ITEM 1. BUSINESS
Background. Control Data Systems, Inc. ("Control Data" or the "Company") is a global software and services company dedicated to helping large organizations develop the enterprise-wide communications systems required to create, transmit, access, and control business information. The Company focuses on the architecture, implementation, and lifetime support of electronic commerce, product design, and product information solutions. The Company provides productivity enhancing solutions for customers in government, financial services, telecommunications, and manufacturing.
The Company's software and services solutions include network design, installation, and maintenance; application design and deployment, particularly for electronic commerce projects; remote and on-site systems management and outsourcing; electronic mail integration; and for the discrete manufacturing industry, product data management ("PDM") systems, and computer-aided design ("CAD") products or systems. To provide its customers with leading-edge solutions the Company invests in four major areas:
o Development of software products associated with electronic commerce integration, PDM, and CAD.
o Training and development of its technical workforce.
o Sales and marketing of its products and services.
o Capital and operational expenditures for the fulfillment of managed services contracts (outsourcing contracts).
The Company also has a number of suppliers and partners providing a range of hardware and software platforms, complementary products and services, and sales and marketing activities.
The Company was established through Ceridian Corporation's ("Ceridian") transfer of its Computer Products business to the Company and Ceridian's subsequent distribution in July of 1992, of the Company's stock as a dividend to Ceridian's stockholders.
The Company's principal offices are located at 4201 Lexington Avenue North, Arden Hills, Minnesota 55126-6198.
Industry Background and Business Transition
The excitement over the information superhighway and other manifestations of Internet activity obscure the more significant forces at work below the surface of the emerging electronic marketplace. The introduction of inexpensive, easy-to-use browser technology is helping to popularize the medium, but this technology alone is not driving this trend. Global competitive forces, combined with continued technology breakthroughs in hardware, software, and telecommunications, are stimulating entrepreneurial interest in conducting business electronically - across both private and public networks - without the traditional limitations of time and space. While the individual technologies are important, equally crucial are the skills to align process and practices through enterprise networking and applications integration.
From its history in the pioneering computer environments of the 1950's, the Company has applied its network integration skills across heterogeneous computing environments. In the early 1990's, the Company completed its transition away from the manufacture of proprietary mainframe computers to that of an open systems integration company. In 1994 the Company recorded a restructuring charge and goodwill write-off of $95.0 million. The restructuring charge and goodwill write-off included expenses for reducing the worldwide employee population, consolidating operations in selected locations, and revaluing certain intangible assets associated with prior acquisitions. In 1995, Control Data took further steps to focus its business for growth in the markets for our enterprise network integration software and services with the sale of certain of its international product fulfillment operations to AmeriData Technologies, Inc. ("AmeriData"). For additional information regarding the divestiture to AmeriData and the restructuring charges, see notes 3 and 18 of the Notes to Consolidated Financial Statements incorporated herein by reference to the Company's Annual Report to Stockholders for the fiscal year ended December 31, 1995 and the Company's Current Report on Form 8-K, dated September 13, 1995, as amended November 10, 1995.
Products and Services
The following table sets forth revenues for the Company's major product and service offerings for the periods indicated:
Software and Services
The dramatic shift to networked computing environments has created a growing demand for technology infrastructures that provide a foundation for electronic commerce. In response to that demand, the Company has organized its delivery of services around the design, implementation and support of three types of technology infrastructures:
o Network Infrastructures. The most basic infrastructures are transport mechanisms that enable institutions to connect desktop users with sharable computing resources. These infrastructures reflect local area networks comprised of interconnected desktop computers and task-specific servers. However, as organizations expand the scope and complexity of their electronic processes beyond the confines of localized groups, their computing environments grow more complex.
o Messaging Infrastructures. At the next level, institutions require infrastructures capable of delivering information (most often in the form of electronic messages and their related attachments) to anyone who needs it regardless of where they are located. In enterprise environments, this often means the infrastructure has to enable users to exchange messages across dissimilar electronic mail domains. Beyond this, messaging infrastructures need to keep track of who's who within a dispersed environment, as well as record the business-related attributes associated with individual mail users.
o Information Infrastructures. As institutions perform more sophisticated work tasks electronically, their underlying infrastructures will be required to: 1) understand where given information resources reside within dispersed environments, 2) help authorized users access the information to which they are entitled, and 3) enable business applications to exchange information so these resources can be leveraged as reusable corporate assets.
The Company provides software solutions and services that support these infrastructure needs as companies in increasing numbers begin to execute more of their basic business processes electronically.
Software
Mail*Hub. As its backbone messaging product, the Company offers Mail*Hub, an E-Mail integrator that links different mail systems on the same network using industry standard X.400 messaging and X.500 directory protocols. The X.500 directory gives customers a database for address, configuration, and routing information within their organization and to similar directories worldwide.
As a state of the art implementation of X.500 directory technology, Mail*Hub is the Company's leading network integration software product. It is packaged with services that include network analysis, configuration, installation, training, network monitoring, maintenance, and hotline support.
CAD/CAM/CAE Application Software Products. The Company offers computer- aided design, manufacturing and engineering ("CAD/CAM/CAE") software applications packages that provide simultaneous engineering, or automated merging of engineering analysis, design, drafting, and manufacturing functions. This eliminates separate data entry operations, reducing the chance of errors and shortening the time to produce a product.
The Company's most important CAD/CAM/CAE offering is its Integrated Computer-aided Engineering and Manufacturing ("ICEM") series of CAD/CAM/CAE software modules for the manufacturing industry, specifically for automotive companies and their suppliers, airplane and aerospace companies and their suppliers, and machinery companies. ICEM software packages include surface modeling, computational fluid dynamics, surface milling, and solid modeling packages.
On January 1, 1993, the Company purchased 45% of the equity interest in ICEM Systems GmbH ("ICEM Systems") owned by Volkswagen AG ("VW"), which gave the Company a 95% equity interest in ICEM Systems. VW retained a 5% equity interest in ICEM Systems. On January 2, 1995, the Company purchased VW's 5% equity interest, making the Company 100% owner of ICEM Systems.
Product Data Management Software Products. The growing volume of complex and hard-to-manage information generated by CAD/CAM/CAE systems in manufacturing and engineering organizations has given rise to increasing demand for PDM software.
The Company's PDM software product is called Metaphase 2.1. Metaphase 2.1 is a collection of software tools and modules for managing the creation, manipulation, and transmission of information throughout a manufacturing or engineering organization to enable users to identify, locate, and manipulate information residing on personal computers, workstations, servers, minicomputers, and mainframes in a complex, heterogeneous system. As with the ICEM product line, Metaphase 2.1 emphasizes reducing the customer's development cycle by enabling different types of users, from designers to manufacturing experts, to share information and data.
The development activities for the Company's PDM product are conducted by Metaphase Technology, Inc. ("Metaphase"), an unconsolidated joint venture formed in August 1992 between the Company and Structural Dynamics Research Corporation ("SDRC"), in which each party holds a 50% ownership position. The Company offers the Metaphase software product in conjunction with its own professional services personnel to design, implement, and support PDM solutions.
Additionally, the Company resells software products from a wide range of third party standards-based suppliers, including Oracle, Informix, Sybase, OpenVision, 3Com, Wellfleet, Banyan, Novell, and Wingra.
Services
The Company has a heritage of managing large programs requiring complex systems integration. Previously such projects centered on use of the Company's proprietary products. In the networked systems environment, the Company is increasingly involved in systems integration activities that require a diverse set of products and services procured from many suppliers. Integral to this business are the many professional services analysts whose knowledge and skills are required to assist in systems design and implementation.
The Company's integration services are designed to assist customers in the selection and creation of computer systems tailored to solve business- specific information management and networking problems or to automate system activities. In creating these customized systems, the Company incorporates selected hardware and software products it has developed or obtained from its suppliers.
The Company emphasizes the development of customized systems solutions using off-the-shelf open systems products. Focus is given on assisting customers with the information management problems caused by the proliferation of personal computers, workstations, servers, and other computers throughout an organization.
Client/Server Services. For customers that are downsizing or reengineering their computing systems through the application of client- server technology, the Company offers the following specialized services:
o Program management, design/development of user interfaces, database design, solution connectivity, system administration, and the implementation of application functionality.
o Evaluation and implementation of operating environments required by the customer's application software. The Company offers experience in both enhanced and conventional versions of UNIX, desktop systems (MS-DOS, Microsoft Windows, and Windows NT), and high performance I/O extensions.
o Evaluation and implementation of the most appropriate, cost effective computer hardware and software for a customer's client/server environment. The Company offers a range of open systems platforms based on its marketing relationships with leading industry platform and peripheral suppliers, including Sun Microsystems, Inc. ("Sun"), Hewlett- Packard Company ("Hewlett-Packard"), and Silicon Graphics, Inc. ("SGI").
Networking Solutions. As computer users take advantage of downsized computer platforms, decentralized organizational processes, and open systems technology, their computing environment's basic networking structure must also be evaluated in terms of its capabilities, performance, and cost. When these changes take place, users often need to find new solutions for interconnecting dissimilar computer systems, finding cost- effective ways to manage complex networks on a daily basis, and improving the productivity of their business processes. The Company's networking experts provide solutions in the following areas:
o E-Mail Integration. The Company's Mail*Hub product allows disparate E- Mail systems from mainframes, PC's and workstation/servers to communicate in a transparent manner.
o Directory Synchronization. The Company's X.500 technology enables the consolidation of e-mail directories and other basic organizational information in a central, updatable corporate repository.
o Security Services. The Company provides network analysis, penetration testing, security system design, and implementation.
o EDI Solutions. Standards based electronic data interchange (EDI) capabilities, enabling organizations to expedite their daily business processes.
o Network Integration Services. Requirements analysis, configuration design, installation, performance assessment, and ongoing maintenance.
o Enterprise Management Center. Remote management, monitoring, and troubleshooting support for computer networks and systems, worldwide, 24 hours a day, 7 days a week.
o Help Desk Hotline. Provides answers to questions on operating systems, networks, applications, and general computing problems. Engineers are trained to solve problems by phone or via dispatched on-site support.
Managed Services. In 1995, the Company introduced a full range of managed network services, including a messaging and information exchange service it offered in conjunction with Sprint Corporation.
o Enterprise Networking. Remote monitoring and management of wide-area network hardware and software solutions that integrate local-area resources into enterprise networks.
o Sprint InfoXchange Enterprise/Intercompany Messaging. Commercial service that offers business-ready features to clients that require enterprise and intercompany messaging, global directory services, and electronic commerce capabilities. Sprint markets the service, and provides the network connections required by clients. The Company provides the mail integration technology, integration expertise, and operations support.
o Enterprise Information Management. Administration, daily operation, maintenance, and support of client/server solutions required to integrate locally managed data bases and other information resources into enterprise solutions.
The Company's integration services are carried out primarily by its professional services staff, which includes over 500 systems analysts serving customers worldwide from regional centers in the United States, Europe, and Asia. To meet the unique needs or preferences of customers in specific geographic markets, the Company selects the most suitable and cost effective hardware platforms currently available from marketing partners and third-party networking products, industry standard applications, and other local products such as microcomputers and terminals.
Revenues from software and services were $174.1 million in 1995, $154.3 million in 1994, $140.3 million in 1993, representing 38.3%, 29.4%, and 31.1%, respectively of the Company's total revenues.
Maintenance and Support
The Company provides hardware and software maintenance service for both CYBER and open systems products through engineers located throughout the United States and in many foreign countries. A central support organization provides technical planning and support, including a worldwide logistics operation for spare parts, a 24-hour hotline and an on-line diagnostic system accessible through CYBER mainframes.
Maintenance and support revenues were $75.4 million in 1995, $92.8 million in 1994, and $113.8 million in 1993, representing 16.6%, 17.7%, and 25.2%, respectively of the Company's total revenues.
Hardware Products
The Company is differentiated from other integrators because it is not captive to a particular product set or technology. This objectivity allows it to work in a multivendor environment without bias. Beginning with its relationship with SGI in 1989, the Company began integrating UNIX based open system products into its customer solutions. Systems based on UNIX and Intel/Microsoft technologies can support the industry's migration from centralized computing, which was dependent on mainframes, to a networked and distributed client-server environment, in which application processing and data are spread across many networked computing resources.
To expand the range of platform options available to its customers, in 1993 the Company signed remarketing agreements with Sun and Hewlett- Packard. As a Sun integrator, the Company remarkets Sun's complete line of workstations, servers, and software worldwide as a part of the Company's systems integration solutions for the commercial marketplace, particularly in the financial services, healthcare, telecommunications, and manufacturing markets. As a Hewlett-Packard integrator, the Company remarkets HP Apollo 9000 Series 700 workstations and HP 9000 Series 800 business server hardware and software, integrating the equipment and applications into solutions for customers in the aerospace, automotive, manufacturing, government, and commercial markets.
Revenues from the sale and lease of hardware products were $205.3 million in 1995, $277.1 million in 1994, and $197.7 million in 1993, representing 45.1%, 52.9%, and 43.8%, respectively, of the Company's total revenues.
Sales
Worldwide Business
The Company markets its products and services principally through its direct sales force located in the United States and 12 other countries. The Company's major international operations are in France, Germany, Korea, China, Taiwan, and the United Kingdom. In 1995, the Company sold seven of its international product distribution operations in Austria, Canada, Greece, Mexico, Norway, Portugal, and the United Kingdom to AmeriData.
The Company also markets its products and services through subsidiaries and distributors located in countries representing smaller markets. The Company believes that one of its strengths is its long-standing presence and name recognition in various foreign countries.
Revenues from the Company's non-U.S. operations were approximately 69.2%, 71.5%, and 65.2%, of the Company's total revenues in 1995, 1994, and 1993, respectively. For further information regarding the Company's U.S. and international operations, see note 17 of the Notes to Consolidated Financial Statements incorporated herein by reference to the Company's Annual Report to Stockholders for the fiscal year ended December 31, 1995.
The Company's sales and support operations are organized into three regions (Americas, Europe, and Asia), each with its own marketing, sales and sales support professionals providing consulting and engineering services. Centralized technology support services are provided to the sales regions from the Company headquarters in Arden Hills, Minnesota. These resources are available to assist field organizations in understanding technology trends, formulate technology strategies, and provide pre-sales consulting and post-sales implementation expertise. The Company also provides essential system integration services including customer hot-line support, program/project management, customized training systems, engineering analysis, and custom software development.
Customers
The Company's products and services are used in a wide variety of applications for customers in government, financial services, telecommunications, and manufacturing. The Company believes that its worldwide sales and support organization enables it to better understand the markets in which it competes, to focus its sales efforts effectively, and to develop long-term relationships with its customers.
The U.S. Government was the only customer of the Company accounting for more than 10% of total revenues in fiscal year 1995, 1994, or 1993. The Company estimates that contracts with the U.S. government represented approximately 13.6%, 12.0%, and 13.7% of total revenue in fiscal years 1995, 1994, and 1993, respectively. Generally, the Company's contracts with the U.S. Government contain provisions to the effect that they may be terminated at the convenience of the customer, and that in the event of such termination, the Company would be entitled to receive payment based on the cost incurred and the anticipated profit on the work completed prior to termination.
Research and Development
The Company's research and development efforts are primarily oriented toward electronic commerce, CAD/CAM/CAE products, PDM, and client/server solutions. In 1994 the Company formed a new Electronic Commerce business unit dedicated to the development of products and services related to messaging and information infrastructures. Its flagship product in this arena is Mail*Hub, a UNIX-based integration toolkit that links disparate E- mail systems. Research and development efforts directed toward enhancing the Company's ICEM application software product line occur through the Company's ICEM Technologies division. Research and development activities for the Company's PDM software product have been transferred to Metaphase. Company-sponsored research and development expenses related to new products or services and the improvement of existing products totaled $9.7 million, $10.1 million, and $23.8 million, for 1995, 1994, and 1993, respectively.
The decrease in research and development expenses primarily relates to the Company's continuing business transition. This transition has enabled the Company to significantly reduce its research and development spending by acquiring and integrating products provided by other vendors and by pursuing customer funding for custom developed solutions.
Competition
The market for the Company's products and services is highly competitive and is characterized by rapid technological advances in both hardware and software development. These advances result in shorter product life cycles and enhanced product capabilities, typically at significantly better price and performance levels. At the same time, these advances have also created increased demand for the skills of knowledgeable systems integrators who can help customers make the best use of the available technology.
Competition in the systems integration market is intense and is based on a variety of factors including customer satisfaction, reputation, price, performance, product quality, software availability, connectivity, networking, compatibility with industry standards, marketing and distribution capability, customer support, name recognition, and financial strength. The Company competes throughout the world with numerous local, regional, national, and international systems integrators. Several of the Company's competitors have significantly greater financial and operational resources than the Company.
Backlog
The backlog of the Company's orders believed to be firm is estimated to have been approximately $23 million as of December 31, 1995, most of which is expected to be reflected in revenues during 1996. At December 31, 1994, the backlog was approximately $76 million. These backlog amounts include the minimum noncancelable future lease revenue expected from contracts existing at those dates, which amounted to $3.0 million for 1995 and $14.7 million for 1994. The decrease in the 1995 backlog from 1994 is primarily due to the operations sold to AmeriData.
No backlog amount is determinable for a large portion of the Company's revenues, particularly for maintenance and other services, and the average time from order to installation of hardware products is shortening. In addition, customers may elect to accelerate or delay the delivery of products, and delivery of large orders may be spread over a period of time and may be subject to modification from time to time. Consequently, the Company believes that backlog information does not necessarily provide a meaningful indication of its future business volume.
Environmental Matters
In connection with the Company's spin-off from Ceridian, Ceridian agreed to retain responsibility for and indemnify the Company against environmental liabilities relating to: 1) facilities formerly operated by the Computer Products business, 2) third-party disposal or treatment sites as to which Ceridian has been or is in the future identified as a potentially responsible party because of past operations of the Computer Products business at its former facilities, and 3) certain other known environmental matters related to past operations of the Computer Products business. These facilities and sites constitute all matters which, at the present time, are known to present potential environmental liabilities related to the operation of the Computer Products business. The Company has generally agreed to indemnify Ceridian against future environmental claims that relate to current and future facilities and operations of the Company.
Compliance by the Company with federal, state, and local environmental protection laws during 1995 had no material effect upon capital expenditures, earnings or competitive position, and is expected to have none in the foreseeable future.
Patents
The Company owns or is licensed under a number of patents which relate to some of its products. The Company believes that its business as a whole is not materially dependent upon any particular patent or license, or any particular group of patents or licenses. Instead, the Company believes that its success and growth are more dependent, among other things, on the quality of its services and products and its reputation with its customers.
Employees
As of December 31, 1995, the Company had approximately 1,800 full-time employees.
ITEM 2.
ITEM 2. PROPERTIES
The Company's corporate headquarters and U.S. field operations headquarters are located in Arden Hills, Minnesota. Facilities located elsewhere are primarily sales and service locations, and include significant office facilities in Atlanta, Georgia; Sunnyvale and Anaheim, California; Rockville, Maryland; Frankfurt, Germany; Copenhagen, Denmark; London, England; Paris, France; Delft, Netherlands; and Taipei, Taiwan.
The following table summarizes the usage and location of the Company's facilities as of January 1, 1996.
No facilities owned by the Company are subject to any major encumbrances. The Company believes that all of the facilities currently utilized in its ongoing business operations meet their intended purposes and are adequately maintained. As a result of the Company's continuing business transition, leased property decreased during fiscal 1995 by approximately 500,000 square feet, a reduction of 31.5%. The number of facilities also decreased from 140 at the end of 1994 to 90 at year end 1995, a net decrease of 50 locations. This substantial reduction was primarily attributable to the consolidation of locations in the U.S. field operations and the sale of certain international operations to AmeriData. Restructuring charges recorded in fiscal year ended December 31, 1994, included provisions of approximately $9.7 million for lease and other obligations related to excess facilities.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
There are no legal proceedings pending against or involving the Company which, in the opinion of management, will have a material adverse effect upon its consolidated financial position or results of operations.
In connection with the Company's spin-off from Ceridian, the Company has agreed to assume responsibility for, and indemnify Ceridian Corporation against, liability in connection with judicial and administrative claims and proceedings relating to the Computer Products business prior to August 1, 1992. It is anticipated that final disposition of some of these claims and proceedings may not occur for several years. Although occasional adverse decisions (or settlements) may occur, management believes that the final disposition of such matters will not have a material adverse effect on the Company's financial position.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the Company's stockholders during the quarter ended December 31, 1995.
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Company are as follows:
Executive officers of the Company are elected by the Board of Directors and serve at the Board's discretion. There are no family relationships among any directors or executive officers of the Company.
James E. Ousley has been President and Chief Executive Officer of Control Data since August 1992. Mr. Ousley was President of Ceridian's Computer Products business from April 1989 to July 1992; Executive Vice President of Ceridian from February 1990 to July 31, 1992; Vice President, Marketing and Sales for Computer Products business from January 1989 to April 1989.
Joseph F. Killoran has been Vice President and Chief Financial Officer of Control Data since February 1994. Mr. Killoran was Vice President and Controller of Control Data from August 1992 to January 1994; Vice President and Controller for Ceridian's Computer Products business from 1989 to July 31, 1992.
Ruth A. Rich has been Vice President, Human Resources and Administration of Control Data since August 1992. Ms. Rich was Vice President, Human Resources and Administration for Ceridian's Computer Products business from November 1990 to July 1992; and Vice President, Human Resources and Administration for Ceridian's Information Services Group from May 1986 to November 1990.
Dieter Porzel has been Vice President, Europe/Middle East/Africa Region of Control Data since February 1993. Mr. Porzel was Vice President, Central Europe Region for Control Data from August 1992 to January 1993; and Vice President, Central Europe Region of Ceridian's Computer Products business from 1987 to 1992.
PART II
ITEM 5.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
"Price Range of Common Stock," appearing on page 31 of the Company's 1995 Annual Report to Stockholders, is incorporated herein by reference.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
"Selected Consolidated Financial Data," appearing on inside cover page of the Company's 1995 Annual Report to Stockholders, is incorporated herein by reference.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
"Management's Discussion and Analysis of Financial Condition and Results of Operations," appearing on pages 9 through 13 of the Company's 1995 Annual Report to Stockholders, is incorporated herein by reference.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated balance sheets of the Company and its subsidiaries as of December 31, 1995 and 1994, the related consolidated statements of operations, stockholders' equity and cash flows for each of the years in the three-year period ended December 31, 1995, and the notes to consolidated financial statements, together with report therein of KPMG Peat Marwick LLP dated January 25, 1996, appearing on pages 8 through 31 of the Company's 1995 Annual Report to Stockholders, are incorporated herein by reference.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
IDENTIFICATION OF DIRECTORS
"Election of Directors" in the Company's Proxy Statement for the 1996 Annual Meeting of Stockholders to be held on May 15, 1996 (hereinafter the "Proxy Statement") is incorporated herein by reference.
IDENTIFICATION OF EXECUTIVE OFFICERS
Information regarding executive officers of the Company is contained in Part I of this Report on page 12 and is incorporated herein by reference.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
"Executive Compensation" in the Proxy Statement is incorporated herein by reference.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
"Stockholdings of Certain Owners and Management" in the Proxy Statement is incorporated herein by reference.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
"Election of Directors-Certain Business Transactions" in the Proxy Statement is incorporated herein by reference.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
Financial Statements
Incorporated by reference into Part II, Item 8 of this report.
Financial Statement Schedules
All other schedules are omitted because they are not applicable, or not required, or because the required information is included in the consolidated financial statements or notes thereto.
Reports on Form 8-K
A Form 8-K/A No. 1 dated November 10, 1995, amending Form 8-K "Date of Report: August 31, 1995" was filed in the Registrant's fiscal quarter ended December 31, 1995 to (i) amend Item 2, Acquisition or Disposition of Assets, relating to the disposition of certain operations of the Registrant and (ii) file the following pro forma financial information under Item 7(b):
1. Pro Forma Combined Statement of Operations for the 6 months ended June 30, 1995
2. Pro Forma Combined Statement of Operations for the year ended December 31, 1994
3. Pro Forma Combined Balance Sheet at June 30, 1995
Exhibits
(Schedules to the foregoing exhibits have not been included but will be submitted supplementary to the Commission upon request)
* - Incorporated by reference to other filing.
(1) - Form 8 and Form 10 refer, respectively, to the Registrant's Form 8 Amendment No. 1 dated July 10, 1992 (the "Form 8") to its Registration Statement on Form 10 dated May 27, 1992 and declared effective July 16, 1992 (the "Form 10").
(2) - Indicates a management contract or compensatory plan or arrangement required to be filed as an exhibit to Form 10-K.
(Schedules to the foregoing exhibits have not been included but will be submitted supplementary to the Commission upon request)
* - Incorporated by reference to other filing.
(1) - Form 8 and Form 10 refer, respectively, to the Registrant's Form 8 Amendment No. 1 dated July 10, 1992 (the "Form 8") to its Registration Statement on Form 10 dated May 27, 1992 and declared effective July 16, 1992 (the "Form 10").
(2) - Indicates a management contract or compensatory plan or arrangement required to be filed as an exhibit to Form 10-K.
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULE
The Board of Directors and Stockholders of Control Data Systems, Inc.:
Under date of January 25, 1996, we reported on the consolidated balance sheets of Control Data Systems, Inc. and subsidiaries as of December 31, 1995 and 1994, and the related consolidated statements of operations, stockholders' equity and cash flows for each of the years in the three-year period ended December 31, 1995, as contained in the 1995 annual report to stockholders. These consolidated financial statements and our report thereon are incorporated by reference in the annual report on Form 10-K for the year 1995. In connection with our audits of the aforementioned consolidated financial statements, we also have audited the related financial statement schedule as listed in the accompanying index. This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statement schedule based on our audits.
In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
/s/ KPMG Peat Marwick LLP
Minneapolis, Minnesota January 25, 1996
Schedule VIII
CONTROL DATA SYSTEMS, INC. Valuation and Qualifying Accounts
Allowance for Doubtful Accounts Receivable:
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
CONTROL DATA SYSTEMS, INC.
By: /s/ JAMES E. OUSLEY James E. Ousley President and Chief Executive Officer
Dated: March 22, 1996
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears above or below constitutes and appoints James E. Ousley and Joseph F. Killoran, or either of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Report, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
CONTROL DATA SYSTEMS, INC. EXHIBIT INDEX
(Schedules to the foregoing exhibits have not been included but will be submitted supplementary to the Commission upon request)
* - Incorporated by reference to other filing.
(1) - Form 8 and Form 10 refer, respectively, to the Registrant's Form 8 Amendment No. 1 dated July 10, 1992 (the "Form 8") to its Registration Statement on Form 10 dated May 27, 1992 and declared effective July 16, 1992 (the "Form 10").
(2) - Indicates a management contract or compensatory plan or arrangement required to be filed as an exhibit to Form 10-K.