Document/Exhibit Description Pages Size
1: 10-K Form 10-K for Maxis, Inc. 18 108K
2: EX-11.1 Statement of Computation of Per Share Earnings 1 5K
3: EX-13.1 1996 Annual Report 27± 132K
4: EX-21.1 Subsidiaries of the Company 1 4K
5: EX-23.1 Consent of Independent Auditors 1 6K
6: EX-27.1 Financial Data Schedule 2 8K
EXHIBIT 13.1
1996 Financials
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Selected Financial Data
Fiscal Years Ended March 31,
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1996 1995 1994 1993 1992
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(in thousands, except per share amounts)
Income Statement Data:
Net revenues $55,412 $38,147 $23,332 $13,864 $10,582
Cost of revenues 17,897 14,186 8,367 5,323 4,338
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Gross profit 37,515 23,961 14,965 8,541 6,244
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Operating expenses:
Research and development 8,416 6,008 3,299 2,440 1,991
Acquisition-related charge 2,232 -- -- -- --
Sales and marketing 12,843 8,813 5,407 2,591 1,395
General and administrative 5,504 4,184 3,225 2,669 2,088
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Total operating expenses 28,995 19,005 11,931 7,700 5,474
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Income from operations 8,520 4,956 3,034 841 770
Interest income 1,493 226 114 197 66
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Income from continuing operations
before income taxes 10,013 5,182 3,148 1,038 836
Provision for income taxes 3,825 1,879 1,021 368 89
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Income from continuing operations 6,188 3,303 2,127 670 747
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Discontinued operations:
Loss from discontinued operations
(net of income tax benefit of $251 in
fiscal 1994 and $203 in fiscal 1993) -- -- (376) (600) --
Gain on disposal of discontinued operations
(net of income tax expense of
$173 in fiscal 1995) -- 303 -- -- --
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Net income $ 6,188 $ 3,606 $ 1,751 $ 70 $ 747
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Per share amounts:
Income from continuing operations $ .56 $ .37 $ .25 $ .08 $ .12
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Net income per share $ .56 $ .40 $ .20 $ .01 $ .12
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Shares used in per share calculations 11,051 8,915 8,621 8,061 6,171
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March 31,
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1996 1995 1994 1993 1992
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Balance Sheet Data:
Cash, cash equivalents and short-term
marketable securities $ 42,890 $ 8,655 $ 4,932 $ 6,932 $ 1,538
Working capital 45,265 11,457 8,208 6,913 200
Total assets 67,300 19,142 14,427 10,168 3,718
Redeemable preferred stock -- 11,363 10,849 10,335 --
Stockholders' equity (deficit) 57,234 2,388 (1,239) (2,480) 1,019
Management's Discussion and Analysis of Financial Condition and Results of
Operations
RESULTS OF OPERATIONS
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Net revenues (in thousands)
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1996 Increase 1995 Increase 1994
$55,412 45.3% $38,147 63.5% $23,332
Net revenues include revenues from sales of software products less
allowances for returns and promotional discounts, licensing revenues and,
provided the Company has completed all significant performance obligations under
the terms of the license agreement and any amounts paid are nonrefundable,
royalty advances. Licensing revenues are derived from international licensing
arrangements, OEM arrangements and licenses to third parties to develop the
Company's products for use on particular hardware platforms.
The increase in net revenues from fiscal 1995 to fiscal 1996 was due
primarily to continued demand for the Company's products, especially the Sim
family of products. Maxis' top three selling products for fiscal 1996 were
SimCity 2000, SimTower and SimIsle. SimCity 2000, initially released in October
1993, continued to be the Company's best-selling product. SimCity, SimCity 2000
and related add-on products accounted for 52% of fiscal 1996 net revenues.
During fiscal 1995, the same family of products accounted for 59% of net
revenues. SimTown was the Company's best-selling product in its learning line, a
segment that grew to 18% of net revenues in fiscal 1996 from 11% in fiscal 1995.
During fiscal 1996, the Company's product releases included SimCity 2000
Special Edition, SimIsle, SimTower for Windows, SimTown for Windows and Full
Tilt! Pinball, as well as several affiliate partner products. The Company also
introduced its first products for 32-bit game consoles: A-Train for the Sony
PlayStation and SimCity 2000 for the Sega Saturn.
International expansion also contributed to overall revenue growth with
international sales, including foreign licensing, increasing from 15% of net
revenues in fiscal 1995 to 20% of net revenues in fiscal 1996. Major territories
contributing to the Company's international growth were Japan and Europe.
International revenues increased from 10% in fiscal 1994 to 15% in fiscal 1995
due primarily to a change from a licensing to a distribution arrangement in the
Company's principal European markets. A portion of the Company's international
sales are denominated in foreign currencies and, accordingly, the Company is
subject to foreign currency exchange risk. During fiscal 1997, the Company
expects that international sales will increase in absolute dollars and could
increase as a percentage of net revenues.
The increase in net revenues from fiscal 1994 to fiscal 1995 was primarily
due to a number of new product introductions. Major product introductions during
fiscal 1995 included SimCity 2000 for Windows, Widget Workshop, SimTower,
SimTown for Macintosh and Klik & Play for Windows. The Company also continued to
benefit from strong sales of products released during the latter half of fiscal
1994. Sales of SimCity 2000 for Macintosh and DOS, released in October 1993 and
December 1993, respectively, and Print Artist (a product the Company no longer
distributes) for DOS and Windows, released in March 1994, contributed
significantly to the Company's fiscal 1995 revenues.
Affiliate partner sales were 10%, 11% and 5% of net revenues in fiscal
1996, 1995 and 1994, respectively. The Company's top-selling affiliate partner
products for fiscal 1996 were RedShift 2 by Maris Multimedia Ltd., GeoSafari
Multimedia by Educational Insights Interactive and A Passion For Art by Corbis
Publishing.
Sales of products on CD-ROM represented 75% of net revenues compared to
30% in fiscal 1995 and 2% in fiscal 1994. The Company plans to offer all new
products on CD-ROM while also continuing to offer some of its products on floppy
disk.
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Cost of revenues (in thousands)
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1996 Increase 1995 Increase 1994
Cost of revenues $17,897 26.2% $14,186 69.5% $8,367
Gross profit 67.7% 62.8% 64.1%
The Company's cost of revenues includes all costs of media, manuals,
duplication, packaging materials, assembly and freight. In addition, royalties
are included in cost of revenues. The Company's gross profit is affected by the
mix of sales among products that are developed or licensed by Maxis and
affiliate partner products that are developed by third parties and distributed
by the Company. Gross profit and operating expenses are significantly lower for
affiliate partner products because the Company's services are generally limited
to sales, distribution and related functions.
The increase in gross profit percentage from fiscal 1995 to
fiscal 1996 was primarily due to a greater mix of products with lower royalty
rates. The decrease in gross profit percentage for fiscal 1995 as compared to
fiscal 1994 was primarily due to a higher level of affiliate partner product
sales, on which the Company receives a significantly lower gross profit.
Affiliate partner products represented 11% of net revenues in fiscal 1995 as
compared to 5% in fiscal 1994.
The Company's gross profit percentage has fluctuated significantly on a
quarterly basis. During fiscal 1996, the gross profit percentage ranged from
64.2% in the third fiscal quarter to 72.5% in the second fiscal quarter.
Quarterly gross profit is affected by the mix of sales among products that are
developed or licensed by Maxis and affiliate partner products that are developed
by third parties and distributed by the Company. During fiscal 1997 the Company
expects gross profit to continue to fluctuate on a quarterly basis and further
expects significantly lower gross profit in the first and second fiscal quarters
relative to the third and fourth fiscal quarters due primarily to the expected
timing of certain Maxis-published product releases.
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Operating expenses (in thousands)
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1996 Increase 1995 Increase 1994
Research and
development $ 8,416 40.1% $6,008 82.1% $3,299
Percentage of
net revenues 15.2% 15.7% 14.1%
Acquisition-
related charge $ 2,232 100% -- 0% --
Percentage of
net revenues 4.0% -- --
Sales and marketing $12,843 45.7% $8,813 63.0% $5,407
Percentage of
net revenues 23.2% 23.1% 23.2%
General and
administrative $ 5,504 31.5% $4,184 29.7% $3,225
Percentage of
net revenues 9.9% 11.0% 13.8%
Research and development
Research and development expenses consist primarily of personnel and
equipment costs required to conduct the Company's development efforts and to
fund third-party software development costs. Third-party software development
costs may include advance product development payments, which are expensed as
paid. The Company believes that significant investments in research and
development are required to remain competitive and has therefore greatly
increased the absolute amount of spending for research and development. These
expenses as a percentage of net revenues for fiscal 1996 as compared to fiscal
1995 remained relatively unchanged. The increase in research and development
expenses in fiscal 1995 over fiscal 1994 was primarily due to expenses incurred
for the development of new products and additional personnel and related costs.
During fiscal 1997, the Company intends to continue its investment in research
and development and therefore expects these expenses to increase in absolute
dollars and could increase as a percentage of net revenues.
Research and development expenditures are charged to operations as
incurred. Statement of Financial Accounting Standards No. 86, "Accounting for
the Costs of Computer Software to be Sold, Leased or Otherwise Marketed,"
requires capitalization of certain software development costs subsequent to the
establishment of technological feasibility. Based on the Company's product
development process, technological feasibility is established upon completion of
a working model. Costs incurred by the Company between completion of the working
model and the point at which the product is ready for general release have been
insignificant.
Acquisition of Cinematronics LLC
In March 1996 the Company acquired for cash Cinematronics LLC, an
independent developer of entertainment software based in Austin, Texas. The
business combination was recorded as a purchase for accounting purposes. In
connection therewith, the Company recorded a nonrecurring acquisition-related
charge of approximately $2.2 million for acquired in-process technology. The
acquisition of Cinematronics represents an element of the Company's strategy to
further expand into the action category of the entertainment market. Over the
next 24 months, the Company expects the delivery of new products from this group
and has provided financial incentives to encourage the timely delivery of the
specified products.
Sales and marketing
Sales and marketing expenses, which include customer support services, have
increased significantly primarily due to the growth of the Company's sales and
marketing organizations in connection with the expansion of the Company's
product lines, diversification of the Company's distribution channels and
introduction of new merchandising and promotional programs. Additionally, in
October 1993, the Company opened an office in the United Kingdom to provide
marketing and sales support for the Company's European operations. On a
year-to-year basis, sales and marketing expenses as a percentage of revenues
remained relatively unchanged. The Company intends to continue to increase its
investment in sales and marketing and expects these expenses to increase in
absolute dollars and as a percentage of net revenues in fiscal 1997.
General and administrative
General and administrative expenses have increased in absolute dollars each
year primarily due to increased staffing and related costs necessary to support
the Company's growth. General and administrative expenses as a percentage of net
revenues have declined over these same periods primarily due to the Company's
revenue growth. The Company expects the level of general and administrative
expenses to increase in absolute dollars in fiscal 1997.
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Interest income (in thousands)
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1996 Increase 1995 Increase 1994
Interest income $1,493 560.6% $226 98.2% $114
Percentage of
net revenues 2.7% 0.6% 0.5%
Interest income increased in absolute dollars and as a percentage of net
revenues due to higher average invested cash balances. The significant increase
in interest income from fiscal 1995 to fiscal 1996 was due to cash received in
the Company's May 1995 initial public offering.
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Provision for income taxes (in thousands)
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1996 Increase 1995 Increase 1994
Provision for
income taxes $3,825 103.6% $1,879 84.0% $1,021
Effective income
tax rate 38% 36% 31%
The year-to-year increases in the provision for income taxes and the
effective income tax rate reflect the Company's income growth and adjustments to
the valuation allowance for deferred tax assets. The effective annual income tax
rate is primarily a function of the level of pretax income in relation to
tax-exempt interest income. See Note 6 to Consolidated Financial Statements.
Discontinued operations
During fiscal 1994, the Company discontinued certain unprofitable
operations related to the development of software for commercial purposes that
had been initiated in fiscal 1993. In connection with the discontinuance of
these activities, the Company incurred net losses of $600,000 and $376,000 for
fiscal 1993 and fiscal 1994, respectively, and a net gain on disposal of the
related assets of $303,000 in fiscal 1995. See Note 10 to Consolidated Financial
Statements.
Recently issued accounting standard
In October 1995 the Financial Accounting Standards Board issued Statement
No. 123 (SFAS No. 123), "Accounting for Stock-Based Compensation," which is
effective for years beginning after December 15, 1995. SFAS No. 123 permits a
company to choose either a new fair value-based method or the current Accounting
Principles Board Opinion No. 25 intrinsic value-based method of accounting for
its stock-based compensation arrangements. The Company has elected to continue
to follow current practice, but SFAS No. 123 requires pro forma disclosures of
net income and earnings per share computed as if the fair value-based method had
been applied.
Liquidity and capital resources
On June 1, 1995, the Company consummated an initial public offering of
3,450,000 shares of common stock, of which 2,450,000 were sold by the Company.
The Company raised approximately $35,500,000 net of expenses. As of March 31,
1996, the Company's principal sources of liquidity included cash and short-term
investments of $42.9 million and an available unsecured bank line of credit in
the amount of $1.0 million, which the Company has not used to date. The line of
credit expires on August 30, 1996. The Company also has longer-term investments
totaling approximately $6.1 million. The Company's cash, short-term investments
and unused bank line of credit are available to meet seasonal working capital
requirements. Seasonally higher revenues during the year-end holiday buying
season generally result in increased accounts receivable and working capital
during the fourth calendar quarter.
The Company uses its working capital to finance ongoing operations, fund
the development and introduction of new products and acquire capital equipment.
The Company's operating activities provided cash of $8.1 million and $5.2
million in fiscal 1996 and 1995, respectively, and used cash of $1.6 million in
fiscal 1994.
In June 1995, the Company entered into a seven-year lease, commencing in
September 1995, for new office space to house its corporate headquarters. The
lease agreement provides for monthly payments beginning at $75,000 and
escalating to $86,600 during the term of the lease. The Company may shorten the
term of the lease to five years and six months in exchange for a one-time
payment equal to three months' rent. During fiscal 1997, the Company expects to
incur approximately $2.6 million in capital expenditures.
From time to time, the Company evaluates acquisitions of businesses,
products or technologies that complement the business of Maxis, such as the
acquisition of Cinematronics LLC. The Company has no present understandings,
commitments or agreements with respect to any material acquisitions of other
businesses, products or technologies. Any such transactions, if consummated, may
use a portion of the Company's working capital or require the issuance of
equity.
The Company believes that existing working capital and cash from operations
will satisfy its liquidity and capital requirements for at least the next year.
Risk factors affecting future earnings and stock price
Preceding sections of this Report, particularly statements regarding the
Company's potential for future success, the potential of the Company's World
Wide Web site or World Wide Web-oriented products, the revenue potential of new
markets and distribution channels, changes in international distribution
operations, revenues from international operations, offering products on new
media, such as CD-ROMs, seasonal trends and profitability on a quarterly basis,
research and development expenses, the Company's potential expansion of its
action category of products, sales and marketing expenses, general and
administrative expenses and the Company's ability to satisfy its liquidity and
capital requirements for the next year, contain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. Actual results could differ materially
from those projected in the forward-looking statements as a result of the risk
factors set forth below and elsewhere in this report.
The Company has experienced, and expects to continue to experience,
significant fluctuations in operating results due to a variety of factors,
including the size and rate of growth of the consumer software market, market
acceptance of the Company's products and those of its competitors, development
and promotional expenses relating to the introduction of new products or new
versions of existing products, projected and actual changes in computing
platforms, the timing and success of product introductions, product returns,
changes in pricing policies by the Company and its competitors, the accuracy of
retailers' forecasts of consumer demand, the timing of orders from major
customers and order cancellations.
The Company's operating results may also fluctuate significantly due to
changes in product plans or delays in shipment. For example, in April 1996, the
Company decided to reevaluate The Mindwarp, an action game it had planned to
ship during fiscal 1997. The Company is assessing the product's design and game
play. There can be no assurance that The Mindwarp will be released during fiscal
1997 or that the product will ever be commercially released. Furthermore, even
if The Mindwarp is released, there can be no assurance that it will contribute
revenues to the Company sufficient to recoup the development and marketing costs
incurred. Such risks apply to all of the Company's products under development.
The consumer software business is highly seasonal. Net revenues are
typically significantly higher during the third fiscal quarter, due primarily to
the increased demand for consumer software during the calendar year-end holiday
buying season. Net revenues in other quarters are generally lower and vary
significantly as a result of new product introductions and other factors. The
Company expects its net revenues and operating results to continue to reflect
significant seasonality and further expects the first quarter, and possibly the
second quarter, of fiscal 1997 to result in losses due to the delay or possible
cancellation of The Mindwarp, seasonality and increased operating expenses.
There can be no assurance that the Company will achieve consistent profitability
on a quarterly or annual basis.
In response to competitive pressures, the Company may take certain pricing
or marketing actions that could materially adversely affect the Company's
business, operating results and financial condition. The Company may be required
to pay fees in advance or to guarantee royalties, which may be substantial, to
obtain licenses to intellectual properties from third parties before products
incorporating such properties have been introduced or achieved market
acceptance.
Products are generally shipped as orders are received, and accordingly the
Company operates with little backlog. The Company's expense levels are based, in
part, on its expectations regarding future sales and, as a result, operating
results would be disproportionately adversely affected by a decrease in sales or
a failure to meet the Company's sales expectations. Defective products may
result in higher customer support costs and product returns.
The Company's gross profit is affected by the mix of sales among products
that are developed or licensed by Maxis and affiliate partner products that are
developed by third parties and distributed by the Company. Gross profit and
operating expenses are significantly lower on affiliate partner products because
the Company's services are generally limited to sales, distribution and related
functions. Effective April 1, 1996, the Company changed the offered terms of its
affiliate partner program granting, among other things, a greater share of
receipts on affiliate sales to affiliate partners. There can be no assurance
that the Company's current share of receipts on affiliate sales for distribution
services or the current mix of affiliate partner sales will be sustained.
The market price of the Company's common stock could be subject to
significant fluctuations in response to variations in quarterly operating
results and other factors, such as announcements of new products by the Company
or its competitors and changes in financial estimates by securities analysts or
other events. The stock market and many technology companies have recently been
trading at or near historic highs and reflect price/earning ratios above
historic norms. Moreover, the stock market has experienced extreme volatility
that has particularly affected the market prices of equity securities of many
high technology companies and that has often been disproportionate to the
operating performance of such companies. Broad market fluctuations, as well as
economic conditions generally and in the software industry specifically, may
adversely affect the market price of the Company's common stock. There can be no
assurance that the Company's stock price will remain at or near its current
level.
Consolidated Balance Sheets
(In thousands, except per share amounts)
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March 31,
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Assets 1996 1995
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Current assets:
Cash and cash equivalents $20,102 $ 2,610
Marketable securities 22,788 6,045
Accounts receivable, less allowances for
returns and doubtful accounts of $5,607
in 1996 and $2,911 in 1995 6,991 3,773
Inventories 1,543 1,691
Income taxes refundable 227 --
Deferred income taxes 2,808 2,366
Other current assets 872 363
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Total current assets 55,331 16,848
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Furniture and equipment, net 3,243 1,771
Deferred income taxes 2,023 515
Long-term marketable securities 6,119 --
Other assets 584 8
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Total assets $67,300 $19,142
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Liabilities and stockholders' equity
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Current liabilities:
Accounts payable $ 1,607 $ 1,418
Payable to affiliate partners 631 186
Royalties payable 1,373 1,211
Accrued compensation 1,685 1,171
Accrued advertising 1,538 699
Income taxes payable -- 127
Other accrued liabilities 2,585 579
Accrued rent 647 --
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Total current liabilities 10,066 5,391
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Commitments
Redeemable preferred stock, $.0001 par value;
authorized shares, 5,000,000;
issued and outstanding shares,
none in 1996 and
2,000,000 in 1995 -- 11,363
Stockholders' equity:
Common stock, $.0001 par value;
authorized shares, 40,000,000; issued
and outstanding, 10,989,906 in 1996
and 6,309,651 in 1995 50,514 2,266
Notes receivable from stockholders (269) (415)
Retained earnings 7,128 1,027
Deferred compensation (139) (490)
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Total stockholders' equity 57,234 2,388
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Total liabilities and stockholders' equity $67,300 $19,142
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See accompanying notes.
Consolidated Statements of Income
(In thousands, except per share amounts)
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Fiscal Years Ended March 31,
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1996 1995 1994
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Net revenues $ 55,412 $ 38,147 $ 23,332
Cost of revenues 17,897 14,186 8,367
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Gross profit 37,515 23,961 14,965
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Operating expenses:
Research and development 8,416 6,008 3,299
Acquisition-related charge 2,232 -- --
Sales and marketing 12,843 8,813 5,407
General and administrative 5,504 4,184 3,225
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Total operating expenses 28,995 19,005 11,931
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Income from operations 8,520 4,956 3,034
Interest income 1,493 226 114
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Income from continuing operations before income taxes 10,013 5,182 3,148
Provision for income taxes 3,825 1,879 1,021
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Income from continuing operations 6,188 3,303 2,127
Discontinued operations:
Loss from discontinued operations (net of income tax benefit of
$251 in fiscal 1994) -- -- (376)
Gain on disposal of discontinued operations (net of income tax
expense of $173 in fiscal 1995) -- 303 --
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Net income $ 6,188 $ 3,606 $ 1,751
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Per share amounts:
Income from continuing operations $ .56 $ .37 $ .25
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Net income per share $ .56 $ .40 $ .20
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Shares used in per share calculations 11,051 8,915 8,621
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See accompanying notes.
Consolidated Statements of Stockholders' Equity (Deficit)
Fiscal Years Ended March 31, 1994, 1995 and 1996 (in thousands)
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Notes Total
receivable Retained stockholders'
Common stock from earnings Deferred equity
Shares Amount stockholders (deficit) compensation (deficit)
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Balances at March 31, 1993 5,400 $ 822 $ -- $ (3,302) $ -- $ (2,480)
Common stock options exercised 14 4 -- -- -- 4
Issuance of common stock for
notes receivable 392 118 (118) -- -- --
Net income -- -- -- 1,751 -- 1,751
Accretion of preferred stock -- -- -- (514) -- (514)
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Balances at March 31, 1994 5,806 944 (118) (2,065) -- (1,239)
Common stock options exercised 115 89 -- -- -- 89
Issuance of common stock for
notes receivable 410 303 (303) -- -- --
Repurchase of common stock (21) (10) 6 -- -- (4)
Deferred compensation resulting from
grant of options -- 940 -- -- (940) --
Amortization of deferred compensation -- -- -- -- 450 450
Net income -- -- -- 3,606 -- 3,606
Accretion of preferred stock -- -- -- (514) -- (514)
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Balances at March 31, 1995 6,310 2,266 (415) 1,027 (490) 2,388
Accretion of preferred stock -- -- -- (87) -- (87)
Conversion of preferred stock into
common stock 2,094 11,449 -- -- -- 11,449
Issuance of common stock in initial
public offering, net of issuance costs 2,450 35,508 -- -- -- 35,508
Common stock issued under stock option
and stock purchase plans 153 406 -- -- -- 406
Tax benefits resulting from employee
stock transactions -- 897 -- -- -- 897
Repurchases of common stock (17) (12) -- -- -- (12)
Repayment of notes receivable -- -- 146 -- 146
Net income -- -- -- 6,188 -- 6,188
Amortization of deferred compensation -- -- -- -- 351 351
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Balances at March 31, 1996 10,990 $ 50,514 $ (269) $ 7,128 $ (139) $ 57,234
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See accompanying notes.
Consolidated Statements of Cash Flows
(in thousands)
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Fiscal Years Ended March 31,
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1996 1995 1994
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Operating activities
Net income $ 6,188 $ 3,606 $ 1,751
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Provision for returns and doubtful accounts 2,696 930 1,263
Depreciation 991 572 388
Acquisition-related charge 2,232 -- --
Deferred income taxes (1,950) (1,765) (1,116)
Gain on disposal of discontinued operations -- (303) --
Amortization of deferred compensation 351 450 --
Changes in operating assets and liabilities:
Accounts receivable (5,914) 1,558 (6,103)
Inventories 148 (582) (460)
Income taxes refundable/payable (354) (908) 1,224
Other current assets (509) (275) 138
Other assets (576) 244 1
Accounts payable 189 905 (215)
Payable to affiliate partners 445 (311) 497
Royalties payable 162 92 387
Accrued compensation 514 551 287
Accrued advertising 839 327 261
Other accrued liabilities 2,653 107 63
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Net cash provided by (used in) operating activities 8,105 5,198 (1,634)
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Investing activities
Purchases of held-to-maturity securities (24,989) (7,280) (10,976)
Maturities of held-to-maturity securities 5,183 7,162 12,377
Purchases of available-for-sale securities (9,000) (3,424) --
Maturities of available-for-sale securities 5,944 1,481 --
Additions to fixed assets, net (2,354) (1,560) (370)
Net cash paid for acquisition (2,342) -- --
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Net cash (used in) provided by investing activities (27,558) (3,621) 1,031
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Financing activities
Repayment of notes receivable to shareholders 146 -- --
Proceeds from issuance of common stock 35,508 -- --
Proceeds from issuance of ESPP stock 302 -- --
Repurchase of common stock (12) (4) --
Proceeds from exercise of options 104 89 4
Tax benefit from exercise of stock options 897 -- --
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Net cash provided by financing activities 36,945 85 4
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Net increase (decrease) in cash and cash equivalents 17,492 1,662 (599)
Cash and cash equivalents at beginning of year 2,610 948 1,547
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Cash and cash equivalents at end of year $ 20,102 $ 2,610 $ 948
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Supplemental disclosure of noncash financing activities:
Accretion of preferred stock $ 87 $ 514 $ 514
Conversion of preferred stock to common stock $ 11,449 $ -- $ --
Issuance of common stock for notes receivable $ -- $ 303 $ 118
Repurchase of common stock in exchange for reduction
of notes receivable $ -- $ (6) $ --
Supplemental disclosure of cash flow information:
Income tax payments $ 5,232 $ 4,809 $ 575
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See accompanying notes
Notes to Consolidated Financial Statements
1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Company
Maxis, Inc. ("Maxis" or the "Company"), a Delaware corporation, develops,
publishes and markets entertainment and learning software for personal computers
and 32-bit game consoles. The Company currently sells its software products,
including affiliate partner products, in North America through software
distributors, major computer and software retailing organizations, consumer
electronics stores, discount warehouse stores and mail order companies.
Internationally, the Company sells its products through a combination of
distribution, direct retail and licensing arrangements.
Basis of presentation
The accompanying consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries. All significant intercompany
transactions and balances have been eliminated. The preparation of financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results could differ
from those estimates.
Revenue recognition
Product sales
Revenue from product sales is recognized upon shipment of product to the
customer, net of appropriate allowances for returns, provided that no
significant vendor obligations remain and collection is deemed probable. Costs
associated with certain post-sales customer obligations are accrued. The
Company's revenue recognition policy is in accordance with the provisions of the
American Institute of Certified Public Accountants' Statement of Position 91-1,
"Software Revenue Recognition."
Software licenses
Software license revenue and royalty advances are recognized as revenue at
the time the Company has completed all significant performance obligations under
the terms of the license agreement and any amounts paid are nonrefundable.
Amounts received prior to revenue recognition are recorded as deferred revenue.
Continuing royalties received under the terms of licensing agreements are
recognized as revenue when the amount of royalties is determinable. Revenue from
software license agreements totaled $5,479,000, $2,643,000 and $1,148,000 for
the fiscal years ended March 31, 1996, 1995 and 1994, respectively.
Major customers
Net revenues from sales to three major customers accounted for 12%, 11% and
10% of net revenues for the fiscal year ended March 31, 1996. Net revenues from
sales to one customer accounted for 19% of net revenues for the fiscal year
ended March 31, 1995 (no customer represented 10% or more of net revenues for
the fiscal year ended March 31, 1994).
Cash and cash equivalents
Cash and cash equivalents consist of cash and highly liquid short-term cash
investments with original maturities of three months or less.
Marketable securities
Effective April 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 115 ("SFAS No. 115"), "Accounting for Certain
Investments in Debt and Equity Securities." Management determines the
appropriate classification of its debt and equity securities at the time of
purchase and reevaluates such designation as of each balance sheet date. Debt
securities are classified as held-to-maturity when the Company has the positive
intent and ability to hold the securities to maturity. Debt securities
classified as held-to-maturity are carried at amortized cost, which is adjusted
for amortization of premiums and accretion of discounts to maturity. Such
amortization is included in interest income. Debt securities not classified as
held-to-maturity are classified as available-for-sale and are carried at amounts
which approximate fair value. Realized gains and losses during fiscal 1996 on
available-for-sale securities were not material.
Accounts receivable
The Company's accounts receivable are principally from distributors and
retailers of the Company's products. Accounts receivable are recorded net of
allowances for potential credit losses ($564,000 and $439,000 at March 31, 1996
and 1995, respectively), and sales returns ($5,043,000 and $2,472,000 at March
31, 1996 and 1995, respectively). The Company performs periodic credit
evaluations of its customers and generally does not require collateral. Actual
losses may differ from the Company's estimates, which could have a material
impact on the Company's future results of operations.
Inventories
Inventories are valued at the lower of standard cost, which approximates
cost, determined using the first-in, first-out method, or market. The Company
evaluates the quantities on hand relative to current selling prices and
historical and forecasted sales volume. Based on these evaluations, provisions
are made to write inventories down to net realizable value.
1. THE COMPANY AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES continued
Furniture and equipment
Furniture and equipment are stated at cost. Depreciation is calculated
using the straight-line method over the estimated useful lives of the assets
which range from three to seven years.
Capitalized software costs
Financial accounting standards provide for the capitalization of certain
software development costs after technological feasibility of the software is
established. No such costs have been capitalized because the impact on the
financial statements would be immaterial.
Royalties expense
Royalties are recognized as cost of revenues based on actual net product
sales or software license revenue. Royalty costs, which are included in cost of
revenues, were $3,291,000, $2,304,000 and $1,939,000 in fiscal 1996, 1995 and
1994, respectively. Royalties paid to a director and stockholder of the Company
who is the developer of some of the Company's software product, totaled
$243,000, $323,000 and $364,000 in fiscal 1996, 1995 and 1994, respectively.
Income taxes
The Company accounts for income taxes using the liability method required
by statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes." Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes.
Per share data
Per share data is based on the weighted average number of common shares and
dilutive common stock equivalents outstanding for the period. Pursuant to
Securities and Exchange Commission Staff Accounting Bulletin (SAB) No. 83,
options to purchase common stock (using the treasury stock method) granted by
the Company during the 12 months immediately preceding the initial public
offering date have been included in the calculation of weighted average number
of common shares outstanding as if the underlying shares were outstanding for
the years ended March 31, 1995 and 1994.
Recently issued accounting standard
In October 1995 the Financial Accounting Standards Board issued Statement
No. 123 (SFAS No. 123), "Accounting for Stock-Based Compensation," which is
effective for years beginning after December 15, 1995. SFAS No. 123 permits a
company to choose either a new fair value-based method or the current Accounting
Principles Board Opinion No. 25 intrinsic value-based method of accounting for
its stock-based compensation arrangements. The Company has elected to continue
to follow current practice, but SFAS No. 123 requires pro forma disclosures of
net income and earnings per share computed as if the fair value-based method had
been applied.
2. MARKETABLE SECURITIES
At March 31, 1996, the Company's held-to-maturity and available-for-sale
debt securities consist of the following (in thousands):
[Download Table]
Gross Gross Estimated
unrealized unrealized fair
Cost gains losses value
--------------------------------------------------------------------------------
Municipal bonds $20,906 $ 278 -- $21,184
Municipal notes 3,001 48 -- 3,049
--------------------------------------------------------------------------------
Total
held-to-maturity securities $23,907 $ 326 -- $24,233
--------------------------------------------------------------------------------
Market auction preferreds $22,475 $ 17 -- $22,492
Money market funds 258 -- -- 258
--------------------------------------------------------------------------------
Total
available-for-sale securities 22,733 17 -- 22,750
--------------------------------------------------------------------------------
Total marketable securities $46,640 $ 343 -- $46,983
--------------------------------------------------------------------------------
Such debt securities have been recorded as cash and cash equivalents
($17,733,000), short-term marketable securities ($22,788,000) and long-term
marketable securities ($6,119,000). The contractual maturities of
held-to-maturity and available-for-sale debt securities at March 31, 1996, are
all two years or less. For all periods presented, realized gains and losses on
available-for-sale securities were not material.
3. INVENTORIES
Inventories consist primarily of software media, manuals and related
packaging materials as follows (in thousands):
[Download Table]
March 31,
--------------------------------------------------------------------------------
1996 1995
--------------------------------------------------------------------------------
Raw materials and work in process $ 356 $ 630
Finished goods 1,187 1,061
--------------------------------------------------------------------------------
$ 1,543 $ 1,691
--------------------------------------------------------------------------------
4. FURNITURE AND EQUIPMENT
[Download Table]
Furniture and equipment consists of the following (in thousands):
March 31,
--------------------------------------------------------------------------------
1996 1995
--------------------------------------------------------------------------------
Computer equipment and software $ 3,099 $ 1,911
Furniture 955 393
Office equipment 892 684
Leasehold improvements 581 16
--------------------------------------------------------------------------------
5,527 3,004
Less accumulated depreciation 2,284 1,233
--------------------------------------------------------------------------------
$ 3,243 $ 1,771
--------------------------------------------------------------------------------
5. BANK LINE OF CREDIT
The Company has an unsecured revolving line of credit for borrowing up to
$1.0 million, which expires on August 30, 1996. Borrowings under the line of
credit bear interest, payable monthly, at a reference rate determined by the
bank (8.25% at March 31, 1996). The agreement also requires the Company to
maintain a minimum quick ratio and minimum net worth. There were no outstanding
borrowings under the line of credit at March 31, 1996.
6. INCOME TAXES
Significant components of the provision for income taxes, including the
tax effect of the losses from discontinued operations, are as follows (in
thousands):
[Download Table]
Fiscal Years Ended March 31,
-----------------------------------------------------------------------------
1996 1995 1994
-----------------------------------------------------------------------------
Current:
Federal $ 4,006 $ 2,753 $ 1,444
State 1,347 876 379
Foreign 422 188 63
-----------------------------------------------------------------------------
Total current 5,775 3,817 1,886
-----------------------------------------------------------------------------
Deferred:
Federal (1,540) (964) (639)
State (410) (296) (117)
Effect of valuation
allowance adjustment -- (505) (360)
-----------------------------------------------------------------------------
Total deferred (1,950) (1,765) (1,116)
-----------------------------------------------------------------------------
Total current and
deferred provision $ 3,825 $ 2,052 $ 770
-----------------------------------------------------------------------------
The reconciliation of income taxes attributable to income from continuing
operations and the loss from discontinued operations computed at the U.S.
federal statutory tax rates to the effective tax rate of the provision for
income taxes is:
[Download Table]
Fiscal Years Ended March 31,
-----------------------------------------------------------------------------
1996 1995 1994
-----------------------------------------------------------------------------
Tax at U.S. statutory rates 35% 34% 34%
State income taxes 6 7 7
Tax exempt interest (4) -- --
Other 1 4 4
Effect of valuation allowance adjustment -- (9) (14)
-----------------------------------------------------------------------------
38% 36% 31%
-----------------------------------------------------------------------------
Significant components of the Company's deferred tax assets are as follows
(in thousands):
[Download Table]
March 31,
-----------------------------------------------------------------------------
1996 1995
-----------------------------------------------------------------------------
Deferred tax assets:
Reserve for allowances for returns
and doubtful accounts $ 2,214 $ 1,260
Expenses not currently deductible for
income tax purposes 2,189 1,406
Other 428 215
-----------------------------------------------------------------------------
Total deferred tax assets $ 4,831 $ 2,881
-----------------------------------------------------------------------------
7. STOCKHOLDERS' EQUITY (Deficit)
Common stock
In April 1995, the Company was reincorporated in the State of Delaware. As
part of this reincorporation, each outstanding share of the former California
corporation no par common stock was converted to one share of Delaware
corporation $.0001 par value common stock and each share of the former
California corporation no par preferred stock was converted to two shares of the
Delaware corporation $.0001 par value preferred stock. All preferred shares and
per share information has been restated to reflect the effect of the conversion.
On June 1, 1995, the Company consummated an initial public offering of
3,450,000 shares of common stock that raised approximately $35.5 million net of
expenses. Of the 3,450,000 shares of common stock, 2,450,000 shares were sold by
the Company and 1,000,000 shares were sold by selling stockholders.
1993 Stock Option Plan
In June 1993, the Company established a stock option plan ("1993 Plan")
under which incentive and nonqualified stock options may be granted to
employees, directors and consultants of the Company to purchase up to 1,854,000
shares of common stock. The options may be granted at an exercise price not less
than 85% of the fair market value of the common stock at the date of grant. The
fair market value of the common stock was determined by the Board of Directors.
All options currently outstanding are immediately exercisable upon grant and
generally vest over various periods as determined by the Board of Directors at
the time of grant. The Company retains the right to repurchase (at the original
purchase price) nonvested shares held at the time of termination of employment.
At March 31, 1996, 311,000 shares were subject to the Company's right of
repurchase. In June 1995, the 1993 Plan was superseded by the 1995 stock option
plan. At that time, the remaining 354,000 options available for grant under the
1993 Plan were cancelled.
1995 Stock Option Plan
In May 1995, the Company established a stock option plan ("1995 Plan") that
provides for grants of options to employees and consultants of the Company and
its subsidiaries to purchase up to 575,000 shares of common stock. With respect
to incentive stock options granted under the 1995 Plan, the exercise price must
be at least equal to the fair market value per share of common stock at the
grant date. Options under the 1995 Plan generally vest and become exercisable at
a rate of 25% of the shares subject to option on the first anniversary of the
commencement of vesting and 25% of the shares each year thereafter. As of March
31, 1996, no outstanding options were exercisable.
7. STOCKHOLDERS' EQUITY (Deficit) continued
Changes in options outstanding from inception of the 1993 Stock Option
Plan to March 31, 1996, are as follows:
[Download Table]
Number Price
of shares per share
--------------------------------------------------------------------------------
Outstanding at March 31, 1993 -- --
Options granted 500,000 $ 0.30 - $ 0.33
Options exercised (406,000) 0.30
Options canceled (82,000) 0.30
--------------------------------------------------------------------------------
Outstanding at March 31, 1994 12,000 $ 0.30 - $ 0.33
Options granted 1,072,000 0.73 - 9.00
Options exercised (525,000) 0.30 - 0.80
Options canceled (11,000) 0.30 - 0.80
--------------------------------------------------------------------------------
Outstanding at March 31, 1995 548,000 $ 0.30 - $ 9.00
Options granted 272,000 11.00 - 48.00
Options exercised (131,000) 0.73 - 0.80
Options canceled (26,000) 0.73 - 39.75
--------------------------------------------------------------------------------
Outstanding at March 31, 1996 663,000 $ 0.33 - $ 48.00
--------------------------------------------------------------------------------
Options vested at March 31, 1996 176,000
--------------------------------------------------------------------------------
Options available for grant at
March 31, 1996 350,000
--------------------------------------------------------------------------------
During fiscal 1994, included in options granted and exercised are options
granted to the Company's senior management team to purchase 392,000 shares of
common stock at $0.30 per share. These options were exercised and common stock
was issued in exchange for notes receivable. The notes receivable are for terms
of either three or nine years, bear interest at rates ranging from 3.69% to
5.97% with interest payable semiannually and principal due at maturity. The
notes are secured by the common stock purchased and are reflected as a reduction
of stockholders' equity.
During fiscal 1995, included in options granted and exercised are options
granted to the Company's senior management team to purchase 410,000 shares of
common stock at prices from $0.73 to $0.80 per share. These options were
exercised and common stock was issued in exchange for notes receivable. The
notes receivable are for terms from two to nine years, bear interest at rates
ranging from 6.24% to 8.01% with interest payable semiannually and principal due
at maturity.
During fiscal 1995, the Company issued options to purchase 1,072,000 shares
of common stock. The Company recorded deferred compensation of $940,000 for
financial reporting purposes with respect to such option grants to reflect the
difference between the exercise price and deemed fair value, for financial
statement presentation purposes, of the Company's common shares. Amortization of
deferred compensation for the fiscal years ended March 31, 1996 and 1995,
totaled $351,000 and $450,000, respectively.
Redeemable preferred stock
Prior to the Company's initial public offering, the Company's redeemable
preferred stock consisted of 5,000,000 authorized shares of no par redeemable
preferred stock of which 2,000,000 shares of redeemable preferred stock were
issued in June 1992 at $5.00 per share amounting to $10,000,000 less issuance
costs of approximately $92,000. The redeemable preferred stock was
noncumulative, fully participating and was entitled to a dividend rate of $0.25
per share. In connection with the Company's initial public offering all
outstanding shares of the Company's redeemable preferred stock were converted
into 2,094,000 shares of common stock.
8. 1995 EMPLOYEE STOCK PURCHASE PLAN
In May 1995 the Company established an employee stock purchase plan
("ESPP") and has reserved an aggregate of 100,000 shares of common stock. The
ESPP is intended to qualify under Section 423 of the Code and permits eligible
employees of the Company to purchase common stock through payroll deductions of
up to 10% of their compensation provided that no employee may purchase more than
$25,000 worth of stock in any calendar year. The ESPP is implemented with
six-month purchase periods as components of 24-month offering periods. The first
such purchase period commenced upon the date of the offering and ended on the
last market trading day on December 29, 1995. The price of common stock
purchased under the ESPP is 85% of the lower of the fair market value of the
common stock on the first day of each offering period or last day of each
purchase period. The ESPP will expire in the year 2005. In fiscal 1996, a total
of 22,000 shares were issued under the plan at $13.60 per share. At March 31,
1996, a total of 78,000 shares were available for issuance under the plan.
9. EMPLOYEE RETIREMENT AND BENEFIT PLAN
The Company has a defined contribution retirement plan covering
substantially all employees which operates under Section 401(k) of the Internal
Revenue Code. Eligible employees may contribute amounts to the plan subject to
certain limitations. The Company matches contributions by plan participants up
to 5% of the participant's pretax compensation. Retirement plan expense for
fiscal 1996, 1995 and 1994 was $321,000, $209,000 and $186,000, respectively.
10. DISCONTINUED OPERATIONS
In December 1993, the Company sold an unprofitable commercial software
division ("Division") to the Division's management. Although a legal transfer of
the assets of the Division occurred in December 1993, the sale could not be
recognized as a divestiture for accounting purposes at that time because there
was an absence of a significant financial investment in the business by
management of the Division.
In September 1994, the Company received full payment of the note receivable
from the management of the Division at which date the divestiture was accounted
for as discontinued operations.
10. DISCONTINUED OPERATIONS continued
The results of the Division for the fiscal year ended March 31, 1995, were
accounted for as discontinued operations in the accompanying consolidated
statements of income. The sale resulted in a gain, net of applicable income
taxes, of $303,000. Revenues related to this Division were $361,000 in fiscal
year 1994. There were no revenues in subsequent periods.
11. COMMITMENTS
In June 1995 the Company entered into a seven-year lease for new office
space to house its principal corporate headquarters. The lease agreement
provides for monthly payments beginning at $75,000, escalating to $86,600 during
the term of the lease. The lease is noncancelable for the first five years and
six months with the option, at the Company's election, to shorten the term of
the lease for a one-time payment equal to three months' rent.
Future minimum lease payments under the Company's operating leases for the
periods ended March 31, pursuant to leases outstanding as of March 31, 1996, are
due as follows (in thousands):
[Download Table]
1997 $1,014
1998 977
1999 901
2000 901
2001 624
--------------------------------------------------------------------------------
$4,417
--------------------------------------------------------------------------------
Rent expense under all leases was $1,021,000, $486,000 and $324,000 for
fiscal 1996, 1995 and 1994, respectively.
12. INFORMATION BY GEOGRAPHIC AREA
Information regarding the Company's operations, including its foreign
subsidiary and export sales, by geographic area for fiscal 1996, 1995 and 1994
is as follows (in thousands):
[Download Table]
Fiscal Years Ended March 31,
--------------------------------------------------------------------------------
1996 1995 1994
Net revenues:
North America $43,564 $32,614 $21,152
Europe 7,197 4,135 1,478
Asia/Pacific and other 4,651 1,398 702
--------------------------------------------------------------------------------
$55,412 $38,147 $23,332
--------------------------------------------------------------------------------
13. BUSINESS COMBINATION
In March 1996, the Company acquired for cash Cinematronics LLC, an
independent developer of entertainment software, with headquarters in Austin,
Texas. The acquisition was accounted for under the purchase method. This
purchase resulted in a non-recurring acquisition-related charge of $2,232,000
for acquired in-process technology. During fiscal 1996, the operations of
Cinematronics LLC were not material to the Company.
14. QUARTERLY FINANCIAL INFORMATION (Unaudited)
[Enlarge/Download Table]
Quarter Ended
-----------------------------------------------------------------------------------------
June September December March
30 30 31 31 Year
-----------------------------------------------------------------------------------------
(In thousands, except per share amounts)
Fiscal year 1996:
Net revenues $11,332 $11,779 $20,111 $12,190 $55,412
Gross profit 7,742 8,536 12,912 8,325 37,515
-----------------------------------------------------------------------------------------
Net income (loss) 1,132 1,722 3,541 (207) 6,188
-----------------------------------------------------------------------------------------
Net income (loss)
per share 0.12 0.15 0.31 (0.02) 0.56
Fiscal year 1995:
Net revenues $ 6,977 $ 6,645 $15,526 $ 8,999 $38,147
Gross profit 4,417 3,928 9,399 6,217 23,961
Income from
continuing
operations 692 48 2,385 178 3,303
Gain on disposal
of discontinued
operations -- 303 -- -- 303
-----------------------------------------------------------------------------------------
Net income 692 351 2,385 178 3,606
-----------------------------------------------------------------------------------------
Income from
continuing
operations
per share 0.08 0.01 0.27 0.02 0.37
Net income
per share 0.08 0.04 0.27 0.02 0.40
Report of Independent Auditors
The Board of Directors and Stockholders
Maxis, Inc.
We have audited the accompanying consolidated balance sheets of Maxis, Inc.
as of March 31, 1996 and 1995, and the related consolidated statements of
income, stockholders' equity (deficit), and cash flows for each of the three
years in the period ended March 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Maxis, Inc. at
March 31, 1996 and 1995, and the consolidated results of its operations and its
cash flows for each of the three years in the period ended March 31, 1996, in
conformance with generally accepted accounting principles.
/s/ERNST & YOUNG LLP
Walnut Creek, California
April 23, 1996
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Board of Directors
Jeff Braun
Chairman and Chief Executive Officer
Maxis, Inc.
Will Wright
Co-Founder and Chief Technical Officer
Maxis, Inc.
Charles Gaylord
Consultant
Eric Dunn
Vice President and General Manager,
Personal Finance Group
Intuit, Inc.
William Janeway
Managing Director
E.M. Warburg, Pincus and Co., Inc.
Dr. Henry Kressel
Managing Director
E.M. Warburg, Pincus and Co., Inc.
Avram Miller
Vice President
Intel Corporation
Sam Poole
President
Maxis, Inc.
Management Team
Jeff Braun
Chairman and Chief Executive Officer
Sam Poole
President
Bob Derber
Vice President and General Counsel
Val Garcia
Vice President, Operations
Fred Gerson
Vice President and
Chief Financial Officer
Deborah Gross
Vice President, Human Resources
Robin Harper
Vice President, Marketing
Doug Litke
Vice President, Business Development
Joe Scirica
Vice President, Product Development
Ileana Seander
Vice President, Sales
Headquarters Address
Maxis, Inc.
2121 N. California Blvd.
Walnut Creek, CA 94596-3572
http://www.maxis.com
Transfer Agent
Harris Trust Company of California
601 South Figueroa, Suite 4900
Los Angeles, CA 90017
(213) 239-0671
Independent Auditors
Ernst & Young LLP
1331 N. California Blvd.
Walnut Creek, CA 94596
Legal Counsel
Wilson, Sonsini, Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304-1050
Corporate Information
Copies of this Annual Report and Form 10-K are available
upon request by calling (510) 933-5630.
COMMON STOCK PROFILE
The Company's common stock is traded on the Nasdaq National Market under
the symbol MXIS. The following table sets forth, for the periods indicated, the
high and low closing prices for the Company's common stock as reported on
Nasdaq:
[Download Table]
Fiscal Year 1996 High Low
--------------------------------------------------------------------------------
First quarter (from May 25, 1995) $30 1/2 $19 1/2
Second quarter 49 1/2 23
Third quarter 44 1/2 29 1/4
Fourth quarter 37 1/2 20 1/4
The Company has not paid cash dividends and has no current plan to do so.
There were 133 stockholders of record on March 31, 1996, excluding stockholders
whose stock is held in nominee or street name by brokers.
ANNUAL MEETING
Shareholders are invited to attend Maxis' Annual Meeting at 10 a.m. on
August 21, 1996, at The Dean Lesher Regional Center for the Arts, Dean Lesher
Theatre, 1601 Civic Drive, Walnut Creek, CA 94596.
Dates Referenced Herein and Documents Incorporated by Reference
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