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Y-
AG
SYSTEMS, PNC,
ANNUAL
REPORT
-
sham) compmed to net income o $5.1 million ( . 3per
f s8
share) for 1984. For a detailed explanation o this change,
f
we call PUT attention to "A Note About a Change in
Accounting,'' which follows this letter.
Along with fmancial strength fiscal year %Q&
wets maeked by m m t strides i product -1
n 0-
Lerttertotltre market expansion, and cuswmer services. of a r t ~ ~ w
p
StOclrholders note i the m r sales growth echiewd by n dimibt@&
s od u
Tb our Stwkholdem: i other counmies. These achievements dernmstmm m
n t
Software AG systems, hc,,bas completed a year the Company has both the res-s and the stsaQ#yQ
. l
of solid growth with revenues as mported of$52.3 snlnion hold its position as a w d d leader i advanced sys~Mh@
n
compared with menubs w-reported of $41.1 miUim tn software solutions.
1984.
In fiscal 1986, the Company elected to adopt a A Y a of fnwslment and Growth
er -
Pevised a h m
~ t i n g wp e ~ b y ~ uf e B
T e Mmnadon management trend
rampized at a *rent point h the s a l e s I b ~ t i o n movSngmmputhg~~an
process bbaa i -us
n y-. Although tMs change h a lpmcewbg department inta the offim and
te
acco~EingrtffeFPedEhe~t~ofu~asreportsdhr desksofend~gahedmomentuminthe
1986, we feel thZs will provide management with a clearer antibpation of this shift and the resulting growth in &
p i c a r r e a f ~ i n g c r p e ~ a n d w i l l ~ f o r ~ pmntidmarket, w developed a sales strategy that
e
Pealisticplanning for the As a &t o of change in s&esses the delivery of business idomation soh-
f
acmunting, net inw>me ~~. The Compsny i rp s e* using our *'off-the&helP' software products. The
net income b 1985 of $5.1 million as - p a d
x with deveiopment of this " s o ~ u ~ o n s ' ~ t e g y our
re~netin~omeofS5.8millionfor1884.Ifthschangs b e l i e f t h a t ~ e r f u l s o f t w a m m o l s ~ d b e f l ~ ~ '4
inacaunthg w applied .- bCfmipmy's net ewy-b+ase Ibr the ~ r m pw o g c m m d m
r -
Stuart J. Miller, President 6Chief
Executive Officer (left)and John
Norris Maguire, Chairman of the
Board (right).
In order to keep pace with ney market growth take the Company'sproven software products-before
and to strengthen our ability t capture an increasing
o available only to users of the IBM nwhfcame computer-
market share, the Company made major investments in i t new compum m s e n w . ADABAS(VMS) and
no
sales,service, and corporate v i s i b i i . NATURAL(VMS), for example, present usarsof Digital
W s : W increased our full-servim branch
e Equipment Corporation's VAX sgstems with their -first
officesin the United States from 8 to 12, while at the same opportunity to use state-of-the-artappliwtim development
time growingour direct sales force by 40%. As a result of m l s i muncrion with Software AG's proven data base
n
this investment, domestic sabs W d 35% Born kcal management system.
1984 to 1985. Growth in inmmatbnd sales was Other products &w us t take immediate
a
, consistently s m m g thraghout the pear, with a 3 4
96 advantage of the growing market for end-user software
hawme &om 1984. pmduw. STPER NATURAL, for instance, is a softwm tool
Sewice: A high level of customer satMaction which improves the abiiity of professionals to access
i an i w n asset fr the Company for two reasons,
s m mt a corporate data bases. while allowing data base
First, revenue h m sales of new products Eo existing administrators to maintain full control over computer access
customers will assume an hcmasing component qf our and secwity.
business. Second, the recommendations of our existing In order ta rompeta successfully m this end-user
customms play a key role in the decision-making process of market. the Company continues to sQn joint development
our prospective clients. and marketing agreements with companies qwhlkhg i n
.I With these considerations in mind, the Company developing applications software. In fiscal 1985, Software
created the new position of Vice Resident for Gustoma AG Systems entered into agreement$ with 4 such
:1 Service in July 1984 and set *gent ~ e wstandards for
quality assurance, cusmmer education, and customer
suppod. In addidan we created a new team of amount
applications companies, bringing the totaI t 25 companbs
that will use Software AG products to develop and m k e t
new applications softwafe.
o
representatives whose perEormance will be m- e by
periodic customer surveys. hoking Ahead to B h d 1988
Vi6ibMty: With the help of a marketing fErm, The actions over the past year have s a W e d
our
we stre11gthmsd pasition in the industry and In the our existing base for fume expansion The course
mar-lace. Through a new advertisingcampaign. direct ahead-to continue to take a leadership rob in prodding
x i ~ & I prornocions, and telemarketing. w brdadmed our
e innovative software solutions t businesses and
o
audience to indude business executives and mana@em gov~mments mtsmatbmlly-wlll be achieved by proven
-81 outside tbe data processing depamnent. As a products, quality service, and a dear stfategy to expand
result @f&m inquiries h m pcspective dwtQmers
efforts, our participation in the constantly c h m g i ~ g
computer
increased seve~-folcl ver those gen&ated by advertising i
o n software markets. We believe thaf the Company i s
t h e ~ ~ p 8 T . positioned weU ta adapt to these changes and tb expand the
iotarest af you, our stockholders.
N ~ F r o d u c t a ~ ~ t s
n
I f l s d 1P85,Software AG Spstems introduced
e
nine nw pmcba, which is the most ever Introduced by
the Company in a single year. Several of these products President and Chairman o the Board
f
W a f Executive OfEcer
The following selectsd h a n d data are derived
from the consolidated &cia1 statements for the years
ended May 31. 1983. 1984.1885 and should be read in
coNunction with the consolidated kanciaI statements and
related notes included elsewhere herein. The data set forth
below for the year ended May 31, 1985, refIect the change
in the Company's accounting for recognizing contract
revenue. For further explanation of the change in
accounting, see Note 15 in the Notes t Consolidated
o
~~ Statements.
Years E d e d May 31 1885 1984 I983 1W2 1981
Revenues (Note 15) $52,m,428 $41,128,805 $30,043,801 824,685,852 $18,87E,D70
Income before -Cumulative
m a of mangela
Aocoun~ S 8,732,615 $ 5,855,607 $ 1,248,903 $ 985.755 $ 3,258,180
PletIlraome $ 5,14Q,Z53 $ 5,855,697 $ 1,248,4303 $ Q05,%5 $ 2,258,180
n
hlcome per C o ~ o S h
%fare Cmuhtfwe Effect
of ~raanged A C C O W ~ ~
i $ 1,12 $ .as $ .20 $ .la $ .49
Wt Incomeper Common Sherre $ A30 $ .as $ .20 $ .IS $ .49
Nmsbw of Shares Used to
compute Net Zncme
Per Common Sfme ~010,019 6,145,465 6,131,741 6,088,810 4,810,650
P r o F m Amaunts A s m g
the dbange i &cou~tiag
n
s
.i Applied Remamively:
R&WIIUW $62,264,426 $30.5,68,48a $31,521,73g $23,219,586 $16,a35,490
Net home $ 8,73a,815 $ ~ , 1 1 & , 0 8 ~ 1,~53,492 $ 26%,13l
$ $ 1,401,427
I MetIncome per Commm Sbare $ 1.12 $ .83 $ .32 $ ,OS % .30
working C a w $24,341,65? $23,380,045 $16,187,048 $13,326,504 $ 1,887,559
I
Ibtal Assets $48,768,551 $51,154,393 $35,882,737 $33,781,243 $21,682,135
T a d Stockholderd Equity $33,091,984 $32,792,453 $2$867,774 $25,622,022 $ 5,l rn*0 10
I
. '.',.. I,. ' , " ..
.'I -
accomplished through the Company's own sales force.
Software AG, D8pmstadt exclusively markets its own
products in Western Europe and the Middle East. as well a$
those products developed by the Company.
The two companies are united i their
n
commitment to w11Einueresearch and development efforts
in order t maintain their products as "state-of-the-art:'
o
TRis partnership for product development and diswibutiw
Softuram AG S y s t e m , h . -ugh
c, its takes S o w AG's powerful software solutions t an u
operating unit Software AG ofNorth ~ ~ chc., , a expanding community of users w i t h a fulI range of
develops, market$. and supports an in-d line of commercial and government organizations. (For certain
compum systems &ware for mainframe m p u m and hancid information concerning the Company's
computer networks. The Cornpan-ong with the related inmmtional activities see Note 1 to C01lsoIidamd Finan*
0
but independent Software AG of Dmmtadt, West Statements.)
Germany-is part of a worldwide association of companies Our product design philosophy is smngly
serving a worldwide community of users with a common oriented toward the requirements of the actual end users
set of software products. -mauagem~nt professloads who need flexible,--to-
Originally formed to market products developed use informadon system tools for solving problem and
by Software AG, Darmstadt, the Company has exclusive making decisions. These products include: ADABAS, one d
marketing rights for these products In the United States and the world's most widely used rdational deta base
in many other territories of the world. outside Western management system; NATURAL, the premier fourth-
Europe. Through licensing agreements with independent generation application development language s s e ;ytm
~ u t o r sthe Company markets those products together
, COM-PLETE, an online environment manager thst manages
with its wvn products in the Far East, Southeast Asia, i n f o m i o n flow in distributed environments; PREDICT, an
Central and South America, Canada, Africa, Israel, and online dictionary used to faeilitam and control access to
Australia. W~thin United States, marketing i
the s data; and NATLTRALlCONPJECTION, a product that enables
users of personal computers within an orgmktion to
n
upload and download information stored i corporate
mai&ame computer systems, without wmpmis'ig
security or data integrity.
er
Highlighs of Fiscal Y a 1985
June 1884
Software AG Systems signs a joirlt development agreement
with Software Internatiod to produce an online query
facility.
August 1884 March lS8S
Software AG Systems increams the numhr of its 1I1- A Datapm Research Corporation survey of users names
service eales branches in the United States from eight to ADABAS the number one data base management system
twelve. for IBM systems.
Auhfust 1984 March 1885
Software AG Systems signs joint m k e t i n g and S o f t w m AG Sysmms btroduces a sopbisticamd e l m &
development agreements with D E W and Advanced mssage m g e m e n t system, the Company's 6rst office
c
Systsms, h .for video, interactive, and computer-besed h h n a ~ o nystems product.
s
training. Mamh 1886
August 1884 Software AG Sysmms inmduces ADABAS/Contlnuous
Software AG Systems enters inm an agreemmt which will Processing Option, a phduct which provides 24-hour
allow CaMomh Software, Inc, to offer an online query and access to data base resources,
reporting system based on NATURAIJVSAM. Mefeh 1885
September 1984 Software AG Systerfisintroduces FiEVIEW a data base
Software AG Systems releases ADABASIVSAM Bfldge, a p d o m a x m moni-g and reporting system.
software product b t allows users of DM'SVSAM data Apfll1985
base manageamit s y s m to migrate to ADABAS without Software AG Systems s i p an agreement with American
an extensive conversion effort. Softwara to develop and market applimtion pmducw that
October 1984 use ADABAS and PJ-AL.
Software AG S y s t e m mmunw ADABAS(-) Map 5986
NATURAL(VMS1, system software that enables D ' i Software & S y s t e m s inmduces a signif~cant ew version
n
Equipment Corporation (DEC) VAX u r n t outilize major of DOG COM-PWI%, providing users of IBM DOB operating
production application dam base and fourth-generation systems with pagram development and communi~tions
tdmologiw. funaims previously unavailable in the DOS environment.
W b e r IS84 May 1886
Software AG Symms signs a joint marketing agreement Software AG Systems introduces HATURAL/Advanced
witb Spstems and computer ?bchnology Corpmtim (SCT). Fadties which gives CICS users several key functims
Decmaber 1886 previously available only through COM-PLETE.
The f;retamationData D~&oM survey of users names May 1WS
ADABAS the topmnbd data base management,q&em for Software AG Systems signs a letter of intent to conduct
IBM s p t . m ~ ~ . joint development and marketing activities with Ashtun-
Jmuarg 1886 'Me, dmlopers.ofthe microcomputer products dl3ase I H
S o f t w m AG Systems bmduces SUPER NATURAL, the and Framework.
" p r o f e s s i solution" software for usem outside the data
~
pmms;s%rg department to access corporate dam bases.
Nlanagement's Discussion and Analysis o Financial
f
C o d i t b and R e d & o Operations.
f
Liquidity and Capitel Resources
The Company believes that it has substantid cash and cash equivalents at fiscal
year-end which a e adequate to meet its needs for the current year The current
r
ratio is 31 co I. Cash flow is enhanced by regular collection of accounts receivable
.
and lease contracts receivable. Lnng-term lease contracts receivable o $4,421,000
f
at fiscalyear-end pmvide an additional source of future cash Bow. The Company
also has a line of credit of $4,000,000 with a commercial bank, $2,000,000 of which
is earmarked to meet working capital needs and the balance for financing
acquisitions. There have been no borrowings under this agreement. Uses o cash are
f
currently confined primariry to expenditures for staff, staff facihties. traveI,
-
communications, and administration. Some cash payments from distributors are
collected by SAG on behalf of the Company and are used by SAG by offset royalties
due them.
The Company's commitments consist primarily of costs to maintain operations such
as salaries and leased premises. The Company has no material commitments for
capital expenditures as of the end of hcal1085.
Fiscal 1985 Compared m Fiscal 1884
Revenues increased 27%to $52,264,000.In general,the increase in revenue is
principally attributable to a greater volum of licenses. Effective for fiscal 1985, t h ~
Company changed its accounting for contract revenue. The new policy is to
recognize revenue at the time the product is installed as opposed to its former policy
which had been to recognize 90% o the revenue at conwact execution and the
f
remaining 20% at installation. As a result o this change in acc~uatiug. evenues
f r
were $932,000 less than they wodd have been if the change had not been made.
Internationalrevenues increased 39% to $1 1,839,000 resulting f o a greater
rm
volume. Interest income on short-term investments contributed $2,133,000 (4%) to
revenues. Revenues h m new products were 5% of total revenue.
Salaries. Wages and Commissions increased 32% to $12.745.000. The increase is
the result of the hiring of 51 employees, an increase of 20%over the previous year.
salary increases and commissions on higher saIes.
Royalty Fees increased 35% to $9,569,000. The increase is primarily due to a higher
growth rate of international sales revenue. whose royalty rate is higher than other
royalty-related revenues.
Other OperatingExpenses increased 28% to $17,257,000. The increase is
atmibutable, in part, to the expenses associated with the increase i personnel and
n
the opening of Eour sales offices during the year. I addition,the Company accrued et
n
$330,000 o
contribution t its employees' Retirement Benefit plan. The Company
made no contribution i 1984.
n
Income Before Income W e s increased to $12,693,000 compared t $10,936,000n
a i
fiscal 1984 primarily due to an increase i revenue.
n
The effective income tax rate i fiscal 1985 increased to 47.0% compared to a 46.5%
n
rate for fiscal 1984. The increase is principally due to an increase in Income Before
Income Wes wbile the amount of foreign and investment tax credits available were
approximately the same as in 1984.
~lsgaCamp~mdtuPrscal1983
Renrenues increased 3796 to $41,127,000. In generat the increasein revenue is
attributable to a greater volurna of licenses. Maintenance fees increased primarily as
a &t of increased sales. Jntermtioml revenues increased 51% to $8,550,000.
Interest innome on short-term hvesmmts contributed $1,379,000 (3%)to
revenues. Revenues h m new products were 11%o total revenues.
f
Salaries, Wages and Commissig~18~ inmeawd 1% t $9,634,000. The sli& increase i
o s
t result d salary increases and commissions on higher sales offset by a decrease
b
in salary rates mused by ~WIIO~*BT.
Rapalty Fees increased as a percentage of revenue primarily due Eo expanded
intermtianal d e s revenue, whose royalty rate i higher than other revenues,
s
Other Operating Expenses decreased 7% to $13,477,000. Included in fiscal 1983
was a $1,50O,W legal settlement as discussed elsewhered After considering the
I& settlement Other Opewting Expenses increased 4% which i &-table
s to
increases in travel, facilities and communicatiorrs.
Income before Income 'XBxes bmased to $10,936,000 compared to $2,234,000 i n
fmd 1883 primarily due to rn incmase in revenue while operating costs remained
stabIe.
The income tax fate i fiscal 1984 increased Eo 46.5% compared IB a 44.1% rate for
n
f s a 1 3 The incram is principally due to the increase in hcpme Befbre Income
icl W .
mes.
~ l B 8 3 ~ t o ~ l ~
Revenues increased 22% to $30,U44,0a0, In gene&, the haease in m n u 9 L
attributable t~ a paw volume of licensesand the e f h t of prim hereases du&g
f i s d 1983 amounting w an mm$e of 7%. Mainmmnce fees bmwamd primarily as
a resulk of m increase i in war base. Royalty expense increased 88 a m a t of
n
b a s e d sales. This increase along with the amortization of die Computer System
Software MaricetingL i m caused roydty fees w remainconstantas a parcentage
of revenues. Interest income on slwrt-tsrm investments mnidhuted $801.000 (3%)
to m n u e s . In general, the revenue inmeme i due to ,agreater volume of licenses
s
far ttra Company's products, Tntexmtional revenues hcmamd 23% u, $5,882,000.
~ v ~ n u&om new products were not si$@cmt.
es
Sd&i88,
msulta h m * &Id C&sSfon~ incY&ed U1$&545,m, h
hams6s #d commlssloas m higher sales mvMnm5.
-
l which
Other Operating Expenses increased 22% tq $14,454,000-The increase was due i n
p r t to the legal -dement of a litigation hvolvlng ADABAS44 i the amount o
n f
$1,60O,Q00 the balance attributable to a a c r o s s - t b m haease for
gnd n .*
facilities, travel, communicatims, marketing and admmimtion.
I general, the relatively lower rate o W t i o n i
n f n 1983 as to fiscal
I 8 had less-adverse effect on mmues and inwme before income taxas, although
s2
salaries, *ages and facilities costs which a m the W r cost elements to the
o
Company, and to.a lessar exteat, the price &arged for the Conkpanfa products, are
mom &eTy to reflect the changes in the ram cvfidhtioa
Income Before hmne 7Wes increased to $2,234,800 compared to $1.101.00Q ip
%call982 primmikg due to an increase i revenue,
n
The income tax rate in heal 1983 increased to 44.1% mmpaed to a 12.3% rate for
n
&call!%!. The increase i attributable, i part, to a lesser amount of invement
s
tax credit available and the absence o f m ' 6 ~ ~ development tax credit, an[t in
wd
part, t an i-
o a in Income Before Income laxes.
Consolidated Statements of Income
Software AG Systems, Inc. and Subsidiaries
For the Three Years Ended May 3 1, 1985
Revenues (Note 15) $52,264,426
$41,126.605 $30,043,891
Costs and Expenses
Salaries, Wages and Commissions 12,745,200
9,633,979 9,545,173
Royalty Fees (Note 5) 9,569,329
7,080,086 3,810,546
Other Operating Expenses (Note 11) 17,257,082
13,476,843 14,454,269
Total Costs and Expenses 39.571.61 1
30,190,908 27,809,988
Income Before Income Taxes and
Cumulative Effect of Change in
Accounting 12,692,815
10,935,697 2,233,903
Income Taxes (Note 6) 5,960,000
5,080,000 985,000
Income before Cumulative Effect
of Change in Accounting 6,732,815
5,855,697 1,248,903
Cumulative Effect of Change in
Accounting for Recognizing
Contract Revenue, net of
Deferred Income Taxes of
$1,380,000 (Note 15) (1,592,662) - -
Net Income $ 5,140,153 $ 5,855,697 $ 1,248,903
Income per Common Share Before
Cumulative Effect of Change
in Accounting
Cumulative Effect of Change in
Accounting for Recognizing
Contract Revenue, net of
Tax (Note 15) (.26) - -
Net Income Per Common Share $ .86 $.95 $.20
Number of Shares Used to Compute
Income Per Common Share 6,010,913
6,145,465 6,131,741
Pro Forma Amounts Assuming the
Change in Accounting is Applied
Retroactively:
Revenues $52,264,426 $39,566,480 $31,521,739
Net Income $ 6,732,815 $ 5,115,089 $ 1,953,492
Net Income per Common Share $1.12 $.83 $.32
See accompanying notes to consolidated financial statements.
Consolidated Statements of Stockholders' Equity
Software AG Systems, Inc. and Subsidiaries
For the Three Years Ended May 3 1, 1985
Common Stock
$.01 Par Value Additional
. Paid-In Retained
Shares Amount Capital Earnings
Balance June 1, 1982 6,135,863 $61.359 $20,284,771 $5,275,892
Shares Acquired and Retired (21,060) (211) (17,790) -
Exercise of Stock Options (Note 13) 1.980 20 14,830 -
Net Income - - 1,248,903
Balance May 3 1, 1983
Shares Acquired and Retired
Exercise of Stock Options (Note 13)
Net Income
Balance May 3 1, 1984
* Shares Acquired and Retired (Note 12)
Exercise of Stock Options (Note 13)
Net Income
* BalanceMay31,1985 5,777,596 $57,776 $15,513.543 $17,520,645
See accompanying notes to consolidated financial statements.
Consolidated Balance Sheets
Software AG Systems, Inc. and Subsidiaries
May 31, 1985 and 1984
ASSETS
Current Assets:
Cash and Investments (Note 2) $17,651,511 $21,195,493
Accounts Receivable (Note 3) 13,387,993 11,860,030
Current Portion of Lease Contracts Receivable (Note 3) 3,900,691 4,527,250
Income Taxes Receivable 103,033 11,033
Other Current Assets 909,929 932,972
Total Current Assets 35,953,157 38,526,778
Lease Contracts Receivable (Note 3) 4,421,335 4,559,256
Property, Equipment and Leasehold Improvements, less
Accumulated Depreciation and Amortization (Note 4) 3,824,390 2,486,092
Computer Software Marketing License, net of
Amortization (Note 5) 3,689,185 4,661,301
Other Assets 878,484 921,466
Total Assets $48,766,551 $51,154,893
1985 1984
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes Payable $ 35,087 $ 41.736
Current Portion of Royalties Payable 2,807,394 4,824,850
Accounts Payable 1,253,164 504,569
Income Taxes Payable 19,894 2,910,000
Deferred Income Taxes (Note 6) 5,200,000 4,420,221
Capitalized Lease Obligations (Note 9) 188.4 53 79,038
Other Current Liabilities (Note 8) 2,107,508 2,365,419
Total Current Liabilities 11,611,500 15,145,833 .
Royalties Payable (Note 5) 855,000 715,000
Capitalized Lease Obligations (Note 9) 475,270 154,747
Deferred Income Taxes (Note 6) 2,720,000 2,300,000
Other Liabilities 12,817 46,860
Total Liabilities 15,674,587 18,362.440
Commitments and Contingencies (Note 9)
* Stockholders' Equity:
Preferred Stock, $10 Par Value;
t
Authorized 2,500,000 Shares, None Issued - -
Common Stock, $.01 Par Value; Authorized
10,000,000 Shares, Issued 5,777,596
and 6,109,198 shares respectively
(Notes 12 and 13) 57,776 61,092
Junior Common Stock, $.01 Par Value;
Authorized 1,000,000 Shares, None Issued -
Additional Paid-In Capital (Notes 12 and 13) 15,513,543 20.350.869
Retained Earnings 17,520,645 12,380,492
Stockholders' Equity 33,091,964 32,792,453
Total Liabilities and Stockholders' Equity $48,766,551 $51,154,893
See accompanying notes to consolidated financial statements.
Consolidated Statements of Changes
in Financial Position
Software AG Systems, Inc. and Subsidiaries
For the Three Years Ended May 3 1, 1985
1985 1984 1983
SOURCES OF WORKING CAPITAL:
Income Before Cumulative Effect of Change in Accounting $6,732,815 $5,855,697 $1,248,903
Items Which Do Not Use Working Capital:
Depreciation and Amortization of Property, Equipment and
Leasehold Improvements 936,868 783,520 746,821
Amortization of Marketing License 972,116 816,735 612,483
Provision for Deferred Income Taxes 420,000 490,000 385,000
Working Capital Provided by Operations
Before Cumulative Effect of Change in Accounting 9,061,799 7,945,952 2,993,207
Cumulative Effect of Change in Accounting for Recognizing
Contract Revenue (1,592,662) - -
Increase in Royalties Payable 140,000 100.000 -
Increase in Capitalized Lease Obligations 320,523 - -
Decrease in Lease Contract Receivable 137,921 1,162,160 -
Other, Net 155,351 68,982 289,859
8,222,932 9,277,094 3,283,066
USES OF WORKING CAPITAL:
Acquisition of Common Stock
Additions to Property, Equipment and Leasehold
Improvements, Net of Disposals
Increase in Lease Contracts Receivable
Increase in Other Assets
Marketing License Obligation
Decrease in Royalties Payable
Decrease in Capitalized Lease Obligations
Decrease in Other Liabilities
Increase in Working Capital $ 960,712 $8,193,896 $1,860,545
1985 1984 1983
SUMMARY OF CHANGES IN WORKING CAPITAL:
Increase (Decrease) in Current Assets:
Cash and Investments $(3,543,982) $12.51 1,621 $1,207,862
Accounts Receivable 1,527,963 3,668,823 1,339,366
Current Portion of Lease Contracts Receivable (626,559) 444,218 974,422
Income Taxes Receivable 92,000 - (644.2 13)
Other Current Assets (23,043) 485.344 129.241)
Increase (Decrease) in Current Liabilities:
I Notes Payable
Current Portion of Royalties Payable
Accounts Payable
Income Taxes Payable
Deferred Income Taxes
Capitalized Lease Obligations
Other Current Liabilities (257,911) 629,252 302,682
1 Increase in Working Capital
(3,534,333)
$ 960,712
8.916.1 10
$ 8,193,896
987,651
$1,860,545
rA See accompanying notes to consolidated financial statements.
1 Software AG Systems, Inc. and Subsidiaries
1 Nates to Consolidated Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Principles of Consolidation
The Consolidated Financial Statements include the accounts of the Company,
Software AG Systems, Inc. and its wholly owned subsidiaries Software A of G
North America, Inc. and Computer Aided Transcriptions, Inc., a dormant
subsidiary.
(b) Revenue Recognition
The Company sells, or leases under arrangements equivalent to a sale, a license
to use its systems software products. The Company's current policy is to
recognize revenue at the time the product is installed (Note 15).
In contracts where the terms indicate a sale upon the satisfaction of other criteria,
such as acceptance upon approval, revenue recognition is delayed until those
specific terms are met.
There are no significant future costs associated with the Company's maintenance
contracts that are not a part of the ongoing conduct of its business; these costs
are charged to operations as incurred. Accordingly, maintenance fees charged to
customers are recorded as revenue when billed. All costs associated with
development and improvement of software products are charged to operations as
incurred.
(c) F'roperty, Equipment, and Leasehold Improvements
Property, equipment and leasehold improvements are carried at cost. Certain
items of equipment acquired under capital lease agreements have been
capitalized and the related lease obligations are classified as liabilities on the
Consolidated Balance Sheet.
Property and equipment, including property covered by capital leases, are
depreciated on a straight line basis over their respective estimated useful lives.
Leasehold improvements are amortized on a straight line basis over their
respective lease terms.
(d) Income Taxes
Deferred income taxes are provided to reflect the tax effect of timing differences
between financial and tax reporting. The Company accounts for investment tax
credit as a reduction of income tax expense in the year the related assets are
placed in service (flow through method).
(e) Income Per Common Share
Income per common share during each period is net income divided by the
weighted average number of common shares outstanding and common share
equivalents resulting from dilutive stock options. Primary and fully diluted
earnings per share are essentially the same.
1 2. CASH AND INVESTMENTS
1
Cash and investments at May 3 1 are as follows:
I,
I 1985 1984
d, Cash and Time Deposits $ 2,834,101 $15,210,602
1 U.S. Treasury Notes,
1I at cost 14,817,410 5,984,891
$17,651,511 $21,195,493
I
1 Interest and dividends from investments for the years ended May 31, 1985, 1984
and 1983 are $2,133,286, $1,379,000 and $801,000, respectively. Investments in
U.S. Treasury Notes at May 3 1, 1985 and 1984, had an estimated market value
of $15,228,000 and $7,040,000, respectively.
3 ACCOUNTS RECEIVABLE AND LEASE CONTRACTS RECEIVABLE
.
The Company includes in Accounts Receivable amounts due from the outright sale
of rights to its products and for related supporting technical services. The Company
also recognizes revenue upon installation of sales-type leases for the license of
its products for periods of up to five years.
At May 3 1, 1985 and 1984 Accounts Receivable and Lease Contracts Receivable
are net of $1,373,695 and $1,135,747, respectively, for allowance for specific
accounts not considered to be collectible.
The receivables from sales-type leases as of May 31 include
the following components:
1985 1984
Minimum Lease Payments Receivable $11,579,584 $12,414,831
Less: Unearned Interest Income 3,257,558 3,328,325
Lease Contracts Receivable 8,322,026 9,086,506
Less: Current Portion 3,900,691 4,527,250
Lease Contracts Receivable-Long Term $ 4,421,335 $ 4,559,256
Future minimum amounts receivable from contracts under sales-type leases for
each of the next five years and all later years are:
1986 $ 5,051,867
1987 3,019,659
' 1988 1,857,397
1989 1,155,462
1990 442,733
thereafter 52,466
TOTAL $11,579,584
Unearned interest income represents the interest factor implicit in the lease
, payments. Interest income earned on lease contracts receivable for the years
1 ended May 31.1985, 1984, and 1983 was $1,385,545, $1,488,100, and
81,354,337 respectively.
4. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS
A summary of property, equipment and leasehold improvements at May 31,
follows:
Estimated Life
1985 1984 (Years)
Office Furniture, Fixtures
and Equipment $4,002,554 $2,872,377 5-10
Leasehold Improvements 1,063,562 987,594 2-5
Transportation Equipment 61,882 20,390 3-5
Capitalized Equipment Leases 937,838 741,156 2-5
6,065,836 4,621,517
Less: Accumulated Depreciation
and Amortization 2,241,446 2,135,425
Net Property, Equipment
and Leasehold Improvements $3,824,390 $2,486,092
Depreciation and amortization expense relative to these assets is included in
Other Operating Expenses.
5. COMPUTER SOFTWARE MARKETING LICENSE AND ROYALTIES
The Company has a perpetual marketing license with its affiliate, Software AG
of Darmstadt, West Germany (SAG),for its principal products and all related
improvements developed by the Company. SAG or any licensee, in the Far
East, Southeast Asia, North.Centra1 and South America, Canada, Africa, Israel, and
Australia. The agreement provides that the Company pay SAG royalties ranging
from 5% of the standard user's fee for licenses granted in North America to
50% of the fees received for licenses or maintenance from users elsewhere.
The agreement also provides that SAG will pay the Company royalties ranging
from 15% of revenues received by SAG for maintenance and support services
to 25% to 50% of the fees received for products of the Company licensed by
SAG. The consideration for the marketing license of $7,035,343 is being
amortized on a basis related to revenues which management estimates will
amortize the cost over approximately seven years.
Amortization expense for the years ended May 31, 1985,1984, and 1983 was
$1,045,724, $816,735, and $612,483 respectively.
6. INCOME TAXES
I The provisions for taxes on income consist of the following:
,
I Year Ended May 31, 1985 1984 1983
Federal:
I
Current
I
I
Deferred ,6,0
22000
2,020,000 835,000
? 5,160,000
4,410,000 835,000
State:
Current
Deferred 320,000
150,000 150,000
800,000
670,000 150,000
$5,960,000
$5,080,000 $985,000
I
The difference between the effective income tax rate and that computed by
I
applying the statutory federal income tax rate is summarized as follows:
I Year Ended May 3 1,
I Statutory Federal Income Tax Rate
Surtax Exemption
State Income Taxes
(net of federal tax benefit)
Investment Tax Credit
Foreign Tax Credit
Officer's Life Insurance
I Dividend Income Exclusion
Other .2 .1 1.1
I
Effective Rate 70
4.% 46.5% 44.1%
,I
1 Deferred income tax expense resulting from timing differences between taxable
and financial statement income is summarized as follows:
Year Ended May 3 1, 1985
1984 1983
Revenue Recognition
(Cash to Accrual) $2,572,000
$ (674,000) $942,000
Depreciation and Amortization 1.0)
(100
9,000 127,000
Foreign Tax Credit 16,000
671,000 (204,000)
Investment Tax Credit 3,000
384,000 (46,000)
I Research and Development
Tax Credit - 95,000 -
' Jobs Tax Credit - 48,000 -
Effect of Net Operating Loss
Carryforwards for Tax
Purposes - 1,637,000 166,000
I $2,580,000
$2,170,000 $985,000
! In 1984 the Company recognized its remaining net operating loss and tax credit
carryforwards for income tax purposes. The amount of the,net operating loss
carryforward utilized in 1984 was $3,560,000.
1 7. RETIREMENT BENEFIT PLAN
The Company has maintained a defined contribution retirement plan for
substantially all of its employees since May 31, 1978. On September 14, 1984,
the plan was amended to meet the requirements of Section 401(k) of the Internal
Revenue Code. On June 10, 1985, the Company received a favorable
determination from the Internal Revenue Service. Per the amended plan,
employee contributions are matched by the Company at the discretion of the
Board of Directors. For the year ended May 3 1, 1985, the Company contribution
was $388,949. There were no contributions made in the years ended 1984 and
1983.
8. OTHER CURRENT LIABILITIES A N D LINE OF CREDIT
Other Current Liabilities at May 3 1 are as follows:
1985 1984
Salaries, Wages, Commissions and Related Expenses $1.61 5.491 $1,615,532
Deferred Revenue 384,419 749,887
Other 107,598 -
$2,107,508 $2,365,419
The Company has a Revolving Line of Credit of $4,000,000 of which $2,000,000
is available for general working capital and $2,000,000 is only available for
acquisitions. The Revolving Promissory Note will bear interest at the bank's
prime rate. As of May 31, 1985, no amounts had been drawn against this line of
credit.
9. LEASES
The minimum future lease payments for obligations under capital leases at May
31, 1985 are as follows:
Year Amount
1986 $274,845
1987 239,500
1988 233,700
1989 220,718
1990 -
Total Minimum Lease Payments 968,763
Less: amount representing interest 305,040
Present value of minimum lease payments $663,723
, The minimum future rental payments required under operating leases at May 31.
/ 1985 are as follows:
Year Equipment Facilities Total
1986 $ 645,502 $2,282,385 $2,927,887
1987 520,452 2,018,046 2,538,498
1988 11,841 1,266,169 1,278,010
1989 10,105 1,063,863 1,073,968
1990 and thereafter 750 47,481 48.23 1
10. BUSINESS SEGMENT AND INTERNATIONAL REVENUES
The Company is engaged in one industry segment, the development and
marketing of systems software, both domestically and worldwide. International
sales are made through independent distributors. Sales to international customers
are priced in U.S. dollars and are comparable to those paid by U.S. customers.
Sales to international customers were as follows:
Year Ended Mav 3 1. 1985 1984 1983
Geographical Region:
Far East and Australia $ 5,594,277 $3,733,780 $2,821,816
Central and South America 1,755,946 403,400 734,797
Middle East and Africa 2,335,126 3,021,567 1,045,858
Canada and Europe 2,153,270 1,400,004 1,059,273
$1 1,838,619 $8,558,751 $5,661,774
Included in accounts receivable and lease contracts receivable are amounts due
from international customers at May 31, 1985 and 1984 as follows:
1985 1984
Far East and Australia $4,010,393 $2,821,028
Central and South America 280,044 -
Middle East and Africa 2,379,161 2,570,031
Canada and E u r o ~ e 807.571 462,162
1 11. SUPPLEMENTARY INFORMATION
Amounts charged to Other Operating Expenses include the following:
Year Ended May 3 1, 1985 1984 1983
1 Depreciation and Amortization
1 of Property, Equipment and
I
1 Leasehold Improvements $ 936,868 $ 783,520 $ 746,821
Taxes other than Income Taxes:
' payroll 845,668 573,446 509,288
Foreign 448,513 410,573 221,175
Other 115,465 87,299 66,748
Advertising 1,410,376 399,898 458,425
Rental Expense for Operating
Leases 2,761,926 2,210,591 1,883,638
Direct costs for product development during fiscal years 1985, 1984, and 1983
were approximately $1,800,000, $720,000 and $600,000 respectively. These
amounts are included in Salaries, Wages, and Commissions and in Other
Operating Expenses in the accompanying Consolidated Statements of Income.
These direct costs do not include amounts expended by its affiliate, Software AG
of Darmstadt. West Germany, for product development.
12. ACQUISITION OF COMMON STOCK
During fiscal 1985, the Company purchased 342.088 shares of its Common Stock
at a cost of $4,971,065 under a stock repurchase program. In addition, 7,020
shares were acquired from a former employee. All acquired shares were
subsequently retired.
13. STOCK OPTIONS-KEY EMPLOYEE INCENTIVE PLAN
The Company has granted common stock options under the Key Employee
Incentive Plan of 1981, which authorizes the granting of awards to key
employees in the form of options to purchase shares of the company's common
stock, cash bonuses and awards, and cash or stock performance awards. The
Company may grant up to a maximum of 450,000 shares prior to termination of
the Plan on April 1, 1991. Stock options grianted may receive tax treatment as
"incentive stock options" under the Economic Tax Recovery Act of 1981. The
option price shall be the fair market value on the date of grant. Shares are
exercisable ratably over a five-year period.
The Plan provides that a participant may, at the discretion of the Compensation
Committee, either at the time of grant or at the time of exercise of a stock option,
receive stock or a cash payment in an amount equal to the difference between
Y
the option price and the fair market value at the time of surrender of the shares.
Accordingly, payment may be made in cash, in shares, or a combination of both. !
The following schedule summarizes the changes in stock options outstanding for
the three fiscal years ended May 3 1, 1985. I
I
1985 1984 1983
Outstanding, beginning of year ' 263,585 113,309 74.041
Granted (at an exercise price
of $13.13in 1985.
$9.68to $12.19in 1984,and
$7.69to $9.94in 1983) 97,900 192,400 77,603
Exercised (at prices of $7.50,
$8.44, $10.81and $9.68in 1985
and at $7.50, $8.44and $9.31
in 1984 and at $7.50in 1983) (17,506) (9,155) (1.980)
Expired or cancelled (35,973) (32,969) (36,355)
Outstanding, end of year 308,006 263,585 113,309
Exercisable, end of year 105,024 61,194 19,640
Available for grant, end of year 206,890 186,415 336,691
14. LITIGATION
In February, 1983,the Company reached an agreement with Mini-Technology,
Inc. in settlement of a lawsuit filed in 1981 against the Company, certain of its
directors and Software AG of Darmstadt, West Germany, an affiliate of the
Company. The terms of the settlement required a payment of $1,500,000 which
was charged to operations. The effect of this settlement on Net Income Per
Common Share for the year ended May 31, 1983 was $. 13.
15. CHANGE IN ACCOUNTING FOR RECOGNIZING CONTRACT REVENUE
Effective for fiscal 1985,the Company changed its accounting for contract revenue
to recognize such revenue when the product is installed as described in Note l b .
()
Previously, ninety percent of the revenue was recognized when the contract was
executed, and ten percent of the revenue was deferred and reflected in revenues
when the product was installed. The Company believes that its newly adopted
accounting is preferable in the circumstances, because it is more conservative and
conforms to emerging accounting recommendations.
Pro forma results presented include the change in revenue recognition as well as
the related marketing expenses and income tax effect. Had no change in accounting
occurred, unaudited pro forma results by quarter for the year ended May 31, 1985
would have been as follows:
Unaudited Quarter Ended
Aug. 31, 1984 Nov. 30. 1984 Feb. 28,1985 May 31,1985 Total
Revenues $1 1,938,484 $12,656,724 $12,054,816 $16,546,096 $53,196,120
Net Income 1,873,371 1,875,729 1,276,250 1,991,500 7,016,850
Net Income per Share .31 .30 .22 .34 1.17
Report of Independent Certified Public Accountants
1 The Board of Directors
Software AG Systems, Inc.
We have examined the consolidated balance sheets of Software AG Systems, Inc.
and Subsidiaries as of May 31, 1985 and 1984 and the related consolidated
11 statements of income, stockholders~ equity, and changes in financial position for
each of the years in the three-year period ended May 31, 1985. Our examinations
were made in accordance with generally accepted auditing standards and,
accordingly, included such tests of the accounting records and such other auditing
procedures as we considered necessary in the circumstances.
In our opinion, the aforementioned consolidated financial statements present
fairly the financial position of Software AG Systems, Inc. and Subsidiaries at May
3 1, 1985 and 1984 and the results of their operations and the changes in their
financial position for each of the years in the three-year period ended May 31,
1985 in conformity with generally accepted accounting principles consistently
applied during the period except for the change, with which we concur, in the
accounting for recognizing contract revenues as described in Note 15 to the
consolidated financial statements.
PEAT, MARWICK, MITCHELL 6. CO.
July 22, 1985
Washington, D.C.
Stock Information Form 10-K Bansfer Agent and
-
The common stock of Software A G A CODY of the Com~anv's Annual ] U
R ~
Systems, Inc. has been traded in on t
~ e ~ d r Form 10-Kf i r the year Manufacturers Hanover Dust
the over-the-counter market ended May 31, 1985, together with Company
(NASDAQ Symbol: SAGA) since financial statements and financial Box 24935
June 9, 1981. Effective June 19, statement schedules as filed with Church Street Station
1984, the Company's common the Securities and Exchange Com- New York, New York 10249
stock commenced reporting on the mission, contains additional infor-
NASDAQ National Market System. mation about the Company. A copy
Prior to June 1981, there was no of the Company's Annual Report
public market for the Company's and Form 10-K may be obtained
common stock. without charge by sending a writ-
The 1985 Annual Meeting of Stock- ten request to Gilbert Markbein,
holders will be held at 10:30 a.m., Tkeasurer and Controller, Software
local time, on October 24, 1985 at G
A Systems, Inc. 11800 Sunrise
the Dulles Marriott Hotel, 331 W . Valley Drive, Reston, Virginia
Service Road, Chantilly, V 22041.
A 22091. Phone: (703) 860-5050.
Summary of Quarterly Financial Data
The following is a summary of selected quarterly financial data for 1985 and 1984:
i (Unaudited) Quarter Ended
I Aug. 31, 1984 Nov. 30, 1984 Feb. 28, 1985 May 31, 1985
7
1
,+
1985:
Total Revenues
Income Before Cumulative Effect
$13,732,432 $12,232,419 $12,189,358 $14,110,217
'1 of Change in Accounting
Net Income
2,724,983
1,132,321
1,686,747
1,686,747
1,331,014
1,331,014
990,071
990,071
I Income per Share Before Cumulative
Effect of Change in Accounting
, Net Income per Share
, (Unaudited) Quarter Ended
I
Aug. 31, 1983 Nov. 30, 1983 Feb. 29, 1984 May 31, 1984
1984:
Total Revenues $8,663,495 $9,905,622 $10,528,006 $12,029,482
Net Income 1,117,753 1,292,946 1,662,328 1,782,670
Net Income per Share .18 .21 .27 .29
Pro Forma Amounts Assuming
the Change in Accounting
is Applied Retroactively:
Total Revenues 7.41 1,325 10,736,607 10,949,417 10,469,131
Net Income 508,058 1,685,857 1,855,262 1,065,912
Net Income per Share .08 .28 .30 .17
1 Stock Price Range and Dividends
1985 1984
High Low High LQW
First Quarter 14% g1/4 lZ1/a g1/4
Second Quarter 15=/8 1z1/4 12% 3a
9/
Third Quarter 21% 133/a 13% 101/4
Fourth Quarter 19% lZ1/a 14 34
9/
The Company has never paid a cash dividend, and it is the present policy of the
Company not to do so. The Company believes that the growth and acquisition
opportunities in the computer software industry require its earnings to support
I
future business activity. Payment of future dividends will be dependent upon the
!
earnings and financial condition of the Company and other factors which the
Board of Directors may deem appropriate. Stock prices set forth above represent
high and low trade prices for the Company's stock as quoted by NASDAQ.
Officers and Directors
DIRECTORS OFFICERS
John Norris Maguire Stuart J. Miller
Chairman of the Board President and Chief Executive Officer
Software AG Systems, Inc. Edward J. Forman
rn Charles B. Branch Senior Vice President, Technology
Former Chairman of the Board and Advanced Markets
and Chief Executive Officer Vincent R. Grillo
Dow Chemical Company Senior Vice President, Marketing
Robert A. Burgin and Sales
Former Chairman of the Board Michael E. Jakes
and Chief Executive Officer Senior Vice President, International
Leaseway Transportation Corporation
Gilbert Markbein
W. H. Conzen Peasurer and Controller
Former Chairman of the Board
and Chief Executive Officer Charles R. Collins
Schering-Plough Corporation Secretary
Partner
Stuart J. Miller Gibson, Dunn, 6. Crutcher, Attorneys
President and Chief Executive Officer
Software AG Systems, Inc.
Peter M. Schnell
President
Software AG
Darmstadt, West Germany
Audit Committee
o Compensation and Organizational Committee
Software AG
Software AG
,
of North ~ m e h c aInc.
Dehmelstrasse 3
11800 Sunrise Valley Drive D-6100 Darmstadt
A
Reston, V 22091 West Germany
(703)860-5050 Telephone (49)06151-504-0
Telex (841)4197104
U.S. SALES EUROPEAN SALES
Atlanta
6201 Powers Ferry Road, N.W.
Atlanta. GA 30339
r& Building
1 Station Square
IaraeJl
SPL System Programming
(Israel) Ltd.
Ausiria
Software A G
Maria-Hilfer-Str. 41-43
(404) 952-5666 Pittsburgh, P 15219
A 53 Petach Tikva Road
1060, Vienna. Austria
Boat4m (412)471-4667 67138 Tel Aviv, Israel
Phone: 222-575628
100 Grandview Road St. Louis Phone: (972)3-268241
Denmark
A
Braintree. M 02184 231 South Bemiston Telex: (922)342459
A/S Nordisk Software A G
(617)848-5057 Clayton, M 63 105
O Branch Office:
Naverland 3
(314) 725-0419 Rarnat Eshkol, Jerusalem
2600 Glostrup. Denmark'
-
c0 Phone: 2-968644
Citicorp Plaza SenFrancisco Japan
.
8420 W Bryn Mawr Avenue 444 Castro Street Software A of Far East
G Branch Office:
Chicago, IL 60631 Mountain View, CA 94041 7-2 Yaesu 2-Chome Stockholm, Sweden
(312)693-0430 (415) 965-7970 C~UO-ku, Tokyo 104 France
Cleveland S u e Japan G
Software A of France
25000 Great Northern 10900 N.E. 8th St. Phone: (81)03-278-0258 55, rue &Amsterdam
Corporate Center Bellevue, W 98004
A Telex: (781)29349 75008 Paris, France
Cleveland OH 44070 (206)451-8055 Mwdw Phone: (33)Ol-281-3011
(216)734-1000 Washington. D.C. Teleinformatica de Mexico SA Telex: (842)650083
Dallas 11490 Commerce Park Drive Arena1 #40 Col. Chiialistac Branch Office:
8111 L.B.J. Freeway Reston, V 22091
A Mexico 01070 DE, Mexico Lyon
Dallas. TX 75251 (703) 620-0100 Phone: (905)550-8033
(214)437-2022 Telex: (383)1761405 Italy
Selesta Sistemi S.P.A.
Denver Panama Via A Volta. 16
300 Union Boulevard INTERNATIONAL SALES Software Technology, Inc. 20093 ~ o l o . Monzese.
~o
Lakewood, CO 80228 PO. Box 6-8168 Milan, Italy
(303)987-3972 r-
Ag El Dorado, Panama City Phone: 2-2538912
Teleinformatica S.A. Panama
DeJlrQit Avenida Corrientes 345 Telex: 311354
Phone: (507)27-4930(or 56)
400 Renaissance Center Pis0 4 Telex: (328)3059 Netherlands
I
Detroit. M 48243 Buenos Ares, Argentina 1043 Automations Centre Volmac BY
(313)446-6809 Phone: (541)34-313-1747 =neapo~e Catharijnesingel33
Telex: (390)18791 SPL Systems (SEA) Pte Ltd. NL3500 GN Utrecht
Hasbrouck Heights 10 Anson Road Suite No. 28-11
Heights Plaza AuShdia Netherlands
International Plaza Building Phone: (31)30-334421
777 Terrace Avenue S.P.L. (Australia)Pty. Limited Sinaa~ore. 0207
Hasbrouck Heights, NJ 07604 Level 7, The Gordon Centre Telex: (844)70644
~hgne': (65)225-0607 (or 08)
(201)288-8111 802 Pacific Highway Telex: (786)42135 spain
-
Houston Gordon. NSW 2072 G
Software A Espana
Australia South Africa Paseo de la Habana 26
3845 West F.M. 1960 Systems Programming (FTY)Ltd.
Houston, TX 77068 Phone: (61)02-498-8555 28036 Madrid, Spain
Telex: (790)26151 PO. Box 2822
(713)444-2651 364 Kent Avenue s-land
Branch Offices: Ferndale Randburg 2 194 SAG Software Systems A G
citg Canberra ~tauffacher Quai 40
8900 Indian Creek Parkway Republic of South Africa 2125
Overland Park, K 662 12
S Melbourne Phone: (27)ll-789-2740 8004 Zurich, Switzerland
(913)451-1651 B d
Telex: (960) 430682
. . Phone: 1-2415292
L s Angeles
o CONSIST EDIFICO CONSIST Branch Offices: United Kingdom
1 Newport Place Alameda Jab - 1.177 Capetown Software A UK Limited
G
1301 Dove Street
- - - - ~
CEP-01420 Durban Laurie House
Sao Paulo, SP. Brazil 22, Colyear Street
~
Newport Beach. CA 92660 Venezuela
(714)851-9905 Phone: (55)11289-4455 Derby, DE1 1LA
11289-4598 A.P.S. C.A. England
Minneapolis Telex: (391)1132546 Centro Comercial Bello Campo, Phone: 322-372535
One Appletree Square Local 39 Mezzanina Telex: 377995
Bloomington, M 55420
N Cauada
Apartado Postal 61260
(612)854-2298 Software AG of Canada Chacao. Caracas e
w& (iermany
151 Savage Drive Venezuela Software A G
New York Cambridge, Ontario NlR 5Y2 Dehmelstrasse 3
244 Westchester Avenue Phone: (58)2-329205
Canada Telex: (395)27433 D-6100 D-stadt
White Plains, NY 10604 Phone: (519)622-0889 West Germany
(914)946-1000 Telex: (389)6959451 Phone: (49)006151-504-0
Orlando Branch Offices: Telex: (841)4197104
405 Douglas Avenue Calgary, Alberta Branch Offices:
Altamonte Springs, F'L 32714 Edmonton, Alberta Dusseldorf
(305) 774-2566 Montreal, Quebec Hamburg
Philadelphia Ottawa, Ontario Munich
3 Neshaminy Interplex Toronto, Ontario Stuttgart
llevose, P 19047
A Regina, Saskatchewan
(215)245-0122
MSF 0340985
Q 1985 Software AG Systems. Inc. ADABAS. NATURAL
and PREDICT are trademarks of Software AG of
North America. Inc.
IEM. VSAM. DOS and CICS are registered trademarks
of International Business Machine, Inc. DEC and VAX are
registered trademarks of the Digital Equipment
Corporation. dease IIl and Framework are registered
trademarks of Ashton-rite.
mm
S~~WFIR€
Software AG
of North America Inc-
11800 Sunrise Valley Drive
R e s t o h VA 22091
(703) 860-5050