<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-K/A
(AMENDMENT NO. 1)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1996
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 0-23078
MAPINFO CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
NEW YORK 06-1166630
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
----------------
ONE GLOBAL VIEW
TROY, NEW YORK 12180
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (518) 285-6000
----------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: Common Stock,
$.002 Par Value Per Share
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 [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [_]
The aggregate market value of the voting stock held by non-affiliates of the
registrant was approximately $49,893,930 based on the closing price of the
Common Stock on the Nasdaq National Market on December 23, 1996.
The number of shares outstanding of the registrant's common stock, $.002 par
value per share as of December 23, 1996 was 5,775,862.
DOCUMENTS INCORPORATED BY REFERENCE
<TABLE>
<CAPTION>
10-K
DOCUMENT DESCRIPTION PART
- -------------------- -------
<S> <C>
Specifically Identified Portions of the Registrant's Proxy Statement
for the Annual Meeting of Shareholders to be held on February 13,
1997................................................................ III
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
MAPINFO CORPORATION
ANNUAL REPORT ON FORM 10-K
YEAR ENDED SEPTEMBER 30, 1996
ITEM 8
FINANCIAL STATEMENTS
16
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN ITEM 8:
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Report of Independent Accountants 18
Consolidated Statements of Income for the years ended September 30, 1994,
1995 and 1996 19
Consolidated Balance Sheets as of September 30, 1995 and 1996 20
Consolidated Statements of Stockholders' Equity for the years ended
September 30, 1994, 1995 and 1996 21
Consolidated Statements of Cash Flows for the years ended September 30,
1994, 1995 and 1996 22
Notes to Consolidated Financial Statements 23
</TABLE>
17
<PAGE>
[LOGO OF COOPERS & LYBRAND APPEARS HERE]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
of Maplnfo Corporation and Subsidiaries
We have audited the consolidated financial statements and the financial
statement schedule of MapInfo Corporation and Subsidiaries listed in Item
14(a) of this Form 10-K. These financial statements and financial statement
schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of MapInfo
Corporation and Subsidiaries as of September 30, 1996 and 1995, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended September 30, 1996 in conformity with
generally accepted accounting principles. In addition, in our opinion, the
financial statement schedule referred to above, when considered in relation to
the basic financial statements taken as a whole, present fairly, in all
material respects, the information required to be included therein.
COOPERS & LYBRAND L.L.P.
Albany, New York
November 5, 1996
18
<PAGE>
MAPINFO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Year Ended September 30,
--------------------------
1994 1995 1996
-------- -------- --------
(in thousands, except
earnings per share)
<S> <C> <C> <C>
Net revenues:
Products $ 26,981 $ 36,070 $ 36,980
Services 2,739 3,971 4,552
-------- -------- --------
Total net revenues 29,720 40,041 41,532
-------- -------- --------
Cost of revenues:
Products 4,035 5,024 6,546
Services 2,155 2,701 2,814
-------- -------- --------
Total cost of revenues 6,190 7,725 9,360
-------- -------- --------
Gross profit 23,530 32,316 32,172
-------- -------- --------
Operating expenses:
Research and development 4,102 5,752 6,984
Selling and marketing 11,736 17,541 19,565
General and administrative 3,077 4,749 5,688
-------- -------- --------
Total operating expenses 18,915 28,042 32,237
-------- -------- --------
Operating income (loss) 4,615 4,274 (65)
Other income, net 406 1,035 975
-------- -------- --------
Income before provision for income taxes 5,021 5,309 910
Provision for income taxes 1,823 1,513 203
-------- -------- --------
Net income $ 3,198 $ 3,796 $ 707
======== ======== ========
Earnings per share:
Primary $ 0.61 $ 0.65 $ 0.12
Fully diluted $ 0.61 $ 0.65 $ 0.12
Weighted average shares outstanding:
Primary 5,231 5,841 5,865
Fully diluted 5,236 5,841 5,865
</TABLE>
See accompanying notes.
19
<PAGE>
MAPINFO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30,
---------------
1995 1996
------- -------
(in thousands)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $14,846 $27,104
Short-term investments, at cost 14,970 4,795
Accounts receivable, less allowance of $949 at September 30,
1995, and $1,249 at September 30, 1996 9,527 7,581
Inventories 241 1,021
Other current assets 1,148 844
Income taxes receivable 260
Deferred income taxes 893 845
------- -------
Total current assets 41,625 42,450
Property and equipment--net 3,564 4,685
Product development costs--net 542 1,115
Deferred income taxes 385
Intangibles and other assets 691 456
------- -------
Total assets $46,422 $49,091
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,542 $ 1,751
Accrued expenses 4,721 4,820
Deferred revenue 970 1,451
Income taxes payable 107 536
------- -------
Total current liabilities 7,340 8,558
Other non-current liabilities 268 138
Deferred income taxes 118
------- -------
Total liabilities 7,726 8,696
------- -------
Commitments (Note 7)
Stockholders' Equity:
Common stock, $.002 par value; 25,000 shares authorized;
5,648 and 5,775 shares issued, respectively 11 12
Preferred stock, $.01 par value; 1,000 shares authorized;
none issued
Paid in capital 28,846 29,824
Retained earnings 9,840 10,547
Translation adjustment 13
------- -------
38,697 40,396
Less treasury stock, at cost, 2 shares 1 1
------- -------
Total stockholders' equity 38,696 40,395
------- -------
Total liabilities and stockholders' equity $46,422 $49,091
======= =======
</TABLE>
See accompanying notes.
20
<PAGE>
MAPINFO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Years Ended September 30, 1994, 1995 and 1996
<TABLE>
<CAPTION>
Common Stock
---------------- Paid-in Retained Translation Treasury
Shares Amount Capital Earnings Adjustment Stock
------------------------------------------------------
(in thousands, except share data)
<S> <C> <C> <C> <C> <C> <C>
Balance, September 30,
1993 3,982,755 $ 8 $ 2,691 $ 2,846 $(1)
Exercise of options 128,943 156
Initial public offering,
net of offering costs 1,347,500 3 23,095
Tax benefit from option
exercises 571
Net income 3,198
------------------------------------------------------
Balance, September 30,
1994 5,459,198 11 26,513 6,044 (1)
Exercise of options and
sale of stock under the
Employee Stock Purchase
Plan 189,353 806
Tax benefit from option
exercises 1,527
Net income 3,796
------------------------------------------------------
Balance, September 30,
1995 5,648,551 11 28,846 9,840 (1)
Exercise of options and
sale of stock under the
Employee Stock Purchase
Plan 126,429 1 593
Tax benefit from option
exercises 385
Net income 707
Foreign currency $13
------------------------------------------------------
Balance, September 30,
1996 5,774,980 $12 $29,824 $10,547 $13 $(1)
------------------------------------------------------
------------------------------------------------------
</TABLE>
See accompanying notes.
21
<PAGE>
MAPINFO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended September 30,
--------------------------
1994 1995 1996
-------- ------- -------
(in thousands)
<S> <C> <C> <C>
CASH FLOWS FROM (USED FOR) OPERATIONS
Net income $ 3,198 $ 3,796 $ 707
Depreciation and amortization 1,093 1,983 3,153
Allowance for doubtful accounts and sales re-
turns 120 616 189
Provision for deferred income taxes 92 (816) (455)
Other 16 200
Changes in operating assets and liabilities,
net of acquisition:
Accounts receivable (1,877) (5,492) 1,646
Inventories (207) 482 (669)
Other current assets (628) (145) 304
Accounts payable and accrued expenses 764 2,207 426
Deferred revenue 190 580 429
Income taxes (780) 107 169
-------- ------- -------
NET CASH FROM OPERATIONS 1,981 3,318 6,099
-------- ------- -------
CASH FLOWS FROM (USED FOR) INVESTMENTS
Additions to property and equipment (1,577) (2,002) (3,406)
Capitalized product development costs (569) (594) (1,316)
Purchase of business and other assets (615) (76)
Short-term investments (16,079) 3,283 10,175
-------- ------- -------
NET CASH FROM (USED FOR) INVESTMENTS (18,225) 72 5,377
-------- ------- -------
CASH FLOWS FROM (USED FOR) FINANCING
Payments on notes payable, long-term debt and
capital leases (519) (183) (196)
Proceeds from exercise of stock options and
ESPP purchases 156 806 593
Tax benefit from option exercises 571 1,527 385
Proceeds of issuance of common stock, net 23,098
-------- ------- -------
NET CASH FROM FINANCING 23,306 2,150 782
-------- ------- -------
NET CHANGE IN CASH AND CASH EQUIVALENTS 7,062 5,540 12,258
Cash and cash equivalents, beginning of period 2,244 9,306 14,846
-------- ------- -------
Cash and cash equivalents, end of period $ 9,306 $14,846 $27,104
======== ======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMA-
TION
Cash paid during the year for:
Interest $ 88 $ 32 $ 16
Income taxes 1,241 662 170
</TABLE>
See accompanying notes.
22
<PAGE>
MAPINFO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
The Company designs, develops, markets, licenses and supports mapping
software products, application development tools, and data products, together
with a range of consulting, training and technical support services. These
products are sold through multiple distribution channels, including an
indirect channel of value-added resellers and distributors, a corporate
account sales force, and a telemarketing sales group. The Company markets its
products worldwide through sales offices in North America, Europe, Australia,
China, Hong Kong, Taiwan and Japan.
Basis of Consolidation
The consolidated financial statements include the accounts of MapInfo
Corporation and its wholly-owned subsidiaries formed in 1994 in Germany and in
1995 in the United Kingdom and Australia. Significant intercompany balances
and transactions have been eliminated.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principals requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets & liabilities at the date of the financial
statements and the reported amount of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
For the purpose of the cash flows statements, the Company defines cash and
cash equivalents as cash and investments with original maturities of three
months or less.
Inventories
Inventories are stated at the lower of cost or market as determined on the
average cost method and consist primarily of computer media, user manuals and
software packaging supplies.
Short-term Investments
Short-term investments are stated at amortized cost, which approximates
market value.
Property and Equipment
Property and equipment is stated at cost. Depreciation is calculated using
the straight-line method over the estimated useful lives of the assets (two to
ten years) for financial reporting purposes and accelerated methods for tax
purposes. When assets are sold, retired, or otherwise disposed of, the
applicable costs and accumulated depreciation are removed from the accounts
and the resulting gain or loss is recognized.
Product Development Costs
Product development costs, including product enhancements, are capitalized
after technological feasibility has been established. These costs are reported
at the lower of unamortized cost or net realizable value and are being
amortized on a straight-line basis over two years, the estimated economic life
of the products. Annual amortization under the straight-line method is greater
than the ratio of current gross revenue to total expected product revenues
method. Amortization expense is classified as research and development expense
in the accompanying consolidated statements of income.
23
<PAGE>
MAPINFO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Intangible Assets
Intangible assets represents the excess of cost over the fair value of net
assets acquired. Intangible assets are being amortized using the straight-line
method over seven years. The Company continually evaluates the existence of
goodwill impairment on the basis of whether the goodwill is fully recoverable
from projected, undiscounted net cash flows of the related business unit.
Revenue Recognition
Product revenue: Revenue from software license and technology development
fees is recognized upon the later of shipment of product or completion of
significant obligations to customers, if collectibility of the resulting
receivable is probable. Upon the recognition of revenue, all costs associated
with insignificant obligations are accrued.
Postcontract customer support (PCS): Generally, PCS that is bundled with an
initial licensing fee is for one year or less and is recognized together with
the initial licensing fee on delivery of the software, if collectibility of
the resulting receivable is probable and enhancements and the costs of
providing these services are expected to be insignificant. When PCS is sold
under separate agreements, the revenue is recognized ratably over the term of
the agreement.
Reserve for Returns
The Company as a matter of policy provides the buyer the right to return the
product within 30 days, for a refund of the purchase price or replacement of
the product. Accordingly, the Company accrues for estimated future returns.
Income Taxes
Statement of Financial Accounting Standard No. 109-"Accounting for Income
Taxes" requires the use of the asset and liability method of accounting for
income taxes. Under the asset and liability method, deferred income taxes are
recognized for the tax consequences of "temporary differences" by applying
enacted statutory tax rates applicable for future years to differences between
financial statement and tax basis of existing assets and liabilities. The
effect of tax rate changes on deferred taxes is recognized in the income tax
provision in the period that includes the enactment date.
Business tax credits are recorded by the flow-through method of accounting,
whereby they are applied as a reduction of income tax expense in the year the
credits are utilized.
Foreign Currency
The assets and liabilities of the Company's foreign subsidiaries are
translated at year-end exchange rates, and the income statements are
translated at the average rate of exchange for the year. Gains or losses
resulting from translating non-U.S. currency financial statements are
accumulated in a separate component of stockholders' equity. Gains and losses
from foreign currency transactions are included in net income.
Computation of Earnings Per Share
Earnings per share is computed using the weighted average number of common
and dilutive common equivalent shares outstanding during the period. Dilutive
common equivalent shares consist of stock options using the treasury stock
method.
24
<PAGE>
MAPINFO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(in thousands)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Reclassifications
Certain reclassifications have been made to the 1994 and 1995 amounts to
conform with the 1996 presentation.
2. SHORT-TERM INVESTMENTS
The Company's short-term investments consist of debt securities which
includes Government bonds and Municipal bonds with maturity dates of one year
or less. In accordance with SFAS No. 115, these debt securities have been
classified in the accompanying consolidated balance sheets as held-to-maturity
securities and are reported at amortized cost because the Company has the
positive intent and ability to hold these debt securities to maturity.
At September 30, short-term investments consist of the following:
<TABLE>
<CAPTION>
1995 1996
---------------------- ----------------------
Type of Amortized Aggregate Amortized Aggregate
Investment cost market value cost market value
---------- --------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Municipal bonds $12,904 $12,905 $4,759 $4,759
Government bonds 2,066 2,061 36 35
------- ------- ------ ------
$14,970 $14,966 $4,795 $4,794
======= ======= ====== ======
</TABLE>
Included in other income, net is interest income of $587, $1,141, and $1,206,
in 1994, 1995, and 1996, respectively.
3. PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
<TABLE>
<CAPTION>
September 30,
----------------
1995 1996
------- -------
<S> <C> <C>
Computer hardware and software $ 5,051 $ 7,365
Equipment 607 945
Furniture and fixtures 778 1,335
Leasehold improvements 85 286
------- -------
6,521 9,931
Accumulated depreciation and amortization (2,957) (5,246)
------- -------
$ 3,564 $ 4,685
======= =======
</TABLE>
Depreciation and amortization expense for the years ended September 30, 1994,
1995 and 1996 was $843, $1,377, and $2,289, respectively.
4. PRODUCT DEVELOPMENT COSTS
Product development costs consist of the following:
<TABLE>
<CAPTION>
September 30,
----------------
1995 1996
------- -------
<S> <C> <C>
Product development costs $ 1,626 $ 2,802
Accumulated amortization (1,084) (1,687)
------- -------
$ 542 $ 1,115
======= =======
</TABLE>
25
<PAGE>
MAPINFO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(in thousands)
4. PRODUCT DEVELOPMENT COSTS (CONTINUED)
Capitalized product development costs for the years ended September 30, 1994,
1995, and 1996 was approximately $569, $594, and $1,316, respectively.
Amortization of capitalized product development costs for the years ended
September 30, 1994, 1995, and 1996 was approximately $250, $606, and $743,
respectively.
5. ACCRUED EXPENSES
Accrued expenses consist of the following:
<TABLE>
<CAPTION>
September 30,
-------------
1995 1996
------ ------
<S> <C> <C>
Accrued payroll $ 695 $1,088
Accrued vacation 486 503
Accrued royalties 327 647
Accrued marketing 246 388
Accrued commission 651 296
Accrued other 2,316 1,898
------ ------
$4,721 $4,820
====== ======
</TABLE>
6. LINES OF CREDIT
The Company has a $10 million uncollateralized line of credit with a
commercial bank, none of which was drawn down at September 30, 1995 or 1996.
Interest is at the bank's prime rate. The line of credit expires on January
31, 1997.
The Company has a revolving convertible credit facility with a commercial bank
under which a maximum of $20 million can be borrowed for a two year period and
then converted into a three year term loan. Interest is at the bank's prime
rate, LIBOR plus 1.5%, or a fixed rate, at the Company's option. The credit
facility contains certain financial ratio covenants and is collateralized by
the common stock and distribution agreements of certain subsidiaries. None of
this credit facility was drawn down at September 30, 1996. The facility
expires in December 1997.
7. COMMITMENTS
The Company leases two facilities in the Rensselaer Technology Park totaling
approximately 102,000 square feet of office space. These offices house the
corporate headquarters and the principal research and development center and
the principal sales, marketing and administrative staff for the Americas.
These leases contain a nominal escalation in rental payments over the term of
the lease, and in addition to monthly lease payments, the Company is
responsible for such costs as real estate taxes and maintenance. The Company
may acquire these facilities through the termination of these leases at
negotiated purchase prices. The leases expire in 2002 and 2004.
Future minimum rental payments required under operating leases that have
initial or remaining non-cancelable lease terms in excess of one year as of
September 30, 1996 decline from $1.8 million in 1997 to $1.4 million in 2001.
Total rent expense for the years ended September 30, 1994, 1995 and 1996 was
approximately $653, $722, and $1,665, respectively.
26
<PAGE>
MAPINFO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(in thousands)
8. INCOME TAXES
Income tax expense consists of:
<TABLE>
<CAPTION>
Year Ended September 30,
-----------------------------
1994 1995 1996
--------- --------- --------
<S> <C> <C> <C>
Current:
Federal $ 1,463 $ 1,742 $ 484
State 256 548 (50)
Foreign 12 39 224
--------- --------- ------
1,731 2,329 658
Deferred income taxes:
Federal 68 (664) (422)
State 24 (152) 28
Foreign (61)
--------- --------- ------
92 (816) (455)
--------- --------- ------
Income tax expense $ 1,823 $ 1,513 $ 203
========= ========= ======
</TABLE>
The provision for income taxes has been reduced for research and development
tax credits of approximately $108, $246, and $65 in 1994, 1995 and 1996,
respectively. At September 30, 1996, the Company has approximately $287 of
research and development tax credit carryforwards which begin to expire in
2009 and approximately $92 of alternative minimum tax credit carryforwards
which have no expiration date.
The provision for income taxes differs from the amount computed by applying
the U.S. federal statutory income tax rate of 34% as follows:
<TABLE>
<CAPTION>
Year Ended September 30,
----------------------------
1994 1995 1996
-------- -------- --------
<S> <C> <C> <C>
Federal statutory income tax rate 34% 34% 34%
State taxes 3 5 2
Non-U.S. tax rates and other foreign charges 24
Tax-exempt investment income (6) (42)
Research and development credit (2) (5) (7)
Non-deductible expenses and other 1.3 0.5 11.3
-------- -------- --------
36.3% 28.5% 22.3%
======== ======== ========
</TABLE>
U.S. income before taxes was $4,935, $5,496, and $684 for the years ended
September 30, 1994, 1995 and 1996, respectively.
27
<PAGE>
MAPINFO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(in thousands)
8. INCOME TAXES--(CONTINUED)
Deferred income taxes recorded in the consolidated balance sheets at
September 30, 1995 and 1996 consist of the following temporary differences:
<TABLE>
<CAPTION>
1995 1996
---- ------
<S> <C> <C>
Current deferred tax assets:
Accrued expenses $605 $ 513
Bad debt reserve 44 106
Inventory 42 31
Allowance for returns 202 195
---- ------
Net current deferred tax assets 893 845
Long term deferred tax assets (liabilities):
Capitalized product development costs (210) (269)
Tax credit carryovers 379
Property and equipment (42) 73
Accrued expenses 87 113
Other non-current assets 47 89
---- ------
Net long term deferred tax asset (liability) (118) 385
---- ------
Net deferred tax asset $775 $1,230
==== ======
</TABLE>
There are no valuation allowances recorded against the Company's deferred tax
assets, as it is more likely than not that all future tax benefits will be
realized against future taxable income. However, the amount of deferred tax
assets, considered realizable could be reduced in the near term if estimates
of future taxable income are reduced.
9. STOCK OPTIONS
The 1993 Stock Incentive Plan has 925,000 shares reserved for issuance to
employees. Stock option activity under this plan is as follows:
<TABLE>
<CAPTION>
Outstanding Options
--------------------------
Shares Number Price
Available of per
for Grant Shares Share
--------------------------------------
<S> <C> <C> <C>
Initial shares reserved 400,000
Options granted (120,116) 120,116 $18.50 to $24.00
Options forfeited 4,583 (4,583) $19.00
Options exercised (17) $19.00
--------------------------------------
Balance, September 30, 1994 284,467 115,516 $18.50 to $24.00
--------------------------------------
Additional shares reserved 275,000
Options granted (266,400) 266,400 $17.25 to $35.25
Options forfeited 36,051 (36,051) $18.50 to $26.00
Options exercised (5,522) $18.50 to $21.50
--------------------------------------
Balance, September 30, 1995 329,118 340,343 $17.25 to $35.25
--------------------------------------
Additional shares reserved 250,000
Options granted (698,035) 698,035 $9.625 to $20.00
Options forfeited 480,017 (480,017) $12.00 to $35.25
Options exercised (2,398) $12.00 to $19.00
--------------------------------------
Balance, September 30, 1996 361,100 555,963 $9.625 to $30.25
======================================
</TABLE>
28
<PAGE>
MAPINFO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(in thousands)
9. STOCK OPTIONS--(CONTINUED)
Under the 1993 Stock Incentive Plan options to purchase 7,306, 41,322 and
53,715 shares of common stock were exercisable at September 30, 1994, 1995 and
1996, respectively.
In March 1996, the Company repriced certain options granted to employees under
this plan on a four-for-five basis. Option holders, holding options to
purchase an aggregate of 327,177 shares with exercise prices ranging from
$17.25 to $35.25 per share were issued 267,741 new options with an exercise
price of $12.00 per share, the closing price of the Company's common stock on
the date of the repricing. The options granted and forfeited as a result of
this repricing are included in the table above.
The 1993 Director Stock Option Plan has 20,000 shares reserved for issuance to
non-employee directors. As of September 30, 1996, options to purchase 15,836
shares at prices ranging from $11.00 to $25.00 have been granted under the
Director Stock Option Plan. In 1995, options for 1,818 shares were exercised
at $11.00. There were no options exercised under this plan in 1994 and 1996.
Options for 14,018 shares at prices ranging from $11.00 to $25.00 remain
outstanding, of which options for 5,018 shares are exercisable at September
30, 1996.
In addition, the Company has two non-qualified stock option plans (Plan I and
II) with six and ten year terms. Options for 60,393, 158,085 and 71,883 shares
were exercised under Plans I and II at prices ranging from $1.00 to $11.00 for
the years ending September 30, 1994 and 1995, respectively, and at prices
ranging from $1.74 to $9.00 for the year ended September 30, 1996. Options for
114,286 shares at prices ranging from $1.74 to $11.00 remain outstanding and
options for 58,934 shares are exercisable at September 30, 1996. No further
options will be granted under Plans I and II.
In addition, the Company has various non-qualified stock option arrangements
with certain employees of the Company, under which 258,033 shares were
granted. At September 30, 1996, options for 19,500 shares are vested and
remain exercisable at $0.02 per share. Options for 68,533 were exercised at
prices ranging from $0.02 to $1.74 in 1994, no options were exercised in 1995,
and 10,000 options were exercised at $0.02 per share in 1996.
10. DEFERRED COMPENSATION (401(K)) PLAN
The Company has a deferred compensation (401(k)) plan which covers
substantially all U.S.-based employees who have met certain service
requirements. Employees may contribute up to 17% of their annual salary (up to
the maximum established by the IRS each year) to the plan. Beginning April 1,
1994, the Company may at its option contribute up to 50% of the first one
thousand dollars contributed by each employee to the plan. Deferred
compensation expense for the years ended September 30, 1994, 1995 and 1996 was
$66, $94 and $110, respectively.
29
<PAGE>
MAPINFO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(in thousands)
11. EMPLOYEE STOCK PURCHASE PLAN
The 1993 Employee Stock Purchase Plan permits eligible employees to
purchase, at a 15% discount, common stock of the Company up to 10% of their
pay. The Company has reserved 100,000 shares of common stock for issuance
under this plan. Activity under the Plan is as follows:
<TABLE>
<CAPTION>
Shares
available Price
for issuance Per Share
------------ ----------------
<S> <C> <C>
Initial shares reserved 100,000
1995 Purchases (23,508) $15.73 to $17.00
-------
Balance, September 30, 1995 76,492
1996 Purchases (42,148) $ 9.56 to $10.20
-------
Balance, September 30, 1996 34,344
=======
</TABLE>
12. CONCENTRATION OF CREDIT RISK
The Company's investment portfolio is diversified and consists of short-term
investment grade securities. At September 30, 1996, the Company had $397 in
U.S. banks in excess of insured limits and $790 in uninsured foreign banks.
The Company sells a significant portion of its product through third-party
distributors. Sales to one distributor represented 9% of total net revenues
for the year ended September 30, 1996, and 10% of total accounts receivable at
September 30, 1996. The next scheduled expiration/renewal date for this
distribution contract is March 1, 1997. There can be no assurance that this
distribution contract will be renewed.
13. BUSINESS SEGMENT AND INTERNATIONAL OPERATIONS
The Company operates in one industry segment consisting of the development,
marketing, licensing and support of mapping software and data products.
Summarized information relating to international operations is as follows:
<TABLE>
<CAPTION>
September 30,
------------------------
1994 1995 1996
------- ------- -------
<S> <C> <C> <C>
Sales to unaffiliated customers:
United States $21,696 $26,298 $19,688
Europe 1,961 3,457 10,067
Australia 607 5,127
Export sales from United States 6,063 9,679 6,650
------- ------- -------
Total sales to unaffiliated customers $29,720 $40,041 $41,532
======= ======= =======
Operating income (loss)
United States $ 4,394 $ 4,406 $ (473)
Europe 221 (149) 366
Australia 17 42
------- ------- -------
Total operating income (loss) $ 4,615 $ 4,274 $ (65)
======= ======= =======
Identifiable assets
United States $36,069 $41,815 $42,367
Europe 1,185 3,110 4,980
Australia 1,497 1,744
------- ------- -------
Total identifiable assets $37,254 $46,422 $49,091
======= ======= =======
</TABLE>
30
<PAGE>
MAPINFO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(in thousands)
13. BUSINESS SEGMENT AND INTERNATIONAL OPERATIONS (CONTINUED)
Export sales from the United States include sales primarily to Canada, Japan,
Hong Kong, and, for the first half of 1995, Europe. Individual country
revenues do not equal or exceed 10% of total revenues. Revenues outside the
Americas increased from 30% of revenues in fiscal 1995 to 48% of revenues in
fiscal 1996. The international portion of the Company's business is subject to
a number of inherent risks, including the difficulties in building and
managing international operations, difficulties in localizing products and
translating documentation into international languages, fluctuations in the
value of international currencies, fluctuating import/export duties and
quotas, and unexpected regulatory, economic, or political changes in
international markets. Changes in international business conditions could have
a material adverse effect on the Company's business and results of operations
in the near term.
14. ACQUISITION
Pursuant to an Asset Purchase Agreement dated August 3, 1995, the Company
purchased assets approximating $824 of its master distributor in Australia,
Peripheral Systems Pty Ltd., an Australian corporation. Purchase consideration
was $330, payable in cash, the assumption of liabilities approximating $116,
and an additional cash payment of $378, paid in February 1996. The acquisition
was accounted for under the purchase method. The results of operations include
the acquired business from date of acquisition.
15. OTHER DEVELOPMENTS
Statement of Financial Accounting Standards No. 121-"Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of"
is effective for fiscal years beginning after December 15, 1995. The Company
adopted this Statement on October 1, 1996. The adoption of this Statement is
not expected to have a material effect on the Company's financial condition or
results of operations. Statement of Financial Accounting Standards No. 123-
"Accounting for Stock-Based Compensation" is effective for fiscal years
beginning after December 15, 1995. The Company adopted this Statement on
October 1, 1996. The Company has elected to continue to apply APB Opinion No.
25 in accounting for its stock-based compensation arrangements. The
information for pro-forma disclosure is presently not known.
16. SUBSEQUENT EVENT
Pursuant to an Agreement dated October 2, 1996, the Company acquired an
exclusive, worldwide license to distribute and sub-license SpatialWare
technology from Unisys Corporation for a six month period. Under the
Agreement, the Company also acquired an option to purchase the underlying
intellectual property and certain fixed assets and to employ the staff of
people engaged in the development, sales and marketing of SpatialWare in
Canada, the United States, and Europe. Purchase consideration was $1,439 in
cash at closing and is a nominal amount upon the exercise of the purchase
option. The Company will include these amounts in capitalized product
development costs. The purchase option is exercisable until April 2, 1997.
During the option period, the Company will direct the development, marketing
and sales efforts of the SpatialWare business.
In the event the option is exercised, the Company will make contingent cash
payments to Unisys based on revenues generated by the SpatialWare business, up
to a maximum of $1,500. In the event the option is not exercised, the Company
will pay Unisys $350, and this amount, together with the original $1,439
purchase price, would be charged to operations.
31
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K
(A) See Item 8 for Index to Consolidated Financial Statements
Consolidated Financial Statement Schedule for the years ended September 30,
1994, 1995 and 1996 included in Item 14(d):
Schedule VIII--Valuation and Qualifying Accounts
Schedules other than those listed above have been omitted since the required
information is not present or not present in amounts sufficient to require
submission of the schedule, or because the information required is included in
the consolidated financial statements and the notes thereto.
32
<PAGE>
Listing of Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
*3.1 Restated Certificate of Incorporation of the Registrant, as
amended to date.
r3.2 By-Laws of the Registrant, as amended to date.
*4 Specimen Certificate for shares of the Registrant's Common
Stock.
*10.1+ Employee Non-Qualified Stock Option Plan I, as amended to
date.
*10.2+ Employee Non-Qualified Stock Option Plan II, as amended to
date.
r10.3+ 1993 Stock Incentive Plan, as amended to date.
r10.4+ 1993 Director Stock Option Plan, as amended to date.
*10.5 Lease Agreement dated as of August 1, 1993 by and between the
Registrant and Rensselaer Polytechnic Institute.
++10.7+ Amended and Restated Employment Agreement, dated as of
February 14, 1994 by and between the Registrant and Brian D.
Owen.
(degrees)10.8+ Amended and Restated Employment Agreement, dated as of May 2,
1994 by and between the Registrant and Matthew J. Szulik.
*10.9+ Employee Patent, Confidential Information and Non-Competition
Agreement dated as of November 4, 1992 by and between the
Registrant and Brian D. Owen.
*10.10+ Employee Patent, Confidential Information and Non-Competition
Agreement dated as of January 5, 1993 by and between the
Registrant and Matthew J. Szulik.
++10.11+ Employee Patent and Confidential Information Agreement dated
as of May 1, 1988 by and between the Registrant and Michael D.
Marvin.
++10.12+ Employee Patent and Confidential Information Agreement dated
as of May 3, 1988 by and between the Registrant and John F.
Haller.
++10.13+ Employment Agreement, dated as of October 18, 1994 by and
between the Registrant and D. Joseph Gersuk.
++10.14+ Employee Patent, Confidential Information and Non-Competition
Agreement dated as of October 20, 1994 by and between the
Registrant and D. Joseph Gersuk.
++10.15+ Employment Agreement, dated as of February 3, 1995 by and
between the Registrant and Elizabeth A. Ireland.
++10.16+ Employee Patent, Confidential Information and Non-Competition
Agreement dated as of August 21, 1989 by and between the
Registrant and Elizabeth A. Ireland.
r10.17+ Employment Agreement, dated as of February 6, 1995 by and
between the Registrant and F. Steven Weick.
r10.18+ Employee Patent, Confidential Information and Non-Competition
Agreement dated as of February 7, 1995 by and between the
Registrant and F. Steven Weick.
r10.19 Two Global View Lease. Lease Agreement dated as of January 10,
1995 between Rensselaer Polytechnic Institute and the
Registrant
g10.20+ Amended and restated Employment Agreement dated as of May 16,
1995 by and between the Registrant and Brian D. Owen.
</TABLE>
33
<PAGE>
<TABLE>
<C> <S>
h10.21+ Amended and restated Employment Agreement dated as of May 8, 1996 by
and between the Registrant and Michael D. Marvin.
s10.22+ Amended and restated Employment Agreement dated as of September 5,
1996, by and between the Registrant and Brian D. Owen.
s10.23+ Amended and restated Employment Agreement dated as of September 30,
1996 by and between the Registrant and Michael D. Marvin.
s10.24+ Employment Agreement executed on October 1, 1996 by and between the
Registrant and John C. Cavalier.
s10.25+ Employee Patent, Confidential Information and Non-Competition
Agreement dated September 30, 1996 by and between the Registrant and
John C. Cavalier.
s10.26+ Amended and restated Employment Agreement dated as of January 11, 1996
by and between the Registrant and D. Joseph Gersuk.
s11 Statement regarding computation of per share earnings.
s21 Subsidiaries of the Registrant.
23 Consent of Coopers & Lybrand L.L.P.
s27 Financial Data Schedule
</TABLE>
- --------
* Incorporated herein by reference from the exhibits to the Registrant's
Registration Statement on Form S-1 (File No. 33-72866).
(degrees) Incorporated herein by reference from the exhibits to the Form 10-Q
filed with the Securities and Exchange Commission on August 15, 1994.
++ Incorporated herein by reference from the exhibits to the Form 10-K
filed with the Securities and Exchange Commission on December 28,
1994.
++Incorporated herein by reference from the exhibits to the Form 10-Q
filed with the Securities and Exchange Commission on February 7, 1995.
r Incorporated herein by reference from the exhibits to the Form 10-Q
filed with the Securities and Exchange Commission on May 12, 1995.
g Incorporated herein by reference from the exhibits to the Form 10-Q
filed with the Securities and Exchange Commission on August 10, 1995.
h Incorporated herein by reference from the exhibits to the Form 10-Q
filed with the Securities and Exchange Commission on May 15, 1996.
+ Management contract or compensation plan or arrangement required to
be filed pursuant to Item 14(c) of Form 10-K.
s Previously filed.
(B) Reports on Form 8-K
The Company filed no reports on Form 8-K with the Securities and Exchange
Commission during the fiscal quarter ended September 30, 1996.
34
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) 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.
MAPINFO CORPORATION
(Registrant)
By: /s/ Joseph Gersuk
Joseph Gersuk
Vice President, Treasurer and Chief Finanical Officer (Principal Financial
and Acccounting Officer)
Date: January 2, 1997
37
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
----------- ----------- --------
<C> <S> <C>
*3.1 Restated Certificate of Incorporation of the
Registrant, as amended to date.
r3.2 By-Laws of the Registrant, as amended to date.
*4 Specimen Certificate for shares of the Registrant's
Common Stock.
*10.1+ Employee Non-Qualified Stock Option Plan I, as
amended to date.
*10.2+ Employee Non-Qualified Stock Option Plan II, as
amended to date.
r10.3+ 1993 Stock Incentive Plan, as amended to date.
r10.4+ 1993 Director Stock Option Plan, as amended to
date.
*10.5 Lease Agreement dated as of August 1, 1993 by and
between the Registrant and Rensselaer Polytechnic
Institute.
++10.7+ Amended and Restated Employment Agreement, dated as
of February 14, 1994 by and between the Registrant
and Brian D. Owen.
(degrees)10.8+ Amended and Restated Employment Agreement, dated as
of May 2, 1994 by and between the Registrant and
Matthew J. Szulik.
*10.9+ Employee Patent, Confidential Information and Non-
Competition Agreement dated as of November 4, 1992
by and between the Registrant and Brian D. Owen.
*10.10+ Employee Patent, Confidential Information and Non-
Competition Agreement dated as of January 5, 1993
by and between the Registrant and Matthew J.
Szulik.
++10.11+ Employee Patent and Confidential Information
Agreement dated as of May 1, 1988 by and between
the Registrant and Michael D. Marvin.
++10.12+ Employee Patent and Confidential Information
Agreement dated as of May 3, 1988 by and between
the Registrant and John F. Haller.
++10.13+ Employment Agreement, dated as of October 18, 1994
by and between the Registrant and D. Joseph Gersuk.
++10.14+ Employee Patent, Confidential Information and Non-
Competition Agreement dated as of October 20, 1994
by and between the Registrant and D. Joseph Gersuk.
++10.15+ Employment Agreement, dated as of February 3, 1995
by and between the Registrant and Elizabeth A.
Ireland.
++10.16+ Employee Patent, Confidential Information and Non-
Competition Agreement dated as of August 21, 1989
by and between the Registrant and Elizabeth A.
Ireland.
r10.17+ Employment Agreement, dated as of February 6, 1995
by and between the Registrant and F. Steven Weick.
r10.18+ Employee Patent, Confidential Information and Non-
Competition Agreement dated as of February 7, 1995
by and between the Registrant and F. Steven Weick.
r10.19 Two Global View Lease. Lease Agreement dated as of
January 10, 1995 between Rensselaer Polytechnic
Institute and the Registrant
g10.20+ Amended and restated Employment Agreement dated as
of May 16, 1995 by and between the Registrant and
Brian D. Owen.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
----------- ----------- --------
<C> <S> <C>
h10.21+ Amended and restated Employment Agreement dated as of
May 8, 1996 by and between the Registrant and Michael
D. Marvin.
s10.22+ Amended and restated Employment Agreement dated as of
September 5, 1996, by and between the Registrant and
Brian D. Owen.
s10.23+ Amended and restated Employment Agreement dated as of
September 30, 1996 by and between the Registrant and
Michael D. Marvin.
s10.24+ Employment Agreement executed on October 1, 1996 by and
between the Registrant and John C. Cavalier.
s10.25+ Employee Patent, Confidential Information and Non-
Competition Agreement dated September 30, 1996 by and
between the Registrant and John C. Cavalier.
s10.26+ Amended and restated Employment Agreement dated as of
January 11, 1996 by and between the Registrant and D.
Joseph Gersuk.
s11 Statement regarding computation of per share earnings.
s21 Subsidiaries of the Registrant.
23 Consent of Coopers & Lybrand L.L.P.
s27 Financial Data Schedule
</TABLE>
- --------
* Incorporated herein by reference from the exhibits to the Registrant's
Registration Statement on Form S-1 (File No. 33-72866).
(degrees) Incorporated herein by reference from the exhibits to the Form 10-Q
filed with the Securities and Exchange Commission on August 15, 1994.
++ Incorporated herein by reference from the exhibits to the Form 10-K
filed with the Securities and Exchange Commission on December 28,
1994.
++Incorporated herein by reference from the exhibits to the Form 10-Q
filed with the Securities and Exchange Commission on February 7, 1995.
r Incorporated herein by reference from the exhibits to the Form 10-Q
filed with the Securities and Exchange Commission on May 12, 1995.
g Incorporated herein by reference from the exhibits to the Form 10-Q
filed with the Securities and Exchange Commission on August 10, 1995.
h Incorporated herein by reference from the exhibits to the Form 10-Q
filed with the Securities and Exchange Commission on May 15, 1996.
+ Management contract or compensation plan or arrangement required to
be filed pursuant to Item 14(c) of Form 10-K.
s Previously filed.
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements
of MapInfo Corporation on Forms S-8 (File Nos. 33-74660, 33-74662, 33-74664,
33-78406, 33-88780 and 333-4268) of our report dated November 5, 1996, on our
audits of the consolidated financial statements and financial statement
schedule of MapInfo Corporation and Subsidiaries as of September 30, 1995 and
1996, and for the years ended September 30, 1994, 1995, and 1996, which report
is included in this Annual Report on Form 10-K/A.
COOPERS & LYBRAND L.L.P.
Albany, New York
January 2, 1997
