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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from_______to________.
Commission file number 0-20034
ELITE INFORMATION GROUP, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 41-1522214
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
5100 WEST GOLDLEAF CIRCLE
LOS ANGELES, CALIFORNIA 90056
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(Address of principal executive offices) (Zip code)
(323) 642-5200
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, $.01 par value
(Title of class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [X] No [ ].
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ].
The aggregate market value of voting stock held by non-affiliates of the
Registrant as of February 28, 2001 computed by reference to the closing sale
price on such date, was $42,484,008. For the purpose of calculating this amount
only, all directors, executive officers and record holders of 10% or more of
voting stock are treated as affiliates. This determination of affiliate status
is not necessarily a conclusive determination for other purposes. As of the same
date, 9,415,123 shares of Common Stock, $.01 par value, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's 2000 Annual Report (the "Annual Report"), filed as
an Exhibit hereto, and the Notice of Annual Meeting of Stockholders and
definitive Proxy Statement pertaining to the 2001 Annual Meeting of Stockholders
(the "Proxy Statement") to be filed pursuant to Regulation 14A (no later than
April 30, 2001), are incorporated herein by reference into Parts II, IV and III,
respectively.
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
OVERVIEW
Elite Information Group, Inc. ("Elite" or the "Company") is the parent company
to Elite Information Systems, Inc. ("EIS"), Elite.com, Inc. and Law Manager,
Inc. ("LMI"). Elite Information Systems is an international software product and
services company that provides a comprehensive suite of financial and practice
management software applications for law firms and other professional service
organizations of all sizes. Elite Information Systems' software products are
often sold with related services to aid the customer in implementation, data
conversion and user training efforts. The Company's products can be licensed
outright and installed onsite at the customer's location or are available
through an ASP hosting solution ("e-Connect from Elite") where Elite Information
Systems maintains hardware and software that is accessed remotely by the
customer. Elite.com provides Internet-based time tracking and billing services
to smaller professional services companies including legal, management
consulting, computer systems consulting and integration, accounting and
engineering. Elite.com utilizes hosted, Internet-based applications and services
delivered through its various partners and alliances. LMI provides software
products including advanced case management, docketing, records management and
e-commerce systems, as well as a full range of implementation services to law
firms, large corporate legal departments and government agencies.
GENERAL DEVELOPMENT OF THE BUSINESS
The Company was incorporated in 1985 in connection with the acquisition of
Broadway & Seymour, Inc., a North Carolina software product and services company
that had been doing business since 1981. The Company adopted a growth through
acquisition strategy of products and businesses, which occurred through
mid-1995. At this time, the Company began refocusing its efforts on integrating
its primary business units, which primarily serviced financial institutions and
law firms. To streamline its business, the Company began divesting certain of
its non-core businesses beginning in 1995.
On May 19, 1999 the Company sold its Customer Relationship Management business
("CRM"), based in Charlotte, North Carolina, to Science Applications
International Corporation ("SAIC"). Following the sale of the CRM business, the
Company changed its name from Broadway & Seymour, Inc. to Elite Information
Group, Inc., to reflect the Company's new single-purpose business. The Company
also changed its NASDAQ trading symbol to ELTE and continues to be traded as a
National Market Issue on the NASDAQ.
During the third quarter of 1999 the Company began start up operations of its
new Elite.com subsidiary. Elite.com provides Internet-based time tracking and
billing services to smaller professional services firms. These services became
available to customers in January 2000, offered through the Elite.com website.
On July 11, 2000, the Company acquired all of the outstanding capital stock of
Law Manager, Inc. LMI is a software products and services company servicing
corporate law firms, large corporate legal departments, and government agencies.
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BUSINESS STRATEGY
The Company's strategy is to develop and market industry-leading practice
management solutions for the professional service automation (PSA) market, both
within the United States and internationally. The Company currently offers
software and Internet-based services to assist in timekeeping, billing and
related business management functions for legal, accounting, consulting, public
relations and other professional services firms. Through its LMI subsidiary, the
Company also provides sophisticated case management solutions to large
corporations and government agencies.
The Company's Elite Information Systems subsidiary has begun marketing its new
32-bit client-server and Internet/intranet-based financial and practice
management products with enhanced query capabilities and object-oriented
architecture (see "Product and Services Based Solutions" below), which represent
an upgrade from the Company's 16-bit Windows-based product line. The Company
markets its financial and practice management tools in the United States,
Canada, the United Kingdom, Europe, South America and South Africa. Although the
Company's customer base is made up largely of law firms, the Company continues
to focus on expanding its market presence in other segments of the professional
services industry, including accounting, actuarial, consulting, advertising,
public relations and other services firms.
Elite Information Systems has an extensive field operations unit that performs
services including installation, implementation, data conversion, training and
consulting for its products. The Company's Professional Services unit also
provides follow-on consulting and technical services to its client base on a fee
for services basis. Substantially all Elite customers contract with the Company
for maintenance and telephone support services on an annual basis.
LMI was acquired in July 2000 in order for the Company to take advantage of
LMI's industry leading advanced case management, docketing, records management
and e-commerce systems, as well as its full range of implementation services.
The Company believes it can achieve advantages by coordinated development and
marketing of its existing products along with products from LMI. The Company is
also interested in expanding into new markets, which LMI will help to do with
its presence in law firms, large corporate legal departments and government
agencies.
Expanding on its efforts to develop and market web-based solutions, in the
second half of 1999 the Company began operations of its Elite.com service.
Elite.com's strategy is to provide smaller professional service firms with
efficient, low cost, time and billing applications via the Internet. Elite.com
focuses its hosted Internet-based services on the solo practitioner and small
firms in the legal, accounting, management and computer consulting, and
engineering markets. These services became available to customers in January
2000, offered through the Elite.com website.
PRODUCT AND SERVICES BASED SOLUTIONS
Software products mentioned in this document are for identification purposes
only and may be trademarks of Elite Information Group, Inc., its subsidiaries or
third parties.
SOFTWARE PRODUCTS
The Company's latest software solutions incorporate 32-bit client-server
and open systems architecture using either a Windows or Internet browser
interface and can be run on multiple operating systems and major
databases including Unix, Windows NT Server, Microsoft SQL Server and
Informix.
e-Connect from Elite enables firms to utilize Elite's suite of
applications through the Internet in a hosted, secure and reliable
environment. This Internet-based system eliminates the need for
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hardware/software installation, upgrades and maintenance while
delivering Elite's existing applications from any Web browser.
Elite Professional Billing System is a comprehensive accounting and
information management software product serving legal and professional
service firms. The Professional Billing System responds to clients'
billing requirements with on-line management information and processes.
Elite Financial Management System is a general ledger and accounts
payable software product that supports multi-currency and simultaneous
cash and accrual-based accounting, as well as budgeting features.
Elite Case Management System is a case tracking software system and
conflicts/related-party database. This system also includes calendar and
docket functions, a case database, a related-party tracking system,
on-line viewing of case information and personal calendars and a
user-defined reporting system.
Elite Marketing System is a comprehensive marketing and practice
development tool that tracks relationships, manages mailings and
monitors the effectiveness of client development efforts.
Elite Conflict of Interest Module is an integrated software tool for
checking conflicts of interest, based on a full-text search engine.
Elite Records Management Module is a software tool for managing both
internal and external records, with bar code support and integration
with the Elite Conflict of Interest System.
Elite WebView is a software tool that summarizes key information from
all Elite applications in a simple and concise manner within a
web-browser. By using built in HTML hyperlinks, a user can quickly move
from application to application.
Elite TimeTrax is an integrated software tool for time and expense entry
and tracking.
Elite Profitability System is a software tool developed to help
companies track the profitability of their firm by client, engagement,
office, department and timekeeper.
WorkFlow is a software application designed to automate paper-intensive
processes by using electronic forms, pre-defined routing of these forms,
and password-based approval of the transactions represented by these
forms.
Event Driven Reporting is an integrated software tool that delivers
critical information electronically in an efficient and timely manner to
managers, administrators, firm committees, internal staff and clients.
Elite Dashboard is a new technology to consolidate information from
multiple sources on a single Web page, readily available on a user's
desktop from email or a Web browser. This integrated portal can include
data from various Elite systems and other sources.
Apex is an advanced customer relationship management software
application designed for law firms, accounting firms and other
professional services firms.
Ask Elite! is a Web-based knowledge portal that uses natural-language
questions to search large amounts of structured and unstructured data
and returns answers to the user.
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SUPPORT SERVICES
The Company views its customer support services as a significant part of
its strategy to establish and maintain strong customer relationships.
The Company offers system maintenance and support at fixed prices under
renewable contracts, as well as conversion and installation services as
needed by its customers. The degree of maintenance service provided to
customers differs depending on the system being supported. Generally,
support contracts entitle users to telephone support and regular
upgraded product releases. In addition, the Company offers certain
training classes and multi-media based instruction to customers that aid
in the implementation and effective use of the Company's solutions.
ELITE.COM SERVICES
Through its Elite.com subsidiary the Company provides Internet-based
time tracking and invoicing solutions that are designed to address the
specific needs of smaller fee-based businesses including legal,
accounting, management and computer consulting, and engineering firms.
Using a standard Web browser and Internet connection, customers can
track time and expenses, produce invoices, generate information reports,
manage accounts receivable and streamline a variety of other practice
management functions.
RESEARCH AND DEVELOPMENT
To meet the changing needs of the professional services industry, the Company
expends resources to continually develop and enhance its proprietary software
products. The Company believes that ongoing commitment to research and
development is important to the long-term success of the business.
For the years ended December 31, 2000, 1999 and 1998, the Company's total
research and development expenditures from continuing operations (excluding
acquired in-process research and development) were $6.1 million, $4.4 million
and $3.1 million, respectively. The Company expects research and development
expenses for 2001 to increase as a percentage of revenues over 2000.
There are inherent risks in the development and introduction of a new product.
For example, new products may have quality or other defects in the early stages
of introduction that were not anticipated in the design of those products. The
Company cannot determine the effects on operating results of unanticipated
complications in product introductions or transitions.
SALES AND MARKETING
New customer contacts are generated by a variety of methods, including customer
referrals, personal sales calls, attendance at trade shows and seminars,
advertising in trade publications, direct mailings to targeted customers and
telemarketing.
The Company maintains a direct sales force where sales personnel are given sales
responsibility within their targeted regional and customer markets.
Additionally, senior management and technical subject matter experts within the
Company are directly involved in obtaining and supporting relationships.
The Company's business strategy also emphasizes sales to existing customers.
Follow-on sales to existing customers include system upgrades, expansion of
license rights, migration to new products and maintenance and support services.
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CUSTOMERS
The Company serves a client base in the legal and other professional services
markets. Elite's customers include over one-third of the top 1,000 law firms in
the United States, and over 40 of the largest firms in the United Kingdom and
Europe. Other professional services markets include accounting, consulting,
public relations, financial services, actuarial, government, software, security,
insurance, market research and systems integration. In addition, through
Elite.com, the Company serves small and sole practitioner firms in similar
professional services markets.
The Company provides software solutions under a variety of financial
arrangements, including fixed fee contracts and billings on a time and materials
basis. Additionally, through e-Connect, the Company's new Internet-based ASP
hosting solution, clients can utilize Elite's products via a hosting model with
contractual payments on a monthly basis.
The majority of the Company's revenue is concentrated in the legal services
industry. However, no single customer accounts for 10% or more of the Company's
consolidated revenue.
GEOGRAPHIC INFORMATION
The Company's assets are principally located in North America. The Company's
revenue is principally generated in the United States; however, for the years
ending December 31, 2000, 1999 and 1998 the Company's revenue generated outside
the United States represented 14%, 16% and 17% of the consolidated revenue,
respectively. For those same periods, revenue generated in Europe represented
approximately 11%, 13% and 13% of consolidated revenue, respectively. Since the
Company's contracts with non-U.S. customers generally denominate the amount of
payments to be received by the Company in local currencies, exchange rate
fluctuations between such local currencies and the U.S. dollar will subject the
Company to currency translation risks. Also, the Company may be subject to
currency transaction risks when the Company's contracts are denominated in a
currency other than the currency in which the Company incurs expenses related to
such contracts.
COMPETITION
The Company's markets are very competitive, due in part to the rapidly changing
technology underlying the Company's products and services. The Company produces
a number of different software modules and applies those modules across the
professional services markets. The Company has a number of competitors for each
module and in each market. Some of these competitors compete with the Company
with regard to a number of modules or markets. Some of these competitors have
greater financial, technical and marketing resources than the Company. The
Company believes that no one single competitor is dominant across all markets in
which the Company participates.
The Company believes that competitive factors for engagements in the
professional services markets include knowledge of the industry, capabilities of
resources, technologies utilized, ease of use, ability to customize solutions
and breadth of functionality of solutions and price. The Company believes it
competes favorably on the basis of these factors.
BACKLOG
A significant portion of the Company's revenue is derived from work to be
performed under longer-term contracts entered into in the ordinary course of
business. At December 31, 2000, 1999 and 1998, the Company's EIS business had
backlog of unearned revenue from signed customer contracts (continuing
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operations) of approximately $15.9 million, $11.6 million and $26.4 million,
respectively. Backlog for the Company's LMI business at December 31, 2000
totaled approximately $1.8 million.
The Company benefited from exceptional new contract sales levels in the second
half of 1998 as customers purchased systems in anticipation of Y2K. However, a
corresponding weakness in the market occurred in the last half of 1999 and most
of 2000, which caused a significant reduction in backlog. In the fourth quarter
of 2000, EIS signed a record $11.9 million in new contracts.
EMPLOYEES AND RECRUITMENT
The Company believes that its future success will depend in part on its
continued ability to hire and retain qualified employees. The Company believes
its relations with its employees are good. Competition for personnel in the
Company's industry is intense. Although it actively recruits personnel and
provides professional employees with career path opportunities, there can be no
assurance that the Company will be successful in attracting and retaining
sufficient numbers of qualified personnel to conduct its business in the future.
The Company seeks employees with expertise and experience in its chosen markets.
At February 28, 2001, the Company had 350 full-time employees. None of the
Company's employees are represented by a labor union.
COPYRIGHTS, TRADEMARKS, PATENTS AND LICENSES
The Company currently markets several proprietary software products. Apart from
a limited number of third party components, the bulk of the Company's products
consist of software and related documentation developed by the Company for which
the Company holds the copyright. The Company distributes its software only
subject to licenses, which restrict the licensee's rights to use and disclose
the software so as to protect the Company's rights. The Company believes that,
due to the rapid pace of innovation within its industry, factors such as the
technological and creative skills of its personnel are more important in
establishing and maintaining a leadership position within the industry than are
the various legal protections of its technology. The Company believes that the
nature of its customers, the importance of the Company's products to them and
their need for continuing product support reduce the risk of unauthorized
reproduction. However, there can be no assurance that any such steps taken by
the Company in this regard will be adequate to deter misappropriation of its
proprietary rights or independent third-party development of functionally
equivalent products.
The Company believes that its services and products do not infringe on the
intellectual property rights of its customers or other third parties. However,
particularly given the rapid changes in patent law, there can be no assurance
that an infringement claim will not be asserted against the Company in the
future. Any such claim, if resolved against the Company, could adversely affect
the Company's reputation, preclude it from offering certain products and
services, and subject it to substantial liability.
YEAR 2000 ISSUES
As a software vendor, the so-called "Year 2000 compliance" or "Y2K" issue is an
issue that the Company has had to address with respect to its products as well
as software and systems provided by others that the Company uses internally.
During the Year 2000 date transition, the Company did not experience any failure
of mission critical systems, nor has it experienced any significant problem with
regard to third party suppliers. Similarly, to management's knowledge, the
Company's customers have not experienced any significant Year 2000 problems with
the Company's software products and services. The Company does
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not anticipate any material adverse effect to its business or its customers in
the future as a result of Year 2000 related problems, however, it is possible
that such problems might still arise.
The Company may be subject to Year 2000 claims or litigation by: its customers;
customers of divested businesses where the Company retained potential product
liabilities, including the CRM business; customers of its recently acquired LMI
business; or other parties. Although the ultimate outcome of any litigation is
uncertain, the Company does not believe that the ultimate amount of liability,
if any, from such actions would have a material adverse effect on the Company.
To date, the Company has not been subject to any such claims or litigation.
As the Company did not, nor does it expect to, experience any significant Year
2000 problems, the Company does not currently expect to incur any significant
additional costs related to its Year 2000 compliance efforts. All incremental
costs associated with the Year 2000 compliance issue will continue to be
expensed as incurred.
EURO CURRENCY
In January 1999, a new currency called the ECU or the "euro" was introduced in
certain Economic and Monetary Union (the "EMU") countries. During 2002, all EMU
countries are expected to be operating with the euro as their single currency.
As a result, in less than two years all organizations headquartered or
maintaining a subsidiary in an EMU country are expected to need to be euro
currency enabled and computer software used by these organizations will need to
be euro currency enabled. The transition to the euro currency involves the
handling of parallel currencies and conversion of legacy data. Uncertainty
exists as to the effects the euro currency will have on the marketplace.
Additionally, all of the final rules and regulations have not yet been defined
and finalized by the European Commission with regard to the euro currency. The
Company is monitoring the rules and regulations as they become known in order to
make any changes to the software that the Company deems necessary to comply with
such rules and regulations. Although the Company currently offers certain
software products that are designed to be multi-currency enabled and the Company
believes that it will be able to accommodate any required euro currency changes
in its software products, there can be no assurance that once the final rules
and regulations are completed that the Company's software will contain all of
the necessary changes or meet all of the euro currency requirements.
ITEM 2. PROPERTIES
The Company's corporate offices are located at 5100 West Goldleaf Circle in Los
Angeles, California. The Company's lease of those premises (approximately 40,000
square feet) expires July 2008. The Company leases approximately 1,600 square
feet of office space in London, United Kingdom for servicing its UK and European
customer base. The Company leases approximately 15,000 square feet of office
space in Conshohocken, Pennsylvania, which houses its LMI staff.
The Company also leases additional facilities, as needed, principally as sales
offices in other cities in North America. The Company believes that its
facilities are adequate for its current needs.
ITEM 3. LEGAL PROCEEDINGS
On December 22, 1999, a putative class action, Brooke Howie, et al. v. Elite
Information Group, Inc., et al., was commenced in the Los Angeles Superior Court
against the Company, the Company's directors, and Solution 6 Holdings Limited
("Solution 6"). The complaint alleged that Elite's directors violated their
fiduciary duties to the Company's shareholders by entering into a merger
agreement with Solution 6, and sought to enjoin the merger. The action was
subsequently removed to federal court and transferred to the
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United States District Court for the District of Delaware. The merger agreement
between the Company and Solution 6 was terminated in May 2000. Following the
termination of the merger, plaintiffs filed a motion asking the Delaware federal
court to dismiss their action as moot but to retain jurisdiction of the matter
to consider plaintiffs' petition for an award of attorney fees and expenses. The
Company considers the fee request to be without merit and is opposing
plaintiffs' petition.
The Company is involved in litigation from time to time that is routine in
nature and incidental to the conduct of its business. The Company believes that
the outcome of any such litigation would not have a material adverse effect on
its consolidated results of operations or financial condition.
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
fourth quarter of the fiscal year ended December 31, 2000.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDERS' MATTERS
MARKET FOR COMMON STOCK
There is hereby incorporated by reference the information appearing under the
caption "Market for Common Stock" in the Company's Annual Report to Shareholders
for the year ended December 31, 2000.
HOLDERS OF RECORD
As of February 28, 2001, there were approximately 85 holders of record of the
Company's Common Stock.
DIVIDENDS
The Company has never declared or paid any cash dividends on its Common Stock.
The Company currently intends to retain any earnings for use in its business and
therefore does not anticipate paying any cash dividends in the foreseeable
future.
ITEM 6. SELECTED FINANCIAL DATA
There is hereby incorporated by reference the information appearing under the
caption "Selected Financial Data" in the Company's Annual Report to Shareholders
for the year ended December 31, 2000.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
There is hereby incorporated by reference the information appearing under the
caption "Management's Discussion and Analysis of Financial Condition and Results
of Operations" in the Company's Annual Report to Shareholders for the year ended
December 31, 2000.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
A portion of the Company's business is transacted in foreign currencies and the
Company may be exposed to financial market risk resulting from fluctuations in
foreign currency exchange rates. The Company
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monitors the volatility of foreign currencies and may utilize hedging programs
or other derivative financial instruments commonly used to reduce financial
market risks if deemed appropriate.
The Company has limited exposure to market risk for changes in interest rates
related to the Company's cash and cash equivalents. The Company maintains an
investment policy designed to ensure the safety and preservation of its cash and
cash equivalents by limiting default risk, market risk and reinvestment risk by
investing in shorter-term high quality financial instruments and depositing its
excess cash and cash equivalents in major financial institutions.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial Statements:
There is hereby incorporated by reference the information appearing in the
consolidated financial statements, "Notes to Consolidated Financial Statements,"
"Report of Independent Accountants" and "Quarterly Financial Data" in the
Company's Annual Report to Shareholders for the year ended December 31, 2000.
Financial Statement Schedules:
Item 14 includes an index to the financial statement schedules.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information under the captions "Election of Directors" and "Section 16(a)
Beneficial Ownership Reporting Compliance" in the Proxy Statement is
incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information under the captions "Executive Officers, Compensation and Other
Information" and "Employment, Severance and Consulting Agreements" in the Proxy
Statement is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information under the captions "Principal Stockholders" and "Stock Ownership
of Directors and Executive Officers" in the Proxy Statement is incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information under the caption "Employment, Severance and Consulting
Agreements" in the Proxy Statement is incorporated herein by reference.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1) Financial Statements.
The following consolidated financial statements and financial information are
included in the Company's Annual Report to Shareholders for the year ended
December 3l, 2000 and are hereby incorporated by reference:
Consolidated Statement of Operations
Consolidated Balance Sheet
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Stockholders' Equity
Notes to Consolidated Financial Statements
Report of Independent Accountants
(a)(2) Financial Statement Schedules.
The following schedules are filed as a part of this report:
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Schedule II - Valuation and Qualifying Accounts and Reserves 16
Report of Independent Accountants on Financial Statement Schedule 17
All other schedules for which provision is made in the applicable regulation of
the Securities and Exchange Commission are not required under the related
instructions, are inapplicable, or the required information is included
elsewhere in the financial statements.
(a)(3) Exhibits:
Exhibit No. Description
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3.1 Restated Certificate of Incorporation of Elite Information Group,
Inc. (formerly Broadway & Seymour, Inc.), dated June 16, 1992
(Incorporated by reference to Exhibit 3.1 to the Registrant's
Quarterly Report on Form 10-Q for the Quarter Ended June 30,
1999)
3.2 Restated By-laws of Elite Information Group, Inc. (formerly
Broadway & Seymour, Inc.) (Incorporated by reference to Exhibit
3.2 to the Company's Registration Statement on Form S-1, SEC File
No. 33-46672)
3.3 Certificate of Designations (Incorporated by reference to Exhibit
3.2 to the Registrant's Quarterly Report on Form 10-Q for the
Quarter Ended March 31, 1999)
3.4 Certificate of Amendment of Certificate of Incorporation of Elite
Information Group, Inc. (formerly Broadway & Seymour, Inc.),
dated May 27, 1999 (Incorporated by reference to Exhibit 99.3 to
the Registrant's Current Report on Form 8-K, filed June 3, 1999)
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4.1 Restated Specimen share certificate (Incorporated by reference to
Exhibit 4.1 to the Registrant's Quarterly Report on Form 10-Q for
the Quarter Ended March 31, 1999)
4.2 Articles 4 and 5 of Elite Information Group, Inc. (formerly
Broadway & Seymour, Inc.), Restated Certificate of Incorporation
(Incorporated by reference to Exhibit 4.2 to the Registrant's
Registration Statement on Form S-1, SEC File No. 33-46672)
4.3 Article II, Section 2.2 of Elite Information Group, Inc.
(formerly Broadway & Seymour, Inc.), Restated By-laws
(Incorporated by reference to Exhibit 4.3 to the Registrant's
Registration Statement on Form S-1, SEC File No. 33-46672)
4.4 Rights Agreement, dated April 14, 1999, between Elite Information
Group, Inc. (formerly Broadway & Seymour, Inc.), and EquiServe
Trust Company, N.A. as Rights Agent, including the form of
Certificate of Designations with respect to the Series A Junior
Participating Preferred Stock, included as Exhibit A to the
Rights Agreement, the forms of Rights Certificate and of Election
to Exercise, included as Exhibit B to the Rights Agreement, and
the form of Summary of Rights to Purchase Share of Series A
Junior Participating Preferred Stock included as Exhibit C to the
Rights Agreement. (Incorporated by reference to Exhibit 4 to the
Company's Registration Statement on Form 8-A dated April 15,
1999)
4.5 First Amendment to Rights Agreement, dated April 14, 1999 between
Elite Information Group, Inc. (formerly Broadway & Seymour, Inc.)
and EquiServe Trust Company, N.A. as Rights Agent (Incorporated
by reference to Exhibit 8 to the Registrant's
Solicitation/Recommendation Statement on Schedule 14D-9 filed
December 21, 1999)
4.6* Second Amendment to Rights Agreement, dated as of April 14, 1999
between Elite Information Group, Inc. and EquiServe Trust
Company, N.A. as Rights Agent
10.1+ Restated 1985 Incentive Stock Option Plan dated June 12, 1985
(Incorporated by reference to Exhibit 10.1 to the Registrant's
Registration Statement on Form S-1, SEC File No. 33-46672)
10.2+ Amendment No. 1 to Restated 1985 Incentive Stock Option Plan of
Elite Information Group, Inc. (formerly Broadway & Seymour,
Inc.), dated February 25, 1993 (Incorporated by reference to
Exhibit 10.2 to the Registrant's Annual Report on Form 10-K for
the Fiscal Year Ended January 31, 1993)
10.3+ Amendment No. 2 to Restated 1985 Incentive Stock Option Plan of
Elite Information Group, Inc. (formerly Broadway & Seymour,
Inc.), dated February 17, 1994 (Incorporated by reference to
Exhibit 10.16 to the Registrant's Transition Report on Form 10-K
for the Eleven Months Ended December 31, 1993)
10.4+ Amendment No. 3 to Restated 1985 Incentive Stock Option Plan of
Elite Information Group, Inc. (formerly Broadway & Seymour,
Inc.), dated May 15, 1995 (Incorporated by reference to Exhibit
10.4 to the Registrant's Quarterly Report on Form 10-Q for the
Quarter Ended September 30, 1995)
10.5+ Elite Information Group, Inc. (formerly Broadway & Seymour, Inc.)
1996 Stock Option Plan dated September 16, 1996 (Incorporated by
reference to Appendix B to the Registrant's Definitive Proxy
Statement on Form DEFS14A dated August 14, 1996)
10.6+ Amended Elite Information Group, Inc. 1996 Stock Option Plan
(Incorporated by reference to the Registrant's Registration
Statement on Form S-8, SEC File No. 333-42900)
10.7 Asset Purchase Agreement between Unisys Corporation and Elite
Information Group, Inc. (formerly Broadway & Seymour, Inc.) dated
as of July 24, 1997. (Incorporated by reference to Exhibit 10.35
to the Registrant's Quarterly Report on Form 10-Q for the Quarter
Ended September 30, 1997)
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10.8 Amendment to Asset Purchase Agreement between Unisys Corporation
and Elite Information Group, Inc. (formerly Broadway & Seymour,
Inc.) dated September 17, 1997. (Incorporated by reference to
Exhibit 10.36 to the Registrant's Quarterly Report on Form 10-Q
for the Quarter Ended September 30, 1997)
10.9 Stock Purchase Agreement among TMC Holding Corporation and Elite
Information Group, Inc. (formerly Broadway & Seymour, Inc.) dated
March 5, 1999. (Incorporated by reference to Exhibit 10.31 to the
Registrant's Annual Report on form 10-K for the year ended
December 31, 1998)
10.10 Asset Purchase Agreement by and between Elite Information Group,
Inc. (formerly Broadway & Seymour, Inc.) and Science Applications
International Corporation dated April 14, 1999. (Incorporated by
reference to Exhibit 2.1 to the Registrant's Current Report on
Form 8-K, filed June 3, 1999)
10.11+ Severance Agreement by and between Elite Information Group, Inc.
(formerly Broadway & Seymour, Inc.) and Barry D. Emerson, dated
May 10, 1999 (Incorporated by reference to Exhibit 10.1 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter Ended
June 30, 1999)
10.12+ Employment Agreement by and between Elite Information Group, Inc.
(formerly Broadway & Seymour, Inc.) and Christopher K. Poole,
dated June 1, 1999 (Incorporated by reference to Exhibit 10.2 to
the Registrant's Quarterly Report on Form 10-Q for the Quarter
Ended June 30, 1999)
10.13 Agreement and Plan of Merger dated December 14, 1999 among
Solution 6 Holdings Limited, EIG Acquisition Corp. and Elite
Information Group, Inc. (Incorporated by reference to Exhibit 1
to the Registrant's Solicitation/Recommendation Statement on
Schedule 14D-9 filed December 21, 1999)
10.14 Stockholders Agreement dated as of December 14, 1999 among
Solution 6 Holdings Limited, EIG Acquisition Corp., Elite
Information Group Inc., Christopher K. Poole, Barry D. Emerson,
Roger Noall, William G. Seymour, Arthur G. Epker III, Alan Rich
and David A. Finley (Incorporated by reference to Exhibit 2 to
the Registrant's Solicitation/Recommendation Statement on
Schedule 14D-9 filed December 21, 1999)
10.15+ Retirement and Post-Employment Agreement dated as of May 20, 1997
between Alan Rich and Elite Information Systems, Inc.
(Incorporated by reference to Exhibit 10.20 to the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1999)
10.16*+ Amendment No. 1 to Retirement and Post-Employment Agreement dated
as of September 30, 2000 between Alan Rich and Elite Information
Systems, Inc.
10.17+ Elite.com, Inc. 1999 Stock Option Plan dated August 27, 1999
(Incorporated by reference to Exhibit 10.21 to the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1999)
10.18 Credit Agreement by and between Elite Information Systems, Inc.,
Elite Information Group, Inc., and Mellon Bank, N.A. dated May
16, 2000 (Incorporated by reference to Exhibit 10.1 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter Ended
June 30, 2000)
10.19 General Security Agreement by and between Elite Information
Systems, Inc., and Mellon Bank, N.A. dated May 16, 2000
(Incorporated by reference to Exhibit 10.2 to the Registrant's
Quarterly Report on Form 10-Q for the Quarter Ended June 30,
2000)
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10.20 Guarantor Security Agreement by and between Elite Information
Group, Inc., and Mellon Bank, N.A. dated May 16, 2000
(Incorporated by reference to Exhibit 10.3 to the Registrant's
Quarterly Report on Form 10-Q for the Quarter Ended June 30,
2000)
10.21 Continuing Guaranty of Elite Information Group, Inc. (for the
benefit of Mellon Bank, N.A.), dated May 16, 2000 (Incorporated
by reference to Exhibit 10.4 to the Registrant's Quarterly Report
on Form 10-Q for the Quarter Ended June 30, 2000)
10.22 Stock Purchase Agreement between Elite Information Group, Inc.,
LMI Acquisition Corporation, Law Manager, Inc., Nicholas Puschak
and Davood Tashayyod, dated as of July 7, 2000 (Incorporated by
reference to Exhibit 2 to the Registrant's Current Report on Form
8-K filed July 11, 2000)
10.23 2000 Employee Stock Purchase Plan (Incorporated by reference to
Exhibit 99.1 to the Registrant's Registration Statement on Form
S-8, SEC File No. 333-42906)
11* Computation of earnings per share
13* Portions of the Elite Information Group, Inc. 2000 Annual Report
21* Subsidiaries of Registrant
23* Consent of Independent Accountants dated March 29, 2001.
* Filed herewith.
+ Management contract or compensatory plan or arrangements required to be
filed as an exhibit.
(b) Reports on Form 8-K:
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ELITE INFORMATION GROUP, INC.
Date: March 30, 2001 By: /s/ Barry D. Emerson
------------------------------------
Barry D. Emerson
Vice President, Treasurer,
Chief Financial Officer
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, this report has been signed by the following persons on
behalf of the Registrant and in the capacities set forth below and on the 30th
day of March 2001.
Signature Title
--------- -----
/s/ Christopher K. Poole
- - -------------------------------
Christopher K. Poole Chairman, Chief Executive Officer
and Director
/s/ Barry D. Emerson
- - -------------------------------
Barry D. Emerson Vice President, Treasurer,
Chief Financial Officer
/s/ Arthur G. Epker III
- - -------------------------------
Arthur G. Epker III Director
/s/ David A. Finley
- - -------------------------------
David A. Finley Director
/s/ Roger Noall
- - -------------------------------
Roger Noall Director
/s/ Alan Rich
- - -------------------------------
Alan Rich Director
/s/ William G. Seymour
- - -------------------------------
William G. Seymour Director
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ITEM 14A(2) SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES:
Elite Information Group, Inc.
Schedule II - Valuation and Qualifying Accounts
and Reserves For the Years ended December 31,
2000, 1999 and 1998
($ in thousands)
Balance at Additions Balance at
beginning charged to end
of period expense Deductions Other of period
---------- ---------- ---------- --------- ----------
Allowance for doubtful accounts
December 31, 2000 $ 2,027 $ 1,683 $ (1,614) $ 209 (1) $ 2,305
December 31, 1999 1,638 1,751 (1,026) (336) (2) 2,027
December 31, 1998 922 1,400 (684) 1,638
(1) Relates to reserve balance of the LMI business, acquired on July 11, 2000.
(2) Relates to reserve balance of the CRM business, sold on May 19, 1999.
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REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors
of Elite Information Group, Inc.
Our audits of the consolidated financial statements referred to in our report
dated February 16, 2001, appearing in the 2000 Annual Report to Shareholders of
Elite Information Group, Inc. (which report and consolidated financial
statements are incorporated by reference in this Annual Report on Form 10-K)
also included an audit of the financial statement schedule listed in Item 14
(a)(2) of this Form 10-K. In our opinion, this financial statement schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.
PricewaterhouseCoopers LLP
Los Angeles, California
February 16, 2001
17