aldus corporation - University of Washington Libraries Digital

Transcription

ALDUS CORPORATION
1992
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R E S P O N D I N G TO O U R C H A L L E N G E S
REDEFINING O U R B U S I N E S S
REAFFIRMING O U R F U T U R E
ALDUS CORPORATION
1992 Annual Report
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kLDUS CORPORATION
CREATES COMPUTER SOFTWARE
SOLUTIONS THAT HELP PEOPLE
THROUGHOUT THE WORLD
EFFECTIVELY COMMUNICATE
INFORMATION AND IDEAS.
LDUS CORPORATION
We introduce six new products to the education market.
Crosfield Electronics Ltd. enters into an agreement with us for the worldwide distribution of
Aldus PressWise.
Skip Walter joins Aldus as our Vice President of Engineering.
Aldus begins a stock-repurchase program and acquires 2 million shares by year's end.
!TER T W O
We establish Aldus Consumer Division and charge it with developing and marketing value-priced
consumer software.
Aldus Benelux subsidiary opens.
Aldus Consumer Division ships Gallery Effects: Volume 1, Classic Art for Windows, a library
of special effects for scanned photographs and bitmap images.
We form Aldus Kabushiki Kaisha, a Tokyo-based, majority-owned joint venture with the Japanese
software company Something Good Inc.
Jim David becomes the new Vice President of our domestic-sales organization, Aldus USA.
Aldus Publishing Collection, consisting of Aldus FreeHand, Aldus PageMaker, and Aldus PhotoStyler, ships throughout Europe as a special promotion.
Aldus PressWise, our page-imposition program for professional printers and prepress companies,
ships in the U.S. and Canada.
Version 2.0 of our consumer publishing product, Personal Press, ships with 50 design templates
and System 7 support.
UARTER T H R E E
We complete the restructuring of our worldwide operations, reducing headcount by 10 percent.
Aldus establishes an OEM (original equipment manufacturers) sales organization to capitalize on
new revenue opportunities.
We acquire a software program for color trapping from Graphic Edge Inc. called RipPrep, which
later becomes Aldus Trap Wise.
The company announces its support for Kodak Photo CD technology, which is later included in
Aldus PhotoStyler and Aldus Fetch.
Aldus launches a major domestic promotion of Aldus Publishing Showcase, a discounted collection
of Aldus FreeHand, PageMaker, and PhotoStyler for Windows.
QUARTER FOUR
We ship Aldus Fetch, our mixed-media, multiuser database program for cataloging, browsing
through, and retrieving digital media on the Apple Macintosh.
Sandy Smith, Vice President of Operations, becomes our Chief Operating Officer, a position she
held in an acting role since April 1992.
A L D U S CORPORATION
FINANCIAL
HIGHLIGHTS
1992
1991
1990
1989
1988
$174,132
6,779
$167,530
23,837
$134,983
23,761
$98,616
17,077
584,127
14,773
.47
1.54
1.63
1.22
1.06
14,543
15,489
14,557
14,051
13,978
Working capital
Total assets
80,275
156,283
127,050
178,569
91,832
141,181
67,841
Shareholders' equity
127,156
155,329
115,790
81,069
52,841
76,346
63,308
Current ratio
Return on revenue
3.9
3.9%
7.6
14.2%
5.3
17.6%
17.3%
Return on equity
4.8%
17.6%
24.1%
23.7%
For the years ended December 31,
I N C O M E S T A T E M E N T (inthousands)
Net sales
Net income
PER SHARE
Net income
Weighted average
shares outstanding (in thousands)
B A L A N C E S H E E T (in thousands)
KEY
99,272
RATIOS
Revenue per employee (in thousands)
NET SALES
(in millions)
180
189
NET INCOME
(in millions)
0-
196
5.8
17.6%
27.5%
5.5
174
166
NET INCOME
PER
SHARE
^^-
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88 89 90 91 92
88 89 90 91 92
88 89 90 91 92
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P R E S I D E N T ' S LETTER
By any measure, 1992 was a difficult year for Aldus. Competition intensified, the
l o COMPETE IN
recession continued to affect sales, and new distribution and customer-buying
patterns emerged worldwide. Throughout the software industry, the high-growth
THE LESS HEADY
environment of the '80s gave way to more sobering profit margins. To compete in the
less heady decade of the '90s, we had to act decisively. >• And act we did, responding
DECADE OF T H E
to the challenges, redefining our business, and reaffirming our future. We developed
a new business strategy that focuses our products on three markets: graphics products
' 9 0 S , WE HAD TO
for professional designers and production specialists; low-cost, high-value consumer
products; and fee-based service products shaped by customer needs. We reduced
ACT D E C I S I V E L Y . W E
staff by 10 percent, both here and abroad. And we brought in new executives to lead
our Sales, Engineering, and Marketing departments. >- We also restructured our
MOVED TO RESPOND
international operations and streamlined the European marketing organization in
Edinburgh for faster, more responsive product support for our subsidiaries. By the
TO OUR C H A L L E N G E S ,
end of the year, our reorganized German subsidiary's performance had improved
over the previous two quarters. >• Internationally, we invested in Japanese, Austra-
REDEFINE OUR
lian, Benelux, and Irish subsidiaries, with the plan of exchanging short-term startup
costs for long-term growth. Overall, 1992 saw little growth in our total revenue of
B U S I N E S S , AND
$174.1 million, up from $167.5 million in 1991. The year ended with earnings per
share at $.47, down 69 percent from their 1991 level of $1.54. Operating costs grew
REAFFIRM OUR
by 22 percent, including $2.1 million in one-time expenses associated with new
subsidiaries, restructuring changes, and obsolete product inventory. >* Despite these
modest results, we turned a tough year into an opportunity for change. We began
to renovate our business from the ground up. We introduced 13 new products or
upgrades for the most complete software publishing solutions on the desktop. And we
incorporated several new technologies into key products to enhance our competitive
advantage. >• Heading into 1993, our goal is to improve our financial performance,
using a combination of new management, a large and loyal customer base, and wellrespected products aimed at markets with the greatest potential for success.
P A U L BRAINERD
PRESIDENT
RESPONDING
TO O U R
CHALLENGES
After eight years in business, we
T H E CHANGING INDUSTRY.
the power of PageMaker. I Finally,
can point proudly to a number of
Several industrywide trends grew in
software products today sell in
achievements. An estimated
magnitude in 1992, collectively
dramatically different environments
1.5 million people worldwide use
challenging the way software com-
than only two years ago, when more
Aldus products. Our products are
panies have historically done business.
knowledgeable salespeople, generally
sold in more than 50 countries and
<l First, the worldwide recession
in small retail stores, influenced
are translated in up to 21 languages.
affected sales in our core desktop
purchase decisions. Now our products
Ranked by 1991 revenue in Soft'letter
publishing markets—graphic design,
are sold primarily through huge
100, Aldus is the ninth-largest
publishing, and advertising. Although
superstores and mail-order catalogs—
microcomputer software company in
we can't predict economic trends, we
mostly at discounts. Our packaging
the world. 4 Our success with Aldus
can actively seek out new markets to
needs to attract immediate attention
PageMaker, now one of 12 Aldus
broaden our revenue base. In 1992,
from the shelf, and our sales staff
products, was immediate. Our
we explored ways to tap our loyal
must create demand in increasingly
original founders, all veterans of the
customer base for new sources of
aggressive ways—
publishing industry, understood the
income, we strengthened our position
through new
need for an easy-to-use page-layout
in the value-priced consumer market,
pricing strategies,
program for the personal computer.
and we took the lead in converting
sales contracts with
As Aldus has grown within a
high-end color prepress and printing
OEMs (original
changing industry, many other
companies to desktop software.
equipment
award-winning products have joined
1 Second, competition continued to
manufacturers),
PageMaker in our product family.
intensify. QuarkXPress has proven to
and direct market-
Today, no other competitor in
be a strong competitor, but we have
ing. These are the challenges that are
publishing and graphics software can
responded by developing a powerful
redefining our business from the
claim the depth or range of Aldus.
new version of PageMaker, tailored
ground up. 4 At the heart of our new
specifically for the high-end graphics
business strategy is focus—sharp, well
professional, t To attract new
articulated, and shared by our U.S.
customers to Aldus products, we have
headquarters staff, our field sales
honed our targeted-market strategy
organizations, and our 11 international
and are building a complete profes-
subsidiaries and branch offices.
sional publishing solution to augment
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REDEFINING
OUR
BUSINESS
In 1992 Aldus developed a three-business strategy for
the future that was designed to respond to inevitable
changes in the industry and economy, w Our Professional Graphics Products business develops and
ARE ALREADY A L D U S
markets software programs for graphic designers and production professionals.
The products here include Aldus PageMaker, Aldus FreeHand, Aldus Persuasion,
c?
PRODUCT O W N E R S ,
Aldus PhotoStyler, Aldus PrePrint, Aldus PressWise, and most recently, Aldus
TrapWise and Aldus Fetch. * Our Consumer Products business reaches a broader
S U C H AS T O N Y G A B L E ,
range of price-conscious consumers who want easy-to-use, automated publishing
and graphics tools. Developed and marketed by our San Diego-based Consumer
GRAPHIC DESIGNER
Division, the products include SuperPaint, Personal Press, Gallery Effects, and the
1992 addition, IntelliDraw. ^> Our Service Products business designs and markets
AND F O U N D E R OF
fee-based technical support, training seminars, consulting, and other customized
service programs that add value to the purchase of our software, v Central to
GABLE DESIGN.
these three businesses is the care and retention of the customers who already
own Aldus products. As the software industry matures, long-term success will
be realized by companies that build on the value inherent in a satisfied installed
redefining
our
base of customers. A major competitive advantage for Aldus is the 1.5 million
customers who now own one or more of our products. In 1992, we began to
implement a systematic strategy for turning this loyal customer base into a
continuous revenue source through product-registration incentives, product
cross-selling, and upgrade sales.
t r a n sf o r rr
A NEW FOCUS FOR O U R
PROFESSIONAL G R A P H I C S
PRODUCTS.
Our Professional Graphics Products
business represents a return to the
source of our success—the graphic
designer and production professional
which includes many features not
found in corporate creative groups
offered by its major competitor,
and communications departments,
QuarkXPress. Version 5.0 represents
design firms, ad agencies, publishing
a renewed commitment to the
houses, prepress firms, and printing
typographical, performance, and
businesses. We built our company
prepress requirements of PageMaker's
PageMaker and the many other Aldus
by understanding the needs of this
target market, the graphics profes-
products with Windows and
influential market segment—skilled
sional, v We announced PageMaker
Macintosh versions. %> The launch of
professionals historically willing
5.0 worldwide in a multicity event
PageMaker 5.0 also inaugurated a key
to pay a premium for precision-
the first week of January 1993. Early
component of our new business
oriented, high-performance graphics
press reviews suggest that the quality
strategy—to release our professional
products. $ In early 1992, we began
of the software and the consistency of
products simultaneously worldwide.
to align each of our professional
our marketing programs will help
Marketing and sales teams for Aldus
graphics products to the special
PageMaker retain its
requirements of this market. Our
leadership position, v In
primary goal for PageMaker, still the
addition to exceeding the
core of our business, is to remain
capabilities of its competi-
competitive in an increasingly
tors, PageMaker 5.0 has
crowded field of desktop publishing
the traditional Aldus
options. We therefore focused on the
advantage of cross-platform
Europe, Aldus USA, and Aldus
development of PageMaker 5.0,
compatibility between the Macintosh
Pacific Rim worked together
and Microsoft Windows operating
throughout the fourth quarter to
environments. In fact, Aldus was one
coordinate product messages,
of the first developers of Windows
develop international sales tools, and
software outside of Microsoft, which
share resources to make this launch a
ensures product reliability and
effective technical support for
OUR
PROFESSIONAL
GRAPHICS
PRODUCTS
success for PageMaker 5.0—and a
before that senior vice president of
model for subsequent product
corporate sales at Egghead Discount
releases. $ The model includes an
Software, to adapt our U.S. sales
emphasis on the Aldus product line
organization to our new customer
as a complete publishing solution.
focus and evolving distribution
Promotions, materials, and mailings
highlight the complementary func-
PREPRESS S O L U T I O N S .
of the year, we had
tions of Aldus FreeHand and
In 1992, our newly focused strategy
made several changes
PageMaker, for example. One of our
for professional products led us to
in the sales organiza-
most successful promotions of the
color prepress and printing com-
tion. § First, all U.S.
year sold Aldus FreeHand, PageMaker,
panies—an important segment of
process, prepress professionals
sales representatives and
and PhotoStyler together as a full-
the professional graphics market
require a different set of tools from
managers went through
solution publishing tool for the
that is just now exploring desktop
those of the graphic designer. § In
intensive "graphics
Windows market.
alternatives, v For several years, we
May, our newly formed Prepress
savvy" training to
have offered color separation and
Products group shipped Aldus
increase their under-
other basic prepress capabilities with
PressWise, a professional page-
standing of our target
Aldus PrePrint, Aldus PageMaker,
imposition program that allows
markets and their need
and Aldus FreeHand. As evolving
printers to assemble multipage
for our products. We
technology made it possible to
PostScript files from all the major
also added experienced
execute precision color work on the
page-layout and graphics applica-
graphics professionals
desktop, we accelerated this commit-
tions. § By January 1993, PressWise
to the sales force. Some
ment to building high-performance
had been followed by the release of
customers, we believe that the market
tools for the prepress professionals in
Aldus Trap Wise, an upgrade to a
for desktop prepress products will
color houses, PostScript service
product called RipPrep, which we
grow over the next few years.
bureaus, print shops, and in-plant
acquired from Graphic Edge Inc.
Meanwhile, Aldus has already
production facilities. Concerned with
in July 1992. TrapWise performs
emerged as an innovator in this field
color registration, ink densities,
professional-quality process- and
and a leader in guiding professionals
trapping, page imposition, and other
spot-color trapping on pages
away frcmi high-cost, high-end
specialized steps in the printing
produced in Aldus FreeHand,
production systems and toward
PageMaker, and other desktop
prepress and printing solutions
publishing software. § Because these
emerging in desktop software.
Katherine McCoy,
a graphic designer
from Cranbrook
Academy ofArt in
Michigan, serves on
our Graphics Arts
Advisory Board,
which helps shape
the future of Aldus
products.
ro
NEW
channels. By the end
BUILDING P
FOCUS
3
to
O
two products offer dramatic cost and
o
time savings to our future prepress
CREATING DEMAND
recent hires come from Agfa, Cros-
A N D S E L L I N G TO W I N .
field, and Linotype-Hell—all leaders
To take advantage of our strong
in the prepress arena. V Organiza-
product line and increase in market-
tionally, we restructured our U.S.
ing dollars, we restructured our
sales force to sharpen sales goals; we
U.S. sales organization, streamlining
created Graphics Specialist positions
its management structure and con-
for each of our six sales districts; and
centrating attention on the profes-
we flattened out the sales organization
sional graphics market, v In April,
for more direct communication
we brought in Vice President of
between district offices and corporate
Aldus USA Sales Jim David, formerly
headquarters. V Aldus Europe has
president of ButtonWare Inc. and
also streamlined management levels
and hired Graphics Specialists in our
European subsidiaries. The goal is to
?2
sell to service bureaus, prepress
dollars. § It was equally important
vendors, and other design profes-
for our product packaging to stand
sionals directly from subsidiary offices
out among the hundreds of other
with the help of at least one technical-
products vying for attention on retail
support expert and prepress specialist
shelves and in mail-order ads. Early
(original equipment manufacturers)
on staff locally. $ Our sales-channel
in the year, we assembled a world-
a fundamental component of our sales
strategy now concentrates more
wide task force to research require-
strategy for new products. Since its
heavily on cooperative marketing
ments for and implement a new
formation midyear, our dedicated
efforts with our most successful
packaging design that could help
OEM sales group has negotiated
dealers, distributors, and direct
influence buying decisions. We
several important contracts. They
accounts to increase demand for our
completed the redesign in September,
include bundling Aldus PhotoStyler
products and drive sales. We have also
with new eye-catching boxes reach-
with Microtek's ScanMaker flatbed
adopted a new pricing strategy in the
ing U.S. shelves early in the fourth
and 35mm slide scanners; bundling
U.S. intended to stimulate sales by
quarter, and overseas markets in early
Aldus Trap Wise and PressWise with
making better use of marketing
1993. § In addition to our retail
the Agfa SelectSet 7000 series of
i/
g
strategy, we have made OEMs
The second component of our new
business strategy, Aldus Consumer
Division (ACD), grew out of our San
Diego-based former subsidiary,
I N T E L L I D R A W , TO
MEET THE DEMAND
image-setters, as well as with Du Pont/
Crosfield Europe's
•
StudioLink high-end
jpC*Z* «S m
prepress systems; and
SmMM
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k 1
bundling the OEM
version of Aldus Fetch
LB
with SuperMac's
mas
m
!EEHMDj
PhotoSpeed system for
Kodak Photo CD image
--*"
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processing. Like all our
OEM agreements, these
&
contracts represent a new
revenue source, while they raise our
Z * ? ^ ^ ^ ^ ^
OF THE H O L I D A Y
credibility and sales presence i
marketplace. $> Finally, we have
Silicon Beach Software. ACD was
efforts with a new emphasis on
formed to take advantage of the
direct sales channels, where we sell
opportunities in consumer software,
products through mass mailings that
a fast-growing, high-volume market
tailor special offers to a specific
triggered by falling hardware and
audience. As with our sales promo-
software prices and changes in
tions, these mailings emphasize our
software distribution channels.
strength as a company that sells a
v Consumer software is aimed at
full line of products that addresses
computer-literate customers who
each step of the publishing process,
prefer the convenience of superstores
from initial design concepts to
and mail-order catalogs, who make
prepress color production. Our goal
their own buying decisions, and who
is to use this full-solution strategy to
seek out value pricing. Aldus
aggressively sell additional products
Consumer Division, therefore,
to both new and existing customers.
develops and markets easy-to-use
BUYING SEASON.
graphics
graphi and publishing products
priced under $200 on the retail shelf.
Besides value pricing, the software is
supplemented our retail and OEM
guished by its highly automated
AS
features, which translate into short
"smart" drawing program for non-
learning curves and high productivity
illustrators who need to convey ideas
for our customers. § In early 1992,
in diagrams or drawings. IntelliDraw
revenue in 1993, especially as we
ACD focused on repositioning former
allows them to draw quickly and to
take it into overseas markets, v The
Silicon Beach products for the value-
easily try out alternatives, while the
ACD business model relies on classic
Chuck Cantellay, programs such as traveling technical
president of Seattle
ImageSetting, is a
seminars, TechNotes publications,
member of the
award-winning
targeted support programs for service
Aldus Imaging
Center program.
bureaus and prepress vendors, and
fee-based packages of various
RVICE INTO
/4
priced consumer market. Pricing
software seamlessly maintains
consumer sales tactics of high-^
to make it a break-even business
support options, known as Aldus
was adjusted to consumer levels,
established alignments, connections,
impact packaging, price promotions,
BUSINESJ
through automation and continual
CustomerFirst. Here, too, we are
packaging was redesigned for greater
and relationships between individual •";?
multiproduct bundles, mail order,
Since shipping our first product in
product improvements. To help
working to lead the industry in
shelf impact, and selling strategies
objects in the drawing. Its general-
and direct-mail marketing. Success-
June 1985, Aldus has been well-
meet this goal, we upgraded several
customer satisfaction. Last year the
shifted toward mail-order catalogs
purpose nature and discount pricing
fully tested this past year in the U.S.,
of our information systems last
Aldus Imaging Center program swept
and direct mail. § The Aldus
are designed to appeal to the broad-
the United Kingdom, and Australia,
customer-oriented service programs.
year, v AutoTech is our voice-
the honors for best support awarded
consumer product line now includes
based consumer market. Since its
our consumer strategy will be
Both our expert technical support
activated artificial-intelligence system
by the Association of Imaging Service
SuperPaint, a 15-time award winner
release in July 1992, the product has
adapted to other European and
organization and our value-added
that automatically answers standard
Bureaus. § While our near-term goal
and the 1992 leader in ACD revenues.
received outstanding reviews world-
Pacific Rim countries in 1993.
service programs have enhanced our
customer questions. This past year,
is to break even on the technical-
Personal Press is our low-priced
wide. We believe that IntelliDraw will
competitive position. In late 1992,
we renovated the system based on
support side, our long-term objective
desktop publishing package, with
become a major source of ACD
we positioned our Service Products
evaluation reports that highlighted
is to make service a profitable
to become a self-sustaining business.
overlooked questions and under-
business. We are now looking at new
v For us, the challenge with tradi-
utilized pockets of information.
ways to package our fee-based service
tional technical support has been
Today, AutoTech saves costs by
programs with Aldus products,
diverting 20 percent of our callers to
improve our data-base systems for
quick, automated problem-solving
direct sales, and expand our profes-
develops and markets
alternatives. § We have also
sional service offerings of technical
Gallery Effects, a
experimented with automated fax
seminars and consulting.
collection of artistic
technology by introducing an index
effects and textures
of product literature and technical
that turn bitmap im-
notes that can be called up by
ages into art. § The
customers from a telephone, then
most recent consumer
faxed back to them. Increasingly,
product in this line is
we have been able to fill information
IntelliDraw, a new
requests this way, which reduces
the automated layout templates and
simple functions that
£^>W^^^^
distinguish it as a true
consumer publishing
product. ACD also
cf/^e^^^0^^0fp^
tfwtmt&fr
A SELF-9HB1|NING
egarded for its high-quality,
the time the caller spends on the
phone. § Our Service Products
business also includes value-added
teamwork
/6
advantage, and a better return on
our resource investment. The first
innovative
Aldus product to fully benefit from
this technology is IntelliDraw from
our Consumer Division in San
Diego. >• Aldus Additions is another
academia, multiuser corporate envi-
REAFFIRMING
cost-effective way of meeting the
ronments, and publishing. >- Both
THE
evolving needs of our customers.
Additions and shared technology
receiver to choose, reuse, and/or
Based on a simple development
free us to think about innovative ways
distribute the collected information.
We believe our three carefully focused businesses
language, Additions technology
of responding to the customer of the
>- The Aldus Advanced Products
position us to improve performance and profitability.
provides developers from other
future. As businesses increase their
Group was formed in early 1992 to
Our Professional Graphics Products business taps an
companies with an interface to
dependence on electronic tools,
develop a new type of publishing
influential market that has historically paid premium
PageMaker's commands, tools, and
customers will require a way to
system, a new way to package and .
prices for high-performance software. The Aldus
page-layout data. They in turn can
manage multiple projects across
deliver information to our customer
Consumer Division builds on its understanding of the
develop "plug-in" products that meet
computing platforms and among
of the future. This dedicated group
cost-conscious consumer to turn low prices into high-volume sales. And our
specialized market requirements in
many users. The workplace of the
is actively exploring all-media data-
Service Products business is drawing on six years of award-winning customer
such professional areas as graphic
future will depend on a central data-
management systems, workflow
service to become a new revenue source for Aldus. >• Key to the long-term
design, business communication,
base to store, preview, retrieve, and
management tools, data-interchange
FUTURE
OF I N F O R M A T I O N .
w
O U R GOAL IS TO
success of these businesses is a view of technology that looks beyond the next
convert information
methodologies for crossing to and
required for simulta-
from applications and platforms,
neous projects. Each
automation of routine production
project will require
tasks, authoring tools for electronic
multiple delivery
publications, and "browsers" for
technology. Since joining us last March, Walter has spearheaded our effort to
systems of the finished
viewing and filtering archives of
identify the customer of the future, and align our technology goals accordingly.
work, such as CD-ROM,
electronic information. >• We are
PIONEER IDEAS AND
product upgrade. With the help of our new Vice President of Engineering, Skip
HE B E N E F I T S O F O B J E C T - O R I E N T E D
TECHNOL-
Walter, the challenges of the past year have become an opportunity to rethink
PRODUCTS IN T H I S
our technology strategies. Walter brings 14 years of experience with Digital
AREA
WHAT WE CALL
•INFORMATION
PACKAGING."
OGY I N C L U D E R E D U C E D D E V E L O P M E N T
CYCLES
Equipment Corporation, where he co-created their ALL-IN-1 office computing
AND A S T R O N G E R C O M P E T I T I V E
ADVANTAGE
>• Our long-term strategy relies on the versatility and adaptability of object-
printed publications, and online
calling this new world information
oriented technology, which takes a modular approach to software development.
transfer. And the finished work will
packaging, and our goal is to lead
Much like Lego blocks, object-based engineering allows us to build whole
entail not just a bound book of text
the industry in pioneering ideas and
products from independent components, instead of retooling complex core
and graphics, but also a way for the
products. In November, we shipped
technology each time customer needs change. Additionally, we can take the
Aldus Fetch, the first product in
component architecture of one product and apply it to many different products,
this new category of information
with little extra development or testing effort. The benefits of this shared
software. Aldus Fetch is a mixed-
technology include reduced development cycles, a stronger competitive
media, multiuser database for
77
EXPANDING
FOREIGN MARKETS.
Last year, we continued to invest in
world markets to expand our revenue
base. While experiencing a difficult
year in Europe, we were pleased with
JR NEW OFFICE IN HONG KONG USES THE LOW-COST
the results in our
significant head start in this poten-
Pacific Rim mar-
tially lucrative arena. With Windows
kets, especially in
becoming a standard in Japan,
Latin America.
complex font issues approaching
»- In April 1992,
resolution, more powerful processors
we formed Aldus
emerging, and the Macintosh market
BRANCH MODEL SUCCESSFULLY TESTED LAST YEAR FOR OUR
AUSTRALIAN OFFICE, WHICH IS NOW A SUBSIDIARY.
A?
archiving and retrieving graphics,
KK (Kabushiki Kaisha), a Tokyo-
expanding, the Japanese market for
clip art, photo images, QuickTime
based joint venture with the Japanese
desktop publishing software shows
movies, and sounds, with a built-in
company Something Good Inc., a
great promise. >- We also opened
browser for easy navigation through
software-development and marketing
a branch office in Hong Kong using
the archive. Fetch represents the start
firm we've worked with for several
the low-cost branch model tested last
of what we hope to be a series of
years. Soon after the formation, we
year on our Australian office (now a
groundbreaking tools that capture
increased our ownership status to 80
subsidiary). Shortly thereafter, we
and communicate information i
increasingly useful ways.
rcent. The partnership minimizes
the time it would otherwise take to
nderstand unique market, cultural,
sponsored one of our most successful
marketing events ever—the Aldus
Graphics Show '92 at the Hong Kong
and localization issues. We are now
Academy for the Performing Arts.
shipping Japanese-language versions
Aimed at graphic designers, prepress
of six Aldus products, giving us a
professionals, publishers, business
communicators, and print managers,
the three-day show featured exhibits,
seminars, and Chinese PageMaker 3.5.
>- We also invested in a new Irish
development subsidiary, to secure a
team of developers experienced in
workflow software for the Windows
environment, and in Canada, where
we are building a sales force. We
also established a new subsidiary in
Benelux. >• Together, these expansion efforts represent a long-term
customer
T H E F U T U R E IS I N
investment that we believe sets us up
OUR C U S T O M E R S .
for solid revenue sources in the years
We have faced the 1992 challenges
to come. Our international sales
and redefined our business for the
represented 48 percent of our 1992
coming years. We have identified
have guided the redefinition of our
revenue, with our Pacific Rim
our future customers with the goal
business. Our future growth depends
markets in the Pacific, Asia, Latin
of having future products ready
on turning the loyalty of these cus-
America, and Canada growing by
when they are. We have invested in
tomers into new sales opportunities.
43 percent over 1991.
countries that are just now beginning
Worldwide, we are developing tactics
to adopt electronic publishing and
19
with the hope of expanding our
installed base by cross-selling
products, and we are retaining
customers through timely product
upgrades and evolving support
options. >• With a newly focused
graphics. In short, we have set the
business strategy, a restructured sales
stage to meet our competitors
organization, and a renewed commit-
head-on. >- Throughout the 1992
ment to innovative technology, we
decision-making process, the
look forward to an exciting and
suggestions coming in from our
productive future.
customer base of 1.5 million people
\
PRODUCTION NOTES
T H E PROCESS
This report was designed and produced with Aldus PageMaker,
Aldus FreeHand, Aldus PhotoStyler, Aldus TrapWise, and Adobe
Photoshop. Photographs were scanned in the TIFF format using a
Linotype-Hell DC 3010 scanner. Thefinalpage designs were
color-separated in Aldus PrePrint and output to an
Agfa SelectSet 7000 as color film separations.
A N N U A L REPORT T E A M
John Snyder and Gary Onn, Finance
Colleen Cullen, Print Production
Aldus Creative Services:
Jamie Jamison, project management
Paula Wong, art direction and illustration
Colleen Stewart, design
Ann Senechal, writing
Marina Gordon, copy editing
Michael Coleman, production and illustration
Desktop Prepress:
Stone Field Digital Prepress
Photography:
Davis Freeman, all photos except:
Richard Hireisen, photo of Katherine McCoy, page 10
Arthur Kan, Aldus Graphics Show, Hong Kong, page 19
Martin Trailer, executive photo of Steve Cullen
Lesley Jones, executive photo of Derek Gray
Raymond Gendreau, executive photo of
Kenneth Grunzweig
Handwriting:
Glenn Yoshiyama
L
financial
MANAGEMENT'S DISCUSSION AND ANALYSIS
22
CONSOLIDATED BALANCE SHEETS
27
CONSOLIDATED STATEMENTS OF INCOME
28
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY . . 2 9
CONSOLIDATED STATEMENTS OF CASH FLOWS
30
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
31
REPORTS O F M A N A G E M E N T A N D I N D E P E N D E N T A U D I T O R S
...39
SUPPLEMENTAL FINANCIAL INFORMATION
ninety-two
41
MANAGEMENT'S
DISCUSSION
AND ANALYSIS
NET SALES
1992
CHANGE
4%
$174,132
(dollar amounts in thousands)
1991
CHANGE
1990
$167,530
24%
$131,983
Aldus' sales are affected by a number of factors, including the release of new products and enhancements to existing products, economic conditions in Aldus' worldwide markets,fluctuationsin foreign
exchange rates, changes in distribution and pricing of products, increasing competition in the software
industry, and entry into new geographic markets.
Net sales for 1992 increased 4 percent from 1991. Aldus experienced strong 1992 sales growth from
its Pacific Rim division, including sales from its new Japanese subsidiary, Aldus Kabushiki Kaisha
("Aldus K.K."), and from new product releases. Aldus K.K. was formed in May 1992 as a venture
with Something Good Inc., a Japanese software company. With the formation of Aldus K.K., Aldus
receives distributor prices for its products in Japan, which are higher than manufacturer prices. New
product releases also helped increase 1992 net sales. During 1992, sales of Aldus PageMaker 4.2 for the
Macintosh, released in December 1991, increased $10 million over 1991 sales of its predecessor,
PageMaker 4.0 for the Macintosh. Product releases in 1992, including Aldus FreeHand 3.1 for Windows
and 3.11 for the Macintosh, Aldus Persuasion 2.1 for the Macintosh and Windows, IntelliDraw 1.0 for
the Macintosh and Windows, and Aldus PhotoStyler 1.1a for Windows, also contributed to the 1992
sales increase. Offsetting some of this growth in 1992 sales was a slowdown in sales of PageMaker 4.0 for
Windows and recessionary conditions in many of Aldus' worldwide markets, particularly Europe.
Released in February 1991, PageMaker 4.0 for Windows has experienced widespread success. Sales of
PageMaker 4.0 for Windows grew in 1991 as localized versions were made available to the worldwide
market. Approximately 18 percent of 1991 PageMaker 4.0 for Windows sales were from upgrade
versions. In 1992, sales of PageMaker 4.0 for Windows declined by $26 million compared with 1991, as
the product's market life matured. Upgrade sales of PageMaker 4.0 for Windows declined to 7 percent
of PageMaker 4.0 sales in 1992.
In 1991, PageMaker 4.0 for Windows contributed significantly to the growth in sales. Sales from 1991
releases ofAldus FreeHand for the Macintosh and Persuasion for Windows also helped push sales over
1990 levels. Sales grew more slowly in 1991 compared with 1990 due to recessionary conditions in Aldus'
domestic and European markets in the second half of 1991, particularly in the United Kingdom,
Sweden, and France. Due to competitive and economic factors, sales ofPageMaker 4.0 for the Macintosh
also were sluggish in the last halfof 1991, prior to the shipment ofthe upgraded 4.2 version in December.
International net sales for 1992,1991, and 1990 were $83.6 million, $81.4 million, and $65.2 million,
respectively. International sales for 1992 and 1991 were 48 percent and 49 percent of total net sales.
International salesfor1992 grew 3 percent over the previous year as a result of strong sales growth from
Aldus' Pacific Rim division.
In 1993, Aldus will release an upgrade ofPageMaker—version 5.0. Historically, more than halfofAldus'
revenues have been derived from sales of PageMaker; however, with increasing competition in the
software industry and changing worldwide economic conditions, there is no assurance PageMaker 5.0
will be as successful as earlier versions. As a result, Aldus cannot determine the effect the release of
PageMaker 5.0, or other planned products, will have on future sales or results of operations.
Fit I C
r^r\DDr\DATinM
MANAGEMENT'S
DISCUSSION
AND ANALYSIS
COST O F S A L E S
1992
PERCENTAGE
OF NET SALES
CHANGE
1991
PERCENTAGE
OF NET SALES
CHANGE
1990
PERCENTAGE
OF NET SALES
$39,421
22.6%
21%
$32,590
19.5%
23%
$26,433
19.6%
Cost of sales includes the purchase and duplication of disks, printing and assembly costs, royalties for
certain software incorporated into Aldus products, and provisions for obsolete inventory.
Cost of sales as a percentage of net sales for 1992 increased from 1991. The increase in cost of sales was
primarily related to a shift in the sales mix to royalty-based products which have lower margins. Sales
of PageMaker, with its low royalty costs, comprised 53 percent of 1992 sales, compared with 64 percent
of 1991 sales. In addition, increased promotional and discounting activities and product bundlings in
the second half of 1992 led to lower margins in some Windows products. These margin reductions were
partially offset by a decrease in printing and assembly costs for new versions of certain products.
Cost of sales as a percentage of net sales in 1991 was consistent with cost of sales in 1990. A slight shift
in the sales mix in 1991 toward royalty-based products wasoffsetbyreducedproduct costs. High-margin
PageMaker sales comprised 64 percent of net sales in 1991, compared with 69 percent of 1990 net sales.
33
SALES A N D
MARKETING
1992
PERCENTAGE
OF NET SALES
CHANGE
1991
PERCENTAGE
OF NET SALES
CHANGE
1990
PERCENTAGE
OF NET SALES
$69,635
40.0%
22%
$57,211
34.1%
30%
$44,061
"32.6%
Sales and marketing expenses increased in 1992 as a result of increased advertising and marketing
programs and geographic expansion, including the addition of three new sales subsidiaries in Australia,
Benelux, and Japan. Aldus' management expects expenditures on sales and marketing to increase in
1993, but at a slower rate than sales, as efforts to expand markets and increase penetration into targeted
software markets continue, and as PageMaker 5.0 is launched in the first half of the year.
The 1991 increase in sales and marketing expenses was the result ofincreased sales and marketing efforts,
particularly advertising related to the shipment of Persuasion 2.0 for Windows, as well as other 1991
product releases.
MANAGEMENT'S
DISCUSSION
AND
GENERAL AND
ADMINISTRATIVE
ANALYSIS
1992
PERCENTAGE
OF NET SALES
CHANGE
1991
PERCENTAGE
OF NET SALES
CHANGE
1990
PERCENTAGE
OF NEJ^SALES
$31,208
17.9%
28%
$24,466
14.6%
30%
$18,797
13.9%
The increase in general and administrative expenses for 1992 reflects additional staffing costs,
depreciation, and rental expense as Aldus opened three new sales subsidiaries: Aldus Australia, Aldus
Benelux, and Aldus K.K. The 1991 increase in general and administrative expenses resultedfromadded
personnel, information systems, and office space necessary to support the growth of Aldus' worldwide
operations. Aldus' management expects general and administrative expenses to increase at a slower rate
than revenues in 1993.
SOFTWARE
DEVELOPMENT
RESEARCH AND DEVELOPMENT
COSTS
24
1992
PERCENTAGE
OF NET SALES
CHANGE
1991
PERCENTAGE
OF NET SALES
CHANGE
1 990
$17,684
10.2%
25%
$14,125
8.4%
20%
$11,736
PERCENTAGE
OF NET SALES
8.7%
A M O R T I Z A T I O N O F C A P I T A L I Z E D S O F T W A R E D E V E L O P M E N T COSTS
1992
PERCENTAGE
OF NET SALES
$10,128
5.8%
_(dollar
_ amounts __
_ .
in thousands)
CHANGE
1991
PERCENTAGE
OF NET SALES
CHANGE
1990
PERCENTAGE
OF NET SALES
9%
$9,288
5.5%
150%
$3,719
2.8%
The increase in research and development costs in 1992 reflects continued expansion of Aldus'
engineering staff, including the addition of a new development subsidiary, Aldus Ireland, and
additional non-capitalized research and development projects. The 1991 increase in research and
development costs resulted from growth of Aldus' engineering staff and increased work on noncapitalized software research and development efforts. Aldus' management believes that continued
investment in research and development is critical to Aldus' growth and competitive position.
Amortization of capitalized software development costs in 1992, as a percentage of net sales, was
comparable to 1991, as significant capitalized software projects continued to be amortized. Amortization of capitalized software development costs increased in 1991, due primarily to the shipment of
PageMaker 4.0 for Windows, Persuasion 2.0 for Windows, and Aldus FreeHand 3.0 for the Macintosh.
Amortization of software development costs are expected to increase in 1993 due to planned product
releases, particularly PageMaker 5.0.
ALDUS CORPORATION
MANAGEMENT'S
DISCUSSION
AND ANALYSIS
INTEREST INCOME
1992
PERCENTAGE
OF NET SALES
CHANGE
1991
PERCENTAGE
OF NET SALES
$4,226
2.4%
(16%)
$5,042
3.0%
CHANGE
.
1990
PERCENTAGE
OF NET SALES
$5,051
3.7%
Interest income decreased in 1992 due to a decrease in cash, cash equivalents, and marketable securities
and a decline in interest rates. In 1992, Aldus used a portion of its investment portfolio to repurchase
1.9 million shares of Aldus common stock for approximately $35 million, to purchase the building that
houses Aldus Europe Ltd. in Edinburgh, Scotland, for approximately $6 million, and to form Aldus'
Japanese subsidiary, Aldus K.K., for approximately $7 million.
Though cash, cash equivalents, and marketable securities increased $30 million over 1990, interest
income for 1991 remained flat due to declining interest rates and a shift to lower-interest, taxadvantaged, and tax-exempt investments in 1991.
PROVISION
FOR
_ „__
INCOME TAXES
1992
$3,139
PERCENTAGE
OF NET SALES
EFFECTIVE
TAX RATE
1.8%
1991
31.7% $10,844
PERCENTAGE EFFECTIVE
OF NET SALES TAX RATE
6.5%
1 990
31.3% $11,504
PERCENTAGE EFFECTIVE
OF NET SALES TAX RATE
8.5% 32.6%
An analysis of differences between the statutory and effective income tax rates is provided in Note 8 to
the Consolidated Financial Statements.
The Statement of Financial Accounting Standards No. 1Q9, "Accounting for Income Taxes," issued in
February 1992, requires an asset-and-liability approach for financial accounting and reporting for
income taxes, and replaces the income-statement approach inherent in Accounting Principles Board
Opinion No. 11. The new standard requires that deferred tax liabilities and assets be adjusted currendy
for the effects of changes in tax laws or rates. Aldus plans to implement the standard in 1993 and will
record the cumulative effect of the new standard at that time. The effect of adopting the standard on
Aldus'financialposition and results of operations will not be material.
26
MANAGEMENT'S
DISCUSSION
AND ANALYSIS
L I Q U I DITY
AND C A P I T A L
Aldus'financialcondition remained strong as of December 31,1992. Aldus' investment portfolio of
c a s n > cash equivalents, and marketable securities totaled $71 million at December 31, 1992eAldus'
investments represent 46 percent of total assets and consist of investment-grade securities diversified
among security types, industries, and issuers. Aldus' working capital at December 31, 1992, was
$80 million, and its current ratio was 3.9 to 1.
Historically, working capital used to finance Aldus' growth has been provided by cash flow from
operations and the exercise of stock options by employees. Expenditures for property and equipment
are expected to be lower in 1993, as no major property purchases are anticipated in the coming year.
In 1992, Aldus purchased the land and building that house Aldus Europe Ltd. in Edinburgh, Scotland,
for approximately $6 million, reducing the annual property costs for this subsidiary. In the U.S., Aldus
has suspended its search for a new headquarters facility. Additions to equipment and leasehold
improvements, however, are expected to continue as Aldus expands its worldwide operations.
Investment in capitalized software and purchases of software technology or software companies also
are expected to grow in 1993 as Aldus continues to develop or acquire new products and technologies.
26"
In January 1992, Aldus announced its intent to repurchase up to 1 million shares of Aldus common
stock from time to time on the open market, depending on market conditions, share price, and other
factors. With further actions in July and December, the Board of Directors increased the number of
shares authorized for repurchase to a total of 3 million shares. As of December 31, 1992, Aldus had
repurchased 1.9 million shares at a cost of $35 million. The repurchased shares are being canceled
upon repurchase. Aldus expects to continue the repurchase of shares in 1993, depending on market
conditions and other factors.
Aldus has six unsecured bank lines of credit, two working capital lines, and four foreign exchange lines.
The working capital lines, totaling $5 million, expire in March 1993 and May 1993, and bear interest
at 4.9 percent and 6.0 percent at December 31, 1992. As of December 31, 1992, $1.6 million was
outstanding on one of these lines. The foreign exchange lines total $34 million and are available for
hedging foreign-denominated receivables for up to one year. As of December 31,1992, no amounts
were outstanding on these lines.
Management expects that existing cash, cash equivalents, and marketable securities, together with cash
generated from operations, will provide sufficient funds for acquisitions, expansion, and operating
requirements in the foreseeable future.
ALDUS CORPORATION
CONSOLIDATED
BALANCE
SHEETS
DECEMBER 3 1 ,
1992
1991
Assets
Current assets:
Cash and cash equivalents
Marketable securities
Trade accounts receivable, net of allowance
for doubtful accounts of $1,226,000 and $1,476,000
Income taxes receivable (Note 8)
Inventories (Note 2)
Deferred income taxes (Note 8)
Prepaid expenses
Total current assets
Property and equipment, at cost (Note 3)
Less accumulated depreciation and amortization
Software development costs, net (Note 4)
Note receivable from and investment in affiliate (Note 5)
Excess of cost over acquired net assets, net
Other assets
$ 36,212,871
34,927,023
$ 60,996,967
45,218,492
21,945,820
5,780,169
5,788,000
3,709,762
108,363,645
25,284,136
1,264,000
6,024,216
3,421,000
4,157,024
146,365,835
49,842,444
24,424,041
25,418,403
35,411,137
17,854,882
17,556,255
13,905,036
1,225,000
5,198,189
2,172,528
$156,282,801
12,338,756
1,400,000
907,878
$178,568,724
Liabilities and Shareholders' Equity
Current liabilities:
Short-term borrowings from bank (Note 6)
Accounts payable
Accrued compensation and benefits
Accrued royalties
Accrued promotional costs
Other accrued liabilities
Deferred revenue
Income taxes payable (Note 8)
Total current liabilities
Deferred income taxes (Note 8)
1,603,849
8,180,428
2,438,434
2,664,245
2,728,862
7,566,437
1,570,368
1,336,000
5,290,103
2,493,431
2,029,524
2,631,746
5,415,273
1,456,245
28,088,623
19,316,322
1,038,000
3,923,000
Commitments and contingencies (Notes 9 and 10)
Shareholders' equity (Note 7):
Common stock—40,000,000 shares authorized;
13,289,337 issued and outstanding (14,783,190 in 1991)
Retained earnings
Translation adjustments
Total shareholders' equity
See accompanying notes.
34,997,170
96,001,745
(3,842,737)
127,156,178
$156,282,801
64,226,461
89,223,090
1,879,851
155,329,402
$178,568,724
ALDUS CORPORATION
CONSOLIDATED
STATEMENTS
O F INCOME
1992
1991
1990
1174,131,749
39,420,504
134,711,245
1167,529,963
32,589,817
134,940,146
$134^83,442
26,432,678
108,550,764
69,635,035
31,207,744
57,211,460
24,465,816
44,060,847
18,797,123
17,683,984
14,125,369
11,735,700
10,127,765
6,056,717
9,288,256
29,849,245
3,719,073
30,238,021
5,042,343
(210,631)
34,680,957
5,051,423
(24,753)
35,264,691
3,139,000
6,778,655
10,844,000
$ 23,836,957
11,504,000
$ 23,760,691
.47
1.54
1.63
14,542,560
15,488,848
14,557,000
Y E A R S ENDED D E C E M B E R 3 1 ,
Net sales
Cost of sales
Gross margin
Sales and marketing
General and administrative
Software development costs:
Research and development
Amortization of capitalized
software development costs
Income from operations
Interest income, net
Other expense, net
Income before provision for income taxes
2C?
Provision for income taxes (Note 8)
Net income
Net income per share
Weighted average number
of common shares
4,226,452
(365,514)
9,917,655
$
CONSOLIDATED
STATEMENTS OF
SHAREHOLDERS' EQUITY
C O M M O N STOCK
RETAINED
EARNINGS
SHARES
Balance, December 31, 1989
Exercise of stock options (Note 7)
Income tax benefit related to stock
options (Note 7)
Capital contribution
—Silicon Beach Software
Shareholder distribution
—Silicon Beach Software
Elimination of deferred tax liability
Currency translation adjustment,
net of deferred taxes of $1,083,000
TRANSLATION
ADJUSTMENTS
13,560,869
$41,138,274
562,637
4,098,954
—
4,098,954
3,538,359
—
3,538,359
500,000
—
—
—
5(1,183,836)
$41,114,833
—
I 81,069,271
500,000
(440,605)
951,214
(440,605)
951,214
2,311,847
2,311,847
23,760,691
1,128,011
115,789,731
23,760,691
Net income
14,123,506
49,275,587
659,684
9,609,993
65,386,133
—
•
9,609,993
;
options (Note 7)
net of deferred taxes of $387,000
5,340,881
5,340,881
751,840
—
23,836,957
751,840
23,836,957
Net income
options (Note 7)
Repurchase of common shares (Note 7)
Employee Stock Purchase Plan
shares (Note 7)
n # of deferred taxes of $2,949,000
Net income
14,783,190
64,226,461
332,673
3,678,694
—
(1,918,600)
92,074
—
—
13,289,337
89,223,090
—
—
1,181,091
—
$34,997,170
933,805
(35,022,881)
1,181,091 \
(5,722,588)
(5,722,588)
6,778,655
$(3,842,737)
$127,156,178
6,778,655
$ 96,001,745
7557329,402"
3,678,694
-tr.
933,805
(35,022,881)
—
1,879,851
3J
CONSOLIDATED
STATEMENTS OF
CASH FLOWS
YEARS ENDED DECEMBER 31 ,
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
Provision (benefit) for deferred income tax
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Decrease (increase) in prepaid expenses
Increase in accounts payable and accrued liabilities
Increase (decrease) in deferred revenue
Increase (decrease) in income taxes payable
Acquisition expenses paid by Silicon
Beach Software shareholder
Net cash provided by operating activities
so
Cash flows from investing activities:
Sales (purchases) of marketable securities and
other investments, net
Properly and equipment purchased
Issuance of notes receivable
Payments received on note receivable from affiliate
Purchases of software technology
Capitalized software development costs
Payments for purchase of Aldus K.K., less cash acquired
Other
Net cash used by investing activities
Cashflowsfrom financing activities:
Short-term borrowings
Principal payments under lease obligations
Common stock repurchased
Proceeds from stock options exercised
Tax benefit from stock options exercised
Proceeds from Employee Stock Purchase Plan
Silicon Beach Software shareholder distribution
Net cash provided (used) by financing activities
Effect of foreign currency exchange rates
on cash and cash equivalents:
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Supplemental disclosures of cashflow information:
Cash paid during the period for:
Interest
Income taxes
1992
1991
199Q
I 6,778,655
$23,836,957
$23,760,691
18,129,504
(1,504,000)
1,694,521
635,769
334,319
6,377,993
114,123
(707,544)
15,680,245
2,051,000
(2,601,787)
(736,657)
(1,183,680)
2,170,062
(123,562)
(4,649,209)
7,706,294
(1,276,000)
(5,936,397)
(784,320)
97,681
2,153,939
862,034
605,081
31,853,340
34,443,369
500,000
27,689,003
10,291,469
(17,131,484)
(1,000,000)
175,000
(1,933,000)
(9,821,526)
(5,445,635)
(106,953)
(24,972,129)
(31,437,419)
(10,720,916)
1,254,159
(9,157,494)
175,000
(975,000)
(7,842,101)
175,000
(2,475,000)
(7,422,236)
(571,472)
(51,371,908)
, 59,754
(17,565,817)
1,587,257
(165,899)
(35,022,881)
3,678,694
933,805
1,181,091
5,340,881
4,098,954
3,538,359
(27,642,034)
14,950,874
'
(440,605)
7,030,809
(4,023,273)
(24,784,096)
60,996,967
$36,212,871
588,074
(1,389,591)
62,386,558
$60,996,967
726,968
17,880,963
44,505,595
$62,386,558
$
72,180
$ 6,619,259
$
89,201
$ 8,714,000
115,875
3,053,271
9,609,993
N O T E S TO
CONSOLIDATED
FINANCIAL STATEMENTS
N O T E ONE
SIGNIFICANT
BUSINESS
A c c o u NTI NG
Aldus Corporation ("Aldus") operates in a single industry segment developing, manufacturing, and
marketing microcomputer software throughits United States operations and European and Pacific Rim
subsidiaries. Aldus sells its products to software distributors, resellers, original equipment manufacturers, and directly to users primarily in North America, Europe, and the Pacific Rim.
POLICIES
For 1992,1991, and 1990, sales to one unaffiliated customer accounted for 12.5 percent, 16.1 percent,
and 15.8 percent of Aldus' consolidated net sales, respectively.
In May 1992, Aldus acquired 80 percent of Aldus Kabushiki Kaisha ("Aldus K.K."), a Tokyo-based
company, from Something Good Inc., a Japanese software company, for approximately $7 million.
Aldus K.K. develops and markets Japanese-language versions ofAldus products. The excess of cost over
acquired net assets is being amortized on the straight-line method over seven years. Accumulated
amortization of the excess cost was $579,000 at December 31,1992. Operating results ofAldus K.K. have
been included in the consolidated financial statements from the date of acquisition.
In February 1990, Aldus acquired Silicon Beach Software Inc., a microcomputer software publisher,
through a pooling of interests. Aldus exchanged 1,212,230 shares of its common stock for all of the
outstanding common stock of Silicon Beach Software Inc. Accordingly, Aldus' 1990 financial statements have been restated to include the accounts and results of operations of Silicon Beach Software.
3/
PRINCIPLES OF CONSOLIDATION
The accompanying financial statements consolidate the accounts of Aldus and its subsidiaries. All
significant intercompany accounts and transactions have been eliminated.
FOREIGN CURRENCY
Assets and liabilities of Aldus' foreign subsidiaries are translated to U.S. dollars at year-end exchange
rates. Income and expense items are translated at the average rates of exchange prevailing during the
year. The adjustment resulting from translating the financial statements of foreign subsidiaries is
reflected as an addition or reduction to shareholders' equity.
Aldus enters into foreign exchange contracts hedging certain exposure to changes in foreign currency
exchange rates. This exposure resultsfromAldus' foreign operations that are denominated in currencies
other than the U.S. doEar. Gains and losses from foreign currency transactions and from foreign
currency options used to hedge currencyfluctuationsare included in other income. At December 31,
1992, there were no foreign currency hedge contracts outstanding.
R E V E N U E RECOGNITION
Aldus recognizes revenue on product sales when the product is shipped. Revenues related to extended
technical support contracts are recognized ratably over the term of the support contracts. Aldus has
policies permitting dealers and distributors to return products under certain circumstances. Estimated
returns are accrued and reflected as a reduction of sales and cost of sales in the period of the original sale.
C A S H AND C A S H EQUIVALENTS
Aldus considers investments in highly liquid debt instruments and money market preferred stocks with
maturities of90 days or less at the date of purchase to be cash equivalents. The carrying amount reported
in the balance sheets for cash and cash equivalents approximates their fair value.
N O T E S TO
CONSOLIDATED
F I N A N C I A L STATEMENTS
NOTE
O N E (continued)
SIGNIFICANT
MARKETABLE SECURITIES
ACCOUNTING
Marketable securities are carried at cost (specific identification basis), which approximate^quoted
market prices. Marketable securities consist principally of investment-grade municipal bonds and
corporate obligations purchased with maturities of three months to one year.
POLICIES
INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out) or market.
DEPRECIATION A N D AMORTIZATION
Depreciation and amortization of property and equipment is provided on the straight-line method over
the following estimated useful lives:
Building
35 years
Computer equipment
i.
^
3—5years
Furniture
5-7 years
Leasehold improvements -.
lesser of lease term or estimated useful life
Depreciation and amortization expense related to property and equipment was $7,423,000, $6,392,000,
and $4,313,000 for the years ended December 31,1992,1991, and 1990, respectively.
SOFTWARE DEVELOPMENT COSTS
Generally, costs related to research, design, and development of computer software are expensed as
incurred. As prescribed by current accounting rules, certain software development costs related to
completion of internally developed products are capitalized and amortized on a product-by-product
basis using the straight-line method over the estimated sales life ofthe product, generally 12 to 24 months.
Purchased software technology is amortized using the straight-line method over periods not exceeding
36 months. Fully amortized software development costs are removed from thefinancialrecords.
ROYALTY C O S T S
Royalties paid on software incorporated in Aldus products are included in cost of sales. Royalty expense
included in cost ofsales in the consolidated statements ofincome for the years ended December 31,1992,
1991, and 1990 was $10,592,000, $6,819,000, and $4,142,000, respectively.
INCOME TAXES
Income tax expense includes United States and foreign income taxes, including United States taxes on
unremitted earnings of foreign subsidiaries. Certain income and expense items included in the
consolidatedfinancialstatements are reported in different years for tax reporting purposes in accordance
with applicable income tax laws. The resulting difference between the consolidatedfinancialstatement
provision for income taxes and income taxes currently payable is reported in the consolidated financial
statements as deferred income taxes. Tax credits are accounted for as a reduction of tax expense in the
year in which the credits reduce taxes payable.
The Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," issued in
February 1992, requires an asset-and-liability approach for financial accounting and reporting for
income taxes and replaces the income-statement approach inherent in Accounting Principles Board
Opinion No. 11. The new standard requires that deferred tax liabilities and assets be adjusted currendy
for the effects of changes in tax laws or rates. Aldus plans to implement the standard in 1993 and will
record the cumulative effect of the new standard at that time. The effect of adopting the standard on
Aldus'financialposition and results of operations will not be material.
N O T E S TO
CONSOLIDATED
NOTE ONE (continued)
SIGNIFICANT
ACCOUNTING
POLICIES
DIVERSIFICATION OF C R E D I T RISK
Aldus is subject to concentrations of credit risk primarily from cash investments and accounts
receivable. Credit risk from cash investments is managed by diversification of Aldus' investment
portfolio and by the purchase of investment-grade securities. Credit risk associated with trade
receivables is limited due to the geographic diversity ofAldus' customers and ongoing credit evaluations.
Aldus also maintains reserves for potential losses, and all credit losses to date have been within
management's expectations.
PER-SHARE INFORMATION
Net income per share is computed using the weighted average number of common and commonequivalent shares outstanding. The computation, using the treasury stock method, assumes that the
proceeds from the exercise of stock options, including tax benefits, are used to repurchase common
shares at the average market price of Aldus' common stock during each period.
NOTE
TWO
INVENTORIES
1992
1991
3,474,439
2,305,730
5,780,169
$ 1,119,255
4,904,961
$ 6,024,216
1992
1991
757,125
4,337,607
24,695,187
^0,052,525
$49,842,444
20,021,986
15,389,151
535,411,137
1992
1991
$24,801,013
(10,895,977)
$ 13,905,036
19,901,577
(7,562,821)
12,338,756
INVENTORIES AS OF DECEMBER 3 1 :
Components and work in process
Finished goods
N O T E THREE
PROPERTY A N D
PROPERTY AND EQUIPMENT AS OF DECEMBER 3 1
EQUIPMENT
Land
Building
Computer equipment
Furniture and leasehold improvements
$
N O T E FOUR
CAPITALIZED
SOFTWARE
DEVELOPMENT
COSTS
CAPITALIZED SOFTWARE DEVELOPMENT COSTS
AS OF DECEMBER 3 1 :
Software development costs
Accumulated amortization
33
N O T E S TO
CONSOLIDATED
NOTE FIVE
TRANSACTIONS
W,TH
Aldus has contracted with McQueen Holdings Limited ("McQueen") for various printing, assembly,
and warehousing services. Aldus holds a 10 percent equity interest in McQueen and a $3^0,000
convertible note receivable due February 28,1994. Aldus' investment in McQueen is accounted for at
cost. PurchasesfromMcQueen amounted to $6,876,000, $9,271,000, and $6,824,000 for the years ended
December 31,1992,1991, and 1990, respectively.
NOTE SIX
LINES
OF
CREDIT
Aldus has six unsecured bank lines of credit, two working capital lines, and four foreign exchange lines.
The working capital lines, totaling $5,085,000, expire in March 1993 and May 1993, and bear interest
at 4.9 percent and 6.0 percent at December 31, 1992. As of December 31, 1992, $1,603,849 was
outstanding on one of these lines. The foreign exchange lines total $34,000,000 and are available for
hedging foreign-denominated receivables for up to one year. As of December 31, 1992, no amounts
were outstanding on these lines.
N O T E SEVEN
COMMON
STOCK
During 1992, Aldus announced its intent to repurchase up to 3 million shares ofAldus common stock
from time to time on the open market, depending on market conditions, share price, and other factors.
As of December 31,1992, the company had repurchased 1,918,600 shares of common stock at a total
cost of $35,022,881. The repurchased shares were cancelled upon repurchase.
Aldus has various stock option plans for directors, officers, and employees that provide for nonqualified
and incentive stock options. The options are generally nonqualified options granted at fair market value
on the grant date and have a term of 10 years. For options granted prior to May 3,1988, the options vest
at 25 percent after the first year and ratably each month for the next three years. Options granted
subsequent to May 3,1988, vest at 20 percent after the first year and ratably each month for the next
four years. As required by generally accepted accounting principles, the tax benefit realized from the
exercise of nonqualified stock options is reported as an addition to shareholders' equity.
In May 1992, the Board of Directors amended the 1984 Restated Stock Option Plan, authorizing the
exchange of new options for previously granted stock options, provided that the terms of the new
options conform to the Plan. Subsequently, options for 1,178,834 shares, ranging in pricefrom$21.00
to $49.00 per share, were exchanged for similar options with an exercise price of $20.75.
ALDUS
CORPORATION
N O T E S TO
CONSOLIDATED
NOTE
S E V E N (continued)
COMMON
STOCK
At December 31,1992, options for 931,063 shares were exercisable and 1,117,196 shares were available
for future grants. Option activity for the three years ended December 31, 1992, was as follows:
NUMBER
PRICE P E R SHARE
Balance outstanding, December 31,1989
1,806,221
Granted
Cancelled
Exercised
1,442,000
(107,813)
(562,637)
15.50
.06
•02
2,577,771
Granted
Cancelled
Exercised
Granted
Cancelled
Exercised
Balance outstanding December 31,1992
AGGREGATE
— $21.75
$ 19,537,425
—
—
—
25.75
23.75
20.00
27,603,863
(1,906,360)
(4,098,954)
.02
—
25.75
41,135,974
1,022,450
(142,878)
(659,684)
24.00
8.30
.12
—
—
—
49.00
48.25
25.75
34,856,897
(2,672,438)
(9,609,993)
2,797,659
.02
—
49.00
63,710,440
2,116,304
(1,684,927)
(332,673)
10.25
10.25
.02
—
—
—
32.50
49.00
24.75
40,283,050
(45,652,978)
(3,678,694)
2,896,363
$
$
.02
.02
— $47.25
$54,661,818
Aldus initiated an employee stock purchase plan in July 1991 for employees with six months of service.
Under the plan, shares of Aldus' common stock maybe purchased at six-month intervals at 85 percent
of the lower of the fair market value on thefirstor last day of each six-month period. Employees may
purchase shares having a value up to 10 percent of their gross compensation during an offering period.
To date, 92,074 shares have been issued under the plan at an average price of $12.83. At December 31,
1992, 207,926 shares were reserved for future issues.
3d
ALDUS CORPORATION
N O T E S TO
CONSOLIDATED
N O T E EIGHT
INCOME
TAXES
T H E COMPONENTS O F THE
PROVISION FOR INCOME
TAXES ARE AS FOLLOWS:
1992
1991
«1990
2,199,000
428,000
2,016,000
4,643,000
6,901,000
836,000
1,056,000
8,793,000
9,882,000
780,000
2,118,000
12,780,000
(1,388,000)
(134,000)
1,8,000
(1,504,000)
$ 3,139,000
1,656,000
214,000
181,000
2,051,000
$ 10,844,000
CurrentFederal
State
Foreign
Total current
Deferred:
Federal
State
Foreign
Total deferred
f<f
T H E C O M P O N E N T S OF THE
DEFERRED INCOME TAX
EXPENSE (BENEFIT) ARE
AS FOLLOWS:
Software development costs deducted
(not deducted) for tax purposes
Tax depreciation different from financial
accounting depreciation
Intercompany profit
Sales reserves and allowances
Inventory valuation accounts
Tax credits utilized for books and not for tax
Charges to (provision for)
non-deductible expenses
A L D U S ' EFFECTIVE INCOME TAX PROVIS
DIFFERS FROM THE STATUTORY
FEDERAL INCOME TAX PROVISION
DUE TO THE FOLLOWING:
Statutory federal income tax provision
Foreign sales corporation benefit
State taxes, net of federal benefit
Tax-exempt interest and dividends
Amortization of excess of cost over
acquired net assets
Foreign losses, not benefited
Other, net
Provision for income taxes
1992
$
190,000
68,000
(892,000)
(190,000)
(93,000)
(517,000)
(70,000)
$(1,504,000)
1991
$
(575,000)
25,000
2,808,000
(99,000)
(226,000)
(173,000)
291,000
$ 2,051,000
(1,310,000)
(53,000)
87,000
(1,276,000)
$11,504,000
1990
$ 1,665,000
(83,000)
(2,166,000)
(15,000)
(42,000)
(350,000)
(285,000)
$(1,276,000)
ON
1992
$ 3,372,000
(395,000)
194,000
(771,000)
245,000
462,000
32,000
$ 3,139,000
1991
$11,792,000
(432,000)
693,000
(1,163,000)
—
—
(46,000)
$10,844,000
1990
$11,990,000
(892,000)
480,000
(928,000)
637,000
217,000
$11,504,000
ALDUS CORPORATION
N O T E S TO
CONSOLIDATED
N O T E NINE
LEASES
Aldus has operating leases for its corporate office, domestic distribution center, foreign subsidiary
offices, domesticfieldsales offices, certain data-processing equipment, telephone equipment, and other
office equipment. Rent expense for operating leases for the years ended December 31,1992,1991, and
1990 was $5,933,000, $5,225,000, and $3,479,000, respectively. Minimum rental commitments for
equipment and facilities under noncancelable operating leases are as follows:
YEAR
AMOUNT
1993
1994
1995
1996
1997
Thereafter
Total
$ 5,720,000
4,549,000
3,897,000
3,105,000
1,956,000
3,170,000
$ 22,397,000
NOTE TEN
LITIGATION
In June 1992, a class action complaint wasfiledin Federal District Court in the Western District of
Washington (No. C92-885C) against Aldus and certain of its current and former officers principally
alleging violations of federal and state securities laws, based on alleged misleading statements by Aldus
regarding itsfinancesand expectedfinancialperformance during the period March 14,1991, through
June 22,1992. The plaintiffs seek to bring suit on behalf of a class consisting of ai purchasers of Aldus
common stock during that period. The amount of damages sought has not been specified, and the trial
is scheduled for July 1994.
Aldus maintains a directors' and officers' insurance policy that it believes should defray a portion of any
liability and the costs of defense of this proceeding.
Aldus believes the suit is without merit, intends to vigorously defend the suit, and expects the resolution
ofthese matters will not have a material adverse effect on itsfinancialcondition and results of operations
as reported in the accompanyingfinancialstatements.
ALDUS CORPORATION
NOTES TO
CONSOLIDATED
N O T E ELEVEN
GEOGRAPHIC
AND OTHER
INFORMATION
Aldus' net sales and income before income taxes for the years ended December 31,1992,1991, and 1990,
and the identifiable assets at each respective year-end, are presented below (in thousands):
UNITED STATES
OPERATIONS
1992
Sales to unaffiliated
customers
Transfers between
geographic areas
Total revenues
Income before
income taxes
Identifiable assets
EUROPEAN
OPERATIONS
OTHER
INTERNATIONAL
OPERATIONS
ELIMINATIONS
mm
CONSOLIDATED
! 103,929
$60,689
$9,514
$174,132
23,496
1127,425
i 60,689
$9,514
(23,496)
; (23,496)
$174,132
i 17,036
1144,067
i 11,323
i 42,098
S 3,835
5 6,300
; (22,276)
; (36,182)
; 9,918
; 156,283
1102,137
i 65,393
28,138
1130,275
i 65,393
(28,138)
$ (28,138)
$ 167,530
i 39,624
i 170,667
! 1,650
; 42,777
; (6,593)
1 (34,875)
$ 34,681
$ 178,569
80,625
$54,358
17,600
98,225
$54,358
(17,600)
: (17,600)
$134,983
; 30,502
; 126,920
> 6,729
; 41,744
; (1,966)
; (27,483)
$ 35,265
$141,181
1991
38
customers
Transfers between
geographic areas
Total revenues
Income before
income taxes
Identifiable assets
1990
customers
Transfers between
geographic areas
Total revenues
Income before
income taxes
Identifiable assets
167,530
$ 134,983
Intercompany transfers between geographic areas are recorded at amounts representative of unaffiliated
party transactions. "Other International Operations" includes Aldus' subsidiaries in Japan and Australia
in 1992. Prior to 1992, sales to customers in those countries were included in "Sales to unaffiliated
customers" (United States). Also included in "Sales to unaffiliated customers" (United States) are export
sales, primarily to Canada, Central America, and South America, of $13,428,000, $16,007,000, and
$10,842,000 in 1992,1991, and 1990, respectively.
ALDUS CORPORATION
REPORT OF
MANAGEMENT
REPORT OF
MANAGEMENT
Management of Aldus is responsible for the preparation of the consolidatedfinancialstatements and
related information contained in this annual report. Thefinancialstatements include certain estimates
and judgments which management considers reasonable based on currently available information and
existing conditions. Management believes the consolidated financial statements fairly reflect Aldus'
financial position and results ofoperations in accordance with generally accepted accounting principles.
Aldus has a system of accounting and internal controls designed to provide reasonable assurance that
assets are protected from improper use and that the accounting records provide a reliable basis for the
preparation of financial statements. The system is periodically reviewed and modified to address
changing conditions and recommendations made by the independent auditors. Management believes
that the internal control system provides reasonable assurance that the resulting financial information
is reliable.
The Board of Directors, through the activities of its Audit Committee, which consists of outside
directors, participates in the process of reportingfinancialinformation. The Committee meets periodically withfinancialmanagement and the independent auditors to review matters relating to accounting,
internal control, auditing, and financial reporting. The independent auditors meet regularly with
members of the Audit Committee to discuss the results of their audit and present their opinions with
respect to the adequacy of the Company's internal controls and the quality of itsfinancialreporting.
39
C^^^/./kctfti^
Paul Brainerd
President
January 29,1993
William H. McAleer
Vice President, Finance
ALDUS CORPORATION
REPORT O F
INDEPENDENT AUDITORS
REPORT OF
ERNST a YOUNG,
INDEPENDENT
AUDITORS
To the Board of Directors and Shareholders
Aldus Corporation
m
We have audited the consolidated balance sheets of Aldus Corporation as of December 31,1992 and
1991, and the related consolidated statements of income, shareholders' equity, and cash flows for each
of the three years in the period ended December 31, 1992. These financial statements are the
responsibility of Aldus' management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements arefreefrommaterial misstatement. An audit includes examining, on a test basis, evidence
• supporting the amounts and disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management, as well as evaluating
the overallfinancialstatement presentation. We believe that our audits provide a reasonable basis for
our opinion.
/o
In our opinion, the financial statements referred to above present fairly, in all material respects, the
consolidated financial position of Aldus Corporation at December 31, 1992 and 1991, and the
consolidated results of its operations and its cashflowsfor each of the three years in the period ended
December 31,1992, in conformity with generally accepted accounting principles.
%Z>AA*<&-t
Seattle, Washington
January 29,1993
SUPPLEMENTAL
FINANCIAL
INFORMATION
QUARTERLY
CONSOLIDATED
RESULTS OF
OPERATIONS
(UNAUDITED)
(in thousands, except per-share data)
1992
Net sales
MARCH
27
JUNE 2 6
SEPTEMBER
25
DECEMBER
31
$44,051
$38,884
$45,306
$45,891
Income (loss) from operations
5,606
(2,231)
776
1,906
Income (loss) before provision
for income taxes
6,815
(1,300)
1,565
2,838
Net income (loss)
4,704
(899)
1,041
1,933
Net income (loss) per share
$
.31
$
(.06)
$
.07
$
.14
Common stock prices*
High
$ 44.25
$ 25.50
$ 15.75
$ 16.50
Low
$ 24.50
$ 11.50
$ 11.75
$ 10.25
1991
MARCH
Net sales
29
i 40,266
J U N E 28
> 44,277
SEPTEMBER 27
D E C E M B E R 31
$40,292
$42,695
Income from operations
7,813
9,879
6,738
5,419
Income before provision for
income taxes
9,207
11,026
7,931
6,517
Net income
6,261
7,607
5,472
4,497
Net income per share
i
.41
5
.49
$
.35
$
.29
Common stock prices*
High
; 55.00
i 59.88
$ 45.50
$ 45.00
Low
i 24.00
$ 36.00
$ 32.00
$ 32.50
* Aldus common stock is traded on the NASDAQ National Market System under the symbol ALDC.
Aldus has never paid dividends on its common stock and has historically retained earnings for use
in its business.
P A U L BRAINERD
President; Chief
Executive Officer
STEVE C U L L E N
Vice President;
General Manager,
Aldus Consumer Division
SANDY SMITH
Chief Operating Officer
J I M DAVID
Vice President,
Aldus USA Sales
BILL MCALEER
Vice President, Finance;
Chief Financial Officer
SKIP WALTER
Vice President, Engineering
KENNETH GRUNZWE1G
Vice President, Marketing
DEREK GREY
Managing Director,
Aldus Europe
JOHN O'HALLORAN
Director,
Aldus Pacific Rim
ALDUS* PROFESSIONAL
A L D U S PAGEMAKER
ALDUS PHOTOSTYLER
ALDUS PRESSWISE
GRAPHICS PRODUCTS
The world leader in desktop publishing
software, PageMaker integrates text and
graphics, allowing users to create professional-looking materials.
Much like an electronic darkroom,
PhotoStyler allows users to capture and
enhance color images from scanner, video
and other digital sources.
PressWise's page-handling tools enable film
strippers and production artists to impose
pages created with desktop publishing
software.
ALDUS FETCH
Fetch allows people to catalog their
graphics, clip art, photo images, QuickTime
movies, and sounds in one visual database.
ALDUS FREEHAND8
By simulating the real world of design and
illustration, Aldus FreeHand enables people
to work out their best ideas with precision
and ease.
ACCOLADES
ALDUS
PERSUASION*
Persuasion is a complete desktop presentations program for producing color or black
and-white slide, overhead, and on-screen
presentations.
Readers' Choice, Desktop Publishing
Software (Windows) — Byte
ALDUS PAGEMAKER
Product of the Year, Desktop
Publishing — Info World
World Class, Desktop Publishing
Software (Macintosh) — Macworld
Best Selling Software Application
in lapan — Macworld
ALDUS FREEHAND
World Class, Draw Programs
(Macintosh) — Macworld
Readers' Choice, Draw Software
(Macintosh) — Publish
Best Draw Program (Macintosh)
— Macwelt (Germany)
ALDUS
CONSUMER
PRODUCTS
GALLERY
EFFECTS1
Gallery Effects is a family of easy-to-apply
artistic effects for computer-generated
images and illustrations.
PERSONAL PRESS
An entry-level page-layout program,
Personal Press automatically designs and
assembles text and graphics into documents
that are ready for printing.
SUPERPAINT®
Aldus SuperPaint combines paint and draw
capabilities in one Macintosh program for
flexibility and precision with business and
design projects.
ALDUS PHOTOSTYLER
GALLERY EFFECTS
Editors' Choice, Best Image-Processing
Program (Windows)
— PC Magazine
Editors' Choice, Best Visual
Resource (Macintosh) — Macllser
INTELLIDRAW
Best Presentation Program
(Macintosh) — Macwelt (Germany)
Readers' Choice, Photo
Enhancement (Windows)
— Publish
Best 100 Products (Windows)
— Windows Magazine
Best 100 Products (Windows)
— Windows Magazine
ALDUS
PERSUASION
World Class, Business Presentation
Graphics (Macintosh) — Macworld
Readers' Choice, Presentation
Software (Macintosh) — Publish
Readers' Choice, Paint Programs
(Macintosh) — Publish
ALDUS CUSTOMER SERVICE
Best Creative Software
— Computer Shopper (UK)
SUPERPAINT
World Class, Paint Programs
(Macintosh) — Macworld
Award of Excellence, Software/Technical
Customer Service — Call Center '92
Three best-support awards/
Aldus Imaging Center Program
— Association of Imaging Service Bureaus
CORPORATE
DIRECTORY
OFFICERS
BOARD OF DIRECTORS
TRANSFER AGENT
PAUL BRAINERD
GARY P . ARNOLD
President, Chief Executive Officer
President, Analogy, Inc.
First Interstate Bank of Washington
Seattle, Washington
1-800-522-6645
SANDY SMITH
G E N E P. CARTER
Chief Operating Officer
Investor
KENNETH GRUNZWEIG
DOUGLAS G. DEVIVO
Vice President, Marketing
General Partner
Vanguard Associates II
STEVE C U L L E N
Vice President;
General Manager,
Aldus Consumer Division
JIM
ANDREW W. SMITH
Retired President
US West Communications
DAVID
Vice President,
Aldus USA Sales
DEREK GRAY
Managing Director,
Aldus Europe Ltd.
B I L L MCALEER
Vice President, Finance;
Chief Financial Officer
S K I P WALTER
Vice President, Engineering
LEGAL C O U N S E L
Suzanne Sorknes
General Counsel;
Assistant Secretary
PERKINS COIE
Seattle, Washington
INDEPENDENT
AUDITORS
Ernst & Young
Seattle, Washington
DAVE ECKERT
Treasurer
ANNUAL MEETING
The annual meeting will be held on
Tuesday, May 4,1993, at 10a.m., at
the Washington State Convention &
Trade Center. All Aldus shareholders are encouraged to attend. For
more information, call Aldus
Investor Relations, (206) 628-2383.
ANNUAL REPORT AND
i o - K REPORT
Publications of interest to current
and potential Aldus investors are
available without charge upon
request. These include annual and
quarterly reports, and the 10-K
form filed with the Securities and
Exchange Commission.
SUCH REQUESTS SHOULD
BE MADE TO:
Aldus Corporation
Investor Relations
411 First Avenue South
Seattle, WA 98104-2871
(206) 628-2383
ALDUS CORPORATION
ALDUS SOFTWARE BENELUX BV
ALDUS KABUSHIKI KAISHA
411 First Avenue South
Seattle, WA 98104-2871
U.S.A.
Tel. (1)206 622 5500
Printerweg 3-5
3800 BN Amersfoort
The Netherlands
Tel. (31)33 511 811
N.E.S. Building
22-14 Sakuragaoka-cho
Shibuya-ku, Tokyo 150
Japan
Tel. (81)3 5458 6758
ALDUS CONSUMER DIVISION
ALDUS CANADA INC.
A division of Aldus Corporation
Suite J
9770 Carroll Center Road
San Diego, CA 92126-4551
U.S.A.
Tel. (1)619 695 6956
Suite 2304
20 Queen Street West
Toronto, Ontario MH5 3R4
Canada
Tel. (1) 416 340 1288
ALDUS SVERIGE AB
ALDUS FRANCE SARL
ALDUS U.K. LTD.
Espace Jouy Technology
21, rue Albert Calmette
Les Metz
78353 Jouy-en-fosas Cedex
France
Tel. (33) 1 34 65 08 17
39 Palmerston Place
Edinburgh, Scotland
United Kingdom EH12 5AU
Tel. (44)31220 4747
ALDUS E U R O P E LTD.
Aldus House
West One Business Park
5 Mid New Cultins
Edinburgh, Scotland
United Kingdom EH11 4DU
Tel. (44)314532211
ALDUS SOFTWARE G M B H
ALDUS SOFTWARE PTY. LTD.
P.O. Box 672
18-20 Orion Road
Lane Cove, NSW 2066
Australia
Tel. (61)2 418 8488
Hans-Henny-Jahnn-Weg 9
2000 Hamburg 76
Germany
Tel. (49) 40 22 71 92 0
Box 47
S-164 93 Kista
Sweden
Tel. (46)8 752 33 00
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aldus corporation - University of Washington Libraries Digital

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