<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): October 16, 1997
HNC SOFTWARE INC.
(Exact name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
0-26146 33-0248788
(Commission File Number) (I.R.S. Employer Identification Number)
5930 Cornerstone Court West, San Diego, CA 92121
(Address of Principal Executive Offices, Including Zip Code)
(619) 546-8877
(Registrant's Telephone Number, Including Area Code)
<PAGE> 2
ITEM 5: OTHER EVENTS.
The following information is being filed in order that it may be incorporated by
reference in the Registrant's definitive proxy statement for its Special Meeting
of Stockholders now scheduled to be held on November 25, 1997. The fact that the
Registrant is filing this quarterly financial information does not indicate that
future quarterly information will be filed in advance of filing a Report on Form
10-Q for any subsequent quarter.
NEWS RELEASE
HNC REPORTS RESULTS FOR THE THIRD QUARTER
OF FISCAL YEAR 1997
SAN DIEGO, CA -- OCTOBER 16, 1997 -- HNC Software Inc. (NASDAQ: HNCS)
today reported financial results for its third fiscal quarter of 1997, which
ended September 30, 1997. Revenues in the third quarter of 1997 were $23.2
million, a 59% increase over revenues of $14.6 million in the third quarter of
1996. Income before taxes was $4.7 million in the third quarter of 1997, an
increase of 141% compared to $1.9 million in the third quarter of 1996 (after
acquisition expenses of $544,000). Net income in the third quarter of 1997 was
$3.0 million compared to $1.4 million in the third quarter of 1996. Earnings per
share in the third quarter of 1997 were $0.14 compared to $0.07 per share in the
third quarter of 1996 (after acquisition expenses of $544,000) or $0.08 per
share (excluding acquisition expenses of $544,000 and fully taxed).
2
<PAGE> 3
<TABLE>
THREE MONTHS ENDING SEPTEMBER 30,
%INCR./
1997 1996 (DECR.)
------- ------- -------
<S> <C> <C> <C>
Revenue $23,213 $14,603 59%
Operating income 4,169 1,574 165%
Operating income excluding
acquisition expenses 4,169 2,118 97%
EPS excluding acquisition expenses
and fully taxed (1) $ 0.14 $ 0.08 75%
As reported $ 0.14 $ 0.07 100%
</TABLE>
- ----------
(1) Excluded acquisition expenses of $544,000 incurred in connection with the
acquisition of Risk Data Corporation and fully taxed.
Revenues for the nine months of 1997 were $62.7 million, an increase of
69% over revenues of $37.1 million for the nine months of 1996. Income before
taxes was $12.1 million for the nine months of 1997 compared to $2.8 million for
the nine months of 1996 (after acquisition expenses of $643,000). Net income was
$7.6 million for the nine months of 1997 compared to $1.1 million for the nine
months of 1996. Earnings per share were $0.37 for the nine months of 1997
compared to $0.05 per share for the nine months of 1996 (after acquisition
expenses of $643,000) or $0.11 (excluding acquisition costs of $643,000 and
fully taxed).
<TABLE>
NINE MONTHS ENDING SEPTEMBER 30,
%INCR./
1997 1996 (DECR.)
------- ------- ------
<S> <C> <C> <C>
Revenue $62,683 $37,058 69%
Operating income 10,694 1,556 587%
Operating income excluding
acquisition expenses 10,694 2,199 386%
EPS excluding acquisition expenses
and fully taxed (1) $ 0.37 $ 0.11 236%
As reported $ 0.37 $ 0.05 640%
</TABLE>
- ----------
(1) Excluded acquisition expenses of $544,000 incurred in connection with the
acquisition of Risk Data Corporation and $99,000 for the terminated CRMA
acquisition and fully taxed.
3
<PAGE> 4
Cash and investments increased $6.3 million to $40.6 million at
September 30, 1997 from $34.2 million at December 31, 1996.
HNC Software Inc., with headquarters in San Diego, California, is
a leader in the application of neural network technology in client/server
environments. The company develops, markets, integrates, and supports advanced
decision software based on computational intelligence. HNC provides practical
solutions in the areas of payment systems, financial services, retail, insurance
information, data mining and internet commerce.
The latest news and information about the Company can be found on the
HNC Software World Wide Web site: http//www.hncs.com or can be accessed by
calling our Stockholder Information line at 1-800-396-8052.
4
<PAGE> 5
HNC SOFTWARE INC.
CONSOLIDATED BALANCE SHEET
(in thousands, except per share data)
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- ------------
(unaudited)
<S> <C> <C>
Current Assets:
Cash, cash equivalents and short-term investments $ 22,404 $ 14,870
Trade accounts receivable, net 25,989 18,832
Current portion of deferred income taxes 6,668 6,400
Other current assets 3,302 2,505
------------- ------------
Total current assets 58,363 42,607
Property and equipment, net 9,664 5,966
Intangible assets, net 1,543 2,264
Deferred income taxes, less current portion 19,754 22,966
Other assets 1,081 1,041
Long-term investments, available for sale 18,157 19,375
------------- ------------
108,562 94,219
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,543 $ 3,270
Accrued liabilities 6,101 4,058
Deferred revenue 2,611 3,377
Other current liabilities 226 418
------------- ------------
Total current liabilities 13,481 11,123
------------- ------------
Deferred revenue, less current portion 114 196
------------- ------------
Other long-term liabilities 246 487
------------- ------------
Stockholders' equity:
Common stock, $0.001 par value - 50,000 shares authorized:
19,540 and 19,126 shares issued and outstanding,
respectively 20 19
Paid in capital 88,218 83,554
Foreign currency translation adjustment 40 54
Unrealized gain (loss) on investments 1 (59)
Retained earnings (accumulated deficit) 6,442 (1,155)
------------- ------------
Total stockholders' equity 94,721 82,413
------------- ------------
$ 108,562 $ 94,219
============= ============
</TABLE>
5
<PAGE> 6
HNC SOFTWARE INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------------------- ------------------------------------
Sept. 30, 1997 Sept. 30, 1996 Sept. 30, 1997 Sept. 30, 1996
--------------- -------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Revenues:
Software license and installation $ 21,542 $ 11,819 $ 56,481 $ 28,244
Contracts and other 1,671 2,784 6,202 8,814
--------------- -------------
Total revenues 23,213 14,603 62,683 37,058
--------------- ------------- --------------- --------------
Operating expenses:
Software license and installation 4,494 2,909 11,939 8,155
Contracts and other 1,111 1,860 4,415 5,869
Research and development 5,834 3,614 14,882 9,173
Sales and marketing 5,365 2,774 14,482 7,595
General and administrative 2,240 1,328 6,271 4,067
Acquisition expenses -- 544 - 643
--------------- ------------- --------------- --------------
Total operating expenses 19,044 13,029 51,989 35,502
--------------- ------------- --------------- --------------
Operating income 4,169 1,574 10,694 1,556
Other income, net 523 371 1,365 1,203
-------------- ------------- --------------- --------------
Income before income tax provision 4,692 1,945 12,059 2,759
Income tax provision 1,736 516 4,462 1,691
-------------- ------------- -------------- --------------
Net income $ 2,956 $ 1,429 $ 7,597 $ 1,068
=============== ============= =============== ==============
Net income per share $ 0.14 $ 0.07 $ 0.37 $ 0.05
=============== ============= =============== ==============
Shares used in computing
net income per share 20,889 20,356 20,572 20,331
=============== ============= =============== ==============
</TABLE>
6
<PAGE> 7
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.
Date: October 24, 1997
HNC SOFTWARE INC.
By:/s/ RAYMOND V. THOMAS
------------------------
Raymond V. Thomas
Vice President, Finance &
Administration and
Chief Financial Officer
7
