SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED: COMMISSION FILE NUMBER:
JANUARY 29, 2000 0-3713
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NATIONAL COMPUTER SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 41-0850527
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
11000 PRAIRIE LAKES DRIVE
EDEN PRAIRIE, MINNESOTA 55344
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 952/829-3000
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Securities registered pursuant to Section 12(g) of the Act:
Common Shares -- par value $.03 a share
(Title of Class)
Rights to Purchase Series A Participating Preferred Stock
(Title of Class)
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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 such shorter periods 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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendments to
this Form 10-K. X
State the aggregate market value of the voting shares held by non-affiliates of
the registrant as of March 31, 2000.
Common Shares, $.03 par value -- $1,523,531,000.
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of April 11, 2000.
Common Shares, $.03 par value - 32,531,800 shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Stockholders for the year ended January 29,
2000 are incorporated by reference into Parts I, II and IV.
Portions of the definitive proxy statement for the Annual Meeting of
Stockholders to be held on May 25, 2000 are incorporated by reference into Part
III.
PART I
ITEM 1. BUSINESS
National Computer Systems, Inc. ("NCS"(R) or the "Company") is a global
information services company, which provides services, software, systems and
Internet-based technologies for the collection, management and interpretation of
data.
The Company's headquarters are located at 11000 Prairie Lakes Drive, Eden
Prairie, Minnesota 55344, telephone 952/829-3000.
MARKETS SERVED
NCS serves two broad markets: Education and Large Scale Data Management.
Education
The Company develops and markets enterprise application software for the
administration and management of curriculum, student instruction and financial
data at the classroom, school, school district and state levels. NCS provides
training, consulting and project management services in support of these
products. In addition, NCS offers network services, including design, hardware
and software procurement, Internet utilization, maintenance and support, and
network administration. NCS offers Internet delivery of electronic testing and
reporting services, teacher resource services and materials, interactive
curriculum and services to link parents with schools.
NCS also develops and markets data collection services and systems for the
Education market. These services and systems provide optical scanning,
image-based or electronic data collection and computer processing services for
the high accuracy, large volume and complex processing needs of major test
publishers, federal and state education agencies, universities and colleges, and
local school districts.
By using the Company's optical scanning and image-based systems and forms,
individual school districts can perform in-house student assessment testing
applications, including teacher created or administration developed norm- or
criterion-referenced tests; administrative applications such as attendance,
scheduling, grade reporting and registration; library and inventory management;
and financial management and payroll.
The Company's information processing services are also provided in support of
federal student financial aid programs for post-secondary education.
Large Scale Data Management
NCS develops, markets and manages complex data collection, processing and
reporting services and products targeted for certain key applications in the
Large Scale Data Management market.
NCS provides scanners and forms for customers to do their own paper-based data
collection. The Company also provides outsourcing services for complex
information management projects. Its services and products include comprehensive
data collection technologies, database management, software development,
document imaging, telecommunications support and information dissemination
systems. In addition, NCS offers network design, hardware and software
acquisition, implementation, maintenance and support services. Finally, NCS'
network administration services include network and system security, help desk,
Internet connectivity and training.
BUSINESS SEGMENTS
NCS delivers its products and services through the following five business
segments.
Assessments and Testing Services
NCS is the largest commercial processor of academic assessment tests for grades
K-12 in the United States. NCS markets test scoring services to major test
publishers, state education agencies, the federal government, local school
districts and commercial customers. For these customers, NCS service offerings
include program design; test item development; program management; software
development; printing, packaging, distribution and collection logistics; and
scoring, editing, analysis and final reporting. Scoring services include
selected response scoring and professional scoring of constructed response test
items such as essays. Both optical mark reading (OMR) and image scanning
technologies are utilized in the scoring process.
The Company offers a secure Internet-based electronic testing delivery and
reporting capability, which allows NCS to participate in the professional
licensure and certification market. This capability also permits NCS to offer an
electronic testing option to traditional statewide grade K-12 testing programs.
The Company also publishes and distributes tests and provides scoring services
to industrial and clinical psychologists, psychiatrists, human resource
professionals and educators. These tests and scoring services include
personality assessment and psychological diagnostic testing and career
development, guidance counseling and human resource organizational assessments.
In addition, to provide tools for workforce development, the Company's test and
scoring services have been expanded to include assessments for personnel
selection and skill and career assessment.
Education Software and Services
A principal strategy of the Company in servicing the education marketplace is to
concentrate on enterprise software for school administration. NCS' software
products include student administrative software to assist educators in student
management, including applications such as academic reporting, attendance
gathering and scheduling. The Company's instructional and curriculum management
software products manage information about student achievement against
educational objectives. In conjunction with its instructional management
software, NCS offers model curriculum and test item databases to assist schools
in establishing and meeting stated or mandated curriculum objectives. During
1999, the Company introduced the ParentCONNECTxp(R) module to allow Internet
access by parents to student academic data. NCS plans to continue to extend the
utility of its systems using Internet capabilities.
With the acquisition of NovaNET Learning, Inc. in fiscal 1999, the Company began
offering an online, comprehensive education and communication private network
that offers self-paced, interactive curriculum for secondary school students and
adults. Acquired in fiscal 1998, NCS' Educational Structures Internet-based
products and services allow educators to access customized lesson plans in
social studies, language arts, mathematics and science with appropriate
student/teacher content resources, teaching strategies and interactive
activities.
NCS products also include financial management software for schools and school
districts. The Company provides software for accounting and financial reporting,
payroll, human resources, inventory and many other financial and administrative
functions.
NCS offers services related to its enterprise software to assist with the design
and implementation of these installations. Services offered by NCS include:
professional consulting; project management; systems installation, integration
and maintenance; training; and help desk and ongoing support.
NCS Services
NCS provides a comprehensive package of services that include: systems analysis
and design; software development; comprehensive data collection technologies,
including Internet-based systems, paper-based imaging and electronic data
gathering; forms management; telecommunication and telephone call center
support; information management and dissemination; network support, such as
Internet connectivity; and training. These services are principally outsourced
to NCS and performed at NCS sites.
The Company's services also include: quality measurement, product warranty and
customer satisfaction surveys and customer data collection; human resource
applications, such as applicant tracking, organizational development, employee
attitude surveys, benefits enrollment and employee evaluation; medical device
tracking services to help medical manufacturers comply with the 1990 Safe
Medical Devices Act; and general data collection, analysis, management and
reporting.
During fiscal 2000, the Company, working with the U.S. Census Bureau, will
manage and operate one of four census data capture centers. NCS, at its center,
will receive completed English and Spanish-language Census forms, manage all
imaging operations and perform all data capture functions to collect and report
the constitutionally-mandated count of the U.S. population.
NCS provides its large scale data management services to several federal
government customers. The U.S. Department of Education, which is the Company's
largest single customer, outsources projects to NCS, including the processing
and eligibility calculation of the federal application for student aid in
post-secondary education. Under contract, NCS also manages the wide area network
over which this information is distributed to and from member colleges,
universities, and other post-secondary institutions, and responds to telephone
calls from applicants at all stages of the financial aid process. Other federal
agencies that are customers of NCS include the U.S. Department of Defense,
Department of Labor, Office of Personnel Management, and the Internal Revenue
Service.
Data Collection Systems
NCS manufactures OMR scanners that can read data from specially designed forms
printed by the Company with specifically formulated inks. Computing capability
is built into most scanners. Scanners usually incorporate, or interface directly
with, software developed by the Company. Optical scanning equipment is most
effective for applications that require the highest accuracy, precise response
definition and cost effective data capture.
The Company's lines of OMR hardware include scanners marketed as OpScan(R)
products. The scanners provide a wide range of capabilities to meet the needs of
customers. The OMR scanning systems utilize a proprietary mark discrimination
system to distinguish valid marks, which provides a very high degree of accuracy
in processing responses. To enhance the usefulness of the OpScan scanners, the
Company offers optional features, such as bar code reading capability, a
transport printer to print alphanumeric messages on scanned documents, optional
read formats and upgraded computer capability options.
NCS markets image-based data collection systems that represent an extension of
the Company's optical mark reading technology. These products contain NCS
proprietary character recognition technology as well as integrated third-party
technologies. When attached to a computer workstation and using sophisticated
software, these scanners allow customers to efficiently and accurately collect
and interpret a wide range of information from a printed form, including
machine- and hand-printed data.
NCS offers a number of utility software and standard application programs for
use with NCS data collection systems. Processing and application software is an
important component of its scanning products and services. The Company also
offers non-proprietary data collection products and technology to address
specific customer needs.
The Company designs, manufactures and sells scannable forms, including
multiple-page booklets. A variety of custom forms are tailored to meet specific
customer needs. In addition, standardized forms are used in applications such as
testing, attendance, scheduling and student evaluation in the Education market
and applications such as customer surveys or market research in the Large Scale
Data Management market.
The Company believes that the use of a properly designed and printed form is an
essential element in assuring that a scanning system performs with greatest
accuracy and optimum capability. In order to assure a high degree of
consistency, reliability, and accuracy, the Company prints its forms to exacting
specifications and recommends them for use with its scanning systems.
International
NCS' products and services are sold internationally. The Company's OMR and
image-based data collection systems and scannable forms and booklets are
utilized outside the United States by ministries of education for testing and
assessment and by commercial or governmental customers for data collection, data
management and reporting applications.
The Company's international business strategy is to focus on certain countries
with services-led applications. These applications center on Internet and
paper-based testing and assessment in the Education market and on telecom
deregulation for commercial or governmental entities.
In-country services include professional consulting; project management;
comprehensive data collection technology and processing; forms management;
telecommunication and telephone call center operations and support; data base
management; and information dissemination.
Additional Business Segment Data
For financial information regarding each of the Company's business segments and
information regarding sales to government agencies, see Note 9 of Notes to
Consolidated Financial Statements and Management's Discussion and Analysis of
Results of Operations and Financial Condition that are included in the Annual
Report to Shareholders for the fiscal year ended January 29, 2000, and
incorporated herein by reference.
MARKETING
NCS markets its data collection hardware and software and its data collection
and processing services in the United States directly through sales employees
and indirectly through business partners, original equipment manufacturers and
resellers. The Company's published test products and related test-scoring
services are marketed in North America through telemarketing, direct mail,
professional journal advertising and professional trade convention attendance.
Outside the United States, the Company's products and services are sold through
sales employees, distributors and independent sales agents. Each of the
Company's sales organizations are supported by marketing and sales support
personnel.
SOFTWARE SUPPORT, TECHNICAL SUPPORT AND MAINTENANCE
Software support is provided on a contractual basis to customers licensing
application software systems from the Company. NCS assists customers with
installation, training, hardware or software upgrades and development of
specific customer application software on a fee-for-service basis.
The Company offers technical support and hardware maintenance to customers
purchasing or leasing its equipment either on a contractual basis or through its
national network of customer service and support engineers. NCS emphasizes
prompt, reliable service and close customer relationships. Technical and
maintenance support includes labor, parts and operational training, and, where
applicable, programming of the equipment and design of forms.
DEVELOPMENT OF PRODUCTS AND SERVICES
The Company's development efforts are directed toward new product development
and enhancements to existing products. During the fiscal years ended January 29,
2000 and January 31, 1999 and 1998, the Company's product development expenses
were approximately $20.4 million, $12.4 million and $8.6 million, respectively.
The expenditures related principally to education software product development,
test processing technology and service process improvements (with emphasis on
Internet applications). For a description of new products acquired through
acquisitions, see Note 2 of Notes to Consolidated Financial Statements that are
included in the Annual Report to Shareholders for the fiscal year ended January
29, 2000, and incorporated herein by reference.
MANUFACTURING
The Company assembles its scanning equipment from electronic components, metal
stampings, molded plastic parts and mechanical sub-assemblies. The Company
assembles most of the scanning systems equipment at its Eagan, Minnesota
facility. Computer hardware is purchased from other manufacturers.
Scannable forms are produced at NCS' printing facilities in Columbia,
Pennsylvania; Owatonna, Minnesota; and Melbourne, Victoria, Australia. The ink
and paper used in forms production are produced to the Company's specifications
by a limited number of suppliers. Although the Company has no long-term supply
contracts with its paper or ink suppliers, the Company has had long-term
relationships with such suppliers and believes that these relationships are
good.
COMPETITION
Competition in the data collection and information management industry is
intense. Numerous companies offer various combinations of data collection and
data management services. Optical scanning and imaging are only two of the
numerous data collection methods available and successfully in use in the
marketplace today. The Company continues to focus on the development of market
niches where scanning technology has advantages over other data entry
technologies. In addition to competition provided by alternative methods of data
capture (including on-line terminal keyboards and optical character readers),
other scanning vendors supply products that directly compete with those of the
Company.
Enterprise software for the Education market has intense competition from
in-house systems, national and regional software and service providers, data
processing service bureaus, test publishers and providers of educational
curriculum and instruction management products and services. Numerous companies
have recently started using the Internet to deliver educational content and
certain administrative functions.
The Company's scannable forms compete with forms produced by commercial and
specialized printers. Principal competitive factors in the scannable forms
printing industry are product quality, service and price.
NCS' test processing, test publishing and computer processing services compete
with several test publishers and data processing service bureaus. The Company's
customer support and maintenance organization competes with services provided by
manufacturers, national service companies, and local providers of maintenance
services.
PATENTS, TRADEMARKS AND LICENSES
The Company holds certain patents, registered and unregistered trademarks and
copyrights. The Company also has rights under licensing arrangements to a number
of patents, trademarks, copyrights and manufacturing processes and materials.
These licensing arrangements are with publishers of various copyrighted
psychological, aptitude and achievement tests. These publishers license NCS to
distribute these tests, to print and sell answer sheets for such tests, and to
score such tests. Payment of royalties is usually based upon the volume of tests
distributed, answer sheets sold, and tests scored. NCS believes that its
business is not dependent upon any one individual patent, trademark, copyright
or license right or group thereof.
"NCS", "OpScan" and "ParentCONNECTxp" are registered trademarks of the Company.
EMPLOYEES
As of February 26, 2000, the Company employed approximately 4,600 full-time
employees. The Company believes that its employee relations are excellent.
EXECUTIVE OFFICERS OF THE REGISTRANT
The names, ages and positions of all of the executive officers of the Company as
of February 26, 2000 are listed below along with their business experience
during the past five years.
NAME AGE POSITION
- ------------------- ------- -----------------------------------------
Russell A. Gullotti 57 Chairman of the Board,
President and Chief Executive Officer
Robert C. Bowen 58 Senior Vice President
Michael C. Brewer 53 Vice President and General Counsel
John W. Fenton, Jr. 59 Secretary-Treasurer
Simon N. Garneau 53 Vice President
Clive M. Hay-Smith 42 Vice President
Robert C. Hickcox 46 Vice President
Gary L. Martini 49 Vice President
Michael A. Morache 49 Vice President
David W. Smith 55 Vice President
Jeffrey W. Taylor 46 Vice President and Chief Financial Officer
Adrienne T. Tietz 53 Vice President
Mr. Gullotti has been President and Chief Executive Officer since October, 1994
and Chairman of the Board since May, 1995.
Mr. Bowen has been a Senior Vice President of NCS for more than five years.
Mr. Brewer has been Vice President and General Counsel of NCS since May, 1995.
Prior to that he was General Counsel of NCS from May, 1992 until May, 1995.
Mr. Fenton has been Secretary-Treasurer of NCS for more than five years.
Mr. Garneau has been a Vice President of NCS since June, 1999. Prior to that he
was a self-employed business consultant from January, 1998 to June, 1999.
Previously, he was President and Chief Executive Officer of ISI Systems, Inc.
(computer software and services) for more than five years.
Mr. Hay-Smith has been a Vice President of NCS for more than five years.
Mr. Hickcox has been a Vice President of NCS since February, 1997 and was
Director, Methods and Tools of NCS from April, 1995 to February, 1997. Prior to
that he was Manager, Tools and Systems with Digital Equipment Corporation
(computer manufacturing and services) for more than five years.
Mr. Martini has been a Vice President of NCS since August, 1997. Prior to that
he was owner and President of Martini & Associates (organizational development
consulting) for more than five years.
Mr. Morache has been a Vice President of NCS since May, 1996. Prior to that he
was a Vice President of Unisys Corporation (information management company) from
September, 1995 to May, 1996. Previously, he was a Senior Vice President with
ALLTEL Information Services, Inc. (information-processing management,
outsourcing services, and application software) for more than five years.
Mr. Smith has been a Vice President of NCS for more than five years.
Mr. Taylor has been Vice President and Chief Financial Officer for more than
five years.
Ms. Tietz has been a Vice President of NCS for more than five years.
Officers are elected annually by the Board of Directors. There are no family
relationships among these officers, nor any arrangement or understanding between
any officer and any other person pursuant to which the officer was selected.
PRIVATE SECURITIES LITIGATION REFORM ACT
In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, the Company is hereby filing, as Exhibit 99
hereto, cautionary statements identifying important factors that could cause the
Company's actual results to differ materially from those projected in forward
looking statements of the Company made by, or on behalf of, the Company.
ITEM 2. PROPERTIES
The Company's principal facilities are as follows:
SQUARE
LOCATION FOOTAGE GENERAL PURPOSE
- --------------- -------------- -------------------------------
Mesa, AZ (1) 96,000 Education software and services,
general offices, and product
development and support
Foothill Ranch, CA 37,000 Education software and services,
product development and support
Cedar Rapids, IA 205,000 Data processing services and
warehouse
Iowa City, IA Assessment and test processing
Building 1 (1) 168,000 and data processing services,
Building 2 (1) 142,000 operations and general offices
Building 3 25,000
Champaign, IL 29,000 Education software and services,
product development and support
Rosemont, IL 23,000 Assessments and test publishing
general offices
Lawrence, KS (2) 90,000 Data processing services,
operations and general offices
Eagan, MN (1) 109,000 Scanner hardware development and
manufacturing; NCS services
general offices; customer support
services operations and general
offices; and international
operations and general offices
Eden Prairie, MN 67,000 Executive general offices and
electronic test processing
operations and general offices
Edina, MN (1) 101,000 Data collection systems and
services general offices,
data processing services
and scanner software
development
Minnetonka, MN (1) 54,000 Assessments and test publishing
and scoring operations and
general offices
Owatonna, MN (1) 128,000 Documents design and production
Columbia, PA (1) 121,000 Documents design and production
Austin, TX
Building 1 35,000 Data processing services,
Building 2 41,000 operations and general offices
Building 3 157,000 Data processing services,
documents design and
production, operations and
general offices
Buenos Aires, Argentina 38,000 Data processing services,
operations and general offices
Nunawading, Victoria 30,000 Data processing services,
(Melbourne) documents design and
Australia (1) production, operations and
general offices
Mississauga, Ontario, 59,000 Assessment and test processing
Canada and data processing services,
operations and general offices
Rotherham, South Yorkshire 34,000 Data processing services,
England operations and general offices
Mexico City, Mexico 24,000 Data processing services,
operations and general offices
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(1) Denotes owned facility.
(2) Construction of an additional 60,000 square foot facility at this
location, to be used for the same general purposes, is scheduled for
completion during the second quarter of 2000.
The Company believes that its facilities will be adequate to meet its current
needs.
ITEM 3. LEGAL PROCEEDINGS
On March 10, 2000, the Company entered into a settlement agreement with Edu-Cap,
Inc. (formerly University Support Services, Inc.) ("Edu-Cap") in connection with
the previously disclosed lawsuit against the Company by Edu-Cap in the United
States District Court, District of Minnesota, Fourth Division. Pursuant to the
settlement agreement, all claims that were alleged or could have been alleged
against the Company by Edu-Cap in the lawsuit have been settled. The settlement
did not have a material adverse effect on the Company's consolidated financial
position or results of operations.
The Company is not a party to nor is its property subject to any material
pending legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted during the fourth quarter of the fiscal year
ended January 29, 2000 to a vote of security holders through the solicitation of
proxies or otherwise.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
"Quarterly Market Data" included in the Annual Report to Shareholders for the
year ended January 29, 2000 is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
"Five Year Financial Data" included in the Annual Report to Shareholders for the
year ended January 29, 2000 is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
"Management's Discussion and Analysis of Results of Operations and Financial
Condition" included in the Annual Report to Shareholders for the year ended
January 29, 2000 is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
"Management's Discussion and Analysis of Results of Operations and Financial
Condition - Capital Resources and Liquidity" included in the Annual Report to
Shareholders for the year ended January 29, 2000 is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements and supplementary data of NCS
and its subsidiaries, included in the Annual Report to Shareholders for the year
ended January 29, 2000 are incorporated herein by reference:
Consolidated Balance Sheets -- January 29, 2000 and January 31, 1999
Consolidated Statements of Income -- Years ended January 29, 2000 and January
31, 1999 and 1998
Consolidated Statements of Changes in Stockholders' Equity -- Years ended
January 29, 2000 and January 31, 1999 and 1998
Consolidated Statements of Cash Flows -- Years ended January 29, 2000 and
January 31, 1999 and 1998
Notes to Consolidated Financial Statements -- January 29, 2000
Report of Independent Auditors dated March 6, 2000
Quarterly Results of Operations (Unaudited)
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
"Election of Directors" included in the Company's definitive proxy statement for
the Annual Meeting of Stockholders to be held on May 25, 2000 and "Executive
Officers of the Registrant" in Part I of this report are incorporated herein by
reference.
ITEM 11. EXECUTIVE COMPENSATION
"Summary Compensation Table" and "Stock Options" included in the Company's
definitive proxy statement for the Annual Meeting of Stockholders to be held on
May 25, 2000 are incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
"Election of Directors" and "Ownership of NCS Common Stock by Certain Beneficial
Owners and Executive Officers" included in the Company's definitive proxy
statement for the Annual Meeting of Stockholders to be held on May 25, 2000 is
incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
"Election of Directors" included in the Company's definitive proxy statement for
the Annual Meeting of Stockholders to be held on May 25, 2000 is incorporated
herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) List of Financial Statements and Financial Statement Schedules
(1) The following consolidated financial statements of National Computer
Systems, Inc. and subsidiaries, included in the Annual Report to
Shareholders for the year ended January 29, 2000 are incorporated by
reference in Item 8:
Consolidated Balance Sheets -- January 29, 2000 and January 31, 1999
Consolidated Statements of Income -- Years ended January 29, 2000 and
January 31, 1999 and 1998
Consolidated Statements of Changes in Stockholders' Equity -- Years
ended January 29, 2000 and January 31, 1999 and 1998
Consolidated Statements of Cash Flows -- Years ended January 29, 2000
and January 31, 1999 and 1998
Notes to Consolidated Financial Statements -- January 29, 2000
Report of Independent Auditors dated March 6, 2000
(2) Consolidated financial statement schedules of National Computer
Systems, Inc. and subsidiaries required to be filed by Item 14(d):
All schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required
under the related instructions or are inapplicable and, therefore, have
been omitted.
(3) Listing of Exhibits:
EXHIBIT
3.1 Restated Articles of Incorporation, as amended, are incorporated
herein by reference to Exhibit 3.1 to the NCS Form 10-K for the
fiscal year ended January 31, 1998.
3.2 Bylaws, as amended and restated, are incorporated herein by
reference to Exhibit 3.2 to the NCS Form 8-K dated March 4, 1996.
4.1 Instruments with respect to long-term debt where the total debt
auth- orized thereunder does not exceed 10% of the consolidated
total assets of the registrant are not being filed; the registrant
will furnish a copy of any such instrument to the Commission upon
request.
4.2 Second Amended and Restated Rights Agreement dated as of December
8, 1998 between NCS and Norwest Bank Minnesota, National
Association (including the form of Right Certificate attached as
Exhibit B thereto) is incorporated herein by reference to Exhibit 1
to Amendment No. 3 to Form 8-A/A dated December 15, 1998.
4.3 Credit Agreement dated as of November 17, 1997 between NCS and The
First National Bank of Chicago (as Agent); Norwest Bank Minnesota,
National Association; Suntrust Bank, Central Florida, National
Association; and The Bank of Tokyo - Mitsubishi Ltd., Chicago
Branch is incorporated herein by reference to Exhibit 4 to the
Company's Form 10-Q for the quarter ended October 31, 1997.
*10.1 Amended and Restated Change In Control Agreement dated as of May
21, 1998, by and between NCS and certain executives of NCS is
incorporated herein by reference to Exhibit 10.1 to the Company's
Form 10-Q for the fiscal quarter ended October 31, 1998.
*10.2 Amended and Restated Severance Agreement dated December 8, 1998, by
and between NCS and Russell A. Gullotti is incorporated herein by
reference to Exhibit 10.2 to the Company's Form 10-Q for the fiscal
quarter ended October 31, 1998.
*10.3 Description of Retirement Arrangements with David C. Malmberg is
incorporated herein by reference to Exhibit 19 to the Company's
Form 10-Q for the fiscal quarter ended October 31, 1992.
*10.4 Agreement dated August 22, 1994 between NCS and Charles W. Oswald
is incorporated herein by reference to Exhibit 10(b) to the
Company's Form 10-Q for the fiscal quarter ended October 31, 1994.
*10.5 NCS 1986 Employee Stock Option Plan is incorporated herein by
reference to Exhibit 10D to the Company's Form 10-K for the fiscal
year ended January 31, 1986.
*10.6 NCS 1989 Non-Employee Director Stock Option Plan, as amended, is
incorporated herein by reference to Exhibit 10.4 to the Company's
Form 10-K for the fiscal year ended January 31, 1998.
*10.7 NCS 1990 Employee Stock Option Plan, as amended, is incorporated
herein by reference to Exhibit 10.1 to the Company's Form 10-Q for
the quarter ended October 31, 1995.
*10.8 NCS 1995 Employee Stock Option Plan, as amended, is incorporated
herein by reference to Exhibit 10.2 to the Company's Form 10-Q for
the quarter ended October 31, 1995.
*10.9 NCS 1997 Employee Stock Option Plan is incorporated herein by
reference to Exhibit 10.14 to the Company's Form 10-K for the year
ended January 31, 1997.
*10.10 NCS 1999 Employee Stock Option Plan is incorporated herein by
reference to Exhibit 10.11 to the Company's Form 10-K for the year
ended January 31, 1999.
*10.11 NCS 1999 Non-Employee Director Stock Option Plan is incorporated
herein by reference to Exhibit 10.12 to the Company's Form 10-K for
the year ended January 31, 1999.
*10.12 NCS 1998 Employee Stock Purchase Plan is incorporated herein by
reference to Exhibit 10.17 to the Company's Form 10-K for the
fiscal year ended January 31, 1998.
*10.13 NCS 1997 Long-Term Incentive Plan is incorporated herein by
reference to Exhibit 10.13 to the Company's Form 10-K for the year
ended January 31, 1997.
*10.14 NCS Supplemental Deferred Compensation Plan is incorporated herein
by reference to Exhibit 4 to the Company's Form S-8 dated March 26,
1999.
*10.15 NCS Corporate Management Incentive Plan -- 1999 is incorporated
herein by reference to Exhibit 10.18 to the Company's Form 10-K for
the fiscal year ended January 31, 1999.
*10.16 NCS Corporate Management Incentive Plan -- 2000.
*10.17 NCS 2000 Long-Term Incentive Program.
13 Portions of NCS' Annual Report to Shareholders for the fiscal year
ended January 29, 2000.
21 Significant Subsidiaries.
23 Consent of Independent Auditors.
24 Power of Attorney authorizing J.W. Fenton, Jr. to sign the NCS Form
10-K for the year ended January 29, 2000 on behalf of other
officers and directors.
27 Financial Data Schedule.
99 Cautionary statements identifying important factors that could
cause the Company's actual results to differ from those projected
in forward looking statements.
- ----------------
* Indicates management contract or compensatory plan or arrangement required
to be filed as an exhibit to this report.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed for the three months ended
January 29, 2000.
(c) Exhibits
The response to this portion of Item 14 is submitted as a separate
section of this report.
(d) Financial Statement Schedules
Financial Statement Schedules have been omitted because they are not
required or are inapplicable.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
NATIONAL COMPUTER SYSTEMS, INC.
Dated: April 25, 2000 By: /s/ J. W. FENTON, JR.
----------------------------
J. W. Fenton, Jr.
SECRETARY-TREASURER
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
By RUSSELL A. GULLOTTI * Chairman of the Board of Directors,
--------------------- President and Chief Executive
Russell A. Gullotti Officer (principal executive officer)
By William J. Cadogan * Director
---------------------
William J. Cadogan
By DAVID C. COX * Director
---------------------
David C. Cox
By DELORES M. ETTER * Director
---------------------
Delores M. Etter
By JEAN B. KEFFELER * Director
---------------------
Jean B. Keffeler
By JOHN J. RANDO * Director
---------------------
John J. Rando
By STEPHEN G. SHANK * Director
---------------------
Stephen G. Shank
By JOHN E. STEURI * Director
---------------------
John E. Steuri
By JEFFREY W. TAYLOR * Vice President and Chief
- ------------------------- Financial Officer (principal
Jeffrey W. Taylor financial officer and
principal accounting officer)
* Executed on behalf of the indicated officers and directors of the registrant
by J. W. Fenton, Jr., Secretary-Treasurer, duly appointed attorney-in-fact.
/s/ J. W. FENTON, JR.
------------------- Dated: April 25, 2000
J. W. Fenton, Jr.
(ATTORNEY-IN-FACT)
FORM 10-K
NATIONAL COMPUTER SYSTEMS, INC.
FOR THE FISCAL YEAR ENDED JANUARY 29, 2000
EXHIBIT INDEX
EXHIBIT
- -------------
10.16 NCS Corporate Management Incentive Plan - 2000.
10.17 NCS 2000 Long-Term Incentive Program.
13 Portions of NCS' Annual Report to Shareholders for the fiscal year
ended January 29, 2000.
21 Significant Subsidiaries.
23 Consent of Independent Auditors.
24 Power of Attorney authorizing a certain person to sign the NCS Form
10-K for the year ended January 29, 2000 on behalf of other officers
and directors.
27 Financial Data Schedule.
99 Cautionary statements identifying important factors that could cause
the Company's actual results to differ from those projected in forward
looking statements.