<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 2, 1999
--------------------
PEREGRINE SYSTEMS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 0-22209 5-3773312
- --------------------------------------------------------------------------------
(STATE OF (COMMISSION FILE NUMBER) (IRS EMPLOYER
IDENTIFICATION NO.) INCORPORATION)
12670 HIGH BLUFF DRIVE, SAN DIEGO, CALIFORNIA 92130
- --------------------------------------------------------------------------------
(Address of principal executive offices of Registrant)
(619) 481-5000
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE>
Item 5. OTHER EVENTS
On March 2, 1999, Peregrine Systems, Inc. (the "Company")
completed the acquisition of Prototype Incorporated, a California corporation
("Prototype"). Prototype is a Novato, California-based company that provides
application software solutions for managing transportation assets within large
organizations. Pursuant to a Stock Acquisition Agreement dated as of March 2,
1999 (the "Acquisition Agreement") by and among the Company, Prototype, and each
holder of Prototype's outstanding shares (together, "Shareholders"), the Company
purchased all outstanding shares of capital stock of Prototype through a direct
stock purchase from each of the Shareholders (the "Acquisition"). The
Acquisition was completed on March 2, 1999.
Pursuant to the Acquisition Agreement, the aggregate purchase
price for all the outstanding shares of Common Stock of Prototype consisted
of (i) cash in the amount of $1,135,993 (after deductions for certain
expenses of Prototype and the Shareholders) and (ii) 761,141 shares of the
Company's Common Stock. A total of 80,121 shares of the Company's Common
Stock were deposited into escrow with a financial institution as collateral
for certain indemnification obligations of Shareholders.
All 761,141 shares of Common Stock of the Company issued in
the Acquisition are restricted securities. The Company agreed to provide certain
registration rights to the Shareholders in respect of such shares.
The Company will use the purchase accounting method to account
for the acquisition of Prototype. In response to the new guidelines announced
by the Securities and Exchange Commission regarding the determination of
charges for acquired in-process research and development ("IPR&D"), and to
place the Prototype acquisition on comparable footing with prior acquisitions
completed by the Company, the Company announced on March 10, 1999, that it
anticipates a restatement of its financial results for the periods extending
back to the quarter ended September 30, 1997. These anticipated restatements
will result in changes to charges for acquired IPR&D and intangible assets,
including related amortization for affected periods. These anticipated
restatements include only noncash charges, have no effect on the Company's
operating earnings excluding acquired IPR&D and amortization of intangible
assets, and have no effect on the financial condition of the Company.
Amendments to the Company's periodic reports for the affected fiscal periods
are expected to be consistent with the summary restated results reported in
the Company's press release of March 10, 1999.
Item 7.
(c) Exhibits.
Exhibit No. Description
----------- -----------
99.1 Press release of Peregrine Systems, Inc.,
dated February 9, 1999.
99.2 Press release of Peregrine Systems, Inc.,
dated March 10, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
PEREGRINE SYSTEMS, INC.
Dated: March 12, 1999 By: /s/ Richard T. Nelson
----------------------------------
Richard T. Nelson, Vice President,
Secretary and General Counsel
<PAGE>
News Release EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contact: David A. Farley
Senior Vice President, Finance & Administration,
and Chief Financial Officer
Peregrine Systems, Inc.
Phone: (619) 481-5000
PEREGRINE SYSTEMS-Registered Trademark- ANNOUNCES ACQUISITION OF
PROTOTYPE INCORPORATED
LEADER IN FLEET MANAGEMENT SYSTEMS EXTENDS INFRASTRUCTURE MANAGEMENT SUITE
SAN DIEGO, Calif. - February 9, 1999 - Peregrine Systems, Inc. (NASDAQ Symbol:
PRGN) today announced the signing of a letter of intent to acquire 100% of the
outstanding shares of Prototype Incorporated of Novato, California. Prototype
is a leading provider of application software solutions for managing fleets of
cars, trucks, and other transportation assets within large organizations. The
transaction is expected to be finalized prior to March 31, 1999 and will be
accounted for using the purchase method of accounting. Peregrine Systems, Inc.
expects to take a charge for acquired in-process research and development costs
associated with the acquisition.
Prototype is a privately held company, founded by Bruce Jacobs, the current
President, in 1976. Through its FleetAnywhere-TM- products Prototype has
supplied software solutions to major corporations and government organizations
to manage organizational fleet infrastructure. Among the hundreds of customers
in the Prototype client base are Lawrence Livermore National Labs, the United
States Army, the California Department of Transportation, the City of Atlanta,
Arizona Public Service Company, Wisconsin Power and Light, American Airlines, US
Airways, Bechtel-Nevada Corporation, and Coach USA. In addition, Prototype
provides an Internet application offering, e.fleet-TM-, which serves the fleet
management needs of any size organization using Internet application supply
techniques.
"The addition of the fleet management capability to our Infrastructure
Management product suite has been a stated part of our strategy for some time,
and we are delighted to fulfill that promise with the acquisition of Prototype,"
said Stephen P. Gardner, President and Chief Executive Officer of Peregrine
Systems, Inc. "Prototype has the product strength, customer base, and market
momentum to expand the number of best-of-breed applications in our portfolio.
We will take immediate steps to integrate the teams in our facilities management
and fleet management areas and to complete the integration, already underway, of
all of our Infrastructure Management solutions into a common product
architecture."
"We are excited to become part of the Peregrine Systems team in providing
end-to-end infrastructure management solutions to our customers. Our success
with FleetAnywhere allows us to become an immediate contributor to the full
solution offered by Peregrine Systems," stated Bruce Jacobs, President and Chief
Executive Officer of Prototype.
PURCHASE ACCOUNTING TREATMENT
Peregrine Systems will use the purchase accounting method to account for
the acquisition of Prototype. Total value of the acquisition, excluding
transaction costs, is $21.3 million, comprised of $19.0 million of Peregrine
Systems common stock and $2.3 million of cash. The common stock exchange rate
will be fixed at closing of the transaction.
Recently the Securities and Exchange Commission ("SEC") has increased the
level of scrutiny given to acquisition accounting, including the methodology
used for the determination of charges for acquired in-process
Page 1 of 2
<PAGE>
research and development costs, and many companies that engaged in acquisitions
over the last several years have received comment letters. It has been reported
that the SEC has issued 150 letters to issuers highlighting the fact that their
future filings will be closely reviewed in connection with such acquisition
accounting issues. In addition, a number of companies have restated their
financial statements in order to revise their acquisition accounting, including
adjusting charges for acquired in-process research and development costs and
related goodwill. To date, the Company has not received a comment letter. The
financial results for the September 1997 and September 1998 quarters may need to
be restated depending on final resolution of the application of acquisition
accounting by the SEC and the accounting standards makers, resulting in changes
to charges for acquired in-process research and development and goodwill,
including related amortization for affected periods. Any required restatement
would result in noncash charges. The aggregate amount of acquired in-process
research and development costs written off in connection with the Company's
three acquisitions from September 1997 through September 1998 totaled
approximately $126.6 million. In light of the current uncertainty concerning
treatment of acquired in-process research and development charges, Peregrine
Systems is unable to precisely determine the amount of any one-time charge for
acquired in-process research and development and related goodwill for the
Prototype acquisition.
Peregrine Systems has scheduled a conference call for 2:00 p.m. Pacific
Time to discuss the acquisition. Anyone interested should call (973) 633-1010.
The conference is available for replay for 24 hours at (402) 220-1950. Please
contact Sue Wagner, Peregrine Systems for more information at (619) 481-5000.
ABOUT PEREGRINE SYSTEMS, INC.
Peregrine Systems is the leading provider of Infrastructure Management
solutions. True Infrastructure Management unites the unique disciplines of the
Enterprise Service Desk, Asset Management, and Facilities Management through
common shared data. Peregrine Systems solutions address all aspects of
organizational infrastructure, from information technology to the buildings and
real estate assets housing the technology and people of the organization. The
merging of these disciplines results in a more thorough understanding of the
impact of events and change upon the investment decisions of a company.
Founded in 1981, Peregrine Systems is headquartered in San Diego,
California with offices throughout the United States as well as in the United
Kingdom, Canada, France, Germany, Denmark, the Netherlands, Sweden, Australia,
and Singapore. Peregrine Systems also has partners and distributors located
through these regions and in Latin America. More information on PSI is
available on the world wide web at http://www.peregrine.com.
This press release contains both historical information and forward looking
information. Numerous important factors affect the Company's operating results
and could cause the Company's actual results to differ materially from the
results indicated in this press release or in any other forward looking
statements made by, or on behalf of, the Company, and there can be no assurance
that future results will meet expectations. These factors include, but are not
limited to, the following: 1) the risk associated with acquisition accounting
and related acquired in-process research and development costs; 2) the Company's
revenues and earnings are subject to a number of factors that make estimation of
operating results prior to the end of a quarter extremely uncertain; 3)
competition for the Company's products is intense; 4) the uncertainties of
whether new software products and product strategies will be successful; 5) risk
of loss of key personnel of the acquired company; 6) risks associated with the
Company's recent acquisitions, including potential difficulties in the
assimilation of operations of the acquired company or assets; 7) the risk of
entering new markets and other specific risks associated with the business of
the acquired company; and 8) the additional considerations and important factors
described on the Company's Report on 10-K filed with the Securities and Exchange
Commission in June 1998 and subsequent Forms 10-Q filed with the Securities and
Exchange Commission, copies of which are available on request from the Investor
Relations department of the Company.
PEREGRINE SYSTEMS IS A REGISTERED TRADEMARK OF PEREGRINE SYSTEMS, INC.
FLEETANYWHERE AND E.FLEET ARE TRADEMARKS OF PROTOTYPE INCORPORATED.
Page 2 of 2
<PAGE>
News Release EXHIBIT 99.2
FOR IMMEDIATE RELEASE
Contact: David A. Farley
Senior Vice President, Finance & Administration,
and Chief Financial Officer
Peregrine Systems, Inc.
Phone: (619) 481-5000
PEREGRINE SYSTEMS-Registered Trademark- COMPLETES ACQUISITION OF
PROTOTYPE INCORPORATED -
LEADER IN FLEET MANAGEMENT SYSTEMS EXTENDS INFRASTRUCTURE MANAGEMENT SUITE NEW
METHODOLOGY FOR PURCHASE ACCOUNTING TREATMENT ADOPTED
- -------------------------------------------------------------------------------
SAN DIEGO, Calif. - March 10, 1999 - Peregrine Systems, Inc. (NASDAQ Symbol:
PRGN) today announced the completion of the acquisition of 100% of the
outstanding shares of Prototype Incorporated of Novato, California. Prototype
is a leading provider of application software solutions for managing fleets of
cars, trucks, and other transportation assets within large organizations.
Through its FleetAnywhere-TM- products Prototype has supplied software
solutions to major corporations and government organizations to manage
organizational fleet infrastructure. Among the hundreds of customers in the
Prototype client base are Lawrence Livermore National Labs, the United States
Army, the California Department of Transportation, the City of Atlanta, Arizona
Public Service Company, Wisconsin Power and Light, American Airlines, US
Airways, Bechtel-Nevada Corporation, and Coach USA. In addition, Prototype
provides an Internet application offering, e.fleet -TM-, which serves the fleet
management needs of organizations of any size using web application hosting
techniques.
"Since the time we first announced our intent to acquire Prototype, the
reaction of many of our customers to the opportunity to use FleetAnywhere or
e.fleet as part of their overall infrastructure management solution has been
most gratifying. We are already working on proposals where both our fleet and
facilities products are being offered," said Stephen P. Gardner, President and
Chief Executive Officer of Peregrine Systems, Inc. "To take full advantage of
the synergies between our new fleet solutions and our facilities solutions, I
have asked Bill Thompson, currently VP/GM for the SPAN-FM-TM- product line, to
expand his duties to include all of our Facilities and Fleet Infrastructure
Management products. Our teams have already met, and we are moving quickly to
integrate organizations, products, and technologies and to make the most of this
rapidly emerging market opportunity."
NEW METHODOLOGY FOR PURCHASE ACCOUNTING TREATMENT
Peregrine Systems will use the purchase accounting method to account for
the acquisition of Prototype. Total value of the acquisition is expected to be
approximately $25.5 million, including 761,141 shares of Peregrine Systems
common stock. The Company expects to take a charge of approximately $4.1
million for acquired in-process research and development ("IPR&D") and to
capitalize approximately $21.4 million as intangible assets. Intangible assets
will be amortized over 5 years.
Recently the Securities and Exchange Commission ("SEC") has increased the
level of scrutiny given to acquisition accounting, including the methodology
used for the determination of charges for acquired IPR&D costs. The SEC has put
companies on notice of the fact that their future filings will be closely
reviewed in connection with such acquisition accounting issues. In addition, a
number of companies have restated their financial statements in order to revise
their acquisition accounting, including adjusting charges for acquired IPR&D and
related intangible assets. To date, the Company has not received a comment
letter, and believes its
<PAGE>
periodic reports filed in fiscal 1998 and 1999, which include charges for IPR&D
costs for the acquisition transactions completed by the Company, were made in
accordance with generally accepted accounting principles and established
industry practices at the time and were supported by independent valuations by
Arthur Andersen, LLP.
In response to the SEC's announced new guidelines, and in order to place
the Prototype transaction on a comparable footing with prior transactions,
Peregrine Systems has decided to proactively move to the new valuation
methodology. Therefore, financial results for the periods extending back to the
quarter ended September 30, 1997 are anticipated to be restated, resulting in
changes to charges for acquired IPR&D and intangible assets, including related
amortization for affected periods. These anticipated restatements involve only
noncash charges, have no effect on the Company's operating earnings excluding
acquired IPR&D and amortization of intangible assets, and have no effect on the
financial condition of Peregrine Systems.
In order to provide a clear understanding to investors of both the
operating results and reported results of the Company, Peregrine Systems will
release future financial results disclosing both Operating EPS, which will not
include amortization of intangible assets or one-time acquired IPR&D charges,
and Reported EPS, which will include the noncash amortization of intangible
assets and acquired IPR&D charges. The first period in which this new
disclosure format will be used will be the period ending March 31, 1999, results
for which are expected to be announced in April 1999. Restated historical
results using this methodology are attached to this press release. These
changes do not impact the reported revenues, cash flows, cash balances, or tax
liabilities of the Company in any way.
ABOUT PEREGRINE SYSTEMS, INC.
Peregrine Systems is the leading provider of Infrastructure Management
solutions. True Infrastructure Management unites the unique disciplines of the
Enterprise Service Desk, Asset Management, Facilities and Fleet Management
through common shared data. Peregrine Systems solutions address all aspects of
organizational infrastructure, from information technology to the buildings and
real estate assets housing the technology and people of the organization. The
merging of these disciplines results in a more thorough understanding of the
impact of events and change upon the investment decisions of a company.
Founded in 1981, Peregrine Systems is headquartered in San Diego,
California with offices throughout the United States as well as in the United
Kingdom, Canada, France, Germany, Denmark, the Netherlands, Sweden, Australia,
and Singapore. Peregrine Systems also has partners and distributors located
through these regions and in Latin America. More information on Peregrine
Systems is available on the world wide web at http://www.peregrine.com.
This press release contains both historical information and forward looking
information. Numerous important factors affect the Company's operating results
and could cause the Company's actual results to differ materially from the
results indicated in this press release or in any other forward looking
statements made by, or on behalf of, the Company, and there can be no assurance
that future results will meet expectations. These factors include, but are not
limited to, the following: 1) the risk associated with acquisition accounting
and related acquired in-process research and development costs; 2) the Company's
revenues and earnings are subject to a number of factors that make estimation of
operating results prior to the end of each quarter extremely uncertain; 3)
competition in the markets for the Company's products is intense; 4) the
uncertainties of whether new software products and product strategies will be
successful; 5) the risks associated with the Company's recent acquisitions,
including potential difficulties in the assimilation of key personnel,
operations and assets of the acquired company; 6) the risk of entering new
markets and other specific risks associated with the business of the acquired
company; and 7) the additional considerations and important factors described on
the Company's Report on 10-K filed with the Securities and Exchange Commission
in June 1998 and subsequent Forms 10-Q filed with the Securities and Exchange
Commission, copies of which are available on request from the Investor Relations
department of the Company.
PEREGRINE SYSTEMS IS A REGISTERED TRADEMARK OF PEREGRINE SYSTEMS, INC.
FLEETANYWHERE-TM- AND E.FLEET-TM- ARE TRADEMARKS OF PROTOTYPE INCORPORATED.
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
MARCH 10, 1999 -- PRESS RELEASE
FINANCIAL TABLES - RESTATED PERIODS
- -----------------------------------------------------------------
NINE MONTHS ENDED FISCAL YEAR ENDED
DECEMBER 31, DECEMBER 31, MARCH 31, MARCH 31,
FISCAL 1999 FISCAL 1999 FISCAL 1998 FISCAL 1998
------------- ------------- ------------- -------------
(unaudited) (unaudited) (audited) (unaudited)
previously reported restated previously reported restated
<S> <C> <C> <C> <C>
Total revenues $ 91,953 $ 91,953 $ 61,877 $ 61,877
Costs and expenses 71,490 71,490 47,851 47,851
------------- ------------- ------------- -------------
Income from operations excluding acquired in-process
research and development costs and amortization of purchased
intangible assets 20,463 20,463 14,026 14,026
Amortization of purchased intangible assets 1,217 12,087 386 3,168
------------- ------------- ------------- -------------
Income from operations excluding acquired in-process research
and development costs 19,246 8,376 13,640 10,858
Acquired in-process research and development costs 91,765 21,866 34,775 6,955
------------- ------------- ------------- -------------
Income (loss) from operations (72,519) (13,490) (21,135) 3,903
Other income, net 553 553 839 839
Income tax expense 6,920 6,920 5,358 5,358
------------- ------------- ------------- -------------
Net loss $ (78,886) $ (19,857) $ (25,654) $ (616)
Diluted net income per share excluding acquired
in-process research and development costs and amortization
of purchased intangible assets $ 0.30 $ 0.30 $ 0.25 $ 0.25
Diluted net income (loss) per share excluding acquired
in-process research and development costs $ 0.28 $ 0.04 $ 0.24 $ 0.17
Diluted net loss per share $ (1.85) $ (0.46) $ (0.74) $ (0.02)
Shares used in computing loss per share amounts 42,718 42,718 34,760 34,760
Shares used in computing income per share amounts 46,178 46,178 37,670 37,670
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------
ANALYSIS OF RESTATED PURCHASE PRICE ALLOCATION
- ------------------------------------------------
Acquisition Purchase IPR&D % of Purchased % of Amortization
Acquired Company/ Technology/Assets date price charge pur. intangibles pur. period
- ------------------------------------------------ ------------ ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
United Software (Apsylog) 9-19-97 $ 38,639 $ 6,955 18% $ 31,684 82% 5 years
Innovative Tech Systems 7-29-98 85,939 18,907 22% 67,032 78% 5 years
International Software Solutions 9-23-98 15,573 2,959 19% 12,614 81% 5 years
------------- ------------- -------------
Total $ 140,151 $ 28,821 21% $ 111,330 79%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
FISCAL YEAR 1999
QUARTERLY EFFECT
- -----------------------------------------------------------------
DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
1998 1998 1998
------------- ------------- -------------
(unaudited) (unaudited) (unaudited)
previously reported restated previously reported
<S> <C> <C> <C>
Total revenues $ 40,549 $ 40,549 $ 29,654
Costs and expenses 31,484 31,484 23,158
------------- ------------- -------------
Income from operations excluding acquired in-process research and
development costs and amortization of purchased intangible assets 9,065 9,065 6,496
Amortization of purchased intangible assets 681 5,567 343
------------- ------------- -------------
Income from operations excluding acquired in-process research
and development costs 8,384 3,498 6,153
Acquired in-process research and development costs - - 91,765
------------- ------------- -------------
Income (loss) from operations 8,384 3,498 (85,612)
Other income, net 100 100 193
Income tax expense 2,969 2,969 2,209
------------- ------------- -------------
Net loss $ 5,515 $ 629 $ (87,628)
Diluted net income per share excluding acquired
in-process research and development costs and amortization
of purchased intangible assets $ 0.12 $ 0.12 $ 0.10
Diluted net income (loss) per share excluding acquired
in-process research and development costs $ 0.11 $ 0.01 $ 0.09
Diluted net loss per share $ 0.11 $ 0.01 $ (2.03)
Shares used in computing loss per share amounts 46,598 46,598 43,118
Shares used in computing income per share amounts 50,076 50,076 46,250
<CAPTION>
SEPTEMBER 30, JUNE 30, JUNE 30,
1998 1998 1998
------------- -------------- -------------
(unaudited) (unaudited) (unaudited)
restated previously reported restated
<S> <C> <C> <C>
Total revenues $ 29,654 $ 21,750 $ 21,750
Costs and expenses 23,158 16,848 16,848
------------- -------------- -------------
Income from operations excluding acquired in-process research and
development costs and amortization of purchased intangible assets 6,496 4,902 4,902
Amortization of purchased intangible assets 4,936 193 1,584
------------- -------------- -------------
Income from operations excluding acquired in-process research
and development costs 1,560 4,709 3,318
Acquired in-process research and development costs 21,866 - -
------------- -------------- -------------
Income (loss) from operations (20,306) 4,709 3,318
Other income, net 193 260 260
Income tax expense 2,209 1,742 1,742
------------- -------------- -------------
Net loss $ (22,322) $ 3,227 $ 1,836
Diluted net income per share excluding acquired
in-process research and development costs and amortization
of purchased intangible assets $ 0.10 $ 0.08 $ 0.08
Diluted net income (loss) per share excluding acquired
in-process research and development costs $ (0.01) $ 0.08 $ 0.04
Diluted net loss per share $ (0.52) $ 0.08 $ 0.04
Shares used in computing loss per share amounts 43,118 38,470 38,470
Shares used in computing income per share amounts 46,250 40,956 40,956
</TABLE>
Note - The sum of diluted net income per share amounts presented on a
quarterly basis will not equal the nine month or fiscal year periods
because, as required by FAS 128 in loss periods, the assumed
conversion of certain securities would have an antidilutive effect on
the income per share amounts.
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
FISCAL YEAR 1998
QUARTERLY EFFECT
- -----------------------------------------------------------------
MARCH 31, MARCH 31, DECEMBER 31, DECEMBER 31,
1998 1998 1997 1997
------------- ------------- ------------- -------------
(unaudited) (unaudited) (unaudited) (unaudited)
previously restated previously restated
reported reported
<S> <C> <C> <C> <C>
Total revenues $ 20,150 $ 20,150 $ 18,509 $ 18,509
Costs and expenses 15,198 15,198 14,109 14,109
------------- ------------- ------------- ------------
Income from operations excluding acquired in-process
research and development costs and amortization of
purchased intangible assets 4,952 4,952 4,400 4,400
Amortization of purchased intangible assets 193 1,584 193 1,584
------------- ------------- ------------- ------------
Income from operations excluding acquired in-process
research and development costs 4,759 3,368 4,207 2,816
Acquired in-process research and development costs - - - -
------------- ------------- ------------- ------------
Income (loss) from operations 4,759 3,368 4,207 2,816
Other income, net 231 231 204 204
Income tax expense 1,846 1,846 1,632 1,632
------------- ------------- ------------- ------------
Net loss $ 3,144 $ 1,753 $ 2,779 $ 1,388
Diluted net income per share excluding acquired
in-process research and development costs and amortization
of purchased intangible assets $ 0.08 $ 0.08 $ 0.07 $ 0.07
Diluted net income (loss) per share excluding acquired
in-process research and development costs $ 0.08 $ 0.04 $ 0.07 $ 0.03
Diluted net loss per share $ 0.08 $ 0.04 $ 0.07 $ 0.03
Shares used in computing loss per share amounts 37,492 37,492 36,078 36,078
Shares used in computing income per share amounts 40,010 40,010 40,220 40,220
<CAPTION>
SEPTEMBER 30, SEPTEMBER 30, JUNE 30, JUNE 30,
1997 1997 1997 1997
-------------- ------------ ----------- ----------
(unaudited) (unaudited) (unaudited) (unaudited)
previously reported restated previously reported restated
<S> <C> <C> <C> <C>
Total revenues $ 12,203 $ 12,203 $ 11,015 $ 11,015
Costs and expenses 9,600 9,600 8,944 8,944
-------------- ------------ ----------- ----------
Income from operations excluding acquired in-process
research and development costs and amortization of
purchased intangible assets 2,603 2,603 2,071 2,071
Amortization of purchased intangible assets - - - -
-------------- ------------ ----------- ----------
Income from operations excluding acquired in-process
research and development costs 2,603 2,603 2,071 2,071
Acquired in-process research and development costs 34,775 6,955 - -
-------------- ------------ ----------- ----------
Income (loss) from operations (32,172) (4,352) 2,071 2,071
Other income, net 226 226 178 178
Income tax expense 1,048 1,048 832 832
-------------- ------------ ----------- ----------
Net loss $ (32,994) $ (5,174) $ 1,417 $ 1,417
Diluted net income per share excluding acquired
in-process research and development costs and amortization
of purchased intangible assets $ 0.05 $ 0.05 $ 0.04 $ 0.04
Diluted net income (loss) per share excluding acquired
in-process research and development costs $ 0.05 $ 0.05 $ 0.04 $ 0.04
Diluted net loss per share $ (1.10) $ (0.17) $ 0.04 $ 0.04
Shares used in computing loss per share amounts 30,002 30,002 28,986 28,986
Shares used in computing income per share amounts 36,482 36,482 35,134 35,134
</TABLE>
Note - The sum of diluted net income per share amounts presented on a
quarterly basis will not equal the nine month or fiscal year periods
because, as required by FAS 128 in loss periods, the assumed
conversion of certain securities would have an antidilutive effect on
the income per share amounts.
ANALYSIS OF RESTATED PURCHASE PRICE ALLOCATION
<TABLE>
<CAPTION>
Acquisition Purchase
Acquired Company / Technology / Assets Date Price IPR&D Costs
<S> <C> <C> <C>
United Software (Apsylog) 9/19/97 $ 38,639 $ 6,955
Innovative Tech Systems 7/29/98 $ 85,939 $ 18,907
International Software Solutions 9/23/98 $ 15,573 $ 2,959
Total $ 140,151 $ 28,821
<CAPTION>
Purchased
Intangible Amortization
Acquired Company / Technology / Assets Assets % of pur. Period
<S> <C> <C> <C>
United Software (Apsylog) $ 31,684 82% 5 years
Innovative Tech Systems $ 67,032 78% 5 years
International Software Solutions $ 12,614 81% 5 years
Total $ 111,330 79%
</TABLE>
