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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1999
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Commission File Number 0-23078
MAPINFO CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 06-1166630
(State or other jurisdiction of (I.R.S. Employer
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
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
--- ---
The number of shares outstanding of the registrant's common stock, $.002 par
value per share, as of May 1, 1999 was 5,753,349.
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<PAGE>
MAPINFO CORPORATION
FORM 10-Q
For the Quarter Ended March 31, 1999
INDEX
Page
----
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements:
Income Statements
for the three and six months ended March 31, 1999 and 1998 1
Balance Sheets
as of March 31, 1999 and September 30, 1998 2
Cash Flows Statements
for the six months ended March 31, 1999 and 1998 3
Notes to Financial Statements 4
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 17
PART II. OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders 18
ITEM 6. Exhibits and Reports on Form 8-K 19
Signatures 20
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
MapInfo Corporation and Subsidiaries
Income Statements
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended March 31, Ended March 31,
------------------ -----------------
1999 1998 1999 1998
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net revenues $18,028 $14,897 $34,173 $28,042
Cost of revenues 3,943 3,350 7,503 6,204
------- ------- ------- -------
Gross profit 14,085 11,547 26,670 21,838
------- ------- ------- -------
Operating expenses:
Research and development 2,720 2,676 5,408 5,107
Selling and marketing 7,450 6,150 14,568 12,222
General and administrative 2,514 1,941 4,683 3,627
------- ------- ------- -------
Total operating expenses 12,684 10,767 24,659 20,956
------- ------- ------- -------
Operating income 1,401 780 2,011 882
Other income - net 183 201 441 479
------- ------- ------- -------
Income before provision for income taxes 1,584 981 2,452 1,361
Provision for income taxes 524 217 784 293
------- ------- ------- -------
Net income $ 1,060 $ 764 $ 1,668 $ 1,068
======= ======= ======= =======
Earnings per share:
Basic $ 0.19 $ 0.13 $ 0.29 $ 0.18
Diluted $ 0.18 $ 0.13 $ 0.28 $ 0.18
Weighted average shares outstanding:
Basic 5,722 5,856 5,716 5,877
Diluted 5,981 5,991 5,939 5,986
</TABLE>
See accompanying notes.
1
<PAGE>
MapInfo Corporation and Subsidiaries
Balance Sheets
(in thousands, except per share data)
<TABLE>
<CAPTION>
March 31, September 30,
1999 1998
-------- --------
(unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 11,076 $ 15,886
Short-term investments, at amortized cost 15,554 13,037
Accounts receivable, less allowance of $1,344 and $1,772
at March 31, 1999 and September 30, 1998, respectively 15,019 15,224
Inventories 397 601
Other current assets 2,192 1,971
Deferred income taxes 737 734
-------- --------
Total current assets 44,975 47,453
Property and equipment - net 4,554 4,430
Product development costs - net 1,190 1,272
Deferred income taxes 1,369 1,369
Intangible assets - net 5,926 3,458
Investments and other assets 2,554 1,549
-------- --------
Total assets $ 60,568 $ 59,531
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,552 $ 2,200
Accrued liabilities 9,841 10,522
Deferred revenue 4,299 3,781
Income taxes payable 1,395 992
-------- --------
Total current liabilities 17,087 17,495
Other non-current liabilities 240 322
-------- --------
Total liabilities 17,327 17,817
-------- --------
Commitments and Contingencies
Stockholders' Equity:
Common stock, $0.002 par value 12 12
Preferred stock, $.01 par value 0 0
Paid-in capital 30,882 31,046
Retained earnings 15,401 13,733
Translation adjustment (344) 95
-------- --------
45,951 44,886
Less treasury stock, at cost 2,710 3,172
-------- --------
Total stockholders' equity 43,241 41,714
-------- --------
Total liabilities and stockholders' equity $ 60,568 $ 59,531
======== ========
</TABLE>
See accompanying notes.
2
<PAGE>
MapInfo Corporation and Subsidiaries
Cash Flows Statements
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Six months
Ended March 31,
--------------------
1999 1998
-------- --------
<S> <C> <C>
Cash flows from (used for) operating activities
Net income $ 1,668 $ 1,068
Depreciation and amortization 2,196 2,089
Allowance for doubtful accounts, sales returns and inventory (377) 89
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable 687 (1,158)
Inventories 171 79
Other current assets (494) (401)
Accounts payable and accrued liabilities (211) 1,271
Deferred revenue 93 596
Income taxes payable 429 187
-------- --------
Net cash from operating activities 4,162 3,820
-------- --------
Cash flows from (used for) investing activities
Additions to property and equipment (1,462) (1,810)
Capitalized product development costs (249) (152)
Acquisition of business and technology (4,064) (2,088)
Short-term investments (2,517) (8,235)
Other investments (1,036) 0
-------- --------
Net cash used for investing activities (9,328) (12,285)
-------- --------
Cash flows from (used for) financing activities
Purchase of common stock for treasury (229) (828)
Proceeds from exercise of options and ESPP stock purchases 488 615
Tax benefit from option exercises 40 78
-------- --------
Net cash from (used for) financing activities 299 (135)
-------- --------
Effect of exchange rate changes on cash and cash equivalents 57 35
-------- --------
Net change in cash and equivalents (4,810) (8,565)
Cash and equivalents, beginning of period 15,886 24,711
-------- --------
Cash and equivalents, end of period $ 11,076 $ 16,146
======== ========
</TABLE>
See accompanying notes.
3
<PAGE>
MapInfo Corporation and Subsidiaries
Notes to Financial Statements
(Unaudited)
1. Basis of Presentation
In the opinion of management, the accompanying balance sheets and related
statements of income and cash flows include all adjustments (consisting only of
normal recurring items) necessary for their fair presentation. The preparation
of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and 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. The results of operations for the interim period
are not necessarily indicative of the results of operations for the full year.
The year-end balance sheet data was derived from audited financial statements,
but does not include all disclosures required by generally accepted accounting
principles.
Certain reclassifications have been made to amounts previously reported to
conform to the 1999 presentation.
2. Earnings Per Share
The following table represents the reconciliation of the basic and dilutive
earnings per share amounts for the three and six months ended March 31, 1999 and
1998:
<TABLE>
<CAPTION>
Three months Six months
ended March 31, ended March 31,
--------------- ----------------
1999 1998 1999 1998
------ ------ ------- ------
(Amounts in thousands,
except per share data)
<S> <C> <C> <C> <C>
Net income $1,060 $ 764 $ 1,668 $1,068
====== ====== ======= ======
Weighted average shares for basic EPS 5,722 5,856 5,716 5,877
Effect of dilutive stock options 259 135 223 109
------ ------ ------- ------
Weighted average shares and assumed
exercise of stock options for diluted EPS 5,981 5,991 5,939 5,986
====== ====== ======= ======
Basic EPS $ 0.19 $ 0.13 $ 0.29 $ 0.18
Diluted EPS $ 0.18 $ 0.13 $ 0.28 $ 0.18
</TABLE>
4
<PAGE>
MapInfo Corporation and Subsidiaries
Notes to Financial Statements - Continued
(Unaudited)
3. Comprehensive Income
Effective October 1, 1998 the Company adopted Statement of Financial Accounting
Standards No. 130 - "Reporting Comprehensive Income" (SFAS No. 130). This
Statement establishes standards for reporting and disclosure of comprehensive
income and its components. This statement requires foreign currency translation
adjustments, which are reported as separate components of stockholders' equity,
to be included in comprehensive income. Prior year information below has been
reclassified to conform to the requirements of SFAS 130.
Comprehensive income was as follows:
<TABLE>
<CAPTION>
Three months Six months
ended March 31, ended March 31,
------------------ ------------------
1999 1998 1999 1998
------- ------- ------- -------
(In thousands)
<S> <C> <C> <C> <C>
Net income $ 1,060 $ 764 $ 1,668 $ 1,068
Change in accumulated translation
adjustments (253) 103 (439) 3
------- ------- ------- -------
Total comprehensive income $ 807 $ 867 $ 1,229 $ 1,071
======= ======= ======= =======
</TABLE>
4. Commitments and Contingencies
The Company's saleable products rely on software applications. The Company
expects that some of its customers may be using older product versions that are
not Year 2000 compliant. The Company will be encouraging such customers to
migrate to compliant product versions. It is possible that the Company may
experience increased expenses in addressing migration issues for such customers.
5. Acquisition
Pursuant to an Asset Purchase Agreement dated December 15, 1998, the Company
acquired substantially all of the assets and assumed certain liabilities of On
Target Communications, Inc., a Pennsylvania corporation doing business as On
Target Mapping. A MapInfo value-added reseller since 1992, On Target Mapping
delivers data products and solutions for telecommunications providers. The
purchase price was approximately $2.2 million, net of cash acquired. In
addition, the Company may be obligated to make a contingent cash payment in
March 2001, based on the financial performance of On Target Mapping in the two
years following the acquisition. The acquisition has been accounted for as a
purchase; and, accordingly, the Company has included On Target Mapping's results
of operations in the financial statements from the date of acquisition.
Intangible assets resulting from the acquisition, including goodwill, are being
amortized on a straight-line basis over a period of five years.
5
<PAGE>
MapInfo Corporation and Subsidiaries
Notes to Financial Statements - Continued
(Unaudited)
6. New Accounting Standards
Effective October 1, 1998, the Company adopted American Institute of Certified
Public Accountants Statement of Position 97-2, "Software Revenue Recognition".
This statement provides guidance on recognizing revenue on software
transactions. The Company's revenue recognition policies have historically been
in compliance with the practices required by this new pronouncement. Therefore,
adoption of this new accounting standard did not affect the Company's results of
operations for the three months ended March 31, 1999, nor is it expected to have
a significant impact on results of operations for the remainder of the fiscal
year.
In June 1997, the Financial Accounting Standards Board issued Statement No. 131,
"Disclosures About Segments of an Enterprise and Related Information" (SFAS No.
131). SFAS No. 131 is effective for fiscal years beginning after December 15,
1997 and requires disclosures about operating segments and enterprise-wide
disclosures about products and services, geographic areas and major customers.
SFAS No. 131 will be effective for the Company's annual report for the fiscal
year ending September 30, 1999.
7. Common Stock Repurchase Program
In February 1999, the Board of Directors authorized the Company to repurchase
from time to time up to $5,000,000 of the Company's Common Stock on the open
market or in negotiated transactions. The repurchase program will remain in
effect until September 30, 2000 unless discontinued earlier by the Board of
Directors. The Company intends to use the repurchased shares for issuance upon
exercise of employee stock options, purchases under the Company's stock purchase
plan, or other corporate purposes. During the six months ended March 31, 1999,
the Company repurchased 15,000 shares at a cost of $229,000 under this program.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Overview
MapInfo Corporation ("MapInfo" or the "Company") designs, develops, markets,
licenses and supports business 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's products are translated into 20 languages and sold in
58 countries throughout the world. MapInfo markets its products worldwide
through sales offices in North America, Europe and Australia, and throughout the
rest of Europe and the Asia-Pacific region through exclusive and non-exclusive
distribution relationships.
Net Revenues
Revenues for the second quarter of 1999 increased 21% to $18.0 million from
$14.9 million in the same period a year ago. Increased demand for deployments of
MapInfo business solutions have driven significant increases in sales of
Company's data and enterprise software products. Approximately 59% of the $3.1
million increase in revenue was attributable to increased unit sales of data
products and 36% of the increase was related to increased unit sales of
enterprise software products such as MapXtreme. Approximately $940 thousand of
the increased data product revenue was attributable to the December 1998
acquisition of On Target Mapping. On a geographic basis, revenues increased 31%
in the Americas and 20% in Europe. The increase in the Americas revenue was
primarily the result of a 74% increase in data revenues, including revenues
attributable to On Target Mapping. The increase in revenues in Europe was
primarily due to strong software product sales in Germany and continued
expansion in the data business in the United Kingdom. Asia-Pacific revenues
decreased 8%, primarily due to lower revenues in Japan, partially offset by
increases in Australia and Greater China.
For the six-months ended March 31, 1999, revenues increased 22% to $34.2 million
from $28.0 million in the same period in 1998. Data products accounted for $3.6
million or 57% of the overall revenue increase. The increase in data business
was primarily attributed to an additional $1.2 million of revenue relating to
the On Target Mapping acquisition, $1.4 million of incremental revenue from The
Data Consultancy acquisition, and an overall increase in demand for MapInfo's
data products worldwide. An increase in sales of the Company's enterprise
software products accounted for 26% of the overall year-to-date revenue
increase. On a geographic basis for the first six months of fiscal 1999,
revenues in the Americas increased by $3.6 million or 26%. This was achieved
principally by 60% growth in data revenues (including revenues attributable to
On Target Mapping) and 11% growth in software products. In Europe, revenues for
the six months increased $3.1 million or 35%, of which approximately half of the
increase was attributable to The Data Consultancy. Asia-Pacific revenues
declined by $620
7
<PAGE>
thousand or 12% in the first half of fiscal 1999 compared to the same period in
fiscal 1998. This decline resulted from lower revenues in Japan, partially
offset by an increase in Greater China revenues.
Cost of Revenues, Operating Expenses and Income Taxes
Cost of revenues as a percentage of revenues decreased to 21.9% in the second
quarter of 1999 from 22.5% for the same period in 1998. As a result, the gross
margin increased to 78.1% from 77.5%. The gross margin increase was primarily
attributable to higher gross margin on services and improved gross margins on
data products. For the six-months ending March 31, 1999, gross margin improved
slightly to 78.0% from 77.9% in 1998.
Research and development (R&D) expenses increased 2% over the prior year period
to $2.7 million in the second quarter of 1999. As a percentage of revenues, R&D
expenses declined to 15.1% in the second quarter of 1999 from 18.0% for the same
period in 1998. For the six-months ending March 31, 1999, R&D expenses increased
approximately $300 thousand or 6% compared to the same period last year. This
increase was primarily the result of the December 1998 acquisition of On Target
Mapping. For the first half of fiscal 1999, R&D expenses declined to 15.8% of
revenues from 18.2% in 1998.
Selling and marketing expenses increased 21% to $7.5 million in the second
quarter of 1999 from $6.2 million for the same period in 1998. For the six
months ending March 31, 1999, selling and marketing expenses increased 20% to
$14.6 million from $12.2 in the same period a year ago. The increase for the
quarter and year-to-date was primarily attributable to a 20% headcount increase
in the Americas sales organization, 39% headcount increase in the European sales
organization, and 21% increase in spending on marketing programs in the
Americas. As a percentage of revenues, selling and marketing expenses for the
second quarter of fiscal 1999 remained consistent with the prior year at 41.3%.
On a year-to-date basis, selling and marketing expenses decreased to 42.6% of
revenues from 43.6% in 1998.
General and administrative (G&A) expenses increased 30% to $2.5 million in the
second quarter of 1999 from $1.9 million for the same period a year ago. For the
six months ending March 31, 1999, G&A expenses increased 29% to $4.7 million
from $3.6 million in 1998. The increase in G&A expenses for the second quarter
and year-to-date was primarily due to The Data Consultancy and the On Target
acquisitions, including associated amortization of intangible assets ($265
thousand in the second quarter of fiscal 1999 and $404 thousand for the
six-months ending March 31, 1999) and increased headcount to support MIS
infrastructure and other business development initiatives. For the second
quarter of fiscal 1999, G&A expenses as a percentage of revenues increased to
13.9% as compared to 13.0% for the same period in 1998. For the six months ended
March 31, 1999, G&A expenses as a percentage of revenues increased to 13.7% from
12.9% in 1998.
8
<PAGE>
The effective income tax rates for the six-months ended March 31, 1999 and 1998
were approximately 32.0% and 21.5%, respectively. The increase in the provision
for income taxes was primarily attributable to an increase in the current year
pre-tax operating income.
Financial Condition
The Company's cash and short-term investments totaled $26.6 million at March 31,
1999 compared to $28.9 million at September 30, 1998. At March 31, 1999, the
Company's investment portfolio consisted primarily of short-term, liquid,
tax-exempt securities.
MapInfo has no long-term debt. The Company has a $10 million credit facility
with a bank that expires in December 1999, and a $10 million credit facility
with a bank that expires in January 2000. There were no outstanding borrowings
under either facility at March 31, 1999.
Net cash generated from operating activities was $4.2 million for the six months
ended March 31, 1999, compared to $3.8 million for the corresponding period in
the prior year. The cash generated from operating activities in the first half
of 1999 was principally the result of net income ($1.7 million), and a decrease
of accounts receivable ($700 thousand). Net cash used for investing activities
in the first half of 1999 was $9.3 million. Significant investing activities
included $1.9 million of contingent payments related to the acquisition of The
Data Consultancy; $2.2 million for the acquisition of On Target Mapping; $1.0
million for an investment in Three D Graphics, Inc.; $1.5 million in purchases
of property and equipment; and $2.5 million in purchases of short-term
investments.
In February 1999, the Board of Directors authorized the Company to repurchase
from time to time up to $5 million of the Company's Common Stock on the open
market or in negotiated transactions. The repurchase program will remain in
effect until September 30, 2000 unless discontinued earlier by the Board of
Directors. The Company intends to use the repurchased shares for issuance upon
exercise of employee stock options, purchases under the Company's stock purchase
plan, or other corporate purposes. During the six months ended March 31, 1999,
the Company repurchased 15,000 shares at a cost of $229 thousand under this
program.
Management believes existing cash and short-term investments together with funds
generated from operations should be sufficient to meet the Company's operating
requirements for the next twelve months.
Acquisition of On Target Mapping
Pursuant to an Asset Purchase Agreement dated December 15, 1998, the Company
acquired substantially all of the assets and assumed certain liabilities of On
Target Communications, Inc., a Pennsylvania corporation doing business as On
Target Mapping. A MapInfo value-added reseller since 1992, On Target Mapping
delivers data products and solutions for telecommunications providers. The
purchase price was approximately $2.2 million, net of cash acquired. In
addition, the Company may be obligated to make a contingent cash payment in
9
<PAGE>
March 2001, based on the financial performance of On Target Mapping in the two
years following the acquisition. The acquisition has been accounted for as a
purchase; and, accordingly, the Company has included On Target Mapping's results
of operations in the financial statements from the date of acquisition.
Intangible assets resulting from the acquisition, including goodwill, are being
amortized on a straight-line basis over a period of five years.
Acquisition of The Data Consultancy
Pursuant to a Share Sale and Purchase Agreement dated December 2, 1997, the
Company acquired all of the issued share capital of The URPI Group Limited, an
English company trading as The Data Consultancy ("The Data Consultancy") and
engaged in the sale of market analysis solutions and information products in the
United Kingdom. The purchase price was approximately $5.4 million, consisting of
$5.0 million in cash and $400 thousand in stock. Approximately $1.0 million of
the purchase price was paid in April 1999. The acquisition has been accounted
for as a purchase; and, accordingly, the Company has included The Data
Consultancy's results of operations in its financial statements from the date of
acquisition. Intangible assets resulting from the acquisition, including
goodwill, are being amortized on a straight-line basis over a period of seven
years.
Investment in Three D Graphics
On October 21, 1998, the Company invested approximately $1 million in Three D
Graphics, Inc., a California software company, under a five-year Convertible
Promissory Note (the "Note"). The Note bears interest at 10% per anum, payable
on a quarterly basis. The Company has the option, at any time prior to October
21, 2003, to convert the outstanding principal amount of the Note into 20% of
the then issued and outstanding shares of capital stock of Three D Graphics,
Inc. As part of the agreement, the Company also received an option to purchase,
on or before October 2, 1999, a majority of the shares of capital stock of Three
D Graphics, Inc. In addition, under a Technology License Agreement, the Company
received a license to bundle Three D Graphics technology with MapInfo's products
for a period of five years.
Investment in Object/FX Corporation
Pursuant to a Purchase Agreement dated April 3, 1998, the Company invested $1.1
million in the form of convertible debt and a minority equity interest in
Object/FX Corporation, a Minnesota company engaged in the development and sale
of Java-based mapping technology. As part of the investment, the Company also
received a warrant to acquire additional shares over a period of 5 years at a
total cost of $550,000 and options from existing stockholders to acquire a
majority interest in Object/FX Corporation at any time during the period
commencing October 3, 2000 and ending April 3, 2001. In addition, MapInfo and
Object/FX Corporation entered into a non-exclusive worldwide marketing
agreement, under which the Company may enhance and sell Object/FX Java-based
products. The investment in Object/FX has been accounted for under the cost
method.
10
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Year 2000 Compliance
Background
Many currently installed computer systems are not capable of correctly
processing 21st century dates. As a result, computer systems, software and other
computer controlled processes used by many companies in a wide variety of
applications will experience operating difficulties unless they are modified or
upgraded to adequately process information involving, related to, or dependent
upon the century change. Significant uncertainty exists concerning the scope and
magnitude of problems associated with the century change.
What the Company is Doing
The Company recognizes the need to take appropriate action so that its
operations will not be adversely impacted by Year 2000 computer failures and has
established a project team, consisting of specifically assigned employees, to
address Year 2000 risks. The project team is coordinating the identification and
implementation of changes to computer hardware and software applications that
will attempt to ensure availability and integrity of the Company's information
systems, operational systems and critical business processes. An appropriate
program of assessment, remediation and testing for both products and internal
systems are underway, but is not yet complete. The Company is also assessing the
potential overall risks of the impending century change on its business
partners, results of operations and financial position.
Status of Company Products
The Company's saleable products rely on software applications. The Company has
designed and tested the most current versions of its saleable products and
believes that such products are Year 2000 compliant, with the exception of
certain minor products. It should be noted that despite these efforts, there can
be no assurances that the Company's current products do not contain undetected
errors or defects associated with Year 2000 date functions that may result in
additional costs to the Company.
Status of Internal Systems
The Company is in the process of conducting a company-wide assessment of its
internal computer systems and operations infrastructure to identify computer
hardware, software, and process control systems that are not Year 2000
compliant. Based on this assessment, the Company believes that its principal
accounting system is Year 2000 compliant. However, as a result of its review,
the Company has determined that it will need to modify or replace certain
information and operational systems so they will be Year 2000 compliant. Some
systems will be remediated as a consequence of normal and previously planned
business improvement and system replacement projects. Others systems, such as
personal computers and office productivity
11
<PAGE>
software, will be remediated specifically for Year 2000 issues, in many cases
through low cost or free upgrades provided by the product vendors. The Company
presently believes that its business-critical computer systems that are not
presently Year 2000 compliant will be replaced, upgraded or modified prior to
2000.
Status of the Company's Customers and Partners
The Company faces risk to the extent that suppliers of products, services, and
systems important to its business operations, and others, with whom the Company
transacts business on a worldwide basis, do not comply with Year 2000
requirements. The Company has initiated formal communications with significant
suppliers to determine the extent to which these parties have addressed their
own Year 2000 issues. In the event any such third parties cannot provide the
Company with products, services or systems that meet the Year 2000 requirements
on a timely basis, or in the event Year 2000 issues prevent such third parties
from timely delivery of products or services required by the Company, the
Company's results of operations could be materially adversely affected.
The Company also faces risk to the extent that major customers or channel
partners do not comply with Year 2000 requirements in their own organizations
and suffer business disruption as a result. To the extent Year 2000 issues cause
significant delays in or cancellation of purchases of the Company's products or
services, the Company's business, results of operations and financial position
could be materially adversely affected. The Company has initiated formal
communications with its largest customers and channel partners to determine the
extent to which the Company is vulnerable to any such third-party's failure to
remediate their own Year 2000 issues.
Remediation Plans, Contingency Plans and Estimated Costs
The Company has not yet completed its estimate of Year 2000 costs at this stage
of the project, but expects to complete the estimates as the assessment and
remediation planning tasks are completed in the near term. It is currently
estimated that the aggregate cost of the Company's Year 2000 efforts will be
approximately $500,000 to $600,000 of which $250,000 has been expended to date.
Much of the expenditures relating to the Company's Year 2000 efforts are
expected to be capitalized and funded through operating cash flows. To the
extent that equipment is deemed obsolete as a result of the Year 2000 issue, the
applicable costs and accumulated depreciation will be removed from the accounts
and the resulting loss, if any, will be recognized in the income statement.
The Company expects that some of its customers may be using older product
versions that are not Year 2000 compliant. The Company will be encouraging such
customers to migrate to compliant product versions. It is possible that the
Company may experience increased expenses in upgrading these customers. Such
amounts are not included in the estimates above.
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The Company expects to complete its Year 2000 project during 1999. Based on
currently available information and remediation plans, the Company does not
believe any material exposure to significant business interruption exists as a
result of Year 2000 compliance issues. While certain IT projects have been
deferred, the Company believes deferral of these projects will not have a
material impact on the Company. Although the Company does not believe that it
will incur any material costs or experience material disruptions in its business
associated with preparing its internal systems for the year 2000, there can be
no assurances that the Company will not experience serious unanticipated
negative consequences and/or material costs caused by undetected errors or
defects in the technology used in its internal systems, which are composed of
third-party software, third-party hardware that contains embedded software and
the Company's own software products. The most reasonably likely worst case
scenario would include: (i) corruption of data contained in the Company's
internal information systems, (ii) hardware failure, and (iii) delays in
shipping the Company's saleable products. The Company is in the process of
developing a contingency plan to address situations that may result if the
Company is unable to achieve Year 2000 readiness of its critical operations, as
anticipated, in a timely manner.
These costs and the timing in which the Company plans to complete its Year 2000
modification and testing processes are based on management's best estimates.
However, there can be no assurance that the Company will timely identify and
remediate all significant Year 2000 problems, that remedial efforts will not
involve significant time and expense, or that such problems will not have a
material adverse effect on the Company's business, results of operations or
financial position.
This discussion of the Company's efforts, and management's expectations,
relating to Year 2000 compliance are Year 2000 Readiness Disclosures as defined
in the Year 2000 Information and Readiness Disclosure Act (S. 2392, 105th
Congress, 2nd Session).
The discussion of the Company's efforts, and management's expectations, relating
to Year 2000 compliance are forward-looking statements. The Company's ability to
achieve Year 2000 compliance and the level of incremental costs associated
therewith, could be adversely impacted by, among other things, the availability
and cost of programming and testing resources, vendors' ability to modify
proprietary software, and unanticipated problems identified in the ongoing
compliance review.
Outlook: Issues and Risks
This Quarterly Report on Form 10-Q contains forward-looking statements. For this
purpose, any statements contained herein that are not statements of historical
fact may be deemed to be forward-looking statements. Without limiting the
foregoing, the words "believes," "anticipates," "plans," "expects," and similar
expressions are intended to identify forward-looking statements, including
statements as to the sufficiency of funds to meet operating requirements for the
next 12 months and statements as to the Year 2000 assessment. The following
important factors, among others, could cause actual results to differ materially
from those indicated by forward-looking statements
13
<PAGE>
made in this Quarterly Report on Form 10-Q and presented elsewhere by management
from time to time. In addition to the other information in this Quarterly Report
on Form 10-Q, the following issues and risks, among others, should be considered
in evaluating MapInfo's outlook and future.
New products and technological change. The mapping software and information
business is characterized by extremely rapid technological change, evolving
industry standards, and frequent new product introductions. These conditions
require continuous expenditures on product research and development to enhance
existing products and to create new products. The Company believes that the
timely development of new products and continuing enhancements to existing
products is essential to maintain its competitive position in the marketplace.
During fiscal 1997 and 1998, the Company introduced a number of new products,
including SpatialWare(R), TargetPro(TM), dbPlanner(TM), MapXsite(R),
MapXtreme(TM) and MapInfo MapX(R). The Company's future success depends, in
part, upon customer and market acceptance of these new products. Any failure to
achieve acceptance of these and other new product offerings could have a
material adverse effect on the Company's business and results of operations.
There can be no assurance that the Company will successfully complete the
development of new or enhanced products or successfully manage transitions from
one product release to the next.
Competition. The Company encounters significant competition in the market for
business mapping systems worldwide. Some of the Company's competition may have
significant name recognition, as well as substantially greater capital
resources, marketing experience, research and development staffs and production
facilities than the Company. Any future growth in the Company's market may make
it more likely that such larger companies will increasingly focus on this
market. Increased competition may lead to pricing pressures that could adversely
affect the Company's gross margins. Prices of software in Europe and Asia are
generally higher than in the Americas to cover localization costs and higher
costs of distribution. Such price uplifts could erode in the future.
Reliance on third parties. The Company relies in part on strategic partners and
independent developers for the development of specialized data products that use
MapInfo software. Failure by such strategic partners or independent developers
to continue to develop such data products, or changes in the contractual
arrangements with such strategic partners or independent developers, could have
a material adverse effect on the Company's business and results of operations.
Expansion to enterprise market. The Company has previously marketed its products
primarily in the desktop mapping market. The Company continues to expand its
product offerings beyond the desktop market to the enterprise and
Internet/intranet markets. Sales to the enterprise and Internet/intranet markets
are directed to different decision-makers within customer organizations and
require different selling and marketing programs than are used in the desktop
market. The failure of these products to achieve market acceptance could have a
material adverse effect on the Company's business and results of operations.
14
<PAGE>
Prices. Future prices the Company is able to obtain for its products may
decrease from previous levels depending upon market or competitive pressures or
distribution channel factors. Any decrease could have a material adverse effect
on the Company's business and results of operations.
Intellectual property rights. The Company regards its software as proprietary
and attempts to protect it with a combination of copyright, trademark and trade
secret laws, employee and third-party non-disclosure agreements, and other
methods of protection. Despite these precautions, it may be possible for
unauthorized third parties to copy certain portions of the Company's products,
reverse engineer or obtain and use information the Company regards as
proprietary. In addition, the Company's shrink-wrap licenses, under which the
Company licenses its products, may be unenforceable under the laws of certain
jurisdictions; and the laws of some foreign countries do not protect the
Company's proprietary rights to the same extent as do the laws of the United
States. Any misappropriation of the Company's intellectual property could have a
material adverse effect on the Company's business and results of operations.
Furthermore, there can be no assurance that third parties will not assert
infringement claims against the Company in the future with respect to current or
future products. Any such assertion could require the Company to enter into
royalty arrangements or result in costly litigation.
Cost of revenues. Cost of revenues varies with the mix of technology development
and licensing fees, product revenues, and services revenues, as well as with the
distribution channel mix. Changes in the revenue mix, as well as the
distribution model, may affect cost of revenues as a percentage of net revenues
in the future.
Risks associated with international operations. Revenues outside the Americas
represented approximately 48% of total Company revenues in the second quarter of
fiscal 1999. 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, reliance on financial commitments from certain
international distributors, difficulties in localizing products and translating
documentation into foreign languages, fluctuations in import/export duties and
quotas, risks associated with the introduction of the Euro and unexpected
regulatory, economic, or political changes in international markets. The
Company's operating results are also affected by exchange rates. Approximately
33% of the Company's revenues were denominated in foreign currencies during the
second quarter of fiscal 1999. Of the Company's international operations, the
Asia-Pacific region represented 12% of total Company revenues in the second
quarter of fiscal 1999. The Company's Asia-Pacific operations, in general, have
been affected by the adverse macroeconomic conditions in Asia, including the
decline of the Australia dollar versus the U.S. dollar. Approximately 55% of the
Company's Asia-Pacific second quarter 1999 revenues were denominated in
Australian dollars. Changes in international business conditions could have a
material adverse effect on the Company's business and results of operations.
15
<PAGE>
Variability of quarterly operating results. The Company's quarterly operating
results may vary significantly from quarter to quarter, depending upon factors
such as the introduction and market acceptance of new products and new versions
of existing products, the ability to reduce expenses, and the activities of
competitors. Because a high percentage of the Company's expenses are relatively
fixed in the near term, minor variations in the timing of orders and shipments
can cause significant variations in quarterly operating results. Substantially
all of its product revenues in each quarter result from software licenses issued
in that quarter. Accordingly, the Company's ability to accurately forecast
future revenues and income for any period is necessarily limited.
Potential volatility of stock price. There has been significant volatility in
the market price of securities of technology companies. The Company believes
factors such as announcements of new products by the Company or its competitors,
quarterly fluctuations in the Company's financial results or other software
companies' financial results, shortfalls in the Company's actual financial
results compared to results previously forecasted by stock market analysts, and
general conditions in the software industry and conditions in the financial
markets could cause the market price of the Common Stock to fluctuate
substantially. These market fluctuations may adversely affect the price of the
Company's Common Stock.
Risks associated with acquisitions and investments. The Company has made a
number of acquisitions and investments and will continue to review future
opportunities. No assurances can be given that acquisition candidates will
continue to be available on terms and conditions acceptable to the Company.
Acquisitions involve numerous risks, including, among other things, possible
dilution to existing shareholders, difficulties and expenses incurred in
connection with the acquisitions and the subsequent assimilation of the
operations and services or products of the acquired companies, the difficulty of
operating new (albeit related) businesses, the diversion of management's
attention from other business concerns and the potential loss of key employees
of the acquired company. In the event that the operations of an acquired
business or investment do not meet expectations, the Company may be required to
restructure the acquired business or write-off the value of some or all of the
assets of the acquired business or investment. There can be no assurance that
any acquisition will be successfully integrated into the Company's operations.
Risks associated with distribution channels. The Company primarily markets and
distributes its products in The Americas, Europe and Australia through the
Company's telesales, outside sales force and through third party resellers. In
Asia-Pacific, the Company's products are marketed and distributed through
exclusive and non-exclusive distribution relationships. There can be no
assurance that the Company will be able to retain its current resellers and
distributors, or expand its distribution channels by entering into arrangements
with new resellers and distributors in the Company's current markets or in new
markets.
16
<PAGE>
Reliance on attracting and retaining key employees. The Company's continued
success will depend in large part on its ability to attract and retain highly
qualified technical, managerial, sales and marketing and other personnel.
Competition for such personnel is intense. The Company has non-competition
agreements with its key management and technical personnel. There can be no
assurance that the Company will be able to continue to attract or retain such
personnel.
For risks related to the Year 2000 problem, see "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Year 2000
Compliance".
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
17
<PAGE>
MapInfo Corporation
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders
The annual meeting of stockholders of the Company was held on February 24, 1999.
The following matters were voted on at the stockholders' meeting.
<TABLE>
<CAPTION>
For Against Withheld Abstentions
--- ------- -------- -----------
<S> <C> <C> <C> <C>
Election of Directors:
Laszlo C. Bardos 5,196,995 26,793
John F. Burton 5,196,325 27,463
John C. Cavalier 5,195,654 28,134
John F. Haller 5,197,795 25,993
Michael D. Marvin 5,194,896 28,892
George C. McNamee 5,194,737 29,051
James A. Perakis 5,195,895 27,893
Amendment to the 1993 Director Stock Option Plan:
The shares authorized under the 1993 Director Stock
Option Plan were increased from 50,000 to 80,000 shares. 4,927,953 247,751 48,084
Amendment to the 1993 Employee Stock Purchase Plan:
The number of shares of Common Stock available for purchase
by employees under the 1993 Employee Stock Purchase Plan was
increased from 300,000 to 400,000. 5,132,982 47,581 43,225
Ratification of PricewaterhouseCoopers LLP
as the Company's Independent Public Accountants
for the current fiscal year. 5,212,122 5,255 6,411
</TABLE>
18
<PAGE>
MapInfo Corporation
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
The exhibits listed in the Exhibit Index filed as part of this report are
filed as part of this report or are included in this report.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the three months ended March 31,
1999.
19
<PAGE>
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.
MAPINFO CORPORATION
Date: May 14, 1999 By: /s/ D. Joseph Gersuk
--------------------------
D. Joseph Gersuk,
Executive Vice President,
Finance, Chief Financial
Officer and Treasurer
20
<PAGE>
Exhibit Index
Exhibit
Number Description of Exhibit
- ------- ----------------------
10.1 1993 Director Stock Option Plan, as amended to date
27 Financial Data Schedule
21
Exhibit 10.1
MapInfo Corporation
1993 Director Stock Option Plan
1. Purpose
The purpose of this 1993 Director Stock Option Plan (the
"Plan") of MapInfo Corporation (the "Company") is to encourage ownership in the
Company by outside directors of the Company whose continued services are
considered essential to the Company's future progress and to provide them with a
further incentive to remain as directors of the Company.
2. Administration
The Board of Directors shall supervise and administer the
Plan. Grants of stock options under the Plan and the amount and nature of the
awards to be granted shall be automatic in accordance with Section 5. However,
all questions of interpretation of the Plan or of any options issued under it
shall be determined by the Board of Directors and such determination shall be
final and binding upon all persons having an interest in the Plan.
3. Participation in the Plan
Directors of the Company who are not employees of the Company
or any subsidiary of the Company shall be eligible to participate in the Plan.
4. Stock Subject to the Plan
(a) The maximum number of shares which may be issued under the
Plan shall be 20,000 shares of the Company's Common Stock, par value $.002 per
share ("Common Stock"), subject to adjustment as provided in Section 9 of the
Plan.
(b) If any outstanding option under the Plan for any reason
expires or is terminated without having been exercised in full, the shares
allocable to the unexercised portion of such option shall again become available
for grant pursuant to the Plan.
(c) All options granted under the Plan shall be
non-statutory options not entitled to special tax treatment under Section 422 of
the Internal Revenue Code of 1986, as amended to date and as it may be amended
from time to time (the "Code").
5. Terms, Conditions and Form of Options
Each option granted under the Plan shall be evidenced by a
written agreement in such form as the Board of Directors shall from time to time
approve, which agreements shall comply with and be subject to the following
terms and conditions:
(a) Option Grants. On the date of each annual meeting of
stockholders of the Company, the Company shall grant to each eligible director
an option for such number of shares of Common Stock equal to $20,000 divided by
the option exercise price per share for each such option (the "Annual Option").
1
<PAGE>
(b) Option Exercise Price. The option exercise price per share
for each option granted under the Plan shall equal (i) the last reported sales
price per share of the Company's Common Stock on the NASDAQ National Market
System (or, if the Company is traded on a nationally recognized securities
exchange on the date of grant, the reported closing sales price per share of the
Company's Common Stock by such exchange) on the date of grant (or if no such
price is reported on such date such price as reported on the nearest preceding
day) or (ii) if the Common Stock is not traded on NASDAQ or an exchange, the
fair market value per share on the date of grant as most recently determined by
the Board of Directors.
(c) Options Non-Transferable. Each option granted under the
Plan by its terms shall not be transferable by the optionee otherwise than by
will, or by the laws of descent and distribution, and shall be exercised during
the lifetime of the optionee only by him. No option or interest therein may be
transferred, assigned, pledged or hypothecated by the optionee during his
lifetime, whether by operation of law or otherwise, or be made subject to
execution, attachment or similar process.
(d) Exercise Period. Each Annual Option shall become
exercisable at the end of nine years and nine months after the date of grant,
provided that such option shall become exercisable one year after the date of
grant if the director has attended during such year at least 75% of the
aggregate of the number of meetings of the Board of Directors and the number of
meetings held by all committees on which he then served. In the event an
optionee ceases to serve as a director, each such option may be exercised by the
optionee (or, in the event of his death, by his administrator, executor or
heirs), at any time within 12 months after the optionee ceases to serve as a
director, to the extent such option was exercisable at the time of such
cessation of service. Notwithstanding the foregoing, no option shall be
exercisable after the expiration of ten years from the date of grant.
(e) Exercise Procedure. Options may be exercised only by
written notice to the Company at its principal office accompanied by (i) payment
in cash of the full consideration for the shares as to which they are exercised
or (ii) an irrevocable undertaking by a broker to deliver promptly to the
Company sufficient funds to pay the exercise price or delivery of irrevocable
instructions to a broker to deliver promptly to the Company cash or a check
sufficient to pay the exercise price.
6. Assignments
The rights and benefits of participants under the Plan may not
be assigned, whether voluntarily or by operation of law, except as provided in
Section 5(d).
7. Effective Date
The Plan shall become effective immediately upon its adoption
by the Board of Directors, but all grants of options shall be conditional upon
the approval of the Plan by the stockholders of the Company within 12 months
after adoption of the Plan by the Board of Directors.
8. Limitation of Rights
(a) No Right to Continue as a Director. Neither the Plan, nor
the granting of an option nor any other action taken pursuant to the Plan, shall
constitute or be evidence of any agreement or understanding, express or implied,
that the Company will retain a director for any period of time.
(b) No Stockholders' Rights for Options. An optionee shall
have no rights as a stockholder with respect to the shares covered by his
options until the date of the issuance to him of a stock certificate therefor,
and no adjustment will be made for dividends or other rights (except as provided
in Section 9) for which the record date is prior to the date such certificate is
issued.
9. Changes in Common Stock
2
<PAGE>
(a) If the outstanding shares of Common Stock are increased,
decreased or exchanged for a different number or kind of shares or other
securities, or if additional shares or new or different shares or other
securities are distributed with respect to such shares of Common Stock or other
securities, through merger, consolidation, sale of all or substantially all of
the assets of the Company, reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split or other distribution with
respect to such shares of Common Stock, or other securities, an appropriate and
proportionate adjustment will be made in (i) the maximum number and kind of
shares reserved for issuance under the Plan, (ii) the number and kind of shares
or other securities subject to then outstanding options under the Plan and (iii)
the price for each share subject to any then outstanding options under the Plan,
without changing the aggregate purchase price as to which such options remain
exercisable. No fractional shares will be issued under the Plan on account of
any such adjustments.
(b) In the event that the Company is merged or consolidated
into or with another corporation (in which consolidation or merger the
stockholders of the Company receive distributions of cash or securities of
another issuer as a result thereof), or in the event that all or substantially
all of the assets of the Company are acquired by any other person or entity, or
in the event of a reorganization or liquidation of the Company, the Board of
Directors of the Company, or the board of directors of any corporation assuming
the obligations of the Company, shall, as to outstanding options, either (i)
provide that such options shall be assumed, or equivalent options shall be
substituted, by the acquiring or successor corporation (or an affiliate
thereof), or (ii) upon written notice to the optionees, provide that all
unexercised options will terminate immediately prior to the consummation of such
merger, consolidation, acquisition, reorganization or liquidations unless
exercised by the optionee within a specified number of days following the date
of such notice.
10. Amendment of the Plan
The Board of Directors may suspend or discontinue the Plan or
review or amend it in any respect whatsoever; provided, however, that without
approval of the stockholders of the Company no revision or amendment shall
change the number of shares subject to the Plan (except as provided in Section
9), change the designation of the class of directors eligible to receive
options, or materially increase the benefits accruing to participants under the
Plan. The Plan may not be amended more than once in any six-month period.
11. Governing Law
The Plan and all determinations made and actions taken
pursuant hereto shall be governed by the laws of the State of New York.
Adopted by the Board of Directors
on November 23, 1993
Approved by the stockholders
on December 8, 1993
3
<PAGE>
AMENDMENT NO. 1 TO THE 1993 DIRECTOR STOCK OPTION PLAN
OF MAPINFO CORPORATION
The first sentence of Subsection 5(a) of the 1993 Director Stock Option
Plan (the "Plan") of MapInfo Corporation is hereby amended and restated in its
entirety to provide as follows:
"(a) Option Grants. On the date of each annual meeting of stockholders
of the Company, the Company shall grant to each eligible director an option for
such number of shares of Common Stock equal to $40,000 divided by the option
exercise price per share for each stock option (the "Annual Option")."
Adopted by the Board of Directors
on December 9, 1994
Approved by the stockholders
on January 20, 1995
4
<PAGE>
AMENDMENT NO. 2 TO THE 1993 DIRECTOR STOCK OPTION PLAN
OF MAPINFO CORPORATION
The first sentence of Subsection 5(a) of the 1993 Director Stock Option
Plan (the "Plan") of MapInfo Corporation is hereby amended and restated in its
entirety, subject to stockholder approval, to provide as follows:
"(a) Option Grants. On the date of each annual meeting of stockholders of the
Company, the Company shall grant to each eligible director an option for 3,000
shares of Common Stock (the "Annual Option")."
Adopted by the Board of Directors
on December 19, 1995
Approved by the Stockholders
on February 2, 1996
5
<PAGE>
AMENDMENT NO. 3 TO THE 1993 DIRECTOR STOCK OPTION PLAN
OF MAPINFO CORPORATION
Subsection 4(a) of the 1993 Director Stock Option Plan (the "Plan") of
MapInfo Corporation is hereby amended and restated in its entirety, subject to
stockholder approval, to provide as follows:
"(a) The maximum number of shares which may be issued under the Plan
shall be 50,000 shares of the Company's Common Stock, par value $.002 per share
("Common Stock"), subject to adjustment as provided in Section 9 of the Plan."
The first sentence of Subsection 5(a) of the Plan is hereby amended and
restated in its entirety, subject to stockholder approval, to provide as
follows:
"(a) Option Grants. On the date of each annual meeting of stockholders of
the Company, the Company shall grant to each eligible director an option for
5,000 shares of Common Stock (the "Annual Option")."
Adopted by the Board of Directors on
November 12, 1996
Approved by the Stockholders on
March 20, 1997
6
<PAGE>
AMENDMENT NO. 4 TO THE 1993 DIRECTOR STOCK OPTION PLAN
OF MAPINFO CORPORATION
Section 5(c) of the 1993 Director Stock Option Plan (the "Plan") of
MapInfo Corporation is hereby amended and restated in its entirety to provide as
follows:
"(c) Options Non-Transferable. Except as otherwise provided in the
option agreement evidencing the option grant, each option granted under the Plan
shall not be transferable by the optionee otherwise than by will, or by the laws
of descent and distribution, and shall be exercised during the lifetime of the
optionee only by him."
Section 10 of the Plan is hereby amended and restated in its entirety
to read as follows:
"10. Amendment of the Plan. The Board of Directors may at any time, and
from time, modify, terminate or amend the Plan in any respect, except that if at
any time the approval of the stockholders of the Company is required as to such
modification or amendment under any applicable tax or regulatory requirement,
the Board of Directors may not effect such modification or amendment without
such approval."
Adopted by the Board of Directors on
December 9, 1996
7
<PAGE>
AMENDMENT NO. 5 TO THE 1993 DIRECTOR STOCK OPTION PLAN
OF MAPINFO CORPORATION
Section 11 of the 1993 Director Stock Option Plan (the "Plan") of
MapInfo Corporation is hereby amended and restated in its entirety to provide as
follows:
"11. Governing Law
The Plan and all determinations made and actions taken pursuant hereto
shall be governed by the laws of the State of Delaware."
Adopted by the Board of
Directors on February 11, 1998
8
<PAGE>
AMENDMENT NO. 6 TO THE 1993 DIRECTOR STOCK OPTION PLAN
OF MAPINFO CORPORATION
Subsection 4(a) of the 1993 Director Stock Option Plan (the "Plan") of
MapInfo Corporation is hereby amended and restated in its entirety, subject to
stockholder approval, to provide as follows:
"(a) The maximum number of shares which may be issued under the Plan
shall be 80,000 shares of the Company's Common Stock, par value $.002 per share
("Common Stock"), subject to adjustment as provided in Section 9 of the Plan."
Adopted by the Board of
Directors on November 14, 1998
Approved by the Stockholders on
February 24, 1999
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ACCOMPANYING FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> MAR-31-1999
<CASH> 11,076
<SECURITIES> 15,554
<RECEIVABLES> 16,363
<ALLOWANCES> 1,344
<INVENTORY> 397
<CURRENT-ASSETS> 44,975
<PP&E> 14,025
<DEPRECIATION> 9,471
<TOTAL-ASSETS> 60,568
<CURRENT-LIABILITIES> 17,087
<BONDS> 0
0
0
<COMMON> 12
<OTHER-SE> 43,229
<TOTAL-LIABILITY-AND-EQUITY> 60,568
<SALES> 18,028
<TOTAL-REVENUES> 18,028
<CGS> 3,943
<TOTAL-COSTS> 3,943
<OTHER-EXPENSES> 12,684
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,584
<INCOME-TAX> 524
<INCOME-CONTINUING> 1,060
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,060
<EPS-PRIMARY> 0.19
<EPS-DILUTED> 0.18
</TABLE>
