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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 5, 1998
SystemSoft Corporation
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(Exact name of Registrant as specified in Charter)
Delaware 0-24418 04-3121799
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
One Innovation Drive, Natick, Massachusetts 01760
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (508) 651-0088
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(Former Name or Former Address, if Changed Since Last Report)
Total Number of Sequentially Numbered Pages 8.
Exhibit Index Appears on Page 4.
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ITEM 5. OTHER EVENTS.
On February 5, 1998, the Company issued two press releases, copies of which
are attached as Exhibit 99.1 and Exhibit 99.2 to this Current Report on Form
8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit No. Exhibit
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99.1 Press Release of the Company dated February 5, 1998.
99.2 Press Release of the Company dated February 5, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SYSTEMSOFT CORPORATION
Dated: February 12, 1998 By: /s/ Paul J. Pedevillano
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Paul J. Pedevillano,
Vice President, Finance and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description Page No.
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99.1 Press Release of the Company dated February 5, 1998. 5
99.2 Press Release of the Company dated February 5, 1998. 7
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
SYSTEMSOFT ANNOUNCES PRELIMINARY Q4 RESULTS
NATICK, Mass. - February 5, 1998 - Based on a preliminary review of its
results for the fiscal fourth quarter ended January 31, 1998, SystemSoft Corp.
(NASDAQ: SYSF) today announced that it expects to post an operating loss, its
first as a publicly held company. SystemSoft expects to report revenues of $4.0
to $5.0 million for the quarter with an operating loss before taxes of $6.5 to
$7.5 million.
In addition, SystemSoft expects to take a one-time charge of $12.0 to $14.0
million for the quarter related to the realizability of royalty obligations and
costs related to previously acquired technology. For the quarter, SystemSoft
expects to report a loss per share of $0.20 to $0.23 from operations, and a
total loss of $0.68 to $0.73 per share after one-time charges. SystemSoft had
reported revenue of $12.0 million and earnings of $0.08 per share in the same
quarter last year, before acquisition and related charges of $42.1 million.
SystemSoft expects to release actual results for the fiscal fourth quarter
and year-end during the week of March 2.
SystemSoft said several factors contributed to the revenue shortfall,
including the following principal factors. First, the recent financial crisis in
Asia resulted in delayed purchasing decisions with Asia-Pacific (APAC) OEMs. The
APAC region had generated about 36% of SystemSoft's revenue during the first
nine months of the Fiscal Year.
Second, SystemWizard continued to experience long implementation cycles,
even as industry acceptance continues to grow. Additionally, SystemSoft
experienced significant turnover in its sales force.
"We are obviously very disappointed with our Q4 results," said Bob Angelo,
Chairman and CEO. "Deb Besemer, who just recently joined us as our new President
and Chief Operating Officer, is committed to building and executing a plan for
fiscal 1999 that will help yield a more focused and predictable business."
"Since joining SystemSoft 60 days ago, I believe that the Company's market
opportunity outweighs its short-term challenges," said President Deb Besemer.
"Fundamentally, SystemSoft is a company with superb technology, a talented
engineering force and attractive growth potential."
Besemer outlined three of her key priorities. "Our first priority is to
bring greater focus on the PC OEM. We will focus on achieving greater leverage
from our existing BIOS, PC Card, and other enabling technologies. Businesses
that divert us from the direct success of our PC OEM customers will be
reassessed. An example of this is the spin-off of our USB business which we
announced separately today."
"Second, we plan to drive SystemWizard and related support products deeper
into the consumer PC marketplace," said Besemer. "Our challenge with
SystemWizard is clear: to help all of our licensees, which includes six of the
top 10 PC OEMs, to accelerate the implementation of our technology and to expand
it to more of their product lines. To help achieve this, we are focused on
building a stronger customer care organization."
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"My third goal is to rebuild our sales force and continue to drive the
organization closer to our customers. I expect to bring in additional senior
talent to help ensure the success of this new organization," she said.
"There are no quick-fixes, but we have a plan," said Besemer. "Our progress
in the new Fiscal Year will be measurable and our results will be clear," said
Besemer.
ABOUT SYSTEMSOFT
SystemSoft is a leading worldwide provider of enabling software and support
technologies for the PC industry. Founded in 1990, the company reported annual
revenue of $39.7 million in its 1997 fiscal year. SystemSoft licenses its
products primarily to Original Equipment Manufacturers (OEMs), including PC
manufacturers and independent software and hardware vendors. Its customers
include Acer, Apple Computer, AST Computer, Compaq, Dell, Digital Equipment
Corporation, Gateway 2000, Hewlett-Packard, Hitachi, IBM, Intel, Microsoft,
Motorola, NEC, Packard Bell, Sykes Enterprises, Inc., and Toshiba. For more
information, visit SystemSoft at www.systemsoft.com.
# # #
Any statements that are not historical facts contained in this release are
forward looking statements that involve risks and uncertainties, including but
not limited to those relating to product demand, the accuracy of management's
estimates of revenue or net income per share for the quarter and year ended
January 31, 1998, pricing, market acceptance, the effect of economic conditions,
intellectual property rights and litigation and the outcome of governmental
proceedings, competitive products, risks in product and technology development,
the results of financing efforts, the ability to complete transactions, and
other risks identified in the Company's Securities and Exchange Commission
filings.
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EXHIBIT 99.2
FOR IMMEDIATE RELEASE
SYSTEMSOFT ANNOUNCES FORMATION OF NEW ENTITY TO FOCUS ON USB TECHNOLOGIES
NATICK, Mass. - February 5, 1998 - SystemSoft Corp. (NASDAQ: SYSF) today
announced that its Universal Serial Bus (USB) software line has been spun-off
into a new, independent corporation whose charter is the continued development
and commercialization of the technology. SystemSoft will own 15-percent of the
new corporation.
"The goal of this new corporation is to improve customer focus. It also
empowers the USB team, which includes several of the industry's best technical
minds in this area, to leverage SystemSoft's technology investment of the past
two years," said Bob Angelo, SystemSoft Chairman and CEO. "In addition to
continuing development of the technology, the new corporation will focus on
marketing USB technology to a broad market, particularly peripherals
manufacturers."
"We believe that the USB peripherals market, especially with the arrival of
Windows 98 later this year, offers opportunities for growth," said Deborah
Besemer, SystemSoft President and Chief Operating Officer. "As an owner in the
new corporation, SystemSoft remains positioned to participate in this growth
while increasing the focus on our primary market segment - the PC OEMs."
Under terms of the arrangement, David Lawrence, SystemSoft Vice President
of Architecture and Emerging Technologies Group and the Chair of the USB Device
Working Group, will head the new corporation in Oxnard, Calif. Approximately
seven existing SystemSoft employees are expected to accept positions with the
new corporation. The financial details of the deal were not disclosed.
"Our first goal as a new corporation is to ensure a smooth transition with
SystemSoft's existing customers," said Lawrence. "We are committed to making
this transition seamless and will be building custom account plans with each
customer to ensure `business as usual' throughout the process."
SystemSoft will retain exclusive marketing and sales rights for USB
technology in Taiwan and Japan, leveraging its local presence in these regions
that are strategically important to USB. In the US, SystemSoft will
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also continue to offer USB technologies to its PC OEM customer base and will
work with the new corporation to transition most other sales and marketing
responsibilities during the next 90 days.
ABOUT SYSTEMSOFT
SystemSoft is a leading worldwide provider of system-level, connectivity
and problem-resolution software. Founded in 1990, the company reported annual
revenue of $39.7 million in its 1997 fiscal year. SystemSoft licenses its
products primarily to Original Equipment Manufacturers (OEMs), including PC
manufacturers and independent software and hardware vendors. Its customers
include Acer, Apple Computer, AST Computer, Compaq, Dell, Digital Equipment
Corporation, Gateway 2000, Hewlett-Packard, Hitachi, IBM, Intel, Microsoft,
Motorola, NEC, Packard Bell, Sykes Enterprises, Inc., and Toshiba. For more
information, visit SystemSoft at www.systemsoft.com.
# # #
Any statements that are not historical facts contained in this release are
forward looking statements that involve risks and uncertainties, including but
not limited to those relating to product demand, pricing, market acceptance, the
effect of economic conditions, intellectual property rights and litigation and
the outcome of governmental proceedings, competitive products, risks in product
and technology development, the results of financing efforts, the ability to
complete transactions, and other risks identified in the Company's Securities
and Exchange Commission filings.
