-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, l3Q1CFbh+8L9lp24nft6Wl7WE4vaSxh83nLdP7Q5CFvBe7N7q88I2B6T7A8OZgh9 8HCuy3OfeazWsI+hqMGz7g== 0000950109-95-002425.txt : 19950628 0000950109-95-002425.hdr.sgml : 19950628 ACCESSION NUMBER: 0000950109-95-002425 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950530 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19950623 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PARAMETRIC TECHNOLOGY CORP CENTRAL INDEX KEY: 0000857005 STANDARD INDUSTRIAL CLASSIFICATION: 7372 IRS NUMBER: 042866152 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-18059 FILM NUMBER: 95548692 BUSINESS ADDRESS: STREET 1: 128 TECHNOLOGY DRIVE CITY: WALTHAM STATE: MA ZIP: 02154 BUSINESS PHONE: 6173985000 MAIL ADDRESS: STREET 1: 128 TECHNOLOGY CORP CITY: WALTHAM STATE: MA ZIP: 02154 8-K/A 1 FORM 8K/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): APRIL 12, 1995 PARAMETRIC TECHNOLOGY CORPORATION (Exact name of registrant as specified in its charter) MASSACHUSETTS 0-18059 04-2866152 (State or other jurisdiction (Commission (IRS Employer of Incorporation) File number) Identification No.) 128 TECHNOLOGY DRIVE WALTHAM, MASSACHUSETTS 02154 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (617) 398-5000 NO CHANGE SINCE LAST REPORT (Former name or former address, if changed since last report) Total number of sequentially numbered pages: 25 Exhibit Index appears on page 9 1 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS --------------------------------- (a) Financial statements of business acquired ----------------------------------------- See Exhibits 99.1 and 99.2, filed herewith. (b) Pro forma combined financial information ---------------------------------------- The following unaudited pro forma combined financial statements give effect to the acquisition of substantially all of the assets and specified liabilities of the Conceptual Design and Rendering System ("CDRS") software business operated by the Design Software Division of Evans & Sutherland Computer Corporation and are based on the historical consolidated financial statements of Parametric Technology Corporation ("the Company") and the historical financial statements of CDRS. The unaudited pro forma combined balance sheet was prepared as if the acquisition had occurred on April 1, 1995, combining the Company's financial information as of April 1, 1995 and CDRS financial information as of March 31, 1995. The unaudited pro forma combined statements of income for the year ended September 30, 1994 and the six months ended April 1, 1995 were prepared as if the acquisition had occurred on October 1, 1993. To prepare the unaudited pro forma combined statement of income, the Company's statement of income for the fiscal year ended September 30, 1994 has been presented with the statement of operations of CDRS for the fiscal year ended December 30, 1994. To prepare the unaudited pro forma combined statement of income, the Company's statement of income for the six months ended April 1, 1995 has been presented with the statement of operations of CDRS for the six months ended March 31, 1995. This method of combined reporting is utilized solely for presentation of unaudited pro forma combined financial statements. Actual statements of income and operations of the Company and CDRS will be combined from the effective date of the acquisition, with no retroactive restatement. The unaudited pro forma combined financial statements are not intended to reflect the results of operations or the financial position which would have actually resulted had the acquisition been effected on the dates indicated above. Moreover, the unaudited pro forma combined financial statements are not intended to be indicative of the results of operations or the financial position which may be attained in the future. The unaudited pro forma combined financial statements are based upon assumptions deemed appropriate by the management of the Company and should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended September 30, 1994 and Quarterly Report on Form 10-Q for the quarter ended April 1, 1995, incorporated herein by reference, and the financial statements of CDRS contained elsewhere in this Form 8-K/A. 2 PARAMETRIC TECHNOLOGY CORPORATION UNAUDITED PRO FORMA COMBINED BALANCE SHEET (AMOUNTS IN THOUSANDS)
Parametric CDRS Pro Forma Pro Forma ASSETS April 1, 1995 March 31, 1995 Adjustments Combined ------------- -------------- ----------- --------- Current assets: Cash and cash equivalents $ 118,252 $ (34,100) A $ 84,152 Short-term investments 160,322 160,322 Accounts receivable 62,235 $ 1,015 63,250 Allowance for doubtful accounts (2,175) (2,175) Other current assets 9,528 222 500 B 10,250 --------- -------- --------- --------- Total current assets 348,162 1,237 (33,600) 315,799 Property and equipment, net 13,515 1,247 (847) C 13,915 Capitalized computer software costs, net 1,424 3,400 D 4,824 Other assets 2,921 18,570 E 21,491 --------- -------- --------- --------- Total assets $ 366,022 $ 2,484 $ (12,477) $ 356,029 ========= ======== ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 12,957 $ 359 $ 500 F $ 13,816 Accrued compensation 14,461 181 14,642 Deferred revenue 33,366 792 34,158 Income taxes 1,774 1,774 --------- -------- --------- --------- Total current liabilities 62,558 1,332 500 64,390 Deferred income taxes 676 69 745 Stockholders' equity: Preferred stock, $.01 par value; 5,000 shares authorized; none issued -- -- Common stock, $.01 par value; 75,000 shares authorized; 57,793 issued 578 578 Additional paid-in capital 113,869 113,869 Parent's equity 1,083 (1,083) G 0 Cumulative translation adjustments 2,943 2,943 Valuation allowance for investments 85 85 Retained earnings 185,313 (11,894) H 173,419 --------- -------- --------- --------- Total stockholders' equity 302,788 1,083 (12,977) 290,894 --------- -------- --------- --------- Total liabilities and stockholders' equity $ 366,022 $ 2,484 $ (12,477) $ 356,029 ========= ======== ========= =========
The accompanying notes are an integral part of the unaudited pro forma combined financial statements. 3 PARAMETRIC TECHNOLOGY CORPORATION UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
Parametric CDRS Year Ended Year Ended Pro Forma Pro Forma September 30, 1994 December 30, 1994 Adjustments Combined ------------------ ----------------- ----------- --------- Revenue: License $ 191,045 $ 5,762 $ 196,807 Service 53,211 1,831 55,042 --------- ------- --------- Total revenue 244,256 7,593 251,849 --------- ------- --------- Cost of revenue: License 878 82 $ 1,133 I 2,093 Service 17,997 616 18,613 --------- ------- -------- --------- Total cost of revenue 18,875 698 1,133 20,706 --------- ------- -------- --------- Gross profit 225,381 6,895 (1,133) 231,143 --------- ------- -------- --------- Operating expenses: Sales and marketing 95,810 3,988 343 J 100,141 Research and development 15,422 1,865 140 J 17,427 General and administrative 11,974 923 1,155 J 14,052 --------- ------- -------- --------- Total operating expenses 123,206 6,776 1,638 131,620 --------- ------- -------- --------- Operating income (loss) 102,175 119 (2,771) 99,523 Other income, net 4,718 -- (997) K 3,721 --------- ------- -------- --------- Income (loss) before income taxes 106,893 119 (3,768) 103,244 Provision (benefit) for income taxes 39,978 580 (1,944) L 38,614 --------- ------- -------- --------- Net income (loss) $ 66,915 $ (461) $ (1,824) $ 64,630 ========= ======= ======== ========= Net income per share $ 1.14 $ 1.10 ====== ====== Weighted average number of common and dilutive common equivalent shares outstanding 58,564 58,564 ====== ======
The accompanying notes are an integral part of the unaudited pro forma combined financial statements. 4 PARAMETRIC TECHNOLOGY CORPORATION UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
Parametric CDRS Six Months Ended Six Months Ended Pro Forma Pro Forma April 1, 1995 March 31, 1995 Adjustments Combined ------------- -------------- ----------- --------- Revenue: License $ 114,879 $ 1,626 $ 116,505 Service 40,662 761 41,423 --------- -------- --------- Total revenue 155,541 2,387 157,928 --------- -------- --------- Cost of revenue: License 657 16 $ 567 I 1,240 Service 13,038 336 13,374 --------- -------- --------- Total cost of revenue 13,695 352 567 14,614 --------- -------- -------- --------- Gross profit 141,846 2,035 (567) 143,314 --------- -------- -------- --------- Operating expenses: Sales and marketing 62,478 2,276 171 J 64,925 Research and development 8,783 1,204 70 J 10,057 General and administrative 7,785 588 577 J 8,950 --------- -------- -------- --------- Total operating expenses 79,046 4,068 818 83,932 --------- -------- -------- --------- Operating income (loss) 62,800 (2,033) (1,385) 59,382 Other income, net 3,714 -- (699) K 3,015 --------- -------- -------- --------- Income (loss) before income taxes 66,514 (2,033) (2,084) 62,397 Provision (benefit) for income taxes 24,876 (600) (940) L 23,336 --------- -------- -------- --------- Net income (loss) $ 41,638 $ (1,433) $ (1,144) $ 39,061 ========= ======== ======== ========= Net income per share $ 0.70 $ 0.65 ====== ====== Weighted average number of common and dilutive common equivalent shares outstanding 59,678 59,678 ====== ======
The accompanying notes are an integral part of the unaudited pro forma combined financial statements. 5 PARAMETRIC TECHNOLOGY CORPORATION NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS The unaudited pro forma combined balance sheet has been prepared as if the acquisition, which is being accounted for as a purchase, was completed as of April 1, 1995, combining Parametric Technology Corporation ("the Company") amounts as of April 1, 1995 and Conceptual Design and Rendering System ("CDRS") software business operated by the Design Software Division of Evans & Sutherland Computer Corporation ("Evans & Sutherland") amounts as of March 31, 1995. The aggregate purchase price of $34.1 million has been allocated to assets acquired and liabilities assumed. The aggregate purchase price is subject to a final adjustment based upon the closing balance sheet of CDRS at April 12, 1995. The allocation of the purchase price among the identifiable intangible assets was based upon an independent appraisal of the fair market value of those assets. This appraisal allocated $19.0 million to purchased research and development in process, which has not yet reached technological feasibility and does not have alternative future uses. This amount has been recorded as a pro forma adjustment in accordance with generally accepted accounting principles. To prepare the unaudited pro forma combined statement of income, the Company's statement of income for the year ended September 30, 1994 has been presented with the statement of operations of CDRS for the year ended December 30, 1994. Also, the Company's statement of income for the six months ended April 1, 1995 has been presented with the statement of operations of CDRS for the six months ended March 31, 1995. This method of combined reporting is utilized solely for presentation of unaudited combined financial statements. Actual statements of income and operations of the Company and CDRS will be combined from the effective date of the acquisition, with no retroactive restatement. The unaudited pro forma combined financial statements should be read in conjunction with the historical consolidated financial statements of the Company and the historical financial statements of CDRS. The unaudited pro forma combined statements of income do not include the $19.0 million write-off of purchased research and development in process arising from this acquisition, as it is a material nonrecurring charge. This charge will be included in the actual consolidated statement of income of the Company in the quarter ending July 1, 1995. The following pro forma adjustments have been made to the pro forma combined financial statements. A) Reflects the cash paid to Evans & Sutherland B) Reflects the receivable from Evans & Sutherland related to the preliminary purchase price adjustment based upon the terms of the asset purchase agreement C) Reflects the adjustment to estimated fair market value of property and equipment D) Reflects the allocation of purchase price to purchased computer software E) Reflects the allocation of purchase price to the intangible assets of $11.5 million and $7.1 million of deferred tax assets as a result of the write-off of $19.0 million of purchased research and development in process F) Reflects the accrual of transaction costs directly attributable to the acquisition G) Reflects the elimination of Evans & Sutherland's equity in CDRS H) Reflects the net, after tax impact of the write-off of purchased research and development in process 6 I) Reflects the amortization of the purchased computer software over an estimated useful life of three years J) Reflects the amortization of the intangible assets, excluding those assets related to purchased research and development in process, over an estimated useful life of seven years K) Reflects the estimated reduction in interest income related to the $34.1 million cash payment to Evans & Sutherland L) Reflects the tax effect of the pro forma adjustments at the Company's effective tax rate and the estimated tax impact of combining the operations of CDRS with the Company (c) Exhibits -------- 2.1 Audited financial statements for the Conceptual Design and Rendering System Operations of Evans & Sutherland Computer Corporation for the year ended December 30, 1994. 2.2 Unaudited financial statements for the Conceptual Design and Rendering System Operations of Evans & Sutherland Computer Corporation for the three months ended March 31, 1995. 7 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. Parametric Technology Corporation June 22, 1995 By: /S/ James F. Kelliher ------------------------------------ James F. Kelliher Vice President of Finance and Assistant Treasurer 8
EXHIBIT INDEX Exhibit No. Description Page - - ----------- ----------- ---- 13.1 Annual Report to Stockholders for the fiscal year ended * September 30, 1994 (filed as Exhibit 13.1 to the Annual Report on Form 10-K for the fiscal year ended September 30, 1994, and incorporated herein by reference). 13.2 Quarterly Report on Form 10-Q for the quarter ended April * 1, 1995 23.1 Consent of KPMG Peat Marwick LLP; filed herewith 10 99.1 Audited financial statements for the Conceptual Design and 11 Rendering System Operations of Evans & Sutherland Computer Corporation for the year ended December 30, 1994 99.2 Unaudited financial statements for the Conceptual Design 21 and Rendering System Operations of Evans & Sutherland Computer Corporation for the three months ended March 31, 1995
* Incorporated by reference EX-23.1 2 CONSENT OF ACCOUNTANTS EXHIBIT 23.1 - - ------------ Consent of Independent Accountants To the Board of Directors of Parametric Technology Corporation: We consent to the inclusion in this Form 8-K/A of our report dated May 26, 1995, on our audit of the financial statements of the Conceptual Design and Rendering System Operations of Evans & Sutherland Computer Corporation as of December 30, 1994 and for the year then ended. KPMG Peat Marwick LLP Salt Lake City, Utah June 22, 1995 EX-99.1 3 AUDITED FINANCIAL STATEMENTS EXHIBIT 99.1 - - ------------ CONCEPTUAL DESIGN AND RENDERING SYSTEM OPERATIONS OF EVANS & SUTHERLAND COMPUTER CORPORATION FINANCIAL STATEMENTS DECEMBER 30, 1994 (WITH INDEPENDENT AUDITORS' REPORT THEREON) Independent Auditors' Report ---------------------------- The Board of Directors of Parametric Technology Corporation We have audited the accompanying balance sheet of Conceptual Design and Rendering System Operations of Evans & Sutherland Computer Corporation as of December 30, 1994, and the related statements of operations, parent's equity, and cash flows for the year ended December 30, 1994. These financial statements are the responsibility of the management of Conceptual Design and Rendering System Operations of Evans & Sutherland Computer Corporation. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Conceptual Design and Rendering System Operations of Evans & Sutherland Computer Corporation as of December 30, 1994, and the results of its operations and its cash flows for the year ended December 30, 1994, in conformity with generally accepted accounting principles. KPMG Peat Marwick LLP Salt Lake City, Utah May 26, 1995 CONCEPTUAL DESIGN AND RENDERING SYSTEM OPERATIONS OF EVANS & SUTHERLAND COMPUTER CORPORATION BALANCE SHEET DECEMBER 30, 1994 Assets ------ Current assets: Accounts receivable $ 1,520,038 Inventories 96,442 Prepaid expenses 32,058 Deferred tax assets (note 4) 23,596 ------------ Total current assets 1,672,134 ------------ Property and equipment, net (note 2) 1,320,736 ------------ $ 2,992,870 ============ Liabilities and Parent's Equity ------------------------------- Current liabilities: Accounts payable $ 259,226 Accrued expenses (note 3) 141,969 Deferred revenue 680,063 ------------ Total current liabilities 1,081,258 Deferred tax liability (note 4) 23,596 Parent's equity 1,888,016 ------------ $ 2,992,870 ============
See accompanying notes to financial statements. CONCEPTUAL DESIGN AND RENDERING SYSTEM OPERATIONS OF EVANS & SUTHERLAND COMPUTER CORPORATION STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 30, 1994 Net sales: Software licenses $ 5,762,124 Maintenance and support 1,830,928 ----------- Total net sales 7,593,052 ----------- Cost of sales: Software licenses 82,091 Maintenance and support 615,486 ----------- Total cost of sales 697,577 ----------- Gross profit 6,895,475 ----------- Sales and marketing 3,988,086 Research and development 1,864,899 General and administrative 923,513 ----------- 6,776,498 ----------- Earnings before income taxes 118,977 Income tax expense (note 4) 580,000 ----------- Net loss $ (461,023) ===========
See accompanying notes to financial statements. CONCEPTUAL DESIGN AND RENDERING SYSTEM OPERATIONS OF EVANS & SUTHERLAND COMPUTER CORPORATION STATEMENT OF PARENT'S EQUITY YEAR ENDED DECEMBER 30, 1994 Balance at December 31, 1993 $ 2,367,560 Capital contribution for income tax expense 580,000 Return of capital to parent (598,521) Net loss (461,023) ----------- Balance at December 30, 1994 $ 1,888,016 ===========
See accompanying notes to financial statements. CONCEPTUAL DESIGN AND RENDERING SYSTEM OPERATIONS OF EVANS & SUTHERLAND COMPUTER CORPORATION STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 30, 1994 Cash flows from operating activities: Net loss $ (461,023) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation on property and equipment 462,384 Tax expense offset to parent's equity 580,000 Change in operating assets and liabilities: Accounts receivable 64,118 Inventories 281,291 Prepaid expenses (525) Accounts payable and accrued expenses 265,350 Deferred revenue 405,355 ---------- Net cash provided by operating activities 1,596,950 ---------- Cash used in investing activities - purchases of property and equipment (921,794) ---------- Cash used in financing activities - return of capital to parent (598,521) ---------- Effect of foreign exchange rate changes (76,635) Net change in cash - Cash at beginning of year - ---------- Cash at end of year $ - ==========
See accompanying notes to financial statements. CONCEPTUAL DESIGN AND RENDERING SYSTEM OPERATIONS OF EVANS & SUTHERLAND COMPUTER CORPORATION NOTES TO FINANCIAL STATEMENTS (1) Summary of Significant Accounting Policies ------------------------------------------ (a) Description of Business and Related Party Transactions ------------------------------------------------------ The Conceptual Design and Rendering System Operations of Evans & Sutherland Computer Corporation ("CDRS") are engaged in the development, production, marketing, and support of computer software. The rights to use the products are sold under license agreements. CDRS is a business group of Evans & Sutherland Computer Corporation (the "Parent"). General and administrative expenses are allocations from the Parent, which are determined from a formula based on revenues, payroll, property and equipment, and inventory. In the opinion of management these allocations are reasonable. (b) Fiscal Year ----------- The Parent's fiscal year ends the last Friday in December. The fiscal year end for the year included in the accompanying financial statements is the 52-week period ended December 30, 1994. Unless otherwise specified, all references to a year are to the fiscal year ending in the year stated. (c) Inventories ----------- Inventories are stated at lower of first-in, first-out cost or market. (d) Property and Equipment ---------------------- Property and equipment are stated at cost. Depreciation on property and equipment is calculated on the straight-line method over the estimated useful lives of the assets, ranging from five to seven years. (e) Software Development Costs -------------------------- CDRS applies the criteria set forth in the Statement of Financial Accounting Standards (SFAS) No. 86, Accounting for the Costs of Software to be Sold, Leased, or Otherwise Marketed, to determine the amount of capitalized software development costs upon the establishment of technological feasibility of the product. The capitalization of software costs has been determined to have an immaterial effect on CDRS's financial statements. All development costs have been expensed in the period incurred. CONCEPTUAL DESIGN AND RENDERING SYSTEM OPERATIONS OF EVANS & SUTHERLAND COMPUTER CORPORATION NOTES TO FINANCIAL STATEMENTS (f) Revenue Recognition ------------------- CDRS recognizes revenue from software licenses upon delivery and customer acceptance. CDRS recognizes revenue from software maintenance contracts ratably over the term of the contract, typically one year. (g) Income Taxes ------------ The provision for income taxes is computed using the asset and liability method on a separate return basis. CDRS is included in the consolidated federal and state income tax returns of its parent. The Parent does not allocate income taxes to CDRS. Accordingly, tax expense is reflected as a capital contribution in the accompanying statement of parent's equity. (h) Foreign Currency Translation ---------------------------- The local foreign currency is the functional currency for CDRS's foreign operations. Assets and liabilities of foreign subsidiaries are translated to U.S. dollars at the current exchange rates as of the applicable balance sheet date. Revenues and expenses are translated at the average exchange rates prevailing during the period. Non-cash adjustments resulting from translation are included in capital contributions in the accompanying statement of parent's equity. Net gains and losses from foreign currency transactions were not significant during the year presented. (2) Property and equipment ---------------------- Property and equipment is summarized as follows: Computer equipment $ 2,746,102 Furniture and fixtures 178,394 ----------- 2,924,496 Less accumulated depreciation (1,603,760) ----------- $ 1,320,736 ===========
(3) Accrued Expenses ---------------- Accrued expenses consist of the following: Accrued employee related costs $ 118,297 Other 23,672 ----------- $ 141,969 ===========
CONCEPTUAL DESIGN AND RENDERING SYSTEM OPERATIONS OF EVANS & SUTHERLAND COMPUTER CORPORATION NOTES TO FINANCIAL STATEMENTS (4) Income Taxes ------------ The components of income tax expense were as follows: Current tax expense: Federal $ 500,000 State and local 80,000 --------- Total tax expense $ 580,000 =========
The actual tax expense differs from the "expected" tax expense (computed by applying the U.S. corporate tax rate of 34 percent) as follows: Expected tax expense $ 40,435 Loss on foreign operations for which there is no current tax benefit 308,301 Change in the beginning of the year valuation allowance for deferred taxes 144,000 State income taxes, net of federal income tax benefit 53,000 Other 34,264 --------- $ 580,000 =========
The tax effects of temporary differences that give rise to deferred tax assets and liabilities are summarized as follows: Current deferred income taxes - deferred revenue $ 255,024 Current deferred income taxes - vacation accrual 44,514 Less valuation allowance (275,942) --------- Deferred tax assets 23,596 Noncurrent deferred income taxes - property and equipment (23,596) --------- Deferred tax liability (23,596) --------- Net deferred tax asset $ - =========
The valuation allowance for deferred tax assets as of January 1, 1994 was $131,942. The valuation allowance increased $144,000 for the year ended December 30, 1994. CONCEPTUAL DESIGN AND RENDERING SYSTEM OPERATIONS OF EVANS & SUTHERLAND COMPUTER CORPORATION NOTES TO FINANCIAL STATEMENTS (5) Foreign Operations and Foreign Sales ------------------------------------ CDRS's foreign operations have historically been conducted principally through the Parent's foreign subsidiaries. Foreign operations are summarized below: Net sales to unaffiliated customers $ 1,283,259 Operating loss 906,768 Identifiable assets 855,272
Total CDRS sales to unaffiliated foreign customers (including export sales) are as follows: Europe $ 1,283,259 Far East 491,826 ----------- Total $ 1,775,085 ===========
(6) Concentration of Credit Risks ----------------------------- Financial instruments that potentially subject CDRS to concentrations of credit risks consist of trade receivables. CDRS has adopted credit policies and standards to evaluate the risk associated with its sales. CDRS's largest customer accounted for more than 73 percent of sales and 38 percent of gross accounts receivable at December 30, 1994. Two additional customers accounted for 30 percent of gross accounts receivable at December 30, 1994. Management believes that any risk of loss is significantly reduced due to the financial position of the customers and distributors with whom it does business. (7) Subsequent Event ---------------- On April 12, 1995, the Parent completed the sale of CDRS to Parametric Technology Corporation for cash consideration of approximately $34,500,000. EX-99.2 4 UNAUDITED FINANCIAL STATEMENTS EXHIBIT 99.2 - - ------------ CONCEPTUAL DESIGN AND RENDERING SYSTEM OPERATIONS OF EVANS & SUTHERLAND COMPUTER CORPORATION INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 1995 (UNAUDITED) CONCEPTUAL DESIGN AND RENDERING SYSTEM OPERATIONS OF EVANS & SUTHERLAND COMPUTER CORPORATION BALANCE SHEET
Assets March 31, 1995 ------ (Unaudited) -------------- Current assets: Accounts receivable $ 1,014,948 Inventories 87,829 Prepaid expenses 65,349 Deferred tax assets 68,923 ----------- Total current assets 1,237,049 ----------- Property and equipment, net 1,246,943 ----------- $ 2,483,992 =========== Liabilities and Parent's Equity ------------------------------- Current liabilities: Accounts payable $ 358,678 Accrued expenses 181,641 Deferred revenue 792,056 ----------- Total current liabilities 1,332,375 Deferred tax liability 68,923 Parent's equity 1,082,694 ----------- $ 2,483,992 ===========
See accompanying notes to unaudited financial statements. CONCEPTUAL DESIGN AND RENDERING SYSTEM OPERATIONS OF EVANS & SUTHERLAND COMPUTER CORPORATION STATEMENT OF OPERATIONS (UNAUDITED)
Three months ended March 31, 1994 1995 ----------- ----------- Net sales: Software licenses $ 1,315,861 $ 432,559 Maintenance and support 337,683 289,625 ----------- ----------- Total net sales 1,653,544 722,184 ----------- ----------- Cost of sales: Software licenses 19,917 4,910 Maintenance and support 140,887 69,830 ----------- ----------- Total cost of sales 160,804 74,740 ----------- ----------- Gross profit 1,492,740 647,444 ----------- ----------- Sales and marketing 814,881 1,218,914 Research and development 486,701 695,450 General and administrative 140,701 305,685 ----------- ----------- 1,442,283 2,220,049 ----------- ----------- Income (loss) before income taxes 50,457 (1,572,605) Income tax expense (benefit) 300,000 (360,000) ----------- ----------- Net loss $ (249,543) $(1,212,605) =========== ===========
See accompanying notes to unaudited financial statements. CONCEPTUAL DESIGN AND RENDERING SYSTEM OPERATIONS OF EVANS & SUTHERLAND COMPUTER CORPORATION STATEMENT OF CASH FLOWS (UNAUDITED)
Three months ended March 31, 1994 1995 ------------ ------------ Cash flows from operating activities: Net loss $ (249,543) $ (1,212,605) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation on property and equipment 130,386 216,458 Tax expense (benefit) offset to parent's equity 300,000 (360,000) Change in operating assets and liabilities: Accounts receivable (2,031,639) 505,090 Inventories 182,049 8,613 Prepaid expenses (18,880) (33,291) Accounts payable and accrued expenses 80,259 139,124 Deferred revenue 516,952 111,993 ----------- ----------- Net cash used by operating activities (1,090,416) (624,618) ----------- ----------- Cash used in investing activities - purchases of property and equipment (171,318) (142,665) ----------- ----------- Cash provided by financing activities - capital contribution from parent 1,261,734 767,283 ----------- ----------- Net change in cash - - Cash at beginning of year - - ----------- ----------- Cash at end of year $ - $ - =========== ===========
See accompanying notes to unaudited financial statements. CONCEPTUAL DESIGN AND RENDERING SYSTEM OPERATIONS OF EVANS & SUTHERLAND COMPUTER CORPORATION NOTES TO FINANCIAL STATEMENTS (1) Basis of Presentation --------------------- The accompanying unaudited financial statements include the accounts of the Conceptual Design and Rendering System ("CDRS") Operations of Evans & Sutherland Computer Corporation (the "Parent"), and have been prepared by CDRS in accordance with generally accepted accounting principles. In the opinion of management, the accompanying unaudited financial statements contain all adjustments, consisting only of those of a normal recurring nature necessary for a fair presentation of the financial position, results of operations and cash flows of CDRS at the dates and for the periods indicated. While CDRS believes that the disclosures presented are adequate to make the information not misleading, these financial statements should be read in conjunction with the audited financial statements of CDRS for the year ended December 30, 1994 included elsewhere in this Form 8-K/A. (2) Subsequent Event ---------------- On April 12, 1995, the Parent completed the sale of CDRS to Parametric Technology Corporation for cash consideration of approximately $34,500,000. -----END PRIVACY-ENHANCED MESSAGE-----