** **

**FORM10-Q**

 

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

 

ý  **QUARTERLYREPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934**

 

**For the Quarterly Period Ended March 31, 2002**

** **

**o****  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934**

** **

**CommissionFile Number  000-30389**

** **

**EXE TECHNOLOGIES, INC.**

(Exact name of registrantas specified in its charter)

 

| **Delaware**                                                     |   | **751719817**                            |
|------------------------------------------------------------------|--------|------------------------------------------|
| (State or other  jurisdiction of  incorporation or organization) |   | (I.R.S. Employer  Identification Number) |
|                                                             |   |                                     |
| **8787  Stemmons Freeway**                                       |
| **Dallas,  Texas 75247**                                         |
| (Address including zip  code of principal executive offices)     |
|                                                             |   |                                     |
| **(214)  775-6000**                                              |
| (Registrant’s telephone  number, including area code)       |

 

Indicate by check mark whether the registrant:  (1) has filed all reports required to befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the Registrant was requiredto file such reports), and (2) has been subject to such filing requirements forthe past 90 days.  Yes ý        NO o

 

Indicate the number of shares outstanding of each of the issuer’sclasses of common stock, as of April 30, 2001.

 

Common stock, $0.01 parvalue, 46,043,870 shares outstanding.

 

 

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**EXE TECHNOLOGIES, INC. AND SUBSIDIARIES**

#### **INDEX TO FORM 10-Q**

** **
| **PART I.**                         | **FINANCIAL INFORMATION**                                                                       |
|-------------------------------------|-------------------------------------------------------------------------------------------------|
|                                |                                                                                            |
| **Item  1.**                        | **Financial  Statements**                                                                       |
|                                |                                                                                            |
|                                | **Consolidated Balance Sheets**                                                                 |
|                                |                                                                                            |
|                                | **Consolidated  Statements of Operations**                                                      |
|                                |                                                                                            |
|                                | **Consolidated  Statements of Cash Flows**                                                      |
|                                |                                                                                            |
|                                | **Notes to  Consolidated Financial Statements**                                                 |
|                                |                                                                                            |
| **Item  2.**                        | **Management’s  Discussion and Analysis of Financial Condition and Results of Operations** |
|                                |                                                                                            |
| **Item  3.**                        | **Quantitative  and Qualitative Disclosures About Market Risk**                                 |
|                                |                                                                                            |
| **PART II.**                        | **OTHER INFORMATION**                                                                           |
|                                |                                                                                            |
| **Item 2.**                         | **Changes in  Securities and Use of Proceeds**                                                  |
|                                |                                                                                            |
| **Item 6.**                         | **Exhibits and Reports  on Form 8-K**                                                           |
|                                |                                                                                            |
| **Signatures**                      |                                                                                            |
|                                |                                                                                            |
| **Index to  Exhibits and Exhibits** |

 

2

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**PARTI. FINANCIAL INFORMATION**

** **

**ITEM 1.  FINANCIAL STATEMENTS**

** **

**EXE TECHNOLOGIES, INC. AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

 
|                                                                                                                                                                            |   | **As of  December 31,********2001** |       | **As of********March 31,********2002** |       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|------------|----------------------------------------|------------|
|                                                                                                                                                                            |   |                                |       | **(unaudited)**                        | ** ** |
| **Assets**                                                                                                                                                                      |   |                                |       |                                   |       |
| **Current assets:**                                                                                                                                                             |   |                                |       |                                   |       |
| Cash and cash equivalents                                                                                                                                                       |   | $                                   | 30,250,156 |                                   | $          | 29,055,171 |   |
| Marketable securities, short-term                                                                                                                                               |   | 12,842,683                          |       | 13,659,708                             |       |
| Accounts receivable, net of allowance for doubtful accounts and  adjustments of approximately $3,721,000 and $4,207,000 at December 31, 2001  and March 31, 2002, respectively  |   | 25,029,162                          |       | 24,703,624                             |       |
| Other receivables and advances                                                                                                                                                  |   | 572,438                             |       | 498,865                                |       |
| Prepaid and other current assets                                                                                                                                                |   | 2,171,409                           |       | 2,326,199                              |       |
|                                                                                                                                                                            |   |                                |       |                                   |       |
| Total current assets                                                                                                                                                            |   | 70,865,848                          |       | 70,243,567                             |       |
|                                                                                                                                                                            |   |                                |       |                                   |       |
| Marketable securities, long-term                                                                                                                                                |   | 2,203,891                           |       | 992,030                                |       |
| Property and equipment, net                                                                                                                                                     |   | 8,424,584                           |       | 7,780,518                              |       |
| Other assets                                                                                                                                                                    |   | 2,549,794                           |       | 2,016,478                              |       |
| Goodwill, net                                                                                                                                                                   |   | 5,265,685                           |       | 5,265,685                              |       |
| Intangible assets, net                                                                                                                                                          |   | 1,760,666                           |       | 1,479,659                              |       |
|                                                                                                                                                                            |   |                                |       |                                   |       |
| Total assets                                                                                                                                                                    |   | $                                   | 91,070,468 |                                   | $          | 87,777,937 |   |
|                                                                                                                                                                            |   |                                |       |                                   |       |
| **Liabilities  and Stockholders’ Equity**                                                                                                                                  |   |                                |       |                                   |       |
| **Current liabilities:**                                                                                                                                                        |   |                                |       |                                   |       |
| Accounts payable                                                                                                                                                                |   | $                                   | 6,585,936  |                                   | $          | 6,888,293 |   |
| Accrued expenses                                                                                                                                                                |   | 11,557,606                          |       | 10,706,759                             |       |
| Accrued payroll and benefits                                                                                                                                                    |   | 1,749,046                           |       | 1,815,681                              |       |
| Deferred revenue                                                                                                                                                                |   | 9,206,736                           |       | 9,698,539                              |       |
| Current portion of long-term debt and capital lease obligations                                                                                                                 |   | 435,167                             |       | 538,173                                |       |
|                                                                                                                                                                            |   |                                |       |                                   |       |
| Total current liabilities                                                                                                                                                       |   | 29,534,491                          |       | 29,647,445                             |       |
|                                                                                                                                                                            |   |                                |       |                                   |       |
| Long-term debt and capital lease obligations, net of current portion                                                                                                            |   | 995,973                             |       | 752,192                                |       |
| Long-term accrued expenses, net of current portion                                                                                                                              |   | 6,814,018                           |       | 6,396,070                              |       |
| Minority interest                                                                                                                                                               |   | 169,623                             |       | 174,644                                |       |
| Commitments and contingencies                                                                                                                                                   |   |                                |       |                                   |       |
|                                                                                                                                                                            |   |                                |       |                                   |       |
| **Stockholders’ equity:**                                                                                                                                                  |   |                                |       |                                   |       |
| Preferred  stock, $.01 par value:  shares  authorized - 20,000,000; none issued or outstanding                                                                             |   | —                              |       | —                                 |       |
| Common  stock, voting, $.01 par value:  shares  authorized - 150,000,000; shares issued - 46,788,900 and 47,138,793 at  December 31, 2001 and March 31, 2002, respectively |   | 467,889                             |       | 471,388                                |       |
| Additional paid-in capital                                                                                                                                                      |   | 178,741,296                         |       | 179,103,592                            |       |
| Note receivable from stockholder                                                                                                                                                |   | (211,750                            | )          | -                                      |       |
| Treasury stock, at cost, 999,483 and 1,094,923 shares of common stock  at December 31, 2001 and March 31, 2002, respectively                                                    |   | (3,431,464                          | )          | (3,645,859                             | )          |
| Accumulated deficit                                                                                                                                                             |   | (119,601,384                        | )          | (122,948,136                           | )          |
| Deferred compensation                                                                                                                                                           |   | (2,515,440                          | )          | (2,246,755                             | )          |
| Other comprehensive loss                                                                                                                                                        |   | 107,216                             |       | 73,356                                 |       |
|                                                                                                                                                                            |   |                                |       |                                   |       |
| Total stockholders’ equity                                                                                                                                                 |   | 53,556,363                          |       | 50,807,586                             |       |
| Total liabilities and stockholders’ equity                                                                                                                                 |   | $                                   | 91,070,468 |                                   | $          | 87,777,937 |   |

 

*See accompanying notes.*

 

3

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**EXE TECHNOLOGIES, INC. ANDSUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

**(UNAUDITED)**

* *
|                                                                      |   | **Three  Months Ended********March 31,** |       |
|---------------------------------------------------------------------------|--------|------------------------------------------|------------|
|                                                                      |   | ** **                               |
|                                                                      |   | **2001**                                 |       | **2002** | ** ** |
|                                                                      |   |                                     |       |   |   |
| **Revenue:**                                                              |   |                                     |       |   |   |
| Software license                                                          |   | $                                        | 9,985,182  |   | $ | 4,144,072 |   |
| Services and maintenance                                                  |   | 17,672,076                               |       | 11,863,633 |   |
| Resale of software and equipment                                          |   | 1,699,973                                |       | 3,099,069 |   |
| Reimbursable expenses                                                     |   | 857,203                                  |       | 529,198 |   |
|                                                                      |   |                                     |       |   |   |
| Total revenue                                                             |   | 30,214,434                               |       | 19,635,972 |   |
|                                                                      |   |                                     |       |   |   |
| **Costs and expenses:**                                                   |   |                                     |       |   |   |
| Cost of software licenses                                                 |   | 46,301                                   |       | 113,076 |   |
| Cost of services and maintenance                                          |   | 11,635,926                               |       | 8,175,300 |   |
| Cost of resale of software and equipment                                  |   | 1,326,112                                |       | 2,572,234 |   |
| Cost of reimbursable expenses                                             |   | 857,203                                  |       | 529,198 |   |
| Sales and marketing                                                       |   | 7,312,229                                |       | 5,055,103 |   |
| Research and  development                                                 |   | 3,847,686                                |       | 3,053,383 |   |
| General and administrative                                                |   | 4,418,367                                |       | 3,177,301 |   |
| Amortization of goodwill and intangible assets                            |   | 1,886,913                                |       | 281,007 |   |
| Warrant and stock compensation expense allocated to:                      |   |                                     |       |   |   |
| Cost of services and maintenance                                          |   | 148,222                                  |       | 87,946 |   |
| Sales and marketing                                                       |   | 191,436                                  |       | 45,446 |   |
| Research and development                                                  |   | 35,589                                   |       | 45,446 |   |
| General and administrative                                                |   | 185,886                                  |       | 89,847 |   |
| Employee severance and other facility closure costs                       |   | 430,080                                  |       | — |   |
|                                                                      |   |                                     |       |   |   |
| Total costs and expenses                                                  |   | 32,321,950                               |       | 23,225,287 |   |
|                                                                      |   |                                     |       |   |   |
| Operating loss                                                            |   | (2,107,516                               | )          | (3,589,315 | ) |
|                                                                      |   |                                     |       |   |   |
| **Other income (expense):**                                               |   |                                     |       |   |   |
| Interest income                                                           |   | 831,099                                  |       | 330,977 |   |
| Interest expense                                                          |   | (7,704                                   | )          | (29,888 | ) |
| Other                                                                     |   | (404,415                                 | )          | (53,505 | ) |
|                                                                      |   |                                     |       |   |   |
| Total other income (expense)                                              |   | 418,980                                  |       | 247,584 |   |
|                                                                      |   |                                     |       |   |   |
| Loss before minority interest and taxes                                   |   | (1,688,536                               | )          | (3,341,731 | ) |
| Minority interest in subsidiary income                                    |   | (98,893                                  | )          | (5,021 | ) |
| Loss before taxes                                                         |   | (1,787,429                               | )          | (3,346,752 | ) |
| Income tax                                                                |   | —                                   |       | — |   |
| Net loss                                                                  |   | $                                        | (1,787,429 | ) | $ | (3,346,752 | ) |
| Net loss per common share - basic and diluted                             |   | $                                        | (0.04      | ) | $ | (0.07 | ) |
| Weighted average number of common shares outstanding - basic and  diluted |   | 44,740,349                               |       | 45,914,688 |   |

 

*See accompanying notes.*

 

4

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**EXE TECHNOLOGIES, INC. ANDSUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(UNAUDITED)**

 
|                                                                                       |   | **Three  Months Ended********March 31,** |       |
|--------------------------------------------------------------------------------------------|--------|------------------------------------------|------------|
|                                                                                       |   |                                     |
|                                                                                       |   | **2001**                                 | ** ** | **2002** | ** ** |
| **Cash Flow from Opertating Activities:**                                                  |   |                                     |       |   |   |
| Net loss                                                                                   |   | $                                        | (1,787,429 | ) | $ | (3,346,752 | ) |
| Adjustments to reconcile net loss to net cash provided by (used in)  operating activities: |   |                                     |       |   |   |
| Depreciation and amortization                                                              |   | 2,902,140                                |       | 1,180,221 |   |
| Provision for losses on receivables                                                        |   | 992,186                                  |       | 1,029,692 |   |
| Amortization of deferred compensation                                                      |   | 386,783                                  |       | 268,685 |   |
| Issuance of warrants for services                                                          |   | 174,350                                  |       | — |   |
| Minority interest                                                                          |   | 107,324                                  |       | 5,021 |   |
| Changes in operating assets and liabilities, net of effect of  acquisition:                |   |                                     |       |   |   |
| Accounts receivable                                                                        |   | (1,108,451                               | )          | (704,154 | ) |
| Other receivables and advances                                                             |   | (589,060                                 | )          | 73,573 |   |
| Prepaids and other current assets                                                          |   | (554,304                                 | )          | (154,790 | ) |
| Other long-term assets                                                                     |   | (299,720                                 | )          | 533,316 |   |
| Accounts payable                                                                           |   | (476,024                                 | )          | 302,357 |   |
| Accrued payroll and benefits                                                               |   | (215,962                                 | )          | 66,635 |   |
| Deferred revenue                                                                           |   | (1,469,152                               | )          | 491,803 |   |
| Accrued expenses                                                                           |   | (1,443,044                               | )          | (1,268,795 | ) |
| Other                                                                                      |   | 221,119                                  |       | (10,359 | ) |
|                                                                                       |   |                                     |       |   |   |
| Net cash used in operating activities                                                      |   | (3,159,244                               | )          | (1,533,547 | ) |
|                                                                                       |   |                                     |       |   |   |
| **Cash Flow from Investing Activites:**                                                    |   |                                     |       |   |   |
| Purchases of property and equipment                                                        |   | (418,405                                 | )          | (281,294 | ) |
| Purchase of marketable securities                                                          |   | (11,250,000                              | )          | (2,000,000 | ) |
| Proceeds from sale of marketable securities                                                |   | 11,931,116                               |       | 2,394,836 |   |
| Cash paid for AllPoints acquisition                                                        |   | (1,618,109                               | )          | — |   |
|                                                                                       |   |                                     |       |   |   |
| Net cash provided by (used in) investing activities                                        |   | (1,355,398                               | )          | 113,542 |   |
|                                                                                       |   |                                     |       |   |   |
| **Cash Flow from Financing Activities:**                                                   |   |                                     |       |   |   |
| Issuance of common stock for options and warrants                                          |   | 530,906                                  |       | 365,795 |   |
| Payments on long-term debt                                                                 |   | (81,782                                  | )          | (140,775 | ) |
| Retirement of AllPoints line of credit                                                     |   | (750,000                                 | )          | — |   |
|                                                                                       |   |                                     |       |   |   |
| Net cash provided by (used in) financing activities                                        |   | (300,876                                 | )          | 225,020 |   |
|                                                                                       |   |                                     |       |   |   |
| Net decrease in cash and cash equivalents                                                  |   | (4,815,518                               | )          | (1,194,985 | ) |
| Cash and cash equivalents at beginning of year                                             |   | 39,820,056                               |       | 30,250,156 |   |
| Cash and cash equivalents at end of period                                                 |   | $                                        | 35,004,538 |   | $ | 29,055,171 |   |
|                                                                                       |   |                                     |       |   |   |
| **Supplemental Cash Flow Information:**                                                    |   |                                     |       |   |   |
| Cash paid for interest                                                                     |   | $                                        | 14,153     |   | $ | 33,320 |   |
| Cash paid for income taxes                                                                 |   | $                                        | 5,190      |   | $ | 56,823 |   |

* *

*See accompanying notes.*

 

5

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**EXE TECHNOLOGIES, INC. ANDSUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIALSTATEMENTS****(UNAUDITED)**

** **

**1. Principles of Consolidation and Basis of Presentation**

** **

EXETechnologies, Inc. (the Company or EXE) provides software that drivescustomers’ supply chain execution processes, including fulfillment,warehousing, distribution, and inventory management. The accompanying unauditedconsolidated financial statements include the accounts of EXE Technologies,Inc. and our majority-owned subsidiaries. All significant intercompany balancesand transactions have been eliminated in consolidation.

 

The accompanyingunaudited consolidated financial statements have been prepared in accordancewith generally accepted accounting principles for interim financial informationand with the instructions to Form 10-Q and Article 10 of Regulation S-X.Accordingly, they do not include all of the information and footnotes requiredby generally accepted accounting principles for fiscal year end financialstatements. In the opinion of management, all adjustments (consisting only ofnormal recurring entries) considered necessary for a fair presentation of theresults have been included for the interim periods presented. Operating resultsfor the three month period ended March 31, 2002 are not necessarily indicativeof the results that may be expected for any other interim period or for theyear ending December 31, 2002. These statements should be read in conjunctionwith the Company’s audited financial statements for the year ended December 31,2001.

 

On January 1,2002, the Company adopted Financial Accounting Standards Board StaffAnnouncement Topic No. D-103, “*IncomeStatement Characterization of Reimbursements Received for “Out-of-Pocket”Expenses Incurred.*”  As aresult, the Company began recording revenue and a related cost of revenue inits statement of operations for reimbursable expenses such as airfare, hotellodging, meals, auto rental and other charges related to providing services toour customers.  Prior to the adoption ofthis standard, the Company recorded these expense reimbursements as a reductionof expenses.  The Company’s prior periodfinancial statements have been reclassified to comply with the new standard.

 

Effective January1, 2002, the Company adopted Emerging Issues Task Force (EITF) 00-25, *“Vendor Income Statement Characterization ofConsideration Paid to a Reseller of the Vendor’s Products”*.  EITF 00-25 requires consideration paid toresellers of the Company’s products be recorded as a reduction in revenue.  The application of this EITF does not resultin any impact to operating or net income (loss) in any past or future periods.

 

In October 2001,the Financial Accounting Standards Board issued Statement of FinancialAccounting Standards (SFAS) No. 144, “*Accountingfor the Impairment or Disposal of Long-Lived Assets*,” effective forfiscal years beginning after December 15, 2001.  This statement establishes new rules for determining impairmentof certain other long-lived assets, including intangible assets subject toamortization, property and equipment and long-lived prepaid assets.  The adoption of this standard did not havean effect on the operating results or the financial position of the Company.

 

6

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**2.  Earnings Per Share**

 

The Companycomputes net income (loss) per share in accordance with the provisions of SFASNo. 128, “Earnings per Share.” Basic net income (loss) per common share iscomputed using the weighted average number of shares of common stockoutstanding during each period.

 

Diluted net income(loss) per common share is computed using the weighted average number of sharesof common stock outstanding during each period and common equivalent sharesconsisting of preferred stock, warrants and stock options (using the treasurystock method), if dilutive. Diluted loss per common share is the same as basicloss per common share for all periods presented because all potentiallydilutive securities were anti-dilutive. The following table sets forthanti-dilutive securities which have been excluded from diluted earnings pershare for the periods presented:

 
|                                     |   | **Three  Months Ended********March 31,** |       |
|------------------------------------------|--------|------------------------------------------|------------|
|                                     |   |                                     |
|                                     |   | **2001**                                 | ** ** | **2002** | ** ** |
|                                     |   |                                     |       |   |   |
| Common stock  options                    |   | 9,054,659                                |       | 9,462,364 |   |
| Warrants                                 |   | —                                   |       | 10,000 |   |
| Total  anti-dilutive securities excluded |   | 9,054,659                                |       | 9,472,364 |   |

 

**3.  Comprehensive Loss**

 

Comprehensive lossincludes foreign currency translation gains (losses) and unrealized gains(losses) on securities available for sale. The following table sets forth the calculation of comprehensive loss forthe periods presented:

 
|                                                     |   | **Three  Months Ended********March 31,** |       |
|----------------------------------------------------------|--------|------------------------------------------|------------|
|                                                     |   | ** **                               |
|                                                     |   | **2001**                                 | ** ** | **2002** | ** ** |
|                                                     |   |                                     | ** ** |   | ** ** |
| Net loss                                                 |   | $                                        | (1,787,429 | ) | $ | (3,346,752 | ) |
| Foreign currency  translation gains                      |   | 174,441                                  |       | 82,463 |   |
| Unrealized gain  (loss) on securities available for sale |   | 115,242                                  |       | (116,323 | ) |
|                                                     |   |                                     |       |   |   |
| Total  comprehensive loss                                |   | $                                        | (1,497,746 | ) | $ | (3,380,612 | ) |

###### ** **

###### **4.  DerivativeFinancial Instruments**

 

In January 2001,the Company began a foreign currency-hedging program to hedge certainnonfunctional currency exposure. Forward currency exchange contracts are utilized by the Company toreduce foreign currency exchange and interest rate risks with the goal of offsettingforeign currency transaction gains and losses recorded for accounting purposeswith gains and losses realized on the

 

7

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forward contracts.  The Company does not hold derivativefinancial instruments for trading or speculative purposes.

 

As of March 31,2002, the Company had outstanding forward currency exchange contracts of $3.1million to sell Japanese Yen and $1.5 million to sell Australian Dollars whichhedge net balance sheet exposures. Gains and losses arising from the changes in the fair value of forwardcurrency exchange contracts are recognized as a component of other income(expense).  At March 31, 2002, thecurrent market settlement values of the forward contracts would result in again of approximately $0.3 million. There were no forward contracts outstanding at March 31, 2001.

###### ** **

###### **5.  IntangibleAssets and Goodwill**

** **

In June 2001, theFinancial Accounting Standards Board issued Statements of Financial AccountingStandards (SFAS) No. 141, “*BusinessCombinations*,” and No. 142, “*Goodwilland Other Intangible Assets*,” effective for fiscal years beginningafter December 15, 2001.  Under the newrules, goodwill and intangible assets deemed to have indefinite lives will nolonger be amortized but will be subject to annual impairment tests inaccordance with these statements.  Otherintangible assets will continue to be amortized over their useful lives.

 

The Company hasapplied the new rules on accounting for goodwill and other intangible assetsbeginning January 1, 2002.  With theapplication of the nonamortization provisions of SFAS No. 142, the Companyceased amortization of goodwill as of January 1, 2002.  The following table presents the quarterlyresults of the Company on a comparative basis assuming the nonamortizationprovisions of SFAS No. 142 were effective January 1, 2001:

 
|                                                         |   | **As of  March 31,** |       |
|--------------------------------------------------------------|--------|----------------------|------------|
|                                                         |   | **2001**             |       | **2002** | ** ** |
|                                                         |   |                 | ** ** |   | ** ** |
| Reported net  loss                                           |   | $                    | (1,787,429 | ) | $ | (3,346,752 | ) |
| Goodwill  amortization                                       |   | 1,514,997            |       | — |   |
| Adjusted net  loss                                           |   | $                    | (272,432   | ) | $ | (3,346,752 | ) |
|                                                         |   |                 |       |   |   |
| Reported net  loss per common share - basic and dilutive     |   | $                    | (0.04      | ) | $ | (0.07 | ) |
| Goodwill  amortization per common share - basic and dilutive |   | 0.03                 |       | — |   |
| Adjusted net  loss per common share - basic and dilutive     |   | $                    | (0.01      | ) | $ | (0.07 | ) |

 

The Company hasnot yet completed the initial goodwill impairment test required by SFAS No.142.  This test involves the use ofestimates related to fair market values of the Company’s reporting units withwhich the goodwill was associated.  TheCompany does not expect the initial impairment test to have a material impacton the Company’s operating results or financial position.  However, the assessment of goodwillimpairment in the future will be impacted if future operating cash flows of theCompany’s reporting units decline, which would result in decreases in therelated estimate of fair market values.

 

8

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Intangible assetsas of December 31, 2001 and March 31, 2002 were as follows:

 
|                               |   | **December  31,** |      | **March 31,** |   |
|------------------------------------|--------|-------------------|-----------|---------------|--------|
|                               |   | **2001**          |      | **2002**      |   |
|                               |   |              |      |          |   |
| Developed and  acquired technology |   | $                 | 4,700,000 |          | $      | 4,700,000 |   |
| Customer base                      |   | 1,800,000         |      | 1,800,000     |   |
| Less accumulated  amortization     |   | (4,739,334        | )         | (5,020,341    | )      |
| Net intangible  assets             |   | $                 | 1,760,666 |          | $      | 1,479,659 |   |

 

Amortization expenserelated to intangible assets totaled $0.4 million and $0.3 million during thethree months ended March 31, 2001 and 2002, respectively.  Intangible assets with definite useful livesare amortized on a straight-line basis. The weighted average amortizationperiod is five years for developed and acquired technology and six years forcustomer base. The estimated aggregate future amortization expense forintangible assets remaining as of March 31, 2002 is as follows:

 
| Remainder of  2002 |   | $       | 840,770   |   |
|--------------------|--------|---------|-----------|--------|
| 2003               |   | 333,332 |      |
| 2004               |   | 305,557 |      |
| Total              |   | $       | 1,479,659 |   |

 

**6.  SegmentInformation**

** **

TheCompany provides software that drives customers’ supply chain executionprocesses, including fulfillment, warehousing, distribution, and inventorymanagement. All financial information is reviewed on a consolidated basis withadditional information by geographic region used to make operating decisionsand assess the results of the Company. The Company’s geographic information as of and for the three monthsended March 31, 2001 and 2002 is as follows:

 
|                                           |   |                     |       |       |       | **Asia  Pacific  and the  Middle East** |       |       |       |        |       |
|------------------------------------------------|--------|--------------------------|------------|------------|------------|-----------------------------------------|------------|------------|------------|-------------|------------|
|                                           |   | **United********States** |       |       |       |                                    |       |       |       |        |
|                                           |   | ** **               | **Europe** | ** ** | ** ** | **Eliminations**                        | ** ** | **Total**  | ** ** |
|                                           |   |                     | ** ** |       | ** ** |                                    | ** ** |       | ** ** |        | ** ** |
| Three months ended March 31, 2001              |   |                     | ** ** |       | ** ** |                                    | ** ** |       | ** ** |        | ** ** |
| Revenue                                        |   | $                        | 16,837,289 |       | $          | 4,537,387                               |       | $          | 8,839,758  |        | $          | — |   | $ | 30,214,434 |   |
| Amortization of goodwill and intangible assets |   | 1,869,034                |       | 13,827     |       | 4,052                                   |       | —     |       | 1,886,913   |       |
| Warrant and stock compensation expense         |   | 324,993                  |       | 102,460    |       | 133,680                                 |       | —     |       | 561,133     |       |
| Restructuring costs                            |   | 430,080                  |       | —     |       | —                                  |       | —     |       | 430,080     |       |
| Operating income (loss)                        |   | (2,329,823               | )          | (664,925   | )          | 887,232                                 |       | —     |       | (2,107,516  | )          |
|                                           |   |                     |       |       |       |                                    |       |       |       |        |       |
| As of March 31, 2001                           |   |                     |       |       |       |                                    |       |       |       |        |       |
| Property and equipment, net                    |   | 5,889,008                |       | 1,311,538  |       | 721,231                                 |       | —     |       | 7,921,777   |       |
| Total assets                                   |   | 134,777,144              |       | 3,730,483  |       | 6,479,760                               |       | (3,108,034 | )          | 141,879,353 |       |
|                                           |   |                     |       |       |       |                                    |       |       |       |        |       |
| Three months ended March 31, 2002              |   |                     |       |       |       |                                    |       |       |       |        |       |
| Revenue                                        |   | 9,276,868                |       | 5,254,992  |       | 5,104,112                               |       | —     |       | 19,635,972  |       |
| Amortization of goodwill and intangible assets |   | 281,007                  |       | —     |       | —                                  |       | —     |       | 281,007     |       |
| Warrant and stock compensation expense         |   | 181,209                  |       | 37,246     |       | 50,230                                  |       | —     |       | 268,685     |       |
| Operating income (loss)                        |   | (3,678,795               | )          | 19,421     |       | 70,059                                  |       | —     |       | (3,589,315  | )          |
|                                           |   |                     |       |       |       |                                    |       |       |       |        |       |
| As of March 31, 2002                           |   |                     |       |       |       |                                    |       |       |       |        |       |
| Property and equipment, net                    |   | 5,714,759                |       | 1,235,092  |       | 830,667                                 |       | —     |       | 7,780,518   |       |
| Total assets                                   |   | $                        | 86,433,735 |       | $          | 3,036,478                               |       | $          | 2,415,758  |        | $          | (4,108,034) |   | $ | 87,777,937 |   |
|                                                |        |                          |            |            |            |                                         |            |            |            |             |            |  |  |  |  |  |  |  |  |  |  |

 

9

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**7.  Employee Severance and Lease Abandonment**

 

During the yearended December 31, 2001, the Company announced and implemented plans to reducecosts and improve operating efficiency. Loss on lease abandonment and employeeseverance and other facility closure costs was $14.3 million for the year endedDecember 31, 2001, of which approximately $0.4 million was recognized duringthe three months ended March 31, 2001. These charges included $10.2 million inabandonment of certain leased office space less estimated sublease rentals atfacilities in North America and in Europe, $3.5 million for severance and otheremployee related costs for the termination of 233 employees, $0.3 million fordisposal of fixed assets, and $0.3 million for abandonment of leased equipmentand other facility closure costs.

 

The Company hasrecorded approximately $4.9 million of cash charges against the reservesestablished for these 2001 cost reduction actions. The remaining liability atMarch 31, 2002 is approximately $9.4 million and is expected to be paid through2007. These reserves include estimates pertaining to sublease rates, vacancyperiods, employee separation costs, and settlement of contractual obligations.Although the Company does not anticipate significant changes, the actual costsmay differ from these estimates.

 

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**ITEM 2.****                                   MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

 

##### **Overview**

 

EXE Technologies,Inc. provides software that drives customers’ supply chain execution processes,including fulfillment, warehousing, distribution, and inventorymanagement.  Our software solutionsdeliver the vital, frontline supply chain intelligence necessary to drivecustomer execution decisions and processes. Our products and services help customers worldwide to increase revenue,reduce distribution costs, manage inventory across the supply chain, andimprove customer loyalty and satisfaction. We provide global service and support for our software from establishedfacilities in North America, Europe, the Middle East, Asia, and Australia.

 

We derive ourrevenue from the sale of software licenses; product related consulting,training, maintenance and support (collectively, “services and maintenance”);and the resale of software and equipment.

 

Our revenues havebeen adversely impacted by a global slowdown in customer spending forlarge-scale IT projects during 2001. This global slowdown began to adversely impact our revenues the end ofthe quarter ended March 31, 2001 and was impacted further by the terrorist attacksupon the United States on September 11, 2001. While the global economic environment for large-scale IT projectsremains challenging, we have remained focused on improving our performancethrough better sales execution, expanded product offerings, and through reducedcost of operations.

 

##### **Results of Operations**

 

**Threemonths ended March 31, 2002 Compared to the Three Months Ended March 31, 2001**

 

**Revenue**

 

*Total Revenue.*  Total revenue decreased $10.6 million, or35.0%, to $19.6 million for the three months ended March 31, 2002, from $30.2million for the three months ended March 31, 2001.  International revenue accounted for 53% of total revenue duringthe three months ended March 31, 2002 and 44% of total revenue during the threemonths ended March 31, 2001.  No singlecustomer accounted for more than 10.0% of total revenue during the three monthsended March 31, 2002 or 2001.

 

*Software License.*  Software license revenue decreased $5.8million, or 58.5%, to $4.1 million for the three months ended March 31, 2002,from $9.9 million for the three months ended March 31, 2001.  Softwarelicense revenue as a percentage of total revenue excluding reimbursableexpenses was 21.7% for the three months ended March 31, 2002 versus 34.0% forthe three months ended March 31, 2001.  These declines were primarily attributable to the global slowdownin customer spending for large-scale IT projects that began during 2001 and hasextended into the first quarter of fiscal year 2002.  Software license revenue improved 15.7% when compared with thepreceding three months ended December 31, 2001.  This improvement is primarily attributed to changes in the U.S.sales operations made late in fiscal 2001 that resulted in a 72.0% improvementin U.S. license revenues.

 

*Services and Maintenance.*  Services and maintenance revenue decreased$5.8 million, or 32.9%, to $11.9 million for the three months ended March 31,2002 from $17.7 million for the three months ended March 31, 2001.  Services and maintenance revenue as apercentage of total revenue excluding reimbursable expenses was 62.1% for thethree months ended March 31, 2002 versus 60.2% for the three months ended March31, 2001.  These decreases in servicesand maintenance revenue were attributed to

 

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the global slowdown in customerspending for large-scale IT projects. The global slowdown in the economy hasadversely impacted our ability to generate new license revenue, therebycontributing to the decline in services and maintenance revenue from newprojects and resulting in a shift in our revenue mix.  The decline was principally in consulting and training revenue,which declined 41.1% when compared with consulting and training revenue duringthe same three month period of the prior year. Most of the decline was in the United States and Asia Pacific sincethese areas have been the most adversely affected by the decline in licenserevenues.

 

*Resale Software and Equipment.*  Resale software and equipment revenueincreased $1.4 million, or 82.3%, to $3.1 million for the three months endedMarch 31, 2002, from $1.7 million for the three months ended March 31,2001.  Resale software and equipment asa percentage of total revenue excluding reimbursable expenses was 16.2% for thethree months ended March 31, 2002 versus 5.8% for the three months ended March31, 2001. These increases were due to a $1.1 million improvement in resalerevenues from Europe that accompanied a large new license and servicescontract.

** **

**Costsand Expenses**

 

*Cost of Software Licenses.*  Cost of software licenses consists primarilyof royalties associated with software used to develop our software products,the cost of reproduction, and the cost of complementary software applicationsthat we purchase to sell to our customers. Cost of software licenses increased $0.1 million for the three monthsended March 31, 2002 when compared to the three months ended March 31,2001.  Cost of software licensesrepresented 2.7% of software license revenue for the three months ended March 31,2002 and 0.5% for the three months ended March 31, 2001. The increase in costof software licenses as a percentage of software license revenue was attributedto an increase in cost of purchasing complementary software that was soldduring the three months ended March 31, 2002.

 

*Cost of Services and Maintenance.*  Cost of services and maintenance consistsprimarily of salaries of professional staff and costs associated withimplementation, consulting and training services, hotline telephone support,new releases of software and updating user documentation.  Cost of services and maintenance decreased$3.4 million, or 29.7%, to $8.2 million for the three months ended March 31,2002, from $11.6 million for the three months ended March 31, 2001.  The decrease was related primarily to areduction in the number of full time and contract services and maintenanceemployees, which was attributable to the decline in global IT spending.  As a percentage of services and maintenancerevenue, cost of services and maintenance increased to 68.9% for the three monthsended March 31, 2002, from 65.8% for the three months ended March 31,2001.  Much of this is attributed to thecontinued decline in revenues from EXceed Fulfill WMS Unix-based productprojects that traditionally carry higher service margins.  However, the cost of services andmaintenance declined when compared with the 73.8% for the preceding threemonths ended December 31, 2001 as the impact of cost reduction actionsimplemented in fiscal 2001 improved services and maintenance margins.

 

*Cost of Resale Software andEquipment.*  Cost ofresale software and equipment consists primarily of the costs of the databasesoftware tools and hardware we purchase to resell to our customers.  Cost of resale software and equipmentincreased $1.3 million, or 94.0%, to $2.6 million for the three months endedMarch 31, 2002, from $1.3 million for the three months ended March 31,2001.  As a percentage of resalesoftware and equipment revenue, cost of resale software and equipment was 83.0%for the three months ended March 31, 2002 and 78.0% for the three months endedMarch 31, 2001. The increase in cost as a percentage of revenue reflects thefact that significant sales of higher margin data base software occurred duringthe three months ended March 31, 2001.

* *

*Sales and Marketing.*  Sales and marketing expenses consistprimarily of salaries, commissions, 

 

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bonuses, recruitingcosts, travel, marketing materials and trade shows.  Sales and marketing expenses decreased $2.2 million, or 30.9%, to$5.1 million for the three months ended March 31, 2002, from $7.3 million forthe three months ended March 31, 2001. The decrease was related primarily to a reduction in the number of salesand marketing employees, which was attributable to the decline in global ITspending and lower commission expenses for sales staff and partners as a resultof lower software license revenues.  Asa percentage of total revenue excluding reimbursable expenses, sales andmarketing expenses increased to 26.5% for the three months ended March 31,2002, from 24.9% for the three months ended March 31, 2001.  The increase in sales and marketing costs asa percentage of total revenue was a result of lower revenue we have experiencedsince the beginning of the slowdown in global IT spending.

 

*Research and Development.*  Research and development expenses consistprimarily of salaries and other personnel-related costs for our productdevelopment activities.  Research anddevelopment expenses decreased $0.8 million, or 20.6%, to $3.1 million for thethree months ended March 31, 2002, from $3.9 million for the three months endedMarch 31, 2001.  The decrease inresearch and development expenses was due primarily to a reduction in thenumber of research and development employees and contractors due to the declinein global IT spending.  As a percentageof total revenue excluding reimbursable expenses, research and developmentexpenses increased to 16.0% for the three months ended March 31, 2002, from13.1% for the three months ended March 31, 2001.  The increase was primarily due to lower revenue we haveexperienced since the beginning of the slowdown in global IT spending.

 

*General and Administrative.*  General and administrative expenses consistprimarily of salaries and other personnel-related costs of our finance, humanresources, information systems, administrative, legal and executivedepartments, insurance costs and the costs associated with legal, accounting,and other administrative services. General and administrative costs decreased $1.2 million, or 28.1%, to$3.2 million for the three months ended March 31, 2002, from $4.4 million forthe three months ended March 31, 2001. The decrease in general and administrative expenses was due to areduction in the number of general and administrative employees and contractorsdue to the decline in global IT spending. As a percentage of total revenue excluding reimbursable expenses,general and administrative expenses increased to 15.6% for the three monthsended March 31, 2002, from 14.6% for the three months ended March 31,2001.  This increase was primarily dueto the lower revenue we have experienced since the beginning of the slowdown inglobal IT spending.

 

*Amortization of Goodwill andIntangible Assets.* Amortization of goodwill and intangible assets relates primarily toassets acquired in connection with the 1997 acquisition of Dallas Systems andthe 2001 acquisition of AllPoints. Amortization of goodwill and intangible assets decreased $1.6 million to$0.3 million for the three months ended March 31, 2002, from $1.9 million forthe three months ended March 31, 2001. Approximately $0.7 million of this decline is attributed to theimplementation of Statement of Financial Accounting Standards Board (SFAS) No.142, *Goodwill and Other Intangible Assets,*whichdirects that goodwill and intangible assets which are deemed to have indefinitelives are no longer amortized but are subject to annual impairment tests.  In addition, $0.9 million of the decline isattributed to the goodwill and intangible impairment write-off of AllPoints inthe fourth quarter of 2001.

 

*Non-Cash Warrant and StockCompensation.* Non-cash warrant and stock compensation expense relates to theamortization of deferred compensation recorded primarily in connection withstock options granted to employees.  Thedeferred compensation recorded represented the difference between the exerciseprice and the deemed fair value of our common stock on the date of grant of theseoptions.  Non-cash warrant and stock compensationexpense decreased $0.3 million to $0.3 million for the three months ended March31, 2002, from $0.6 million for the three months ended March 31, 2001.

 

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*EmployeeSeverance and Lease Abandonment. *Duringthe three months ended March 31, 2001 we implemented a restructuring plan toreduce costs and improve operating efficiency. In connection with this plan, we recorded a charge of $0.4 million forseverance and other employee related costs for the termination of 18 services,sales and marketing, development, and administrative employees.

 

*Other Income (Expense).*  Other income (expense) consists of gains andlosses from currency fluctuations, interest expense, and interest income oninvestments.  Other income declined $0.2million to an income of $0.2 million for the three months ended March 31, 2002,from an income of $0.4 million for the three months ended March 31, 2001.  The decline was due to a decrease ininterest income of $0.5million due to a decline in interest rates and adecline in funds held in marketable securities and lower interest rates duringthe three months ended March 31, 2002. This decline was offset by an improvement of $0.3 million from foreignexchange losses due to the implementation of a foreign currency-hedgingprogram.

* *

*Income Tax.*  No income tax benefit was recognized foroperating losses recorded for the three months ended March 31, 2002 and 2001due to the uncertainty of the timing and amount of future taxable income.

 

**Liquidityand Capital Resources**

 

Wehave funded our operations through the issuance of our preferred and commonstock, bank borrowings and cash flow from operations.  As of March 31, 2002 we had $29.1 million in cash and cashequivalents, $13.7 million in short-term marketable securities, $1.0 million inlong-term marketable securities and $40.6 million in working capital.

 

Netcash used in operating activities was $1.5 million for the three months endedMarch 31, 2002.  Cash used in operationswas primarily used to fund the $3.3 million operating loss, net of non-cashcharges for depreciation, amortization, provisions for losses on receivables,minority interest, and warrant and stock compensation expenses.  Other charges in cash from operatingactivities included cash used for decreases in accrued expenses, primarilyrelated to our cost reduction plans implemented in 2001 and increases inaccounts receivable and prepaid and other current assets.  These uses were offset by decrease in otherlong-term assets and increases in accounts payable, accrued payroll anddeferred revenue.  Net cash used inoperating activities was $3.2 million for the comparable three months endedMarch 31, 2001.

 

Net cash provided by investing activities was $0.1million for the three months ended March 31, 2002.  We purchased property and equipment of $0.3 million and generated$0.4 million of cash from net sales of marketable securities.  Net cash used in investing activities was$1.4 million for the comparable three months ended March 31, 2001.

 

Netcash provided by financing activities was $0.2 million for the three monthsended March 31, 2002.  We generated cashof $0.4 million from the issuance of common stock and reduced other long-termdebt by $0.2 million.  Net cash used infinancing activities was $0.3 million for the comparable three months endedMarch 31, 2001, and arose primarily from the proceeds of our initial publicoffering.

 

Over the next year, we expect the cost reductionactions that occurred during the year ended December 31, 2001, combined withour efforts to improve our revenues through expanded product offerings andimproved revenue productivity from our sales force and strategic alliances, toenhance our future liquidity. We believe that companies will again focus on theeffectiveness of their flow of inventory throughout the supply chain andpurchase our software to increase revenue, reduce distribution costs, manageinventory across the supply chain, and improve customer loyalty andsatisfaction.

 

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However, our short-termprofitability and our plans for growth may be adversely impacted by continuedeconomic slowdown or a deepening of the current recession, and could result insustained operating losses and a decrease in our working capital. Additionally,in the future we may pursue acquisition of businesses, products andtechnologies, or enter into strategic alliances, that could complement orexpand our existing business. Any of these expansion activities could result ina decrease in our working capital and possibly require us to obtain additionalequity or debt financing.

 

We have no specific agreements, commitments orunderstandings to make new acquisitions or investments. We believe that ourexisting working capital will be sufficient to fund our operations for the nextyear. However, there can be no assurance that we will not require additionalfinancing in the future. We cannot be sure that we will be able to obtain thisadditional financing or that, if we can, the terms will be acceptable to us.

 

**Forward-LookingStatements**

 

In addition to historical information,this filing and our Annual Report on Form 10-K may contain forward-lookingstatements.  Any statements containedherein (including without limitation statements to the effect that the Companyor its management “believes,” “expects,” “anticipates,” “plans,” and similarexpressions) that relate to future events or conditions, including, amongothers, statements relating to economic conditions, sales execution, costreduction and restructuring actions and their impact on earnings and cashflows, sufficiency of working capital, accounting for goodwill and otherintangible assets, interest rate risk and enhancement of the company’s softwareshould be considered forward-looking statements.  These forward-looking statements are subject to certain risks anduncertainties that could cause actual results to differ materially from thosereflected in these forward-looking statements. Factors that might cause such a difference include, but are not limitedto, those discussed in the section entitled “Management’s Discussion andAnalysis of Financial Condition and Results of Operations-Certain Factors ThatMay Affect Future Results” in our Annual Report on Form 10-K.  Readers are cautioned not to place unduereliance on these forward-looking statements, which reflect management’sopinions only as of the date hereof. The Company undertakes no obligations to revise or publicly release theresults of any revision to these forward-looking statements, whether as aresult of new information, future events, or otherwise.

 

**ITEM 3.****                                   QUANTITATIVEAND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

 

We developproducts in the United States and market our products in North America, Europe,the Middle East, Asia and Australia. Revenues outside the United States were40.5%, 46.9% and 52.8% of our total revenues for the years ended December 31,2000 and 2001 and for the three months ended March 31, 2002, respectively. Mostof our foreign subsidiaries’ sales and expenses are made in local currencies.International sales denominated in currencies other than the U.S. dollar areprimarily in the Japanese Yen, Singapore dollar and the Euro. Accordingly, weare exposed to fluctuations in currency exchange rates. Foreign currencytransaction gains (losses) were approximately $(0.8) million, $(0.5) millionand $(0.1) million for the years ended December 31, 2000 and 2001 and for thethree months ended March 31, 2002, respectively. Because most of our sales arecurrently made in U.S. dollars, a strengthening of the dollar could make ourproducts less competitive in foreign markets.

 

In January 2001,we began a foreign currency-hedging program to hedge certain nonfunctionalcurrency exposure. Forward currency exchange contracts are utilized by us toreduce foreign currency exchange and interest rate risks with the goal ofoffsetting foreign currency transaction gains and losses recorded foraccounting purposes with gains and losses realized on the forward contracts. Wedo not hold derivative financial instruments for trading or speculativepurposes.

 

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As of March 31,2002, the Company had outstanding forward currency exchange contracts of $3.1million to sell Japanese Yen and $1.5 million to sell Australian Dollars whichhedge net balance sheet exposures. Gains and losses arising from the changes in the fair value of forwardcurrency exchange contracts are recognized as a component of other income(expense).  At March 31, 2002, thecurrent market settlement values of the forward contracts would result in again of approximately $0.3 million. There were no forward contracts outstanding at March 31, 2001.

 

We used a portionof the proceeds obtained from our August 2000 initial public offering torepay all outstanding amounts under our revolving credit facility and termloan, which we subsequently terminated. To the extent that we enter into a newcredit facility in the future, future interest expense could be subject tofluctuations based on the general level of U.S. interest rates.

 

We have investedthe remaining proceeds from our initial public offering in investment gradecorporate and government securities and money market funds. The primaryobjective of our investment activities is to preserve capital while at the sametime maximizing the income we receive from our investments withoutsignificantly increasing risk. Some of the securities that we invest in mayhave market risk. This means that a change in prevailing interest rates maycause the principal amount of the investment to fluctuate. For example, if wehold a security that was issued with a fixed interest rate at the then–prevailingrate and the prevailing interest rate later rises, the principal amount of ourinvestment will probably decline. As of March 31, 2002, we had $24.4 million ofsecurities which mature in 90 days or less, $13.7 million of securities whichmature between 90 days and one year, and $1.0 million of securities whichmature between one and two years. We do not believe that we have any materialexposure to interest rate risk.

 

##### **PART II.**                                                OTHERINFORMATION

 

**ITEM 2.  CHANGES IN SECURITIES AND USE OFPROCEEDS**

 

**(d)****                                  Use of Proceeds**

 

The Company completed its initial public offering of 8.0 millionshares of its common stock pursuant to a Registration Statement on Form S-1(Registration No. 333-35106, effective August 3, 2000) on August 9, 2000.  Total proceeds from the offering, includingthe exercise of the over-allotment option, were approximately $63.9 million,net of underwriting discounts and commissions of approximately $5.0 million andother fees and expenses of approximately $1.8 million.

 

From the date of receipt through March 31, 2002, we have used theproceeds as follows:

 
| Repayment  of indebtedness | $ | 16.6  million |   |
|----------------------------|---|---------------|--------|
| Acquisition  of businesses | $ | 3.4 million   |   |
| Working  capital           | $ | 10.3  million |   |
| Total                      | $ | 30.3  million |   |

 

The remainder of theproceeds has been invested in investment grade corporate and governmentsecurities and money market funds. We intend to use the remaining proceeds forresearch and development activities; expenditures on sales and marketing,consulting services, and general and administrative personnel; systems costs;and working capital and general corporate purposes, including possibleacquisitions of, or investments in, businesses and technologies that arecomplementary to our business. None of the net proceeds of the offering werepaid by us, directly or indirectly, to any director, officer or general partnerof ours or any of their associates, or to any persons owning ten percent ormore of any class of our equity securities, or any affiliates of ours.

 

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**ITEM 6.****                                   EXHIBITSAND REPORTS ON FORM 8-K**

##### ** **

(a)           Exhibits

 

10.1                           FirstAmendment to Employment Agreement dated as of February 19, 2002, between theCompany and Michael Burstein.

 

(b)                                 Reportson Form 8-K

 

None.

 

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#### **SIGNATURES**

 

Pursuant to therequirements of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned thereunto dulyauthorized.

 

 
|                      | EXE TECHNOLOGIES, INC.                 |
|---------------------------|----------------------------------------|
|                      |                                   |   |
|                      |                                   |   |
| Date:  May  13, 2001 | By:                                    |   /s/  RAYMOND R. HOOD |   |
|                      | Raymond R. Hood                        |
|                      | Chairman of the Board of Directors and |
|                      | Chief Executive Officer                |
|                      |                                   |   |
|                      |                                   |   |
| Date:  May  13, 2001 | By:                                    |   /s/  MICHAEL A. BURSTEIN |   |
|                      | Michael A. Burstein                    |
|                      | Senior Vice President, Finance, Chief  |
|                      | Financial Officer and Treasurer        |

 

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**INDEX TOEXHIBITS**

** **

 
| 10.1 |   | First Amendment to Employment Agreement dated as of  February 19, 2002, between the Company and Michael Burstein. |
|------|--------|-------------------------------------------------------------------------------------------------------------------|

 

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