SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 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 0-25346
TRANSACTION SYSTEMS ARCHITECTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 47-0772104
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
330 South 108th Avenue
Omaha, Nebraska 68154
(Address of principal executive offices, including zip code)
(402) 390-7600
(Registrant's telephone number, including area code)
---------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No .
---- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date:
25,805,731 shares of Class A Common Stock at August 1, 1997
2,171,252 shares of Class B Common Stock at August 1, 1997
<PAGE>
TRANSACTION SYSTEMS ARCHITECTS, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
TABLE OF CONTENTS
Page
Part I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Balance Sheets as of June 30, 1997
and September 30, 1996 3
Condensed Consolidated Statements of Operations for the three
and nine months ended June 30, 1997 and 1996 4
Condensed Consolidated Statement of Stockholders' Equity
for the nine months ended June 30, 1997 5
Condensed Consolidated Statements of Cash Flows for the
nine months ended June 30, 1997 and 1996 6
Notes to Condensed Consolidated Financial Statements 7 - 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9 - 11
Part II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
Index to Exhibits 14
<PAGE>
<TABLE>
<CAPTION>
TRANSACTION SYSTEMS ARCHITECTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited and in thousands)
June 30, September 30,
1997 1996
------------- ------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 42,579 $ 32,751
Billed receivables, net 35,200 30,598
Accrued receivables 27,201 19,284
Deferred income taxes 5,626 4,348
Other 2,263 1,443
------------- -----------
Total current assets 112,869 88,424
Property and equipment, net 14,672 13,340
Software, net 5,659 5,424
Intangible assets, net 9,487 7,236
Installment receivables 1,275 1,593
Investment and notes receivable 6,819 8,105
Other 3,379 1,775
------------ -----------
Total assets $ 154,160 $ 125,897
============= ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 795 $ 1,147
Current portion of capital lease obligations 274 342
Accounts payable 7,627 8,629
Accrued employee compensation 3,566 5,210
Accrued liabilities 9,891 7,732
Income taxes 6,256 4,466
Deferred revenue 27,925 20,507
------------- -----------
Total current liabilities 56,334 48,033
Long-term debt 1,502 1,431
Capital lease obligations 263 256
------------- -----------
Total liabilities 58,099 49,720
------------- -----------
Stockholders' equity:
Class A Common Stock 129 127
Class B Common Stock 11 11
Additional paid-in capital 102,299 95,909
Accumulated translation adjustments 103 (236)
Accumulated deficit (6,469) (19,622)
Treasury stock, at cost (12) (12)
------------- -----------
Total stockholders' equity 96,061 76,177
------------- -----------
Total liabilities and stockholders'equity 154,160 $ 125,897
============= ===========
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRANSACTION SYSTEMS ARCHITECTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in thousands, except per share amounts)
Three Months Ended June 30, Nine Months Ended June 30,
----------------------------------- ------------------------------
1997 1996 1997 1996
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Software license fees $ 31,186 $ 21,545 $ 89,504 $ 60,042
Maintenance fees 10,746 9,173 31,031 26,042
Services 12,395 11,206 35,745 29,427
Hardware, net 881 977 2,218 3,279
------------- ------------- ------------ ------------
Total revenues 55,208 42,901 158,498 118,790
------------- ------------- ------------ ------------
Expenses:
Cost of software license fees:
Software costs 6,494 5,292 18,413 14,224
Amortization of purchased software 783 801 2,356
Cost of maintenance and services 13,038 10,969 38,055 29,481
Research and development 4,618 3,499 13,321 10,967
Selling and marketing 12,368 8,570 34,967 25,192
General and administrative:
General and administrative costs 8,814 7,589 25,882 20,195
Amortization of goodwill and purchased
intangibles 210 157 664 452
------------- ------------- ------------ ------------
Total expenses 45,542 36,859 132,103 102,867
------------- ------------- ------------ ------------
Operating income 9,666 6,042 26,395 15,923
------------- ------------- ------------ ------------
Other income (expense):
Interest income 557 442 1,497 1,587
Interest expense (55) (54) (136) (179)
Other (38) (99) (582) (180)
------------- ------------- ------------ ------------
Total other 464 289 779 1,228
------------- ------------- ------------ ------------
Income before income taxes 10,130 6,331 27,174 17,151
Provision for income taxes (3,793) (2,393) (10,539) (6,381)
------------- ------------- ------------ ------------
Net income $ 6,337 $ 3,938 $ 16,635 $ 10,770
============= ============= ============ ============
Pro forma information(Note 4):
Net income $ 6,337 $ 3,665 $ 16,128 $ 10,225
============= ============= ============ ============
Net income per common
and equivalent share $ 0.22 $ 0.13 $ 0.56 $ 0.36
============= ============= ============ ============
Weighted average shares outstanding 28,821 28,798 28,676 28,654
============= ============= ============ ============
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRANSACTION SYSTEMS ARCHITECTS, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
For the nine months ended June 30, 1997
(unaudited and in thousands)
Class A Class B Additional Accumulated
Common Common Paid-in Translation AccumulatedTreasury
Stock Stock Capital Adjustments Deficit Stock Total
-------- ------- --------- --------------------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, September 30, 1996
as previously reported $ 119 $ 11 $ 96,062 $ (236) $ (19,494)$ (12)$ 76,450
Adjustment for Regency Voice Systems and
related entities pooling of interests 8 (153) (128) (273)
-------- ------- --------- --------- --------- -------- --------
Balance, September 30, 1996
as restated 127 11 95,909 (236) (19,622) (12) 76,177
Adjustment for Open Systems Solutions,
Inc. pooling of interests 1 5 (176) (170)
Distribution to owners of Regency
Voice Systems and related entities (3,306) (3,306)
Issuance of Class A Common Stock 1 581 582
Exercise of stock options 938 938
Tax benefit of stock options exercised 1,780 1,780
Sale of stock options 3,086 3,086
Net Income 16,635 16,635
Translation adjustments 339 339
-------- ------- --------- --------- --------- -------- --------
Balance, June 30, 1997 $ 129 $ 11 $ 102,299 $ 103 $ (6,469)$ (12)$ 96,061
======== ======= ========= ========= ========= ======== ========
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
TRANSACTION SYSTEMS ARCHITECTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in thousands)
Nine Months Ended June 30,
---------------------------
1997 1996
---------- ---------
Cash flows from operating activities:
Net income $ 16,635 $ 10,770
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 4,006 3,230
Amortization 3,392 4,384
Increase in receivables, net (11,263) (7,949)
(Increase) decrease in other current assets 1,802 (537)
Decrease in installment receivables 318 476
Increase in other assets (3,202) (924)
Increase (decrease) in accounts payable (1,349) 545
Decrease in accrued employee compensation (1,972) (884)
Increase (decrease) in accrued liabilities 2,431 (1,771)
Decrease in income tax liabilities 3,535 1,415
Increase (decrease) in deferred revenue 6,597 (241)
--------- ----------
Net cash provided by operating activities 20,930 8,514
--------- ----------
Cash flows from investing activities:
Purchases of property and equipment (4,918) (5,210)
Purchases of software and distribution rights (4,312) (1,926)
Acquisiton of businesses, net of cash acquired (2,422) (5,196)
Additions to investment and notes receivable (3,886) (7,276)
Proceeds from notes receivable repayments 4,180 -
--------- ----------
Net cash used in investing activities (11,358) (19,608)
--------- ----------
Cash flows from financing activities:
Proceeds from issuance of Class A Common Stock 582 162
Purchase of Treasury Stock - 4
Proceeds from sale and exercise of stock options 4,021 818
Distribution to RVS owners (3,306) (2,037)
Proceeds from long-term debt - 182
Payments of long-term debt (934) (20)
Payments on capital lease obligations (85) (341)
--------- ----------
Net cash provided by (used in)
financing activities 278 (1,232)
--------- ----------
Effect of exchange rate fluctuations on cash (22) (181)
--------- ----------
Increase (decrease) in cash and cash equivalents 9,828 (12,507)
Cash and cash equivalents, beginning of period 32,751 36,235
--------- ----------
Cash and cash equivalents, end of period $ 42,579 $ 23,728
========= ==========
See notes to condensed consolidated financial statements.
<PAGE>
TRANSACTION SYSTEMS ARCHITECTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Consolidated Financial Statements
The condensed consolidated financial statements at June 30, 1997 and for the
three and nine months ended June 30, 1997 and 1996 are unaudited and reflect all
adjustments (consisting only of normal recurring adjustments) which are, in the
opinion of management, necessary for a fair presentation of the financial
position and operating results for the interim periods. The condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto, together with management's
discussion and analysis of financial condition and results of operations,
contained in the Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1996. The results of operations for the three and nine months
ended June 30, 1997 are not necessarily indicative of the results for the entire
fiscal year ending September 30, 1997.
The condensed consolidated financial statements include all domestic and foreign
subsidiaries which are more than 50% owned and controlled. Investments in
companies less than 20% owned are carried at cost.
2. Net Income Per Common and Equivalent Share
Net income per common and common equivalent share is determined by dividing net
income by the weighted average number of shares of common stock and dilutive
common equivalent shares outstanding during each period using the treasury stock
method.
In March 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128 "Earnings Per Share" (SFAS No. 128),
which specifies the computation, presentation and disclosure requirements for
earnings per share. SFAS No. 128 is effective for periods ending after December
15, 1997 and requires retroactive restatement of prior periods earnings per
share. The statement replaces the "primary earnings per share" calculation with
a "basic earnings per share" and redefines the "dilutive earnings per share"
computation. Adoption of the statement is not expected to have a material effect
on the Company's reported income per share.
3. Stock Split
On June 7, 1996, the Company's Board of Directors authorized a two-for-one stock
split effected in the form of a 100% stock dividend to be distributed on July 1,
1996 to shareholders of record on June 17, 1996. All references in the condensed
consolidated financial statements to number of shares and per share amounts have
been restated to retroactively reflect the stock split.
4. Acquisitions
On May 13, 1997, the Company completed the acquisition of Regency Voice Systems,
Inc. and related entities (RVS). RVS develops, markets and supports financial
software products and related services including interactive voice response and
PC-banking products for financial institutions. Owners of RVS received 1,615,383
shares of TSA Class A Common Stock in exchange for 100% of RVS's outstanding
securities. The exchange was accounted for as a pooling of interests. The
accompanying historical condensed consolidated financial statements have been
restated to reflect the results of operations of RVS.
RVS was taxed primarily as a Partnership and, accordingly, taxable income was
included in the personal tax of RVS owners who were responsible for the payment
of taxes thereof. Pro forma net income and net income per common and equivalent
share on the accompanying condensed statement of operations reflects a pro forma
tax provision for combined federal and state income taxes to report income taxes
on the basis of which they will be reported in future periods.
On October 8, 1996, the Company completed the acquisition of Open Systems
Solutions, Inc. (OSSI). Stockholders of OSSI received 209,993 shares of TSA
Class A Common Stock in exchange for 100% of OSSI's common stock. The stock
exchange was accounted for as a pooling of interests. OSSI's results of
operations prior to the acquisition were not material and the condensed
consolidated financial statements have not been restated to reflect this
acquisition.
5. Investment and Notes Receivable
In January 1996, the Company entered into a transaction with Insession, Inc.
(Insession) whereby the Company acquired a 7.5% minority interest in Insession
for $1.5 million. In addition, since January 1996, the Company loaned Insession
$5.0 million under promissory notes of which Insession repaid the Company
$500,000 in June 1997. The promissory notes bear an interest rate of prime plus
0.25%, and are payable in January 1999 ($1.0 million), January 2000 ($1.0
million) and January 2001 ($1.5 million). The remaining $1.0 million of
promissory notes are payable upon demand. The promissory notes are secured by
future royalties owed by the Company to Insession.
In March 1997, the Company revised the terms of the line of credit and purchase
option agreement it has with U.S. Processing, Inc. (USPI). Under the terms of
the revised agreement, the Company received $3.6 million as repayment of
advances made under the previous line of credit. In addition, the Company
converted $1.0 million of prior advances under the line of credit into a 19.9%
ownership interest in USPI. The revised line of credit provides USPI with the
ability to borrow $4.5 million from the Company. As of June 30, 1997, borrowings
under the revised line of credit totaled $825,000.
<PAGE>
<TABLE>
<CAPTION>
TRANSACTION SYSTEMS ARCHITECTS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
The following table sets forth certain financial data and the percentage of total revenues of the Company, as restated for RVS,
for the periods indicated:
Three Months Ended June 30, Nine Months Ended June 30,
------------------------------------------- -----------------------------------------
1997 1996 1997 1996
------------------------------------------- -----------------------------------------
% of % of % of % of
Amount Revenue Amount Revenue Amount Revenue Amount Revenue
--------- --------- ------------------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Software license fees $ 31,186 56.5% $ 21,545 50.2% $ 89,504 56.5% $ 60,042 50.5 %
Maintenance fees 10,746 19.5 9,173 21.4 31,031 19.6 26,042 21.9
Services 12,395 22.5 11,206 26.1 35,745 22.6 29,427 24.8
Hardware, net 881 1.6 977 2.3 2,218 1.4 3,279 2.8
--------- -------- --------- --------- -------- -------- -------- --------
Total revenues 55,208 100.0 42,901 100.0 158,498 100.0 118,790 100.0
--------- -------- ---------- --------- -------- -------- --------- -------
Expenses:
Cost of software license fees:
Software costs 6,494 11.8 5,292 12.3 18,413 11.6 14,224 12.0
Amortization of purchased software 0 0.0 783 1.8 801 0.5 2,356 2.0
Cost of maintenance and services 13,038 23.6 10,969 25.6 38,055 24.0 29,481 24.8
Research and development 4,618 8.4 3,499 8.2 13,321 8.4 10,967 9.2
Selling and marketing 12,368 22.4 8,570 20.0 34,967 22.1 25,192 21.2
General and administrative:
General and administrative costs 8,814 16.0 7,589 17.7 25,882 16.3 20,195 17.0
Amortization of goodwill and
purchased intangibles 210 0.4 157 0.4 664 0.4 452 0.4
--------- -------- --------- -------- -------- --------- --------- -------
Total expenses 45,542 82.5 36,859 85.9 132,103 83.3 102,867 86.6
--------- -------- --------- -------- -------- --------- --------- ------
Operating income 9,666 17.5 6,042 14.1 26,395 16.7 15,923 13.4
--------- -------- --------- -------- ---------- --------- --------- ------
Other income (expense):
Interest income 557 1.0 442 1.0 1,497 0.9 1,587 1.3
Interest expense (55) (0.1) (54) (0.1) (136) (0.1) (179) (0.2)
Other (38) (0.1) (99) (0.2) (582) (0.4) (180) (0.2)
--------- -------- --------- -------- -------- -------- --------- ------
Total other 464 0.8 289 0.7 779 0.5 1,228 1.0
--------- -------- --------- -------- -------- --------- --------- ------
Income before income taxes 10,130 18.3 6,331 14.8 27,174 17.1 17,151 14.4
Provision for income taxes (3,793) (6.9) (2,393) (5.6) (10,539) (6.6) (6,381) (5.4)
--------- -------- --------- -------- --------- --------- --------- ------
Net income 6,337 11.5 3,938 9.2 16,635 10.5 10,770 9.1
========= ======== ========= ======== ========= ======== ======= ======
Pro forma information:
Net income $ 6,337 11.5 % $ 3,665 8.5 % $ 16,128 10.2 % $ 10,225 8.6%
========= ======== ========= ======== ========= ======== ======== ======
</TABLE>
<PAGE>
Results of Operations (continued)
Revenues
Total revenues for the third quarter of fiscal 1997 increased 28.7% or $12.3
million over the comparable period in fiscal 1996. Of this increase, $9.6
million of the growth resulted from a 44.7% increase in software license fee
revenue, $1.2 million from a 10.6% increase in services revenue and $1.6 million
from a 17.1% increase in maintenance fee revenue.
Total revenues for the first three quarters of fiscal 1997 increased 33.4% or
$39.7 million over the comparable period in fiscal 1996. Of this increase, $29.4
million of the growth resulted from a 49.0% increase in software license fee
revenue, $6.3 million from a 21.5% increase in services revenue and $5.0 million
from a 19.2% increase in maintenance fee revenue.
The growth in software license fee revenue is the result of increased demand for
the Company's BASE24 products and continued growth of the installed base of
customers paying monthly license fee (MLF) revenue. Contributing to the strong
demand for the Company's products is the continued world-wide growth of
electronic payment transaction volume and the growing complexity of electronic
payment systems. MLF revenue was $8.6 million in the third quarter of fiscal
1997 compared to $6.0 million in the third quarter of fiscal 1996. MLF revenue
was $23.7 million in the first three quarters of fiscal 1997 compared to $16.0
million in the first three quarters of fiscal 1996.
The growth in services revenue for both the third quarter and first three
quarters of fiscal 1997 is the result of increased demand for technical and
project management services which is a direct result of the increased installed
base of the Company's BASE24 products.
The increase in maintenance fee revenue for both the third quarter and first
three quarters of fiscal 1997 is a result of the continued growth of the
installed base of the Company's BASE24 products.
Expenses
Total operating expenses for the third quarter of fiscal 1997 increased 23.6% or
$8.7 million over the comparable period in fiscal 1996. Total operating expenses
for the first three quarters of fiscal 1997 increased 28.4% or $29.2 million
over the comparable period in fiscal 1996. The primary reason for the overall
increase in operating expenses is the increase in staff required to support the
increased demand for the Company's products and services. Total staff (including
both employees and independent contractors) increased from 1,224 at June 30,
1996 to 1,508 at June 30, 1997.
The Company's operating margin for the third quarter of fiscal 1997 was 17.5% as
compared to 14.1% for the comparable period in fiscal 1996. Operating margin for
the first three quarters of fiscal 1997 was 16.7% as compared to 13.4% for the
first three quarters of fiscal 1996. These improvements are primarily due to the
impact of the growth in the Company's recurring revenues (MLF's, maintenance and
facilities management fees) and the conclusion in December 1996 of the software
amortization associated with the acquisition of Applied Communications, Inc.
(ACI) and Applied Communications Inc. Limited (ACIL) in December 1993.
The Company's gross margin (total revenues minus cost of software and cost of
maintenance and services) for the third quarter of fiscal 1997 was 64.6% as
compared to 60.3% for the comparable period in fiscal 1996. The gross margin for
the first three quarters of fiscal 1997 was 63.9% as compared to 61.2% for the
first three quarters of fiscal 1996. The improvements are principally due to the
conclusion of software amortization associated with the acquisitions of Applied
Communications, Inc. and Applied Communications Inc Limited.
EBITDA
The Company's earnings before interest expense, income taxes, depreciation and
amortization (EBITDA) increased from $8.6 million in the third quarter of fiscal
1996 to $11.8 million for the third quarter of fiscal 1997. EBITDA was $33.7
million for the first three quarters of fiscal 1997 as compared to $23.2 million
for the first three quarters of fiscal 1996. The increase in EBITDA can be
attributed to the continued growth in both recurring and non-recurring revenues
more than offsetting the growth in operating expenses. EBITDA is not intended to
represent cash flows for the periods.
Results of Operations (continued)
Pro Forma Income Taxes
RVS was taxed primarily as a Partnership and accordingly taxable income was
included in the personal tax of RVS owners who were responsible for the payment
of taxes thereof. Pro forma net income reflects a pro forma tax provision for
combined federal and state income taxes to report income taxes on the basis of
which they will be reported in future periods.
The effective pro forma tax rate for the third quarter of fiscal 1997 was 37.4%
as compared to 42.1% for the third quarter of fiscal 1996. The effective pro
forma tax rate for the first three quarters of fiscal 1997 was 40.6% as compared
to 40.3% for the first three quarters of fiscal 1996. The change in the
effective pro forma tax rate is principally the result of the amount of deferred
tax assets which were recognized in the first three quarters of 1997 as compared
to the first three quarters of fiscal 1996.
As of June 30, 1997, the Company has deferred tax assets of $21.9 million and
deferred tax liabilities of $0.6million. Each quarter, the Company evaluates its
historical operating results as well as its projections for the next 24 months
to determine the realizability of the deferred tax assets. This analysis
indicated that $5.6 million of the deferred tax assets were more likely than not
to be realized. Accordingly, the Company has recorded a valuation allowance of
$16.3 million as of June 30, 1997.
The Company intends to analyze the realizability of the net deferred tax assets
at each future reporting period. Such analysis may indicate that the realization
of various deferred tax benefits is more likely than not and, therefore, the
valuation reserve may be reduced.
Backlog
- -------
As of June 30, 1997 and 1996, the Company had non-recurring revenue backlog of
$25.5 million and $20.0 million, respectively, in software license fees and
$16.9 million and $11.0 million, respectively, in services. The Company includes
in its non-recurring revenue backlog all fees specified in contracts which have
been executed by the Company to the extent that the Company contemplates
recognition of the related revenue within one year. There can be no assurance
that the contracts included in non-recurring revenue backlog will actually
generate the specified revenues or that the actual revenues will be generated
within the one year period.
As of June 30, 1997 and 1996, the Company had recurring revenue backlog of $86.6
million and $65.0 million, respectively. The Company defines recurring revenue
backlog to be all monthly license fees, maintenance fees and facilities
management fees specified in contracts which have been executed by the Company
and its customers to the extent that the Company contemplates recognition of the
related revenue within one year. There can be no assurance, however, that
contracts included in recurring revenue backlog will actually generate the
specified revenues.
Liquidity and Capital Resources
- -------------------------------
As of June 30, 1997, the Company had working capital of $56.5 million which
includes cash and cash equivalents of $42.6 million. The Company has a $10
million bank line of credit of which there are no borrowings outstanding. The
bank line of credit currently expires on August 31, 1997 and is expected to be
renewed through June 1998.
During the nine months ended June 30, 1997, the Company's cash flow from
operations amounted to $20.9 million and cash used in investing activities
amounted to $11.3 million. Of the $11.3 of cash used in investing activities,
$1.0 million consisted of advances to Insession under promissory notes and $2.9
consisted of advances to USPI under a line of credit. Insession repaid advances
of $500,000 during the third quarter of fiscal 1997 and USPI repaid advances of
$3.6 million during the second quarter of fiscal 1997.
In the normal course of business, the Company evaluates potential acquisitions
of complementary businesses, products or technologies. In October 1996, the
Company acquired 100% of OSSI in exchange for 209,993 shares of the Company's
Class A Common Stock. In May 1997, the Company acquired 100% of RVS in exchange
for 1,615,383 shares of the Company's Class A Common Stock.
Management believes that the Company's working capital, cash flow generated from
operations and borrowing capacity are sufficient to meet the Company's working
capital requirements for the foreseeable future.
<PAGE>
TRANSACTION SYSTEMS ARCHITECTS, INC.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27.00 Financial Data Schedule
(b) Reports on Form 8-K
Form 8-K dated May 20, 1997, under Item 2 , Acquisition or
Disposition of Assets, was filed with the Securities and
Exchange Commission reporting the Stock Exchange Agreement
between the Company and Regency Voice Systems, Inc. and
related entities.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: August 13, 1997
TRANSACTION SYSTEMS ARCHITECTS, INC
(Registrant)
/s/Dwight G. Hanson
-----------------------------------.
Dwight G. Hanson
Principal Accounting Officer
<PAGE>
TRANSACTION SYSTEMS ARCHITECTS, INC.
INDEX TO EXHIBITS
Exhibit
Number Description
27.00 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> JUN-30-1997
<CASH> 42,579
<SECURITIES> 0
<RECEIVABLES> 62,401
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 112,869
<PP&E> 29,672
<DEPRECIATION> 15,000
<TOTAL-ASSETS> 154,160
<CURRENT-LIABILITIES> 56,334
<BONDS> 0
0
0
<COMMON> 140
<OTHER-SE> 95,921
<TOTAL-LIABILITY-AND-EQUITY> 154,160
<SALES> 158,498
<TOTAL-REVENUES> 158,498
<CGS> 57,269
<TOTAL-COSTS> 132,103
<OTHER-EXPENSES> (915)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 136
<INCOME-PRETAX> 27,174
<INCOME-TAX> 10,539
<INCOME-CONTINUING> 16,635
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,635
<EPS-PRIMARY> .56
<EPS-DILUTED> .56
</TABLE>
