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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): September 18, 2000
ARIS CORPORATION
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(Exact Name of Registrant as Specified in Charter)
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<S> <C> <C>
WASHINGTON 0-22649 91-1497147
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(State or Other Jurisdiction of (Commission File Number) (IRS Employer Identification
Incorporation) No.)
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2229 - 112TH AVENUE N.E., BELLEVUE, WASHINGTON 98004
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(Address of Principal Executive Offices) (Zip Code)
(425) 372-2747
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Registrant's telephone number, including area code
NONE
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 18, 2000, Aris Corporation ("Aris"), through its
wholly-owned subsidiary, Aris UK Limited, completed the sale of substantially
all the assets of its European education operations pursuant to an Asset
Purchase Agreement by and among, Aris UK Limited, Gilat Communications Ltd.,
John Bryce Training Ltd., Winford Management Limited and John Bryce Training
(Europe) B.V. (the "Purchase Agreement").
Pursuant to the terms of the Purchase Agreement, Aris received
consideration of approximately $10.8 million consisting of approximately $6.6
million in cash and the balance in 295,454 shares of Gilat common stock. In
exchange, the buyer received substantially all of the assets of Aris' UK
education operations and all of the outstanding stock of Aris Computer Services
GmbH, which was sold to John Bryce Training (Europe) B.V. as part of the
transaction.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro Forma Financial Information.
UNAUDITED PRO FORMA FINANCIAL INFORMATION
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ARIS CORPORATION
UNAUDITED CONDENSED PRO FORMA BALANCE SHEET
As of June 30, 2000
(In thousands, except for share data)
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CONSOLIDATED PRO FORMA
ARIS UK EDUCATION ADJUSTMENTS PRO FORMA
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Assets
Current assets:
Cash and cash equivalents ................ $ 12,509 $ (556) $ 6,625(1) $ 18,578
Accounts receivable, net ................. 20,778 (459) -- 20,319
Other current assets ..................... 10,720 (407) -- 10,313
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Total current assets ................ 44,007 (1,422) 6,625 49,210
Property and equipment, net .............. 11,624 (2,128) -- 9,496
Intangible and other assets, net ......... 9,927 (1,038) 4,136(2) 13,025
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Total assets ........................ $ 65,558 $ (4,588) $ 10,761 $ 71,731
==========================================================
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable ......................... $ 2,417 $ -- $ -- $ 2,417
Accrued liabilities ...................... 7,374 -- 1,910(3) 9,284
Deferred revenue ......................... 3,115 (1,015) -- 2,100
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Total current liabilities ........... 12,906 (1,015) 1,910 13,801
Commitments and contingencies
Shareholders' equity:
Preferred stock, 5,000,000 shares
authorized, none issued and outstanding ..
Common stock, no par value;
100,000,000 shares authorized ............
Additional paid-in capital ............... 56,862 (24) -- 56,838
Retained earnings (accumulated deficit) .. (3,638) (3,549) 8,851 1,664
Accumulated other comprehensive loss ..... (572) -- -- (572)
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Total shareholders' equity .......... 52,652 (3,573) 8,851 57,930
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Total liabilities and
shareholders' equity .............. $ 65,558 $ (4,588) $ 10,761 $ 71,731
==========================================================
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See notes to unaudited condensed pro forma financial statements.
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ARIS CORPORATION
UNAUDITED CONDENSED PRO FORMA STATEMENTS OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1999
(In thousands, except per share data)
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CONSOLIDATED PRO FORMA
ARIS UK EDUCATION US EDUCATION ADJUSTMENTS PRO FORMA
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Revenue, net:
Consulting ..................... $ 74,620 $ -- $ -- $ -- $ 74,620
Training ....................... 34,774 (16,826) (17,681) -- 267
Software ....................... 8,579 -- -- -- 8,579
--------- --------- --------- --------- ---------
Total revenues ................. 117,973 (16,826) (17,681) -- 83,466
Cost of revenues
Consulting ..................... 42,085 -- -- -- 42,085
Training ....................... 16,508 (7,523) (8,544) -- 441
Software ....................... 1,510 -- -- -- 1,510
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Total cost of revenues ......... 60,103 (7,523) (8,544) -- 44,036
Gross profit ....................... 57,870 (9,303) (9,137) -- 39,430
Selling, general and administrative
expense ........................ 50,799 (9,317) (12,133) 1,221(4) 30,570
Amortization of intangible assets .. 2,007 (107) (383) -- 1,517
Acquisition expenses ............... 383 -- -- -- 383
Charges related to reorganization .. 6,600 (100) (6,500) -- --
--------- --------- --------- --------- ---------
Total operating expenses ........... 59,789 (9,524) (19,016) 1,221 32,470
--------- --------- --------- --------- ---------
Income (loss) from operations .. (1,919) 221 9,879 (1,221) 6,960
--------- --------- --------- --------- ---------
Interest income .................... 892 -- (57) -- 835
Other income (expense), net ........ (173) -- (9) -- (182)
Income (loss) before income
tax ........................... (1,200) 221 9,813 (1,221) 7,613
Income tax expense (benefit) ....... 1,323 71 2,209 (458) 3,145
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Net income (loss) .............. $ (2,523) $ 150 $ 7,604 $ (763) $ 4,468
========= ========= ========= ========= =========
Basic earnings (loss) per share .... $ (0.22) $ 0.39
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Weighted-average number of
common shares - Basic .......... 11,605 11,605
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Diluted earnings (loss) per share .. $ (0.22) $ 0.38
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Weighted-average number of
common and potential
common shares - Diluted ....... 11,605 11,889
========= =========
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See notes to unaudited condensed pro forma financial statements.
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ARIS CORPORATION
UNAUDITED CONDENSED PRO FORMA STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(In thousands, except per share data)
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CONSOLIDATED UK US PRO FORMA
ARIS EDUCATION EDUCATION ADJUSTMENTS PRO FORMA
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Revenue, net:
Consulting ............................. $ 29,036 $ -- $ -- $ -- $ 29,036
Training ............................... 12,359 (7,007) (5,223) -- 129
Software ............................... 4,071 -- -- -- 4,071
-------- -------- -------- -------- --------
Total revenues ......................... 45,466 (7,007) (5,223) -- 33,236
Cost of revenues
Consulting ............................. 19,683 -- -- -- 19,683
Training ............................... 5,985 (3,271) (2,623) -- 91
Software ............................... 679 -- -- -- 679
-------- -------- -------- -------- --------
Total cost of revenues ................. 26,347 (3,271) (2,623) -- 20,453
Gross profit .............................. 19,119 (3,736) (2,600) -- 12,783
Selling, general and
administrative expense .................. 26,323 (3,832) (3,319) 221(4) 19,393
Amortization of intangible assets.......... 1,943 (41) (51) -- 1,851
Charges related to reorganization.......... 4,000 -- (4,000) -- --
-------- -------- -------- -------- --------
Total operating expenses .................. 32,266 (3,873) (7,370) 221 21,244
-------- -------- -------- -------- --------
Income (loss) from operations........... (13,147) 137 4,770 (221) (8,461)
-------- -------- -------- -------- --------
Interest income ........................... 325 -- 46 -- 371
Other income (expense), net ............... 44 -- (1) -- 43
Income (loss) before income tax ........ (12,778) 137 4,815 (221) (8,047)
Income tax expense (benefit)............... (3,707) 44 1,122 (81) (2,622)
-------- -------- -------- -------- --------
Net income (loss) ...................... $ (9,071) $ 93 $ 3,693 $ (140) $ (5,425)
======== ======== ======== ======== ========
Basic earnings (loss) per share............ $ (0.71) $ (0.42)
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Weighted-average number of
common shares - Basic .................. 12,820 12,820
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Diluted earnings (loss) per share.......... $ (0.71) $ (0.42)
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Weighted-average number of
common and potential
common shares - Diluted............... 12,820 12,820
======== ========
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See notes to unaudited condensed pro forma financial statements.
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NOTES TO UNAUDITED CONDENSED
PRO FORMA FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The unaudited condensed pro forma Balance Sheet and Statements of
Operations give effect to the disposition by Aris Corporation ("the Company") of
its European ("UK") and United States ("US") education operations on a pro forma
basis. These unaudited pro forma financial statements have been prepared from
the historical consolidated financial statements of the Company and should be
read in conjunction therewith.
The unaudited condensed pro forma Balance Sheet presents the financial
position of the Company as of June 30, 2000 as if the UK education operations
were disposed of on that date. The US education operations divestitures were
completed on or before June 30, 2000 and therefore are already excluded from
this information. The unaudited pro forma Statements of Operations for the year
ended December 31, 1999 and the six months ended June 30, 2000 have been
prepared to reflect the disposition of the US and UK education operations as if
the dispositions had occurred on January 1, 1999.
US education operations were closed or sold to former members of
management. The specific information and impact on divestiture of US education
operations has been previously disclosed in the 10Q for the quarters ending
March 31, 2000 and June 30, 2000.
The proceeds from the sale of UK education are approximately
$10,761,000, comprised of $6,625,000 in cash and 295,454 shares of Gilat
Communications, Inc., valued at $4,136,000 using the closing price of the
purchaser's common stock on September 18, 2000.
The unaudited condensed pro forma financial information is provided for
illustrative purposes only and is not necessarily indicative of the results that
would have been achieved had the divestitures been consummated at the dates
indicated. This information is not necessarily indicative of the future
operating results or financial condition of the Company after the divestitures.
NOTE 2 - PRO FORMA ADJUSTMENTS
The following adjustments have been made to reflect the pro forma
information:
ADJUSTMENT 1: reflects the increase in the Company's cash related to the
receipt of cash from the Gilat Communications, Inc. of approximately $6,625,000
for the purchase of UK education operations.
ADJUSTMENT 2: reflects the receipt of 295,454 shares of Gilat
Communications, Inc. common stock valued at $4,136,000 for the sale of UK
education operations.
ADJUSTMENT 3: reflects accrual for estimated Income tax expense of
approximately $1,500,000 and other direct expenses related to the sale of the UK
education operations.
ADJUSTMENT 4: reflects reinstatement of corporate overhead costs that
were previously allocated to US and UK education operations.
(c) Exhibits.
2.1 Asset Purchase Agreement dated August 10, 2000 by and among,
Aris UK Limited, a Company incorporated in England and Wales,
Gilat Communications Ltd., an Israeli corporation, John Bryce
Training Ltd., an Israeli corporation, Winford Management
Limited, a Company incorporated in England and Wales and John
Bryce Training (Europe) B.V, a Dutch company. (Incorporated by
reference to Exhibit 99.1 to the Current Report on Form 8-K
dated August 31, 2000 (SEC File Number 333-25409))
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ARIS CORPORATION
By: /s/ D. Gamache
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Diane Gamache, CPA
Chief Financial Officer
Dated: October 3, 2000
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EXHIBIT INDEX
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Exhibit Number Description
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2.1 Asset Purchase Agreement dated August 10, 2000 by and among, Aris UK
Limited, a Company incorporated in England and Wales, Gilat
Communications Ltd., an Israeli corporation, John Bryce Training
Ltd., an Israeli corporation, Winford Management Limited, a Company
incorporated in England and Wales and John Bryce Training (Europe)
B.V, a Dutch company. ( Incorporated by reference to Exhibit 99.1 to the
Current Report on Form 8-K dated August 31, 2000 (SEC File Number 333-25409))
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