<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): January 11, 2000
BEST SOFTWARE, INC.
(Exact name of registrant as specified in its charter)
Virginia 0-23117 54-1222526
(State or other jurisdiction (Commission File No.) I.R.S. Employer
of incorporation) (Identification No.)
11413 Isaac Newton Square
Reston, Virginia 20190
(Address of principal executive offices)
(703) 709-5200
(Registrant's telephone number, including area code)
N/A
(former name or former address, if changed since last report)
<PAGE> 2
ITEM 5. OTHER ITEMS.
1. Filed herewith as Exhibit 99.1 is a press release issued on
January 12, 2000 by Best Software, Inc. (the "Company") announcing the execution
of an Agreement and Plan of Merger dated as of January 12, 2000 (the "Merger
Agreement"), by and among the Company, The Sage Group plc ("Parent") and Bobcat
Acquisition Corp., a wholly owned subsidiary of Parent ("Purchaser"). The Merger
Agreement provides for Purchaser to commence a cash tender offer (the "Offer")
within five business days for all of the shares of common stock, no par value
per share (collectively, the "Shares"), of the Company at a price of $35.00 per
Share, net to the seller in cash, upon the terms and subject to the conditions
contained in the Agreement. The Merger Agreement further provides that, as soon
as practicable after the satisfaction or waiver of the conditions set forth in
the Merger Agreement (including, without limitation, the consummation of the
Offer), and in accordance with the relevant provisions of the Virginia Stock
Corporation Act, as amended, Purchaser will be merged (the "Merger") with and
into the Company. Following the consummation of the Merger, the Company will
continue as the surviving corporation and will be a wholly owned subsidiary of
Parent. In the Merger, the holders of Shares (other than the Company, Parent,
Purchaser or any subsidiary of any of the foregoing) will receive the same per
Share consideration as is paid to holders of Shares in the Offer. The foregoing
is qualified in its entirety by reference to the complete text of the Press
Release which is filed as Exhibit 99.1 hereto.
2. Filed herewith as Exhibit 99.2 is a press release issued on
January 12, 2000 by the Company announcing the Company's financial results for
the fourth quarter of 1999, which is incorporated herein by this reference.
3. Filed herewith as Exhibit 3.3 is an amendment to the Company's
Bylaws approved on January 11, 2000 by the Board of Directors to provide that
Article 14.1 of the Virginia Stock Corporation Act shall not apply to
acquisitions of shares of capital stock of the Company.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(c) Exhibits
3.3 Amendment of the Bylaws of Best Software, Inc. adopted
by the Board of Directors at a meeting of the Board held
on January 11, 2000.
99.1 Press Release of Best Software, Inc. issued on January
12, 2000.
99.2 Press Release of Best Software, Inc. issued on January
12, 2000.
<PAGE> 3
SIGNATURES
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.
BEST SOFTWARE, INC.
Date: January 13, 2000 By: /s/ David N. Bosserman
----------------------
Name: David N. Bosserman
Title: Executive Vice President, Chief
Financial Officer and Treasurer
(Principal Financial Officer)
<PAGE> 1
EXHIBIT 3.3
AMENDMENT OF THE BYLAWS OF BEST SOFTWARE, INC.
ADOPTED AT A MEETING HELD ON JANUARY 11, 2000
Article V of the Bylaws of the Corporation has been amended to add a new
Section 5 as follows:
Section 5 - Control Share Acquisition Statute:
Article 14.1 of the Virginia Stock Corporation Act shall not apply to
acquisitions of shares of capital stock of the Corporation.
<PAGE> 1
EXHIBIT 99.1
WEDNESDAY JANUARY 12, 3:44 AM EASTERN TIME
COMPANY PRESS RELEASE
BEST SOFTWARE ANNOUNCES DEFINITIVE MERGER AGREEMENT WITH SAGE GROUP PLC
DEAL PAIRS BEST-OF-BREED ENTERPRISE SOLUTIONS PROVIDERS TO CREATE GLOBAL
POWERHOUSE
RESTON, Va.--(BUSINESS WIRE)--Jan. 12, 2000--Best Software, Inc. (Nasdaq:Best -
news), a leading provider of human resources, payroll, fixed asset and planning
solutions, today announced a definitive merger agreement with The Sage Group
plc, a leading worldwide supplier of accounting solutions. The all-cash deal, at
$35 per share of Best Software, is valued at approximately $445 million and is
expected to close in the first quarter of 2000. Best Software will become a
wholly-owned subsidiary of Sage Group and will operate as part of Sage US, Inc.
"We're pleased to join forces with one of the world's largest and most
successful software companies," said Tim Davenport, president, CEO and chairman
of the board of Best Software, Inc. "Together, Best Software and Sage will
provide an unparalleled suite of complementary applications in key markets
around the world."
Best Software, founded in 1982 and headquartered in Reston, Virginia, develops
solutions which enable organizations to transform the way they manage their
people, assets and planning processes. Its award-winning products include Abra
Suite(R) for HR and payroll management and the FAS family of fixed asset
management solutions, in addition to Best! Imperativ Asset Accounting(TM),
Web-native, award-winning Best! Imperativ HRMS(TM) and new Best! Imperativ
Active Planner(TM) for strategic financial planning and budgeting.
"Best Software's leadership position and large installed customer base, combined
with their exciting new Imperativ product line, makes them an ideal addition to
the Sage family and should make our expanded portfolio of PC accounting and
payroll products even more attractive to our channel partners and current and
prospective customers alike," said Paul Walker, chief executive for Sage Group
plc. "Our respective reputations for customer support and the strength of the
Sage and Best software brands provides us with an ideal platform upon which to
jointly build our business in the evolving e-commerce world."
Sage Group plc creates accounting software and related services for small and
medium-sized businesses. Its integrated and modular accounting products range
from packages for small businesses through to applications for medium-sized and
larger organizations. The Sage product line is based on 18 years of continuous
development in both DOS and Windows environments and is backed by comprehensive
support services.
About Sage
The Sage Group plc is the largest supplier of mainstream PC accounting software
to small and mid-market companies in the world. Formed in 1981, The Sage Group
plc now employs over 2,500 people worldwide in its market-leading companies in
the UK, France and Germany and the US.
About Best Software
Best Software, with more than 50,000 customers worldwide and offices in the US,
Canada and Europe, develops solutions which enable organizations to transform
their HR, fixed asset and planning and budgeting processes. Its scalable,
cost-effective solutions complement core financial management systems and
support the full spectrum of Microsoft(R) platforms, including Windows(R) 95,
Windows(R) 98, Windows NT(R) and BackOffice(R). For further
<PAGE> 2
information, call 800/368-2499, send an email to [email protected] or
access our web site at www.bestsoftware.com.
Note to Editors: Tim Davenport, president, CEO and chairman, Best Software, Inc.
and Dave Hanna, president and CEO, Sage US, will host a live teleconference
today at 1:00 pm EST to announce details of their definitive merger agreement.
To listen to the event, call 1-800-811-0667 in the US or 913/981-4901 for
international calls and ask for the Best Software conference call (code 874074).
The call will also be accessible over the Internet through Investor Broadcast
Network's Vcall, located at http://www.vcall.com. Listeners should go to the
website at least fifteen minutes before the call to register, download, and
install any necessary audio software. For those unable to attend the live event,
a replay will be available beginning approximately one hour after the call at no
charge.
Sage is a trademark of The Sage Group plc. MAS 90, BusinessWorks, DacEasy, and
Acuity are registered trademarks of Sage Software, Inc. Peachtree is a
registered trademark of Peachtree Software, Inc. Best Software, Abra Suite and
the Best logo are registered trademarks and Best! Imperativ Active Planner,
Best! Imperativ Asset Accounting, Best! Imperativ HRMS and FAS are trademarks of
Best Software. Microsoft, Windows, Windows 95, Windows 98, Windows NT, and
BackOffice are registered trademarks and SQL Server is a trademark of Microsoft
Corporation.
Forward-looking statements in this release, including statements regarding the
delivery and integration of new products and services and expectations for
revenue and earnings, are based on information available to the Company as of
the date hereof. Such forward looking statements are made only as of the date
hereof. The Company's actual results could differ materially from those stated
or implied by such forward looking statements due to risks and uncertainties
associated with fluctuations in the Company's quarterly operating results,
concentration of the Company's product offerings, development risks involved
with new products and technologies, competition, and other risk factors
disclosed in the Company's filings with the Securities and Exchange Commission.
Contact:
Best Software, Inc.
Brian Muys, 703/709-5200, x3829 (Public Relations)
Brian [email protected]
or
David Crum, 703/709-5200, x3202 (Investor Relations)
[email protected]
or
Duffey Communications
Mike Neumeier, 404/266-2600
[email protected]
<PAGE> 1
EXHIBIT 99.2
WEDNESDAY JANUARY 12, 3:47 AM EASTERN TIME
COMPANY PRESS RELEASE
BEST SOFTWARE ANNOUNCES RESULTS FOR THE FOURTH QUARTER
RESTON, Va.--(BUSINESS WIRE)--Jan. 12, 2000--Best Software, Inc. (Nasdaq:
Best-News), a leading provider of human resources, fixed asset and planning
solutions, today announced financial results for the fourth quarter and the year
ended December 31, 1999.
In the quarter, Best Software generated record revenue of $26.4 million and
diluted earnings per share of $0.36 (exclusive of acquisition-related costs).
For the year, Best Software generated record revenue of $91.4 million and
diluted earnings per share of $0.96 (exclusive of acquisition-related costs).
Best Software's overall revenue grew 24% to $26.4 million compared to $21.4
million in the quarter ended December 31, 1998. License fees and royalties rose
16% to $11.8 million from $10.2 million. Services revenue increased 31% to $14.6
million from $11.1 million.
"We're pleased to deliver a solid quarter in the face of Year 2000 concerns and
unfavorable exchange rates from our European business," said Tim Davenport,
president, CEO and chairman. "The continued ramp-up of our Imperativ business,
now with the additions of Best Imperativ Active Planner and Best Imperativ
Payroll, points to a strong 2000."
Pro Forma Results
For the quarter ended December 31, 1999, operating income grew 62% to $6.6
million, compared with operating income of $4.0 million in the fourth quarter of
1998. Net income for the quarter was $4.4 million, a 56% increase over net
income of $2.9 million in the prior year. Diluted earnings per share for the
quarter were $0.36 compared with diluted earnings per share of $0.23 in the
quarter ended December 31, 1998, an increase of 57%.
For the year ended December 31, 1999, revenue was $91.4 million compared to
$69.3 million for the 1998 year, an increase of 32%. Operating income for the
year was $17.2 million compared with $11.9 million for 1998, an increase of 45%.
Net income for the year was $12.1 million, a 37% increase over net income of
$8.8 million in the prior year. Diluted earnings per share for the year were
$0.96 compared with diluted earnings per share of $0.72 in the year ended
December 31, 1998, an increase of 33%.
The Company's above described pro forma financial results for the three- and
twelve-month periods exclude the write-off of in-process research and
development and the amortization of acquired intangibles, as well as the related
tax effects.
As Reported Results
As reported for the December 1999 quarter, operating income was $5.8 million
compared with $3.4 million in the fourth quarter of 1998. Net income was $4.0
million compared with $2.4 million in the prior quarterly period. Diluted
earnings per share were $0.32 compared with $0.20 in the quarter ended December
31, 1998.
As reported for the year ended December 31, 1999, operating income was $13.6
million compared to $6.8 million for the 1998 year. Net income was $9.9 million
compared with $5.6 million in the prior year. Diluted earnings per share were
$0.79 compared with $0.46 for the year ended December 31, 1998.
<PAGE> 2
Highlights since the third quarter earnings release include:
- In January 2000, Best Software and Delphia Consulting, LLC
announced an expanded partnership to provide enhanced
implementation, training and customization services to Best
Software, Best Software customers and its national network of
more than 100 Best! Imperativ Certified Solution Providers. The
agreement with Delphia, an award-winning Microsoft Certified
Solution Provider and long-time Best Software value-added
reseller based in Columbus, Ohio, marks the creation of the
Best! Imperativ Resource Center.
- In December 1999, Best Software announced that Burton
Snowboards, the leading manufacturer of snowboard equipment and
clothing, selected Best! Imperativ HRMS(TM) to replace its
current human resources system. It will be used to manage
benefits and human resources for over 500 employees nationwide.
- In November 1999, Best Software and Pivotpoint announced a
partnership. Pivotpoint will offer Best Software's Abra Suite(R)
and FAS Asset Accounting(TM) solutions along with Pivotpoint's
enterprise resource planning and extended enterprise
application, Point.Man. Based in Woburn, Massachusetts,
Pivotpoint Inc. is a leading provider of extended enterprise
applications to mid-market manufacturers.
Best Software, with over 50,000 customers worldwide and offices in the US,
Canada and Europe, is a leading provider of human resources, fixed asset and
planning solutions. Its scalable, cost-effective solutions complement core
accounting systems and support the full spectrum of Microsoft platforms,
including Windows(R) 95, Windows(R) 98, Windows NT(R), and BackOffice(R).
Best Software will hold an investor conference call today at 8:00 a.m. Eastern
Time. Investors interested in participating should dial 888-855-5428 and
reference the "Best Software Announcement" with Conference Code 871611.
Investors from outside the U.S. or without access to the toll-free number should
dial 719/457-2665.
Forward looking statements in this release, including statements regarding the
delivery and integration of new products and services and expectations for
revenue and earnings, are based on information available to the Company as of
the date hereof. Such forward looking statements are made only as of the date
hereof. The Company's actual results could differ materially from those stated
or implied by such forward looking statements due to risks and uncertainties
associated with fluctuations in the Company's quarterly operating results,
concentration of the Company's product offerings, development risks involved
with new products and technologies, competition, and other risk factors
disclosed in the Company's filings with the Securities and Exchange Commission.
Best Software and the Best logo are registered trademarks and Best! Imperativ,
Best! Imperativ Active Planner, Best! Imperativ HRMS, and FAS Asset Accounting
are trademarks of Best Software, Inc. Abra Suite is a registered trademark of
Abra Software, Inc., a wholly-owned subsidiary of Best Software, Inc. Microsoft,
Windows, Windows 95, Windows 98, Windows NT, and BackOffice are registered
trademarks of Microsoft Corporation. All other trademarks are the property of
their respective holders.
<PAGE> 3
Best Software, Inc.
Consolidated Financial Information -- Unaudited
<TABLE>
<CAPTION>
Pro Forma Consolidated Statements of Operations
(in thousands, except per share amounts)
Quarter Ended Twelve-Months Ended
December 31 December 31
1999 1998 1999 1998
------ ------ ------ ------
Pro forma Pro forma Pro forma Pro forma
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenue:
License fees and
royalties $11,839 $10,229 $41,872 $34,406
Services 14,610 11,148 49,542 34,924
------- ------- ------- -------
Total 26,449 21,377 91,414 69,330
------- ------- ------- -------
Cost of revenue:
License fees and
royalties 731 680 2,077 1,997
Services 5,181 3,428 17,045 11,425
------- ------- ------- -------
Total 5,912 4,108 19,122 13,422
------- ------- ------- -------
Gross margin 20,537 17,269 72,292 55,908
------- ------- ------- -------
Operating expenses:
Sales and marketing 7,872 7,494 30,934 24,604
Research and
development 3,718 3,438 14,643 11,157
General and
administrative
(Note 1) 2,388 2,297 9,519 8,295
------- ------- ------- -------
Total 13,978 13,229 55,096 44,056
------- ------- ------- -------
Operating income 6,559 4,040 17,196 11,852
Other income, net 610 565 2,276 2,323
------- ------- ------- -------
Income before
income taxes 7,169 4,605 19,472 14,175
Income tax
provision 2,724 1,750 7,379 5,380
======= ======= ======= =======
Net income $ 4,445 $ 2,855 $12,093 $ 8,795
======= ======= ======= =======
Basic earnings
per common share $ 0.38 $ 0.25 $ 1.03 $ 0.77
======= ======= ======= =======
Diluted earnings
per common share $ 0.36 $ 0.23 $ 0.96 $ 0.72
======= ======= ======= =======
Basic shares used
in computing earnings
per share 11,780 11,652 11,739 11,455
======= ======= ======= =======
Diluted shares used
in computing earnings
per share 12,502 12,370 12,561 12,180
======= ======= ======= =======
</TABLE>
Note 1. For the quarter ended December 31, 1999, excludes amortization of
acquired intangibles of $720,000. For the quarter ended December 31, 1998,
excludes the write-off of in-process research and development ("IPR&D") of
$320,000 and amortization of acquired intangibles of $336,000. For the twelve
months ended December 31, 1999, excludes the write-off of IPR&D of $1.2 million
and amortization of acquired intangibles of $2.4 million. For the twelve months
ended December 31, 1998, excludes the write-off of IPR&D of $4.2 million and
amortization of acquired intangibles of $882,000.
<PAGE> 4
Best Software, Inc.
Consolidated Financial Information - Unaudited
<TABLE>
<CAPTION>
Consolidated Statements of Operations
(in thousands, except per share amounts)
Quarter Ended Twelve-Months Ended
December 31 December 31
1999 1998 1999 1998
----- ----- ----- ------
<S> <C> <C> <C> <C>
Revenue:
License fees and
royalties $11,839 $10,229 $41,872 $34,406
Services 14,610 11,148 49,542 34,924
------- ------- ------- -------
Total 26,449 21,377 91,414 69,330
------- ------- ------- -------
Cost of revenue:
License fees
and royalties 731 680 2,077 1,997
Services 5,181 3,428 17,045 11,425
------- ------- ------- -------
Total 5,912 4,108 19,122 13,422
------- ------- ------- -------
Gross margin 20,537 17,269 72,292 55,908
------- ------- ------- -------
Operating expenses:
Sales and marketing 7,872 7,494 30,934 24,604
Research and
development 3,718 3,438 14,643 11,157
General and
administrative 2,388 2,297 9,519 8,295
Amortization of
acquired intangibles 720 336 2,374 882
Write-off of purchased
research and development -- 320 1,200 4,170
------- ------- ------- -------
Total 14,698 13,885 58,670 49,108
------- ------- ------- -------
Operating income 5,839 3,384 13,622 6,800
Other income, net 610 565 2,276 2,323
------- ------- ------- -------
Income before
income taxes 6,449 3,949 15,898 9,123
Income tax provision 2,450 1,530 6,035 3,500
======= ======= ======= =======
Net income $ 3,999 $ 2,419 $ 9,863 $ 5,623
======= ======= ======= =======
Basic earnings
per common share $ 0.34 $ 0.21 $ 0.84 $ 0.49
======= ======= ======= =======
Diluted earnings
per common share $ 0.32 $ 0.20 $ 0.79 $ 0.46
======= ======= ======= =======
Basic shares used
in computing earnings
per share 11,780 11,652 11,739 11,455
======= ======= ======= =======
Diluted shares used
in computing earnings
per share 12,502 12,370 12,561 12,180
======= ======= ======= =======
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
Consolidated Condensed Balance Sheets
(In thousands) December 31 December 31
1999 1998
----- ------
<S> <C> <C>
Assets:
Cash, cash equivalents
and short term investments $31,509 $46,280
Accounts receivable,
net of allowances 11,946 8,198
Other current assets 5,020 3,130
Property and equipment, net 5,757 4,333
Acquired intangibles, net 12,533 7,178
Long term marketable
securities 19,025 --
Other non-current assets 4,255 5,451
======= =======
Total assets $90,045 $74,570
======= =======
Liabilities and
Shareholders' Equity:
Current deferred maintenance
and services revenue $24,959 $19,350
Other current liabilities 13,999 14,394
Non-current deferred
maintenance and services revenue 838 616
Other non-current liabilities -- 125
------- -------
Total liabilities 39,796 34,485
------- -------
Total shareholders' equity 50,249 40,085
======= =======
Total liabilities and
shareholders' equity $90,045 $74,570
======= =======
</TABLE>
Contact:
Best Software, Inc.
Investor Contact
David N. Bosserman, 703/709-5200, ext. 3286
[email protected]
or
Media Contact
Brian Muys, 703/709-5200, ext. 3829
[email protected]
