<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED MARCH 31, 1999 COMMISSION FILE NUMBER 0-26358
COMPUTRON SOFTWARE, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-2966911
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
301 ROUTE 17 NORTH
RUTHERFORD, NEW JERSEY 07070
(Address of principal executive offices) (Zip Code)
(201) 935-3400
(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 |_|
Number of shares outstanding of the issuer's common stock as of April 9, 1999
Class Number of Shares Outstanding
--------------------------------------- ----------------------------
Common Stock, par value $0.01 per share 23,913,557
<PAGE>
COMPUTRON SOFTWARE, INC.
INDEX
<TABLE>
<CAPTION>
Page
PART I FINANCIAL INFORMATION Number
------
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets
December 31, 1998 and March 31, 1999......................3
Consolidated Statements of Operations
Three months ended March 31, 1998 and 1999................4
Consolidated Statements of Comprehensive Loss
Three months ended March 31, 1998 and 1999................5
Consolidated Statements of Cash Flows
Three months ended March 31, 1998 and 1999................6
Notes to Consolidated Interim Financial Statements...........7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................10
PART II OTHER INFORMATION
Item 1. Legal Proceedings............................................24
Item 6. Exhibits and Reports on Form 8-K.............................24
SIGNATURES
Signatures...........................................................25
</TABLE>
<PAGE>
COMPUTRON SOFTWARE, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1998 1999
-------- --------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 4,009 $ 1,360
Restricted cash 4,856 546
Accounts receivable, net of allowance for doubtful accounts of $2,192
and $2,004 at December 31, 1998 and March 31, 1999, respectively 11,172 14,095
Prepaid expenses and other current assets 2,309 2,153
-------- --------
Total current assets 22,346 18,154
-------- --------
Equipment and leasehold improvements, at cost:
Computer and office equipment 12,641 12,797
Furniture and fixtures 1,510 1,470
Leasehold improvements 976 1,020
-------- --------
15,127 15,287
Less--accumulated depreciation and amortization 11,957 12,373
-------- --------
3,170 2,914
-------- --------
Capitalized software development costs, net of accumulated amortization
of $4,439 and $4,578 at December 31, 1998 and March 31, 1999, respectively 1,024 1,235
Goodwill, net of accumulated amortization of $1,607 and $1,740
at December 31, 1998 and March 31, 1999, respectively 1,291 1,058
Other assets 686 710
-------- --------
$ 28,517 $ 24,071
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current portion of long-term debt and capital lease obligations $ 1,685 $ 1,679
Short term borrowing -- 462
Accounts payable 4,513 4,029
Accrued expenses 8,503 8,216
Due to shareholders 4,404 --
Deferred revenue 9,558 11,079
-------- --------
Total current liabilities 28,663 25,465
-------- --------
Long-term liabilities:
Long-term debt and capital lease obligations, less current portion 2,229 1,811
Commitments and contingencies
Stockholders' deficit:
Preferred stock, $.01 par value, authorized 5,000
shares, no shares issued and outstanding -- --
Common stock, $.01 par value, authorized 50,000 shares;
23,913 and 23,914 shares outstanding at
December 31, 1998 and March 31, 1999, respectively 239 239
Additional paid-in capital 70,122 70,122
Accumulated deficit (72,059) (72,603)
Accumulated other comprehensive loss (677) (963)
-------- --------
Total stockholders' deficit (2,375) (3,205)
-------- --------
$ 28,517 $ 24,071
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
3
<PAGE>
COMPUTRON SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
1998 1999
-------- --------
<S> <C> <C>
Revenues:
License fees $ 4,019 $ 3,517
Services 11,004 12,270
-------- --------
Total revenues 15,023 15,787
-------- --------
Operating expenses:
Cost of license fees 1,014 662
Cost of services 7,422 6,828
Sales and marketing 4,355 3,270
Research and development 2,902 2,071
General and administrative 3,645 3,417
-------- --------
Total operating expenses 19,338 16,248
-------- --------
Operating loss (4,315) (461)
-------- --------
Other income (expense):
Costs related to class action litigation (22) --
Interest income 128 38
Interest expense (12) (105)
Other income (expense) 16 (16)
-------- --------
Other income (expense), net 110 (83)
-------- --------
Net loss $ (4,205) $ (544)
======== ========
Basic and diluted net loss per common share $ (0.18) $ (0.02)
======== ========
Weighted average basic and diluted common shares outstanding 23,777 23,914
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements
4
<PAGE>
COMPUTRON SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
------------------------
March 31,
------------------------
1998 1999
------- -------
<S> <C> <C>
Net loss $(4,205) $ (544)
Translation adjustment (180) (286)
------- -------
Comprehensive loss $(4,385) $ (830)
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
5
<PAGE>
COMPUTRON SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1998 1999
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(4,205) $ (544)
Adjustments to reconcile net loss to net cash flows used in operating activities
Depreciation and amortization 925 754
Provision for doubtful accounts -- 68
Loss on disposal of equipment and leasehold improvements -- 57
Changes in current assets and liabilities
Restricted cash (203) 4,296
Accounts receivable (1,115) (3,167)
Prepaid expenses and other current assets 84 116
Accounts payable and accrued expenses 333 (372)
Due to shareholders -- (4,404)
Deferred revenue 545 1,564
------- -------
Net cash flows used in operating activities (3,636) (1,632)
------- -------
Cash flows from investing activities:
Other assets 271 (62)
Capitalized software development costs -- (350)
Purchase of equipment and leasehold improvements (1,072) (320)
Short-term investments (2) --
------- -------
Net cash flows used in investing activities (803) (732)
------- -------
Cash flows from financing activities:
Proceeds from exercise of stock options 1 --
Net borrowings from revolving line of credit -- 464
Proceeds from long term debt 5,000 --
Payments of long term debt and capital lease obligations (16) (426)
------- -------
Net cash flows provided by financing activities 4,985 38
------- -------
Foreign currency exchange rate effects (167) (323)
------- -------
Net increase (decrease) in cash and cash equivalents 379 (2,649)
Cash and cash equivalents, beginning of period 6,280 4,009
------- -------
Cash and cash equivalents, end of period $ 6,659 $ 1,360
======= =======
Supplemental disclosures of cash flow information
and noncash financing activities:
Cash paid during the period for -
Interest $ 1 $ 106
======= =======
Income taxes $ 20 $ 21
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
6
<PAGE>
COMPUTRON SOFTWARE, INC.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(1) OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES
The Company designs, develops, markets and supports client/server financial,
workflow, plant maintenance and archival data management software solutions to
manage mission-critical applications in large organizations operating across a
broad range of industries worldwide.
Basis of Presentation:
The accompanying consolidated financial statements include the accounts of
Computron Software, Inc. and its wholly owned foreign subsidiaries located in
Australia, Canada, France, Germany, Poland, Singapore, South Africa and the
United Kingdom (collectively, the "Company"). The unaudited consolidated
financial statements have been prepared by the Company in accordance with
generally accepted accounting principles and in the opinion of management,
contain all adjustments, consisting only of those of a normal recurring nature,
necessary for a fair presentation of these consolidated financial statements.
These consolidated financial statements should be read in conjunction with the
consolidated financial statements and related notes included in the Company's
1998 Annual Report on Form 10-K filed with the Securities and Exchange
Commission.
The results of operations for the three months ended March 31, 1999, are not
necessarily indicative of results to be expected for any future periods.
(a) REVENUE RECOGNITION
The Company recognizes revenue in accordance with Statement of Position 97-2
"Software Revenue Recognition" ("SOP 97-2"). Revenue from non-cancelable
software licenses is recognized when the license agreement has been signed,
delivery has occurred, the fee is fixed or determinable and collectibility is
probable. Post contract support (maintenance) fees are typically billed
separately and are recognized on a straight line basis over the life of the
applicable agreement. The Company recognizes service revenues from consulting
and implementation services, including training, provided by both its own
personnel and by third parties, upon performance of the services, pursuant to a
professional services agreement. When the Company enters into a license
agreement requiring development or significant customization of the software
products, the Company recognizes revenue relating to the agreement using
contract accounting. Anticipated losses, if any, are charged to operations in
the period such losses are determined.
(b) CASH AND CASH EQUIVALENTS
Cash equivalents are stated at cost, which approximates market, and consist of
short-term, highly liquid investments with original maturities of less than
three months.
<PAGE>
COMPUTRON SOFTWARE, INC.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(2) REVOLVING LINE OF CREDIT AND LONG-TERM DEBT
On March 31, 1998, the Company entered into a Loan and Security Agreement
("Agreement") which provides for maximum borrowings of up to $10 million. The
Agreement contains a revolving line of credit and a term loan. The term loan
provided for $5 million available in one drawdown which the Company borrowed on
the closing date. The term loan bears interest at prime rate (7.75% at March 31,
1999) plus 1.5%, and is repayable in 36 monthly installments beginning May 1,
1998. Under the revolving line of credit the Company currently has available the
lesser of $5 million or 85% of eligible receivables, as defined. Such available
amount is reduced further by a $0.6 million letter of credit outstanding at
March 31, 1999. The available amount under the revolving line of credit at March
31, 1999 was approximately $2.4 million.
Borrowings under the revolving line of credit bear interest at prime rate plus
1.25%. The Agreement provides for yearly fees as follows: (i) $111 in year one,
$86 in years two and three and (ii) an unused revolving line of credit fee of
.375% per annum. The Agreement is secured by substantially all domestic assets
of the Company together with a pledge of 65% of the stock of its foreign
subsidiaries, and contains certain financial restrictive covenants. The Company
was in compliance with the covenants as of March 31, 1999.
Effective March 8, 1999, the Company amended the Agreement ("Amended Agreement")
in order to increase amounts available under the term loan portion of the
facility by the lesser of $1 million or eligible maintenance revenue, as
defined, through September, 2001, to extend the termination date of the credit
facility to March 31, 2002, and to establish financial restrictive covenants for
1999.
Additional amounts under the Amended Agreement are available in as many as
two one-time borrowings of $500, and are subject to the limitation that the
total outstanding balance of term loans under the credit line may not exceed
50% of eligible maintenance revenues through March 2000, 40% of eligible
maintenance revenues from April 1, 2000 through March 31, 2001, and 30% of
eligible maintenance revenues from April 1, 2001 to September 30, 2001.
Additional term loans borrowed are repayable in equal monthly principal
installments from the date of borrowing to March 31, 2002. As of March 31,
1999, the amount available under the term loan was approximately $0.6 million.
(3) CONTINGENCIES
On March 6, 1998, the District Court issued a final order approving the
settlement of the class action securities litigation. The overall settlement
included consideration totaling $15 million for the benefit of class members,
including $6 million of consideration from the Company, and payments from
certain of its present and former officers and directors, its former auditors,
and the insurance companies that provided Computron with directors and officers
liability insurance. In return for the payments by the insurance companies, the
settlement also resolved a separate lawsuit brought by the Company against the
insurance companies. As its share of the settlement,
<PAGE>
COMPUTRON SOFTWARE, INC.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
the Company paid $1 million in cash, and issued one million shares of Common
Stock of the Company ("Settlement Stock"). The Company recorded a charge to
operations of $6 million during the quarter ended September 30, 1997, reflecting
the Company's share of the settlement costs, excluding legal fees.
The class members received a non-transferable right to resell the Settlement
Stock to a business trust formed by the Company at a price of $5.00 per share
during a period from December 1, 1998 to December 21, 1998 (the "Put Period").
The trust was capitalized by a contribution of $5 million in cash by the Company
in March 1998. During the Put Period, class members exercised the put with
respect to 881 shares of Settlement Stock. The right to put the remaining shares
of Settlement Stock automatically expired as of midnight on December 21, 1998.
Pursuant to the terms of the stipulation of settlement, the Company paid $4,404
during January 1999 in satisfaction of the timely claims made under the put, and
returned to the Company the remaining balance of the trust. Shares of Settlement
Stock that were not timely put according to the terms of the settlement remain
freely transferable.
Historically, the Company has been involved in other disputes and/or litigation
encountered in its normal course of business. The Company believes that the
ultimate outcome of these proceedings will not have a material adverse effect on
the Company's business, consolidated financial condition, results of operations
or cash flows.
(4) COMPREHENSIVE INCOME (LOSS)
Effective January 1, 1998 the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 130, "Reporting Comprehensive Income," a new accounting
rule on reporting comprehensive income (loss). SFAS No. 130 requires reporting
of comprehensive income (loss), which includes net income (loss) and all other
non-owner changes in equity (deficit) during a period.
(5) BASIC AND DILUTED NET LOSS PER COMMON SHARE
Basic and diluted net loss per common share is presented in accordance with SFAS
No. 128, "Earnings Per Share" ("SFAS No. 128"). Basic net loss per common share
is based on the weighted average number of shares of common stock outstanding
during the period. Diluted net loss per common share is the same as basic net
loss per common share since the effect of stock options, warrants and
contingently issuable shares in connection with the December 1997 private
placement of common stock and the Settlement Stock, as defined in Note 3, is
anti-dilutive for all periods presented.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
This Report contains statements of a forward-looking nature relating to future
events or the future financial performance of the Company. Investors are
cautioned that such statements are only predictions and that actual events or
results may differ materially. In evaluating such statements, investors should
specifically consider the various factors identified in this Report and in the
Company's 1998 Annual Report on Form 10-K filed with the Securities and Exchange
Commission which could cause actual results to differ materially from those
indicated by such forward-looking statements, including the matters set forth
under the caption "Certain Factors That May Affect Future Results and Financial
Condition and the Market Price of Securities" below.
The Company was founded in 1978 as a developer of custom financial software for
mission-critical applications in large organizations, primarily financial
institutions. In the early 1980's, the Company developed financial software for
legacy platforms and introduced sophisticated enterprise-wide financial
software. Identifying the need for client/server financial software applications
in the late 1980's, the Company commenced the re-architecture of its financial
software and began the development and deployment of new products, specifically
a workflow and document management product. In 1993, the Company introduced
Computron Financials and Computron Workflow, the client/server versions of its
financial and workflow products. Computron COOL was introduced in the latter
half of 1993. Since 1994, the Company has released versions of its products with
the capability to interoperate with popular RDBMS software. During the fourth
quarter of 1995, the Company acquired the rights to its Computron Yorvik
software.
In April and June 1996, respectively, the Company acquired the Financial
Services Division of Generale de Service Informatique (GSI) based in Paris,
France, and a portion of the business and assets of AT&T Istel and Co., GMBH, in
Essen, Germany. These operations primarily provide software products and
services in their respective countries.
The Company's revenues are derived from license fees and services. Revenue from
non-cancelable software licenses is recognized when the license agreement has
been signed, delivery has occurred, the fee is fixed or determinable and
collectibility is probable. Revenues for consulting and implementation services,
including training, are recognized upon performance of the services. When the
Company enters into a license agreement requiring development or significant
customization of the software products, the Company recognizes revenue relating
to the agreement using contract accounting. The Company's license agreements
generally do not provide a right of return. Historically, the Company's backlog
has not been substantial, since products are generally shipped as orders are
received.
The Company has experienced, and may in the future experience, significant
fluctuations in its quarterly and annual revenues and results of operations. The
Company believes that domestic and international operating results will continue
to fluctuate significantly in the future as a result of a variety of factors,
including the timing of revenue recognition related to significant license
<PAGE>
agreements, the lengthy sales cycle for the Company's products, the proportion
of revenues attributable to license fees versus services, the utilization of
third parties to perform services, the amount of revenue generated by resales of
third party software, changes in product mix, demand for the Company's products,
the size and timing of individual license transactions, the introduction of new
products and product enhancements by the Company or its competitors, changes in
customers' budgets, competitive conditions in the industry and general economic
conditions. For a description of certain factors which may affect the Company's
operating results, see "Potential for Significant Fluctuations in Operating
Results; Seasonality."
The Company incurred net losses of $31.8 million for 1996, $13.6 million for
1997 and $9.0 million for 1998, and reported a net loss of $0.5 million for the
three months ended March 31, 1999. As of March 31, 1999 the Company had an
accumulated deficit of $72.6 million. There can be no assurance that the Company
will be profitable in the future.
RESTRUCTURING COSTS
During its fiscal second quarter of 1998, the Company committed itself to a plan
whereby it eliminated 32 positions in the United States, which were rendered
redundant through a reengineering process, and eliminated 16 positions outside
the United States, which were servicing legacy products. Of the 48 positions
eliminated, all were terminated prior to December 31, 1998 except as follows:
six people resigned prior to being terminated and one position was terminated
subsequent to December 31, 1998. Accordingly, the Company recorded a net charge
to operations in 1998 totaling approximately $1.0 million ($1.3 million in the
second quarter of 1998, reduced in the third quarter of 1998 by $0.3 million for
anticipated savings attributable to resignations) reflecting the termination
costs of those personnel. As of December 31, 1998 the Company had incurred cash
outlays of $0.8 million. The remaining $0.2 million included in accrued expenses
was satisfied through cash outlays during the first quarter of 1999.
EURO CURRENCY
On January 1, 1999, certain countries of the European Union established fixed
conversion rates between their existing currencies and one common currency, the
euro. The euro will then trade on currency exchanges and may be used in business
transactions. Beginning in January 2002, new euro-denominated currencies will be
issued and the existing local currencies will be withdrawn from circulation by
July 1, 2002. The Company is in the process of arranging euro bank accounts for
the conversion to the euro currency, and is evaluating other systems and
business issues raised by the euro conversion. These issues include the need to
adapt computer and other business systems and equipment on its suite of
products. During 1998, the Company derived approximately 47.1% of its total
revenues outside the United States, a significant portion of which is in Europe.
The Company has not completed its assessment of the potential impact of the euro
conversion. However, at present, the Company believes the euro conversion will
not have a material effect on the Company's consolidated financial position or
results of operations.
YEAR 2000 COMPLIANCE
The efficient operation of the Company's business is dependent in part on its
information technology ("IT") systems (which include computer software programs
and operating systems) and its non-IT systems (process control and other systems
which include embedded technologies), collectively the "Internal Programs and
Systems". The Company has been evaluating its Internal Programs and Systems to
identify potential Year 2000 compliance problems, and has primarily conducted
these evaluations and assessments using the Company's information technology
personnel (Phase 1). These actions are necessary to ensure that the Internal
Programs and Systems will be Year 2000 compliant.
It is anticipated that modification or replacement of some of the Internal
Programs and Systems may be necessary to make such Programs and Systems Year
2000 compliant (Phase 2). The Company is also communicating with its suppliers,
domestically and abroad, and others to coordinate Year 2000 conversion. Based on
present information, the Company believes that it will be able to achieve such
Year 2000 compliance through a combination of modification of some existing
Internal Programs and Systems and the replacement of other Internal Programs and
Systems with new programs and systems that are already Year 2000 compliant by
June 30, 1999. However, there can be no assurance that these efforts will be
successful or that the systems of other companies on which the Company's
business relies will be timely converted.
<PAGE>
To date, costs incurred in evaluating its Internal Programs and Systems have
been less than $50,000, and anticipated costs necessary to complete such
evaluations, modifications and/or replacements are not expected to exceed
$100,000. Most costs incurred to achieve Year 2000 compliance, have, in fact,
been the same as those required as a normal part of technology upgrades, a
critical part of normal operations within a technology-based organization.
The Company has focused resources on the thorough review, testing, and
replacement, where necessary, of Internal Programs and Systems. The Company uses
its own software, which has already been Year 2000 certified, for all accounting
functions. Contingency plans are currently being developed, primarily focusing
on third-party deliverables and dependencies which may affect implementation of
identified anomalies.
With respect to software programs which the Company licenses externally to
customers (collectively, the "External Programs"), the most recent versions of
the Company's External Programs have been Year 2000 certified. The Company has
notified its customer base that the older versions of the External Programs may
not be Year 2000 compliant, and the Company encouraged these customers to
upgrade to its most recent versions of the External Programs. In addition,
continuing periodic communication with customers is scheduled for the remainder
of 1999, focused on providing assistance and education to customers as they
transition to the new century, minimizing any possibility of anomalous
conditions. Costs incurred to date to evaluate and identify potential Year 2000
compliance problems contained in the Company's External Programs have not been
material, and the Company expects that future expenses associated with achieving
Year 2000 compliance will not have a material effect on the consolidated
financial results in 1999 and 2000.
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain operating
data as a percentage of total revenues:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------
1998 1999
------ ------
<S> <C> <C>
Revenues:
License fees ............................... 26.8% 22.3%
Services ................................... 73.2 77.7
------ ------
Total revenues .......................... 100.0 100.0
Operating expenses:
Cost of license fees ....................... 6.7 4.2
Cost of services ........................... 49.4 43.3
Sales and marketing ........................ 29.0 20.7
Research and development ................... 19.3 13.1
General and administrative ................. 24.3 21.6
------ ------
Total operating expenses ................ 128.7 102.9
------ ------
Operating loss ............................... (28.7) (2.9)
Other income (expense) ....................... .7 (0.5)
====== ======
Net loss ..................................... (28.0)% (3.4)%
====== ======
</TABLE>
TOTAL REVENUES
Total revenues increased 5.1% for the three months ended March 31, 1999,
compared to the three months ended March 31, 1998. The increase was mainly
attributable to an increase in services revenue of $1.3 million, partially
offset by a decrease in hardware sales.
The Company derived approximately $7.9 million and $6.4 million or 52.5% and
40.7%, respectively, of its total revenues, from customers outside of the United
States for the three months ended March 31, 1998 and 1999, respectively. The
Company expects that such revenues will continue to represent a significant
percentage of its total revenues in the future. Most of the Company's
international license fees and services revenue are denominated in foreign
currencies. With respect to the Company's sales that are US dollar-denominated,
decreases in the value of foreign currencies relative to the US dollar could
make the Company's products less price competitive.
LICENSE FEES
License fees include revenues from software license agreements and hardware
sales entered into between the Company and its customers with respect to both
the Company's products and, to a lesser degree, third party products resold by
the Company. Total license fees decreased 12.5% for the three months ended March
31, 1999, as compared to the three months ended March 31,
<PAGE>
1998. License fees for internally developed products increased $0.6 million
or 24.8% from the comparable prior year period while license fees for
acquired products decreased $1.1 million or 75.1% from the comparable prior
year period due to a $0.6 million decrease in low-margin hardware sales in
Germany from 1998 related to one customer.
SERVICES REVENUE
Services revenue includes fees from software maintenance agreements, training,
installation and consulting services. Maintenance fees are billed separately and
are recognized ratably over the period of the maintenance agreement. Training,
installation and consulting service revenues are recognized as the services are
performed. Services revenue increased 11.5% for the three months ended March 31,
1999, as compared to the three months ended March 31, 1998. The increase was
mainly due to higher utilization rates in the U.S. associated with the demand
for version upgrades and implementation services for the Company's core products
offset by declines in legacy product service revenues in the Company's France
operations.
COST OF LICENSE FEES
Cost of license fees consists primarily of amortization of capitalized software
development costs, amounts paid to third parties with respect to products resold
by the Company in conjunction with licensing of the Company's products and, to a
lesser extent, the costs of documentation.
Cost of license fees decreased during the quarter ended March 31, 1999 as
compared to the corresponding prior year period due to the related decrease in
Germany of hardware sales, as well as, lower amortization of capitalized
software costs.
COST OF SERVICES
Cost of services consists primarily of personnel costs for product quality
assurances, training, installation, consulting and customer support.
For the three months ended March 31, 1999, cost of services as a percentage of
services revenue was 55.6% compared to 67.4% for the three months ended March
31, 1998. The decrease is primarily due to continued high utilization rates as
demand for services increased and a decrease in lower margin outsourcing revenue
in the Company's France operations.
SALES AND MARKETING
Sales and marketing expenses consist primarily of salaries, commission and
bonuses paid to sales and marketing personnel, as well as travel and promotional
expenses.
Sales and marketing expenses decreased for the three months ended March 31, 1999
as compared to the three months ended March 31, 1998, as a result of
restructuring in the second quarter of 1998 that lowered headcount and a
reduction in marketing program costs.
RESEARCH AND DEVELOPMENT
Research and development expenses consist primarily of personnel costs, costs of
equipment, facilities and third party software development costs. Research and
development expenses are
<PAGE>
generally charged to operations as incurred. However, certain software
development costs are capitalized in accordance with Statement of Financial
Accounting Standards No. 86. Such capitalized software development costs are
generally amortized over periods not exceeding three years.
Research and development expenses decreased from $2.9 million in the first
quarter of 1998 to $2.1 million in the first quarter of 1999 mainly due to a
decrease in personnel. The Company capitalized $0.3 million in software
development costs in the first quarter of 1999 as compared to none in the first
quarter of 1998. The rate of capitalization of software development costs may
fluctuate depending on the mix and stage of development of the Company's product
development and engineering projects.
GENERAL AND ADMINISTRATIVE
General and administrative expenses consist primarily of salaries for
administrative, executive and financial personnel, and outside professional
fees. General and administrative expenses represented 21.6% of total revenues
for the three months ended March 31, 1999, compared to 24.3% of total revenues
for the three months ended March 31, 1998. General and administrative expenses
decreased 6.3% for the three months ended March 31, 1999, as compared to the
three months ended March 31, 1998, primarily due to decreases in payroll and
related costs and in depreciation.
OTHER INCOME (EXPENSE)
Other income (expense) net decreased from $110 income for the three months ended
March 31, 1998 to $(83) expense for the three months ended March 31, 1999
primarily due to interest expense on the term loan (Note 2).
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1999, the Company had cash and cash equivalents of $1.3 million and
restricted cash of $0.5 million and a working capital deficit of $7.3 million.
Included in the deficit is $11.1 million of deferred revenue. On March 31, 1998,
the Company entered into a three-year Loan and Security Agreement ("Agreement")
which provides maximum borrowings of up to $10 million. The Agreement contains a
revolving line of credit and a term loan. The term loan
<PAGE>
provided for $5 million available in one drawdown which the Company borrowed on
the closing date. The original term loan was repayable in 36 monthly
installments which began on May 1, 1998. Under the revolving line of credit the
Company currently has available the lesser of $5 million or 85% of eligible
receivables, as defined. Such available amount is reduced further by a $.6
million letter of credit outstanding at March 31, 1999. The available amount
under the revolving line of credit at March 31, 1999 was approximately $2.4
million. Effective March 8, 1999, the Company amended its credit facility
with its bank in order to increase amounts available under the term loan
portion of the agreement by the lesser of $1 million or eligible maintenance
revenue, as defined, through September, 2001, to extend the termination date
of the credit facility to March 31, 2002, and to establish financial
restrictive covenants for 1999 (see note 2 to the Consolidated Interim
Financial Statements).
The Company is required to comply with quarterly and annual financial statement
reporting requirements, as well as certain restrictive financial covenants. The
ability to continue to borrow under the Agreement is dependent upon future
compliance with such covenants and available collateral. Management believes
that the Company's projected operating results over the next twelve months will
result in compliance under the Agreement, although there can be no assurances
that such operating results will be achieved.
The Company's operating activities used cash of and $3.6 million and $1.6
million for the three months ended March 31, 1998 and 1999, respectively. Net
cash used by operations in the three months ended March 31, 1998 was comprised
primarily of the net loss and an increase in accounts receivable offset by
depreciation and amortization expense, and an increase in deferred revenue. Net
cash used by operations during the three months ended March 31, 1999 was
comprised of the net loss offset by depreciation and amortization expense and
an increase in accounts receivable, net of deferred revenue, totaling
$1.6 million.
The Company's investing activities used cash of $0.8 million and $0.7 million
for the three months ended March 31, 1998 and 1999, respectively. The principal
uses during 1998 were leasehold improvements and equipment purchases. The uses
in 1999 were for capitalized software development costs and the purchase of
equipment.
Cash provided by financing activities was $5.0 million and $38 thousand during
the three months ended March 31, 1998 and 1999, respectively and related mainly
to the issuance of long-term debt in 1998 and repayments of debt in 1999 offset
by borrowings under the revolving line of credit.
The Company has no significant capital commitments. Planned capital expenditures
for 1999 total approximately $1.2 million. The Company's aggregate minimum
operating lease payments for 1999 will be approximately $2.4 million. The
Company expects that its operating cash flow will be sufficient to fund the
Company's working capital requirements through 1999. However, the Company's
ability to achieve this result is affected by the extent of cash generated from
operations and the pace at which the Company utilizes its available resources.
Accordingly, the Company may in the future be required to seek additional
sources of financing including the issuance of debt and/or sale of equity
securities. No assurance can be given that any such additional sources of
financing will be available on acceptable terms or at all.
CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS AND FINANCIAL CONDITION AND THE
MARKET
<PAGE>
PRICE OF SECURITIES
The Company's future business, results of operations and financial condition are
also dependent on the Company's ability to successfully develop, manufacture,
market and support its products in order to meet customer demands. Inherent in
this process are a number of factors that the Company must carefully manage in
order to be successful. A discussion of certain of these factors is discussed
below.
HISTORY OF OPERATING AND NET LOSSES
The Company generated a net loss of $13.6 million for 1997, $9.0 million for
1998, and reported a net loss for the three months ended March 31, 1999 of $0.5
million. As of March 31, 1999, the Company had an accumulated deficit of $72.6
million. There can be no assurance that the Company will be profitable in the
future.
POTENTIAL FOR SIGNIFICANT FLUCTUATIONS IN QUARTERLY OPERATING RESULTS;
SEASONALITY
The Company has experienced, and may in the future experience, significant
quarter to quarter fluctuations in revenues and results of operations. Such
fluctuations may result in volatility in the price of the Company's Common
Stock. Quarterly revenues and results of operations may fluctuate as a result of
a variety of factors, including the proportion of revenues attributable to
license fees versus services, the utilization of third parties to perform
services, the amount of revenue generated by resales of third party software,
changes in product mix, demand for the Company's products, the size and timing
of individual license transactions, the introduction of new products and product
enhancements by the Company or its competitors, changes in customer budgets,
competitive conditions in the industry and general economic conditions. Further,
the license of the Company's products generally involves a significant
commitment of capital by the customer and may be delayed due to time-consuming
authorization procedures within an organization. For these and other reasons,
the sales cycles for the Company's products are typically lengthy and subject to
a number of significant risks over which the Company has little or no control,
including customers' budgetary constraints and internal authorization reviews.
The Company has historically operated with little backlog, since its products
are generally shipped as orders are received. The Company has historically
recognized a substantial portion of its revenues in the last month of a quarter,
with these revenues frequently concentrated in the last week of the quarter.
License fees in any quarter are substantially dependent on orders booked and
shipped in the last month and last week of that quarter. Delays in the timing of
recognition of specific revenues may adversely and disproportionately affect the
Company's results of operations because a high percentage of the Company's
operating expenses are relatively fixed, planned expenditures are based
primarily on sales forecasts and only a small percentage of the Company's
operating expenses vary with its revenues. Accordingly, the Company believes
that period to period comparisons of results of operations are not necessarily
meaningful and should not be relied upon as an indication of future results of
operations. There can be no assurance that the Company will be profitable in any
future quarter.
The Company's business has experienced and is expected to continue to experience
significant seasonality, due in part to customer buying patterns. These
fluctuations are caused primarily by customer budgeting and purchasing patterns,
and by the Company's sales commission policies which generally compensate sales
personnel on the basis of quarterly and annual performance quotas. The Company
believes this pattern may continue in the future.
<PAGE>
Due to the foregoing factors, the Company's operating results may be below the
expectations of public market analysts and investors, in some future quarter .
Such an event may have a material adverse effect on the price of the Company's
Common Stock. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations."
LITIGATION
Historically, the Company has been involved in disputes and/or litigation
encountered in its normal course of business. The Company believes that the
ultimate outcome of these proceedings will not have a material adverse effect on
the Company's business, financial condition and results of operations or cash
flows.
MANAGEMENT CHANGES
In December 1998, a new Senior Vice President of Sales and Marketing was added.
No other changes were made to the executive management in 1998 or first quarter
1999. Failure to attract and maintain key management and employee personnel
could have material adverse effects on the quality of the Company's products,
and the Company's business and financial condition and results of operations.
INTENSE COMPETITION
The financial applications and business software market is intensely competitive
and rapidly changing. A number of companies offer products similar to the
Company's products and target the same customers as the Company. The Company
believes its ability to compete depends upon many factors within and outside its
control, including the timing and market acceptance of new products and
enhancements developed by the Company and its competitors, product
functionality, performance, price, reliability, customer service and support,
sales and marketing efforts and product distribution. The primary competition
for Computron Financials is the financial applications software offered by
Oracle Corporation and PeopleSoft, Inc. The principal competitors for the
Company's Computron Workflow and Computron COOL(TM) software are Eastman Kodak
Company ("Kodak"), Micro Bank, TASC, Staffware Corporation and FileNet
Corporation. The principal competitors for the Company's Computron Yorvik(TM)
software are Project Software Development, Inc. (PSDI), Indus International,
Inc. (Indus) and others. The Company has an agreement with Kodak pursuant to
which Kodak has the right to license Computron COOL software to third parties
under its own private label and modify such software. Most of the Company's
competitors are substantially larger than the Company and have significantly
greater financial, technical, and marketing resources, and extensive direct and
indirect channels of distribution. As a result, they may be able to respond more
quickly to new or emerging technologies and changes in customer requirements, or
to devote greater resources to the development, promotion and sale of their
products than the Company. The Company's products also compete with products
offered by other vendors, and with proprietary software developed by third-party
professional service organizations and management information systems
departments of potential customers. Due to the relatively low barriers to entry
in the software market, the Company expects additional competition from other
established and emerging companies as the client/server applications software
market continues to develop and expand. The Company also expects that
competition will increase as a result of software industry consolidations. In
addition, current and potential competitors have established or may establish
cooperative relationships among themselves or with third parties to increase the
ability of their
<PAGE>
products to address the needs of the Company's prospective customers.
Accordingly, it is possible that new competitors or alliances among competitors
may emerge and rapidly acquire significant market share. Increased competition
is likely to result in price reductions, reduced gross margins and loss of
market share, any of which would have a material adverse effect on the Company's
business, results of operations and financial condition. There can be no
assurance that the Company will be able to compete successfully against current
or future competitors or that competitive pressures will not have a material
adverse effect on the Company's business, results of operations and financial
condition. See "Business--Competition", in the Company's 1998 Annual Report on
Form 10-K.
DEPENDENCE ON PRINCIPAL PRODUCTS
Substantially all of the Company's revenues are derived from the licensing of
Computron Financials, Computron Workflow, Computron COOL, Computron Yorvik and
fees from related services. These products and services are expected to continue
to account for substantially all of the Company's revenues for the foreseeable
future. Accordingly, the Company's future results of operations will depend, in
part, on achieving broader market acceptance of these products and services, as
well as the Company's ability to continue to enhance these products and services
to meet the evolving needs of its customers. A reduction in demand or increase
in competition in the market for financial applications or business software, or
decline in sales of such products and services, could have a material adverse
effect on the Company's business, results of operations and financial condition.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, in the Company's Annual Report on Form 10-K,
"Business--Products".
NEW PRODUCTS AND RAPID TECHNOLOGICAL CHANGE; RISK OF PRODUCT DEFECTS,
DEVELOPMENT DELAYS AND LACK OF MARKET ACCEPTANCE
The financial applications and business software market is characterized by
rapid technological change, changes in customer requirements, frequent new
product introductions and enhancements and emerging industry standards. Such
changes may or may not affect the Company's software performance, customization,
reporting functionality, or other business objectives, and may or may not render
the Company incapable of meeting future customer software demands. The
introduction of products embodying new technologies and emergence of new
industry standards can render existing products obsolete and unmarketable.
Accordingly, the life cycles of the Company's products are difficult to
estimate. The Company's future success will depend in part upon its ability to
enhance its current products and to develop and introduce new products that
respond to evolving customer requirements and keep pace with technological
development and emerging industry standards, such as new operating systems,
hardware platforms, interfaces and third party applications software. There can
be no assurance that the Company will be successful in developing and marketing
product enhancements or new products that respond to technological change,
changes in customer requirements, or emerging industry standards, that the
Company will not experience difficulties that could delay or prevent the
successful development, introduction and marketing of such products and
enhancements, or that any new products or enhancements that it may introduce
will achieve market acceptance. The inability of the Company, for technological
or other reasons, to develop and introduce new products or enhancements in a
timely manner in response to changing customer requirements, technological
change or emerging industry standards, would have a material adverse effect on
the Company's business, results of operations and financial condition.
<PAGE>
Software products as complex as those offered by the Company often encounter
development delays and may contain undetected errors or failures when introduced
or when new versions are released. Such delays, errors or failures create a risk
that the software will not meet its stated functionality and could cause the
Company's future operating results to fall short of the published expectations
of certain public market financial analysts. From time to time, the Company
ports its products to various, new platforms, though no assurance can be given
concerning the successful development of the Company's software products on
these additional platforms or the performance characteristics of its
applications. In addition, the Company and its products and technologies rely
upon third-party products from hardware vendors, software vendors, RDBMS
vendors, tools vendors, reporting products, etc. Such dependencies may or may
not affect the Company's ability in the future to provide continued availability
and/or support for all Computron products. The Company has in the past
experienced delays in the development of software by third parties which
software is being licensed to and implemented by customers who are
simultaneously licensing and implementing the Company's products. Those delays
have resulted in delays in the development and shipment of the Company's
products. There can be no assurance that, despite testing by the Company and by
current and potential customers, errors will not be found in new products or
enhancements after commencement of commercial shipments, or that the Company
will not experience development delays, resulting in loss of or delay in market
acceptance of a new product or enhancement, which could have a material adverse
effect on the Company's business, results of operations and financial condition.
See "Business--Product Development," in the Company's 1998 Annual Report on Form
10-K.
DEPENDENCE ON PROPRIETARY RIGHTS; RISKS OF INFRINGEMENT
The Company's success is heavily dependent upon its proprietary technology. The
Company regards its software as proprietary, and relies primarily on a
combination of contractual provisions and trade secrets, copyright and trademark
law to protect its proprietary rights. The Company has no patents or patent
applications pending, and existing trade secrets and copyright laws afford only
limited protection. Despite the Company's efforts to protect its proprietary
rights, unauthorized parties may attempt to copy aspects of the Company's
products or to obtain and use information that the Company regards as
proprietary. Policing unauthorized use of the Company's products is difficult,
and while the Company is unable to determine the extent to which piracy of its
software products exists, software piracy can be expected to be a persistent
problem. The Company makes source code available to certain of its customers
which may increase the likelihood of misappropriation or other misuse of the
Company's software. In addition, the laws of some foreign countries do not
protect the Company's proprietary rights to the same extent as do the laws of
the United States. There can be no assurance that the steps taken by the Company
to protect its proprietary rights will be adequate or that the Company's
competitors will not independently develop technologies that are substantially
equivalent or superior to the Company's technologies.
The Company has obtained Federal registrations for its trademark "Computron" and
"Yorvik". In addition, the Company has certain U.S. common law rights, and
rights under foreign laws in relation to its trademarks, service marks and
product names. Although the Company believes that the trademarks and service
marks it uses are distinct, there can be no assurance that the Company will be
able to register or protect such trademarks and service marks.
The Company does not believe that any of its products, trademarks or other
proprietary rights
<PAGE>
infringe the proprietary rights of third parties. However, there can be no
assurance that third parties will not assert infringement claims against the
Company in the future with respect to current or future products. As the number
of software products in the industry increases and the functionality of these
products further overlap, the Company believes that software developers may
become increasingly subject to infringement claims. Any such claims, with or
without merit, can be time consuming and expensive to defend, cause product
shipment delays or require the Company to enter into royalty or licensing
agreements. Such royalty and license agreements, if required, may not be
available on terms acceptable to the Company, or at all, which could have a
material adverse effect on the Company's business, results of operations and
financial condition. See "Business--Intellectual Property," in the Company's
1998 Annual Report on Form 10-K.
SECURITY RISKS
The Company's products provide security features designed to protect its users'
data from unauthorized retrieval or modification. Its built in security features
utilize the capabilities of its own applications, the client operating system
software, as well as the security features contained in the RDBMS platforms on
which the applications run. Computron's systems add additional capabilities to
those provided by the underlying security systems. Though the Company is not
aware of any violations of its application security architecture within its
installed base, and its security features are subject to constant review and
enhancement, no assurances can be given concerning the successful implementation
of security features and their effectiveness within a customer's operating
environment. In the event of an actual security breach, there may be a material
adverse effect on the Company's business, results of operations, and financial
condition.
RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS
The Company derived approximately $21.3 million, $29.4 million and $29.9 or
39.2%, 43.4% and 47.1% of its total revenues, from customers outside of the
United States in 1996, 1997 and 1998, respectively. The Company derived
approximately $7.9 million and $6.4 million or 52.5% and 40.7% of its total
revenues from customers outside the United States for the three months ended
March 31, 1998 and 1999, respectively. The Company expects that such revenues
will continue to represent a significant percentage of its total revenues in the
future. The Company believes that its continued growth and profitability will
require expansion of its sales in international markets. There can be no
assurance, however, that the Company will be able to maintain or increase
international market demand for its products and services. Most of the Company's
international license fees and services revenue are denominated in foreign
currencies. The Company does not currently hedge its foreign exchange exposure.
With respect to the Company's sales that are U.S. dollar-denominated, decreases
in the value of foreign currencies relative to the U.S. dollar could make the
Company's products less price competitive. Additional risks inherent in the
Company's international business activities generally include unexpected changes
in regulatory requirements, tariffs and other trade barriers, costs of
localizing products for foreign countries, lack of acceptance of localized
products in foreign markets, longer accounts receivable payment cycles,
difficulties in managing international operations, potentially adverse tax
consequences, restrictions on repatriation of earnings, reduced legal protection
of the Company's intellectual property, and the burdens of complying with a wide
variety of foreign laws. There can be no assurance that such factors will not
have a material adverse effect on the Company's future international revenues
and, consequently, on the Company's business, results of operations and
financial condition. See "Management's Discussion and Analysis of Financial
<PAGE>
Condition and Results of Operations."
RELIANCE ON CERTAIN RELATIONSHIPS
The Company relies on relationships with a number of consultants, systems
integrators and software and hardware vendors to enhance its product development
and marketing and sales efforts, to implement the Company's software products
and to support its customers. These relationships, many of which are not the
subject of formal written agreements, provide marketing and sales leads to the
Company's direct sales force, assistance in the Company's product development
process and assistance in the service and implementation of the Company's
products. There can be no assurance that these companies, most of which have
significantly greater financial and marketing resources than the Company, will
not develop or market software products which compete with the Company's
products in the future or will not otherwise discontinue their relationships
with or support of the Company. The failure by the Company to maintain its
existing relationships, or to establish new relationships in the future, because
of a divergence of interests, acquisition of one or more of these third parties
or other reason, could have a material adverse effect on the Company's business,
product development, results of operations, and financial condition.
The Company also licenses software from third parties which is incorporated into
its products. These licenses expire from time to time. In addition, the Company
generally does not have access to source code for the software supplied by these
third parties. Certain of these third parties are small companies that do not
have extensive financial and technical resources. If any of these relationships
were terminated or if any of these third parties were to cease doing business or
terminate the support of these products, the Company may be forced to expend
significant time and development resources to try to replace the licensed
software. Such an event would have a material adverse effect upon the Company's
business, results of operations and financial condition. See
"Business--Strategic Alliances," and "Intellectual Property," in the Company's
1998 Annual Report on Form 10-K.
CONTROL BY EXISTING STOCKHOLDERS
The Company's executive officers, directors and affiliates together beneficially
own approximately 59% of the outstanding shares of Common Stock as of March 15,
1999. As a result, these stockholders are able to exercise control over matters
requiring stockholder approval, including the election of directors, and
mergers, consolidations and sales of all or substantially all of the assets of
the Company. This may prevent or discourage tender offers for the Company's
Common Stock unless the terms are approved by such stockholders.
RELIANCE ON KEY PERSONNEL
The Company's future success will depend to a significant extent upon a number
of key management and technical personnel. The loss of the services of one or
more key employees could have a material adverse effect on the Company's
business. The Company is a party to employment agreements with certain key
personnel. In addition, the Company is the beneficiary of key-person life
insurance on the lives of certain key personnel. The Company believes that its
future success will also depend in large part upon its ability to attract and
retain highly skilled technical, management, sales and marketing personnel.
Competition for such personnel is intense, and the services of qualified
personnel are difficult to obtain and replace. There can be no
<PAGE>
assurance that the Company will be successful in attracting and retaining the
personnel necessary to develop, market, service and support its products and
conduct its operations successfully. The inability of the Company to attract,
hire, assimilate and retain such personnel, or to increase revenues at a rate
sufficient to absorb the resulting increased expenses, would have a material
adverse effect on the Company's business, results of operations and financial
condition.
POSSIBLE VOLATILITY OF STOCK PRICE
The trading price of the Company's Common Stock has been, and, in the future
could be, subject to significant fluctuations in response to variations in
quarterly operating results, the gain or loss of significant contracts, changes
in estimates of operating results by analysts, announcements of technological
innovations or new products by the Company or its competitors, general
conditions in the software and computer industries and other events or factors.
In addition, the stock market in general has experienced extreme price and
volume fluctuations which have affected the market price from many companies in
industries similar or related to that of the Company and which have been
unrelated to the operating performance of such companies. These market
fluctuations may adversely affect the market price of the Company's Common
Stock.
<PAGE>
COMPUTRON SOFTWARE, INC.
Part II
Other Information
ITEM 1. LEGAL PROCEEDINGS
Historically, the Company has been involved in disputes and/or litigation
encountered in its normal course of business. The Company believes that the
ultimate outcome of these proceedings will not have a material adverse effect on
the Company's business, financial condition and results of operations or cash
flows.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
Exhibit 27 - Financial Data Schedule (Edgar filing only).
Reports on Form 8-K - None
<PAGE>
COMPUTRON SOFTWARE, INC.
SIGNATURE
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.
COMPUTRON SOFTWARE, INC.
DATE: By: : /s/ Michael R. Jorgensen
---------------------------
Michael R. Jorgensen
Executive Vice President, Chief Financial
Officer, Treasurer and Secretary (Principal
Financial and Accounting Officer)
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<PERIOD-START> JAN-01-1999
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