. At March 31, 1997, the remaining accrual of $.6 million is related
principally to employee severance and the disposal of fixed assets.
During the fourth quarter of 1995, the Company reserved approximately
$1.5 million which consisted of approximately $1.0 million for the consolidation
of certain facilities that were expected to be subleased and approximately $.5
million for employee severance costs. During the first quarter of 1996, the
Company utilized cash of approximately $.3 million to satisfy obligations
related to these reserves and revised its estimate of the remaining costs to
complete the restructuring downward by $.2 million. As of March 31, 1997, the
reserve balance is $.2 million, related principally to employee severance costs.
- 9 -
<PAGE> 10
INCOME TAXES
The Company's provision for income taxes of $.4 million (or 46% of
income before taxes) for the quarter ended March 31, 1997, exceeds the tax
expense at statutory rates due to the permanent differences of non-deductible
goodwill amortization and state income taxes. The Company's income tax benefit
of $.3 million (or 28% of loss before taxes) for the quarter ended March 31,
1996, differs from the tax benefit at statutory rates due to the loss incurred
in the first quarter of 1996 as adjusted for the permanent differences of
non-deductible goodwill amortization and state income taxes.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1997, the Company had cash and cash equivalents of
approximately $11.7 million and working capital of approximately $17.9 million.
The Company utilized portions of the proceeds from the sales of Corbel and AMSG
to fund working capital requirements, pay off its revolving credit facility,
which expired in May 1996, and certain other debt and to pay certain expenses.
The Company has reviewed its working capital and capital expenditure
requirements and believes that the remaining proceeds from the Corbel and AMSG
sales, cash flow from operations and the issuance of stock pursuant to its
employee stock purchase and stock option plans will be sufficient to fund its
working capital and capital expenditure requirements for the near term. The
Company is reviewing its working capital and capital expenditure requirements
beyond the near term and is evaluating financing alternatives to provide an
additional source of capital.
- 10 -
<PAGE> 11
(A)(3) EXHIBITS:
Exhibit No. Description
- ----------- -----------
3.1 Restated Certificate of Incorporation of Broadway & Seymour, Inc.,
dated June 16, 1992 (Incorporated by reference to Exhibit 3.1 to the
Registrants Annual Report on Form 10-K for the Fiscal Year Ended
January 31, 1993)
3.2 Restated By-laws of the Company (Incorporated by reference to Exhibit
3.2 to the Company's Registration Statement on Form S-1, SEC File No.
33-46672)
4.1 Specimen share certificate (Incorporated by reference to Exhibit 4.1 to
the Registrant's Registration Statement on Form S-1, SEC File No.
33-46672)
4.2 Articles 4 and 5 of Broadway & Seymour, Inc.'s Restated Certificate of
Incorporation (Incorporated by reference to Exhibit 4.2 to the
Registrant's Registration Statement on Form S-1, SEC File No. 33-46672)
4.3 Article II, Section 2.2 of the Company's Restated By-laws (Incorporated
by reference to Exhibit 4.3 to the Registrant's Registration Statement
on Form S-1, SEC File No. 33-46672)
10.1** Restated 1985 Incentive Stock Option Plan of Broadway & Seymour, Inc.
dated June 12, 1985 (Incorporated by reference to Exhibit 10.1 to the
Registrant's Registration Statement on Form S-1, SEC File No. 33-46672)
10.2** Amendment No. 1 to Restated 1985 Incentive Stock Option Plan of
Broadway & Seymour, Inc. dated February 25, 1993 (Incorporated by
reference to Exhibit 10.2 to the Registrant's Annual Report on Form
10-K for the Fiscal Year Ended January 31, 1993)
10.3** Amendment No. 2 to Restated 1985 Incentive Stock Option Plan of
Broadway & Seymour, Inc. dated February 17, 1994 (Incorporated by
reference to Exhibit 10.16 to the Registrant's Transition Report on
Form 10-K for the Eleven Months Ended December 31, 1993)
10.4** Amendment No. 3 to Restated 1985 Incentive Stock Option Plan of
Broadway & Seymour, Inc. dated May 15, 1995 (Incorporated by reference
to Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q for
the Quarter Ended September 30, 1995)
10.5** Broadway & Seymour, Inc. 1996 Stock Option Plan dated September 16,
1996 (Incorporated by reference to Appendix B to the Registrant's
Definitive Proxy Statement on Form DEFS14A dated August 14, 1996)
10.6 Limited Partnership Agreement of National Pension Alliance dated April
8, 1994 by and among Corbel/NPA Inc., Stuart Hack Corp. and Michael E.
Callahan, Inc. (Incorporated by reference to Exhibit 10.7 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter Ended
September 30, 1995)
10.7 Stock Purchase Agreement dated January 10, 1994 by and among Broadway &
Seymour, Inc., certain shareholders of Elite Data Processing, Inc. and
Harvey Rich (Incorporated by reference to Exhibit 2.1 to the
Registrant's Current Report on Form 8-K dated February 1, 1994)
10.8 Stock Pledge Agreement dated as of February 1, 1994 by and among
Broadway & Seymour, Inc., Alan Richeimer (a/k/a Alan Rich) and Harvey
Rich and Eva Rich, as trustees of the Harvey and Eva Rich Family Trust
created by that Trust Agreement dated September 19,1988 (Incorporated
by reference to Exhibit 10.1 to the Registrant's Current Report on Form
8-K dated February 1, 1994)
- 11 -
<PAGE> 12
Exhibit No. Description
- ----------- -----------
10.9 Asset Purchase Agreement dated as of June 9, 1995 by and among Broadway
& Seymour Inc., The MiniComputer Company of Maryland, Inc., Robert W.
Johnson, Michael W. Matthai and Robert A. Erich, Jr. (Incorporated by
reference to Exhibit 10.18 to the Registrant's Quarterly Report on Form
10-Q for the Quarter Ended September 30, 1995)
10.10 Asset Purchase Agreement, dated as of April 10,1996 by and between
Fidelity Investments Institutional Services Company Inc. and Broadway &
Seymour, Inc., BancCorp Systems, Inc., Heebink Group, Inc., and
National Systems Group, Inc. (Incorporated by reference to Exhibit 2.1
to the Registrant's Current Report on Form 8-K dated May 15, 1996)
10.11 Amendment No. 1 to Asset Purchase Agreement dated May 15, 1996 by and
between Fidelity Investments Institutional Services Company Inc. and
Broadway & Seymour, Inc., BancCorp Systems, Inc., Heebink Group, Inc.,
and National Systems Group, Inc. (Incorporated by reference to Exhibit
2.1a to the Registrant's Current Report on Form 8-K dated May 15, 1996)
10.12 Quantech License and Services Agreement, dated April 10, 1996, by and
between Fidelity Investments Institutional Services Company, Inc. and
Corbel & Co. (Incorporated by reference to Exhibit 2.2 to the
Registrant's Current Report on Form 8-K dated May 15, 1996)
10.13 Licenses and Services Agreement, dated April 10, 1996, by and between
Fidelity Investments Institutional Services Company, Inc. and BancCorp
Systems, Inc. (Incorporated by reference to Exhibit 2.3 to the
Registrant's Current Report on Form 8-K dated May 15, 1996)
10.14 Temporary Professional Services Agreement, dated May 15, 1996, by and
between Fidelity Investments Institutional Services Company, Inc. and
Broadway & Seymour, Inc. (Incorporated by reference to Exhibit 2.4 to
the Registrant's Current Report on Form 8-K dated May 15, 1996)
10.15 Guaranty and Indemnity Agreement, dated April 10, 1996, by and between
Fidelity Investments Institutional Services Company, Inc. and Broadway
& Seymour, Inc. (Incorporated by reference to Exhibit 2.5 to the
Registrant's Current Report on Form 8-K dated May 15, 1996)
10.16 Amendment No. 1 to the Guaranty and Indemnity Agreement, dated May 15,
1996 by and between Fidelity Investments Institutional Services
Company, Inc. and Broadway & Seymour, Inc. (Incorporated by reference
to Exhibit 2.5a to the Registrant's Current Report on Form 8-K dated
May 15, 1996)
10.17 Transition Services and Support Agreement, dated May 15, 1996, by and
between Fidelity Investments Institutional Services Company, Inc. and
Broadway & Seymour, Inc. (Incorporated by reference to Exhibit 2.6 to
the Registrant's Current Report on Form 8-K dated May 15, 1996)
10.18 Stock Purchase Agreement, dated as of November 19, 1996, by and among
Broadway & Seymour, Inc., Corbel & Co. and SunGard Investment Ventures,
Inc. (Incorporated by reference to Exhibit 2.1 to the Registrant's
Current Report on Form 8-K dated November 19, 1996)
10.19** Employment Agreement dated as of September 1, 1995 by and between
Broadway & Seymour, Inc. and Alan C. Stanford (Incorporated by
reference to Exhibit 10.28 to the Registrant's Quarterly Report on Form
10-Q for the Quarter Ended September 30, 1995)
- 12 -
<PAGE> 13
Exhibit No. Description
- ----------- -----------
10.20** Employment Agreement dated as of January 19, 1995 by and between
Broadway & Seymour, Inc. and David A. Finley (Incorporated by reference
to Exhibit 10.26 to the Registrant's Annual Report on Form 10-K for the
Year Ended December 31, 1995)
10.21** Retirement and Post-employment agreement as of July 15, 1996 by and
between Broadway & Seymour, Inc. and William W. Neal, III (Incorporated
by reference to Exhibit 10.22 to the Registrant's Quarterly Report on
Form 10-Q for the Period Ended September 30, 1996)
10.22** Termination Agreement dated as of March 1, 1996 by and between Broadway
& Seymour, Inc. and David Durham (Incorporated by reference to Exhibit
10.26 to the Registrant's Annual Report on Form 10-K for the Year Ended
December 31, 1995)
11* Computation of earnings per share
27* Financial Data Schedule, which is submitted electronically to the
Securities and Exchange Commission for information only and not filed.
- --------------------
* Filed herewith.
** Management contract or compensatory plan or arrangement required to be filed
as an exhibit.
- 13 -
<PAGE> 14
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
BROADWAY & SEYMOUR, INC.
Date: May 13, 1997 By: /s/ David A. Finley
------------ -------------------
David A. Finley, Executive
Vice President and
Chief Financial Officer
- 14 -
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE
NUMBER
------
(A)(3) EXHIBITS:
Exhibit No. Description
- ----------- -----------
<S> <C> <C>
3.1 Restated Certificate of Incorporation of Broadway & Seymour, Inc.,
dated June 16, 1992 (Incorporated by reference to Exhibit 3.1 to the
Registrants Annual Report on Form 10-K for the Fiscal Year Ended
January 31, 1993)
3.2 Restated By-laws of the Company (Incorporated by reference to Exhibit
3.2 to the Company's Registration Statement on Form S-1, SEC File No.
33-46672)
4.1 Specimen share certificate (Incorporated by reference to Exhibit 4.1 to
the Registrant's Registration Statement on Form S-1, SEC File No.
33-46672)
4.2 Articles 4 and 5 of Broadway & Seymour, Inc.'s Restated Certificate of
Incorporation (Incorporated by reference to Exhibit 4.2 to the
Registrant's Registration Statement on Form S-1, SEC File No. 33-46672)
4.3 Article II, Section 2.2 of the Company's Restated By-laws (Incorporated
by reference to Exhibit 4.3 to the Registrant's Registration Statement
on Form S-1, SEC File No. 33-46672)
10.1** Restated 1985 Incentive Stock Option Plan of Broadway & Seymour, Inc.
dated June 12, 1985 (Incorporated by reference to Exhibit 10.1 to the
Registrant's Registration Statement on Form S-1, SEC File No. 33-46672)
10.2** Amendment No. 1 to Restated 1985 Incentive Stock Option Plan of
Broadway & Seymour, Inc. dated February 25, 1993 (Incorporated by
reference to Exhibit 10.2 to the Registrant's Annual Report on Form
10-K for the Fiscal Year Ended January 31, 1993)
10.3** Amendment No. 2 to Restated 1985 Incentive Stock Option Plan of
Broadway & Seymour, Inc. dated February 17, 1994 (Incorporated by
reference to Exhibit 10.16 to the Registrant's Transition Report on
Form 10-K for the Eleven Months Ended December 31, 1993)
10.4** Amendment No. 3 to Restated 1985 Incentive Stock Option Plan of
Broadway & Seymour, Inc. dated May 15, 1995 (Incorporated by reference
to Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q for
the Quarter Ended September 30, 1995)
10.5** Broadway & Seymour, Inc. 1996 Stock Option Plan dated September 16,
1996 (Incorporated by reference to Appendix B to the Registrant's
Definitive Proxy Statement on Form DEFS14A dated August 14, 1996)
10.6 Limited Partnership Agreement of National Pension Alliance dated April
8, 1994 by and among Corbel/NPA Inc., Stuart Hack Corp. and Michael E.
Callahan, Inc. (Incorporated by reference to Exhibit 10.7 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter Ended
September 30, 1995)
10.7 Stock Purchase Agreement dated January 10, 1994 by and among Broadway &
Seymour, Inc., certain shareholders of Elite Data Processing, Inc. and
Harvey Rich (Incorporated by reference to Exhibit 2.1 to the
Registrant's Current Report on Form 8-K dated February 1, 1994)
10.8 Stock Pledge Agreement dated as of February 1, 1994 by and among
Broadway & Seymour, Inc., Alan Richeimer (a/k/a Alan Rich) and Harvey
Rich and Eva Rich, as trustees of the Harvey and Eva Rich Family Trust
created by that Trust Agreement dated September 19,1988 (Incorporated
by reference to Exhibit 10.1 to the Registrant's Current Report on Form
8-K dated February 1, 1994)
</TABLE>
- 15 -
<PAGE> 16
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C> <C>
10.9 Asset Purchase Agreement dated as of June 9, 1995 by and among Broadway
& Seymour Inc., The MiniComputer Company of Maryland, Inc., Robert W.
Johnson, Michael W. Matthai and Robert A. Erich, Jr. (Incorporated by
reference to Exhibit 10.18 to the Registrant's Quarterly Report on Form
10-Q for the Quarter Ended September 30, 1995)
10.10 Asset Purchase Agreement, dated as of April 10,1996 by and between
Fidelity Investments Institutional Services Company Inc. and Broadway &
Seymour, Inc., BancCorp Systems, Inc., Heebink Group, Inc., and
National Systems Group, Inc. (Incorporated by reference to Exhibit 2.1
to the Registrant's Current Report on Form 8-K dated May 15, 1996)
10.11 Amendment No. 1 to Asset Purchase Agreement dated May 15, 1996 by and
between Fidelity Investments Institutional Services Company Inc. and
Broadway & Seymour, Inc., BancCorp Systems, Inc., Heebink Group, Inc.,
and National Systems Group, Inc. (Incorporated by reference to Exhibit
2.1a to the Registrant's Current Report on Form 8-K dated May 15, 1996)
10.12 Quantech License and Services Agreement, dated April 10, 1996, by and
between Fidelity Investments Institutional Services Company, Inc. and
Corbel & Co. (Incorporated by reference to Exhibit 2.2 to the
Registrant's Current Report on Form 8-K dated May 15, 1996)
10.13 Licenses and Services Agreement, dated April 10, 1996, by and between
Fidelity Investments Institutional Services Company, Inc. and BancCorp
Systems, Inc. (Incorporated by reference to Exhibit 2.3 to the
Registrant's Current Report on Form 8-K dated May 15, 1996)
10.14 Temporary Professional Services Agreement, dated May 15, 1996, by and
between Fidelity Investments Institutional Services Company, Inc. and
Broadway & Seymour, Inc. (Incorporated by reference to Exhibit 2.4 to
the Registrant's Current Report on Form 8-K dated May 15, 1996)
10.15 Guaranty and Indemnity Agreement, dated April 10, 1996, by and between
Fidelity Investments Institutional Services Company, Inc. and Broadway
& Seymour, Inc. (Incorporated by reference to Exhibit 2.5 to the
Registrant's Current Report on Form 8-K dated May 15, 1996)
10.16 Amendment No. 1 to the Guaranty and Indemnity Agreement, dated May 15,
1996 by and between Fidelity Investments Institutional Services
Company, Inc. and Broadway & Seymour, Inc. (Incorporated by reference
to Exhibit 2.5a to the Registrant's Current Report on Form 8-K dated
May 15, 1996)
10.17 Transition Services and Support Agreement, dated May 15, 1996, by and
between Fidelity Investments Institutional Services Company, Inc. and
Broadway & Seymour, Inc. (Incorporated by reference to Exhibit 2.6 to
the Registrant's Current Report on Form 8-K dated May 15, 1996)
10.18 Stock Purchase Agreement, dated as of November 19, 1996, by and among
Broadway & Seymour, Inc., Corbel & Co. and SunGard Investment Ventures,
Inc. (Incorporated by reference to Exhibit 2.1 to the Registrant's
Current Report on Form 8-K dated November 19, 1996)
10.19** Employment Agreement dated as of September 1, 1995 by and between
Broadway & Seymour, Inc. and Alan C. Stanford (Incorporated by
reference to Exhibit 10.28 to the Registrant's Quarterly Report on Form
10-Q for the Quarter Ended September 30, 1995)
</TABLE>
- 16 -
<PAGE> 17
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C> <C>
10.20** Employment Agreement dated as of January 19, 1995 by and between
Broadway & Seymour, Inc. and David A. Finley (Incorporated by reference
to Exhibit 10.26 to the Registrant's Annual Report on Form 10-K for the
Year Ended December 31, 1995)
10.21** Retirement and Post-employment agreement as of July 15, 1996 by and
between Broadway & Seymour, Inc. and William W. Neal, III (Incorporated
by reference to Exhibit 10.22 to the Registrant's Quarterly Report on
Form 10-Q for the Period Ended September 30, 1996)
10.22** Termination Agreement dated as of March 1, 1996 by and between Broadway
& Seymour, Inc. and David Durham (Incorporated by reference to Exhibit
10.26 to the Registrant's Annual Report on Form 10-K for the Year Ended
December 31, 1995)
11* Computation of earnings per share
27* Financial Data Schedule, which is submitted electronically to the
Securities and Exchange Commission for information only and not filed.
</TABLE>
- --------------------
* Filed herewith.
** Management contract or compensatory plan or arrangement required to be filed
as an exhibit.
- 17 -
<PAGE> 1
Exhibit 11
BROADWAY & SEYMOUR, INC.
COMPUTATION OF EARNINGS PER SHARE
(In thousands, except share and per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
Mar. 31, Mar. 31,
1997 1996
------- ------
<S> <C> <C>
Net income (loss) $ 480 ($835)
======= ======
Primary earnings per share:
Weighted average common shares outstanding 9,048 8,895
Reduction from effect of treasury stock (39) (39)
Addition from assumed exercise of stock options 125
Addition from assumed participation in employee
stock purchase plan 1
------- ------
Weighted average common and common equivalent
shares outstanding 9,135 8,856
======= ======
Net income (loss) per common and common
equivalent share $ 0.05 ($0.09)
======= ======
Fully diluted earnings per share:
Weighted average common shares outstanding 9,048 8,895
Reduction from effect of treasury stock (39) (39)
Addition from assumed exercise of stock options 125
Addition from assumed stock bonus awards
Addition from assumed participation in employee
stock purchase plan 1
------- ------
Weighted average common and common equivalent
shares outstanding 9,135 8,856
======= ======
Net income (loss) per common and common
equivalent share $ 0.05 ($0.09)
======= ======
</TABLE>
- 18 -
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 11,714,000
<SECURITIES> 0
<RECEIVABLES> 26,058,000
<ALLOWANCES> (921,000)
<INVENTORY> 751,000
<CURRENT-ASSETS> 42,365,000
<PP&E> 16,598,000
<DEPRECIATION> (10,568,000)
<TOTAL-ASSETS> 60,627,000
<CURRENT-LIABILITIES> 24,486,000
<BONDS> 0
0
0
<COMMON> 91,000
<OTHER-SE> 33,631,000
<TOTAL-LIABILITY-AND-EQUITY> 60,627,000
<SALES> 19,659,000
<TOTAL-REVENUES> 19,659,000
<CGS> 13,600,000
<TOTAL-COSTS> 13,600,000
<OTHER-EXPENSES> 5,452,000
<LOSS-PROVISION> 137,067
<INTEREST-EXPENSE> (184,000)
<INCOME-PRETAX> 882,000
<INCOME-TAX> 402,000
<INCOME-CONTINUING> 480,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 480,000
<EPS-PRIMARY> 0.05
<EPS-DILUTED> 0.05
</TABLE>
