10-K/A 1 c20943-10ka.txt AMENDMENT NO. 2 TO ANNUAL REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 AMENDMENT NO. 2 ON FORM 10-K/A TO ANNUAL REPORT ON FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2000 Commission file number 0-19771 DATA SYSTEMS AND SOFTWARE INC. (Exact name of registrant as specified in its charter) Delaware 22-2786081 ---------------------------------------- ------------------- (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 200 Route 17, Mahwah, New Jersey 07430 ---------------------------------------- ------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (201) 529-2026 ---------------- Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $.01 per share Common Stock Purchase Rights (Title of class) 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. [X] Yes 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 amendment to this Form 10-K. [X] The aggregate market value of the common stock of the registrant held by non-affiliates of the registrant at March 26, 2001 was approximately $31.2 million. Such aggregate market value was calculated by using the closing price of the stock on that date on the Nasdaq National Market. Number of shares outstanding of the registrant's common stock, as of March 26, 2001: 6,869,787. Documents incorporated by reference: None. DATA SYSTEMS & SOFTWARE INC. AMENDMENT NO. 2 ON FORM 10-K/A TABLE OF CONTENTS PAGE Explanatory Note .......................................................... 2 PART II Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations........................... 3 Signature...................................................... 9 EXPLANATORY NOTE This Amendment No. 2 on Form 10-K/A to the registrant's Annual Report on Form 10-K is being filed to amend certain of the information presented under the heading "Summary Quarterly Financial Data (Unaudited)" in Part II, Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations. 2 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL The following discussion includes statements that are forward-looking in nature. Whether such statements ultimately prove to be accurate, depends upon a variety of factors that may affect our business and operations. Certain of these factors are discussed at "Item 1. Description of Business--Factors That May Influence Future Results." During 2000, we operated in three reportable segments: consulting and development services, utility solutions and computer hardware sales. CONSULTING AND DEVELOPMENT SERVICES Sales in our consulting and development services segment remained stable, with an increase in Israeli sales offset by decreased domestic sales. Gross profit margins in this segment improved due to increased fixed-price embedded software consulting sales in Israel, more than offsetting the increased labor costs resulting from of the relative shortage of qualified programmers and engineers. Although this shortage has recently eased, we expect that the competitive marketplace for qualified engineers will continue to adversely affect margins in 2001 and future periods. UTILITY SOLUTIONS This segment has been evolving since we first began to develop and market two-way interactive communications solutions for utilities in 1992. In January 1998, we acquired certain assets and licensed intellectual property from Lucent Technologies, Inc. and began to market the Comverge Distributed Connection to commercial and industrial customers in the U.S. In August 1999 we acquired the Scientific-Atlanta Control Systems business division, including its line of load control products and Maingate gateway system. Sales increased in the first half of 2000, primarily as a result of sales of load control products. During the second half of 2000 sales declined, particularly sales of our load control products. We believe that this decline reflects the seasonal nature of load control products sales, with most purchases being made in preparation for the summer air conditioning season, as well as the fact that sales during the first half of 1999 were particularly strong due to a large backlog of orders during Scientific-Atlanta's phase-out from the load control business. We do not expect significant improvement in sales before the third quarter of 2001. COMPUTER HARDWARE Sales and gross profits in this segment increased dramatically in 2000. Although gross profit margins in 2000 were slightly higher than those in 1999, we expect the increasingly competitive market will cause downward pressure on our gross profit margin in 2001. 3 RESULTS OF OPERATIONS The following table sets forth selected consolidated statement of operations data as a percentage of our total sales.
YEAR ENDED DECEMBER 31, ---------------------------------------------------------------- 1996 1997 1998 1999 2000 ----- ----- ----- ----- ----- Sales ............................................. 100.0% 100.0% 100.0% 100.0% 100.0% Cost of sales ..................................... 81.3 86.6 78.5 79.6 78.8 ----- ----- ----- ----- ----- Gross profit .................................... 18.7 13.4 21.5 20.4 21.2 Research and development expenses ................. 4.0 3.7 4.4 3.2 1.6 Selling, general and administrative expenses ...... 25.4 31.4 34.2 31.4 28.3 Gain on sale of division .......................... -- -- -- -- 2.0 ----- ----- ----- ----- ----- Operating loss .................................. (10.7) (21.7) (17.1) (14.2) (6.7) Interest income (expense), net .................... 1.4 0.7 (0.6) (2.1) 1.8 Other income (loss), net .......................... 6.3 (0.7) (5.9) (0.8) (0.1) Minority interests. ............................... (0.4) 1.9 2.4 (0.7) -- Equity loss in affiliates ......................... (5.5) -- -- -- -- ----- ----- ----- ----- ----- Loss from continuing operations before provision (benefit) for income taxes .......... (8.9) (19.8) (21.2) (17.8) (5.0) Provision (benefit) for income taxes .............. (0.5) 9.7 -- 0.2 0.3 ----- ----- ----- ----- ----- Loss from continuing operations ................. (8.4) (29.5) (21.2) (18.0) (5.3) Income (loss) from discontinued operations, net of income taxes ............................. 0.7 0.6 (30.4) (22.0) (0.2) Gain on sale of discontinued operations, net of income taxes ............................. -- -- 16.3 -- 7.3 ----- ----- ----- ----- ----- Income (loss) before extraordinary item ........... (7.7) (28.9) (35.3) (40.0) 1.8 Extraordinary loss on early redemption of debt ... -- -- -- -- (1.6) ----- ----- ----- ----- ----- Net income (loss) ................................. (7.7)% (28.9)% (35.3)% (40.0)% 0.2% ===== ===== ===== ===== =====
The following table sets forth certain information with respect to revenues and profits of our three reportable business segments for the years ended December 31, 1998, 1999 and 2000, including the percentages of revenues attributable to such segments. The column marked "Other" aggregates information relating to miscellaneous operating segments, which may be combined for reporting under applicable accounting principles as well as the operations from the Company's multimedia software segment which is no longer in operation so as to be comparable with the current year's presentation.
CONSULTING AND DEVELOPMENT UTILITY COMPUTER SERVICES SOLUTIONS HARDWARE OTHER TOTAL(*) -------------- --------- -------- ----- ------- (DOLLARS IN THOUSANDS) Year ended December 31, 2000: Revenues from external customers .......................... $18,977 $ 17,105 $21,515 $ 204 $57,801 Percentage of total revenues from external customers 33% 30% 37% -- 100% Segment profit (loss) ................................... $ 1,530 $ (3,216) $ 726 $ 41 $ (919) Year ended December 31, 1999: Revenues from external customers ........................ $18,784 $ 5,061 $15,218 $ 285 $39,348 Percentage of total revenues from external customers 48% 13% 38% 1% 100% Segment profit (loss) ................................... $ (832) $ (3,297) $ 328 $ 64 $(3,737) Year ended December 31, 1998: Revenues from external customers ........................ $18,640 $ 212 $16,374 $1,124 $36,350 Percentage of total revenues from external customers .................................... 51% 1% 45% 3% 100% Segment profit (loss) ..................................... $ 5,742 $ (3,428) $ 1,514 $ (957) $ 2,871
---------- (*) Our consolidated sales for 2000, 1999 and 1998 included $38,000, $360,000 and $360,000, respectively, in management fees received from Tower. See Note 18 to the consolidated financial statements included in this report for reconciliation to our consolidated financial information. 4 2000 COMPARED TO 1999 SALES. Sales increased by 46% to $57.8 million in 2000, from $39.7 million in 1999, entirely due to higher unit sales. The increase was primarily due to a $12.0 million increase in sales in the utility solutions segment, which had its first sales in the second quarter of 1999 and a $6.3 million, or 41%, increase in computer hardware sales. GROSS PROFIT. Gross profit increased by 51%, to $12.2 million in 2000, from $8.1 million in 1999, increasing in all segments. Gross profits increased by $2.7 million and $1.0 million in the utility solutions and computer hardware segments, respectively, primarily due to their increased level of sales. Gross profits increased in the consulting and development services segment to 26.2% in 2000 as compared to 23.8% in 1999. This improvement was due primarily to increased highly profitable fixed-price embedded hardware/software system sales. RESEARCH AND DEVELOPMENT EXPENSES ("R&D"). R&D expenses continued to decrease in 2000 to $0.9 million from $1.3 million in 1999, as the development of our company's utility solutions products mature. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A"). SG&A increased by 30% to $16.3 million in 2000 from $12.5 million in 1999. This increase is primarily due to a $3.2 million increase in marketing and administrative costs related to the utility solutions segment, which increased its level of activity significantly in 2000. GAIN ON SALE OF DIVISION. In September 2000, the Company completed the sale of substantially all the assets of its CinNetic division, included in the consulting and development services segment, for a total of $1.8 million resulting in a gain of $1.1 million. The CinNetic division had operating losses of approximately $315,000 and $505,000 in 2000 and 1999, respectively. OPERATING LOSS. Operating losses decreased by 31% to $3.9 million in 2000 from $5.6 million in 1999. The decrease is primarily due to the gain from the sale of CinNetic in 2000, as well as the increase in gross profits and decreases in R&D, partially offset by the increase in SG&A. INTEREST INCOME AND INTEREST EXPENSE. The increase in interest income to $1.8 million in 2000 from $61,000 in 1999 is due to the interest income on the investment of the proceeds from the sale of our Tower investment in January 2000 and from our long-term deposit. The decrease in interest expense in 2000 from 1999 was due primarily to the charge in 1999 of $300,000 for the beneficial conversion feature of our Debentures. INCOME TAXES. The provision for income taxes increased to $171,000 in 2000 from $62,000 in 1999. The tax expense is comprised primarily of foreign taxes. We establish valuation allowances against virtually all deferred tax assets, as we believe that it is more likely than not that they will not be realized. The valuation allowance was the primary reason for our recording a tax expense that resulted in the effective income tax rate in 2000 of (6%) rather than the 34% US Federal statutory rate. For a detailed analysis of the income tax provision, see Note 16 to the consolidated financial statements included in this annual report. LOSSES FROM DISCONTINUED OPERATIONS. The loss in 1999 was comprised of equity losses from our investment in Tower, which was sold in January 2000. Losses in 1999 included equity losses of $5.0 million and income taxes of $3.7 million. These taxes represent Israeli taxes associated with the anticipated repatriation of earnings from our Israeli subsidiary that held our investment in Tower. Prior to the signing of a definitive sale agreement in December 1999, earnings of this Israeli subsidiary had been considered permanently invested and, accordingly, no income taxes were provided on such earnings. GAIN FROM SALE OF DISCONTINUED OPERATIONS, NET OF TAXES. The gain, net of taxes, is from the sale of our Tower investment. EXTRAORDINARY ITEM. A portion of our convertible debentures was redeemed prior to maturity giving rise to an extraordinary loss of $753,000. In addition, we recognized an additional extraordinary loss of $190,000 in connection with our refinancing of our short-term debt. 1999 COMPARED TO 1998 SALES. Sales increased by 8% to $39.7 million in 1999 from $36.7 million in 1998. The increase was primarily due to a $4.8 million increase in sales in the utility solutions segment, which had its first sales in the second quarter of 1999. This increase was partially offset, primarily by a $1.2 million decrease in computer hardware sales, mostly during the first half of 1999. GROSS PROFIT. Gross profit increased by 2% to $8.1 million in 1999 from $7.9 million in 1998. The increase was primarily due to a $1.3 million increase in utility solutions segment gross profit from the aforementioned increase in sales. This increase was partially offset by a $1 million decrease in computer hardware gross profits, due to the aforementioned decrease in segment sales, coupled with a decrease in gross profit margins in this segment to 15% in 1999 from 20% in 1998 as a result of a shift in sales to lower margin customers and products. R&D EXPENSES. The decrease in R&D in 1999, as compared to 1998, was due to lower R&D in the utility solutions segment, as the development of the EPSM product approached completion. SG&A EXPENSES. Despite the increased level of activity, SG&A remained stable at $12.5 million in 1999 as in 1998. This was achieved as marketing and administrative costs related to the utility solutions segment increased by $820,000, offset primarily by a $740,000 decrease in corporate SG&A. 5 OPERATING LOSS. Operating losses decreased by 10% to $5.6 million in 1999 from $6.3 million in 1998. The decrease was primarily due to the 25% decrease in operating losses from corporate activity and the 18% decrease in operating losses in the utility solutions segment. These improvements were partially offset by the 77% decrease in operating profits in the computer hardware segment as described above. INTEREST EXPENSE. The increase in interest expense to $910,000 in 1999 from $360,000 in 1998 was due to the term loan taken in August 1999, to finance the acquisition of the Scientific-Atlanta Control Systems business division, increased utilization of our lines of credit and the finance expenses related to the convertible debentures issued in the last quarter of 1999, including a $300,000 non-cash charge for the beneficial conversion feature of our Debentures. OTHER LOSS, NET. In 1998, other loss was attributable to a net expense of $418,000, due to the write-off of a note receivable received from the sale of our interest in a joint venture, net of a gain on the sale of shares received from a conversion feature in the note, the write-off of other investments and related assets totaling $497,000 and a $1.1 million loss in connection with guarantees given by us on behalf of an affiliate and former subsidiary of ours that declared bankruptcy. INCOME TAXES. The provision for income taxes increased to $62,000 in 1999 from $35,000 in 1998. We establish valuation allowances against virtually all deferred tax assets, as we believe that it is more likely than not that they will not be realized. For a detailed analysis of the income tax provision, see Note 16 to the consolidated financial statements included in this annual report. LOSSES FROM DISCONTINUED OPERATIONS. The loss in 1999 was comprised of equity losses from our investment in Tower. Losses in 1999 included equity losses of $5.0 and income taxes of $3.7 million. These taxes represent Israeli taxes associated with the anticipated repatriation of earnings from our Israeli subsidiary that held our investment in Tower. Prior to the signing of a definitive sale agreement in December 1999, earnings of this Israeli subsidiary were considered permanently invested and, accordingly, no income taxes were provided on such earnings. In 1998, the loss was comprised of a write-down of our Tower investment by $6.1 million to reflect Tower's share price as of December 31, 1998, in addition to $3.7 million in equity losses from Tower. In 1998, the loss also included $1.3 million of losses from the PHD division activity, which was sold during that year. GAIN FROM SALE OF DISCONTINUED OPERATIONS. In 1998, we recognized a gain from the sale of our PHD division, which was sold during that year. LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2000, we had working capital of approximately $18.2 million, including $16.9 million cash, cash equivalents and short-term deposits. The increase in cash and short-term deposits was due to net proceeds of $27.9 million from the sale of our Tower investment, received in January 2000 and the net proceeds from our sale of the CinNetic division of $1.8 million in August 2000. In addition we have a long-term deposit of $6 million securing our Comverge subsidiary's long-term bank debt in the same amount. This debt replaced short-term debt, previously used to finance the acquisition by this subsidiary of the Scientific-Atlanta Control Systems business division in 1999. In February 2000 we utilized a portion of the Tower proceeds to redeem $1.7 million of our debentures for $2.0 million in cash. The $260,000 balance of the debentures was converted into 84,794 shares of our common stock. In addition, we used a portion of the proceeds from the sale of our Tower investment for operations to reduce the balance of accounts payable and accrued expenses. In September 2000 we announced the decision to repurchase up to 500,000 of our shares. In 2000 we repurchased a total of 500,385 shares for a total of $2.4 million. We believe we have adequate liquidity to finance our operating activities and corporate expenses for fiscal 2001 and the foreseeable future, including debt service and planned capital expenditures. DSI Israel's increased profitability in 2000 enabled it to reduce its usage of available bank credit lines. Bank credit lines currently available to DSI Israel total approximately $1.9 million, denominated in NIS and bearing interest at an average interest rate of the Israeli prime rate plus 0.2% per annum. The Israeli prime rate fluctuates and as of December 31, 2000 was 9.5%. As of December 31, 2000, DSI Israel was utilizing $570,000 of these lines of credit. IMPACT OF INFLATION AND CURRENCY FLUCTUATIONS In 2000 and 1999, the devaluation of the NIS against the dollar was at relatively the same level as inflation in Israel. A majority of our sales are denominated in dollars. The remaining portion is primarily denominated in NIS, linked to the dollar. Such sales transactions are negotiated in dollars; however, for the convenience of the customer they are settled in NIS. These transaction amounts are linked to the dollar between the date the transactions are entered into until the date they are effected and billed. From the time these transactions are effected and billed, through the date of settlement, amounts are primarily unlinked. The majority of our expenses are in dollars or dollar-linked NIS and virtually all the remaining expenses were in NIS. The dollar cost of our operations in Israel may be adversely affected in the future by 6 a devaluation of the NIS in relation to the dollar, should it be significantly different from the rate of inflation, since most transactions are linked to or are denominated in US dollars. This adverse effect principally arises with respect to its severance pay obligations and also with respect to the unbilled portion of long-term projects. As of December 31, 2000, virtually all of our monetary assets and liabilities that were not denominated in dollars or dollar-linked NIS were denominated in NIS, and the net amount of such monetary assets and liabilities was not material. In the event that in the future we have material net monetary assets or liabilities that are not denominated in dollar-linked NIS, such net assets or liabilities would be subject to the risk of currency fluctuations. SUMMARY QUARTERLY FINANCIAL DATA (UNAUDITED) The following table sets forth certain of our unaudited quarterly consolidated financial information for the years ended December 31, 1999 and 2000. This information should be read in conjunction with our consolidated financial statements and the notes thereto.
1999 2000 -------------------------------------- -------------------------------------- FIRST SECOND THIRD FOURTH FIRST SECOND THIRD FOURTH QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER ------- ------- ------- ------- ------- ------- ------- ------- (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Sales .......................................... $ 7,676 $ 8,265 $ 9,217 $14,550 $14,722 $ 15,790 $15,006 $12,321 Cost of sales .................................. 5,910 6,552 7,743 11,410 11,435 12,229 11,865 10,077 ------- ------- ------- -------- ------- -------- ------- ------- Gross profit ................................... 1,766 1,713 1,474 3,140 3,287 3,561 3,141 2,244 Research and development expenses .............. 309 272 196 492 394 146 158 230 Selling, general and administrative expenses ... 2,790 2,872 2,919 3,890 4,700 3,853 3,805 3,982 Gain on sale of division ....................... -- -- -- -- -- -- 1,144 -- ------- ------- ------- -------- ------- -------- ------- ------- Operating income (loss) ........................ (1,333) (1,431) (1,641) (1,242) (1,807) (438) 322 (1,968) Interest income (expenses), net ................ (16) 190 (156) (867) 141 332 217 359 Other income (loss), net ....................... 151 (219) (267) 29 (75) (114) 48 91 Minority interests ............................. 18 91 95 (479) -- -- -- -- ------- ------- ------- -------- ------- -------- ------- ------- Income (loss) from continuing operations before provision (benefit) for income taxes ......... (1,180) (1,369) (1,969) (2,559) (1,741) (220) 587 (1,518) Provision (benefit) for income taxes ........... 37 (25) 20 30 51 25 55 40 ------- ------- ------- -------- ------- -------- ------- ------- Income (loss) from continuing operations ....... (1,217) (1,344) (1,989) (2,589) (1,792) (245) 532 (1,558) Loss from discontinued operations, net of income taxes ................................. (1,489) (1,738) (1,115) (4,386) -- (104) -- -- Gain on sale of discontinued operations, net of income taxes .......................... -- -- -- -- 4,222 -- -- -- ------- ------- ------- -------- ------- -------- ------- ------- Income (loss) before extraordinary item ........ (2,706) (3,082) (3,104) (6,975) 2,430 (349) 532 (1,558) Extraordinary loss on early redemption of debt -- -- -- -- (943) -- -- -- ------- ------- ------- -------- ------- -------- ------- ------- Net income (loss). ............................. $(2,706) $(3,082) $(3,104) $ (6,975) $ 1,487 $ (349) $ 532 $(1,558) ======= ======= ======= ======== ======= ======== ======= ======= Basic net income (loss) per share: Income (loss) from continuing operations ..... $ (0.16) $ (0.18) $ (0.27) $ (0.35) $ (0.24) $ (0.04) $ 0.07 $ (0.22) Discontinued operations ...................... (0.20) (0.23) (0.15) (0.59) 0.56 (0.01) -- -- Extraordinary item ........................... -- -- -- -- (0.12) -- -- -- ------- ------- ------- -------- ------- -------- ------- ------- Net income (loss) per share--basic ........... $ (0.36) $ (0.41) $ (0.42) $ (0.94) $ 0.20 $ (0.05) $ 0.07 $ (0.22) ======= ======= ======= ======== ======= ======== ======= ======= Weighted average number of shares outstanding--basic ........................... 7,433 7,433 7,433 7,433 7,460 7,470 7,462 7,297 ======= ======= ======= ======== ======= ======== ======= ======= Diluted net income (loss) per share: Income (loss) from continuing operations ..... $ (0.16) $ (0.18) $ (0.27) $ (0.35) $ (0.24) $ (0.04) $ 0.07 $ (0.22) Discontinued operations ...................... (0.20) (0.23) (0.15) (0.59) 0.56 (0.01) -- -- Extraordinary item ........................... -- -- -- -- (0.12) -- -- -- ------- ------- ------- -------- ------- -------- ------- ------- Net income (loss) per share--diluted ........... $ (0.36) $ (0.41) $ (0.42) $ (0.94) $ 0.20 $ (0.05) $ 0.07 $ (0.22) ======= ======= ======= ======== ======= ======== ======= ======= Weighted average number of shares outstanding--diluted ......................... 7,433 7,433 7,433 7,433 7,460 7,470 7,926 7,297 ======= ======= ======= ======== ======= ======== ======= =======
7 The quarterly financial data for the first three quarters of 2000 reported above differ from the data for these periods previously reported by us on Form 10-Q as described below:
FIRST QUARTER SECOND QUARTER THIRD QUARTER ------------------- ------------------- ------------------- PREVIOUSLY AS PREVIOUSLY AS PREVIOUSLY AS REPORTED ADJUSTED REPORTED ADJUSTED REPORTED ADJUSTED ---------- -------- ---------- -------- ---------- -------- Income (loss) from continuing operations .............. $3,115 $(1,792) $ (807) $ (245) $ 518 $ 532 Discontinued operations ............................... -- 4,222 (104) (104) -- -- Extraordinary item .................................... (340) (943) -- -- -- -- ------ ------- ------ ------ ----- ----- Net income (loss) ..................................... $2,775 $ 1,487 $ (911) $ (349) $ 518 $ 532 ====== ======= ====== ====== ===== ===== Basic net income (loss) per share: Income (loss) from continuing operations ............ $ 0.42 $ (0.24) $(0.11) $(0.04) $0.07 $0.07 Discontinued operations ............................. -- 0.56 (0.01) (0.01) -- -- Extraordinary item .................................. (0.05) (0.12) -- -- -- -- ------ ------- ------ ------ ----- ----- Net income (loss) per share ........................... $ 0.37 $ 0.20 $(0.12) $(0.05) $0.07 $0.07 ====== ======= ====== ====== ===== ===== Diluted net income (loss) per share: Income (loss) from continuing operations ............ $ 0.42 $ (0.24) $(0.11) $(0.04) $0.07 $0.07 Discontinued operations ............................. -- 0.56 (0.01) (0.01) -- -- Extraordinary item .................................. (0.05) (0.12) -- -- -- -- ------ ------- ------ ------ ----- ----- Net income (loss) per share ......................... $ 0.37 $ 0.20 $(0.12) $(0.05) $0.07 $0.07 ====== ======= ====== ====== ===== =====
The differences between the amounts previously reported and as adjusted principally related to: (i) The gain on sale of discontinued operations, net of taxes of $4,222 has been reclassified from other income (loss), net, to properly reflect the sale of our interest in Tower as a discontinued operation. Taxes related to the sale of $460 previously provided for in the second quarter of 2000 and $307 identified in the fourth quarter of 2000 have been offset against the gain in the first quarter of 2000 as presented above. (ii) The extraordinary loss on early redemption of debt was restated to include an additional $413 loss that had been previously deferred and $190 previously reported as interest expense. 8 SIGNATURE Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the Township of Mahwah, State of New Jersey, on May 14, 2001. DATA SYSTEMS & SOFTWARE INC. By: /s/ Sheldon Krause ---------------------------- Sheldon Krause, Secretary 9