<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): September 28, 1999
BROADCOM CORPORATION
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
California 000-23993 33-0480482
- ---------------------------- ------------------------ -------------------
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
16215 Alton Parkway, Irvine, California 92618
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (949) 450-8700
Not Applicable
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed since Last Report)
<PAGE> 2
ITEM 5. OTHER EVENTS
On August 31, 1999 Broadcom Corporation ("Broadcom") completed the
acquisitions of HotHaus Technologies Inc. and AltoCom, Inc. Although
individually and in aggregate the acquisitions were not significant to Broadcom
as defined in Rule 1-02(w) of Regulation S-X, Broadcom is providing pro forma
combined financial information giving effect to the acquisitions.
The following unaudited condensed pro forma combined financial
statements (the "Pro Forma Statements") are based on the historical consolidated
financial statements of Broadcom and its subsidiaries (included on a Current
Report on Form 8-K filed September 17, 1999) as adjusted to give effect to the
business combinations between Broadcom and HotHaus Technologies Inc. and between
Broadcom and AltoCom, Inc., accounted for in each case using the pooling-of-
interests method of accounting. Additionally, the Pro Forma Statements reflect
adjustments made to (i) conform the accounting policies of the combining
companies and (ii) eliminate intercompany transactions. No adjustments have been
made to give effect to expenses related to the business combinations, which
expenses Broadcom expects to record in the quarter ending September 30, 1999.
The Pro Forma Statements give effect to the business combinations as if they had
occurred prior to the beginning of each period presented.
All share numbers and per share amounts included in the Pro Forma
Statements have been retroactively adjusted to reflect Broadcom's two-for-one
stock split, in the form of a 100% stock dividend, effective February 17, 1999,
as well as an earlier three-for-two stock split effective March 9, 1998.
The Pro Forma Statements are unaudited; however, they contain all
normal recurring accruals and adjustments that, in the opinion of management,
are necessary to present fairly the combined financial position of Broadcom and
subsidiaries and HotHaus Technologies Inc. and AltoCom, Inc. at June 30, 1999
and December 31, 1998 and the combined results of operations for each of the six
quarters through June 30, 1999, the years ended December 31, 1998, 1997 and
1996, and the six month periods ended June 30, 1999 and 1998. It should be
understood that accounting measurements at interim dates inherently involve
greater reliance on estimates than at year-end. The Pro Forma Statements are
presented for informational purposes only, do not purport to constitute complete
financial statements, and are not necessarily indicative of future operating
results. The Pro Forma Statements also do not include footnotes and certain
financial presentations normally required for complete financial statements
under generally accepted accounting principles. Therefore, the Pro Forma
Statements should be read in conjunction with Broadcom's audited financial
statements and notes thereto for the year ended December 31, 1998, and the
related Management's Discussion and Analysis of Financial Condition and Results
of Operations, included on the Current Report on Form 8-K filed September 17,
1999.
The information contained in this Form 8-K is not a complete
description of our business or the risks associated with an investment in our
Common Stock. We urge you to carefully review and consider the various
disclosures, including but not limited to the section entitled "Risk Factors,"
made by us in our Current Report on Form 8-K filed September 17, 1999 and in our
other reports filed with the SEC, including our Annual Report on Form 10-K for
the year ended December 31, 1998 and our subsequent reports on Forms 10-Q and
8-K, that discuss our business in greater detail and advise interested parties
of certain risks, uncertainties and other factors that may affect our business,
results of operations or financial condition.
2
<PAGE> 3
UNAUDITED CONDENSED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------------------------------------
Mar. 31, June 30, Sept. 30, Dec. 31, Mar. 31, June 30,
1998 1998 1998 1998 1999 1999
------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Revenue $37,120 $ 49,244 $ 55,474 $ 74,618 $ 99,980 $119,027
Cost of revenue 14,083 21,427 24,898 30,995 40,815 47,729
------- -------- -------- -------- -------- --------
Gross profit 23,037 27,817 30,576 43,623 59,165 71,298
Operating expense:
Research and development 8,104 11,155 14,085 17,746 22,436 26,926
Selling, general and administrative 5,790 6,923 8,285 11,941 13,048 13,962
------- -------- -------- -------- -------- --------
Total operating expense 13,894 18,078 22,370 29,687 35,484 40,888
Merger related costs -- -- -- -- -- 11,122
Litigation settlement costs -- -- -- -- -- 17,036
------- -------- -------- -------- -------- --------
Income from operations 9,143 9,739 8,206 13,936 23,681 2,252
Interest and other income, net 316 1,308 1,260 1,270 1,695 1,937
------- -------- -------- -------- -------- --------
Income before income taxes 9,459 11,047 9,466 15,206 25,376 4,189
Provision for income taxes 4,149 4,951 4,294 7,192 8,882 1,466
------- -------- -------- -------- -------- --------
Net income $ 5,310 $ 6,096 $ 5,172 $ 8,014 $ 16,494 $ 2,723
======= ======== ======== ======== ======== ========
Basic earnings per share $ .08 $ .07 $ .06 $ .09 $ .17 $ .03
======= ======== ======== ======== ======== ========
Diluted earnings per share $ .06 $ .06 $ .05 $ .07 $ .15 $ .02
======= ======== ======== ======== ======== ========
Weighted average shares (basic) 63,453 89,419 90,850 93,725 95,834 98,774
======= ======== ======== ======== ======== ========
Weighted average shares (diluted) 90,247 104,520 105,869 108,626 111,548 115,126
======= ======== ======== ======== ======== ========
</TABLE>
3
<PAGE> 4
UNAUDITED CONDENSED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Six Months Ended
Years Ended December 31, June 30,
------------------------------ ------------------
1998 1997 1996 1999 1998
-------- -------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
Revenue $216,456 $ 42,341 $23,874 $219,007 $86,364
Cost of revenue 91,403 15,563 8,175 88,544 35,510
-------- -------- ------- -------- -------
Gross profit 125,053 26,778 15,699 130,463 50,854
Operating expense:
Research and development 51,090 21,545 7,541 49,362 19,259
Selling, general and administrative 32,939 11,410 4,364 27,010 12,713
-------- -------- ------- -------- -------
Total operating expense 84,029 32,955 11,905 76,372 31,972
Merger related costs -- -- -- 11,122 --
Litigation settlement costs -- -- -- 17,036 --
-------- -------- ------- -------- -------
Income (loss) from operations 41,024 (6,177) 3,794 25,933 18,882
Interest and other income, net 4,154 91 165 3,632 1,624
-------- -------- ------- -------- -------
Income (loss) before income taxes 45,178 (6,086) 3,959 29,565 20,506
Provision (benefit) for income taxes 20,586 (157) 1,514 10,348 9,100
-------- -------- ------- -------- -------
Net income (loss) $ 24,592 $ (5,929) $ 2,445 $ 19,217 $11,406
======== ======== ======= ======== =======
Basic earnings (loss) per share $ .29 $ (.10) $ .05 $ .20 $ .15
======== ======== ======= ======== =======
Diluted earnings (loss) per share $ .24 $ (.10) $ .04 $ .17 $ .12
======== ======== ======= ======== =======
Weighted average shares (basic) 84,362 58,170 51,200 97,304 76,436
======== ======== ======= ======== =======
Weighted average shares (diluted) 102,316 58,170 67,608 113,337 97,384
======== ======== ======= ======== =======
</TABLE>
4
<PAGE> 5
UNAUDITED CONDENSED PRO FORMA COMBINED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
--------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 101,398 $ 72,511
Short-term investments 64,286 34,344
Accounts receivable, net 50,654 42,279
Inventory 7,393 7,325
Deferred taxes 6,546 6,184
Other current assets 11,397 10,028
--------- ---------
Total current assets 241,674 172,671
Property and equipment, net 38,520 31,600
Long-term investments 28,106 42,826
Deferred taxes 29,134 6,721
Other assets 5,427 6,790
--------- ---------
Total assets $ 342,861 $ 260,608
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 25,165 $ 22,374
Wages and related benefits 9,285 3,135
Accrued liabilities 19,119 8,244
Current portion of long-term debt 3,514 7,252
--------- ---------
Total current liabilities 57,083 41,005
Long-term debt, less current portion 985 4,100
Shareholders' equity:
Common stock 257,889 206,932
Notes receivable from employees (2,013) (2,743)
Deferred compensation (6,516) (6,926)
Retained earnings 35,433 18,240
--------- ---------
Total shareholders' equity 284,793 215,503
--------- ---------
Total liabilities and shareholders' equity $ 342,861 $ 260,608
========= =========
</TABLE>
5
<PAGE> 6
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.
BROADCOM CORPORATION,
a California corporation
September 28, 1999 By: /s/ WILLIAM J. RUEHLE
-----------------------------
William J. Ruehle
Vice President and
Chief Financial Officer
