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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): February 28, 2000
BROADCOM CORPORATION
(Exact Name of Registrant as Specified in Charter)
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California 000-23993 33-0480482
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(State or Other Jurisdiction of (Commission File Number) (IRS Employer Identification No.)
Incorporation)
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16215 Alton Parkway, Irvine, California 92618
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (949) 450-8700
Not Applicable
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(Former Name or Former Address, if Changed since Last Report)
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ITEM 5. OTHER EVENTS
On February 28, 2000, Broadcom Corporation issued a press release, a
copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by
reference.
ITEM 7. EXHIBITS
(a) Not Applicable.
(b) Not Applicable.
(c) Exhibits
99.1 Press Release dated February 28, 2000, of the Registrant.
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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.
BROADCOM CORPORATION,
a California corporation
February 29, 2000 By: /s/ WILLIAM J. RUEHLE
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William J. Ruehle
Vice President and
Chief Financial Officer
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EXHIBIT 99.1
NEWS RELEASE
BROADCOM BUSINESS MEDIA CONTACTS
Bill Blanning or Eileen Algaze
Corporate Communications Dept.
949-450-8700
[email protected]
[email protected]
BROADCOM FINANCIAL ANALYST CONTACT DIGITAL FURNACE CONTACT
William Ruehle Lucy Henner
Vice President and Chief Financial Officer Director of Communications
949-450-8700 770-263-0911 ext. 23
[email protected] Mobile: 678-296-0249
[email protected]
BROADCOM TO ACQUIRE DIGITAL FURNACE CORPORATION, PROVIDING SOLUTION TO TRIPLE
UPSTREAM CAPACITY OF BROADBAND CABLE NETWORKS
Broadcom's combined silicon and software solution will reduce the systems cost
for integration of voice and data into the existing cable network
IRVINE, Calif. and ATLANTA, Ga.- February 28, 2000 - Broadcom Corporation
(Nasdaq: BRCM), the leading provider of integrated circuits enabling high-speed
broadband communications to and throughout the home and business, today
announced that it is acquiring Digital Furnace Corporation, an Atlanta-based
developer of communications algorithms and software that significantly increase
the capacity of existing broadband networks for interactive services.
The core technology of Digital Furnace, Propane(TM), is a patent-pending
software solution that runs on Broadcom's Data Over Cable Service Interface
Specification (DOCSIS) chipsets. Fully compatible with DOCSIS standards, Propane
uses sophisticated algorithms to improve efficiency and reduce latency in
broadband networks, providing as much as three times greater upstream capacity
for interactive services.
Broadband cable operators are moving aggressively to introduce services to the
fast-growing Internet access and telephony markets. According to Forrester
Research, Inc., 26 million households will have Internet access via cable modems
by 2005, and 20 per cent of U.S. households will have telephone service via
cable-connected phones. These interactive services require cable operators to
maximize efficiency of their reverse-path capacity, from the subscriber to the
network. Propane provides cable operators with a tool that can increase this
reverse-path capacity up to three times, depending on cable plant and market
variables. This allows them to provide new interactive services cost-effectively
with available upstream bandwidth.
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"The Digital Furnace(TM) software will turbo-charge Broadcom's cable-modem
technology, optimizing the full capabilities of our chipsets," said Dr. Henry T.
Nicholas III, President and CEO of Broadcom. "We can offer our cable modem
customers superior and wider performance capabilities, allowing them to
differentiate themselves in the expanding residential and business markets."
"We're excited about combining our technology with Broadcom's chips to help
speed delivery of new voice, video and data services," said John Lappington,
CEO, President and co-founder of Digital Furnace. "High-speed Internet access,
multiple telephony lines, computer networking, security and video conferencing
all create higher and higher demand for network capacity. With the added
capacity provided by Propane, cable operators deploying Broadcom-based
communications equipment can now greatly increase their number of interactive
customers and resulting service revenue over existing broadband networks."
In connection with the acquisition, which is expected to close shortly, Broadcom
will issue an aggregate of approximately 664,735 shares of its Class B Common
Stock and reserve approximately 85,265 additional shares of its Class B Common
Stock for issuance upon exercise of outstanding employee stock options and other
rights of Digital Furnace. The share issuances are expected to be exempt from
registration pursuant to section 3(a)(10) of the Securities Act of 1933, as
amended. A portion of the shares issued will be held in escrow pursuant to the
terms of the respective acquisition agreements, as well as various employee
share repurchase agreements. (Share numbers shown reflect Broadcom's recent
2-for-1 stock split.)
The merger transaction will be accounted for as a pooling of interests.
Broadcom's financial reports for the first fiscal quarter of 2000 (ending March
31) and prior periods will reflect the effects of the acquisition. The company
expects to record a one-time charge in the first quarter to cover related
expenses.
The boards of directors of both companies have approved the merger, which awaits
approval by Digital Furnace shareholders and the satisfaction of other closing
conditions. The operations and employees of Digital Furnace will be integrated
with those of Broadcom's Residential Broadband Business Unit, also based in
Atlanta.
Shares of Broadcom's Class B Common Stock are identical to Broadcom Class A
Common Stock except for certain voting rights, may be converted into Class A
Common Stock at any time at the holder's option, and are automatically converted
into Class A Common Stock upon sale and most other transfers. Broadcom's Class A
Common Stock is traded on the Nasdaq National Market(R); the Class B Common
Stock is not publicly traded.
ABOUT DIGITAL FURNACE
Digital Furnace Corporation is a leading-edge communications technology firm
that develops advanced voice, data and video solutions for the small office/home
office (SOHO) and residential markets. Based on research by company founders Dr.
John Limb, Georgia Research Alliance Eminent Scholar at Georgia Tech, and Daniel
Howard, Digital Furnace's patent-pending Propane technology significantly
increases the capacity of broadband networks, allowing cable operators to serve
new markets while minimizing costly plant upgrades. The
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Digital Furnace management team includes experts in software development,
telecommunications, broadband communications and video technology. Founded in
1998 with the support of the Georgia Center for Advanced Telecommunications
Technology, the privately-held company is based in Atlanta, Georgia, and may be
contacted at 770-263-0911 or www.digitalfurnace.com.
ABOUT BROADCOM
Broadcom Corporation is the leading provider of highly integrated silicon
solutions that enable broadband digital transmission of voice, data and video
content to and throughout the home and within the business enterprise. Using
proprietary technologies and advanced design methodologies, the company designs,
develops and supplies integrated circuits for a number of the most significant
broadband communications markets, including the markets for cable set-top boxes,
cable modems, high-speed office networks, home networking, Voice over Internet
Protocol (VoIP), residential broadband gateways, direct broadcast satellite and
terrestrial digital broadcast, and digital subscriber line (xDSL). Broadcom is
headquartered in Irvine, Calif., and may be contacted at 949-450-8700 or
www.broadcom.com.
SAFE HARBOR STATEMENT OF BROADCOM CORPORATION UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995:
This release may contain forward-looking statements based on our current
expectations, estimates and projections about our industry, management's
beliefs, and certain assumptions made by us. Words such as "anticipates,"
"expects," "intends," "plans," "believes," "seeks," "estimates," "may," "will"
and variations of these words or similar expressions are intended to identify
forward-looking statements. In addition, any statements that refer to
expectations, projections or other characterizations of future events or
circumstances, including any underlying assumptions, are forward-looking
statements. These statements are not guarantees of future performance and are
subject to certain risks, uncertainties and assumptions that are difficult to
predict. Therefore, our actual results could differ materially and adversely
from those expressed in any forward-looking statements as a result of various
factors.
Important factors that may cause such a difference for Broadcom in connection
with the acquisition of Digital Furnace include, but are not limited to, the
risks inherent in acquisitions of technologies and businesses, including the
timing and successful completion of technology and product development through
volume production, integration issues, costs and unanticipated expenditures,
changing relationships with customers, suppliers and strategic partners,
potential contractual, intellectual property or employment issues, accounting
treatment and charges, and the risks that the acquisition cannot be completed
successfully or that anticipated benefits are not realized; the rate at which
our present and future customers and end-users adopt Broadcom's and Digital
Furnace technologies and products in the markets for data, voice and video
broadband communications; delays in the adoption and acceptance of industry
standards in the foregoing markets; the timing of customer-industry
qualification and certification of our products and the risks of
non-qualification or non-certification; the timing, rescheduling or cancellation
of significant customer orders; the loss of a key customer; the volume of our
product sales and pricing concessions on volume sales; the qualification,
availability and pricing of competing products and technologies and the
resulting effects on sales and pricing of our products; silicon
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wafer pricing and the availability of foundry and assembly capacity and raw
materials; intellectual property disputes and customer indemnification claims;
our ability to specify, develop, complete, introduce, market and transition to
volume production new products and technologies in a timely manner; the effects
of new and emerging technologies; the effectiveness of our product cost
reduction efforts; fluctuations in our manufacturing yields and other problems
or delays in the fabrication, assembly, testing or delivery of our products; the
risks of producing products with new suppliers and at new fabrication and
assembly facilities; problems or delays that we may face in shifting our
products to smaller geometry process technologies and in achieving higher levels
of design integration; the risks and uncertainties associated with our
international operations; our ability to retain and hire key executives,
technical personnel and other employees in the numbers, with the capabilities,
and at the compensation levels needed to implement our business and product
plans; changes in our product or customer mix; the quality of our products and
any remediation costs; the effects of natural disasters and other events beyond
our control; the level of orders received that can be shipped in a fiscal
quarter; potential business disruptions, claims, expenses and other difficulties
resulting from "Year 2000" problems in computer-based systems used by us, our
suppliers or our customers; general economic conditions and specific conditions
in the markets we address; and other factors.
Our forthcoming Annual Report on Form 10-K, recent Quarterly Reports on Form
10-Q, recent Current Reports on Form 8-K, and other Securities and Exchange
Commission filings discuss some of the important risk factors that may affect
our business, results of operations and financial condition. We undertake no
obligation to revise or update publicly any forward-looking statements for any
reason.
Broadcom(R) and the Broadcom pulse logo are trademarks of Broadcom Corporation
and/or its subsidiaries in the United States and certain other countries.
Digital Furnace and Propane are trademarks of Digital Furnace Corporation. All
other trademarks mentioned are the property of their respective owners.
