SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
PLANNING SCIENCES INTERNATIONAL PLC
Tuition House
St George's Road
Wimbledon
London SW19 4EU
United Kingdom
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
---------------- ---------------
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
---------------- ---------------
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):
82- N.A.
Page 1 of 14 Pages
Exhibit Index Appears on Page 11
PLANNING SCIENCES INTERNATIONAL PLC
Form 6-K
TABLE OF CONTENTS
Page
Financial Information:
Condensed Consolidated Balance Sheets as of March 31, 1996 (Unaudited) and December
31, 1995 (Audited) 3
Condensed Consolidated Statements of Income for the three months ended March 31, 1996
and 1995 (Unaudited) 4
Condensed Consolidated Statements of Cash Flows for the three months ended March 31,
1996 and 1995 (Unaudited) 5
Notes to Condensed Consolidated Financial Statements (Unaudited) 6
Management's Discussion and Analysis of Financial Condition and Results of Operations. 8
Exhibit Index 11
Exhibit A. First Quarter Press Release 12
2
PLANNING SCIENCES INTERNATIONAL PLC
Condensed Consolidated Balance Sheets
-------------------------------------------------
March 31, 1996 December 31, 1995
-------------------------------------------------
(unaudited) (audited)
-------------------------------------------------
(in thousands)
US$ US$
Assets
Current assets:
Cash and cash equivalents 639 2,280
Accounts receivable, net of allowances 5,018 4,001
for doubtful accounts of $292 at March 31, 1996
(December 31, 1995 - $290)
Prepaid expenses and other current assets 1,354 381
-------- --------
Total current assets 7,011 6,662
-------- --------
Property and equipment, net 1,527 1,093
-------- --------
Total assets 8,538 7,755
-------- --------
Liabilities and shareholders' equity
Current liabilities:
Bank overdraft - 391
Current portion of lease obligations 179 84
Accounts payable 771 546
Taxes payable 458 310
Accrued liabilities 1,118 1,030
Deferred revenues 2,291 1,967
UK value added tax 293 373
Other accounts payable 328 355
-------- -------
Total current liabilities 5,438 5,056
Non current liabilities:
Deferred taxation 34 34
Long-term portion of lease obligations 320 175
--------- -------
Total liabilities 5,792 5,265
Shareholder's equity:
Ordinary shares 1,565 1,565
Preference shares - -
Additional paid-in capital 715 715
Retained earnings 604 278
Minority interest 3 -
Cumulative translation adjustment (141) (68)
---------- --------
Total shareholders' equity 2,746 2,490
---------- --------
Total liabilities and shareholders' equity 8,538 7,755
---------- --------
See accompanying notes
3
PLANNING SCIENCES INTERNATIONAL PLC
Condensed Consolidated Statement of Operations
(Unaudited)
----------------------------------------
Three months ended
----------------------------------------
March 31, 1996 March 31, 1995
----------------------------------------
(in thousands, except per share amounts)
US$ US$
Revenues:
License 3,313 2,570
Services and other 1,890 1,245
-------------- --------------
5,203 3,815
-------------- --------------
Cost of revenues
License 102 68
Services and other 1,032 764
-------------- ---------------
1,134 832
-------------- ---------------
Gross profit 4,069 2,983
Operating expenses
Sales and marketing 2,067 1,500
Research and development 597 379
General and administrative 885 694
--------------- --------------
Total operating expenses 3,549 2,573
-------------- --------------
Income from operations 520 410
Other income (expense) (2) (49)
--------------- ---------------
Income before provision for taxes 518 361
Provision for income taxes 192 137
-------------- --------------
Net income 326 224
============== ==============
Net income per share $0.04 $0.03
Weighted average shares outstanding 8,895 7,896
See accompanying notes
4
PLANNING SCIENCES INTERNATIONAL PLC
Condensed Consolidated Statements of Cash Flows
(Unaudited)
----------------------------------------
Three months ended
----------------------------------------
March 31, 1996 March 31, 1995
----------------------------------------
(in thousands)
US$ US$
Cash flows from operating activities
Net income 326 224
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation 95 7
Minority interest 3 -
Changes in operating assets and liabilities
Accounts receivable (1,019) (1,342)
Provision for bad debts 2 8
Supplies - (3)
Prepaid expenses and other receivables (972) 238
Accounts payable 225 172
Accrued liabilities and other expenses 130 859
Deferred revenues 324 147
-------- ------
Net cash (used in) provided by operating activities (886) 310
-------- ------
Cash flows from investing activities
Purchases of assets (264) (260)
-------- ------
Net cash (used in) investing activities (264) (260)
-------- ------
Cash flows from financing activities
Repayment of capital lease obligations (27) (1)
Increase (decrease) in bank overdraft (391) 563
-------- ------
Net cash (used in) provided by financing activities (418) 562
-------- ------
Effect of exchange rate changes on cash (73) 65
-------- ------
Net (decrease)/increase in cash (1,641) 677
-------- ------
Cash at beginning of period 2,280 43
-------- ------
Cash at end of period 639 720
======== ======
See accompanying notes
5
PLANNING SCIENCES INTERNATIONAL PLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business
- --------
Planning Sciences International plc ("the Company") is incorporated in the
United Kingdom. The Company develops, markets and supports high performance
client/server decision support software for business planning and decision
making. Its principal product is marketed under the name Gentia.
Basis of Presentation
- ---------------------
The consolidated financial statements are stated in United States dollars and
are prepared under United States generally accepted accounting principles.
Interim Financial Information
- -----------------------------
The financial information at March 31, 1996 and for the three months ended March
31, 1996 and 1995 are unaudited but include all adjustments (consisting only of
normal recurring adjustments) which the Company considers necessary for a fair
presentation of the financial position at such date and the operating results
and cash flows for those periods. Results of the three month period ended March
31, 1996 are not necessarily indicative of results that may be expected for the
entire year. The condensed consolidated balance sheet at December 31, 1995 has
been derived from the audited consolidated financial statements at that date.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to the Securities and Exchange
Commission Rules and Regulations. These condensed consolidated financial
statements should be read in conjunction with the audited consolidated financial
statements and notes for the nine months ended December 31, 1995 included in the
Company's Prospectus filed April 30, 1996.
Principles of Consolidation
- ---------------------------
The accompanying financial statements consolidate the accounts of the Company
and its wholly and majority owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated.
Foreign Exchange
- ----------------
The consolidated balance sheets of the Company and its foreign subsidiaries are
translated from their respective functional currencies to United States dollars
at period-end exchange rates and the statements of operations and cash flows at
average rates for the relevant periods. Gains and losses resulting from
translation are accumulated as a separate component of shareholders' equity. Net
gains and losses resulting from foreign exchange transactions, which are not
material in any of the reporting periods, are included in the consolidated
statement of operations.
6
PLANNING SCIENCES INTERNATIONAL PLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Per Share Information
- ---------------------
Net income per share information is computed based on the weighted average
number of shares outstanding and dilutive share equivalents of outstanding share
options using the treasury stock method. Net income per share is based upon the
weighted average number of shares and equivalent shares outstanding during the
period. Equivalent shares consist of share options and are excluded for the
computation if their effect is anti-dilutive except that, pursuant to the
Securities and Exchange Commission Staff Account Bulletins, shares and
equivalent shares issued during the twelve month period ended March 12, 1996
have been included in the calculation as if they were outstanding for all
periods through December 31, 1995 (using the treasury stock method for the
options at the initial public offering price).
Reorganization of Share Capital
- -------------------------------
Effective on April 29, 1996 the Company reorganized its authorized and issued
share capital as follows: its Deferred shares of 5p each and its "B" shares of
5p each were converted into "A" shares of 5p each and all of its "A" shares of
5p each were consolidated and redesignated as Ordinary shares of 15p each on the
basis of one Ordinary share for every three "A" shares. All shares and
references thereto in these financial statements have been restated to show the
effect of this reorganization.
2 INITIAL PUBLIC OFFERING
On April 30, 1996 the Company completed its initial public offering of 3,000,000
American Depositary Shares, representing 3,000,000 Ordinary shares at US$16.00
per share, of which 2,000,000 shares were sold by the Company and 1,000,000
shares were sold by selling shareholders. The Company received proceeds of
approximately US$29.7 million from the IPO, net of issuance costs.
3 LITIGATION
The Company is involved in one legal action arising in relation to patents in
the U.S. While the outcome of this matter is currently not determinable, it is
management's opinion that this matter will not have a material adverse effect on
the Company's consolidated financial condition or results of its operations.
7
PLANNING SCIENCES INTERNATIONAL PLC
Management's Discussion and Analysis of Financial Condition and Results of
Operations for the three months ended March 31, 1996 and 1995.
Revenues
- --------
Revenues were $5.2 million in the 3 months ended March 31, 1996, an increase of
36% compared to revenues of $3.8 million for the 3 months ended March 31, 1995.
License revenues were $3.3 million in the 3 months ended March 31, 1996, an
increase of 29% over license revenues of $2.6 million for the 3 months ended
March 31, 1995. Services and other revenues were $1.9 million in the 3 months
ended March 31, 1996, an increase of 52% compared to $1.2 million for the 3
months ended March 31, 1995. The increase in revenues reflected both increased
sales of the Company's Gentia product as well as increased consulting and
maintenance services related thereto.
Gross Profit
- ------------
Gross profit was $4.1 million or 78% for the 3 months ended March 31, 1996,
compared to $3.0 million or 78% for the 3 months ended March 31, 1995.
Sales and Marketing
- -------------------
Sales and marketing costs were $2.1 million in the 3 months ended March 31,
1996, an increase of 38% compared to $1.5 million in the 3 months ended March
31, 1995. The increase in dollar expenditure reflects the Company's increased
investment in its sales and marketing organization. The Company expects these
expenses will continue to increase as a result of its continued investment in
its sales and marketing organization.
Research and Development
- ------------------------
Research and development costs were $597,000 in the 3 months ended March 31,
1996, an increase of 58% compared to $379,000 in the 3 months ended March 31,
1995. The increase is primarily as a result of hiring additional personnel to
continue the Company's development program. The Company's research and
development centre is located in Ipswich, England and related expenditure was
therefore incurred predominantly in pounds sterling.
General and Administrative
- --------------------------
General and administrative costs were $885,000 in the 3 months ended March 31,
1996, an increase of 28% compared to $694,000 in the 3 months ended March 31,
1995. The Company expects general and administrative expenditures to increase in
absolute dollar terms in 1996.
8
PLANNING SCIENCES INTERNATIONAL PLC
Management's Discussion and Analysis of Financial Condition and Results of
Operations for the three months ended March 31, 1996 and 1995. (Continued)
Liquidity and Capital Resources
- -------------------------------
The Company has funded its operations from its operational cash flows, bank
facilities and a $1 million private placement of equity in September 1995. The
Company has a bank credit line of $500,000 in the United States and a bank
overdraft facility of approximately $925,000 ((pound)600,000) in the United
Kingdom none of which was outstanding at March 31, 1996. The bank overdraft
facility, which is repayable on demand, is collateralized by the assets of the
Company. Borrowing under the credit line, which expires in September 1996, would
be collateralized by the U.S. assets of the Company.
Accounts receivable at March 31, 1996 were $5.0 million, an increase of 25%
compared to December 31, 1995 reflecting the continuing growth of the Company's
business. Prepaid expenses increased from $381,000 at December 31, 1995 to $1.4
million at March 31, 1996, primarily due to expenditure incurred in relation to
the initial public offering of the Company.
Other Income (expenses)
- -----------------------
Other expenses were $2,000 in the 3 months ended March 31, 1996 compared to
$49,000 in the 3 months ended March 31, 1995. The reduction was primarily due to
a significant reduction in interest costs due to the Company's increased
profitability and reduced use of bank facilities.
9
The information contained in Exhibit 1 hereto, consisting of the registrant's
unaudited financial statements for the three months ended March 31, 1996, has
been distributed to its security holders and is furnished to the Commission
pursuant to Rule 13a-16 under the Securities Act of 1934, as amended (the
"Act"). This report and the information furnished herewith shall not be deemed
to be "filed" for the purposes of Section 18 of the Act or otherwise subject to
the liabilities of that section.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused the Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PLANNING SCIENCES
INTERNATIONAL PLC
By: [Signature of Anthony K. Fox]
-----------------------------
Anthony K. Fox
Chief Financial Officer
Date: May 17, 1996
10
EXHIBIT INDEX
Page
----
Exhibit A First Quarter Press Release 12