<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT TO APPLICATION OR REPORT
Filed pursuant to Section 12, 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): March 2, 2000
- ------------------------------------------------- -------------
PROJECT SOFTWARE & DEVELOPMENT, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-2448516
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
0-23852
------------------------
(Commission File Number)
100 Crosby Drive, Bedford, Massachusetts 01730
(Address of principal executive offices, including zip code)
(781) 280-2000
(Registrant's telephone number, including area code)
<PAGE> 2
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Current Report on Form 8-K,
originally filed with the Securities and Exchange Commission on March 15, 2000,
as set forth in pages attached hereto:
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
The following financial statements relating to the Acquisition are attached
hereto:
(a) FINANCIAL STATEMENTS FOR INTERMAT, INC.
Page No.
Report of PricewaterhouseCoopers LLP, Independent Public
Accountants,as to INTERMAT, Inc. : 4
Balance Sheet of INTERMAT, Inc as of December 31, 1999 5
Statement of Operations and Retained Earnings of INTERMAT, Inc 6
for the year ended December 31, 1999
Statement of Cash Flows for INTERMAT, Inc.
for the year ended December 31, 1999 7
Notes to Financial Statements 8
(b) PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma combined condensed financial
information is attached hereto:
Unaudited Pro Forma combined condensed financial information of
Project Software & Development, Inc. and Subsidiaries 16
Unaudited Pro Forma Combined Condensed Balance Sheet as of
September 30, 1999 17
Unaudited Pro Forma Combined Condensed Statement of Continuing
Operations for the year ended September 30, 1999 18
Unaudited Pro Forma Combined Condensed Balance Sheet
as of December 31, 1999 19
Unaudited Pro Forma Combined Condensed Statement of
Continuing Operations for the three months ended
December 31, 1999 20
Notes to the Unaudited Pro Forma Combined Condensed Financial
Information 21
(c) EXHIBITS
Consent of PricewaterhouseCoopers LLP Independent
Accountants, dated May 12, 2000 22
2
<PAGE> 3
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this amendment to be signed on its
behalf by the undersigned, thereunto duly authorized.
Dated: May 15, 2000
PROJECT SOFTWARE & DEVELOPMENT, INC.
By: /s/ Carole A. Tyner.
------------------------------
Carole A. Tyner.
Vice President Finance and Treasurer
(Principal Financial Officer)
3
<PAGE> 4
Report of Independent Accountants
To the Board of Directors and Stockholders of
Project Software & Development, Inc.:
In our opinion, the accompanying balance sheet and the related statements of
operations and retained earnings, and cash flows present fairly, in all material
respects, the financial position of INTERMAT, Inc. at December 31, 1999, and the
results of its operations and its cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States.
These financial statements are the responsibility of the Company's management;
our responsibility is to express an opinion on these financial statements based
on our audit. We conducted our audit of these statements in accordance with
auditing standards generally accepted in the United States, which 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, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
May 12, 2000
4
<PAGE> 5
INTERMAT, Inc.
BALANCE SHEET
<TABLE>
<CAPTION>
ASSETS DECEMBER 31, 1999
-----------------
<S> <C>
(IN THOUSANDS,EXCEPT SHARE AND PER SHARE DATA)
Current assets:
Cash and cash equivalents $ 338
Accounts receivable, less allowance for
doubtful accounts of $384 1,857
Other current assets 451
-------
Total current assets 2,646
-------
Property and equipment, net 674
Goodwill and other intangibles, net 3,974
-------
Total assets $ 7,294
=======
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 254
Accrued compensation 414
Note payable 1,400
Income taxes payable 52
Deferred revenue 628
Due to parent company 10,270
-------
Total current liabilities 13,018
-------
Commitments and contingencies
Stockholders' equity (deficit)
Common stock, $.01 par value;1,000 authorized;
100 issued 0
Additional paid-in capital 2,406
Retained earnings (8,130)
-------
Total stockholders' equity (deficit) (5,724)
-------
Total liabilities and stockholders' equity (deficit) $ 7,294
=======
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE> 6
INTERMAT, INC.
STATEMENT OF OPERATIONS and RETAINED EARNINGS
(in thousands except share data)
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1999
------------
<S> <C>
Revenues:
Software $ 1,526
Support and services 6,792
-------
Total revenues 8,318
-------
Cost of revenues: 4,418
Gross margin 3,900
Operating expenses:
Sales and marketing 1,518
Product development 638
General and administrative 2,313
-------
Total operating expenses 4,469
-------
Loss from operations (569)
Interest income 26
Interest (expense) (126)
-------
Loss before income taxes (669)
Provision for income taxes 52
Net loss $ (721)
=======
Retained deficit, beginning of year $(7,409)
Retained deficit, end of year $(8,130)
Net loss per share, basic and diluted $ (7.21)
-------
Shares used to calculate net loss
per share
Basic and diluted 100
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE> 7
INTERMAT, Inc.
STATEMENT OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1999
-----------------
<S> <C>
Cash flows from operating activities:
Net loss $ (721)
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 1,402
Changes in operating assets and liabilities,
net of effect of acquisitions:
Accounts receivable 346
Other current assets (220)
Accounts payable 135
Accrued compensation (215)
Income taxes payable (36)
Due to Parent company (1,600)
Deferred revenue 601
-------
Net cash used by operating activities (308)
-------
Cash flows from investing activities:
Acquisitions of property and equipment (164)
-------
Net cash used in investing activities (164)
-------
Net decrease in cash and cash equivalents (472)
Cash and cash equivalents, beginning of year 810
-------
Cash and cash equivalents, end of year $ 338
=======
Supplemental information:
Cash paid for income taxes $ 88
Cash paid for interest $ 126
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE> 8
INTERMAT, INC.
NOTES TO FINANCIAL STATEMENTS
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Presentation
As of December 31, 1999, INTERMAT, Inc. (the "Company") was a wholly owned
subsidiary of Strategic Distribution, Inc. ("SDI"). Accordingly, these
financial statements may not be indicative of a stand alone entity. On March 2,
2000, the Company was acquired by Project Software & Development, Inc. This
transaction was accounted for as a purchase.
Nature of Business
The Company provides data management software and develops and supplies
inventory cataloging services for businesses maintenance, repair and operations.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid instruments purchased with original
maturities of three months or less to be cash equivalents. Cash equivalents
consist primarily of money market funds, which are stated at cost, which
approximates fair market value.
Concentration of Credit Risk
Financial instruments which potentially subject the Company to
concentration of credit risk consist primarily of temporary cash investments and
accounts receivable. Credit risk on accounts receivable is minimized as a result
of the diverse nature of the Company's customer base. The Company has not
experienced significant losses related to accounts receivable from individual
customers or groups of customers in a particular industry or geographic area.
Due to these factors, no additional credit risk beyond amounts provided for
collection losses is believed inherent in the Company's accounts receivable.
Goodwill
Goodwill represents the excess of the cost of acquired businesses over the
fair value of their net tangible and identified intangible assets. Goodwill is
evaluated at each balance sheet date to determine whether any potential
impairment exists. Goodwill is generally amortized on a straight-line basis over
the estimated useful life, usually five years.
Income per share
Basic earnings per share is computed by dividing income available to common
shareholders by the weighted average number of common shares outstanding.
Diluted earnings per share is computed by dividing income available to common
shareholdres by the weighted average common shares outstanding plus additional
common shares that would have been outstanding if dilutive potential common
shares had been issued. For purposes of this calculation, stock options are
considered dilutive potential common shares in periods in which they have a
dilutive effect.
8
<PAGE> 9
INTERMAT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Depreciation and Amortization
Property and equipment are stated at cost.
Depreciation is computed over the estimated useful lives of the assets as
follows:
Description Estimated Useful Life
----------- ---------------------
Computer equipment & software 3 years
Furniture and fixtures 5 years
Leasehold improvements are amortized on the straight-line method over the
shorter of their estimated useful life or term of the lease. Maintenance and
repairs are charged to expense as incurred. Upon retirement or sale, the cost of
the assets disposed of and the related accumulated depreciation are removed from
the accounts and any resulting gain or loss is included in the determination of
net income.
Income Taxes
The Company accounts for income taxes under Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109), which
requires an asset and liability approach for accounting and reporting for income
taxes. SFAS 109 also requires a valuation allowance against net deferred tax
assets if, based upon the available evidence, it is more likely than not that
some or all of the deferred tax assets will not be realized.
Revenue Recognition
The Company licenses its software products under noncancellable license
agreements and provides services including training, installation, consulting,
and maintenance, consisting of product support services and periodic updates.
License fee revenues are generally recognized upon contract execution and
shipment, when collection of the resulting receivable is deemed probable and the
fees are fixed or determinable.
The revenue from cataloging services is generally recognized through
monthly progress billings or when the work is completed.
Segment Information:
In accordance with SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information.", the Company has identified one reportable
industry segment: the development, marketing and support of software for
maintenance, repair and operations inventory cataloging. Less than 10% of
revenues arise from sales and services outside the United States. No customer
accounted for more than 10% of revenue in 1999.
Deferred Revenue
Revenue on all software license transactions in which there are significant
outstanding obligations is deferred and recognized once such obligations are
fulfilled. Deferred revenue also includes maintenance contracts billed in
advance.
Computer Software Costs
Computer software costs consist of internally developed software.
Development costs incurred in the research and development of new software
products, and enhancements to existing products, are expensed in the period
incurred unless they qualify for capitalization under Statement of Financial
Accounting Standards No. 86, "Accounting for the Cost of Computer Software to
Be Sold, Leased or Otherwise Marketed." These costs are amortized on a
straight-line basis over the estimated useful or market life of the software
(generally, one to two years).
9
<PAGE> 10
INTERMAT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
B. NOTE PAYABLE:
The Company issued a subordinated note in the amount of $1,400,000 due January
28, 2000. This note bears interest at 9% per annum, payable on June 30 and
December 31 of each year, commencing June 30, 1997. The note was issued to two
prior principals of INTERMAT Acquisition Corporation. This was subsequently paid
off on February 28, 2000.
C. DUE TO PARENT COMPANY:
Amounts due to the parent company represent non-interest bearing loans made
by SDI to fund operations and growth of the Company. The Company periodically
pays down this loan when possible. The loan is treated as a demand note and
classified as a current liability.
D. INCOME TAXES:
The components of income before income taxes consist of the following:
<TABLE>
<CAPTION>
Year Ended
December 31, 1999
-----------------
<S> <C>
(in thousands)
Income before income taxes:................ (669)
-----
$(669)
-----
The provision for income taxes consists of:
Current taxes:
Federal .............................. 0
State ................................ 52
$ 52
-----
Total ............................ $ 52
=====
</TABLE>
10
<PAGE> 11
INTERMAT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The components of the deferred tax assets and liabilities are as follows:
<TABLE>
<CAPTION>
December 31, 1999
-----------------
<S> <C>
(in thousands)
Deferred tax assets:
Allowance for doubtful accounts 146
Accrued vacation ............... 27
Depreciation ................... 40
Amortization of intangibles .... 515
Amortization of In-process R&D . 2,436
Amortization of Goodwill ....... 4
Net operating loss carryforwards 173
Valuation allowance ............ (3,341)
-------
Net deferred tax assets ........ $ 0
=======
</TABLE>
The major components of the deferred tax assets relate to amortization of
intangibles which possess a longer tax life compared to book life.
The Company has provided a full valuation allowance for the deferred tax assets
since it is more likely than not that these future benefits will not be
realized. If the Company achieves future profitability, a significant portion of
these deferred tax assets could be available to offset future income taxes.
E. PROPERTY AND EQUIPMENT:
Property and equipment are stated at cost and consist of the following as
of December 31, 1999.
<TABLE>
<S> <C>
(in thousands)
Computer equipment and software ................... $ 1,158
Furniture and fixtures ............................ 395
Leasehold improvements ............................ 145
1,698
Less accumulated depreciation and amortization .... (1,024)
-------
$ 674
=======
</TABLE>
Depreciation and amortization expense was $442,000 for 1999
11
<PAGE> 12
INTERMAT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
F. GOODWILL AND OTHER INTANGIBLE ASSETS:
Intangible assets consist of the following as of December 31, 1999:
<TABLE>
<S> <C>
(in thousands)
Goodwill .......................... $ 272
Other intangible assets ........... 6,500
-------
6,772
Less accumulated amortization ..... (2,798)
-------
$ 3,974
=======
</TABLE>
Goodwill and other intangibles are being amortized over five years.
Amortization expense was $933,000 for 1999.
G. COMMITMENTS AND CONTINGENCIES:
The Company leases its office facilities under an operating lease
agreements which expires on January 31, 2004. The Company pays all insurance,
utilities, and pro rated portions of any increase in certain operating expenses
and real estate taxes. The aggregated rent expense under the lease was $389,000
for 1999.
The operating leases provide for minimum aggregate future rentals as of
December 31, 1999 as follows:
(in thousands)
December 31, 2000 $353
December 31, 2001 $353
December 31, 2002 $353
December 31, 2003 $410
December 31, 2004 $ 35
12
<PAGE> 13
INTERMAT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The Company is not a party to any legal proceedings the outcome of which,
in the opinion of management, would have a material adverse effect on the
Company's results of operations or financial condition.
I. EMPLOYEE BENEFITS:
Retirement Plan
The Company participates in SDI's qualified defined contribution plan (the
"Retirement Savings Plan") available to substantially all of INTERMAT's domestic
employees. Under the Plan, employees may make voluntary contributions based on a
percentage of their pretax earnings.
Contributions to the Retirement Savings Plan are at the discretion of the
Board of Directors of SDI and are limited to the amount deductible for federal
income tax purposes. Amounts charged to expense for this Plan, in 1999, was
$86,000.
The Company participates in SDI's Incentive Stock Option Plans (the "1990
Plan" and the "1999 Plan", collectively referred to as the "ISO Plans") under
which the SDI Board of Directors is authorized to grant certain directors,
executives, key employees, consultants and advisers, options for the purchase of
up to 3,000,000 shares of common stock under the 1990 Plan and up to 1,500,000
shares of common stock under the 1999 Plan. The ISO Plans provide for the
granting of both incentive stock options and options that do not qualify as
incentive stock options ("nonqualified options"). In the case of each incentive
stock option granted under the ISO Plans, the option price must not be less than
the fair market value of the common stock at the date of grant. To date, all
options granted under the ISO Plans are exercisable at not less than the fair
market value of the common stock at the date of grant. A significant portion of
the options granted under the 1990 Plan are exercisable at various rates from
25.0% to 33.3% per year beginning on the first anniversary of the date of grant,
and a significant portion of the options granted under the 1990 Plan are
exercisable at 33.3% per year beginning on the third anniversary of the date of
grant. A smaller portion of the options granted under the 1990 Plan were
exercisable at date of grant.
Stock option activity is summarized as follows:
<TABLE>
<CAPTION>
1999 No. of Shares Price per share
- ---- ------------- ---------------
<S> <C> <C>
Outstanding at December 31, 1998 272,033 $2.81 - $5.97
Granted 129,500 $2.50 - $2.56
Canceled (1,917) $2.50 - $3.94
Exercised 0
Outstanding at December 31, 1999 399,616 $2.50 - $5.97
Exercisable at December 31, 1999 82,049 $2.81 - $5.97
</TABLE>
13
<PAGE> 14
INTERMAT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The following table summarizes information about stock options outstanding at
December 31, 1999:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
-------------------------------------------------- --------------------------------
Number Weighted-Avg
Outstanding Remaining Number
Range of As of Contractual Weighted-Avg Exercisable Weighted-Avg
Exercise Prices 12/31/99 Life (years) Exercise Price As of 12/31/99 Exercise Price
- --------------- ----------- ------------ -------------- -------------- --------------
<C> <C> <C> <C> <C> <C>
$2.50 - $5.97 399,616 8 $3.84 82,049 $4.13
</TABLE>
The Company complies with the pro forma disclosure requirements of
Statement of Financial Accounting Standards Board No. 123, "Accounting for
Stock-Based Compensation" (SFAS 123). The fair value method of the Company's
stock options was estimated using the Black-Scholes option pricing model. This
model was developed for use in estimated fair value of traded options that have
no vesting restrictions and are fully transferable. This model requires the
input of highly subjective assumptions including the expected stock price
volatility. Because the Company's stock options have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimates, in
management's opinion, the existing model does not necessarily provide a reliable
single measure of the fair value of its stock options.
The fair value of the Company's stock options was estimated using the
following weighted-average assumptions:
<TABLE>
<CAPTION>
Year Ended
December 31, 1999
-----------------
<S> <C>
Expected life (in years) 8
Volatility 76.85%
Risk-free interest rate 5.43%
Dividend yield 0%
</TABLE>
14
<PAGE> 15
INTERMAT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
For pro forma purposes, the estimated fair value of the Company's stock
options is amortized over the options' vesting period. The Company's pro forma
information is as follows:
<TABLE>
<CAPTION>
Year Ended
December 31, 1999
-----------------
(in thousands)
<S> <C>
Net loss
As reported.................... (721)
Pro forma...................... (861)
</TABLE>
Under SFAS 123, the weighted-average estimated fair value of options
granted during 1999 was $2.60 per share.
15
<PAGE> 16
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
The following unaudited pro forma combined condensed financial information gives
effect to the acquisition by Project Software & Development, Inc. (PSDI) of
INTERMAT in a transaction accounted for as a purchase. The unaudited pro forma
combined condensed balance sheets as of September 30, 1999 and December 31, 1999
are based on the historical balance sheets of PSDI and INTERMAT and have been
prepared to reflect the acquisition by PSDI of INTERMAT as if it had occurred
at September 30, 1999 and December 31, 1999, respectively. The unaudited pro
forma combined condensed statement of continuing operations for the year ended
September 30, 1999 is based on the historical statements of continuing
operations of PSDI and INTERMAT and combines the results of continuing
operations of PSDI for the fiscal year ended September 30, 1999 and the twelve
months ended December 31, 1999 of INTERMAT, as if the acquisition occurred on
October 1, 1998. INTERMAT's fiscal year ends on December 31. The results of
continuing operations for INTERMAT for the twelve months ended December 31, 1999
do not differ materially from the results for the twelve months ended September
30, 1999.
The unaudited pro forma combined condensed statements of continuing operations
for the three months ended December 31, 1999 is based on the historical
statements of PSDI and INTERMAT and combines the results of continuing
operations of PSDI and INTERMAT for the three months ended December 31, 1999.
The pro forma combined condensed financial information is presented for
illustrative purposes only and is not necessarily indicative of the financial
position or operating results that would have been achieved if the acquisition
had been consummated as of the beginning of the period presented, nor are they
necessarily indicative of the future financial position or operating results of
PSDI. The pro forma combined condensed financial information does not give
effect to any cost savings or restructuring and integration costs which may
result from the integration of PSDI and INTERMAT operations. Such costs related
to restructuring and integration have not yet been determined and PSDI expects
to charge such costs to operations during the quarter incurred.
The unaudited pro forma combined condensed financial information is based on
continuing operations only and excludes the results of extraordinary items.
The unaudited pro forma combined condensed financial information should be read
in conjunction with the financial statements and notes thereto of PSDI as filed
on its Annual Report on Form 10-K and INTERMAT included elsewhere in this
Registration Statement.
16
<PAGE> 17
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
AS OF SEPTEMBER 30, 1999
(IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
PSDI INTERMAT ADJUSTMENTS COMBINED
--------- --------- ------------ ----------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 59,903 $ 338 $ (55,100)(1) $ 5,141
Marketable securities 30,920 -- -- 30,920
Accounts receivable, net 38,736 1,857 -- 40,593
Prepaid expenses 3,919 -- -- 3,919
Other current assets 1,171 451 -- 1,622
Deferred income taxes 2,017 -- -- 2,017
--------- --------- --------- ---------
Total current assets 136,666 2,646 (55,100) 84,212
Marketable securities 7,413 -- -- 7,413
Property and equipment, net 12,055 674 -- 12,729
Intangible assets, net 1,509 3,974 62,101(1) 67,584
Other assets 406 -- -- 406
Deferred income taxes 984 -- -- 984
--------- --------- --------- ---------
Total assets $ 159,033 $ 7,294 $ 7,001 $ 173,328
========= ========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses $ 12,172 $ 254 $ 1,277(2) $ 13,703
Accrued compensation 8,429 414 -- 8,843
Note payable -- 1,400 -- 1,400
Income taxes payable 4,227 52 -- 4,279
Due to parent company -- 10,270 -- 10,270
Deferred revenue 16,580 628 -- 17,208
Deferred income taxes 187 -- -- 187
--------- --------- --------- ---------
Total current liabilities 41,595 13,018 1,277 55,890
Deferred rent 146 -- -- 146
Deferred revenue 92 -- -- 92
Equity in minority interest 44 -- -- 44
Stockholders' equity (deficit):
Common stock 213 0 0 (3) 213
Additional paid-in capital 67,418 2,406 (2,406)(3) 67,418
Retained earnings (accumulated deficit) 50,210 (8,130) 8,130 (3) 50,210
Accumulated other comprehensive income (loss) (685) -- -- (685)
--------- --------- --------- ---------
Total stockholders' equity (deficit) 117,156 (5,724) 5,724 117,156
--------- --------- --------- ---------
Total liabilities and stockholders' equity (deficit) $ 159,033 $ 7,294 $ 7,001 $ 173,328
========= ========= ========= =========
</TABLE>
See accompanying notes to the unaudited pro forma combined condensed financial
information.
17
<PAGE> 18
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF CONTINUING OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATE)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
PSDI INTERMAT ADJUSTMENTS COMBINED
-------- -------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues:
Software $ 62,240 $ 1,526 $ -- $ 63,766
Support and services 83,425 6,792 -- 90,217
-------- ------- -------- ---------
Total revenues 145,665 8,318 -- 153,983
-------- ------- -------- ---------
Cost of revenues:
Software 5,018 -- -- 5,018
Support and services 42,310 4,418 -- 46,728
-------- ------- -------- ---------
Total cost of revenues 47,328 4,418 -- 51,746
-------- ------- -------- ---------
Gross margin 98,337 3,900 -- 102,237
Operating expenses:
Sales and marketing 47,417 1,518 -- 48,935
Product development 14,959 638 -- 15,597
General and administrative 11,628 2,313 -- 13,941
Goodwill amortization -- -- 12,420(1) 12,420
-------- ------- -------- ---------
Total operating expenses 74,004 4,469 12,420 90,893
-------- ------- -------- ---------
Income (loss) from operations 24,333 (569) (12,420) 11,344
Interest income (expense), net 3,002 (100) -- 2,902
Other income (expense), net (175) -- -- (175)
-------- ------- -------- ---------
Income (loss) before income taxes 27,160 (669) (12,420) 14,071
Provision for income taxes 9,280 52 -- 9,332
-------- ------- -------- ---------
Income (loss) from continuing operations $ 17,880 $ (721) $(12,420) $ 4,739
======== ======= ======== =========
Basic income (loss) from continuing
operations per common share (4) $ 0.87 $ 0.23
Diluted income (loss) from continuing operations
per common share (4) $ 0.85 $ 0.22
Weighted average number of common shares
used to calculate income (loss) per share (4):
Basic 20,459 20,459
Diluted 21,094 21,094
</TABLE>
See accompanying notes to the unaudited pro forma combined condensed financial
information.
18
<PAGE> 19
UNAUDITED PRO FORMA COMBINED CONDENSED
BALANCE SHEET AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
PSDI INTERMAT ADJUSTMENTS COMBINED
--------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 63,580 $ 338 $ (55,100) $ 8,818
Marketable securities 26,114 -- -- 26,114
Accounts receivable, net 40,400 1,857 -- 42,257
Prepaid expenses 5,034 -- -- 5,034
Other current assets 1,315 451 -- 1,766
Deferred income taxes 2,158 -- -- 2,158
--------- --------- --------- ---------
Total current assets 138,601 2,646 (55,100) 86,147
Marketable securities 9,286 -- -- 9,286
Property and equipment, net 12,221 674 -- 12,895
Intangible assets, net 2,616 3,974 62,101 68,691
Other assets 389 -- -- 389
Deferred income taxes 1,044 -- -- 1,044
--------- --------- --------- ---------
Total assets $ 164,157 $ 7,294 $ 7,001 $ 178,542
========= ========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses $ 15,911 $ 254 $ 1,277 $ 17,442
Accrued compensation 4,352 414 -- 4,766
Note payable -- 1,400 -- 1,400
Income taxes payable 5,085 52 -- 5,137
Due to parent company -- 10,270 -- 10,270
Deferred revenue 15,648 628 -- 16,276
Deferred income taxes 94 -- -- 94
--------- --------- --------- ---------
Total current liabilities 41,090 13,018 1,277 55,385
Deferred rent 139 -- 139
Deferred revenue 87 -- -- 87
Equity in minority interest -- -- -- --
Stockholders' equity (deficit): --
Common stock 216 -- -- 216
Additional paid-in capital 70,697 2,406 (2,406) 70,697
Retained earnings (Accumulated deficit) 52,806 (8,130) 8,130 52,806
Accumulated other comprehensive loss (878) -- -- (878)
--------- --------- --------- ---------
122,841 (5,724) 5,724 122,841
Total stockholders' equity (deficit) 122,841 (5,724) 5,724 122,841
========= ========= ========= =========
Total liabilities and stockholders' equity (deficit) $ 164,157 $ 7,294 $ 7,001 $ 178,542
========= ========= ========= =========
</TABLE>
See accompanying notes to the unaudited pro forma combined condensed
financial information.
19
<PAGE> 1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (No. 33-79074, 33-79142, 33-95774, 33-95780 and 333-3402)
of Project Software & Development, Inc. of our report dated May 12, 2000, of
INTERMAT, Inc., which appears in the Current Report on Form 8-K of Project
Software & Development, Inc. dated March 2, 2000.
PricewaterhouseCoopers LLP
Boston, Massachusetts
May 15, 2000
