<PAGE>
Exhibit 99.5
UNAUDITED PRO FORMA FINANCIAL STATEMENTS
Effective July 12, 2000, Hoover's, Inc. ("Hoover's") acquired 100 percent of
the outstanding stock and assumed all outstanding stock options and warrants
of Powerize, Inc. ("Powerize"), a provider of Internet content and search
tools. The total cost of the acquisition, including transaction costs, was
approximately $16.6 million. The acquisition was accounted for as a purchase
business combination.
The following unaudited pro forma financial statements include the unaudited
pro forma balance sheet as of June 30, 2000 and the unaudited pro forma
statement of operations for Hoover's most recent fiscal year and the three
months ended June 30, 2000. The unaudited pro forma balance sheet assumes the
acquisition was consummated on June 30, 2000. The unaudited pro forma
statements of operations for Hoover's most recent fiscal year includes
financial information for Hoover's for the year ended March 31, 2000 and for
Powerize for the year ended December 31, 2000. The unaudited pro forma
statements of operations assume the acquisition was consummated on April 1,
1999.
The unaudited pro forma financial statements reflect the allocation of the
purchase price based upon current estimates of the fair values of assets
acquired and liabilities assumed. The final allocation of the purchase price
may vary as additional information is obtained and, accordingly, the ultimate
allocation may differ from that used in the unaudited pro forma financial
statements.
The unaudited pro forma financial statements are based on the historical
financial statements of Hoover's and Powerize. They are not necessarily
indicative of the combined entity's operations had the acquisition actually
occurred on the dates indicated, nor are they necessarily indicative of future
operations. The pro forma adjustments and the assumptions on which they are
based are described in the accompanying notes to these unaudited pro forma
financial statements.
The unaudited pro forma financial statements are based on, and should be read
in conjunction with, Hoover's historical financial statements as of and for
the year ended March 31,2000 and related notes thereto previously filed on
form 10-K, Hoover's historical financial statements as of and for the three
months ended June 30,2000 and related notes thereto previously filed on form
10-Q, and the Powerize historical financial statements and related notes
thereto for the year ended December 31, 1999 and the three months ended June
30, 2000.
F-18
<PAGE>
HOOVER'S, INC. AND POWERIZE.COM, INC.
UNAUDITED PROFORMA STATEMENT OF INCOME
<TABLE>
<CAPTION>
(Unaudited)
Hoover's, Inc. Powerize.com, Inc. Hoover's, Inc.
Year ended Year ended Proforma Proforma Three months ended
March 31 December 31 Adjustments Combined June 30
------------ ------------ ------------ ------------ ------------
2000 1999 2000
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenue:
Advertising and e-commerce $ 6,688,289 $ - $ - $ 6,688,289 $ 3,045,973
Subscription royalties 8,742,799 1,137,543 - $ 9,880,342 3,064,280
Licensing 2,082,017 $ 2,082,017 523,656
CD-ROM and Print, net 1,507,041 $ 1,507,041 228,477
Consulting and other - 508,803 - $ 508,803 -
------------ ------------ ------------ ------------ ------------
Total Revenues 19,020,146 1,646,346 - 20,666,492 6,862,386
------------ ------------ ------------ ------------ ------------
Cost of Revenue
Cost of Online Revenue 7,457,164 121,870 - $ 7,579,034 2,614,886
Consulting and other - 1,254,637 - $ 1,254,637 -
------------ ------------ ------------ ------------ ------------
Total Cost of Revenues 7,457,164 1,376,507 - 8,833,671 2,614,886
------------ ------------ ------------ ------------ ------------
Gross profit (loss) 11,562,982 269,839 - 11,832,821 4,247,500
Operating Expenses:
Sales and marketing 12,590,335 6,291,506 - $ 18,881,841 3,910,431
Product development 2,004,932 3,232,950 - $ 5,237,882 623,013
General and administrative 7,083,348 2,277,790 - $ 9,361,138 2,855,704
Non-cash compensation 1,701,503 - $ 46,681 B $ 1,748,184 91,324
Amortization of Intangibles - - 5,133,528 A $ 5,133,528 -
------------ ------------ ------------ ------------ ------------
Total operating expenses 23,380,118 11,802,246 5,180,209 40,362,573 7,480,472
------------ ------------ ------------ ------------ ------------
Operating loss (11,817,136) (11,532,407) (5,180,209) (28,529,752) (3,232,972)
Interest (expense) income, net 2,289,635 75,612 - 2,365,247 790,599
------------ ------------ ------------ ------------ ------------
Net loss $ (9,527,501) $(11,456,795) $ (5,180,209) $(26,164,505) $ (2,442,373)
============ ============ ============ ============ ============
Loss per share $ (.88) $ (2.12) $ (.19)
Shares used in computation
of basic and diluted loss per
share 10,840,753 12,324,759 12,792,518
<CAPTION>
(Unaudited)
Powerize.com, Inc.
Three months ended Proforma Proforma
June 30 Adjustments Combined
------------ ------------ ------------
2000
------------ ------------ ------------
<S> <C> <C> <C>
Revenue:
Advertising and e-commerce $ - $ - $ 3,045,973
Subscription royalties 357,178 - $ 3,421,458
Licensing - $ 523,656
CD-ROM and Print, net - $ 228,477
Consulting and other 518,965 - $ 518,965
------------ ------------ ------------
Total Revenues 876,143 - 7,738,529
------------ ------------ ------------
Cost of Revenue
Cost of Online Revenue 170,326 - $ 2,785,212
Consulting and other 1,298,496 - $ 1,298,496
------------ ------------ ------------
Total Cost of Revenues 1,468,822 - 4,083,708
------------ ------------ ------------
Gross profit (loss) (592,679) - 3,654,821
Operating Expenses:
Sales and marketing 2,529,399 - $ 6,439,830
Product development 602,977 - $ 1,225,990
General and administrative 841,633 - $ 3,697,337
Non-cash compensation - 11,670 B $ 102,994
Amortization of Intangibles - 1,283,382 A $ 1,283,382
------------ ------------ ------------
Total operating expenses 3,974,009 1,295,052 12,749,533
------------ ------------ ------------
Operating loss (4,566,688) (1,295,052) (9,094,712)
Interest (expense) income, net (68,443) - $ 722,156
------------ ------------ ------------
Net loss $ (4,635,131) $ (1,295,052) $ (8,372,556)
============ ============ ============
Basic and diluted loss per
share $ (.59)
Shares used in computation of
basic and diluted loss per share 14,260,216
</TABLE>
F-19
<PAGE>
HOOVER'S, INC. and POWERIZE.COM, INC.
UNAUDITED PROFORMA BALANCE SHEET
<TABLE>
<CAPTION>
Hoover's, Inc. Powerize.com, Inc. Proforma Proforma
at June 30 at June 30 Adjustments Combined
------------ ------------ ------------ ------------
2000 2000
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 39,987,435 $ 280,812 $ (2,430,034) A 37,838,213
Short-term investments 11,032,250 - - 11,032,250
Accounts receivable, net of allowances 4,254,842 1,315,824 - 5,570,666
Book inventory, less allowances 26,336 - - 26,336
Prepaid Expenses and other current assets 214,095 73,796 - 287,891
------------ ------------ ------------ ------------
Total current assets 55,514,958 1,670,432 (2,430,034) 54,755,356
Property and equipment, net 2,910,736 765,582 - 3,676,318
Prepaid license fees, net - 325,782 (325,782) B -
Other assets 6,118,787 275,356 - 6,394,143
Goodwill - - 14,658,001 C 14,658,001
Intangible Assets Acquired - - 9,480,000 D 9,480,000
Amort-Intangible Assets Acquired - - - -
------------ ------------ ------------ ------------
TOTAL ASSETS $ 64,544,481 $ 3,037,152 $ 21,382,185 $ 88,963,818
============ ============ ============ ============
LIABILITIES AND STOCKHOLDERS'
DEFICIT
Current liabilities
Accounts payable and commissions $ 1,525,687 $ 4,544,490 $ - 6,070,177
Accrued expenses 2,489,072 1,913,387 (459,705) A,H 3,942,754
Current portion of other liabilities 24,776 - - 24,776
Deferred revenue 3,473,104 934,110 350,000 E 4,757,214
Notes payable - 3,638,679 - 3,638,679
------------ ------------ ------------ ------------
Total current liabilities 7,512,639 11,030,666 (109,705) 18,433,600
------------ ------------ ------------ ------------
Other liabilities
Other liabilities - Obligations under
capital leases, less current portion 31,274 - - 31,274
------------ ------------ ------------ ------------
Total other liabilities 31,274 - - 31,274
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
TOTAL LIABILITIES 7,543,913 11,030,666 (109,705) 18,464,874
------------ ------------ ------------ ------------
Stockholders' Equity
Common stock 131,667 654 14,186 A 146,507
Additional paid in capital 78,540,385 15,421,357 (1,844,458) A 92,117,284
Deferred compensation (1,088,062) (573,889) 480,526 F (1,181,425)
Treasury stock (150,000) - - (150,000)
Retained earnings (20,433,422) (22,841,636) 22,841,636 G (20,433,422)
Shareholder's Equity (Deficit) - - - -
------------ ------------ ------------ ------------
57,000,568 (7,993,514) 21,491,890 70,498,944
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 64,544,481 $ 3,037,152 $ 21,382,185 $ 88,963,818
============ ============ ============ ============
</TABLE>
F-20
<PAGE>
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
1. GENERAL
The Company expects to account for the acquisition as a
purchase business combination. The accompanying
unaudited pro forma financial statements reflect an
estimated aggregate purchase price of approximately
$16.6 million, consisting of cash ($2.4 million), the
fair value of common stock, options and warrants issued
($13.5 million), and transaction costs ($.7 million).
The interim financial statements for the three months
ended June 30, 2000 and 1999, have been prepared by us
pursuant to the rules and regulations of the Securities
and Exchange Commission (the SEC). Accordingly, they do
not include all of the information and footnotes
required by generally accepted accounting principles for
complete financial statements. These statements are
unaudited and, in the opinion of management, include all
adjustments (consisting of normal recurring adjustments
and accruals) necessary to present fairly the results
for the periods presented.
The balance sheet at June 30, 2000, has been derived
from the unaudited financial statements at that date but
does not include all of the information and footnotes
required by generally accepted accounting principles.
The results of operations for such periods are not
necessarily indicative of the results expected for a
full year or for any future period.
For further information, refer to the financial
statements and related notes included in our
Registration Statement on Form S-1 and our Annual Report
filed on Form 10-K.
2. UNAUDITED PRO FORMA INCOME STATEMENT
The accompanying unaudited pro forma income statement
has been prepared as if the acquisition was consummated
on April 1, 1999. Pro forma adjustments were made:
(A) To record amortization of intangibles and
goodwill, using estimated lives of three years
for identified intangible assets and eight years
for goodwill.
(B) To record noncash compensation expense for
unvested options using an estimated life of two
years.
3. UNAUDITED PRO FORMA BALANCE SHEET
The accompanying unaudited pro forma balance sheet has
been prepared as if the acquisition was consummated on
June 30, 2000. Pro forma adjustments were made:
F-21
<PAGE>
(A) To record the purchase consideration of (in thousands)
<TABLE>
<S> <C>
Cash to Powerize shareholders and option holders $ 2,430
Value of stock to Powerize shareholders and option holders $11,633
Value of vested options $ 1,313
Value of warrants $ 552
Transaction costs $ 703
-------
Total purchase price $16,631
</TABLE>
(B) To record the elimination of Powerize recorded intangibles
(C) To record goodwill associated with the acquisition
(D) To record intangibles acquired (in thousands). The value of
intangible assets was estimated based upon an independent
valuation.
<TABLE>
<S> <C>
i. Assembled Workforce $ 1,430
ii. Content Provider Relationships $ 1,900
iii. Registered Users Base $ 1,150
iv. Internal Use Software $ 5,000
-------
Total $ 9,480
</TABLE>
(E) To eliminate historical recorded deferred revenue not
associated with remaining obligations assumed by Hoover's.
(F) To record deferred compensation associated with unvested
options assumed.
(G) To eliminate Powerize's historical equity accounts.
(H) To eliminate historical recorded accrued expenses and
prepaid assets not associated with remaining obligations
assumed by Hoover's.
F-22
