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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ________
Commission file number 00-26810
LOGIC WORKS, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-2663477
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
University Square at Princeton
111 Campus Drive
Princeton, NJ 08540
(Address and zip code of principal executive offices)
(609) 514-1177
(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 |_|.
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 12,553,420 common stock shares
outstanding at October 31, 1997.
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<PAGE>
LOGIC WORKS, INC.
Table of Contents
PART I. FINANCIAL INFORMATION Page
----
Item 1. Financial Statements
Condensed Consolidated Balance Sheets at
September 30, 1997 and December 31, 1996 ...................... 3
Condensed Consolidated Statements of Operations
for the Three and Nine Months Ended September
30, 1997 and 1996 ............................................. 4
Condensed Consolidated Statements of Cash Flows
for the Nine Months Ended September 30, 1997 and 1996 ......... 5
Notes to Condensed Consolidated Financial Statements .......... 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations ..................................... 7-10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings ............................................. 11
Item 2. Changes in Securities ......................................... 11
Item 3. Defaults Upon Senior Securities ............................... 11
Item 4. Submission of Matters to a Vote of Security Holders ........... 11
Item 5. Other Information ............................................. 11
Item 6. Exhibits and Reports on Form 8-K .............................. 11
Signatures .................................................... 12
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LOGIC WORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, December 31,
1997 1996
---------------------------
Assets (unaudited) (audited)
Current Assets
Cash and cash equivalents $22,509 $20,385
Marketable securities 13,255 8,109
Accounts receivable, net 10,284 10,182
Other current assets 4,079 3,675
---------------------------
Total current assets 50,127 42,351
Property and equipment, net 4,377 3,760
Other assets 2,101 2,258
---------------------------
Total assets $56,605 $48,369
===========================
Liabilities and stockholders' equity
Current Liabilities
Accounts payable $ 1,657 $ 2,394
Accrued compensation 3,451 2,014
Deferred revenue 5,900 5,296
Income taxes payable 1,832 26
Other current liabilities 4,481 4,324
---------------------------
Total current liabilities 17,321 14,054
Total stockholders' equity 39,284 34,315
---------------------------
Total liabilities and stockholders' equity $56,605 $48,369
===========================
See notes to condensed consolidated financial statements.
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LOGIC WORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(dollars in thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
1997 1996 1997 1996
------------------------------ ------------------------------
Revenues
<S> <C> <C> <C> <C>
License fees $ 9,861 $ 8,127 $ 26,236 $ 24,769
Maintenance & service fees 3,339 2,382 9,484 6,682
------------------------------ ------------------------------
Total revenues 13,200 10,509 35,720 31,451
Cost of revenues
Cost of license fees 779 617 2,137 1,604
Cost of maintenance & service fees 793 871 2,552 2,863
------------------------------ ------------------------------
Total cost of revenues 1,572 1,488 4,689 4,467
Gross margin 11,628 9,021 31,031 26,984
Operating expenses
Sales and marketing 6,321 6,806 18,413 17,998
Research and development 1,822 1,628 5,296 4,230
General and administrative 1,583 1,703 4,638 4,424
Acquired in-process research and development -- 995 -- 995
------------------------------ ------------------------------
Total operating expenses 9,726 11,132 28,347 27,647
Operating income (loss) 1,902 (2,111) 2,684 (663)
Other income, net 418 255 1,005 749
------------------------------ ------------------------------
Income (loss) before income taxes 2,320 (1,856) 3,689 86
Income taxes 858 (557) 1,367 202
------------------------------ ------------------------------
Net income (loss) $ 1,462 $ (1,299) $ 2,322 $ (116)
============================== ==============================
Primary earnings (loss) per share $ 0.11 $ (0.11) $ 0.18 $ (0.01)
============================== ==============================
Fully diluted earnings (loss) per share $ 0.11 $ (0.11) $ 0.18 $ (0.01)
============================== ==============================
Weighted average shares outstanding
Primary 12,919 11,386 12,730 11,386
============================== ==============================
Fully diluted 13,148 11,386 13,085 11,386
============================== ==============================
</TABLE>
See notes to condensed consolidated financial statements.
4
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LOGIC WORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
--------------------
1997 1996
--------------------
<S> <C> <C>
Cash flows from operating activities
Net income (loss) $ 2,322 $ (115)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization 1,465 967
Compensation element of common
stock, warrants and stock option grants 79 423
Acquired in process research and development -- 995
Changes in operating assets and liabilities:
(Increase) in current assets and other noncurrent assets (522) (2,468)
Increase in accounts payable and other current liabilities 3,750 610
Increase in deferred revenue 604 1,239
--------------------
Net cash provided by operating activities 7,698 1,651
--------------------
Cash flows from investing activities
Purchase of property and equipment (1,553) (3,840)
Acquisition of TestBytes -- (1,075)
Purchase of marketable securities (13,192) (1,559)
Proceeds from sale of marketable securities 8,046 4,536
Purchase of intangibles (235) (629)
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Net cash used in investing activities (6,934) (2,567)
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Cash flows from financing activities
Proceeds from the issuance of stock 1,323 847
Purchase of treasury stock -- (279)
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Net cash provided by financing activities 1,323 568
Effect of foreign exchange rate on cash 37 134
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Net increase (decrease) in cash and cash equivalents 2,124 (214)
Cash and cash equivalents at beginning of period 20,385 19,629
--------------------
Cash and cash equivalents at end of period $ 22,509 $ 19,415
====================
</TABLE>
See notes to condensed consolidated financial statements.
5
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LOGIC WORKS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Organization and Basis of Presentation
Logic Works, Inc. (the "Company") is a provider of database design and modeling
solutions. The Company was incorporated in Delaware in 1985 and operates in one
industry segment. The Company has subsidiaries in Australia, Canada, England,
Germany and France to further broaden its global market. The Company markets its
products worldwide primarily through direct and indirect sales and marketing
channels. The accompanying condensed consolidated financial statements include
the accounts of the Company and its wholly-owned subsidiaries.
The accompanying condensed consolidated financial statements have been prepared
in accordance with the rules and regulations of the Securities and Exchange
Commission and, accordingly, do not include all financial information and
footnotes required under generally accepted accounting principles for complete
financial statements. In the opinion of management, the accompanying condensed
consolidated financial statements contain all adjustments consisting of normal
recurring adjustments that the Company considers necessary for a fair
presentation of the financial position of the Company as of September 30, 1997
and the results of the Company's operations for the three and nine months ended
September 30, 1997 and 1996, respectively, and its cash flows for the nine
months ended September 30, 1997 and 1996, respectively. This report on Form 10-Q
should be read in conjunction with the Company's audited financial statements
for the year ended December 31, 1996 and the notes therein, included in the
Company's annual report on Form 10-K. Certain amounts have been reclassified to
conform with current year presentation. The results of operations for interim
periods are not necessarily indicative of the results of operations to be
expected for the entire year.
2. Per Share Amounts
Primary and fully diluted net income per share is computed using the weighted
average number of common and dilutive common equivalent shares outstanding and
gives effect to certain adjustments. Shares used in computing primary net income
per share include common shares and common equivalent shares consisting of
outstanding stock options.
3. Impact of Recently Issued Accounting Standards
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, "Earnings per Share", which is required to be adopted on December 31, 1997.
At that time, the Company will be required to change the method currently used
to compute earnings per share and to restate all prior periods. Under the new
requirements for calculating primary earnings per share, the dilutive effect of
options will be excluded. The Company anticipates an increase of $0.01 to
primary earnings per share for the three months ended September 30, 1997 and the
Company anticipates no impact to primary earnings per share for the three months
ended September 30, 1996. The Company anticipates an increase of $0.01 to
primary earnings per share for the nine months ended September 30, 1997 and the
Company anticipates no impact to primary earnings per share for the nine months
ended September 30, 1996. The impact of Statement 128 on the calculation of
fully diluted earnings per share for these quarters is not anticipated to be
material.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This Quarterly Report contains, in addition to historical information,
forward-looking statements that involve risks and uncertainties. The Company's
actual results could differ significantly from the results discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include those discussed in "Business Considerations" in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996, which
has been filed with the Securities and Exchange Commission.
The Company is a leading provider of database design and modeling solutions. The
Company's Windows-based products allow customers to realize the benefits of
client/server systems by enabling easy, rapid and high-quality design,
deployment and management of relational databases and related applications.
Results of Operations
The following table sets forth certain operating data as a percentage of total
revenues for the periods indicated (subtotals not adjusted for rounding):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------------------
1997 1996 1997 1996
----------------------------------------
<S> <C> <C> <C> <C>
Percentages of Revenues:
Revenues:
License fees 74.7% 77.3% 73.4% 78.8%
Maintenance & service fees 25.3 22.7 26.6 21.2
----------------------------------------
Total revenues 100.0 100.0 100.0 100.0
----------------------------------------
Cost of revenues:
License fees 5.9 5.9 6.0 5.1
Maintenance & service fees 6.0 8.3 7.1 9.1
----------------------------------------
Total cost of revenues 11.9 14.2 13.1 14.2
----------------------------------------
Gross margin 88.1 85.8 86.9 85.8
----------------------------------------
Operating expenses:
Sales and marketing 47.9 65.1 51.6 57.3
Research and development 13.8 15.2 14.8 13.3
General and administrative 12.0 16.2 13.0 14.1
Acquisition of in process research
and development -- 9.5 -- 3.2
----------------------------------------
Total operating expenses 73.7 106.0 79.4 87.9
----------------------------------------
Operating income (loss) 14.4 (20.2) 7.5 (2.1)
Other income, net 3.2 2.4 2.8 2.4
----------------------------------------
Income (loss) before income taxes 17.6 (17.8) 10.3 0.3
Income taxes 6.5 (5.3) 3.8 0.6
----------------------------------------
Net income (loss) 11.1% (12.5)% 6.5% (0.3)%
========================================
</TABLE>
7
<PAGE>
Total Revenues. Total revenues increased 25.7% to $13.2 million in the three
months ended September 30, 1997 from $10.5 million in the three months ended
September 30, 1996. Total revenues increased 13.3% to $35.7 million in the nine
months ended September 30, 1997 from $31.5 million in the nine months ended
September 30, 1996. The Company's revenues are derived from two sources: license
fees and maintenance and service fees. The Company derived approximately $2.9
million and $2.1 million or 21.6% and 20.0% of its total revenues, from
international customers in the three months ended September 30, 1997 and 1996,
and $8.0 million and $6.9 million, or 22.4% and 21.9% of its total revenues from
international customers in the nine months ended September 30, 1997 and 1996,
respectively. The Company expects that international revenues will continue to
represent a significant percentage of total revenues. To date, the majority of
the Company's international license fees and service fees have been denominated
in United States dollars and, accordingly, the Company has not hedged its
exposure to foreign currency fluctuations. The Company anticipates that, in the
future, an increasing proportion of the Company's sales will be denominated in
foreign currencies. In such event, an increasingly significant portion of the
Company's revenues will be subject to the risks inherent in international
operations. These risks include, but are not limited to, unexpected changes in
regulatory requirements, exchange rates, tariffs and other barriers, and
potentially adverse tax consequences. The Company may enter into hedging
transactions to mitigate the effects of exchange rate variations.
License Fees. License fees increased 22.2% to $9.9 million in the three months
ended September 30, 1997 from $8.1 million in the three months ended September
30, 1996. License fees increased 5.6% to $26.2 million in the nine months ended
September 30, 1997 from $24.8 million in the nine months ended September 30,
1996. The increase during this period resulted from continued market acceptance
of the Company's products, primarily ERwin, which was stimulated by the
Company's sales and marketing activities, including the expansion of the
Company's direct and indirect channels. The ERwin product line accounted for
77.6% and 75.9% of the Company's license fees for the three months ended
September 30, 1997 and 1996, and 76.1% and 78.6% for the nine months ended
September 30, 1997 and 1996, respectively. In June 1997, the Company released
ERwin 3.0, this new version contributed to the increased ERwin revenue in the
three months ended September 30, 1997. The Company anticipates that this product
will continue to generate increased license fee revenue in the future. ModelMart
accounted for 7.8% and 11.4% of license fees for the three months ended
September 30, 1997 and 1996, and 9.1% and 8.0% of license fees for the nine
months ended September 30, 1997 and 1996, respectively. The remainder of the
license fees were received primarily from licenses of BPwin. License fees
include revenues from software licensed either directly from the Company or
through Value Added Resellers, dealers or distributors, and from third party
software.
Cost of License Fees. Cost of license fees as a percentage of license fee
revenues was 7.9% and 7.6% for the three months ended September 30, 1997 and
1996, respectively and 8.1% and 6.5% for the nine months ended September 30,
1997 and 1996, respectively. The increase in the cost of license fees is the
result of the release of ERwin 3.0 in June 1997 and BPwin 2.0 in September 1997.
The Company may enter into, from time to time, arrangements under which the
Company will resell third party products, resulting in additional costs of
license fees. Cost of license fees consists primarily of the costs of product
media, duplication, manuals, shipping and third party royalty costs for software
licensed to the Company's customers.
Maintenance & Service Fee Revenue. Maintenance and service fee revenue increased
by 37.5% to $3.3 million in the three months ended September 30, 1997 from $2.4
million in the three months ended September 30, 1996. Maintenance and service
fee revenue increased 41.8% to $9.5 million in the nine months ended September
30, 1997 from $6.7 million in the nine months ended September 30, 1996. The
growth in maintenance and service fee revenues during the periods presented was
primarily the result of increased maintenance fees as a result of a targeted
effort from the sales force to increase the renewal rate on maintenance
agreements and, to a lesser extent, the increase in ModelMart license fee
revenue, for which all users in the workgroup are encouraged to be under
maintenance.
Cost of Maintenance & Services. Cost of maintenance and services as a percentage
of maintenance and service fee revenue was 23.7% and 36.6% for the three months
ended September 30, 1997 and 1996,
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respectively and 26.9% and 42.8% for the nine months ended September 30, 1997
and 1996 respectively. The decrease in cost for these periods is the result of a
larger increase in maintenance fees which has a lower cost than training and
consulting services. Training and consulting fees generate lower margins than
maintenance fees because of the labor intensive nature of training and
consulting. Cost of maintenance and services consists primarily of personnel and
related costs for training, consulting provided by the Professional Services
Group, customer technical support and payments to third party service providers.
Cost of maintenance and services also reflects the costs associated with product
media, duplication, manuals, and shipping product upgrades to customers who have
subscribed to the Company's maintenance plans.
Sales and Marketing. Sales and marketing expenses were $6.3 million in the three
months ended September 30, 1997 as compared to $6.8 million in the three months
ended September 30, 1996 and represented 47.9% and 65.1%, of total revenues in
each period, respectively. The decrease in the comparable three month periods is
attributable to reduced personnel expenses as well as increased cost control on
marketing programs. Sales and marketing expenses increased 2.2% to $18.4 million
in the nine months ended September 30, 1997 from $18.0 million in the nine
months ended September 30, 1996 and represented 51.6% and 57.3% respectively, of
total revenues in each period. Sales and marketing expenses increased in the
nine months ended September 30, 1997, primarily due to increases in personnel
expenses from increased hiring, increased advertising and promotional costs, and
increased sales commissions. The growth in the Company's sales and marketing
expenses during the nine months ended September 30, 1997 reflects the continued
expansion of its direct field sales force. The increase in sales and marketing
expenses during the nine months ended September 30, 1997 also reflects increased
advertising and promotional programs related to releases of extended versions of
ERwin, ModelMart and BPwin and releases of new products such as Universal
Directory and TESTBytes. In March 1997, the Company also hosted its first
International User Conference in New Orleans. Sales and marketing expenses
consist primarily of salaries, commissions and bonuses paid to sales and
marketing personnel, as well as travel and promotional expenses.
Research and Development. Research and development expenses increased 12.5% to
$1.8 million in the three months ended September 30, 1997 from $1.6 million in
the three months ended September 30, 1996 and represented 13.8% and 15.2% of
total revenues, respectively. Research and development expenses increased 26.2%
to $5.3 million in the nine months ended September 30, 1997 from $4.2 million in
the nine months ended September 30, 1996 and represented 14.8% and 13.5% of
total revenues, respectively. The increase in research and development expenses
during the periods presented was the result of the Company's ongoing development
of extended versions of ERwin, BPwin, TESTBytes, ModelMart and Universal
Directory, as well as ongoing development of new products, and the continuation
of its quality control and quality assurance programs. Research and development
expenses are generally charged to operations as they are incurred and have not
been capitalized since capitalizable costs have not been material. Research and
development expenses consist primarily of software engineering personnel costs,
costs of third party equipment and software for development purposes and costs
of outside consultants hired by the Company to assist in its product development
efforts.
General and Administrative. General and administrative expenses were $1.6
million for the three months ended September 30, 1997 as compared to $1.7
million for the three months ended September 30, 1996 and represented 12.0% and
16.2% of total revenues, respectively. General and administrative expenses
increased 4.5% to $4.6 million for the nine months ended September 30, 1997 from
$4.4 million for the nine months ended September 30, 1996 and represented 13.0%
and 14.1% of total revenues, respectively. The increase in general and
administrative expenses, for the nine months ended September 30, 1997, related
primarily to the overall expansion of the Company's operations and facilities`.
General and administrative expenses consist primarily of salaries of
administrative, executive and financial personnel, provision for doubtful
accounts, and professional fees.
Acquired In-process Research and Development. On September 30, 1996, the Company
acquired the source code for TESTBytes, an automatic test data generation tool,
from a privately-held software company. The total cost of the transaction,
including acquisition costs, was approximately $1.6 million. Subsequent to an
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independent valuation, the company recorded a charge of $1.0 million for the
acquisition of in-process research and development and acquisition costs in the
quarter ended September 30, 1996.
Income Taxes. The Company provides for income taxes at an effective tax rate
based on estimated annual federal and state statutory rates.
Impact of Recently Issued Accounting Standards. In June 1997, the Financial
Accounting Standards Board issued Statement No. 130, "Reporting Comprehensive
Income" ("FAS 130"), effective for years beginning after December 15, 1997. FAS
130 establishes standards for the reporting and display of comprehensive income
and its components in a full set of general purpose financial statements. The
adoption of FAS 130 will not affect results of operations or financial position,
but will affect the disclosure of shareholder equity changes in such items as
foreign currency translation adjustments and the unrealized gains (losses) of
available-for-sale securities. Management is currently evaluating the disclosure
impact of FAS 130.
In June 1997, the Financial Accounting Standards Board issued Statement No. 131,
"Disclosures about Segments of an Enterprise and Related Information" ("FAS
131"), effective for years beginning after December 15, 1997. FAS 131 requires
that a public company report financial and descriptive information about its
reportable operating segments in annual and interim financial statements. The
adoption of FAS 131 will not affect results of operations or financial position,
but may affect the Company's reporting of segment information. Management is
currently evaluating the disclosure impact of FAS 131
Liquidity and Capital Resources
At September 30, 1997, the Company had cash and cash equivalents of $22.5
million and marketable securities of $13.3 million.
Net cash provided by operating activities was $7.8 million for the nine months
ended September 30, 1997 compared to $1.6 million for the nine months ended
September 30, 1996. The increase in cash provided by operating activities
primarily reflects the Company's increase in net income and an increase in
accounts payable and other current liabilities. The increase in accounts payable
and other current liabilities arose in the normal course of operations.
Net cash and cash equivalents used in investing activities increased $4.4
million in the first nine months of 1997 as compared to the same period in 1996.
This increase in investing activities primarily reflects the net change in the
marketable securities position.
Net cash provided by financing activities increased by $.6 million in the first
nine months of 1997 compared to the same period in 1996 as a result of the
increase in the exercising of employee stock options.
The Company believes that its existing cash balances together with cash flow
from operations will be sufficient to meet its cash requirements for at least
the next twelve months.
"LOGIC WORKS," "ERwin," "TESTBytes," "BPwin," "OOwin," and "RPTwin" are
registered trademarks of the Company. "ModelMart," "Universal Directory,"
"Universal Modeling Architecture (UMA)," "Logic Works" with logo and the phrase
"Making Database Design Easier in a Client/Server World" are trademarks of the
Company. This filing on Form 10-Q also includes trademarks and tradenames of
companies other than Logic Works, Inc.
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PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not subject to any lawsuits or other claims brought
in the ordinary course of business, which, in the opinion of
management, based upon consultation with legal counsel, will have a
material adverse effect on the Company's business, financial
condition, and/or results of operations.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
See attached press release.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
11. Statement regarding computation of per share earnings.
27. Statement regarding financial data schedule.
b) Reports on Form 8-K
No Reports on Form 8-K
11
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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, thereunto duly authorized.
LOGIC WORKS, INC.
Dated: November 14, 1997 By: /s/ GREGORY A. PETERS
-------------------------------
Gregory A. Peters
Chief Executive Officer, President and Director
(Principal Executive Officer)
Chief Financial Officer
(Principal Financial Officer)
12
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Item 5 Attachment
LOGIC WORKS ANNOUNCES RECORD THIRD QUARTER RESULTS
Gregory A. Peters Named CEO
PRINCETON, N.J., October 21, 1997 - Logic Works, Inc. (NASDAQ: LGWX), a leading
provider of database design and modeling solutions, today reported record
revenues of $13.2 million and net income of $1.5 million, or $0.11 per share,
for the third quarter ended September 30, 1997. This compares to revenues of
$10.5 million and a net loss of $1.3 million, or $0.11 per share, for the third
quarter ended September 30, 1996.
For the first nine months of 1997, revenues were $35.7 million and net income
was $2.3 million, or $0.18 per share. This compares to revenues of $31.5 million
and a net loss of $0.1 million, or $0.01 per share, for the first nine months of
1996.
"We are pleased with the acceleration in revenue growth these results reflect,"
said Gregory A. Peters, President and Chief Executive Officer. "Logic Works
ERwin continues to pace revenues, growing 30% year over year and provides a
tremendous springboard to leverage our entire product family into major accounts
worldwide. This has enabled our direct sales force to increase our average order
size as it continues to further penetrate these accounts."
The company also announced that Peters has been named president and chief
executive officer and a member of the board of directors. Peters has been
serving as interim president and chief executive officer since April 1997 and as
chief financial officer since August 1996.
"The board was unanimous in its decision and in its support of Greg," said
Benjamin Cohen, chairman of the board. "After a thorough external search, we
felt that the best individual to lead Logic Works forward was already here.
Greg's skills, as evidenced by
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his accomplishments since he joined the company a year ago, are exactly what
Logic Works needs in this position."
"Companies are looking for solutions to solve the multitude of complexities
associated with information systems development across the Web, data warehouse
and client/server environments," said Peters. "I believe we have the people,
technology and momentum to continue to deliver innovative solutions to IT
professionals managing database related projects."
Peters joined Logic Works in August 1996 as Chief Financial Officer. Prior to
that he was Chief Financial Officer and Treasurer and a member of the Office of
the President at Micrografx, Inc. Peters is a C.P.A. and earned a B.A. degree
from Rhodes College.
Peters will join the board and replace Robert Davoli who has stepped down to
pursue his venture capital responsibilities. "Bob has made a significant
contribution to the company since he joined us in 1995," said Cohen. "He remains
a valued colleague to the board and to the company."
About Logic Works
Logic Works is a leading provider of client/server, data warehouse and business
process re-engineering software solutions with over 45,000 users worldwide.
Logic Works' tools are adaptable to a wide variety of leading technologies,
providing an open and extensible solution. Logic Works is headquartered in
Princeton, New Jersey, with Federal government offices in Vienna, Va., and
international offices in the United Kingdom, Germany, and Australia. Logic Works
also has key distributors in the Far East and 42 countries worldwide.
This press release contains forward-looking statements. All forward-looking
statements involve risks and uncertainties, including, without limitation, the
risks detailed in the
14
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Company's filings and reports with the Securities and Exchange Commission. Such
statements are only predictions and actual events or results may differ
materially.
15
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EXHIBIT INDEX
Number Description Page No.
- ------ ----------- --------
11 Statement re: Computation of Per Share Earnings 17
27 Statement re: Financial Data Schedule 18
16
Exhibit 11
LOGIC WORKS, INC.
COMPUTATION OF EARNINGS PER SHARE
(unaudited)
(dollars in thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------------------
1997 1996 1997 1996
----------------------------------------
<S> <C> <C> <C> <C>
Primary
Net income (loss) $ 1,462 $ (1,299) $ 2,322 $ (116)
========================================
Weighted average number of common shares outstanding 12,306 11,386 12,012 11,348
Weighted average stock options outstanding 613 -- 718 --
----------------------------------------
Weighted average number of common shares outstanding as adjusted 12,919 11,386 12,730 11,348
Net income (loss) per share $ 0.11 $ (0.11) $ 0.18 $ (0.01)
========================================
Fully diluted
Net income (loss) $ 1,462 $ (1,299) $ 2,322 $ (116)
========================================
Weighted average number of common shares outstanding 12,306 11,386 12,012 11,348
Weighted average stock options outstanding 842 -- 1,073 --
----------------------------------------
Weighted average number of common shares outstanding as adjusted 13,148 11,386 13,085 11,348
Net income (loss) per share $ 0.11 (0.11) $ 0.18 $ (0.01)
========================================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 22,509,000
<SECURITIES> 13,255,000
<RECEIVABLES> 12,527,000
<ALLOWANCES> 2,243,000
<INVENTORY> 0
<CURRENT-ASSETS> 50,127,000
<PP&E> 7,929,000
<DEPRECIATION> 3,552,000
<TOTAL-ASSETS> 56,605,000
<CURRENT-LIABILITIES> 17,321,000
<BONDS> 0
0
0
<COMMON> 125,000
<OTHER-SE> 39,159,000
<TOTAL-LIABILITY-AND-EQUITY> 56,605,000
<SALES> 26,236,000
<TOTAL-REVENUES> 35,720,000
<CGS> 2,137,000
<TOTAL-COSTS> 4,689,000
<OTHER-EXPENSES> 28,347,000
<LOSS-PROVISION> 431,000
<INTEREST-EXPENSE> 34,000
<INCOME-PRETAX> 3,689,000
<INCOME-TAX> 1,367,000
<INCOME-CONTINUING> 2,322,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,322,000
<EPS-PRIMARY> 0.18
<EPS-DILUTED> 0.18
</TABLE>
