Intergraph Corp · 10-Q/A · For 6/30/00

Filed On 8/23/00 3:42pm ET   ·   SEC File 0-09722   ·   Accession Number 351145-0-28

Amendment to Quarterly Report   —   Form 10-Q
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q/A      Amendment to Quarterly Report                          4±    16K 


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UNITED STATES                   
SECURITIES AND EXCHANGE COMMISSION                    
Washington, D.C. 20549                    

FORM 10-Q/A                   
Amendment No. 1                   

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)                    
OF THE SECURITIES EXCHANGE ACT OF 1934                    

For the quarterly period ended June 30, 2000                    

OR                    

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)                   
OF THE SECURITIES EXCHANGE ACT OF 1934                    

For the transition period from          to                    
                    --------    --------

Commission file number 0-9722                   

INTERGRAPH CORPORATION                
------------------------------------------------------                    
(Exact name of registrant as specified in its charter)                    

Delaware                                 63-0573222         
-------------------------------      ------------------------------------       
(State or other jurisdiction of      (I.R.S. Employer Identification No.)       
incorporation or organization)                                                  

Intergraph Corporation                                                
Huntsville, Alabama                          35894-0001             
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(Address of principal executive offices)           (Zip Code)                   

(256) 730-2000        
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(Telephone Number)          

Indicate by check mark whether the registrant (1) has  filed                    
all  reports required to be filed by Section 13 or 15(d)  of                    
the Securities Exchange Act of 1934 during the preceding  12                    
months  (or for such shorter period that the registrant  was                    
required to file such reports), and (2) has been subject  to                    
such  filing  requirements for the past 90 days.    YES    X                    
NO                                                                              
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Common stock, par value  $.10 per share: 49,380,467 shares                    
outstanding as of June 30, 2000                   

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This Form 10-Q/A hereby amends Item 1 - Note 19 of Notes  to                    
Consolidated  Financial  Statements  and  Item  2   of   the                    
Company's Form 10-Q for the quarterly period ended June  30,                    
2000.                                                                           

SUBSEQUENT EVENTS                                                               
-----------------                                                               

On  July  21,  2000, the Company completed the sale  of  the                    
Intense3D  graphics accelerator division of ICS  to  3Dlabs,                    
Inc.  Ltd.  ("3Dlabs"),  a leading  supplier  of  integrated                    
hardware  and  software graphics accelerator  solutions  for                    
workstations and design professionals. Full year 1999 third-                    
party  revenue  for the Intense3D division approximated  $38                    
million,  with operating results at an approximate breakeven                    
level.   As  initial consideration for the acquired  assets,                    
3Dlabs  issued to the Company approximately 3.6  million  of                    
its   common  shares,  subject  to  a  registration   rights                    
agreement  and  a  three year irrevocable proxy  granted  to                    
3Dlabs,  with  an  aggregate market value  of  approximately                    
$13.2  million on the date of closing.  As of  the  date  of                    
filing  this  Form 10-Q/A, the market value of these  shares                    
has declined by approximately $3.6 million.  Fifteen percent                    
of  the  shares have been placed in escrow for one  year  to                    
cover  any  potential claims against the Company by  3Dlabs.                    
The  agreement also contains an earn-out provision based  on                    
various  performance measures for Intense3D  operations  for                    
the remainder of 2000 following the July 1 effective date of                    
the  sale.  These performance measures include the financial                    
contribution of the division, the retention of key employees                    
by the division, the delivery schedules of new products, and                    
the  performance  of  products developed  by  the  division.                    
The   earn-out  provision  provides  an  opportunity   for                      
additional proceeds of up to $25 million, payable  in  stock                    
and/or   cash   at   the   option  of  3Dlabs.   Significant                    
contingencies  associated with the  sale  include  potential                    
penalties  for  the  failure of ICS to meet  its  forecasted                    
level  of purchases from 3Dlabs and potential liability  for                    
inventory included in the sale, including inventory on order                    
from  SCI,  that  proves  to  be  obsolete  or  excess.   In                    
addition,  the  Company serves as the  intermediary  between                    
3Dlabs  and  SCI  for  manufacturing performed  by  SCI  for                    
3Dlabs,  and as such, is exposed should 3Dlabs be unable  to                    
meet  its  obligations  to  SCI,  though  such  exposure  is                    
mitigated  by  a certain payment guarantee in favor  of  the                    
Company.   See the Company's Annual Report on Form 10-K  for                    
the  year  ended December 31, 1999 for a discussion  of  the                    
Company's business relationship with SCI.                                       

The Company expects to record a pretax gain from the initial                    
proceeds  of the sale of approximately $8 million  in  third                    
quarter 2000, with any unrealized holding gains or losses on                    
the  Company's  stock  investment in 3Dlabs  recorded  as  a                    
component of "Accumulated other comprehensive income" in the                    
Company's consolidated balance sheet.                                           

On July 21, 2000, the Company announced its intent to form a                    
strategic  alliance with Silicon Graphics, Inc.  ("SGI"),  a                    
worldwide   provider  of  high-performance   computing   and                    
advanced  graphics  solutions, in  which  SGI  will  acquire                    
certain of the Company's hardware business assets, including                    
ICS's  Zx10 family of workstations and servers.   Under  the                    
proposed  alliance, the Company will become a  reseller  for                    
SGI  and  will offer its application solutions  on  the  SGI                    
platform.   In connection with this agreement,  the  Company                    
plans  to purchase $100 million in SGI products and services                    
over  a three year period.  The terms of the sale are  still                    
being  finalized.  The transaction is expected to  close  in                    
third quarter 2000.                                                             

These  two  transactions signal completion of the  Company's                    
exit of the development, design, and manufacture of hardware                    
products, allowing the Company's operating segments to focus                    
on  providing software, systems integration, and services to                    
the industries in which Intergraph is a market leader.  Upon                    
completion  of  these transactions, the Company  expects  to                    
incur  a  nonrecurring charge to operations in the range  of                    
$10  million  to  $12 million, primarily for  inventory  and                    
fixed  asset write-offs, employee severance, and other costs                    
incurred in connection with the shutdown of the remainder of                    
the   hardware  development  business.   The  Company   will                    
continue  to  sell  hardware products  from  other  vendors,                    
including SGI, and to perform hardware maintenance  services                    
for  its  installed  customer base.   However,  the  Company                    
anticipates  that revenues from both of these  sources  will                    
continue to decline over time as hardware will no longer  be                    
a primary focus of the Company.                                                 

INTERGRAPH CORPORATION AND SUBSIDIARIES                   
SIGNATURE                   

Pursuant  to  the  requirements  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.                                

INTERGRAPH CORPORATION                    
----------------------                    
(Registrant)                    

           By: /s/ John W. Wilhoite              Date: August 23, 2000
              --------------------------               ---------------
John W. Wilhoite                
Executive Vice President and                
Chief Financial Officer               
(Principal Financial and Accounting Officer)                

Dates Referenced Herein   and   Documents Incorporated By Reference

This 10-Q/A Filing		Date		Other Filings
		12/31/99		10-K, 10-K/A
For The Period Ended		6/30/00		10-Q
		7/21/00
Filed On / Filed As Of		8/23/00
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