QuickLinks -- Click here to rapidly navigate through this document
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrantý | ||
Filed by a Party other than the Registranto | ||
Check the appropriate box: | ||
o | Preliminary Proxy Statement | |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
o | Definitive Proxy Statement | |
o | Definitive Additional Materials | |
ý | Soliciting Material Pursuant to Section 240.14a-12 |
RWD Technologies, Inc. | ||||
(Name of Registrant as Specified In Its Charter) | ||||
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) | ||||
Payment of Filing Fee (Check the appropriate box): | ||||
ý | No fee required | |||
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11 | |||
(1) | Title of each class of securities to which transaction applies: | |||
(2) | Aggregate number of securities to which transaction applies: | |||
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |||
(4) | Proposed maximum aggregate value of transaction: | |||
(5) | Total fee paid: | |||
o | Fee paid previously with preliminary materials. | |||
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
(1) | Amount Previously Paid: | |||
(2) | Form, Schedule or Registration Statement No.: | |||
(3) | Filing Party: | |||
(4) | Date Filed: |
RWD Reports Second Quarter 2003 Results
BALTIMORE, MD—August 5, 2003—RWD Technologies, Inc. (Nasdaq: RWDT), a professional services company, today announced its financial results for the second quarter and six-month period ended June 30, 2003.
Revenue and net loss excluding special charges for the second quarter of 2003 were $24.7 million and $4.4 million respectively, compared to revenue of $30.0 million and a net loss excluding special charges of $2.1 million in the second quarter of 2002. The loss per share excluding special charges for the second quarter of 2003 was $0.28 compared with a loss per share of $0.09 on the same basis for 2002. The revenues for the six-month period of 2003 and 2002 were $48.1 million and $59.1 million respectively, resulting in net losses excluding special charges per share of $0.65 and $0.01 respectively.
The special charges in 2003 include severance, lease termination costs, and costs related to the pending privatization transaction. Including these special charges and income taxes, the quarterly loss in 2003 was $7.4 million, or $0.48 per share and the six-month loss was $13.5 million, or $0.87 per share. For 2002, the financial results including special charges, income taxes, and the cumulative effect of a change in accounting for goodwill were a $2.2 million loss for the second quarter, or $0.14 per share, and a $13.8 million loss, or $0.90 per share for the six-month period.
The primary reason for the Company's poor financial performance in the second quarter was an unexpected decrease in the Enterprise Systems segment's SAP service revenue. As a result, reductions were made in current staffing levels. On an encouraging note, SAP product sales, which are now about 25 percent of total SAP sales, increased significantly in the first half of 2003 with expectations that this trend will continue for the rest of the year.
The Performance Solutions segment continues its diversification in the lean manufacturing and plant floor training business. It is expanding its presence into the transportation business by improving the maintenance of trains manufactured by Bombardier. It also has been experiencing significant growth in the United Kingdom.
The Applied Technology Solutions segment has made considerable progress towards its goal to achieve profitability by the end of 2003. It is focusing its attention on providing University360® learning systems platforms that deliver customized high-level training programs required by industry for their employees and professional organizations for their membership.
As announced on April 29, 2003, RWD Technologies has a pending merger agreement with Research Park Acquisition, Inc. (RPA), an entity owned by Dr. Robert W. Deutsch, Chairman, CEO, and President of the Company, and some of his family members. The merger agreement provides that, at the closing of the merger, each outstanding share of the Company's common stock (other than the stock owned by RPA) will convert into the right to receive $2.10 in cash. The transaction has been unanimously approved by the Board of Directors of the Company following the unanimous recommendation of a Special Committee of the Board. The closing of the merger is subject to various conditions, including stockholder approval by the holders of a majority of the Company's common stock not held by RPA at a special meeting of stockholders. It is currently anticipated that a special meeting of stockholders to vote on the proposed merger will be held in September 2003 after the completion and distribution of the proxy and voting materials.
As a result of the merger, the Company will become a privately held company. Accordingly, upon closing, the registration of the Company's common stock under the Securities Exchange Act of 1934, as amended, will terminate. Following the completion of the merger, the Company will continue to do business under the name "RWD Technologies, Inc."
This is neither a solicitation of a proxy, an offer to purchase, nor a solicitation of an offer to sell shares of the Company. Stockholders of RWD Technologies are advised to read the definitive proxy materials, when available, including the proxy statement and the merger agreement, before making any decisions regarding the merger. Copies of the definitive proxy materials, and any amendment or supplements
thereto, will be available without charge at the SEC's Web site at www.sec.gov or RWD Technologies' Web site at www.rwd.com as they are mailed to stockholders.
About RWD Technologies, Inc.
RWD Technologies, Inc. (Nasdaq: RWDT) a professional services and products company with corporate headquarters in Baltimore, Maryland, provides a broad range of technology solutions to the business problems confronting Fortune 1000 companies. The Company's three operational segments include Performance Solutions, Enterprise Systems, and Applied Technology Solutions. Performance Solutions assists automotive manufacturers, their suppliers, and other companies in the design and implementation of lean manufacturing processes. In addition, they are engaged in assisting automotive manufacturers launch new vehicles in a manner that increases product quality at a reduced cost. They are also engaged in improving the management of transportation systems in the U.K. and U.S. containing trains manufactured by Bombardier. Enterprise Systems is a world leader in delivering and maintaining performance-based productivity solutions for companies implementing enterprise software packages that operate part or all of a company's business processes. They maintain a very close relationship with SAP and produce products that support the end users in the operation of SAP and other enterprise resource planning systems. Applied Technology Solutions is a leader in delivering integrated Web-based learning and business integrated solutions that are designed to maximize worker productivity as well as reduce operating costs. Solutions range from providing eLearning platforms that incorporate several proprietary software packages to eBusiness systems with embedded performance support that enhance the efforts of the end users of complex technological systems.
Established in 1988, RWD now has approximately 750 employees located at 13 offices in the United States, 4 offices in Europe, and one office in both Canada and Singapore. RWD provides services to more than 20 industries. Information about RWD can be found at the Corporation's World Wide Web site: www.rwd.com.
Media Contact:
Beth Marie Buck, Vice President & CFO
RWD Technologies, Inc.
877.952.8360
bbuck@rwd.com
Certain statements contained herein, including statements regarding development of the Company's services, markets, and future demands for the Company's services, and other statements regarding matters that are not historical facts, are forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995). Such forward-looking statements include risks and uncertainties; consequently, actual results may differ materially from those expressed or implied thereby. Factors that could cause actual results to differ materially include, but are not limited to, reliance on strategic partners and alliance organizations, expansion of international operations, reliance on the market for enterprise resource planning software, rapid technological change in the information technology industry, reliance on a few key clients, the Company's ability to attract and retain sufficient employees, substantial competition, concentration of revenue in the automotive industry, which is subject to cyclical and economic factors outside the Company's control, as well as various project risks associated with individual projects that could materially impact operating results, the Company's ability to effectively manage its growth, variability of operating results, and dependence on key personnel. For additional information regarding the Company's business risks, see the Company's most recently filed Form 10-K and 10-Q.
Copyright ® 2003 RWD Technologies, Inc. All rights reserved.
RWD, RWD Technologies, RWD Technologies, Inc. and University 360 are registered trademarks of RWD Technologies Inc. in the United States and in several other countries. All other products and names mentioned herein are or may be the trademarks of their respective owners.
Financial data pages attached.
RWD TECHNOLOGIES, INC.
STATEMENTS OF OPERATIONS
(unaudited) (in thousands, except per share data)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2003 | 2002 | 2003 | 2002 | |||||||||
Revenue | $ | 24,654 | $ | 29,961 | $ | 48,109 | $ | 59,142 | |||||
Cost of revenue | 23,192 | 25,646 | 45,980 | 49,207 | |||||||||
Gross profit | 1,462 | 4,315 | 2,129 | 9,935 | |||||||||
Selling, general and administrative expenses | 5,812 | 6,430 | 12,233 | 13,009 | |||||||||
Operating loss excluding special charges1 | (4,350 | ) | (2,115 | ) | (10,104 | ) | (3,074 | ) | |||||
Software development cost impairment charges2 | — | 500 | — | 775 | |||||||||
Severance and lease termination charges | 1,605 | 720 | 2,187 | 763 | |||||||||
Privatization transaction costs | 1,273 | — | 1,273 | — | |||||||||
Other (loss) income, net | (128 | ) | 88 | 152 | 52 | ||||||||
Loss before income taxes and cumulative effect of a change in accounting principle | (7,356 | ) | (3,247 | ) | (13,412 | ) | (4,560 | ) | |||||
Income tax expense (benefit) | 67 | (1,027 | ) | 102 | (3,289 | ) | |||||||
Income (loss) before cumulative effect of a change in accounting principle | (7,423 | ) | (2,220 | ) | (13,514 | ) | (1,271 | ) | |||||
Cumulative effect on prior years of changing method of accounting for goodwill | — | — | — | (12,529 | ) | ||||||||
Net loss | $ | (7,423 | ) | $ | (2,220 | ) | $ | (13,514 | ) | $ | (13,800 | ) | |
Basic and diluted loss per share: | |||||||||||||
Income (Loss) before cumulative effect of a change in accounting principle | (0.48 | ) | (0.14 | ) | (0.87 | ) | (0.08 | ) | |||||
Cumulative effect on prior years of changing method of accounting for goodwill | — | — | — | (0.82 | ) | ||||||||
Net loss per share | $ | (0.48 | ) | $ | (0.14 | ) | $ | (0.87 | ) | $ | (0.90 | ) | |
Weighted average shares outstanding: | |||||||||||||
Diluted calculation | 15,482 | 15,375 | 15,445 | 15,375 | |||||||||
Basic calculation | 15,482 | 15,375 | 15,445 | 15,375 | |||||||||
Number of employees | 770 | 882 |
- 1
- Proforma loss per share excluding special charges would be $0.28 for the second quarter and $0.65 for the six-month period of 2003 and $0.09 and $0.01 for the respective periods of 2002.
- 2
- Impairment charges for products are required to be included in cost of revenue in the Company's SEC filings.
RWD TECHNOLOGIES, INC.
CONDENSED BALANCE SHEETS
(in thousands)
| June 30, 2003 | December 31, 2002 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
| (unaudited) | | ||||||||
ASSETS | ||||||||||
CURRENT ASSETS: | ||||||||||
Cash and investments | $ | 7,783 | $ | 11,312 | ||||||
Restricted cash and investments | 10,528 | 10,508 | ||||||||
Contract accounts receivable, net | 16,358 | 19,053 | ||||||||
Costs and estimated earnings in excess of billings on uncompleted contracts | 6,314 | 6,005 | ||||||||
Income tax refund receivable | 2,056 | 7,802 | ||||||||
Prepaid expenses and other current assets | 2,665 | 1,703 | ||||||||
Deferred tax assets | 388 | 388 | ||||||||
Total Current Assets | 46,092 | 56,771 | ||||||||
Fixed Assets, net | 8,050 | 9,675 | ||||||||
Capitalized software development costs and other assets | 3,548 | 4,251 | ||||||||
Restricted investments | 2,421 | 2,508 | ||||||||
Total Assets | $ | 60,111 | $ | 73,205 | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
CURRENT LIABILITIES: | ||||||||||
Accounts payable and accrued expenses | $ | 12,733 | $ | 13,379 | ||||||
Billings in excess of costs and estimated earnings on uncompleted contracts | 284 | 744 | ||||||||
Credit lines payable | 6,040 | 4,705 | ||||||||
Deferred revenue | 2,514 | 2,682 | ||||||||
Current portion of long-term debt | 600 | 567 | ||||||||
Total Current Liabilities | 22,171 | 22,077 | ||||||||
NONCURRENT LIABILITIES: | ||||||||||
Long-term debt, net of current portion | 2,481 | 2,712 | ||||||||
Deferred tax liabilities | 388 | 388 | ||||||||
Total Liabilities | 25,040 | 25,177 | ||||||||
STOCKHOLDERS' EQUITY: | ||||||||||
Common stock | 1,553 | 1,542 | ||||||||
Additional paid-in capital | 46,319 | 46,499 | ||||||||
Accumulated comprehensive income | 354 | (117 | ) | |||||||
Retained (deficit) earnings | (13,155 | ) | 104 | |||||||
Total Stockholders' Equity | 35,071 | 48,028 | ||||||||
Total Liabilities and Stockholders' Equity | $ | 60,111 | $ | 73,205 | ||||||
RWD Reports Second Quarter 2003 Results
RWD TECHNOLOGIES, INC. STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share data)
RWD TECHNOLOGIES, INC. CONDENSED BALANCE SHEETS (in thousands)