<PAGE> 1
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UNITED STATES
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 DECEMBER 31, 1998
OR
[ ] 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: 0-26156
------------------------
NOVADIGM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 22-3160347
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
ONE INTERNATIONAL BLVD., SUITE 200, MAHWAH, NJ 07495
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(201) 512-1000
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE
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 for 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 [ ]
On December 31, 1998, there were 17,716,838 shares of the Registrant's
Common Stock outstanding.
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<PAGE> 2
NOVADIGM, INC.
INDEX
<TABLE>
<CAPTION>
PAGE
NO.
----
<S> <C> <C>
PART I FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements................. 3
Condensed Consolidated Balance Sheets as of December 31,
1998 and March 31, 1998..................................... 3
Condensed Consolidated Statements of Operations for the
three-month and nine-month periods ended December 31, 1998
and December 31, 1997....................................... 4
Consolidated Statements of Cash Flows for the nine-month
periods ended December 31, 1998 and December 31, 1997....... 5
Notes to Condensed Consolidated Financial Statements........ 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 7
PART II OTHER INFORMATION
Item 1. Legal Proceedings........................................... 11
Item 2. Changes in Securities....................................... 11
Item 3. Defaults Upon Senior Securities............................. 11
Item 4. Submission of Matters to A Vote of Security Holders......... 11
Item 5. Other Information........................................... 11
Item 6. Exhibits and Reports on Form 8-K............................ 11
SIGNATURES........................................................... 12
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOVADIGM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1998 1998
------------ ---------
(UNAUDITED)
<S> <C> <C>
Cash and cash equivalents................................... $ 5,041 $ 4,431
Short-term marketable securities............................ 10,893 14,534
Accounts receivable, net.................................... 11,285 6,352
Prepaid expenses and other current assets................... 869 841
-------- --------
Total current assets................................... 28,088 26,158
Property and equipment, net................................. 1,485 1,763
Other assets................................................ 837 955
-------- --------
$ 30,410 $ 28,876
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities.................... $ 6,036 $ 6,314
Deferred revenue............................................ 2,679 2,518
-------- --------
Total current liabilities.............................. 8,715 8,832
Stockholders' equity:
Common stock: 30,000 shares authorized; 17,717 and 17,471
outstanding as of December 31, 1998 and March 31, 1998,
respectively.............................................. 11 11
Additional paid-in capital.................................. 65,719 66,087
Accumulated deficit......................................... (42,863) (43,548)
Treasury Stock.............................................. (1,194) (2,527)
Cumulative translation adjustment........................... 22 21
-------- --------
Total stockholders' equity........................ 21,695 20,044
-------- --------
$ 30,410 $ 28,876
======== ========
</TABLE>
See accompanying notes.
3
<PAGE> 4
NOVADIGM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------ ------------------
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
REVENUES:
Licenses.......................................... $ 5,566 $ 5,443 $15,201 $10,747
Services.......................................... 2,820 1,773 7,632 5,459
------- ------- ------- -------
Total revenues................................. 8,386 7,216 22,833 16,206
OPERATING EXPENSES:
Cost of services.................................. 1,071 1,952 2,922 5,065
Sales and marketing............................... 4,169 4,286 12,109 9,838
Research and development.......................... 1,229 1,786 3,685 5,068
General and administrative........................ 1,392 1,289 3,861 3,558
------- ------- ------- -------
Total operating expenses....................... 7,851 9,313 22,577 23,529
------- ------- ------- -------
Operating income (loss)............................. 535 (2,097) 256 (7,323)
Interest income, net................................ 153 180 436 806
------- ------- ------- -------
Income (loss) before provision (benefit) for income
taxes............................................. 688 (1,917) 692 (6,517)
Provision (benefit) for income taxes................ 5 -- 7 (75)
------- ------- ------- -------
Net income (loss)................................... $ 683 $(1,917) $ 685 $(6,442)
======= ======= ======= =======
Earnings (loss) per share-basic..................... $ 0.04 $ (0.11) $ 0.04 $ (0.37)
======= ======= ======= =======
Weighted average common shares outstanding-basic.... 17,570 17,434 17,514 17,366
------- ------- ------- -------
Earnings (loss) per share-diluted................... $ 0.04 $ (0.11) $ 0.04 $ (0.37)
------- ------- ------- -------
Weighted average common and common equivalent shares
outstanding -- diluted............................ 18,919 17,434 18,007 17,366
======= ======= ======= =======
</TABLE>
See accompanying notes.
4
<PAGE> 5
NOVADIGM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
DECEMBER 31,
--------------------------
1998 1997
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)......................................... $ 685 $ (6,442)
Adjustments to reconcile net income (loss) to net cash used
in operating activities --
Depreciation and amortization.......................... 676 837
Increase in accounts receivable........................ (4,932) (2,931)
Increase in prepaid expenses and other current
assets................................................ (28) (437)
Decrease (increase) in other assets.................... 118 (68)
(Decrease) increase in accounts payable and accrued
liabilities........................................... (279) 1,518
Decrease in accrued restructuring costs................ -- (1,394)
Increase in deferred revenue........................... 161 1,127
-------- --------
Net cash used in operating activities............. (3,599) (7,790)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment....................... (398) (889)
Purchases of held-to-maturity securities.................. (21,158) (12,545)
Proceeds from redemptions of held-to-maturity
securities............................................. 24,799 17,615
-------- --------
Net cash provided by investing activities......... 3,243 4,181
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from the exercise of options................. (368) 773
Net issuance (purchase) of treasury stock................. 1,333 (1,535)
-------- --------
Net cash provided by (used in) financing
activities...................................... 965 (762)
-------- --------
Effect of exchange rate changes on cash..................... 1 6
-------- --------
Net increase (decrease) in cash and cash equivalents........ 610 (4,365)
Cash and cash equivalents at the beginning of the period.... 4,431 7,984
-------- --------
Cash and cash equivalents at the end of the period.......... $ 5,041 $ 3,619
======== ========
</TABLE>
See accompanying notes.
5
<PAGE> 6
NOVADIGM, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements have been
prepared by Novadigm, Inc. (the "Company"), without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission (the "Commission").
Certain information or footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations. In the
opinion of the Company's management, the statements include all adjustments
(which are of a normal and recurring nature) necessary for the fair presentation
of the financial information set forth therein. These financial statements
should be read in conjunction with the Company's audited consolidated financial
statements included within the Company's Form 10-K filed with the Commission on
June 24, 1998. The interim results presented herein are not necessarily
indicative of the results of operations that may be expected for the full fiscal
year ending March 31, 1999, or any other future period.
2. EARNINGS PER SHARE
The Company has implemented Statement of Financial Accounting Standards No.
128, "Earnings Per Share" ("SFAS 128") as of March 31, 1998 and, in accordance
with the pronouncement, has restated prior year amounts. SFAS 128 requires the
presentation of basic earnings per share ("Basic EPS") and diluted earnings per
share ("Diluted EPS"). Basic EPS is calculated by dividing income available to
common shareholders by the weighted average number of shares of common stock
outstanding during the period. Diluted EPS is calculated by dividing income
available to common shareholders by the weighted average number of common shares
outstanding for the period adjusted to reflect potentially dilutive securities.
Common equivalent shares were excluded from the calculations of loss per share
for the periods ending December 31, 1997 because the effect of including such
shares in the computation would be anti-dilutive.
In accordance with SFAS 128, the following table reconciles income (loss)
and share amounts used to calculate basic earnings per share and diluted
earnings per share.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------ ------------------
1998 1997 1998 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA) ------- ------- ------- -------
<S> <C> <C> <C> <C>
Numerator:
Net income (loss)................................. $ 683 $(1,917) $ 685 $(6,442)
------- ------- ------- -------
Denominator:
Weighted average number of common shares
outstanding -- basic........................... 17,570 17,434 17,514 17,366
Incremental shares from assumed conversion of
options........................................ 1,349 0 493 0
------- ------- ------- -------
Weighted average common and common equivalent
shares outstanding -- diluted.................. 18,919 17,434 18,007 17,366
======= ======= ======= =======
Earnings (loss) per share -- basic................ $ 0.04 $ (0.11) $ 0.04 $ (0.37)
======= ======= ======= =======
Earnings (loss) per share -- diluted.............. $ 0.04 $ (0.11) $ 0.04 $ (0.37)
======= ======= ======= =======
</TABLE>
3. RECENT ACCOUNTING PRONOUNCEMENTS
During fiscal 1999, the Company will adopt Statement of Financial
Accounting Standards No. 130 "Reporting Comprehensive Income" ("SFAS 130") and
Statement of Financial Accounting Standards No. 131 "Disclosures about Segments
of an Enterprise and Related Information" ("SFAS 131"). The adoption of SFAS 130
is required on an interim basis, however, the impact of adoption was not
material. SFAS 131 is required on an interim basis, however, it is not required
in the year of initial application. The Company is currently assessing the
disclosure impact of SFAS 131 on its financial statements.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These forward-looking statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from historical results or anticipated results. These risks include a history of
operating losses. The Company's quarterly operating results have fluctuated
significantly in the past, and may fluctuate in the future, due to a number of
factors, including the number, size and timing of customer orders, the timing
and market acceptance of the Company's new products, the dependence on
resellers, the level and pricing of international sales, changes in the level of
operating expenses, technological advances and new product introductions by the
Company's competitors, competitive conditions in the industry and foreign
currency exchange rates. In addition, the sales cycle for the Company's products
is lengthy and unpredictable depending upon the interest of the prospective
customer in the Company's products, the size of the order, the decision-making
and acceptance procedures within the customer's organization, the complexity of
implementation and other factors. The Company's operating results may also vary
significantly due to seasonal trends, as a result of efforts by the Company's
direct sales personnel to meet annual quotas, lower international revenues in
the summer months when many European businesses experience lower sales, the
establishment of calendar year capital budgets by prospective customers, as well
as other factors. There can be no assurance that the Company will be able to
achieve or maintain profitability on a quarterly or annual basis in the future.
Many currently installed computer systems and software products are unable
to distinguish 21st century dates from 20th century dates ("Year 2000"). The
Company has on occasion warranted, and generally represents to its customers,
that the newer version of its products, EDM version 4.0 and RADIA version 2.0,
are free from Year 2000 defects. There can be no assurance that the Company's
products are Year 2000 compliant, or that the Company's products will not be
integrated with, or otherwise interact with, non-compliant software. The Company
has assessed the Year 2000 compliance of its internal systems and has determined
that some internal systems may not be Year 2000 compliant. Failure of such
internal systems to operate properly with regard to Year 2000 and thereafter
could require the Company to incur unanticipated expenses to address any
problems, which could have a material adverse effect on the Company's business,
operating results and financial condition. However, the Company believes the
economic impact of replacing or upgrading these non-compliant internal systems
to be immaterial and will replace these systems during 1999. The Company is in
the process of assessing whether any of its customers, suppliers or service
providers will be adversely affected by Year 2000 issues. The failure of its
customers, suppliers or service providers to be Year 2000 compliant could have
material adverse effects on the Company's business, financial condition and
results of operations. The Company believes a Year 2000 contingency plan is not
necessary.
This report should be read in conjunction with the Company's annual report
on Form 10-K as filed with the Securities and Exchange Commission, in particular
the section therein entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Business Risks."
RESULTS OF OPERATIONS
The Company generates revenues principally from licensing the rights to use
its software products to end users and from sublicense fees received from
resellers. The Company also generates service revenues from consulting and
training activities performed for license customers and maintenance revenues
from support and software update rights.
7
<PAGE> 8
For the periods indicated, the following table sets forth the percentage of
total revenue represented by the respective line items in the Company's
condensed consolidated statements of operations (unaudited):
<TABLE>
<CAPTION>
FOR THE THREE FOR THE NINE
MONTHS ENDED MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------- ----------------
1998 1997 1998 1997
----- ----- ------- -----
<S> <C> <C> <C> <C>
REVENUES:
Licenses................................................. 66.4% 75.4% 66.6% 66.3%
Services................................................. 33.6 24.6 33.4 33.7
----- ----- ----- -----
Total revenues........................................ 100.0 100.0 100.0 100.0
OPERATING EXPENSES:
Cost of services......................................... 12.8 27.1 12.8 31.3
Sales and marketing...................................... 49.7 59.4 53.0 60.7
Research and development................................. 14.7 24.7 16.1 31.3
General and administrative............................... 16.4 17.9 17.0 21.9
----- ----- ----- -----
Total operating expenses.............................. 93.6 129.1 98.9 145.2
----- ----- ----- -----
Operating income (loss).................................... 6.4 (29.1) 1.1 (45.2)
Interest income, net....................................... 1.8 2.5 1.9 5.0
----- ----- ----- -----
Income (loss) before provision (benefit) for income
taxes.................................................... 8.2 (26.6) 3.0 (40.2)
Provision (benefit) for income taxes....................... 0.1 -- -- (0.5)
----- ----- ----- -----
Net income (loss).......................................... 8.1% (26.6)% 3.0% (39.7)%
===== ===== ===== =====
</TABLE>
Total revenues for the Company's third fiscal quarter ended December 31,
1998 were $8.4 million compared to $7.2 million for the same quarter of the
previous year, an increase of $1.2 million or 16%. The increase in total revenue
in this year's third quarter is due primarily to higher services revenue. Total
revenues for the nine-month period ended December 31, 1998 were $22.8 million
compared to $16.2 million for the same nine-month period of the previous year.
Total revenues increased $6.6 million or 41% comparing the nine-month period
ended December 31, 1998 with the comparable period of last year due to higher
license and service revenues.
License revenues were $5.6 million or 66.4% of total revenues for the
quarter ended December 31, 1998 compared to $5.4 million or 75.4% of total
revenues for the same period last year. License revenues for the nine-month
period ended December 31, 1998 were $15.2 million or 66.6% of total revenues
compared to $10.7 million or 66.3% of total revenues for the same period last
year. The increase in license revenues for the three-month and nine-month
periods ended December 31, 1998 were primarily attributable to closing a greater
number of contracts, particularly in North America. For the three-month and
nine-month periods ended December 31, 1998, license revenues from direct
channels were 80% and 53% of all license revenues, respectively. For the
three-month and nine-month periods ended December 31, 1997, license revenues
from direct channels were 48% and 43% of all license revenues, respectively. The
increase in license revenue from direct channels in absolute dollar terms and as
a percent of total license revenues in both the three-month and nine-month
periods ended December 31, 1998 compared to the same periods a year ago is due
primarily to the reorganization and increased investment in the direct sales
organization in North America and Europe. International license revenues
(license revenue from customers outside North America) for the three-month and
nine-month periods ended December 31, 1998 were 26% and 50% of all license
revenue, respectively. International license revenues for the three-month and
nine-month periods ended December 31, 1997 were 48% and 50% of all license
revenue, respectively. International license revenue declined as a percent of
total license revenue in the three-month period ended December 31, 1998 compared
to the same period last year due to the closing of a large contract in the
United Kingdom in the prior year period. The Company expects international
license revenue to grow and be a significant contributor to total license
revenue, however as a percent of total license revenues, international license
revenues may fluctuate from quarter to quarter. From time to time, the Company
accepts guaranteed sublicense fees from distributors. Distributors pay
guaranteed sublicense fees in order to have the right to sublicense the
Company's products to its customers and to receive
8
<PAGE> 9
training and support services from the Company. At December 31, 1998,
approximately 35% of all guaranteed sublicense fees received by the Company had
not yet been relicensed by the Company's distributors to end-users.
Service revenues were $2.8 million or 33.6% of total revenues for the
quarter ended December 31, 1998 compared to $1.8 million or 24.6% of total
revenues for the comparable quarter last year. Service revenues for the
nine-month period ended December 31, 1998 were $7.6 million or 33.4% of total
revenues compared to $5.5 million or 33.7% of total revenues for the comparable
period last year. The higher service revenues for the three-month and nine-month
periods ended December 31, 1998 are due primarily to higher maintenance revenues
associated with a growing installed base and an increase in the amount the
Company charges customers for the annual renewal of maintenance. The Company
expects maintenance revenue to increase on a quarterly basis as compared to the
prior year due to a growing customer base and the increase in its charge for
maintenance services. Consulting services and training fee revenues are also
expected to grow on a quarterly basis due to the Company's growing customer
base.
Cost of services includes the direct and indirect costs of providing
training, technical support and consulting services to the Company's customers.
Cost of services consists primarily of payroll, related benefits, and travel for
field engineers and support personnel, other related overhead and third-party
consulting fees. Cost of services were $1.1 million or 38% of service revenues
for the quarter ended December 31, 1998 compared to $2.0 million or 110% of
service revenues for the quarter ended December 31, 1997. Cost of services for
the nine-month period ended December 31, 1998 was $2.9 million or 38% of service
revenues compared to $5.1 million or 93% of service revenues for the same period
last year. The lower cost of services in the three-month and nine-month periods
ended December 31, 1998 compared to the same periods for the prior year, are
mainly attributable to the reorganization of the technical services department
after the close of fiscal 1998, which included lowering headcount, redefining
service packages and reducing the use of outside consultants. The Company
expects cost of services to increase moderately in future quarters.
Sales and marketing expenses consist primarily of salaries, related
benefits, commissions, travel, consultant fees, and other costs associated with
the Company's sales and marketing efforts. Sales and marketing expenses for the
quarter ended December 31, 1998 were $4.2 million or 49.7% of total revenues as
compared to $4.3 million or 59.4% of total revenues for the same period last
year. The decrease in the three-month period this year compared to the same
period last year is due primarily to lower travel and entertainment expense and
professional fees and an adjustment to the doubtful account reserve. Sales and
marketing expenses for the nine-month period ended December 31, 1998 were $12.1
million or 53.0% of total revenues as compared to $9.8 million or 60.7% of total
revenues for the same period last year. The sales and marketing expenses
increased $2.3 million or 23% in the nine-month period this year compared to the
same period last year primarily due to higher compensation costs resulting from
higher reported revenues during the current nine-month period. The Company
expects increases in sales and marketing expense in absolute dollar terms in
support of the Company's revenue plan.
Research and development expenses consist primarily of salaries, related
benefits, consultant fees, and other costs associated with the Company's
research and development efforts. Research and development expenses were $1.2
million or 14.7% of total revenues for the quarter ended December 31, 1998
compared to $1.8 million or 24.7% of total revenues for the same period last
year. Research and development expenses for the nine-month period ended December
31, 1998 were $3.7 million or 16.1% of total revenues as compared to $5.1
million or 31.3% of total revenues for the same period last year. The lower
expenses for the three-month and the nine-month periods ended December 31, 1998
is primarily due to lower staffing levels in the current year periods compared
to the same periods last year, due to the completion last year of the
development of version 4.0 of the Enterprise Desktop Manager and version 1.0 of
Radia. The Company believes that a significant investment in research and
development is essential to provide for the Company's future growth,
particularly research and development relating to the Company's Internet
activities. The Company anticipates that it will continue to invest resources to
further enhance and develop its products and anticipates growth in research and
development expense.
9
<PAGE> 10
General and administrative expenses consist primarily of salaries, related
benefits, travel and fees for professional services such as legal, consulting
and accounting. General and administrative expenses were $1.4 million or 16.4%
of total revenue for the quarter ended December 31, 1998 compared to $1.3
million or 17.9% of total revenues for the same period of last year. General and
administrative expenses for the nine-month period ended December 31, 1998 were
$3.9 million or 17.0% of total revenue compared to $3.6 million or 21.9% of
total revenues for the same period of last year. The increase in general and
administrative expenses in the three-month and nine-month periods ended December
31, 1998 compared to the same periods last year is primarily due to higher
compensation expense. The Company expects general and administrative expenses to
increase moderately in dollar terms and to decrease as a percent of total
revenue in the future quarters.
Net interest income was $153,000 and $436,000 for the three-month and
nine-month periods ended December 31, 1998, respectively, compared to $180,000
and $806,000 for the same periods of last year, respectively. Net interest
income is comprised primarily of interest earned on the Company's cash
equivalents and marketable securities offset by interest expense, bank fees and
other charges. Net interest income decreased for the three-month and nine-month
periods ended December 31, 1998 compared to the same periods in the prior year
due to lower average cash and marketable securities balances in the current
year.
LIQUIDITY AND CAPITAL RESOURCES
Cash used in operations for the nine-month period ended December 31, 1998
was $3.6 million compared to $7.8 million for the same nine-month period last
year. The decrease in cash used in operations for the nine-month period ended
December 31, 1998 is primarily due to reporting a net profit in the current year
period of $0.7 million compared to a net loss in the prior year period of $6.4
million.
As of December 31, 1998, the Company had working capital of $19.4 million
including $15.9 million of cash, cash equivalents and short-term marketable
securities. The Company has a revolving line of credit, which permits unsecured
borrowings up to $1.0 million through August, 1999. As of December 31, 1998,
there were no outstanding loans under the line of credit and the Company was in
compliance with the terms of the agreement.
Property and equipment expenditures were $398,000 and $889,000 for the
nine-month periods ended December 31, 1998 and December 31, 1997, respectively.
The Company had no material commitments to purchase property and equipment at
December 31, 1998 and expects to purchase property and equipment throughout the
remainder of the fiscal year at a rate consistent with the prior fiscal year.
Although it is difficult for the Company to predict future liquidity
requirements with certainty, the Company believes that its existing cash and
marketable securities balances, together with cash from operations and funds
available under the existing line of credit, will be adequate to finance its
operations for the next twelve months.
10
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.1 Financial Data Schedule
(b) Reports
None
11
<PAGE> 12
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.
Dated: February 12, 1999 NOVADIGM, INC.
By: /s/ WALLACE D. RUIZ
------------------------------------
Wallace D. Ruiz
Vice President & Chief Financial
Officer
(principal financial and chief
accounting officer)
12
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
27.1 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 5,041
<SECURITIES> 10,893
<RECEIVABLES> 12,035
<ALLOWANCES> 750
<INVENTORY> 0
<CURRENT-ASSETS> 28,088
<PP&E> 5,076
<DEPRECIATION> 3,591
<TOTAL-ASSETS> 30,410
<CURRENT-LIABILITIES> 8,715
<BONDS> 0
0
0
<COMMON> 11
<OTHER-SE> 21,684
<TOTAL-LIABILITY-AND-EQUITY> 30,410
<SALES> 0
<TOTAL-REVENUES> 8,386
<CGS> 0
<TOTAL-COSTS> 7,851
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (153)
<INCOME-PRETAX> 688
<INCOME-TAX> 5
<INCOME-CONTINUING> 683
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 683
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
