<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20509
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ............... to ...............
Commission File number 0 - 24326
---------
Ovid Technologies, Inc.
-----------------------
(Exact name of registrant as specified in its charter)
Delaware 13 - 3333107
-------- ------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
333 Seventh Avenue, New York, New York 10001
--------------------------------------------
(Address of principal executive offices - Zip code)
(212) 563-3006
--------------
(Registrant's telephone number, including area code)
-------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the registrant was
required to file reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class of Stock No. of Shares Outstanding Date
-------------- ------------------------- ----
Common 6,029,131 July 31, 1997
<PAGE>
OVID TECHNOLOGIES, INC.
INDEX
-----------
PART I - FINANCIAL INFORMATION Page
----
Item 1. Financial Statements (Unaudited):
Condensed Consolidated Balance Sheets as of
December 31, 1996 and June 30, 1997 3
Condensed Consolidated Statements of Operations for
the three months ended June 30, 1996 and 1997 4
Condensed Consolidated Statements of Operations for
the six months ended June 30, 1996 and 1997 5
Condensed Consolidated Statements of Cash Flows
for the six months ended June 30, 1996 and 1997 6
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings: 14
Item 2. Changes in Securities:
None
Item 3. Defaults Upon Senior Securities:
None
Item 4. Submission of Matter to a Vote of Securities Holders 15
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
Exhibit 11 - Computation of Net Income Per Common Share 16
Exhibit 27 - Financial Data Schedule
<PAGE>
OVID TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(Unaudited)
---------------
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
ASSETS: 1996 1997
---- --------
<S> <C> <C>
Current assets:
Cash and cash equivalents ............................... $ 1,426 $ 925
Short-term investments - held to maturity ............... 5,382 8,431
Accounts receivable, less allowance for doubtful accounts
of $895 and $960 for 1996 and 1997, respectively ...... 12,310 10,332
Prepaid and other current assets ........................ 698 761
Deferred income taxes ................................... 298 298
Income taxes receivable ................................. 495 --
Total current assets ................................. 20,609 20,747
Equipment and leasehold improvements, net ............... 3,216 3,724
Full-text database, net ................................. 2,223 2,598
Deferred income taxes ................................... 307 320
Deposits and other assets ............................... 107 202
------- -------
Total assets ........................................ $26,462 27,591
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable ........................................ $ 2,343 2,134
Accrued expenses ........................................ 3,146 3,656
Customer deposits ....................................... 457 460
Income taxes payable .................................... 1,411 1,543
Unearned revenue ........................................ 3,838 2,939
Obligation under database subscriptions ................. 656 703
------- -------
Total current liabilities ............................ 11,851 11,435
------- -------
Commitments and Contingencies
Stockholders' equity:
Preferred stock, $.01 par value; 1,000,000 shares
authorized; no shares issued .......................... -- --
Common stock, $.01 par value; 10,000,000 shares
authorized; 5,894,832 and 6,016,864 shares issued and
outstanding for 1996 and 1997, respectively ............ 59 60
Additional paid-in capital .............................. 8,688 8,766
Retained earnings ....................................... 5,792 7,251
Foreign currency translation adjustment ................. 72 79
------- -------
Total stockholders' equity ........................... $14,611 $16,156
------- -------
Total liabilities and stockholders' equity ......... $26,462 $27,591
======= =======
</TABLE>
The accompanying notes are an integral part of the condensed
consolidated financial statements.
3
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share and share amounts)
(Unaudited)
for the three months ended June 30,
---------
<TABLE>
<CAPTION>
1996 1997
---- ----
<S> <C> <C>
Revenues:
Database subscriptions and software ....... $ 8,062 $ 8,977
Maintenance and other ..................... 670 824
---------- ----------
Total revenues ........................ 8,732 9,801
---------- ----------
Cost of revenues:
Database subscriptions and software ....... 2,806 3,215
Maintenance and other ..................... 58 51
---------- ----------
Total cost of revenues ................ 2,864 3,266
---------- ----------
Gross profit .......................... 5,868 6,535
Operating expenses:
Sales and marketing ....................... 2,004 1.996
Product development ....................... 1,374 1,637
General and administrative ................ 1,371 1,440
---------- ----------
Total operating expenses .............. 4,749 5,073
---------- ----------
Income from operations ................ 1,119 1,462
Interest income and other, net ............ 63 79
---------- ----------
Income before provision for income taxes .. 1,182 1,541
Provision for income taxes ................ 472 617
---------- ----------
Net income ............................ $ 710 $ 924
========== ==========
Net income per common share ........... $ .10 $ .13
========== ==========
Weighted average number of shares of
common stock and common stock equivalents 7,288,858 7,292,334
========== ==========
</TABLE>
The accompanying notes are an integral part of the condensed
consolidated financial statements.
4
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share and share amounts)
(Unaudited)
for the six months ended June 30,
---------
<TABLE>
<CAPTION>
1996 1997
---- ----
<S> <C> <C>
Revenues:
Database subscriptions and software ............. $ 14,650 $ 16,651
Maintenance and other ........................... 1,332 1,601
---------- ----------
Total revenues .............................. 15,982 18,252
---------- ----------
Cost of revenues:
Database subscriptions and software ............. 5,167 6,003
Maintenance and other ........................... 105 109
---------- ----------
Total cost of revenues ...................... 5,272 6,112
---------- ----------
Gross profit ................................ 10,710 12,140
Operating expenses:
Sales and marketing ............................ 3,819 3,943
Product development ............................ 2,740 3,127
General and administrative ..................... 2,695 2,781
---------- ----------
Total operating expenses .................... 9,254 9,851
---------- ----------
Income from operations ...................... 1,456 2,289
Interest income and other, net .................. 116 142
---------- ----------
Income before provision for income taxes ........ 1,572 2,431
Provision for income taxes ...................... 629 973
---------- ----------
Net income .................................. $ 943 $ 1,458
========== ==========
Net income per common share ................. $ .13 $ .20
========== ==========
Weighted average number of shares of common stock
and common stock equivalents .................. 7,235,228 7,247,343
========== ==========
</TABLE>
The accompanying notes are integral part of the condensed
consolidated financial statements.
5
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
for the six months ended June 30,
---------
<TABLE>
<CAPTION>
1996 1997
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income ............................................. $ 943 $ 1,459
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization ........................ 1,091 1,147
Provision for doubtful accounts ...................... 180 65
Deferred income tax expense .......................... 13 (14)
Changes in assets and liabilities:
(Increase) decrease in accounts receivable, net of
unearned revenue ................................... (1,345) 1,014
(Increase) in full text database costs ............... (411) (708)
Decrease in other assets ............................. 637 337
Decrease in accounts payable ......................... (819) (208)
Increase in other liabilities ........................ 663 699
-------- --------
Cash provided by operating activities .............. 952 3,791
-------- --------
Cash flows from investing activities:
Purchase of short-term investments ..................... (10,346) (14,714)
Redemption of short-term investments at maturity ....... 8,715 11,665
Capital expenditures ................................... (874) (1,322)
-------- --------
Cash provided by investing activities .............. (2,505) (4,371)
-------- --------
Cash flows from financing activities:
Proceeds from the exercise of stock options ............ 38 79
-------- --------
Cash provided by financing activities .............. 38 79
-------- --------
Decrease in cash and cash equivalents .................. (1,515) (501)
Cash and cash equivalents, beginning of period ......... 1,775 1,426
-------- --------
Cash and cash equivalents, end of period ............... $ 260 $ 925
======== ========
</TABLE>
The accompanying notes are integral part of the condensed
consolidated financial statements.
6
<PAGE>
OVID TECHNOLOGIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
-------------------
1. Basis of Presentation:
These condensed consolidated financial statements should be read in
conjunction with the Company's Form 10-K dated March 28, 1997, as amended, and
the historical consolidated financial statements and related notes included
therein. In the opinion of management, the accompanying unaudited condensed
financial statements include all adjustments, consisting of only normal
recurring accruals, necessary to present fairly the condensed consolidated
financial position, results of operations and cash flows of the Company.
Certain information and footnote disclosure normally included in financial
statements prepared in conformity with generally accepted accounting
principles have been condensed or omitted pursuant to the Securities and
Exchange Commission rules and regulations. Quarterly operating results are not
necessarily indicative of the results which would be expected for the full
year.
2. Legal Proceedings
On or about June 6, 1997, an action was commenced in the Circuit Court of the
13th Judicial Circuit of the State of Florida against the Company by PowerCerv
Technologies Corporation ("PowerCerv"), a firm hired by the Company to provide
certain software and consulting services. On or about July 7, 1997 the Company
removed the action to the United States District Court for the Middle District
of Florida. The complaint alleges counts for breach of contract, open account,
and tortious interference with contractual or business relationships.
PowerCerv seeks, among other things: $250,400 as liquidated damages for the
purported hiring by the Company of two former employees of PowerCerv resulting
in an alleged breach of the agreement between the Company and PowerCerv;
approximately $62,000 for unpaid invoices; and an unspecified amount of other
damages on the tortious interference claim related thereto. The Company is
aware that PowerCerv obtained a preliminary injunction to prevent its former
employees from working with the Company. The Company has moved to dismiss the
action in Florida or, alternatively, to transfer the action to the District of
Utah, which motion is currently pending. The Company intends to vigorously
defend against the claims asserted against it. While the Company believes that
the litigation will be resolved without a materially adverse effect on the
Company's business or financial position, there can be no assurance as to the
ultimate outcome of, or the costs incurred by the Company in defending, this
litigation.
3. Recently Issued Pronouncements
In March 1997, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 128, "Earnings per Share". Statement 128 establishes standards
for computing and presenting earnings per share ("EPS") and is effective for
financial statements issued for periods ending after December 15, 1997. This
Statement will eliminate the presentation of primary EPS and will require the
presentation of basic EPS (the principal difference being that common stock
equivalents will not be considered in the computation of basic EPS.). It will
also require the presentation of diluted EPS which will give effect to all
dilutive potential common shares that were that were outstanding during the
period. Under the provisions of SFAS No. 128, basic EPS would have been $.12
and $.15 for the three months ended June 30, 1996 and 1997, respectively, and
$.16 and $.26 for the six months ended June 30, 1996 and 1997, respectively.
Diluted EPS would have been the same as the reported amounts in the financial
statements.
7
<PAGE>
OVID TECHNOLOGIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
-------------------
4. Pending Change in Revenue Recognition Policy
Ovid Technologies has been evaluating the effect of a proposal by the
Accounting Standards Executive Committee (AcSEC) of the AICPA which will
provide additional guidance in recognizing revenue on software transactions.
The proposed Statement of Position ("SOP"), Software Revenue Recognition, has
been under review by the Financial Accounting Standards Board ("FASB") and is
expected to be approved and issued in the near future. Based on the current
drafting of the proposed SOP, which will supersede the existing guidance of
SOP 91-1, Ovid's revenue recognition policy will change significantly.
Further discussion and the proforma and prospective presentations of the
effect of this proposed accounting change are included in Management's
Discussions and Analysis of Financial Condition and Results of Operations.
8
<PAGE>
OVID TECHNOLOGIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Three and Six Months Ended June 30, 1997 as compared to
Three and Six Months Ended June 30, 1996
REVENUES
For the three months ended June 30, 1997, the Company's total revenues
increased 12% to 9.8 million versus $8.7 million for the comparable period in
1996. For the first six months of 1997, total revenues increased to $18.3
million, an increase of 14%, from $16.0 million during the first half of 1996.
Strong sales in the North American and Asian medical markets contributed to a
significant amount of the overall sales growth. The Company experienced only
modest growth in European medical and North American non-medical markets. The
Company expects these trends to continue in the near future. The Company will
continue to focus on creating greater distribution channels in European
medical and North American non-medical markets with the belief that these
actions will lead to long-term revenue growth in these areas. (See Pending
Change in Revenue Recognition Policy below.)
Revenues from database subscriptions and software increased to $9.0 million in
the second quarter of 1997 from $8.1 million during the same period of 1996.
These same revenues grew to $16.7 million during the six months ended June 30,
1997 from $14.7 million during the comparable period in 1996. This revenue
growth was primarily attributable to an increase in the sale of network
configurations to large medical institutions in North America and an increase
in sales in Asia.
Maintenance revenues increased 23% to $.8 million for the three months ended
June 30, 1997, from $0.7 million for the same period in 1996. During the six
months ended June 30, 1997, maintenance revenues increased 20% to $1.6 million
from $1.3 million for the comparable period in 1996. The increase in
maintenance revenues is directly attributable to the increase in network
sales, which have mandatory maintenance charges of 17% of the first year's
software fees.
COST OF REVENUES
Cost of revenues increased 14% to $3.3 million for the second quarter of 1997
from $2.9 million in the same period in 1996. As a percent of revenues, total
cost of revenues remained a constant 33% for the second quarter of 1997 and
1996. For the six months ended June 30, 1997, total cost of revenues increased
16% to $6.1 million for the first half of 1996 from $5.3 million for the same
period in 1996. As a percentage of total revenues, cost of revenues remained a
constant 33% in the first six months of 1997 and 1996.
The cost of database subscriptions and software as a percentage of
corresponding revenues increased to 36% for the second quarter of 1996 from
35% in the second quarter of 1996. For the six months ended June 30, 1997,
total cost of database subscriptions and software increased 36% for the first
half of 1997 from 35% in the comparable period in 1996. The increase was
primarily due to an increase in royalty expense (due to sales of database
subscriptions paying higher royalties to their providers).
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONT.
SALES AND MARKETING EXPENSES
Sales and marketing expenses were $2.0 million during the second quarter of
1997 and 1996. As a percentage of total revenues, sales and marketing expenses
decreased to 20% during the second quarter of 1997 from 23% during the
comparable quarter in 1996. Sales and marketing increased to $3.9 million in
the first half of 1997 from $3.8 million during the same period in 1996, an
increase of 3%. As a percentage of total revenues, sales and marketing
expenses decreased to 22% in the first six months of 1997 from 24% during the
first six months of 1996. Increase in sales and marketing expense is
attributable to minor increases in sales in North American academic markets
and in several markets outside North America, primarily western Europe and
Australia. The Company does not expect significant increases in sales and
marketing investment in the future. The Company believes that the significant
increase in sales and marketing expenditure made from 1996 to 1997 will
facilitate continued sales growth in the near future. Consequently, the
Company expects that sales and marketing expenses will decrease as a
percentage of sales over time.
PRODUCT DEVELOPMENT EXPENSES
Product development expenses increased 19% to $1.6 million during the second
quarter of 1997 from $1.4 million during the same period in 1996. For the
first half of 1997, product development expenses increased 14% to $3.1 million
for the six months ended June 30, 1997 from $2.7 million for the same period
in 1996. As a percentage of total revenues, product development expenses
increased to 17% in the second quarter 1997 from 16% in the same period 1996,
and remained a constant 17% for the first six months in 1997 and 1996. The
Company expects to have significant expenditure needs in full-text production
and development over the next two years with no significant changes in product
development expenses as a percentage of sales during this period.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses were $1.4 million for both the second
quarters of 1997 and 1996. As a percentage of total revenues, general and
administrative expenses decreased to 15% in the second quarter ended June 30,
1997 from 16% for June 30, 1996. General and administrative expenses increased
3% to $2.8 million during the first half of 1997 from $2.7 million during the
same period in 1996. As a percentage of total revenues, general and
administrative expenses decreased to 15% in the six months ended June 30, 1997
from 17% for the comparable period in 1996. The percent decrease is primarily
attributable to the ability of the Company to increase revenues through new
sales and database subscription renewals while controlling the growth of
general expenses.
PROVISION FOR INCOME TAXES
The Company recorded a tax provision of $973,000 for the first half of 1997 as
compared to $629,000 for the same period in 1996. This represents a 40%
effective tax rate for both 1997 and 1996.
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONT.
PENDING CHANGE IN REVENUE RECOGNITION POLICY
The Company has been evaluating the effect of a proposal by the Accounting
Standards Executive Committee (AcSEC) of the AICPA which will provide
additional guidance in recognizing revenue on software transactions. The
proposed Statement of Position ("SOP"), Software Revenue Recognition, has been
under review by the Financial Accounting Standards Board ("FASB") and is
expected to be approved and issued in the near future. Based on the current
drafting of the proposed SOP, which will supersede the existing guidance of
SOP 91-1, The Company's revenue recognition policy will change significantly.
The Company currently recognizes license fees for third-party databases and
proprietary software upon shipment. Ovid's costs of fulfilling its obligations
under the terms of the license agreement, which are not significant, are
accrued at the time of delivery. As the proposed SOP is currently drafted,
revenues for these products will be recognized on a straight-line basis over
the term of the contract, generally one year. Additionally, the transition to
the proposed SOP will be on a prospective basis and will apply only to
transactions entered into after the SOP is adopted. Retroactive application of
the provision of the proposed SOP would be prohibited.
On August 6, 1997, the FASB approved the proposed SOP, subject to editorial
changes. Formal release of the final SOP is expected to occur during the third
quarter. In the event, the final SOP is formally released by AcSEC as
expected, the Company intends to change its method of accounting for license
fees for third-party databases and proprietary software for all transactions
entered into on or after July 1, 1997. As the proposed SOP allows prospective
adoption only and nearly two thirds of total revenues are affected, the effect
will be significant in the quarter in which the change in accounting is made.
Assuming the Company adopts the proposed SOP as of July 1, 1997, the Company
expects to report a loss for the three months ending September 30, 1997.
Although the impact of the change in accounting will have a diminishing effect
in future quarters, the quarterly impact will continue to be significant
through June 30, 1998.
Pro forma effects of this change in accounting are contrasted with the
historical results below. The "pro forma" presentations for the year ended
December 31, 1996 and the 6 months and 3 months ended June 30, 1997 assume
that the Company's accounting policy for license fees for third-party
databases and proprietary software has always conformed to the provisions of
the proposed SOP. The "prospective" presentation for the 3 months ended June
30, 1997 assumes the Company adopted the changed method of accounting for
license fees for third-party databases and proprietary software for
transactions entered into on or after April 1, 1997 to conform to the proposed
SOP and illustrates the initial effect of prospective adoption.
(Continued on following page)
11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONT.
Presentation of Data
(In thousands, except per share and share amounts)
(unaudited)
<TABLE>
<CAPTION>
12 MONTHS ENDED 6 MONTHS ENDED 3 MONTHS ENDED
DECEMBER 31, 1996 JUNE 30, 1997 JUNE 30, 1997
----------------- ------------- -------------
As Reported Proforma As Reported Proforma As Reported Proforma Prospective
----------- -------- ----------- -------- ----------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Total revenues $33,605 $31,111 $18,252 $18,002 $9,801 $9,127 $3,348
Total cost of revenues 10,944 9,933 6,112l 5,808 3,266 2,953 1,508
Gross profit 22,661 21,178 12,140 12,193 6,535 6,174 1,840
Total operating expenses 18,319 18,310 9,851 9,840 5,073 5,173 4,932
Income (loss) from operations 4,342 2,868 2,289 2,353 1,462 1,000 (3,093)
Net income (loss) 2,756 1,873 1,458 1,497 924 648 (1,808)
Net income (loss) per common share $ .39 $ .26 $ .20 $ .21 $ .13 $ .09 ($ .25)
Number of shares 7,140 7,140 7,247 7,247 7,292 7,292 7,292
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1997, the Company had cash and cash equivalents of
approximately $0.9 million, and working capital of $9.3 million. Operating
activities provided the Company with $3.8 million in cash during the first six
months of 1997 as compared to $1.0 million during the same period in 1996. The
increase in cash provided by operating activities from 1997 to 1996 was
primarily due to a decrease in accounts receivable and an increase in net
income, partially offset by a decrease in accounts payable.
The Company's investing activities used cash of $4.4 million during the first
six months of 1997, compared to using cash of $2.5 during the same period in
1996. The primary use of cash in 1997 was the purchase $14.7 million of short
term investments less $11.7 million of redemptions. During the first half of
1996, the primary use of cash was the purchase of $10.3 million of short term
investments less $8.7 million of redemptions. The Company's ongoing strategy
is to invest excess cash in short-term investments. Capital expenditures for
the Company were $1.3 million and $.9 million in 1997 and 1996, respectively.
The Company's financing activities provided $79,000 in 1997 as compared to
$38,000 provided in the same period for 1996, both related to the exercise of
stock options. Effective February 13, 1996, the Company entered into a
line-of-credit agreement for $1.0 million collateralized by the Company's
assets, bearing interest at the banks' prime rate plus 1%. There is no
specified expiration date for the agreement; however, the agreement is
cancelable in writing by either party at any time. There have been no
borrowings under this agreement.
The Company has cash expenditure commitments of approximately $1.5 million in
the third quarter related to prepaid royalties on recently licensed full text
journals. Additionally the Company will continue to incur significant costs
related to data preparation and production of these journals,
12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONT.
however the Company believes that its available cash and cash flow from
operations will be sufficient to finance its planned operations and capital
requirements for the foreseeable future. The Company anticipates capital
expenditures through the second half of 1997 to continue at the current rate.
The pending change in the Company's revenue recognition will have no effect on
cash flow from operations. (See Pending Change in Revenue Recognition Policy
above)
13
<PAGE>
OVID TECHNOLOGIES, INC.
ITEM 1. LEGAL PROCEEDINGS
See Note 2 of the Notes to Condensed Consolidated Financial Statements.
14
<PAGE>
OVID TECHNOLOGIES, INC.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS
(a) The Company's Annual Meeting of Stockholders was held on June 11,
1997 (the "Annual Meeting").
(b) The following matters were voted upon and approved by the
Company's stockholders at the Annual Meeting:
(i) The election of five directors to serve for the ensuing year.
The following nominees were elected as directors of the Company (with the
Company's stockholders having voted as set forth below):
Nominee Vote for Withheld Authority to Vote
------- -------- --------------------------
Mark L. Nelson 5,866,397 15,671
Deborah M. Hull 5,866,197 15,671
Martin F. Kahn 5,866,197 15,671
Harry Diakoff 5,866,397 15,671
John J. Hanley 5,866,197 15,671
(ii) The approval to amend the Corporation's 1993 Stock Option
Plan to increase the number of shares which may be issued thereunder. The
Company's stockholders voted as follows:
FOR: 4,922,627 AGAINST: 129,318 ABSTENTIONS: 1,520 NON-VOTES: 828,609
(iii) The ratification of the appointment of Coopers & Lybrand
L.L.P. as the Company's independent certified public accountants for the fiscal
year ending December 31, 1997. The Company's stockholders voted as follows:
FOR: 5,876,017 AGAINST: 4,751 ABSTENTIONS: 1,300 NON-VOTES: 6
15
<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.
Ovid Technologies, Inc.
(Registrant)
August 13, 1997 /s/ Deborah M. Hull
- --------------- -------------------
Deborah M. Hull
Chief Operating Officer
August 13, 1997 /s/ Jerry P. McAuliffe
- --------------- ----------------------
Jerry P. McAuliffe
Chief Financial Officer
16
<PAGE>
Exhibit 11
OVID TECHNOLOGIES, INC.
COMPUTATION OF NET INCOME PER COMMON SHARE
---------
<TABLE>
<CAPTION>
Three Months Three Months Six Six
Ended Ended Months Ended Months Ended
6/30/96 6/30/97 6/30/96 6/30/97
<S> <C> <C> <C> <C>
Net Incom ....................... $ 710,000 $ 924,000 $ 943,000 $1,459,000
========== ========== ========== ==========
Shares used in calculation of net
income per share of common
stock:
Weighted average shares of
common stock outstanding .... 5,732,131 5,986,623 5,722,472 5,954,052
Dilutive effect of stock options
after the application of the
treasury stock method ......... 1,556,727 1,305,711 1,512,756 1,293,291
---------- ---------- ---------- ----------
7,288,858 7,292,334 7,235,228 7,247,343
========== ========== ========== ==========
Net income per share of
common stock .................. $.10 $.13 $.13 $.20
==== ==== ==== ====
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 925
<SECURITIES> 8,431
<RECEIVABLES> 11,292
<ALLOWANCES> 960
<INVENTORY> 0
<CURRENT-ASSETS> 20,747
<PP&E> 4,824
<DEPRECIATION> 1,100
<TOTAL-ASSETS> 27,591
<CURRENT-LIABILITIES> 11,435
<BONDS> 0
0
0
<COMMON> 60
<OTHER-SE> 8,766
<TOTAL-LIABILITY-AND-EQUITY> 27,591
<SALES> 9,801
<TOTAL-REVENUES> 9,801
<CGS> 3,266
<TOTAL-COSTS> 5,073
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 79
<INCOME-PRETAX> 1,541
<INCOME-TAX> 617
<INCOME-CONTINUING> 924
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 924
<EPS-PRIMARY> .13
<EPS-DILUTED> .13
</TABLE>
