<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 June 30, 1997
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 0-22495
PEROT SYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 75-2230700
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
12377 MERIT DRIVE, SUITE 1100
DALLAS, TEXAS 75251
(Address of principal executive offices) (Zip Code)
(972) 383-5600
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
As of July 31, 1997, the registrant had outstanding 39,976,232 shares of Class
A Common Stock and 50,000 shares of Class B Common Stock.
<PAGE> 2
PEROT SYSTEMS CORPORATION
FORM 10-Q
For the Quarter Ended June 30, 1997
<TABLE>
<CAPTION>
INDEX Page
<S> <C>
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS (Unaudited)
Condensed Consolidated Balance Sheets as of June 30, 1997 and
December 31, 1996 1
Condensed Consolidated Statements of Operations for the three months
and six months ended June 30, 1997 and 1996 2
Condensed Consolidated Statements of Cash Flows for the six months
ended June 30, 1997 and 1996 3
Notes to Condensed Consolidated Financial Statements 4-6
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 7-9
PART II: OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS. 10
ITEM 2: CHANGES IN SECURITIES. 10
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 11
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K 11
SIGNATURES 12
EXHIBIT INDEX 13
</TABLE>
i
<PAGE> 3
ITEM 1. FINANCIAL STATEMENTS
PEROT SYSTEMS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 1997 AND DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
------------- -----------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 16,983 $ 27,516
Accounts receivable, net 108,490 113,804
Prepaid expenses 16,914 9,450
Deferred income taxes 20,274 25,935
-------- --------
Total current assets 162,661 176,705
Property and equipment, net 39,885 29,335
Purchased software, net 8,523 6,413
Investments in and advances to unconsolidated affiliates 10,604 6,582
Other assets 26,473 13,212
-------- --------
Total assets $248,146 $232,247
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities on capital lease obligations and $ 2,160 $ 2,377
long-term debt
Short-term debt 19,830 138
Income taxes payable 2,707 13,039
Accrued liabilities 87,527 82,973
Accrued compensation 8,404 20,240
Other current liabilities 32,692 35,946
-------- --------
Total current liabilities 153,320 154,713
Capital lease obligations and long-term debt, less 1,880 2,796
current maturities
Other long-term liabilities 3,747 3,976
-------- --------
Total liabilities 158,947 161,485
-------- --------
Stockholders' equity:
Common stock
406 396
Other stockholders' equity
88,793 70,366
-------- --------
Total stockholders' equity 89,199 70,762
-------- --------
Total liabilities and stockholders' equity $248,146 $232,247
======== ========
</TABLE>
The accompanying notes are an integral part of these
financial statements.
1
<PAGE> 4
PEROT SYSTEMS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(SHARES AND DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Contract revenue $ 185,011 $ 140,228 $ 354,082 $ 276,992
Costs and expenses
Direct cost of services 148,127 109,436 277,841 216,716
Selling, general and administrative 33,623 20,027 64,468 39,113
expenses
--------- --------- --------- ---------
Operating income 3,261 10,765 11,773 21,163
Interest income 483 752 1,142 1,259
Interest expense (273) (87) (500) (212)
Equity in earnings (losses) of affiliate 253 (78) 226 (156)
Other income/(expense), net (513) (93) 1,441 (106)
--------- --------- --------- ---------
Income before taxes 3,211 11,259 14,082 21,948
Provision for income taxes 1,796 5,511 5,984 10,743
--------- --------- --------- ---------
Net income $ 1,415 $ 5,748 $ 8,098 $ 11,205
========= ========= ========= =========
Net income attributed to common shareholders $ 1,415 $ 5,599 $ 8,098 10,908
========= ========= ========= =========
Primary and fully diluted earnings per common share:
Earnings per common share $ 0.03 $ 0.12 $ 0.15 $ 0.23
========= ========= ========= =========
Weighted average common shares
outstanding 54,271 49,321 56,010 48,886
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these
financial statements.
2
<PAGE> 5
PEROT SYSTEMS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Six months ended June 30,
1997 1996
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 8,098 $ 11,205
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 15,147 8,191
Other noncash items 3,338 (5,855)
Changes in current assets 5,823 (26,981)
Changes in current liabilities (26,773) 66,839
-------- --------
Net cash provided by operating activities 5,633 53,399
-------- --------
Cash flows from investing activities:
Purchase of property, equipment and software (23,633) (8,893)
Proceeds from sale of property, equipment and software 525 384
Investments in and advances to unconsolidated affiliates (3,082) (772)
Acquisition of businesses, net of cash acquired of $532 in 1997 (13,452) -
--------- ---------
Net cash used in investing activities (39,642) (9,281)
--------- ---------
Cash flows from financing activities:
Principal payments on debt and
capital lease obligations (1,571) (1,230)
Dividends paid on preferred stock - (595)
Net proceeds from short-term borrowings 18,800 -
Proceeds from issuance of common stock 897 2,046
Proceeds from sale of stock options 8,139 -
Proceeds from issuance of treasury stock 181 -
Repayment of stockholder notes receivable 184 1,046
Repurchase of treasury stock (1,414) (10)
-------- --------
Net cash provided by financing activities 25,216 1,257
-------- --------
Effect of exchange rate changes on cash and cash equivalents (1,740) 566
-------- --------
Net increase in cash and cash equivalents (10,533) 45,941
Cash and cash equivalents at beginning of period 27,516 17,357
-------- --------
Cash and cash equivalents at end of period $ 16,983 $ 63,298
======== ========
</TABLE>
The accompanying notes are an integral part of these
financial statements.
3
<PAGE> 6
PEROT SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. GENERAL
The accompanying unaudited interim condensed consolidated financial statements
have been prepared in accordance with the rules and regulations of the
Securities and Exchange Commission ("SEC"). The interim condensed consolidated
financial statements include the consolidated accounts of Perot Systems
Corporation and its majority-owned subsidiaries (collectively, "the Company")
with all significant inter-company transactions eliminated. In the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
necessary for a fair statement of the financial position, results of operations
and cash flows for the interim periods presented have been made. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles ("GAAP")
have been condensed or omitted pursuant to such SEC rules and regulations.
These financial statements should be read in conjunction with the audited
financial statements for the year ended December 31, 1996 as filed in the
Company's Registration Statement on Form 10 filed with the SEC on April 30,
1997. Operating results for the three month and six month periods ended June
30, 1997 are not necessarily indicative of the results for the year ending
December 31, 1997. Dollar amounts presented are in thousands, except as
otherwise noted.
NOTE 2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128 ("SFAS 128"), "Earnings Per Share,"
effective for fiscal years ending after December 15, 1997. SFAS 128 replaces
the presentation of primary earnings per common share with basic earnings per
share, with the principal difference being that common stock equivalents are
not considered in computing basic earnings per share. SFAS 128 also eliminates
the modified treasury stock method, and requires reconciliation of the
numerator and denominator used in computing basic and diluted earnings per
share. The Company has not yet determined the effect of SFAS 128 on the
Company's earnings per share.
NOTE 3. ACQUISITIONS
During the second quarter of 1997, the Company completed three business
acquisitions and, in the six months ended June 30, 1997, a total of six
acquisitions were completed, all under the purchase method of accounting.
Collectively, total consideration paid and goodwill recorded were:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, 1997 June 30, 1997
------------- ------------
<S> <C> <C>
Cash $10,584 $13,984
Shares of Class A Common Stock 1,521 2,701
------- -------
Total Consideration 12,105 16,685
Less Fair Market Value of
Net Assets Acquired 2,006 3,728
------- -------
Goodwill $10,099 $12,957
======= =======
</TABLE>
The Company issued 180,000 shares of Class A Common Stock for the three months
ended June 30, 1997 and 370,000 shares for the six months ended June 30, 1997
in connection with these acquisitions.
4
<PAGE> 7
PEROT SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Goodwill of $18,602 and $7,294 was included in other non-current assets as of
June 30, 1997 and December 31, 1996, respectively.
On the basis of a pro forma consolidation of the results of operations as if
the acquisitions had taken place on January 1, 1996 and January 1, 1997, the
impact on revenue, net income and earnings per share would not have been
material.
The Company invested an additional $494 and $1,527 in an existing
unconsolidated limited partnership during the three months and six months ended
June 30, 1997, respectively. Immaterial interests in other unconsolidated
entities were purchased during the three months ended June 30, 1997 with one
material purchase of $1,000 made during the six months ended June 30, 1997.
NOTE 4. BORROWINGS
At June 30, 1997, there was a balance of $18,800 outstanding on the Company's
$40,000 line of credit.
NOTE 5. STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
------------- -----------------
<S> <C> <C>
Common stock $ 406 $ 396
Additional paid-in-capital 60,730 51,461
Retained earnings 35,927 27,830
Cumulative translation adjustment (461) 1,009
Notes receivable from stockholders (4,871) (4,286)
Contract rights - (4,342)
Deferred compensation (1,254) (1,306)
Treasury stock (1,278) -
-------- --------
Total stockholders' equity $ 89,199 $ 70,762
======== ========
</TABLE>
The primary factor causing an increase in paid-in-capital was the renegotiation
of the terms of the strategic alliance with Swiss Bank in April 1997 (see Note
7). The renegotiated terms of the alliance resulted in the issuance of
3,617,160 options to purchase Class B Common Stock. The contract rights relating
to the original Swiss Bank agreement were eliminated with an offsetting
reduction in paid-in-capital for the unamortized balance of $4,146 at March 31,
1997. Additionally, paid-in-capital was increased by $2,697 in connection with
the issuance of common shares for business acquisitions and by $1,991 for
issuances of stock under benefit plans.
NOTE 6. SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest expense was $196 and $87 for the three months ended June
30, 1997 and 1996 and $423 and $212 for the six months ended June 30, 1997 and
1996, respectively. Cash paid for income taxes was $7,932 and $7,198 for the
three month period and $10,529 and $7,571 for the six month period ended June
30, 1997 and 1996, respectively.
5
<PAGE> 8
PEROT SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 7. SWISS BANK AGREEMENT
On April 24, 1997, the Company concluded the renegotiation of the terms of its
strategic alliance with Swiss Bank, initially entered into in January 1996. For
more information, refer to Note 17 of the Company's annual financial statements
included in the Company's registration statement on Form 10 filed with the
Securities and Exchange Commission on April 30, 1997, as amended.
NOTE 8. SUBSEQUENT EVENTS
In July 1997, the Company acquired certain assets and intellectual property of
Nets, Inc. ("Nets") for $8,754 in cash. Nets is engaged in research and
development for Internet related products and services.
The Company's President and Chief Executive Officer, James Cannavino, resigned
on July 25, 1997. Under the terms and conditions of Mr. Cannavino's employment
agreement, the Company is required to pay up to $1,200 in severance benefits,
payable semi-monthly for a period of two years, subject to certain
contingencies which may reduce or eliminate the payments in the second year.
6
<PAGE> 9
PEROT SYSTEMS CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Comparison of the three months ended June 30, 1997 and 1996
Contract revenue increased in the second quarter of 1997 by 32% to
$185.0 million from $140.2 million in the second quarter of 1996, due primarily
to a $12.9 million increase in revenue from sales to new clients, $17.8 million
in revenue growth from Swiss Bank, and $18.4 million in revenue from businesses
acquired since the third quarter of 1996. Revenue from existing clients
decreased by $4.4 million.
Domestic contract revenue grew by 23% in the second quarter of 1997 to
$120.3 million from $97.9 million in the second quarter of 1996, and decreased
as a percentage of total contract revenue to 65% from 70% over the same
periods.
Non-domestic contract revenue, consisting of European and Asian
operations, grew by 53% in the second quarter of 1997 to $64.7 million from
$42.4 million in the second quarter of 1996, and increased as a percent of
total contract revenue to 35% from 30% over the same periods.
Direct cost of services increased in the second quarter of 1997 by 35%
to $148.1 from $109.4 million in the second quarter of 1996, due primarily to
growth in the Company's business. Selling, general and administrative expenses
("SG&A") increased in the second quarter of 1997 by 68% to $33.6 million from
$20.0 million in the second quarter of 1996, due to the addition of key
executives, expansion of the sales force, goodwill amortization, and staff
growth in administrative support areas such as communications, finance, human
resources, legal, marketing and internal systems.
Other expense increased in the second quarter of 1997 to approximately
$513,000 from an expense of approximately $93,000 in the second quarter of
1996, primarily due to a loss on the sale of assets.
As a result of the factors noted above, operating income decreased in
the second quarter of 1997 to $3.3 million from $10.8 million in the second
quarter of 1996, and operating margin declined to 1.8% from 7.7%. Net income
margin in the second quarter of 1997 decreased to 1% from 4% over the same
period in 1996.
Comparison of the six months ended June 30, 1997 and 1996
Contract revenue increased in the six months ended June 30, 1997 by
28% to $354.1 million from $277.0 million in the six months ended June 30,
1996, due primarily to $27.5 million in revenue from sales to new clients,
$26.8 million in revenue growth from Swiss Bank, and $28.4 million in revenue
from businesses acquired since the third quarter of 1996. Revenue from existing
clients decreased by $5.3 million.
7
<PAGE> 10
PEROT SYSTEMS CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
Domestic contract revenue grew by 26% in the six months ended June 30,
1997 to $231.3 million from $183.7 million in the six months ended June 30,
1996, and decreased as a percentage of total contract revenue to 65% from 66%
over the same periods.
Non-domestic contract revenue, consisting of European and Asian
operations, grew by 32% in the six months ended June 30, 1997 to $123.1 million
from $93.3 million in the six months ended June 30, 1996, and increased as a
percent of total contract revenue to 35% from 34% over the same periods.
Direct cost of services increased in the six months ended June 30,
1997 by 28% to $277.8 from $216.7 million in the six months ended June 30,
1996, due primarily to growth in the Company's business. Selling, general and
administrative expenses ("SG&A") increased in the six months ended June 30,
1997 by 65% to $64.5 million from $39.1 million in the six months ended June
30, 1996, due to the addition of key executives, expansion of the sales force,
goodwill amortization, and staff growth in administrative support areas such as
communications, finance, human resources, legal, marketing and internal
systems.
As a result of the factors noted above, operating income decreased in
the six months ended June 30, 1997 to $11.8 million from $21.2 million in the
six months ended June 30, 1996, and operating margin declined to 3.3% from
7.6%. Net income margin in the six months ended June 30, 1997 decreased to 2.3%
from 4.0% over the same period in 1996.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow from operating activities decreased to $5.6 million from
$53.4 million for the six-month periods ended June 30, 1997 and 1996,
respectively. The first half of 1996 reflected an unusual increase in current
liabilities related to the inception of a large contract executed at the
beginning of that period offset in part by an increase in current assets.
During the first half of 1997, depreciation and amortization increased by $7.0
million due to increases in depreciable assets and goodwill amortization on
recently acquired businesses. In addition, during the first half of 1997, net
current assets and liabilities decreased by $21 million due primarily to
payment of accrued income taxes and bonuses and a reduction in deferred
revenue.
Net cash used in investing activities was $39.7 million for the first
half of 1997, compared to $9.3 million for the first half of 1996. Expenditures
for computer and communication equipment during the first half of 1997 totaled
approximately $23.7 million compared to approximately $8.9 million in the prior
year period, reflecting staff increases and general business growth.
Additionally, in the first half 1997, net cash used for business interests
acquired was approximately $13.4 million and net cash used to acquire minority
interests in several business ventures was $3.1 million.
For the first half of 1997, net cash provided by financing activities
was approximately $25.3 million, compared to approximately $1.3 million for the
first half of 1996. This increase was due primarily to a $18.8 million
borrowing on the Company's line of credit, $8.1 million in proceeds from the
sale to Swiss Bank of options to purchase the Company's Class B Common Stock
and approximately $0.9 million in proceeds from issuances of common stock, which
was offset in part by the repurchase of $1.4 million in shares of the Company's
Class A Common Stock, which was held as treasury stock at June 30, 1997. See
Note 3 to the Condensed Consolidated Financial Statements.
8
<PAGE> 11
PEROT SYSTEMS CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
In August 1996, the Company's credit line was increased from $10.0
million to $40.0 million. At June 30, 1997, $18.8 million was outstanding on
the line.
The Company anticipates that cash flows from operating activities and
unused borrowing capacity under its existing line of credit will provide
sufficient funds to meet its needs for the remainder of 1997. Significant
growth in the Company's business during the remainder of 1997 and in 1998 could
result in the need for private or public offerings of debt or equity
instruments of the Company to provide the funds necessary to support its
growth.
9
<PAGE> 12
PEROT SYSTEMS CORPORATION
FORM 10-Q
For the Quarter Ended June 30, 1997
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is, from time to time, involved in various litigation
matters arising in the ordinary course of its business. The Company believes
that the resolution of currently pending legal proceedings, either individually
or taken as a whole, will not have a material adverse effect on the Company's
consolidated financial position or results of operations.
ITEM 2. CHANGES IN SECURITIES.
The Company has issued 353,000 shares of its Class A Common Stock
("Class A Shares") under its restricted stock plan and options to purchase an
additional 5,325,502 Class A Shares to its employees from January 1, 1997 to
June 30, 1997. Class A Shares were sold at the fair value of such shares at the
time of sale and the exercise price of each option was the fair value at the
time of the grant of the option. The Company sold all 353,000 Class A Shares
issued under its restricted stock plan to employees at a price equal to $3.75
per share. From January 1, 1997 to June 30, 1997, an additional 422,610 Class A
Shares were sold to employees upon the exercise of employee stock options at
prices ranging from $0.50 per share to $2.50 per share. The Company issued
options to purchase 2,853,602 shares with an exercise price of $3.75 per share
and options to purchase 2,471,500 shares at an exercise price of $6.75 per
share. The Company relied on Rule 701 promulgated under the Securities Act of
1933, as amended (the "Securities Act"), or Section 4(2) of the Securities Act
with respect to all sales and offers of its securities to its employees and
directors. The Company also issued 152,183 Class A Shares deemed to have a fair
value of $4.90 per share to its 401(k) plan as a portion of the Company's 1996
matching contribution.
From January 1, 1997 to June 30, 1997, the Company has issued 370,000
Class A Shares in connection with the acquisition of three businesses by the
Company. The Company issued 120,000 shares deemed to have a fair value of $4.90
per share, 70,000 shares deemed to have a fair value of $8.45 per share and
180,000 shares deemed to have a fair value of $8.45 per share. The Company
relied on Section 4(2) of the Securities Act with respect to such issuances.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company held its annual meeting of shareholders of the Company on April 18,
1997. The purpose of the meeting was to elect nine nominees to serve as
directors of the Company and ratify the selection of Coopers & Lybrand L.L.P.
as the Company's independent accountants for the fiscal year ending December
31, 1997. The number of shares voted with respect to each nominee was as
follows:
10
<PAGE> 13
PEROT SYSTEMS CORPORATION
FORM 10-Q
For the Quarter Ended June 30, 1997
<TABLE>
<CAPTION>
Nominee For Withheld
- ------------------------------ -------------- ----------------
<S> <C> <C>
Morton H. Meyerson 27,807,099 146,800
James A. Cannavino 27,814,799 139,100
James Champy 27,802,399 151,500
Steve Blasnik 27,784,433 169,466
Craig Fields 27,770,729 183,170
Raymond L. Golden 27,916,029 37,870
Carl Hahn 27,926,699 27,200
Ross Perot, Jr. 27,944,799 9,100
John L. Segall 27,910,929 42,970
</TABLE>
There were no broker non-votes. All of the nominees were elected to the Board
of Directors. These directors constitute the entire Board of Directors of the
Company. The selection of Coopers & Lybrand L.L.P. as the Company's independent
accountants for the fiscal year ended December 31, 1997 was ratified by the
shareholders. The vote was 27,780,862 for and 134,700 against with the holders
of 34,337 shares abstaining.
In addition, the Company solicited consents of the holders of the Common Stock
in lieu of a special meeting with respect to the amendment and restatement of
the Company's Certificate of Incorporation. The holders of 29,709,639 shares of
the Common Stock consented to the amendment and restatement. 39,245,748 shares
of Common Stock were outstanding. The amendment eliminated provisions relating
to the Company's Liquidation Preference Common Stock and Series A Preferred
Stock from the Certificate of Incorporation. No shares of either class of
capital stock were outstanding at the time of the shareholder action.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required by Item 601 of Regulation S-K
Exhibit No. Document
------------------ --------------------------
11 Computation of Earnings per Common Share
27 Financial Data Schedule
(b) Reports of Form 8-K
No reports were filed on Form 8-K during the three months ended June
30, 1997.
11
<PAGE> 14
PEROT SYSTEMS CORPORATION
FORM 10-Q
For the Quarter Ended June 30, 1997
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.
PEROT SYSTEMS CORPORATION
(Registrant)
Date: August 14, 1997 By /s/ TERRY ASHWILL
---------------------
Terry Ashwill
Vice President and Chief Financial Officer
By /s / JOHN J. VONESH
-----------------------
John J. Vonesh
Controller and Principal Accounting Officer
12
<PAGE> 15
PEROT SYSTEMS CORPORATION
FORM 10-Q
For the Quarter Ended June 30, 1997
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
-------------- ------------------------------------------------------
<S> <C>
11 Computation of Earnings per Common Share.
27 Financial Data Schedule as of June 30, 1997.
</TABLE>
13
<PAGE> 1
EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE
(Dollars and share amounts in thousands, except per
share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1997 1996 1997 1996
------------------------ ------------------------
<S> <C> <C> <C> <C>
Net income .......................................... $ 1,415 $ 5,748 $ 8,098 $ 11,205
Preferred stock dividend ............................ - (149) - (298)
Modified treasury stock method adjustment ........... 224 186 379 376
------------------------ ------------------------
$ 1,639 $ 5,785 $ 8,477 $ 11,283
======================== ========================
Average common shares outstanding ................... 39,883 36,168 39,745 35,706
Common stock equivalents ............................ 14,388 13,153 16,265 13,180
------------------------ ------------------------
Weighted average common shares outstanding .......... 54,271 49,321 56,010 48,886
======================== ========================
Primary and fully diluted earnings per common share.. $ 0.03 $ 0.12 $ 0.15 $ 0.23
======================== ========================
</TABLE>
14
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000894253
<NAME> PEROT SYSTEMS CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 16,983
<SECURITIES> 0
<RECEIVABLES> 116,373
<ALLOWANCES> 7,883
<INVENTORY> 0
<CURRENT-ASSETS> 162,661
<PP&E> 95,680
<DEPRECIATION> 55,795
<TOTAL-ASSETS> 248,146
<CURRENT-LIABILITIES> 153,320
<BONDS> 0
0
0
<COMMON> 406
<OTHER-SE> 88,793
<TOTAL-LIABILITY-AND-EQUITY> 248,146
<SALES> 354,082
<TOTAL-REVENUES> 354,082
<CGS> 277,841
<TOTAL-COSTS> 342,083
<OTHER-EXPENSES> (1,441)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 500
<INCOME-PRETAX> 14,082
<INCOME-TAX> 5,984
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,098
<EPS-PRIMARY> .15
<EPS-DILUTED> .15
</TABLE>
