SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 21, 1998
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GIGA INFORMATION GROUP, INC.
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Exact name of registrant as specified in its charter
Delaware File No. 0-21529 06-1422860
- --------------- ----------- ----------------
(State or other (Commission (I.R.S. Employer
jurisdiction or File Identification
organization) Number) Number)
One Longwater Circle,
Norwell, MA 02061
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 982-9500
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Not Applicable
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(former name or former address, if changed since last report)
NYFS07...:\54\47954\0001\21\FRM0228M.510
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Item 5. Other Events
Filed herewith is a copy of the Giga Information Group, Inc. (the
"Company") Press Release, dated October 21, 1998, announcing its results of
operations for the three and nine months ended September 30, 1998. All normal
recurring adjustments that are, in the opinion of management, necessary for a
fair presentation of the results of operations for the periods presented have
been included. The nature of the Company's business is such that the results for
any interim period are not necessarily indicative of the results for an entire
fiscal year or any other interim period.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of business acquired:
Not applicable.
(b) Pro Forma financial information:
Not applicable.
(c) Exhibit:
(99) Press Release, dated October 21, 1998
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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 hereunto duly authorized.
GIGA INFORMATION GROUP, INC.
By: /s/ Daniel M. Clarke
------------------------------------
Daniel M. Clarke
Senior Vice President and
Chief Financial Officer
Date: October 23, 1998
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GIGA INFORMATION GROUP, INC.
FORM 8-K
CURRENT REPORT
EXHIBIT INDEX
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Exhibit No. Description
- ----------- -----------
(99) Press Release, dated October 21, 1998
4
GiGA
Giga Information Group
FOR IMMEDIATE RELEASE
FOR INVESTOR INFORMATION CONTACT:
Daniel M. Clarke, Chief Financial Officer
Phone: 1 (781) 982-9500
Fax: 1 (781) 871-4098
Email: [email protected]
GIGA'S THIRD QUARTER RESULTS CONTINUE GROWTH
Revenues increase 102%; Annualized Value up 99%
CAMBRIDGE, Mass. (October 21, 1998) - Giga Information Group Inc. (NASDAQ: GIGX)
announced today that revenues for the third quarter ended September 30, 1998
increased 102% to $8.8 million from $4.3 million in the same period of 1997. The
operating loss for the third quarter of 1998 decreased 25% to $4.9 million from
$6.5 million in the same period last year. The net loss for the third quarter of
1998 decreased to $5.6 million, or $0.79 per share, from $6.5 million, or $3.13
per share, in the third quarter of 1997.
Revenues for the nine months ended September 30, 1998 increased 108% to $26.4
million from $12.7 million in the same period of 1997. The operating loss for
the nine months ended September 30, 1998 decreased 27% to $13.8 million from
$18.8 million in the same period last year. The net loss for the nine months
ended September 30, 1998 decreased to $15.1 million, or $3.94 per share, from
$19.0 million, or $9.18 per share, for the nine months ended September 30, 1997.
Annualized Value at September 30, 1998 was $38.3 million versus $19.2 million at
September 30, 1997, representing a 99% increase year-on-year. The Company
defines Annualized Value as the cumulative annualized subscription value of the
Company's Continuous Information Services agreements in effect at any given
point in time without regard to commencement date, duration, or risk of
cancellation.
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Giga reports third quarter 1998 results
2-2-2
"We are pleased by our record third quarter performance," said Gideon I.
Gartner, Chairman, CEO and President of Giga Information Group. "While Giga's
year-over-year results indicate continued strong market acceptance, certain
market trends indicate a somewhat slower growth rate in the next several
quarters."
ABOUT GIGA INFORMATION GROUP
Giga Information Group (NASDAQ: GIGX), founded by industry icon Gideon I.
Gartner, delivers knowledge and strategic technology and management advice to IT
decision makers via innovative research processes and GigaWeb, its leading-edge
Web presence. Giga's research focus is on helping companies integrate their
businesses with the Internet; it also covers trends in the computing,
telecommunications and related industries. Giga began providing its services in
April 1996, and today its global client base exceeds 900 organizations
comprising over 13,000 individual users, including IT vendors, IT users and
institutional investors. The Company's Web site can be accessed at
HTTP://WWW.GIGAWEB.COM. Giga Information Group is a trademark of Giga
Information Group Inc.
The Company's consolidated operating results are attached.
# # #
Statements that are not historical fact may be considered forward-looking
statements (as defined in the Private Securities Litigation Reform Act of 1995)
that involve risks and uncertainties. Consequently, actual events or results may
differ materially from those expressed or implied by those set forth in such
forward-looking statements. Factors that could cause actual results to differ
materially include, but are not limited to, the Company's ability to attract and
retain highly skilled and experienced employees, ability to secure subscriptions
to its services and to achieve and sustain high renewal rates, ability to
effectively manage growth, ability to understand and anticipate market trends
and develop and offer new products and services, significant competition from
existing and new competitors, potential fluctuations in quarterly operating
results, continued market acceptance and demand of Giga services, dependence on
Internet infrastructure for access to GigaWeb and other risks as detailed from
time-to-time in the Company's filings with the Securities and Exchange
Commission. The Company undertakes no obligation to update any forward-looking
statements as a result of new information, unanticipated events, or otherwise.
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GIGA INFORMATION GROUP, INC.
<TABLE>
<CAPTION>
CONSOLIDATED OPERATING RESULTS
(unaudited, in thousands, except share and Quarter Ended September 30, Nine Months Ended September 30,
per share data) --------------------------------- ----------------------------------
% %
1998 1997 Change 1998 1997 Change
---- ---- ------ ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Continuous Information Services $ 8,235 $ 3,743 120% $ 22,643 $ 9,547 137%
Other, principally events 515 588 -12% 3,771 3,154 20%
-------- -------- --------- --------
Total revenues 8,750 4,331 102% 26,414 12,701 108%
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Costs and expenses:
Cost of services 4,579 3,199 43% 14,272 9,865 45%
Sales and marketing 6,739 5,500 23% 19,055 14,938 28%
Research and development 402 523 -23% 1,040 1,770 -41%
General and administrative 1,628 1,159 40% 4,727 3,365 40%
Depreciation and amortization 321 490 -34% 1,120 1,595 -30%
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Total costs and expenses 13,669 10,871 26% 40,214 31,533 28%
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Loss from operations (4,919) (6,540) -25% (13,800) (18,832) -27%
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Interest income 270 48 463% 429 223 92%
Interest expense (Note 1.) (1,139) (88) 1194% (1,919) (129) 1388%
Foreign exchange gain/(loss) 195 29 572% 245 (302) 181%
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Loss from continuing operations before income taxes (5,593) (6,551) -15% (15,045) (19,040) -21%
Income tax (benefit) charge 36 (17) 312% 36 (6) 700%
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Loss from continuing operations (5,629) (6,534) -14% (15,081) (19,034) -21%
-------- -------- --------- --------
Income from disposal of discontinued BIS Shrapnel
business, less applicable income taxes of $21 - 41 -100% - 41 -100%
-------- -------- --------- --------
Income from discontinued operations - 41 -100% - 41 -100%
-------- -------- --------- --------
Net loss $ (5,629) $ (6,493) -13% $ (15,081) $ (18,993) -21%
=========== ========== =========== ==========
Results per common share:
Historical - basic and diluted:
Loss from continuing operations $ (0.79) $ (3.15) -75% $ (3.94) $ (9.20) -57%
=========== ========== =========== ==========
Net loss $ (0.79) $ (3.13) -75% $ (3.94) $ (9.18) -57%
=========== ========== =========== ==========
Weighted average number of shares (Note 2.) 7,142,319 2,077,397 244% 3,824,978 2,068,155 85%
=========== ========== =========== ==========
</TABLE>
Note 1. Interest Expense:
Interest expense for the quarter and nine months ended September 30, 1998
includes a non-recurring, non-cash charge of $844,000 and $1,182,000,
respectively. The charge was recorded to accrete a discount for the fair
market value of common stock warrants issued in conjunction with
$10,000,000 of Bridge Notes. The Bridge Notes were repaid in August 1998
using a portion of the proceeds from the Company's Initial Public Offering
of common stock and the balance of the discount was recognized as expense
at that time.
Note 2. Computation of weighted average common shares:
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, 1998 September 30, 1998
------------------ ------------------
Weighted Weighted
Actual Average Actual Average
------ ------- ------ -------
<S> <C> <C> <C> <C>
Shares issued and outstanding at beginning of period 2,184,346 2,184,346 2,093,107 2,093,107
Shares issued from Initial Public Offering 3,000,000 2,021,739 3,000,000 681,319
Shares issued from conversion of preferred stock 4,686,784 2,903,768 4,686,784 978,559
Shares issued from exercise of warrants 47,999 29,739 47,999 10,022
Shares issued from exercise of stock options 7,659 2,727 98,898 61,971
---------- ---------- ---------- ----------
Total 9,926,788 7,142,319 9,926,788 3,824,978
========== ========== ========== ==========
</TABLE>
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GIGA INFORMATION GROUP, INC.
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET DATA September 30, December 31,
(in thousands, except share data) 1998 1997
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(unaudited)
<S> <C> <C>
Assets
Cash, cash equivalents and investments $ 26,695 $ 3,539
Accounts receivable, net 7,756 8,961
Total current assets 42,374 20,980
Property and equipment, net 2,421 1,695
Total assets 44,963 23,023
Liabilities and Stockholders' Equity (Deficit)
Deferred revenues $ 23,264 $ 20,604
Debt, current portion 442 1,974
Total current liabilities 31,555 31,176
Total liabilities 32,121 32,113
Total stockholders' equity (deficit) 12,842 (9,090)
Total liabilities and stockholders' equity (deficit) 44,963 23,023
Common stock issued and outstanding 9,926,788 2,093,107
</TABLE>
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