United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________ to ________
Commission File Number 0-27138
CATALYST INTERNATIONAL, INC.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 39-1415889
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(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
8989 North Deerwood Drive, Milwaukee, WI 53223
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(Address of Principal Executive Offices) (Zip Code)
(414) 362-6800
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(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant (1) 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 August 4, 2000, 8,121,911 shares of the issuer's common stock were
outstanding.
<PAGE>
CATALYST INTERNATIONAL, INC.
FORM 10-Q
FOR THE PERIOD ENDED JUNE 30, 2000
INDEX
Page No.
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements 3
Consolidated Balance Sheets - June 30, 2000
and December 31, 1999 3
Consolidated Statements of Operations - Three
months ended June 30, 2000 and 1999 5
Consolidated Statements of Operations - Six
months ended June 30, 2000 and 1999 6
Consolidated Statements of Cash Flows - Six
months ended June 30, 2000 and 1999 7
Notes to Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures about
Market Risk 13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 4. Submission of Matters to a Vote of Stockholders 13
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 14
Page 2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CATALYST INTERNATIONAL, INC.
Consolidated Balance Sheets
(in thousands)
ASSETS
<TABLE>
<CAPTION>
June 30, Dec. 31,
2000 1999
---------- ----------
(unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $22,367 $21,169
Accounts receivable 9,276 10,107
Prepaid and other expenses 746 778
------- -------
Total Current Assets 32,389 32,054
Equipment and Leasehold Improvements:
Computer hardware and software 6,589 6,246
Office equipment 2,421 2,209
Leasehold improvements 858 853
------- -------
9,868 9,308
Less accumulated depreciation 6,088 5,799
------- -------
Total Equipment and Leasehold Improvements 3,780 3,509
------- -------
Total Assets $36,169 $35,563
======= =======
</TABLE>
See accompanying notes
Note: The balance sheet at December 31, 1999 has been derived from the
audited balance sheet at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
Page 3
<PAGE>
CATALYST INTERNATIONAL, INC.
Consolidated Balance Sheets
(in thousands, except share amounts)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
June 30, Dec. 31,
2000 1999
---------- ----------
(unaudited)
<S> <C> <C>
Current Liabilities:
Accounts payable $ 1,564 $ 2,237
Accrued liabilities 2,499 2,529
Deferred revenue 6,082 6,567
Current portion of long-term debt 316 333
------- -------
Total Current Liabilities 10,461 11,666
Noncurrent Liabilities:
Long-term debt 281 181
Deferred revenue 68 169
Deferred rent 235 266
------- -------
Total Non-Current Liabilities 584 616
------- -------
Total Liabilities 11,045 12,282
Stockholders' Equity:
Preferred stock, $.01 par value; 2,000,000 shares
authorized; none issued or outstanding - -
Common stock, $.10 par value; 25,000,000 shares
authorized; shares issued: 9,162,408 in 2000
and 8,939,264 in 1999 916 894
Additional paid-in capital 43,564 42,610
Accumulated deficit (14,592) 15,459)
Treasury stock, at cost: 1,063,263 shares
of common stock in 2000 and 1999 (4,764) (4,764)
------- -------
Total Stockholders' Equity 25,124 23,281
------- -------
Total Liabilities and Stockholders' Equity $36,169 $35,563
======= =======
</TABLE>
See accompanying notes
Note: The balance sheet at December 31, 1999 has been derived from the
audited balance sheet at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
Page 4
<PAGE>
CATALYST INTERNATIONAL, INC.
Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three months ended
June 30,
2000 1999
---------- ----------
<S> <C> <C>
Revenues:
Software license fees $ 2,229 $ 3,194
Services and post-contract customer support 6,940 6,085
Hardware 1,890 2,230
------- -------
Total Revenues 11,059 11,509
Operating Expenses:
Cost of software license fees 236 233
Cost of services and post-contract customer support 4,189 3,761
Cost of hardware 1,531 1,840
Product development 1,371 2,329
Sales and marketing 2,629 2,042
General and administrative 654 1,359
------- -------
Total Operating Expenses 10,610 11,564
------- -------
Income (loss) from operations 449 (55)
Other income 154 164
------- -------
Net income $ 603 $ 109
======= =======
Net income per share:
Basic $ 0.08 $ 0.02
Diluted 0.07 0.01
Shares used in computing net income per share:
Basic 8,005 6,987
Diluted 8,408 7,726
</TABLE>
See accompanying notes
Page 5
<PAGE>
CATALYST INTERNATIONAL, INC.
Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Six months ended
June 30,
2000 1999
---------- ----------
<S> <C> <C>
Revenues:
Software license fees $ 4,617 $ 6,055
Services and post-contract customer support 13,163 12,670
Hardware 3,600 3,511
------- -------
Total Revenues 21,380 22,236
Operating Expenses:
Cost of software license fees 379 380
Cost of services and post-contract customer support 8,434 7,634
Cost of hardware 2,889 3,016
Product development 2,787 3,913
Sales and marketing 4,623 3,603
General and administrative 1,620 2,373
------- -------
Total Operating Expenses 20,732 20,919
------- -------
Income from operations 648 1,317
Other income 219 245
------- -------
Net income $ 867 $ 1,562
======= =======
Net income per share:
Basic $ 0.11 $ 0.22
Diluted 0.10 0.20
Shares used in computing net income per share:
Basic 7,958 6,976
Diluted 8,500 7,716
</TABLE>
See accompanying notes
Page 6
<PAGE>
CATALYST INTERNATIONAL, INC.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Six months ended
June 30,
2000 1999
---------- ----------
<S> <C> <C>
Operating Activities:
Net income $ 867 $ 1,562
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 973 867
Compensation expense on stock options - 337
(Gain) loss on disposal of equipment 182 (11)
Changes in operating assets and liabilities:
Accounts receivable 831 (2,237)
Prepaid expenses and other assets 32 (181)
Accounts payable (673) 357
Accrued liabilities (30) (433)
Deferred revenue (586) (205)
Deferred rent (31) (10)
------- -------
Total adjustments 698 (1,516)
------- -------
Net cash provided by operating activities 1,565 46
Investing Activities:
Purchase of equipment and leasehold improvements (1,125) (506)
Capitalization of software costs - (446)
------- -------
Net cash used in investing activities (1,125) (952)
Financing Activities:
Payments on long-term debt (218) (216)
Proceeds from exercise of stock options 976 87
------- -------
Net cash provided by financing activities 758 71
------- -------
Net increase (decrease) in cash 1,198 (835)
Cash and cash equivalents at the beginning of period 21,169 8,555
------- -------
Cash and cash equivalents at the end of the period $22,367 $ 7,720
======= =======
Noncash investing and financing activities:
There were no capital lease transactions in the second quarter of 2000.
During the six months ended June 30, 2000, the Company acquired $301,000 of
computer hardware under capital leases.
</TABLE>
See accompanying notes
Page 7
<PAGE>
CATALYST INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10
of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for fiscal
year end financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three- and six-
month periods ended June 30, 2000 are not necessarily indicative of the
results that may be expected for the year ended December 31, 2000. For
further information, refer to the financial statements and footnotes thereto
included in the Catalyst International, Inc. Annual Report on Form 10-K for
the year ended December 31, 1999.
2. NET INCOME PER SHARE OF COMMON STOCK
Catalyst International, Inc. ("Catalyst" or the "Company") has presented net
income per share in accordance with Statement of Financial Accounting
Standards (SFAS) No. 128, "Earnings Per Share." The following table sets
forth the computation of basic and diluted earnings per share.
<TABLE>
<CAPTION>
For the For the
Three Months Six Months
ended June 30, ended June 30,
2000 1999 2000 1999
(in thousands) (in thousands)
Denominator
-----------
<S> <C> <C> <C> <C>
Denominator for basic earnings per share -
weighted average common shares 8,005 6,987 7,958 6,976
Effect of dilutive securities - stock
options and warrants 403 739 542 740
Denominator for diluted earnings per share 8,408 7,726 8,500 7,716
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion contains forward-looking statements that are subject
to risks and uncertainties that could cause actual results to differ
materially from those anticipated by such statements. These statements use
words such as "believe," "anticipate," "estimate," or "future," or are
otherwise stated as the Company's predictions for the future. These
statements, as with any predictions of the future, involve certain risk
factors beyond the Company's control. The Company's actual results may
differ materially from the results discussed in the forward-looking
statements, and any such differences could have a material negative impact on
the Company's share price. Factors that might cause such a difference
include, but are not limited to, a decrease in demand for the Company's
products, delays in the timely availability of new features and releases of
the Company's products, a too-rapid increase in the
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Company's level of spending, actions taken by competitors, technological
changes, those herein identified, , and other factors identified from time to
time as risks in the Company's forms and reports filed with the Securities
and Exchange Commission.
TOTAL REVENUES
The Company's revenues are derived from software license fees, services and
post-contract customer support ("PCS"), and hardware sales. Total revenues
for the second quarter of 2000 were $11.1 million, which represented a
decrease of 3.9% from second quarter 1999 total revenues of $11.5 million.
For the first six months of 2000, total revenues were $21.4 million, down
3.8% compared to 1999 total revenues of $22.2 million for the same period.
The decrease in total revenues for the three- and six-month periods was due
primarily to a decrease in software license fees.
International revenues were $1.2 million in the second quarter of 2000,
compared to international revenues of $2.4 million in the second quarter of
1999. International revenues represented 11.0% of total revenues for the
second quarter of 2000 compared to 20.5% in the same period of 1999.
International revenues decreased for the quarter ended June 30, 2000 compared
to the second quarter of 1999 due primarily to the completion of two large
European projects which were not replaced with projects of comparable size.
The Company believes that international revenues may increase slightly or
remain the same.
SOFTWARE LICENSE FEES
Software license fee revenues consist of revenues from software license
agreements for the Company's products, related add-on products, and third
party software. The second quarter of 2000 software license fee revenues of
$2.2 million represented a decrease of 30.2% over second quarter of 1999
software license fee revenues of $3.2 million. For the first six months of
2000, license fee revenues of $4.6 million represented a decrease of 23.7%
compared to 1999 license fee revenues of $6.1 million for the same period.
This decrease was attributable to lower sales and installation activity, in
addition to the impact of turnover in the Company's sales force. The Company
believes that license fee revenues may increase in the future due to
increased worldwide sales and marketing efforts, including hiring new sales
personnel, the introduction of new products, and efforts to deliver standard
packaged solutions that meet the requirements of its vertical markets.
The Company follows the software revenue recognition practices set forth in
Statement of Position 97-2, "Software Revenue Recognition," issued by the
American Institute of Certified Public Accountants. For projects requiring
"significant" modifications to the Company's products, the Company uses
contract accounting procedures based upon percentage of completion to
recognize revenue, provided that such amounts are reasonably collectable.
Revenue for projects with few or no modifications are recognized upon
reaching contract milestones, to the extent that payment is fixed and
determinable and considered collectable.
SERVICES AND PCS
Services and PCS revenues are derived from software modifications,
professional services, and PCS agreements. Services and PCS revenues
increased 14.1% to $6.9 million in the second quarter of 2000, up from $6.1
million in the second quarter of 1999. For the six-month period ended June
30, 2000, services and PCS revenues were $13.2 million, an increase of
$493,000, or 3.9%, over revenues of $12.7 million for the first six months of
1999. The components of services and PCS revenues as a percentage of total
revenues in the second quarter of 2000 were 13.7% for software modifications,
29.7% for professional services, and 19.4 % for PCS agreements compared with
11.7%, 26.4%, and 14.8%,
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respectively, in the second quarter of 1999. Services and PCS revenues
increased in the second quarter of 2000 due to the combined effect of multi-
site rollouts for existing customers, upgrades to new releases of the
Company's products, implementation of the Company's products at new customer
sites, and renewals of PCS agreements.
Software modifications are determined during the customer's Conference Room
Pilot (CRP) and consist of changes to the software to facilitate specific
functionality desired by the customer. The Company believes that as the
number of new contracts increases, future modification revenues as a
percentage of total revenues may decrease due to the increased functionality
of new releases of the Company's products; however, the relationship is
dependent upon the variety of modifications that the individual customer
specifies.
Professional services revenues are derived from training, technical services,
performance of the CRP, project management, and implementation services.
Professional services revenues are based on the number of days of work
actually performed. The increase in professional services revenue for the
second quarter of 2000 was due to an effort on the part of the Company to
sell upgrades, training, and other services to existing customers. The
Company believes that future professional services revenues may increase as
new customer contracts are signed.
Customers typically enter into an agreement for PCS at the time they first
license the Catalyst WMS and, once installed, pay for the first year of PCS
in advance. PCS revenues are recognized ratably over the term of the PCS
agreement. The increase in PCS revenues for the second quarter of 2000 was
due primarily to growth in the installed customer base for the Company's
products and current customers renewing their PCS agreements. The Company
believes that PCS revenues may increase in the future as more of the
Company's products are implemented, resulting in the execution of
corresponding PCS agreements and renewal of existing PCS agreements.
HARDWARE
Hardware revenues consist primarily of computer hardware, radio frequency
equipment, and printers that the Company sold to its customers on behalf of
hardware and other equipment manufacturers. Hardware revenues decreased
$340,000 to $1.9 million in the second quarter of 2000 from $2.2 million
during the same period of 1999. Hardware sales represented 16.8% of total
revenues in the first half of 2000 compared to 15.8% for the same period in
1999. Hardware sales in 1999 were higher due to a multi-site equipment sale
to one major customer.
COST OF SOFTWARE LICENSE FEES
Cost of software license fees consists of the cost of third-party software
products sold by the Company. In the second quarter of 2000, the cost of
software license fees increased slightly to $236,000 from $233,000 in the
second quarter of 1999. Year to date cost of software license fees decreased
by less than 1.0% to $379,000 in 2000 from $380,000 in 1999, reflecting
consistency in third party software sales. The Company anticipates that the
cost of software license fees for third-party software should decrease in the
future as a percentage of total software license fee revenues and remain
relatively constant as a percentage of related third-party software revenues.
COST OF SERVICES AND PCS
Cost of services and PCS consists primarily of personnel and related costs
for the performance of
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software modifications, professional services, and PCS. The cost of services
and PCS increased 11.4% to $4.2 million in the second quarter of 2000 from
$3.8 million for the second quarter of 1999. However, as a percentage of
services and PCS revenues, the cost of services and PCS decreased slightly to
60.4% for the second quarter of 2000 from 61.8% for the second quarter of
1999. Year to date cost of services and PCS increased 10.5% to $8.4 million
in 2000 from $7.6 million for the same period in 1999 and increased as a
percent of related revenues to 64.1% at June 30, 2000 from 60.3% at June 30,
1999. The cost of services and PCS increased due to the allocation of
technical resources which were previously utilized in product development
activities.
COST OF HARDWARE
Cost of hardware consists primarily of the cost of computer hardware, radio
frequency equipment, and printers sold by the Company on behalf of the
equipment manufacturers. The Company does not inventory, service, or
discount hardware items, but makes them available to customers who desire a
turnkey solution. Cost of hardware in the second quarter of 2000 was $1.5
million compared to $1.8 million for the second quarter of 1999. The
decrease in cost is attributable to the decrease in sales of hardware.
PRODUCT DEVELOPMENT
Product development costs are expenses associated with research and
development, including costs of engineering personnel and related development
expenses such as software tools, training, and documentation. Product
development expenses as a percentage of total revenues for the second quarter
of 2000 decreased to 12.4% from 20.2% in the second quarter of 1999. Actual
product development expenses were $1.4 million in the second quarter of 2000
and $2.8 million for the six months ended June 30, 2000, representing a
decrease of 41.1% and 28.8%, respectively. The decrease in product
development costs was primarily due to the completion in 1999 of the
Company's efforts to develop Release 8.0 of the Company's WMS product, along
with redirection of technical resources previously assigned to development
efforts. The Company continues to expense all software development costs
related to its WMS product as incurred. The Company believes that product
development costs may increase in the future due to expenses related to
partnering initiatives and as the development of the products to be offered
by Catalyst-Exchange.com, Inc. accelerates.
SALES AND MARKETING
Sales and marketing expenses consist primarily of salaries and commissions
paid to sales personnel, along with marketing, promotional, and travel
expenses. Sales and marketing expenses as a percentage of total revenues for
the second quarter of 2000 increased to 23.8% from 17.7% in the second
quarter of 1999. Actual sales and marketing expenses increased to $2.6
million in the second quarter of 2000 compared to $2.0 million in the second
quarter of 1999 and increased to $4.6 million for the six months ended June
30, 2000 compared to $3.6 million for the same period in 1999. The increase
in sales and marketing expense as a percentage of total revenues and in
actual sales and marketing expenses was primarily due to increased trade show
and promotional activities, the addition of sales and marketing personnel,
and a charge for severance to a former executive. The Company expects that
sales and marketing expenses will increase as a percentage of total revenues
with the broadening of marketing efforts in the mid-tier and Internet
fulfillment markets.
GENERAL AND ADMINISTRATIVE
General and administrative expenses consist primarily of the salaries of
administrative, executive, finance, and quality assurance personnel. General
and administrative expenses as a percentage of total
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revenues for the second quarter of 2000 decreased to 5.9% from 11.8% in the
second quarter of 1999. Actual general and administrative expenses decreased
to $654,000 in the second quarter of 2000 from $1.4 million in the second
quarter of 1999. The second quarter of 1999 included a charge to
compensation expense for the former CFO and employee procurement expenses
which were not present in the second quarter of 2000. For the six-month
period, general and administrative expenses were $1.6 million for 2000
compared to $2.4 million for 1999. The Company expects that general and
administrative expenses may increase in the future, but should continue to
decrease as a percentage of total revenues.
OTHER INCOME AND EXPENSE
Other income and expense consists primarily of interest income and interest
expense and does not have a material impact on operating results. The
Company expects other income and expense to remain relatively constant in the
future and expects interest income may increase due to additional invested
cash balances and higher interest rates earned.
INCOME TAX EXPENSE
No federal or state tax expense was recorded for the quarters or six-month
periods ended June 30, 2000 and 1999 due to the Company's federal and state
net operating loss position. No deferred tax expense was recorded in the
quarters ended June 30, 2000 and 1999 as the Company continues to have a
substantial net operating loss carryforward. The Company recorded a
valuation allowance to reserve for the net deferred tax assets.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $1.6 million for the six months
ended June 30, 2000, compared to $46,000 during the six months ended June 30,
1999. The increase during this period was due primarily to the decrease in
accounts receivable offset somewhat by an accounts payable decrease.
Cash used for investing activities increased to $1.1 million during the six
months ended June 30, 2000 from $952,000 during the six months ended June 30,
1999 due to increased equipment and leasehold improvement purchases.
Financing activities generated cash of $758,000 in the first six months of
2000 compared to $71,000 in the first six months of 1999. The increase in
net cash provided by financing activities in 2000 was due to an increase in
proceeds from the exercise of stock options.
As of June 30, 2000, the Company had $22.4 million in cash and cash
equivalents, which consisted primarily of investments in commercial paper,
money market funds, corporate debt securities, and repurchase agreements. In
addition, the Company has a $5.0 million line of credit (the "Revolving
Credit Facility") with Bank One, Milwaukee, Wisconsin. As of June 30, 2000,
there were no amounts outstanding under the Revolving Credit Facility.
Accounts receivable was $9.3 million as of June 30, 2000. This compares to
$10.1 million at December 31, 1999. The decrease from the December 31, 1999
balance was due to an improvement in the collection cycle. Days sales
outstanding was 75 at June 30, 2000 compared to 98 at December 31, 1999. At
June 30, 2000, the Company had reserves for doubtful accounts of $1.0 million
and feels it has adequately provided for any risks known or anticipated at
this time.
Longer term cash requirements, other than normal operating expenses, are
anticipated for the
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development of new software products, enhancement of existing products, and
the financing of anticipated growth. The Company believes that its existing
cash, cash equivalents, and available Revolving Credit Facility, along with
anticipated cash generated from operations, should be sufficient to satisfy
its cash requirements for at least the next twelve months.
On April 18, 2000, the Company announced the formation of a separate wholly
owned subsidiary known as Catalyst-Exchange.com, Inc., which was incorporated
on May 3, 2000. Catalyst-Exchange.com, Inc. was formed to deliver a true
Business-to-Business product and service offering for the retail and consumer
packaged goods industries. Catalyst-Exchange.com, Inc. earned no revenues
in the second quarter of 2000, nor did it incur any material expenses during
that period.
The Company has never paid cash dividends on its common stock. The Company's
policy has been to retain cash from operations to provide funds for the
operation and expansion of its business. Accordingly, the Company does not
anticipate paying cash dividends in the foreseeable future.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company does not believe it has material exposure to market risk with
respect to any of its investments as the Company does not use market rate
sensitive instruments for trading or other purposes. For purposes of the
Consolidated Statements of Cash Flows, the Company considers all highly
liquid investments with a maturity of three months or less when purchased to
be cash equivalents. Cash equivalents consist principally of investments in
commercial paper, money market funds, corporate debt securities, and
repurchase agreements. The cost of these securities, which are considered as
"available for sale" for financial reporting purposes, approximates fair
value at both June 30, 2000 and 1999. There were no realized gains or losses
in the periods ended June 30, 2000 or 1999.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In 1999, a former customer (the "Claimant") instituted an arbitration
proceeding against the Company with the American Arbitration Association in
Milwaukee, Wisconsin. The Claimant attempts to revoke its acceptance of the
Company's product alleging breach of warranty. The Claimant seeks relief in
the form of monetary damages. The Company believes that the allegations of
the Claimant are without merit and intends to vigorously defend against them.
The potential outcome for this legal proceeding cannot be determined at this
time and accordingly, no estimate for such potential settlement and
arbitration costs has been included in the accompanying financial statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS
The Company's 2000 Annual Meeting of Stockholders was held on Tuesday, April
25, 2000. At the meeting, the first matter acted upon by the stockholders
was the re-election of Douglas B. Coder and Terrence L. Mealy as Class II
Directors for three-year terms expiring at the 2003 Annual Meeting of
Stockholders or until their successors are duly qualified and elected. The
terms of all other then-serving directors continued after the meeting,
including Roy J. Carver, Jr., James F. Goughenour, Sean P. McGowan, and
Elizabeth J. Reeves. As of the March 31, 2000 record date for the Annual
Meeting, 6,970,679 shares of Common Stock were outstanding and eligible to
vote. Of the 5,586,717 shares of Common Stock voted at the meeting, in
person or by proxy, at least 5,574,917 shares were voted for the re-election
of Messrs. Coder and Mealy.
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The second matter acted upon by the stockholders was the ratification of the
appointment by the Company's Audit Committee of Ernst & Young LLP as the
Company's independent auditors for 2000. Of the 5,586,717 shares of Common
Stock voted at the meeting, in person or by proxy, 5,577,937 shares were
voted in favor of the ratification, 5,680 shares were voted against the
ratification, and 3,100 shares abstained from a vote on the ratification.
No other matters were acted upon by the stockholders at the Annual Meeting
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Number Description
3.1 Amended and Restated Certificate of Incorporation (1)
3.2 Amended and Restated By-Laws (1)
10.1 1993 Stock Option Plan, as amended, of Catalyst USA,
Inc.* (1)
10.2 1997 Director Stock Option Plan of Catalyst
International, Inc.* (2)
27 Financial Data Schedule
* Represents a compensation plan.
(1) Incorporated by reference to Registration Statement 33-97522C
on Form SB-2.
(2) Incorporated by reference to Exhibit 4.1 of Registration
Statement 33-97522C on Form S-8 dated September 26, 1997.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the second quarter of
2000.
SIGNATURES
Pursuant the requirements of the Securities Exchange Act of 1934, the
registrant had duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CATALYST INTERNATIONAL, INC.
Dated: August 11, 2000 By: /s/ Sean P. McGowan
--------------------------------
Sean P. McGowan
President and Chief Executive
Officer
Signing on behalf of the registrant
and as principal executive officer.
Dated: August 11, 2000 By: /s/ Timothy Sherlock
--------------------------------
Timothy Sherlock
Vice President, Finance and
Chief Financial Officer
Signing on behalf of the registrant
and as principal financial officer.
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