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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2005
COMMISSION FILE NUMBER: 33-64732
SPSS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-2815480
(STATE OR OTHER JURISDICTION (IRS EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION)
233 S. WACKER DRIVE, CHICAGO, ILLINOIS 60606
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE: (312) 651-3000
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS 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 FILING REQUIREMENTS
FOR THE PAST 90 DAYS. YES [X] NO [ ]
INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS AN ACCELERATED FILER (AS
DEFINED IN RULE 12b-2 OF THE EXCHANGE ACT). YES [X] NO [ ]
AS OF APRIL 29, 2005, THERE WERE 17,806,314 SHARES OF COMMON STOCK
OUTSTANDING, PAR VALUE $.01, OF THE REGISTRANT.
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SPSS INC.
FORM 10-Q
QUARTER ENDED MARCH 31, 2005
INDEX
PAGE
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2004 AND MARCH 31, 2005 (UNAUDITED) 3
CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH
31, 2004 (UNAUDITED) AND 2005 (UNAUDITED) 4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED
MARCH 31, 2004 (UNAUDITED) AND 2005 (UNAUDITED) 5
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31,
2004 (UNAUDITED) AND 2005 (UNAUDITED) 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 13
ITEM 4. CONTROLS AND PROCEDURES 13
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 16
ITEM 5. OTHER INFORMATION 16
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 16
2
SPSS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT FOR SHARE DATA)
December 31, March 31,
2004 2005
------------ ---------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 37,107 $ 47,137
Accounts receivable, net 50,007 41,098
Inventories 789 680
Deferred income taxes 15,503 14,760
Prepaid income taxes 7,064 7,793
Other current assets 5,248 4,761
--------- ---------
Total current assets 115,718 116,229
Property, equipment and leasehold improvements, net 21,480 21,041
Capitalized software development costs, net 28,178 28,542
Goodwill 42,197 41,862
Intangibles, net 3,278 3,214
Deferred income taxes 22,860 23,469
Other noncurrent assets 1,614 1,222
--------- ---------
Total assets $ 235,325 $ 235,579
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 2,500 $ 2,500
Accounts payable 6,127 5,865
Income and value added taxes payable 7,340 4,657
Deferred revenues 62,148 62,226
Other current liabilities 23,757 23,161
--------- ---------
Total current liabilities 101,872 98,409
Noncurrent notes payable 3,381 2,767
Noncurrent deferred income taxes 632 1,021
Other noncurrent liabilities 981 664
Stockholders' equity:
Common Stock, $.01 par value; 50,000,000 shares
authorized; 17,705,744 and 17,803,604 shares issued and
outstanding in 2004 and 2005, respectively 177 178
Additional paid-in capital 152,477 153,924
Deferred compensation (145) (108)
Accumulated other comprehensive loss (7,818) (7,464)
Accumulated deficit (16,232) (13,812)
--------- ---------
Total stockholders' equity 128,459 132,718
--------- ---------
Total liabilities and stockholders' equity $ 235,325 $ 235,579
========= =========
See accompanying notes to consolidated financial statements.
3
SPSS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
(UNAUDITED)
Three Months Ended
March 31,
-----------------------
2004 2005
------- --------
Net revenues:
License fees $24,826 $25,997
Maintenance 23,841 25,312
Services 8,443 6,147
------- -------
Net revenues 57,110 57,456
Operating expenses:
Cost of license and maintenance revenues 3,936 3,701
Sales, marketing and services 32,387 30,278
Research and development 11,987 11,404
General and administrative 4,874 8,091
------- -------
Operating expenses 53,184 53,474
------- -------
Operating income 3,926 3,982
------- -------
Other expense:
Net interest expense 75 21
Other expense 602 453
------- -------
Other expense 677 474
------- -------
Income before income taxes 3,249 3,508
Income tax expense 1,145 1,088
------- -------
Net income $ 2,104 $ 2,420
======= =======
Basic net income per share $ 0.12 $ 0.14
======= =======
Diluted net income per share $ 0.11 $ 0.13
======= =======
Share data:
Shares used in computing basic net income per share 17,765 17,760
======= =======
Shares used in computing diluted net income per share 18,428 18,002
======= =======
See accompanying notes to consolidated financial statements.
4
SPSS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(IN THOUSANDS)
(UNAUDITED)
Three Months Ended
March 31,
--------------------
2004 2005
------ ------
Net income $2,104 $2,420
Other comprehensive income:
Foreign currency translation adjustment 577 354
------ ------
Comprehensive income $2,681 $2,774
====== ======
See accompanying notes to consolidated financial statements.
5
SPSS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
Three Months Ended March 31,
----------------------------
2004 2005
-------- --------
Cash flows from operating activities:
Net income $ 2,104 $ 2,420
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 4,064 3,564
Deferred income taxes 1,768 759
Noncash services recoveries (375) -
Changes in assets and liabilities:
Accounts receivable 7,892 8,009
Inventories 413 99
Prepaid expenses (1,703) 449
Accounts payable 72 (190)
Accrued expenses (2,254) (281)
Accrued income taxes (5,911) (3,364)
Deferred revenues (1,805) 1,130
Other 895 895
-------- --------
Net cash provided by operating activities 5,160 13,490
-------- --------
Cash flows from investing activities:
Capital expenditures, net (485) (1,238)
Capitalized software development costs (2,583) (2,283)
Proceeds from the divestiture of Sigma-series product line 2,000 -
-------- --------
Net cash used in investing activities (1,068) (3,521)
-------- --------
Cash flows from financing activities:
Net borrowings under line-of-credit agreements (651) (614)
Proceeds from issuance of common stock 1,850 1,448
-------- --------
Net cash provided by financing activities 1,199 834
-------- --------
Effect of exchange rates on cash 139 (773)
-------- --------
Net change in cash and cash equivalents 5,430 10,030
Cash and cash equivalents at beginning of period 36,101 37,107
-------- --------
Cash and cash equivalents at end of period $ 41,531 $ 47,137
======== ========
Supplemental disclosures of cash flow information:
Interest paid $ 218 $ 124
Income taxes paid 6,402 2,667
Cash received from income tax refunds 1,291 91
See accompanying notes to consolidated financial statements.
6
SPSS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying consolidated financial statements of SPSS Inc. (the
"Company") have been prepared in accordance with accounting principles generally
accepted in the United States of America for interim financial information, the
instructions to United States Securities and Exchange Commission Form 10-Q and
Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States of America for complete financial statements. It is
presumed that the reader has already read the Company's Annual Report on Form
10-K for the year ended December 31, 2004, as amended.
In the opinion of management, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation have been
included. The results of operations for the interim periods are not necessarily
indicative of the results that may be expected for the fiscal year. For further
information, refer to the consolidated financial statements and accompanying
notes included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2004, as amended.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
NOTE 2 - STOCK OPTION PLANS
The Company maintains one stock incentive plan that is flexible and allows
various forms of equity incentives to be issued under it. The Company accounts
for this plan using the intrinsic value method under the recognition and
measurement principles of Accounting Principles Board ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees," and related interpretations. In
prior years, the Company has recognized compensation cost for restricted stock
and restricted stock units to employees. No compensation is recognized for stock
option grants to employees. All options granted under the stock incentive plan
had an exercise price equal to the market value of the underlying common stock
on the date of grant. The following table illustrates the effects on net income
and income per share if the Company had applied the fair value recognition
provisions of Financial Accounting Standards Board (FASB) Statement of Financial
Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation,"
to stock-based compensation.
THREE MONTHS ENDED MARCH 31,
------------------------------
2004 2005
--------- ---------
Net income, as reported $ 2,104 $ 2,420
Deduct:
Stock-based employee compensation cost, net of related
tax, included in net income, as reported.................................. 16 -
Total stock-based employee compensation expense determined
under the fair value based method for all awards, net of related taxes.... (1,123) (861)
--------- ---------
Pro forma net income $ 997 $ 1,559
========= =========
Income per share:
Basic-- as reported $ 0.12 $ 0.14
Basic-- pro forma $ 0.06 $ 0.09
Diluted-- as reported $ 0.11 $ 0.13
Diluted-- pro forma $ 0.05 $ 0.09
NOTE 3 - DOMESTIC AND FOREIGN OPERATIONS
Net revenues per geographic region are summarized as follows:
7
THREE MONTHS ENDED MARCH 31,
----------------------------
2004 2005
------- -------
United States $23,245 $24,043
United Kingdom 8,830 8,603
Other 25,035 24,810
------- -------
Total $57,110 $57,456
======= =======
NOTE 4 - EARNINGS PER COMMON SHARE
Earnings per common share (EPS) are computed by dividing net income by the
weighted average number of shares of common stock (basic) plus common stock
equivalents outstanding (diluted) during the period. Common stock equivalents
consist of contingently issuable shares and stock options, which have been
included in the calculation of diluted weighted average shares outstanding using
the treasury stock method. Basic weighted average shares reconciles to diluted
weighted average shares as follows:
THREE MONTHS ENDED MARCH 31,
----------------------------
2004 2005
------ -------
Basic weighted average common shares outstanding 17,765 17,760
Dilutive effect of stock options 663 242
------ ------
Diluted weighted average common shares outstanding 18,428 18,002
====== ======
Anti-dilutive shares not included in the diluted EPS calculation for the three
months ended March 31, 2004 and March 31, 2005, were 1,441 and 958,
respectively.
NOTE 5 - COST MANAGEMENT PROGRAMS
During the three months ended March 31, 2005, the Company incurred certain
expenses related to cost management programs totaling $1,666. The cost
management programs included $1,320 for discontinued use of office space from
consolidating certain activities and $346 related to the layoff of approximately
16 employees in the sales, marketing and administrative functions. As of March
31, 2005, $1,495 of these cost management programs remained in accrued
liabilities. The Company expects the accrual to be utilized by August 31, 2006,
the completion of the lease term.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS 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, INCLUDING, WITHOUT LIMITATION, STATEMENTS
REGARDING THE COMPANY'S EXPECTATIONS, BELIEFS, INTENTIONS OR FUTURE STRATEGIES
THAT ARE SIGNIFIED BY THE WORDS "EXPECTS," "ANTICIPATES," "INTENDS," "BELIEVES,"
"ESTIMATES" OR SIMILAR LANGUAGE. ALL FORWARD-LOOKING STATEMENTS INCLUDED IN THIS
DOCUMENT ARE BASED ON INFORMATION AVAILABLE TO SPSS ON THE DATE HEREOF. SPSS
CAUTIONS INVESTORS THAT ITS BUSINESS AND FINANCIAL PERFORMANCE AND THE MATTERS
DESCRIBED IN THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO SUBSTANTIAL RISKS
AND UNCERTAINTIES. FOR FURTHER INFORMATION REGARDING THESE RISKS AND
UNCERTAINTIES, PLEASE REFER TO PUBLICLY AVAILABLE DOCUMENTS THAT SPSS HAS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION. BECAUSE OF THESE RISKS AND
UNCERTAINTIES, SOME OF WHICH MAY NOT BE CURRENTLY ASCERTAINABLE AND MANY OF
WHICH ARE BEYOND THE COMPANY'S CONTROL, ACTUAL RESULTS COULD DIFFER MATERIALLY
FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS. DEVIATIONS BETWEEN
ACTUAL FUTURE EVENTS AND THE COMPANY'S ESTIMATES AND ASSUMPTIONS COULD LEAD TO
RESULTS THAT ARE MATERIALLY DIFFERENT FROM THOSE EXPRESSED IN OR IMPLIED BY THE
FORWARD-LOOKING STATEMENTS. SPSS DOES NOT INTEND TO UPDATE THESE FORWARD-LOOKING
STATEMENTS TO REFLECT ACTUAL FUTURE EVENTS.
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE COMPANY'S
FINANCIAL STATEMENTS AND ACCOMPANYING NOTES, WHICH APPEAR ELSEWHERE IN THIS
QUARTERLY REPORT ON FORM 10-Q.
2005 FINANCIAL HIGHLIGHTS
Some of our key financial highlights for the three months ended March 31, 2005
were as follows:
8
- Revenues for the three months ended March 31, 2005 were $57.5
million, 1% higher than the three months ended March 31, 2004.
- License revenues were $26.0 million during the three months ended
March 31, 2005, 5% higher than in the comparable period in 2004.
- Service revenues were $6.1 million for the three months ended March
31, 2005, down $2.3 million from the comparable period in 2004.
- General and administrative expenses were $8.1 million during the
three months ended March 31, 2005, up $3.2 million from the
comparable period in 2004.
- Operating income was $4.0 million, up $0.1 million from the three
months ended March 31, 2004.
- Net income of $2.4 million increased 15% from the comparable period
in 2004.
- Diluted EPS was $0.13, an increase of 18% from $0.11 in 2004.
- Cash was $47.1 million at March 31, 2005, up $10.0 million from
December 31, 2004.
- Operating cash flow was $13.5 million during the three months ended
March 31, 2005, $8.3 million higher than the comparable period in
2004.
COMPARISON OF THREE MONTHS ENDED MARCH 31, 2004 TO THREE MONTHS ENDED MARCH 31,
2005.
NET REVENUES.
(In thousands)
MARCH 31, MARCH 31, PERCENTAGE PERCENT OF TOTAL REVENUES
THREE MONTHS ENDED 2004 2005 CHANGE 2004 2005
---------- ---------- ---------- ---------------- ------------
License $24,826 $25,997 5% 43% 45%
Maintenance 23,841 25,312 6% 42% 44%
Services 8,443 6,147 (27)% 15% 11%
------- ------- --- --- ---
Net revenues $57,110 $57,456 1% 100% 100%
License revenues increased $1.2 million from the first quarter of 2004 to
the first quarter of 2005 primarily driven by higher sales of SPSS data mining
and desktop statistical analysis tools, higher sales in Spain and Singapore as
well as a $0.5 million favorable impact of changes in currency exchange rates.
Maintenance revenues increased $1.5 million during the first quarter of
2005 primarily due to higher and consistent renewal rates for the Company's
major offerings and $0.5 million favorable impact of changes in currency
exchange rates.
Services revenues decreased $2.3 million for the first quarter of 2005
compared to the first quarter of 2004 primarily due to fewer ShowCase, data
mining and market research consulting projects. This decrease was partially
offset by a $0.1 million favorable impact of changes in currency exchange rates.
During the first three months of 2005, service revenues decreased by 27% from
the comparable period in 2004 and decreased to 11% of net revenues.
COST OF LICENSE AND MAINTENANCE REVENUES.
(In thousands)
MARCH 31, MARCH 31, PERCENTAGE PERCENT OF TOTAL REVENUES
THREE MONTHS ENDED 2004 2005 CHANGE 2004 2005
---------- --------- ----------- ----------- ---------------
Cost of license and maintenance revenues $ 3,936 $ 3,701 (6)% 7% 6%
Cost of license and maintenance revenues consists of costs of goods sold,
amortization of capitalized software development costs, and royalties paid to
third parties. These costs decreased $0.2 million from the 2004 first quarter
primarily due to lower costs associated with royalties paid to third parties.
Cost of license and maintenance revenues should remain relatively constant as a
percentage of total revenues in the remaining quarters of the 2005 fiscal year.
9
SALES, MARKETING AND SERVICES.
(In thousands)
MARCH 31, MARCH 31, PERCENTAGE PERCENT OF TOTAL REVENUES
THREE MONTHS ENDED 2004 2005 CHANGE 2004 2005
--------- --------- ---------- ---------- ---------------
Sales, marketing and services $ 32,387 $ 30,278 (7)% 57% 53%
Sales, marketing and services expenses decreased $2.1 million from the
first three months of 2004 primarily due to reduction of staff as a result of
the cost management program as further discussed in Note 5 to the Consolidated
Financial Statements, and changes in currency exchange rates of $0.7 million.
RESEARCH AND DEVELOPMENT.
(In thousands)
MARCH 31, MARCH 31, PERCENTAGE PERCENT OF TOTAL REVENUES
THREE MONTHS ENDED 2004 2005 CHANGE 2004 2005
--------- --------- ---------- ---------- ---------------
Research and development $ 11,987 $ 11,404 (5)% 21% 20%
Research and development costs decreased $0.6 million from the 2004 first
quarter primarily due to $0.4 million in increased capitalization of labor costs
related to development of the Company's core products during the first quarter
of 2005. Research and development expenses are expected to remain relatively
flat in the remaining quarters of 2005.
GENERAL AND ADMINISTRATIVE.
(In thousands)
MARCH 31, MARCH 31, PERCENTAGE PERCENT OF TOTAL REVENUES
THREE MONTHS ENDED 2004 2005 CHANGE 2004 2005
--------- --------- ---------- ---------- ---------------
General and administrative $ 4,874 $ 8,091 66% 8% 14%
General and administrative expenses increased $3.2 million from the first
three months of 2004 primarily due to higher legal and accounting expenses
related to the audit of the Company's consolidated financial statements and
internal control over financial reporting of $1.2 million, and one-time charges
of $1.3 million related to exit costs for office space ceased to be used as a
result of consolidating activities.
10
NET INTEREST EXPENSE.
(In thousands)
MARCH 31, MARCH 31, PERCENTAGE PERCENT OF TOTAL REVENUES
THREE MONTHS ENDED 2004 2005 CHANGE 2004 2005
--------- --------- ---------- ---------- ---------------
Net interest expense $ 75 $ 21 (72)% -% -%
Net interest expense in the three months ended March 31, 2005 related to
the Company's financing arrangement with Wells Fargo Foothill, Inc. The decrease
from the 2004 quarterly period was a result of lower debt levels. Net interest
expense should remain relatively constant in the remaining quarters of the 2005
fiscal year.
OTHER EXPENSE.
(In thousands)
MARCH 31, MARCH 31, PERCENTAGE PERCENT OF TOTAL REVENUES
THREE MONTHS ENDED 2004 2005 CHANGE 2004 2005
---------- --------- ---------- ------------ ---------------
Other expense $ 602 $ 453 (25)% 1% 1%
Other expense in the three months ended March 31, 2005 decreased $0.1
million compared to the three months ended March 31, 2004. The Company wrote off
its 2001 investment in e-Intelligence Corporation in the first quarter of 2004
($0.2 million). Other expense also includes losses from foreign currency
transactions from the strengthening of the U.S. dollar against other major
currencies during the first quarter of 2005.
INCOME TAX EXPENSE.
(In thousands)
MARCH 31, MARCH 31, PERCENT OF PRE-TAX INCOME
THREE MONTHS ENDED 2004 2005 2004 2005
--------- --------- ---- ----
Income tax expense $1,145 $ 1,088 35% 31%
The income tax provision decreased in the three months ended March 31,
2005 compared to the three months ended March 31, 2004 and as a percent of
pretax income was 31% for the first quarter of 2005. The Company's effective tax
rate is expected to remain at or near 31 - 32 percent for the remainder of the
2005 fiscal year and should be consistent with the full year fiscal year 2004
rate of 31 percent.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2005, working capital was $17.8 million with a current
ratio of 1.2 to 1. Excluding current deferred revenue, working capital was $80.0
million with a current ratio of 3.2 to 1. Cash flows from operating activities
were $13.5 million in the three months ended March 31, 2005 compared with $5.2
million in the three months ended March 31, 2004. The increase in cash from
operations in 2005 was mainly due to lower tax payments and accrued expense, a
decrease in prepaid expenses and an increase in deferred revenues. Average days
sales outstanding were 67 days at March 31, 2005 and December 31, 2004, and 75
days at March 31, 2004.
Cash flows from operating activities were more than adequate to fund
capital expenditures and software development costs of $3.1 million and $3.5
million in 2004 and 2005, respectively. Management believes that SPSS has ample
capacity in its plant and equipment to meet expected needs for future growth.
Additionally, in February 2004, SPSS received scheduled payments totaling $2.0
million on the sale of its Sigma-series product line consummated in December
2003.
Cash provided by financing activities was $0.8 million in the three months
ended March 31, 2005 and $1.2 million in the three months ended March 31, 2004.
In the three months ended March 31, 2005, financing activities provided cash
proceeds of $1.4 million from the issuance of common stock, primarily through
the exercise of stock options. These proceeds were partially decreased by net
repayments of $0.6 million under line of credit agreements.
11
On March 31, 2003, SPSS entered into a four (4) year, $25 million credit
facility with Wells Fargo Foothill, Inc. (f/k/a Foothill Capital Corporation).
The Wells Fargo Foothill facility includes a four (4) year term loan in the
amount of $10,000,000, two revolving lines of credit and a letter of credit
facility not to exceed $3,000,000. The maximum amount SPSS may borrow under
Revolver A will depend upon the value of the Company's eligible accounts
receivable generated within the United States. Revolver B provides for a credit
facility of up to $3,500,000 provided that no event of default exists. As of
March 31, 2005, the Company has availability of $5,914,000 under the revolving
lines of credit.
The terms and conditions of the Wells Fargo Foothill credit facility are
specified in a Loan and Security Agreement, dated as of March 31, 2003, by and
between Wells Fargo Foothill and SPSS. The term loan portion of the facility
bears interest at a rate of 2.5% above prime, with potential future reductions
of up to 0.5% in the interest rate based upon the Company's achievement of
specified EBITDA targets. One component of the revolving line of credit will
bear interest at a rate of prime plus 3.0%. On the remainder of the revolving
line of credit, SPSS may select interest rates of either prime plus 0.25% or
LIBOR plus 2.5% with respect to each advance made by Wells Fargo Foothill. The
credit fee rate for letters of credit is 2.0% per annum times the daily balance
of the undrawn amount of all outstanding letters of credit. In May 2003, the
Company began paying down evenly the term loan of $10,000,000 over the four (4)
year period (i.e., $2,500,000 per year over four years). At March 31, 2005, SPSS
had $5,267,000 outstanding under its line of credit with Wells Fargo Foothill,
including $2,500,000 classified as current notes payable and the face amount of
letters of credit issued and outstanding under the existing credit facility
totaling approximately $893,000.
The Wells Fargo Foothill facility requires SPSS to meet certain financial
covenants including minimum EBITDA targets and includes additional requirements
concerning, among other things, the Company's ability to incur additional
indebtedness, create liens on assets, make investments, engage in mergers,
acquisitions or consolidations where SPSS is not the surviving entity, sell
assets, engage in certain transactions with affiliates, and amend its
organizational documents or make changes in capital structure. The Company was
in compliance with all covenants as of March 31, 2005.
The Wells Fargo Foothill facility is secured by all of the Company's
assets located in the United States. ShowCase Corporation, a Minnesota
corporation and wholly owned subsidiary of SPSS, and NetGenesis Corp., a
Delaware corporation and wholly owned subsidiary of SPSS, have guaranteed the
obligations of SPSS under the Loan and Security Agreement. This guaranty is
secured by all of the assets of ShowCase and NetGenesis.
SPSS may be obligated to make future contingent purchase price payments
related to the Company's acquisition of Data Distilleries B.V. in the amount of
up to $2.0 million at current estimated exchange rates. The Company's obligation
to make contingent payments shall end on October 31, 2005.
SPSS intends to fund its future capital needs through operating cash flows
and borrowings on our credit facility. SPSS anticipates that amounts available
from cash and cash equivalents on hand, under its line of credit, and cash flows
generated from operations, will be sufficient to fund the Company's operations
and capital requirements at the current level of operations. However, no
assurance can be given that changing business circumstances will not require
additional capital for reasons that are not currently anticipated or that the
necessary additional capital will then be available to SPSS on favorable terms
or at all.
12
CRITICAL ACCOUNTING POLICIES
The Company's consolidated financial statements are prepared in accordance
with accounting principles generally accepted in the United States of America.
As such, SPSS makes certain estimates, judgments and assumptions that it
believes are reasonable based upon the information available. These estimates
and assumptions affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the periods presented. The Company's critical accounting
policies include revenue recognition, capitalization of software development
costs, impairment of long-lived assets, the estimation of credit losses on
accounts receivable and the valuation of deferred tax assets. For a discussion
of these critical accounting policies, see "Critical Accounting Policies and
Estimates" in the SPSS Annual Report on Form 10-K/A for the year ended December
31, 2004, filed with the Securities and Exchange Commission.
INTERNATIONAL OPERATIONS
Revenues from international operations were 59% and 58% of total net
revenues in the three months ended March 31, 2004 and March 31, 2005,
respectively.
RECENT ACCOUNTING PRONOUNCEMENTS
In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payments".
This statement is a revision of SFAS No. 123, "Accounting for Stock-Based
Compensation", and supersedes APB opinion No. 25, "Accounting for Stock Issued
to Employees". SFAS 123R requires all share-based payments to employees,
including grants of employee stock options, to be recognized in the financial
statements based on their fair values. The SEC issued guidance on April 14, 2005
announcing that public companies will now be required to adopt SFAS 123R by
their first fiscal year beginning after June 15, 2005. Accordingly, the Company
will be required to adopt SFAS 123R in its first quarter of fiscal year 2006.
The Company is currently evaluating the provisions of this statement to
determine the impact on its consolidated financial statements. It is, however,
expected to have a negative effect on consolidated net income.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
SPSS is exposed to market risk from fluctuations in interest rates on
borrowings under its borrowing arrangement that bear interest at either the
prime rate or the Eurodollar rate. As of March 31, 2005, the Company had
$5,267,000 outstanding under this line of credit. A 100 basis point increase in
interest rates would result in an additional $53,000 of annual interest expense,
assuming the same level of borrowing.
SPSS is exposed to market risk from fluctuations in foreign currency
exchange rates. Since a substantial portion of its operations and revenue occur
outside the United States and in currencies other than the U.S. dollar, the
Company's results can be significantly affected by changes in foreign currency
exchange rates. To manage this exposure to fluctuations of currency exchange
rates, SPSS may enter into various financial instruments, such as options, which
generally mature within 12 months. Gains and losses on these instruments are
recognized in other income or expense. Were the foreign currency exchange rates
to depreciate immediately and uniformly against the U.S. dollar by 10 percent
from levels at March 31, 2005, management expects this would have a material
adverse effect on the Company's financial results.
At March 31, 2005, SPSS did not have any option contracts outstanding.
Historically, the Company's derivative instruments did not qualify for
hedge accounting treatment under SFAS No. 133. Accordingly, gains and losses
related to changes in the fair value of these instruments were recognized in
income in each accounting period.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures. SPSS maintains disclosure controls and
procedures that have been designed to ensure that information related to the
Company is recorded, processed, summarized and reported on a timely basis. SPSS
reviews these disclosure controls and procedures on a periodic basis. In
connection with this review, SPSS has established a compliance committee that is
responsible for accumulating potentially material information regarding its
activities and considering the materiality of this information. The compliance
committee (or a subcommittee) is also responsible for making recommendations
regarding disclosure
13
and communicating this information to the Company's Chief Executive Officer and
Chief Financial Officer to allow timely decisions regarding required disclosure.
The SPSS compliance committee is comprised of the Company's senior legal
official, principal accounting officer, senior manager in charge of investor
relations, principal risk management officer, chief information officer and
certain other members of the SPSS senior management.
The Company's Chief Executive Officer and Chief Financial Officer, with
the participation of the compliance committee, evaluated the effectiveness of
the design and operation of the Company's disclosure controls and procedures as
of the end of the period covered by this Quarterly Report on Form 10-Q, as
required by Rule 13a-15 of the Securities Exchange Act of 1934. This evaluation
included a review of the material weaknesses discussed in both Management's
Annual Report on Internal Control Over Financial Reporting and the Attestation
Report of the Registered Public Accounting Firm filed with the Company's Annual
Report on Form 10-K for fiscal year 2004 filed with the SEC on March 16, 2005,
as amended on April 22, 2005 (the "2004 Annual Report"). This evaluation also
included remedial actions taken by the Company to address these material
weaknesses as further described below under the section titled "Changes in
Internal Control Over Financial Reporting".
Based on this evaluation of the Company's disclosure controls and
procedures, and the changes described below, the Company's Chief Executive
Officer and Chief Financial Officer believe that as of the end of the period
covered by this Quarterly Report on Form 10-Q, the Company's disclosure controls
and procedures were not effective in ensuring that the information required to
be disclosed by the Company in the reports it files or submits under the
Securities Exchange Act of 1934 is recorded, processed, summarized, and reported
within the time periods specified in the rules and forms of the SEC. SPSS
believes, however, that since March 31, 2005, its disclosure controls and
procedures have improved due to remedial measures resulting from the scrutiny of
such matters by its management in assessing and improving its internal control
over financial reporting. SPSS believes that its disclosure controls and
procedures will continue to improve as it completes the implementation of the
changes described below.
Changes in Internal Control Over Financial Reporting. In response to
material weaknesses identified in conjunction with the assessment of the
Company's internal control over financial reporting as of December 31, 2004,
management implemented additional controls to strengthen its internal control
over financial reporting with respect to revenue. With respect to income taxes,
the Company continues to implement additional controls related to the review and
validation of information used to compute income taxes, global tax reporting
structure and staffing requirements.
REVENUE
During the third and fourth quarters of 2004, the Company began the
process of improving its internal controls over financial reporting. With regard
to deficiencies identified by management related to revenue, the Company took
the following actions:
- Hired two professional accountants in September and October 2004 to
assist with its monthly closing process, including additional review
of significant contracts to ensure that all key aspects of revenue
recognition are considered and that conclusions are fully and
properly documented;
- Reviewed key controls and initiated remediation and testing of
certain control deficiencies; and
- Implemented formalized procedures for testing key information
technology application controls.
During the second quarter of 2005, management will further update its
comprehensive revenue policies including distribution of these policies to key
personnel in the international subsidiaries. Also during 2005, the Company will
continue evaluating additional controls and procedures to further remediate this
material weakness, as necessary.
INCOME TAXES
During the first quarter of 2005, the Company has hired a tax professional
with appropriate international tax expertise. Also during 2005, the Company will
continue evaluating additional controls and procedures to further remediate this
material weakness, as necessary. Such additional actions may include enhanced
procedures related to the review and validation of information used to compute
income taxes, global tax reporting structure and staffing requirements.
We believe these actions will strengthen our internal control over
financial reporting and address the material weaknesses related to revenue and
income taxes.
14
Other than the changes described above, there have been no changes in the
Company's internal control over financial reporting identified in the evaluation
that occurred during the Company's first quarter of fiscal year 2005 that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.
Inherent Limitations on the Effectiveness of Controls. Our management,
including our Chief Executive Officer and Chief Financial Officer, does not
expect that our disclosure controls and procedures or our internal control over
financial reporting will prevent or detect all errors and all fraud. A control
system, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.
Because of the inherent limitations in all control systems, no evaluation of
controls can provide absolute assurance that misstatements due to error or fraud
will not occur or that all control issues and instances of fraud, if any, within
the Company will be detected.
15
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
SPSS Inc. has been named as a defendant in a lawsuit filed on December 6,
2002 in the United States District Court for the Southern District of New York,
under the caption Basu v. SPSS Inc., et al., Case No. 02CV9694. The complaint
alleges that, in connection with the issuance and initial public offering of
shares of common stock of NetGenesis Corp., the registration statement and
prospectus filed with the Securities and Exchange Commission in connection with
the IPO contained material misrepresentations and/or omissions. The alleged
violations of the federal securities laws took place prior to the effective date
of the merger in which the Company's acquisition subsidiary merged with and into
NetGenesis Corp. NetGenesis Corp. is now a wholly owned subsidiary of SPSS.
Other defendants to this action include the former officers and directors of
NetGenesis Corp. and the investment banking firms that acted as underwriters in
connection with the IPO. The plaintiff is seeking unspecified compensatory
damages, prejudgment and post-judgment interest, reasonable attorney fees,
experts' witness fees and other costs and any other relief deemed proper by the
Court. The Company is aggressively defending itself, and plans to continue to
aggressively defend itself against the claims set forth in the complaint. The
Company and the named officers and directors filed an answer to the complaint on
July 14, 2003. At this time, the Company believes the lawsuit will be settled
with no material adverse effect on its results of operations, financial
condition, or cash flows.
SPSS has been named as a defendant in a lawsuit filed on or about May 14,
2004, and amended on September 30, 2004, in the United States District Court for
the Northern District of Illinois, under the caption Fred Davis, Individually
and On Behalf of All Others Similarly Situated v. SPSS Inc., Jack Noonan, Edward
Hamburg and KPMG LLP, Case No. 04C3427. The complaint alleges that the
defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of
1934, and Rule 10b-5 promulgated thereunder. The complaint alleges that the
defendants failed to disclose and misrepresented a series of material adverse
facts regarding the Company's revenues. The complaint seeks to recover
unspecified compensatory damages, reasonable attorney fees, experts' witness
fees and other costs and any other relief deemed proper by the court on behalf
of all purchasers of the Company's securities between May 2, 2001 and March 30,
2004, although no court has determined that such persons constitute a proper
class. On December 15, 2004, SPSS, Mr. Noonan and Dr. Hamburg filed a motion to
dismiss the amended complaint. On January 28, 2005, the Lead Plaintiff filed a
memorandum in opposition to the motion to dismiss the amended complaint filed by
SPSS, Mr. Noonan and Dr. Hamburg. On February 18, 2005, SPSS, Mr. Noonan and Dr.
Hamburg filed a reply memorandum in support of their motion to dismiss. SPSS,
Mr. Noonan and Dr. Hamburg believe that the suit is without merit and intend to
defend vigorously against the allegations contained in the complaint.
SPSS may also become party to various claims and legal actions arising in
the ordinary course of business.
ITEM 5. OTHER INFORMATION
Audit Committee Pre Approval of Non-Audit Related Services
The audit committee of the Company's board of directors approved certain
non-audit related services provided to SPSS by KPMG LLP, the Company's auditors.
The audit committee pre-approved these non-audit related services pursuant to
the pre-approval procedure previously established by the audit committee.
During the fiscal quarter ended March 31, 2005, the audit committee
pre-approved the following:
- $24,000 to be paid KPMG as compensation for tax services related to
SPSS Science Germany.
- $16,000 to be paid KPMG as compensation for tax services related to
SPSS Japan.
- $6,000 to be paid KPMG as compensation for tax services related to
SPSS Asia Pacific.
- $2,000 to be paid KPMG as compensation for tax services related to
SPSS entities in Denmark.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits (Note: Management contracts and compensatory plans or
arrangements are identified with a "+" in the following list.)
16
INCORPORATION
EXHIBIT BY REFERENCE
NUMBER DESCRIPTION OF DOCUMENT (IF APPLICABLE)
- ----------- ----------------------------------------------------------------------------------------------- ----------------
2.1 Agreement and Plan of Merger among SPSS Inc., SPSS ACSUB, Inc., Clear Software, Inc. and the (1), Ex. 2.1
shareholders named therein, dated September 23, 1996.
2.2 Agreement and Plan of Merger among SPSS Inc., SPSS Acquisition Inc. and Jandel Corporation, (2), Annex A
dated October 30,1996.
2.3 Asset Purchase Agreement by and between SPSS Inc. and DeltaPoint, Inc., dated as of May 1, (14), Ex. 2.3
1997.
2.4 Stock Purchase Agreement among the Registrant, Edward Ross, Richard Kottler, Norman Grunbaum, (3), Ex. 2.1
Louis Davidson and certain U.K.-Connected Shareholders or warrant holders of Quantime Limited
named therein, dated as of September 30, 1997, together with a list briefly identifying the
contents of omitted schedules.
2.5 Stock Purchase Agreement among the Registrant, Edward Ross, Richard Kottler, Norman Grunbaum, (3), Ex. 2.2
Louis Davidson and certain Non-U.K. Shareholders or warrant holders of Quantime Limited named
therein, dated as of September 30, 1997, together with a list briefly identifying the contents
of omitted schedules.
2.6 Stock Purchase Agreement by and among SPSS Inc. and certain Shareholders of Quantime Limited (4), Ex. 2.1
listed on the signature pages thereto, dated November 21, 1997.
2.7 Stock Purchase Agreement by and among Jens Nielsen, Henrik Rosendahl, Ole Stangegaard, Lars (4), Ex. 2.2
Thinggaard, Edward O'Hara, Bjorn Haugland, 2M Invest and the Shareholders listed on Exhibit A
thereto, dated November 21, 1997.
2.8 Stock Purchase Agreement by and among SPSS Inc. and the Shareholders of Integral Solutions (15), Ex. 2.1
Limited listed on the signature pages hereof, dated as of December 31, 1998.
2.9 Share Purchase Agreement by and among SPSS Inc., Surveycraft Pty Ltd. and Jens Meinecke and (17), Ex. 2.9
Microtab Systems Pty Ltd., dated as of November 1, 1998.
2.10 Stock Acquisition Agreement by and among SPSS Inc., Vento Software, Inc. and David Blyer, John (18), Ex. 2.1
Gomez and John Pappajohn, dated as of November 29, 1999.
2.11 Asset Purchase Agreement by and between SPSS Inc. and DataStat, S.A., dated as of December 23, (20), Ex. 2.11
1999.
2.12 Agreement and Plan of Merger dated as of November 6, 2000, among SPSS Inc., SPSS Acquisition (21), Ex. 2.1
Sub Corp., and ShowCase Corporation.
2.13 Agreement and Plan of Merger dated as of October 28, 2001, among SPSS Inc., Red Sox (24), Ex. 99.1
Acquisition Corp. and NetGenesis Corp.
2.14 Stock Purchase Agreement by and among SPSS Inc., LexiQuest, S.A. and the owners of all of the (26), Ex. 2.14
issued and outstanding shares of capital stock of LexiQuest, S.A., dated as of January 31,
2002.
2.15 Stock Purchase Agreement dated as of November 4, 2003, by and among SPSS Inc., SPSS (30), Ex. 2.15
International B.V. and the owners of all of the issued and outstanding shares of Data
Distilleries B.V. identified on Exhibit A thereto.
3.1 Certificate of Incorporation of SPSS. (5), Ex. 3.2
3.2 By-Laws of SPSS. (5), Ex. 3.4
4.1 Intentionally omitted.
4.2 Amended and Restated Rights Agreement, dated as of August 31, 2004, by and between SPSS Inc. (32), Ex. 4.2
and Computershare Investor Services LLP, as Rights Agent
17
10.1 Employment Agreement with Jack Noonan.+ (7), Ex. 10.1
10.2 Agreement with Valletta.+ (6), Ex. 10.2
10.3 Agreement between SPSS and Prentice Hall. (6), Ex. 10.5
10.4 Intentionally omitted.
10.5 HOOPS Agreement. (6), Ex. 10.7
10.6 Stockholders Agreement. (5), Ex. 10.8
10.7 Agreements with CSDC. (5), Ex. 10.9
10.8 Amended 1991 Stock Option Plan.+ (5), Ex. 10.10
10.9 SYSTAT Asset Purchase Agreement. (8), Ex. 10.9
10.10 Intentionally omitted.
10.11 Lease for Chicago, Illinois Office. (9), Ex. 10.12
10.12 Amendment to Lease for Chicago, Illinois Office. (9), Ex. 10.13
10.13 1995 Equity Incentive Plan.+ (10), Ex. 10.14
10.14 Intentionally omitted.
10.15 Amended and Restated 1995 Equity Incentive Plan.+ (11), Ex. 10.17
10.16 Intentionally omitted.
10.17 Software Distribution Agreement between the Company and Banta Global Turnkey. (12), Ex. 10.19
10.18 Lease for Chicago, Illinois in Sears Tower. (13), Ex. 10.20
10.19 Intentionally omitted.
10.20 Intentionally omitted.
10.21 Second Amended and Restated 1995 Equity Incentive Plan.+ (16), Ex. A
10.22 Intentionally omitted.
10.23 Third Amended and Restated 1995 Equity Incentive Plan.+ (19), Ex. 10.1
10.24 Intentionally omitted.
10.25 Intentionally omitted.
10.26 Intentionally omitted.
10.27 2000 Equity Incentive Plan.+ (22), Ex. 10.45
10.28 SPSS Qualified Employee Stock Purchase Plan.+ (22), Ex. 10.46
10.29 SPSS Nonqualified Employee Stock Purchase Plan.+ (22), Ex. 10.47
10.30 Intentionally omitted.
10.31 Stock Purchase Agreement by and between SPSS Inc. and Siebel Systems, Inc. (23), Ex. 10.31
10.32 1999 Employee Equity Incentive Plan.+ (25), Ex. 4.1
10.33 Intentionally omitted.
18
10.34 Intentionally omitted.
10.35 Intentionally omitted.
10.36 Intentionally omitted.
10.37 Intentionally omitted.
10.38 Intentionally omitted.
10.39 Intentionally omitted.
10.40 Intentionally omitted.
10.41 Intentionally omitted.
10.42 Intentionally omitted.
10.43 Loan and Security Agreement, dated as of March 31, 2003, by and between SPSS Inc. and each of (27), Ex. 10.43
SPSS' subsidiaries that may become additional borrowers, as
Borrower, and Foothill Capital Corporation, as Lender.
10.44 Amendment to Stock Purchase Agreement, dated as of October 1, 2003, by and between SPSS Inc. (28), Ex. 10.44
and America Online, Inc.
10.45 Amended and Restated Strategic Online Research Services Agreement, dated as of October 1, (28), Ex. 10.45
2003, by and between SPSS Inc. and America Online, Inc.
10.46 Consulting Agreement, dated as of June 1, 2003, by and between SPSS Inc. and Norman H. Nie (29), Ex. 10.46
Consulting, L.L.C.
10.47 SPSS Inc. Amended and Restated 2002 Equity Incentive Plan (33), Ex. 10.47
10.48 Amended and Restated Employment Agreement, dated as of August 16, 2004, by and between SPSS (34), Ex. 10.48
Inc. and Raymond H. Panza.
10.49 Employment Agreement, dated as of August 16, 2004, by and between SPSS Inc. and Edward Hamburg. (34), Ex. 10.49
10.50 OEM Agreement, dated as of November 5, 2004, by and between SPSS Inc. and Hyperion Solutions (34), Ex. 10.50
Corporation*
10.51 Amended and Restated Consulting Agreement, dated as of January 1, 2005, by and between SPSS (34), Ex. 10.51
Inc. and Norman H. Nie Consulting, L.L.C.
10.52 Amended and Restated Employment Agreement, dated as of March 1, 2005, by and between SPSS Inc. (34), Ex. 10.52
and Jack Noonan.
10.53 Form of Amended and Restated Change of Control Agreement (35), Ex. 10.53
10.54 Form of Change of Control Agreement (35), Ex. 10.54
14.1 Intentionally Omitted.
14.2 SPSS Inc. Amended and Restated Code of Business Conduct and Ethics (36), Ex. 14.2
31.1 Certification of the Chief Executive Officer and President pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2 Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
19
32.1 Certification of the Chief Executive Officer and President
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
99.1 SPSS Inc. Charter of the Audit Committee of the Board of Directors. (31), Ex. 99.1
99.2 Supplement A to the SPSS Inc. Charter of the Audit Committee of the Board of Directors. (31), Ex. 99.2
- ----------
* Portions of this Exhibit are omitted and have been filed separately with
the Securities and Exchange Commission in connection with a pending
request for confidential treatment of certain portions of the Exhibit
pursuant to Rule 406 under the Securities Act of 1933.
(1) Previously filed with the Report on Form 8-K of SPSS Inc., dated September
26, 1996, filed on October 11, 1996, as amended on Form 8-K/A-1, filed
November 1, 1996. (File No. 000-22194)
(2) Previously filed with Amendment No. 1 to the Registration Statement on
Form S-4 Registration Statement of SPSS Inc. filed on November 7, 1996.
(File No. 333-15427)
(3) Previously filed with the Report on Form 8-K of SPSS Inc., dated September
30, 1997, filed on October 15, 1997. (File No. 000-22194)
(4) Previously filed with the Registration Statement on Form S-3 of SPSS Inc.
filed on November 26, 1997. (File No. 333-41207)
(5) Previously filed with Amendment No. 2 to the Registration Statement on
Form S-1 of SPSS Inc. filed on August 4, 1993. (File No. 33-64732)
(6) Previously filed with Amendment No. 1 to the Registration Statement on
Form S-1 of SPSS Inc. filed on July 23, 1993. (File No. 33-64732)
(7) Previously filed with the Registration Statement on Form S-1 of SPSS Inc.
filed on June 22, 1993. (File No. 33-64732)
(8) Previously filed with the Registration Statement on Form S-1 of SPSS Inc.
filed on December 5, 1994. (File No. 33-86858)
(9) Previously filed with the Annual Report on Form 10-K of SPSS Inc. for the
year ended December 31, 1994. (File No. 000-22194)
(10) Previously filed with 1995 Proxy Statement of SPSS Inc. (File No.
000-22194)
(11) Previously filed with 1996 Proxy Statement of SPSS Inc. (File No.
000-22194)
(12) Previously filed with the Annual Report on Form 10-K of SPSS Inc. for the
year ended December 31, 1996. (File No. 000-22194)
(13) Previously filed with the Quarterly Report on Form 10-Q of SPSS Inc. for
the quarterly period ended March 31, 1997. (File No. 000-22194)
(14) Previously filed with the Quarterly Report on Form 10-Q of SPSS Inc. for
the quarterly period ended June 30, 1997. (File No. 000-22194)
(15) Previously filed with the Report on Form 8-K of SPSS Inc., dated December
31, 1998, filed on January 15, 1999, as amended on Form 8-K/A filed March
12, 1999. (File No. 000-22194)
(16) Previously filed with 1998 Proxy Statement of SPSS Inc. (File No.
000-22194)
(17) Previously filed with the Annual Report on Form 10-K of SPSS Inc. for the
year ended December 31, 1998. (File No. 000-22194)
20
(18) Previously filed with the Report on Form 8-K of SPSS Inc., dated November
29, 1999, filed December 10, 1999. (File No. 000-22194)
(19) Previously filed with Quarterly Report on Form 10-Q of SPSS Inc. for the
quarterly period ended June 30, 1999. (File No. 000-22194)
(20) Previously filed with the Annual Report on Form 10-K of SPSS Inc. for the
year ended December 31, 1999. (File No. 000-22194).
(21) Previously filed with the Report on Form 8-K of SPSS Inc., filed November
15, 2000. (File No. 000-22194).
(22) Previously filed with the Registration Statement on Form S-4 on of SPSS
Inc., filed on December 19, 2000. (File No. 333-52216)
(23) Previously filed with the Registration Statement on Form S-3 of SPSS Inc.
filed on October 9, 2001. (File No. 333-71236)
(24) Previously filed with the Report on Form 8-K of SPSS Inc., dated October
28, 2001, filed on October 29, 2001. (File No. 000-22194)
(25) Previously filed with the Registration Statement on Form S-8 of SPSS Inc.
filed on September 15, 2000. (File No. 333-45900)
(26) Previously filed with the Report on Form 8-K of SPSS Inc., dated February
6, 2002, filed on February 21, 2002. (File No. 000-22194)
(27) Previously filed with the Annual Report on Form 10-K of SPSS Inc. for the
year ended December 31, 2002. (File No. 000-22194)
(28) Previously filed with the Report on Form 8-K of SPSS Inc., dated October
1, 2003, filed on October 15, 2003. (File No. 000-22194)
(29) Previously filed with the Quarterly Report on Form 10-Q of SPSS Inc. for
the quarterly period ended September 30, 2003. (File No. 000-22194)
(30) Previously filed with the Report on Form 8-K of SPSS Inc., dated November
5, 2003, filed on November 18, 2003. (File No. 000-22194)
(31) Previously filed with the Annual Report on Form 10-K of SPSS Inc. for the
year ended December 31, 2003. (File No. 000-22194)
(32) Previously filed with the Form 8-A12G/A of SPSS Inc. filed on August 31,
2004. (File No. 000-22194)
(33) Previously filed with the Registration Statement on Form S-8 of SPSS Inc.
filed on October 29, 2004. (File No. 222-120066)
(34) Previously filed with the Annual Report on Form 10-K of SPSS Inc. for the
year ended December 31, 2004. (File No. 000-22194)
(35) Previously filed with the Current Report on Form 8-K of SPSS Inc., dated
April 28, 2005, filed on May 2, 2005. (File No. 000-22194)
(36) Previously filed with the Current Report on Form 8-K of SPSS Inc., dated
April 28, 2005, filed on April 28, 2005. (File No. 000-22194)
21
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SPSS Inc.
Date: May 5, 2005 By: /s/ Jack Noonan
------------------------------
Jack Noonan
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the undersigned, in his capacity as the principal
financial officer of the Registrant.
Date: May 5, 2005 By: /s/ Raymond H. Panza
-------------------------------
Raymond H. Panza
Executive Vice-President,
Corporate Operations, Chief
Financial Officer, and
Secretary
22
SPSS INC.
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
- -------- -----------
31.1 Certification of the Chief Executive Officer and President pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
31.2 Certification of the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1 Certification of Chief Executive Officer and President pursuant to 18 U.S.C.
Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
23