<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20548
FORM 10-Q/A
(AMENDMENT NO. 1)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
[_] 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: 0-25674
CBT GROUP PUBLIC LIMITED COMPANY
(Exact name of registrant as specified in its charter)
Republic of Ireland Not Applicable
----------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
900 Chesapeake Drive
Redwood City, California 94063
(Address of principal executive offices, including zip code)
(650) 817-5900
(Registrant's telephone number, including area code)
Indicate by check mark whether 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 Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past ninety (90) days.
Yes [X] No [_]
The number of American Depositary Shares (issued or issuable in exchange for
Registrant's issued and outstanding Ordinary Shares) outstanding as of July 29,
1998 was 43,881,451.
1
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CBT GROUP PUBLIC LIMITED COMPANY
TABLE OF CONTENTS
Page
Number
------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
December 31, 1997 and as of June 30, 1998 3
Condensed Consolidated Statements of
Operations for the three and six month
periods ended June 30, 1997 and 1998 4
Condensed Consolidated Statements of Cash
Flows for the six month periods ended June
30, 1997 and 1998 5
Notes to Condensed Consolidated Financial
Statements 6
This quarterly report on form 10-Q/A ("Form 10-Q/A") is being filed as
Amendment No. 1 to the Registrant's Quarterly Report on Form 10-Q filed
with the Securities and Exchange Commission on August 14, 1998 ("Form
10-Q") for the purpose of amending Item 1 to include additional
disclosure in the Notes to Condensed Consolidated Financial Statements.
2
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PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
CBT GROUP PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1997 1998
-------- --------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets
- --------------
Cash $ 35,506 $ 45,577
Short term investments 36,038 36,091
Accounts receivable, net 40,030 44,009
Inventories 615 1,021
Deferred tax assets, net 140 142
Prepaid expenses 4,198 8,458
-------- --------
Total Current assets 116,527 135,298
Intangible assets 5,600 4,878
Property and equipment, net 10,207 14,345
Investment 200 350
Deferred tax assets, net 342 47
Other assets 8,453 12,023
-------- --------
Total assets 141,329 166,941
======== ========
LIABILITIES AND SHAREHOLDERS EQUITY
Current Liabilities
- -------------------
Borrowings under bank overdraft facility and overdrafts 13 13
Accounts Payable 4,820 6,296
Accrued payroll and related expenses 6,411 3,785
Other accrued liabilities 16,715 17,491
Deferred revenues 4,551 1,075
-------- --------
Total Current Liabilities 32,510 28,660
Non Current Liabilities
- -----------------------
Other accrued liabilities 519 474
Minority equity interest 622 622
-------- --------
Total Non Current Liabilities 1,141 1,096
Shareholders' Equity
- --------------------
Ordinary Shares: 30,000,000 shares authorized , IR37.5p par 6,372 6,571
value, at December 31, 1997 and 120,0000 shares
authorized, par value IR9.375p at June 30, 1998;
Issued and outstanding:10,511,190 shares at December 31,
1997 and 43,249,900 shares at June 30, 1998
Additional paid-in-capital 97,868 115,745
Accumulated surplus 2,984 14,425
Deferred Compensation (112) -
Treasury Stock (2) (2)
Cumulative translation adjustment 568 446
-------- --------
Total Shareholders' equity 107,678 137,185
-------- --------
Total Liabilities and shareholders' equity 141,329 166,941
======== ========
</TABLE>
Note: The condensed consolidated balance sheet at December 31, 1997 has been
derived from the audited financial statements at that date and has been restated
to reflect the acquisition of The ForeFront Group, Inc (see note 2 below). In
addition, the balance sheet does not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
3
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CBT GROUP PLC
Condensed Consolidated Statements of Operations
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Six Months
-------------------------------- ----------------------------------
Ended June 30, Ended June 30,
-------------------------------- ----------------------------------
1997 1998 1997 1998
--------------- --------------- ---------------- ----------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues $29,755 $44,852 $56,482 $84,781
Cost of revenues 5,173 6,697 9,854 12,641
------- ------- ------- -------
Gross profit 24,582 38,155 46,628 72,140
Operating expenses:
Research and development 4,731 6,604 9,162 12,994
Sales and marketing 13,415 18,622 26,243 35,490
General and administrative 3,616 3,594 5,964 6,808
Acquired research and development 447 -- 447 --
Cost of acquisitions -- 5,505 926 5,505
------- ------- ------- -------
Total operating expenses 22,209 34,325 42,742 60,797
------- ------- ------- -------
Income from operations 2,373 3,830 3,886 11,343
Other income, net 665 936 1,220 1,903
------- ------- ------- -------
Income before provision for income taxes 3,038 4,766 5,106 13,246
Provision for income taxes 817 667 1,336 1,805
------- ------- ------- -------
Net income 2,221 4,099 3,770 11,441
======= ======= ======= =======
Net income per equivalent ADS (1) - Basic $0.06 $0.09 $0.09 $0.27
======= ======= ======= =======
ADSs used in computing net income per 39,923 43,283 39,690 42,939
equivalent ADS - Basic ======= ======= ======= =======
Net income per equivalent ADS (1) - Diluted $0.05 $0.09 $0.09 $0.25
======= ======= ======= =======
ADSs used in computing net income per equivalent 43,938 46,357 43,757 46,080
======= ======= ======= =======
</TABLE>
(1) Net income per equivalent ADS gives effect to the two-for-one share split
of Registrants' ADSs effected March 1998. Prior periods have been restated
to give effect to such split.
4
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CBT GROUP PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
(dollars in thousands)
Six Months Ended June 30,
1997 1998
----------- -----------
(Unaudited) (Unaudited)
CASH FLOW FROM OPERATING ACTIVITIES
Net income $ 3,770 $11,441
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 1,671 2,958
Loss on Disposal of Assets 70
Accrued interest on short-term investments (222) 236
Compensation Expense 51 112
Changes in operating assets and Liabilities:
Accounts receivable (3,928) (4,114)
Inventories (150) (410)
Deferred Tax Assets -- 293
Non Cash acquired R&D costs 447 --
Prepaid expenses and other assets (3,285) (7,885)
Accounts payable (391) 1,541
Accrued payroll and related expenses
and other accrued liabilities 2,338 (1,784)
Deferred revenues (2,251) (3,455)
------- -------
Net cash provided by operating activities (1,950) (997)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (2,096) (6,499)
Payments to acquire short-term investments (248) (50,330)
Proceeds from short-term investments -- 50,041
Proceeds from disposal of property and equipment -- 20
Payments to acquire Investments -- (150)
------ ------
Net cash used in investing activities (2,344) (6,918)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of bank loans (794) --
Repayments under bank overdraft facility (138) --
Proceeds from issuance of preferred shares
in subsidiary 605 --
Proceeds from issuance of ordinary shares,
net 5,106 18,076
----- ------
Net cash (used in) provided by financing
activities 4,779 18,076
----- ------
Effect of exchange rate changes on cash (80) (90)
----- ------
Net (decrease) increase in cash 405 10,071
Cash at beginning of period 17,560 35,506
------- -------
Cash at end of period $17,965 $45,577
======= =======
5
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CBT GROUP PLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 INTERIM CONSOLIDATED FINANCIAL STATEMENTS
These interim consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q. Accordingly, they do not
include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals),
considered necessary for a fair presentation of financial position, results of
operations and cash flows at the dates and for the periods presented have been
included. The interim financial information herein is not necessarily
indicative of results for any future period.
NOTE 2 ACQUISITION OF THE FOREFRONT GROUP, INC
On May 29, 1998, CBT Group PLC ("CBT," or the "Company") completed the
acquisition of The ForeFront Group, Inc ("ForeFront"). The Company issued
approximately 2.2 million ADSs in connection with the acquisition and assumed
options, warrants and other rights to acquire ForeFront common stock that can
be exercised for approximately 1.0 million ADSs. The transaction is being
accounted for as a "pooling of interests" in accordance with U.S. generally
accepted accounting principles.
The results of operations of the previously separate companies from the
beginning of the fiscal year to the end of the interim period nearest
May 29, 1998 are as follows:
-----------------------------------------------------------------------
Six Months Ended
-----------------------------------------------------------------------
June 30, 1998
-----------------------------------------------------------------------
CBT ForeFront Combined
--- --------- --------
-----------------------------------------------------------------------
(dollars in thousands)
-----------------------------------------------------------------------
Revenue $72,677 $12,104 $84,781
-----------------------------------------------------------------------
Net Income $14,497 $(3,056) $11,441
-----------------------------------------------------------------------
Change in Shareholders Equity $132,041 $5,144 $137,185
-----------------------------------------------------------------------
CBT eliminates all intercompany transactions on consolidation. There were no
intercompanmy transactions between the company and ForeFront.
Reconciliation of revenue and earnings previously reported by CBT, based on
CBT's separate results before restating for the ForeFront pooling, to the
combined amounts currently presented in the condensed financial statements and
notes to the condensed financial statements are as follows:
------------------------------------------------------------------
Three Months Ended Six Months Ended
------------------------------------------------------------------
June 30, 1997 June 30, 1997
------------------------------------------------------------------
CBT ForeFront Combined CBT ForeFront Combined
------------------------------------------------------------------
(dollars in thousands) (dollars in thousands)
-------------------------------------------------------------------
------------------------------------------------------------------------------
Revenue $25,589 $4,166 $29,755 $48,164 $8,318 $56,482
------------------------------------------------------------------------------
Net Income $4,627 $(2,406) $2,221 $7,563 $(3,793) $3,770
------------------------------------------------------------------------------
NOTE 3 SHARE SPLIT
On March 9, 1998 the Company effected a two-for-one split of its issued and
outstanding ADSs. Subsequent thereto, the Company's shareholders approved a
proposal at the Company's 1998 Annual General Meeting to subdivide each of the
Ordinary Shares of IR37.5p into four Ordinary Shares of IR9.375p (the "Ordinary
Share Split"). As a consequence of the Ordinary Share Split, effective May 22,
1998 each ADS represents and is exchangeable for one Ordinary Share (the "Ratio
Change"). Aside from the Ratio Change, the Ordinary Share Split had no effect
on the ADSs and had no effect on the number of ADSs outstanding.
NOTE 4 CHANGES IN ACCOUNTING PRINCIPLES
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income." This Statement
requires all items recognized under accounting standards as components of
comprehensive earnings be reported in an annual financial statement that is
displayed with the same prominence as other financial statements. This
Statement also requires that an entity classify items of other comprehensive
earnings by their nature in an annual financial statement. For example, other
comprehensive income may include foreign currency translation adjustments,
minimum pension liability adjustments, and other unrealized gains and losses on
marketable securities classified as available-for-sale. Annual financial
statements for prior periods will be reclassified, as required.
6
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The Company's total comprehensive earnings were as follows:
Six months ended
June 30,
1997 1998
----------- -----------
(dollars in thousands) (Unaudited) (Unaudited)
Net Income $3,770 $11,441
Other Comprehensive Income (123) (122)
------ -------
Total Comprehensive Income 3,647 11,319
====== =======
7
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
CBT GROUP PLC
Date: April 6, 1998 By: /s/ William G. McCabe
----------------------
William G. McCabe
Chairman of the Board
Date: April 6, 1998 By: /s/ Gregory M. Priest
----------------------
Gregory M. Priest
Chief Executive Officer and President
8
