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) February 17, 1999
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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\2579\FRM2179M.380
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Item 5. Other Events
Filed herewith is a copy of the Giga Information Group, Inc. (the
"Company") Press Release, dated February 17, 1999, announcing its results of
operations for the three and twelve months ended December 31, 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 February 17, 1999
2
<PAGE>
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: February 18, 1999
3
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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 February 17, 1999
4
EXHIBIT 99
GIGA
Giga Information Group (R)
FOR IMMEDIATE RELEASE
FOR INFORMATION CONTACT:
Daniel M. Clarke
Chief Financial Officer
Giga Information Group
One Longwater Circle
Norwell, Massachusetts 02061
1 (781) 982-9500
Fax 1 (781) 871-4098
[email protected]
GIGA INFORMATION GROUP'S FOURTH QUARTER AND YEAR-END
RESULTS SHOW CONTINUED GROWTH
ANNUAL REVENUES INCREASE 97%
ANNUALIZED VALUE OF CONTRACTS REACHES $43.8 MILLION AS CLIENT BASE
GROWS TO EXCEED 950 ENTERPRISES, BOTH IN UNDER THREE YEARS
CAMBRIDGE, Mass. (February 17, 1999) -- Giga Information Group, Inc. (NASDAQ:
GIGX) today announced that revenues for the fourth quarter ended December 31,
1998 increased 77 percent to $12.3 million from $7.0 million in the same period
of 1997. The operating loss for the fourth quarter of 1998 decreased to $4.0
million from $4.6 million in the same period last year. The net loss for the
fourth quarter of 1998 increased to $3.6 million, or $0.37 per share, from $2.8
million, or $1.35 per share, in the fourth quarter of 1997 which included income
from the disposal of discontinued operations of $1.3 million, or $0.61 per
share.
Revenues for the year ended December 31, 1998 increased 97 percent to $38.8
million from $19.7 million for 1997. The operating loss for the year ended
December 31, 1998 decreased to $17.8 million from $23.4 million last year.
The net loss for the year ended December 31, 1998
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Giga announces fourth quarter and year end results 2-2-2
decreased to $18.7 million, or $3.49 per share, from $21.8 million, or $10.53
per share, for the year ended December 31, 1997. Net loss for the year ended
December 31, 1998 includes expense from an extraordinary item of $0.7 million,
or $0.13 per share. Net loss for the year ended December 31, 1997 included
income from the disposal of discontinued operations of $1.3 million, or $0.63
per share.
Earnings per share for the quarter and year ended December 31, 1998 includes the
weighted average impact of the Company's Initial Public Offering of 3,000,000
shares of Common Stock and the conversion of all shares of the Company's
Convertible Preferred Stock into an aggregate of 4,686,784 shares of Common
Stock. See Note 2 to the attached Consolidated Operating Results.
The Company's Annualized Value of contracts at December 31, 1998 was $43.8
million versus $26.6 million at December 31, 1997, representing a 65 percent
increase from year to year. The Company defines Annualized Value ("AV") as the
cumulative annualized subscription value of the Company's Continuous Information
Services ("CIS") agreements in effect at a given point in time.
"Our growth in AV is a significant achievement for our business, considering
that our first customer contracts were signed less than 3 years ago," said
Gideon I. Gartner, CEO and President. "And, all broad categories of expense
continue to decline as a percentage of revenues, showing that operating leverage
is taking hold. However, our AV growth rate is slowing at a faster rate than I
expected. While certain planned expenses are being reduced to better match
revenues, the company is cognizant of the need to remain competitive in the
marketplace."
(more)
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Giga announces fourth quarter and year end results 3-3-3
ABOUT GIGA INFORMATION GROUP
Giga Information Group, founded by industry icon Gideon I. Gartner, delivers
technology and management advice to IT decision makers via innovative research
processes and a leading-edge Web interface. Giga's research focus is on helping
companies integrate their businesses with the Internet; it also covers other
issues pertaining to the computing, telecommunications and related industries.
Giga began providing its services in April 1996, and now has a global client
base exceeding 950 organizations and over 14,000 individuals. Its enterprise
clients include IT users, IT vendors, and institutional investors.
Headquartered in Cambridge, Massachusetts, Giga has 10 other offices covering
the Americas and Europe. Giga is also represented by distributors in other areas
of the world.
The Company's Web site can be accessed at http://www.gigaweb.com. The Company's
logo with the name Giga Information Group is a registered trademark of Giga
Information Group Inc.
The Company's Consolidated Operating Results and Consolidated Balance Sheet Data
are attached.
# # #
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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 and sustain 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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(more)
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Giga announces fourth quarter and year end results 4-4-4
<TABLE>
<CAPTION>
Giga Information Group, Inc.
CONSOLIDATED OPERATING RESULTS
(in thousands, except share and Quarter Ended December 31, Year Ended December 31,
per share data) ------------------------------ -------------------------------
(unaudited) % %
1998 1997 Change 1998 1997 Change
---- ---- ------ ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Continuous Information Services $ 9,146 $ 5,053 81% $ 31,789 $ 14,600 118%
Other, principally events 3,199 1,905 68% 6,970 5,059 38%
--------- --------- --------- ---------
Total revenues 12,345 6,958 77% 38,759 19,659 97%
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Costs and expenses:
Cost of services 5,778 2,786 107% 20,050 12,651 58%
Sales and marketing 7,982 4,658 71% 27,037 19,596 38%
Research and development 147 205 -28% 1,187 1,975 -40%
General and administrative 2,062 2,700 -24% 6,789 6,065 12%
Depreciation and amortization 348 1,215 -71% 1,468 2,810 -48%
--------- --------- --------- ---------
Total costs and expenses 16,317 11,564 41% 56,531 43,097 31%
--------- --------- --------- ---------
Loss from operations (3,972) (4,606) -14% (17,772) (23,438) -24%
--------- --------- --------- ---------
Interest income 307 54 469% 736 277 166%
Interest expense (43) (106) -59% (1,255) (235) 434%
Foreign exchange gain/(loss) 61 (73) -184% 306 (375) -182%
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Loss from continuing operations before income taxes (3,647) (4,731) -23% (17,985) (23,771) -24%
Income tax (benefit) charge - (635) -100% 36 (641) -106%
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Loss from continuing operations (3,647) (4,096) -11% (18,021) (23,130) -22%
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Income from disposal of discontinued BIS market research
business, less applicable income taxes of $568 - 1,101 -100% - 1,101 -100%
Income from disposal of discontinued BIS Shrapnel
business, less applicable income taxes of $109 - 171 -100% - 212 -100%
--------- --------- --------- ---------
Income from discontinued operations - 1,272 -100% - 1,313 -100%
--------- --------- --------- ---------
Loss before extraordinary item (3,647) (2,824) 29% (18,021) (21,817) -17%
--------- --------- --------- ---------
Extraordinary item, net of applicable income
taxes of $0 (Note 1.) - - - (707) - -
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Net loss (Note 1.) $ (3,647) $ (2,824) 29% $ (18,728) $ (21,817) -14%
========= ========= ========= =========
Results per common share:
Historical - basic and diluted:
Loss from continuing operations $ (0.37) $ (1.96) -81% $ (3.36) $ (11.16) -70%
========= ========= ========= =========
Extraordinary item $ - $ - - $ (0.13) $ - -
========= ========= ========= =========
Net loss $ (0.37) $ (1.35) -73% $ (3.49) $ (10.53) -67%
========= ========= ========= =========
Weighted average number of shares (Note 2.) 9,935,646 2,086,728 376% 5,365,202 2,072,837 159%
========= ========= ========= =========
</TABLE>
(more)
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Giga announces fourth quarter and year end results 5-5-5
Giga Information Group, Inc.
NOTES TO CONSOLIDATED OPERATING RESULTS
Note 1. Extraordinary Item:
Net loss for the year ended December 31, 1998 includes a non-recurring, non-cash
charge of $707,000 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 causing the balance of the
discount at the date of repayment to be recognized as expense at that time.
<TABLE>
<CAPTION>
Note 2. Components of weighted average common shares:
Quarter Ended Year Ended
December 31, 1998 December 31, 1998
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Weighted Weighted
Actual Average Actual Average
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<S> <C> <C> <C> <C>
Shares issued and outstanding at beginning of period 9,926,788 9,926,788 2,093,107 2,093,107
Shares issued from Initial Public Offering - - 3,000,000 1,265,753
Shares issued from conversion of preferred stock - - 4,686,784 1,913,235
Shares issued from exercise of warrants - - 47,999 19,594
Shares issued from exercise of stock options 16,714 8,858 115,612 73,512
---------- ---------- ---------- ----------
Total 9,943,502 9,935,646 9,943,502 5,365,202
========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Giga Information Group, Inc.
CONSOLIDATED BALANCE SHEET DATA
(in thousands, except share data) December 31, December 31,
1998 1997
---- ----
<S> <C> <C>
Assets
Cash, cash equivalents and marketable securities $ 21,057 $ 3,539
Accounts receivable, net 15,017 8,961
Total current assets 45,591 20,980
Property and equipment, net 3,430 1,695
Total assets 49,213 23,023
Liabilities and Stockholders' Equity (Deficit)
Deferred revenues $ 29,470 $ 20,604
Debt, current portion 461 1,974
Total current liabilities 39,363 31,176
Total liabilities 39,807 32,113
Total stockholders' equity (deficit) 9,406 (9,090)
Total liabilities and stockholders' equity (deficit) 49,213 23,023
Common stock issued and outstanding 9,943,502 2,093,107
</TABLE>
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