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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 JUNE 30, 2001
[ ] 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 000-24677
BINDVIEW DEVELOPMENT CORPORATION
(Exact name of registrant as specified in its charter)
TEXAS 76-0306721
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5151 SAN FELIPE, 21st FLOOR, HOUSTON, TX 77056
(Address of principal executive offices) (Zip code)
(713) 561-4000
(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 [ ]
As of August 10, 2001, the Company had 53,948,124 shares of Common Stock, no par
value, outstanding.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BINDVIEW DEVELOPMENT CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<Table>
<Caption>
JUNE 30, DECEMBER 31,
ASSETS 2001 2000
--------- ------------
(UNAUDITED)
Current assets:
Cash and cash equivalents $ 45,024 $ 49,337
Short-term investments 3,326 9,247
Accounts receivable, net of allowance of $1,705 and $804 11,670 23,729
Other 1,276 1,428
--------- ---------
Total current assets 61,296 83,741
Property and equipment, net 13,053 14,150
Deferred income taxes 14,350 8,484
Investments and other 5,686 6,659
--------- ---------
Total assets $ 94,385 $ 113,034
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 745 $ 4,045
Accrued liabilities 2,745 2,421
Accrued compensation 4,139 2,826
Deferred revenues 9,132 9,966
--------- ---------
Total current liabilities 16,761 19,258
Deferred revenues 1,751 1,515
Stockholders' equity:
Common stock, no par value, 100,000 shares authorized,
53,817 and 52,298 shares issued, respectively 1 1
Treasury stock, at cost, 2,683 and 635 shares, respectively (12,399) (5,324)
Additional paid-in capital 121,479 117,816
Accumulated deficit (31,808) (19,819)
Notes receivable from stockholders (1,188) (144)
Accumulated other comprehensive loss (212) (269)
--------- ---------
Total stockholders' equity 75,873 92,261
--------- ---------
Total liabilities and stockholders' equity $ 94,385 $ 113,034
========= =========
</Table>
See notes to unaudited consolidated financial statements.
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BINDVIEW DEVELOPMENT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<Table>
<Caption>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
------------------------ ------------------------
2001 2000 2001 2000
-------- -------- -------- --------
Revenues:
Licenses $ 10,296 $ 13,376 $ 20,049 $ 23,537
Services 7,222 6,974 14,486 12,838
-------- -------- -------- --------
17,518 20,350 34,535 36,375
-------- -------- -------- --------
Cost of revenues:
Licenses 301 575 636 1,128
Services 1,908 995 3,420 1,630
-------- -------- -------- --------
2,209 1,570 4,056 2,758
-------- -------- -------- --------
Gross profit 15,309 18,780 30,479 33,617
Operating costs and expenses:
Sales and marketing 14,253 9,474 26,476 18,351
Research and development 5,472 6,140 10,826 11,889
General and administrative 5,469 2,461 7,760 4,591
Depreciation and amortization 1,460 1,200 3,160 2,490
Transaction and restructuring -- -- 594 5,581
-------- -------- -------- --------
Operating loss (11,345) (495) (18,337) (9,285)
Other income (expense), net 464 1,271 1,349 2,353
-------- -------- -------- --------
Income (loss) before income taxes (10,881) 776 (16,988) (6,932)
Provision (benefit) for income taxes (3,167) 247 (4,999) (786)
-------- -------- -------- --------
Net income (loss) $ (7,714) $ 529 $(11,989) $ (6,146)
======== ======== ======== ========
Earnings (loss) per common share - basic and
diluted $ (0.15) $ 0.01 $ (0.23) $ (0.12)
======== ======== ======== ========
Reconciliation of net income (loss) to
comprehensive income (loss):
Net income (loss) $ (7,714) $ 529 $(11,989) $ (6,146)
Gain (loss) from foreign currency translation 117 (209) 57 (215)
-------- -------- -------- --------
Comprehensive income (loss) $ (7,597) $ 320 $(11,932) $ (6,361)
======== ======== ======== ========
</Table>
See notes to unaudited consolidated financial statements.
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BINDVIEW DEVELOPMENT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30,
------------------------
2001 2000
-------- --------
Cash flows from operating activities:
Net loss $(11,989) $ (6,146)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 3,160 2,397
Bad debt expense 2,812 104
Deferred income tax benefit (4,999) (873)
Changes in operating assets and liabilities:
Accounts receivable 8,958 2,498
Other assets 127 (272)
Accounts payable (2,845) (698)
Accrued liabilities 1,657 (1,770)
Deferred revenues (502) (419)
-------- --------
Net cash used in operating activities (3,621) (5,179)
-------- --------
Cash flows from investing activities:
Capital expenditures (1,923) (6,324)
Net proceeds from maturity (purchase) of investments 6,705 (2,329)
Other -- (780)
-------- --------
Net cash provided by (used in) investing activities 4,782 (9,433)
-------- --------
Cash flows from financing activities:
Payments on notes payable and long-term debt -- (262)
Repurchase of common stock (7,075) --
Net proceeds from sale of common stock 1,754 4,617
-------- --------
Net cash provided by (used in) financing activities (5,321) 4,355
Effect of exchange rate changes on cash (153) (156)
-------- --------
Net decrease in cash and cash equivalents (4,313) (10,413)
Cash and cash equivalents at beginning of year 49,337 72,150
-------- --------
Cash and cash equivalents at end of period $ 45,024 $ 61,737
======== ========
Non-cash financing and investing activities:
Conversion of convertible debentures and preferred
stock into common stock $ -- $ 23
Note receivable issued to shareholder in exchange for
400,000 shares of common stock $ 1,044 $ --
</Table>
See notes to unaudited consolidated financial statements.
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BINDVIEW DEVELOPMENT CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL
The accompanying consolidated financial statements of BindView
Development Corporation, a Texas corporation (the "Company" or "BindView"),
included herein have been prepared without audit pursuant to the rules and
regulations of the Securities and Exchange Commission. Accordingly, certain
information and disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been omitted.
The Company believes that the presentations and disclosures herein are adequate
to make the information not misleading. The consolidated financial statements
reflect all adjustments (consisting of normal recurring adjustments) necessary
for a fair presentation of the interim periods.
The results of operations for the interim periods are not necessarily
indicative of the results of operations to be expected for the full year. These
consolidated financial statements should be read in conjunction with the
Company's audited consolidated financial statements included in its Annual
Report on Form 10-K for the year ended December 31, 2000.
2. EARNINGS (LOSS) PER SHARE
The following table sets forth the computation of basic and diluted
earnings (loss) per share (in thousands, except per share amounts):
<Table>
<Caption>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
------------------------ ------------------------
2001 2000 2001 2000
-------- -------- -------- --------
Numerator:
Net income (loss) - numerator for
earnings (loss) per share -
basic and diluted $ (7,714) $ 529 $(11,989) $ (6,146)
======== ======== ======== ========
Denominator:
Denominator for basic earnings
(loss) per share -
weighted-average shares 51,632 51,882 51,577 50,893
Effect of dilutive securities:
Effect of stock options -- 2,984 -- --
-------- -------- -------- --------
Total diluted shares 51,632 54,866 51,577 50,893
======== ======== ======== ========
Earnings (loss) per common share -
basic and diluted $ (0.15) $ 0.01 $ (0.23) $ (0.12)
======== ======== ======== ========
</Table>
Options and warrants to purchase 13.6 million shares of common stock
for the three and six months ended June 30, 2001 and 11.1 million shares of
common stock for the six months ended June 30, 2000 were outstanding, but were
not included in the computation of diluted loss per share as their inclusion
would have been anti-dilutive. Options and warrants to purchase 5.9 million
shares were outstanding for the three months ended June 30, 2000, but were not
included in the computation of diluted earnings per share because the exercise
prices of those options exceeded the average market price of the common shares.
3. RESTRUCTURING EXPENSES
In March 2001, the Company implemented a restructuring plan primarily
involving a reduction of approximately seven percent of the Company's workforce.
This restructuring included involuntary employee separation expenses for
approximately 50 employees and other related expenses. The accrued restructuring
expenses and amounts charged against the provision as of June 30, 2001 were as
follows (in thousands):
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<Table>
<Caption>
BEGINNING CASH REMAINING ACCRUAL
ACCRUAL EXPENDITURES JUNE 30, 2001
--------- ------------ -----------------
Employee severance ............... $539 $539 $ --
Other restructuring Costs ..... 55 25 30
---- ---- ----
$594 $564 $ 30
==== ==== ====
</Table>
4. INCOME TAXES
The Company follows the liability method of accounting for income
taxes. Under this method, deferred income tax assets and liabilities are
determined based on differences between the financial statement and income tax
bases of assets and liabilities using enacted tax rates in effect for the year
in which the differences are expected to reverse. The Company's interim
provisions for income taxes were computed using its estimated effective tax rate
for the year.
At June 30, 2001, the Company had net operating loss ("NOL")
carryforwards of approximately $65.0 million available to offset future taxable
income. These NOL carryforwards expire between 2003 and 2021. The Company has a
deferred tax asset of approximately $14.4 million for the estimated after-tax
benefit it expects to realize and has a valuation allowance of approximately
$10.0 million for the portion of the NOL carryforwards that it expects will
expire without being utilized.
5. COMMON STOCK
Under terms of a share repurchase program approved by the Board of
Directors, the Company purchased approximately 2.0 million shares of common
stock during the six months ended June 30, 2001, at an average price per share
of $3.46. Since inception of the program in August 2000, the Company has
repurchased approximately 2.7 million shares of common stock for approximately
$12.4 million, an average price per share of $4.62. Under terms of the program,
the Company can expend an additional $7.6 million to repurchase shares.
6. SUBSEQUENT EVENT
In July 2001, the Company completed a corporate reorganization and
implemented cost-cutting measures to improve its operating leverage that
included a fourteen percent reduction in the Company's workforce. The Company
will take a restructuring charge in the third quarter of 2001 currently
estimated to range between $4.0 million and $6.0 million.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results
of Operations contain forward-looking statements which involve risks and
uncertainties. The Company's actual results may differ significantly from the
results discussed in the forward-looking statements. Factors that might cause
such a difference include those discussed in the "Risk Factors" set forth in the
Company's Annual Report on Form 10-K for the year ended December 31, 2000, as
well as other factors such as, for example: the risks associated with lower
customer demand in a weak economy; increased competition within the network
management software industry; the effects of recently-implemented cost
reductions on the Company's business; transitional inefficiencies that may arise
during the Company's implementation of recently-announced reorganization plans;
and the management challenges of implementing those plans while attempting to
maintain employee motivation and effectiveness. The following discussion should
be read in conjunction with the Company's Consolidated Financial Statements.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2001 COMPARED WITH THE THREE MONTHS ENDED JUNE 30,
2000
REVENUES. Revenues for the current quarter decreased 14 percent to
$17.5 million, from $20.4 million in revenues for the second quarter of 2000.
This decrease was due to a 23 percent decline in license revenue in the current
quarter to $10.3 million, from $13.4 million for the second quarter of 2000.
Revenues in the current quarter were hurt by the global decline in IT spending,
which resulted in lower than expected sales to large enterprise customers and to
customers in Europe.
GROSS PROFIT. Gross profit for the current quarter decreased 18 percent
to $15.3 million from $18.8 million in the second quarter of 2000. This decline
related to the decrease in license revenues. Gross margin for the current
quarter was 87.4 percent compared with 92.3 percent in the second quarter of
2000. The compression in gross margin reflects a change in business mix
resulting from the decrease in license revenue, which has a higher gross margin
than services revenue. License revenues accounted for 58.8 percent of revenues
in the current quarter compared with 65.7 percent for the second quarter of
2000, whereas services revenue accounted for 41.2 percent of revenues in the
current quarter compared with 34.3 percent in the second quarter of 2000.
OPERATING COSTS AND EXPENSES. Operating costs and expenses for the
three months ended June 30, 2001 totaled $26.7 million, compared with $19.3
million for the three months ended June 30, 2000. The increase in operating
costs and expenses related primarily to (i) higher sales and marketing expenses
related to infrastructure investments made in the second half of 2000 to
increase the Company's growth rate and to enhance the Company's sales and
marketing capabilities in Europe and with large enterprise customers, the
returns from which were negatively affected by the difficult economic conditions
and (ii) $2.8 million in bad debt expense related to a review by the Company of
its collections efforts and experience with specific customers and its overall
customer base in light of the weaker economy and its decisions to reposition
itself with respect to various sales force deployment and market issues. The
Company does not expect to see similar levels of bad debt expense in future
periods.
In July 2001, the Company completed a corporate reorganization and
implemented cost-cutting measures to improve its operating leverage that
included a fourteen percent reduction in the Company's workforce. The Company
will take a restructuring charge in the third quarter of 2001 currently
estimated to range between $4.0 million and $6.0 million. These actions are
expected to reduce operating expenses in the second half of 2001 by $8.0 million
to $10.0 million and lower the level of revenues required to break even in the
fourth quarter to approximately $21.0 million.
OTHER INCOME (EXPENSE). Other income totaled $0.5 million and $1.3
million for the three months ended June 30, 2001 and 2000, respectively. The
decline in other income was the result of lower interest rates on investments as
well as lower average investment balances during the period.
PROVISION (BENEFIT) FOR INCOME TAXES. The provision (benefit) for
income taxes for the current quarter was $(3.2) million (an effective tax rate
of 29.1 percent), compared with $0.2 million (an effective tax rate of 31.8
percent) for 2000. The Company's effective tax rate includes the effects of
state and foreign income taxes and certain foreign losses for which no tax
benefits have been provided.
NET INCOME (LOSS). Due to the factors described above, net loss for the
quarter ended June 30, 2001 was $7.7 million compared with net income of $0.5
million for the quarter ended June 30, 2000.
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OUTLOOK. The Company anticipates that revenues for the third and fourth
quarters of 2001 will increase sequentially over that reported for the second
quarter and that revenues for 2001 will range between $71.0 and $77.0 million.
The Company also anticipates that its operating leverage will improve as a
result of the corporate reorganization and restructuring that was completed in
July. The fourteen percent reduction in workforce is expected to lower operating
costs and expenses for the second half of 2001 by $8.0 million to $10.0 million
and lower the level of revenues required to break even in the fourth quarter to
approximately $21.0 million.
SIX MONTHS ENDED JUNE 30, 2001 COMPARED WITH THE SIX MONTHS ENDED JUNE 30, 2000
REVENUES. Revenues for the first six months decreased 5 percent to
$34.5 million, from $36.4 million in revenues for the first six months of 2000.
This decrease was due to a 15 percent decline in license revenue in the first
six months of 2001 to $20.0 million, from $23.5 million for the first six months
of 2000. Revenues in the current year were hurt by the global decline in IT
spending, which resulted in lower than expected sales to large enterprise
customers and to customers in Europe.
GROSS PROFIT. Gross profit for the first six months decreased 9 percent
to $30.5 million, from $33.6 million for the first six months of 2000. This
decline related to the decrease in license revenues. Gross margin for the first
six months was 88.3 percent, down from 92.4 percent in 2000. The compression in
gross margin reflects a change in business mix resulting from the decrease in
license revenue, which has a higher gross margin than services revenue. License
revenues accounted for 58.1 percent of revenues in the first six months of 2001
compared with 64.7 percent for the first six months of 2000, whereas services
revenue accounted for 41.9 percent of revenues in the first six months of 2001
compared with 35.3 percent in the first six months of 2000.
OPERATING COSTS AND EXPENSES. Operating costs and expenses for the six
months ended June 30, 2001 totaled $48.8 million, compared with $42.9 million
for the six months ended June 30, 2000. The increase in operating costs and
expenses primarily related to the increased sales and marketing infrastructure
investments and bad debt expense previously noted offset by $5.6 million in
one-time merger and restructuring related costs incurred in the first quarter of
2000 associated with the acquisition of Entevo Corporation ("Entevo").
During the six months ended June 30, 2001, the Company implemented a
restructuring plan primarily involving a reduction of approximately seven
percent of the Company's workforce and resulting in one-time restructuring
charges of $0.6 million, or $0.01 per share after tax. This restructuring
included involuntary employee separation expenses for approximately 50 employees
totaling $0.5 million and other related miscellaneous restructuring expenses. As
of June 30, 2001, there were no material actions remaining under the plan.
During the six months ended June 30, 2000, the Company merged with
Entevo in a stock-for-stock transaction accounted for as a pooling of interests.
Transaction costs of $3.8 million and restructuring costs of $1.8 million were
incurred in the quarter ended March 31, 2000 as a result of the merger. The
transaction costs consisted of investment banking fees of $2.5 million and
professional fees and other miscellaneous expenses of $1.3 million. At the time
of the merger, management approved restructuring plans to eliminate duplicate
positions and integrate Entevo's and the Company's operations. These
restructuring costs consisted of employee severance and relocation costs of $1.5
million and other miscellaneous integration and restructuring costs of $0.3
million. As of June 30, 2001, there are no actions remaining under the plan.
OTHER INCOME (EXPENSE). Other income totaled $1.3 million and $2.4
million for the six months ended June 30, 2001 and 2000, respectively. The
decline in other income was the result of lower interest rates on investments as
well as lower average investment balances during the period.
PROVISION (BENEFIT) FOR INCOME TAXES. The benefit for income taxes for
first six months was $5.0 million (an effective tax rate of 29.4 percent),
compared with $0.8 million (an effective tax rate of 11.3 percent) for 2000. The
Company's effective tax rate includes the effects of state and foreign income
taxes and certain foreign losses for which no tax benefits have been provided as
well as the portion of Entero transaction costs incurred in the first quarter of
2000 which are not deductible for tax purposes.
NET INCOME (LOSS). Due to the factors described above, net loss for the
six months ended June 30, 2001 was $11.9 million compared with $6.1 million for
the six months ended June 30, 2000.
LIQUIDITY AND CAPITAL RESOURCES
The Company's capital requirements have principally related to working
capital needs and capital expenditures. These requirements have been met through
a combination of issuances of securities and internally generated funds.
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The Company had cash and cash equivalents of $45.0 million at June 30,
2001 compared with $49.3 million at December 31, 2000. The decrease in the
Company's cash and cash equivalents primarily related to (i) cash used to fund
the Company's net operating loss in the first half of 2001, (ii) the purchase of
2.0 million shares of the Company's common stock for $7.1 million, and (iii)
capital expenditures of $1.9 million. The Company's principal cash requirements
for the second half of 2001 are: (i) to fund its operating losses, which will
include a restructuring charge in the third quarter of $4.0 million to $6.0
million, (ii) estimated common stock purchases of $2.0 million and (iii) capital
expenditures of $1.4 million. The Company believes that it has sufficient cash
on hand to meet these cash requirements, as well as those for the foreseeable
future.
The Company took actions in July 2001 to reduce its operating losses
and accelerate its return to profitability. These actions included a fourteen
percent reduction in workforce, which is expected to lower operating costs and
expenses in the second half of 2001 an estimated $8.0 million to $10.0 million
and has lowered the anticipated level of revenues required to break even in the
fourth quarter to approximately $21.0 million. Moreover, the Company is
currently evaluating the effectiveness of its sales and marketing programs in an
effort to increase its growth rate and has engaged McKinsey and Company to
assist in this effort. The Company believes that these actions will strengthen
its financial position and improve its future operating results.
Cash flows used in operating activities were $3.6 million and $5.2
million for the six months ended June 30, 2001 and 2000, respectively. The
continued usage of cash in operating activities is due primarily to the
generation of operating losses during the first six months of 2001 and 2000,
respectively.
Cash flows provided by (used in) investing activities were $4.7 million
and $(9.4) for the six months ended June 30, 2001 and 2000, respectively.
Capital expenditures totaled $1.9 million and $6.3 million for the six months
ended June 30, 2001 and 2000, respectively. The majority of these expenditures
related to computer equipment and software and furniture, fixtures and equipment
related to business expansion. The Company estimates that capital expenditures
for the remainder of 2001 will be approximately $1.4 million. The remaining
planned capital expenditures for 2001 are normal recurring items necessary to
support business expansion and anticipated growth. The Company expects to fund
these capital expenditures out of its existing working capital.
Cash flows provided by (used in) financing activities were $(5.3)
million and $4.3 million for the six months ended June 30, 2001 and 2000,
respectively. In August 2000, the Company's Board of Directors authorized a
stock repurchase program of up to $10.0 million and subsequently increased the
commitment to $20.0 million in March 2001. Since inception of the program, the
Company has repurchased approximately 2.7 million shares of common stock for
approximately $12.4 million, an average price per share of $4.62. During the six
months ended June 30, 2001, the Company repurchased 2.0 million shares of its
common stock totaling $7.1 million, an average price per share of $3.46. Under
terms of the program, the Company can expend an additional $7.6 million to
repurchase shares and expects to fund such additional purchases, if any, out of
its existing working capital. The Company currently estimates that common stock
repurchases for the remainder of the year will be approximately $2.0 million.
The Company maintains a $30.0 million line-of-credit arrangement that
is secured by cash and cash equivalents, short-term investments and long-term
investments. The facility, which expires in September 2001, may be renewed at
the Company's option for an additional four years. Borrowings on this line bear
interest rate at LIBOR plus 1.5 percent. No fees are paid on the unused portion
of the commitment. As of June 30, 2001, the Company had no outstanding
borrowings under the facility.
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PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Effective May 1, 2001, Edward L. Pierce became senior vice president and
chief financial officer of the Company.
Effective May 31, 2001, Kevin P. Cohn became vice president and corporate
controller of the Company; on July 26, 2001, the Company's board of directors
elected Mr. Cohn to the additional position of chief accounting officer.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q includes "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All statements
other than statements of historical facts included in this Report, including
without limitation, statements regarding the Company's future financial
position, business strategy, planned products, products under development,
markets, budgets and plans and objectives of management for future operations,
are forward-looking statements. Although we believe that the expectations
reflected in these forward-looking statements are reasonable, we cannot assure
you that those expectations will prove to have been correct. Important factors
that could cause actual results to differ materially from the Company's
expectations are disclosed in statements set forth under "Cautionary Statements"
in our Annual Report on Form 10-K, as well as other factors such as, for
example: the risks associated with lower customer demand in a weak economy;
increased competition within the network management software industry; the
effects of recently-implemented cost reductions on the Company's business;
transitional inefficiencies that may arise during the Company's implementation
of recently-announced reorganization plans; and the management challenges of
implementing those plans while attempting to maintain employee motivation and
effectiveness. All subsequent written and oral forward-looking statements
attributable to us, or persons acting on our behalf, are expressly qualified in
their entirety by these Cautionary Statements, the other example factors listed
in the previous sentence, and such other statements.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: The following exhibits are filed with this Quarterly Report.
Exhibit 10.1 Executive Employment Agreement, May 1, 2001, between the Company
and Edward L. Pierce (senior vice president and chief financial officer)
Exhibit 10.2 Restricted Stock Agreement, May 1, 2001, between the Company and
Edward L. Pierce
Exhibit 10.3 Promissory Note, May 1, 2001, executed in favor of the Company by
Edward L. Pierce
Exhibit 10.4 Change of Control Agreement, May 1, 2001, between the Company and
Edward L. Pierce
Exhibit 10.5 Indemnification Agreement, May 1, 2001, between the Company and
Edward L. Pierce
Exhibit 10.6 Nonqualified Stock Option Agreement, May 1, 2001, between the
Company and Richard P. Gardner (then president and chief executive officer)
Exhibit 10.7 Nonqualified Stock Option Agreement, May 1, 2001, between the
Company and William D. Miller (then senior vice president worldwide sales and
services; now chief operating officer)
Exhibit 10.8 Nonqualified Stock Option Agreement, May 1, 2001, between the
Company and Kevin M. Weiss (then senior vice president and chief marketing
officer)
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Exhibit 10.9 Executive Employment Agreement, May 31, 2001, between the Company
and Kevin P. Cohn (vice president, corporate controller, and chief accounting
officer)
Exhibit 10.10 Nonqualified Stock Option Agreement, May 31, 2001, between the
Company and Kevin P. Cohn
Exhibit 10.11 Change of Control Agreement, May 31, 2001, between the Company and
Kevin P. Cohn
Exhibit 10.12 Indemnification Agreement, May 31, 2001, between the Company and
Kevin P. Cohn
(b) Reports on Form 8-K.
In a Report on Form 8-K dated July 3, 2001, the Company reported that it had
revised its financial guidance for the fiscal quarter ending June 30, 2001, that
Richard P. Gardner had resigned as president and chief executive officer, and
that Eric J. Pulaski had been elected president and chief executive officer.
In a Report on Form 8-K dated July 20, 2001, the Company reported that it
had completed a corporate reorganization and implemented a number of
cost-cutting measures to improve operating efficiency and accelerate the
Company's return to profitability. The press release also announced that Bill
Miller had been appointed chief operating officer and Gary Margolis had been
promoted to chief technology officer.
In a Report on Form 8-K dated July 31, 2001, the Company reported that it
had issued a press release announcing financial results for the quarter and six
months ended June 30, 2001.
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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.
BINDVIEW DEVELOPMENT CORPORATION
August 14, 2001 By: /s/
---------------------------------
Kevin P. Cohn
Vice President, Controller and
Chief Accounting Officer
(Principal accounting officer)
12
13
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
Exhibit 10.1 Executive Employment Agreement, May 1, 2001, between the
Company and Edward L. Pierce (senior vice president and chief
financial officer)
Exhibit 10.2 Restricted Stock Agreement, May 1, 2001, between the Company and
Edward L. Pierce
Exhibit 10.3 Promissory Note, May 1, 2001, executed in favor of the Company
by Edward L. Pierce
Exhibit 10.4 Change of Control Agreement, May 1, 2001, between the Company
and Edward L. Pierce
Exhibit 10.5 Indemnification Agreement, May 1, 2001, between the Company and
Edward L. Pierce
Exhibit 10.6 Nonqualified Stock Option Agreement, May 1, 2001, between the
Company and Richard P. Gardner (then president and chief
executive officer)
Exhibit 10.7 Nonqualified Stock Option Agreement, May 1, 2001, between the
Company and William D. Miller (then senior vice president
worldwide sales and services; now chief operating officer)
Exhibit 10.8 Nonqualified Stock Option Agreement, May 1, 2001, between the
Company and Kevin M. Weiss (then senior vice president and chief
marketing officer)
Exhibit 10.9 Executive Employment Agreement, May 31, 2001, between the
Company and Kevin P. Cohn (vice president, corporate controller,
and chief accounting officer)
Exhibit 10.10 Nonqualified Stock Option Agreement, May 31, 2001, between the
Company and Kevin P. Cohn
Exhibit 10.11 Change of Control Agreement, May 31, 2001, between the Company
and Kevin P. Cohn
Exhibit 10.12 Indemnification Agreement, May 31, 2001, between the Company and
Kevin P. Cohn