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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): June 30, 2000
BROADCOM CORPORATION
(Exact Name of Registrant as Specified in Charter)
<TABLE>
<S> <C> <C>
California 000-23993 33-0480482
---------------------------- -------------------------- --------------------------
(State or Other (Commission File Number) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
</TABLE>
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 May 31, 2000 Broadcom Corporation ("Broadcom") completed the
acquisition of Pivotal Technologies Corporation ("Pivotal"). Although the
acquisition was not significant to Broadcom as defined in Rule 1-02(w) of
Regulation S-X, Broadcom is voluntarily providing pro forma combined financial
information giving effect to the acquisition.
The following unaudited condensed pro forma combined financial
statements (the "Pro Forma Statements") are based on the consolidated financial
statements of Broadcom and its subsidiaries (included in the Annual Report on
Form 10-K for the year ended December 31, 1999 and the Quarterly Report on Form
10-Q for the quarter ended March 31, 2000) as adjusted to give effect to the
business combination between Broadcom and Pivotal, which is being accounted for
using the pooling-of-interests method of accounting. The Pro Forma Statements
also include the pooled operations of Broadcom's prior acquisitions.
Additionally, the Pro Forma Statements reflect adjustments made to (i) conform
the accounting policies of the combined company and (ii) eliminate intercompany
transactions. No adjustments have been made to give effect to expenses related
to the business combination, which expenses Broadcom expects to record in the
quarter ending June 30, 2000. The Pro Forma Statements give effect to the
business combination as if it 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 2-for-1 stock
splits, each in the form of a 100% stock dividend, effective February 11, 2000
and February 17, 1999, respectively, as well as an earlier 3-for-2 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 and results of
operations of Broadcom and subsidiaries and Pivotal for each of the nine
quarters through March 31, 2000, and the combined results of operations for the
years ended December 31, 1999, 1998 and 1997. 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, 1999, and the related Management's
Discussion and Analysis of Financial Condition and Results of Operations,
included in the Annual Report on Form 10-K.
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 sections entitled "Management's Discussion and Analysis
of Financial Condition" and "Risk Factors," made by us in our Annual Report on
Form 10-K for the year ended December 31, 1999, and in our other reports filed
with the Securities and Exchange Commission, including 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.
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<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,
1999 1999 1999 1999 2000
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Revenue $ 100,214 $ 119,452 $ 139,561 $ 161,998 $ 191,591
Cost of revenue 41,006 48,077 56,345 66,563 79,077
--------- --------- --------- --------- ---------
Gross profit 59,208 71,375 83,216 95,435 112,514
Operating expense:
Research and development 24,664 30,216 31,294 35,559 45,613
Selling, general and administrative 13,814 15,090 15,132 18,566 19,138
Merger-related costs -- 11,122 4,088 -- 2,901
Litigation settlement costs -- 17,036 -- -- --
--------- --------- --------- --------- ---------
Income (loss) from operations 20,730 (2,089) 32,702 41,310 44,862
Interest and other income, net 1,707 2,006 2,156 2,779 3,425
--------- --------- --------- --------- ---------
Income (loss) before income taxes 22,437 (83) 34,858 44,089 48,287
Provision (benefit) for income taxes 7,708 (242) 10,264 11,100 9,658
--------- --------- --------- --------- ---------
Net income $ 14,729 $ 159 $ 24,594 $ 32,989 $ 38,629
========= ========= ========= ========= =========
Basic earnings per share $ .08 $ -- $ .12 $ .16 $ .18
========= ========= ========= ========= =========
Diluted earnings per share $ .07 $ -- $ .10 $ .13 $ .15
========= ========= ========= ========= =========
Weighted average shares (basic) 194,360 200,865 203,756 207,688 211,217
========= ========= ========= ========= =========
Weighted average shares (diluted) 225,640 233,434 238,333 245,199 252,577
========= ========= ========= ========= =========
</TABLE>
The combined statements of operations above have been restated to give
retroactive effect to acquisitions accounted for using the pooling-of-interests
method.
3
<PAGE> 4
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,
1998 1998 1998 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenue $ 37,190 $ 49,244 $ 55,474 $ 74,821
Cost of revenue 14,083 21,427 24,898 30,995
-------- -------- -------- --------
Gross profit 23,107 27,817 30,576 43,826
Operating expense:
Research and development 9,239 11,935 14,910 19,460
Selling, general and administrative 6,036 7,162 8,528 12,396
-------- -------- -------- --------
Income from operations 7,832 8,720 7,138 11,970
Interest and other income, net 323 1,312 1,266 1,279
-------- -------- -------- --------
Income before income taxes 8,155 10,032 8,404 13,249
Provision for income taxes 3,627 4,545 3,869 6,410
-------- -------- -------- --------
Net income $ 4,528 $ 5,487 $ 4,535 $ 6,839
======== ======== ======== ========
Basic earnings per share $ .04 $ .03 $ .02 $ .04
======== ======== ======== ========
Diluted earnings per share $ .03 $ .03 $ .02 $ .03
======== ======== ======== ========
Weighted average shares (basic) 127,259 179,403 182,503 189,700
======== ======== ======== ========
Weighted average shares (diluted) 180,788 209,566 212,351 219,338
======== ======== ======== ========
</TABLE>
The combined statements of operations above have been restated to give
retroactive effect to acquisitions accounted for using the pooling-of-interests
method.
4
<PAGE> 5
Unaudited Condensed Pro Forma Combined Statements of Operations
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------------------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Revenue $ 521,225 $ 216,729 $ 42,341
Cost of revenue 211,991 91,403 15,563
--------- --------- ---------
Gross profit 309,234 125,326 26,778
Operating expense:
Research and development 121,733 55,544 22,822
Selling, general and administrative 62,602 34,122 11,886
Merger-related costs 15,210 -- --
Litigation settlement costs 17,036 -- --
--------- --------- ---------
Income (loss) from operations 92,653 35,660 (7,930)
Interest and other income, net 8,648 4,180 107
--------- --------- ---------
Income (loss) before income taxes 101,301 39,840 (7,823)
Provision (benefit) for income taxes 28,830 18,451 (852)
--------- --------- ---------
Net income (loss) $ 72,471 $ 21,389 $ (6,971)
========= ========= =========
Basic earnings (loss) per share $ .36 $ .13 $ (.06)
========= ========= =========
Diluted earnings (loss) per share $ .31 $ .10 $ (.06)
========= ========= =========
Weighted average shares (basic) 201,667 169,716 116,508
========= ========= =========
Weighted average shares (diluted) 235,651 205,511 116,508
========= ========= =========
</TABLE>
The combined statements of operations above have been restated to give
retroactive effect to acquisitions accounted for using the pooling-of-interests
method.
5
<PAGE> 6
Unaudited Condensed Pro Forma Combined Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
Mar. 31, June 30, Sept. 30, Dec. 31, Mar. 31,
1999 1999 1999 1999 2000
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 92,772 $ 109,014 $ 162,129 $ 180,816 $ 237,741
Short-term investments 51,641 64,289 78,348 90,059 90,902
Accounts receivable, net 46,510 50,834 64,550 92,124 91,551
Inventory 15,326 7,393 12,257 19,177 30,991
Deferred taxes 6,184 6,546 7,183 8,380 8,380
Prepaid expenses and other current assets 8,486 11,776 13,646 12,950 22,633
--------- --------- --------- --------- ---------
Total current assets 220,919 249,852 338,113 403,506 482,198
Property and equipment, net 37,924 40,536 46,198 51,151 54,037
Long-term investments 42,124 28,106 20,072 9,351 --
Deferred taxes 10,793 34,849 68,317 137,779 211,728
Other assets 8,504 6,337 9,131 7,966 11,490
--------- --------- --------- --------- ---------
Total assets $ 320,264 $ 359,680 $ 481,831 $ 609,753 $ 759,453
========= ========= ========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 31,766 $ 26,135 $ 56,031 $ 46,458 $ 56,836
Wages and related benefits 7,035 9,594 12,156 15,430 14,716
Accrued liabilities 9,904 19,121 23,384 26,131 20,689
Current portion of long-term debt 5,641 4,367 1,271 1,787 1,606
--------- --------- --------- --------- ---------
Total current liabilities 54,346 59,217 92,842 89,806 93,847
Long-term debt, less current portion 5,089 2,461 2,937 3,075 1,834
Shareholders' equity:
Common stock 243,871 282,717 350,508 451,294 558,712
Notes receivable from employees (2,541) (2,389) (2,219) (1,821) (1,631)
Deferred compensation (8,213) (9,185) (9,279) (12,632) (11,969)
Retained earnings 27,712 26,859 47,042 80,031 118,660
--------- --------- --------- --------- ---------
Total shareholders' equity 260,829 298,002 386,052 516,872 663,772
--------- --------- --------- --------- ---------
Total liabilities and shareholders' equity $ 320,264 $ 359,680 $ 481,831 $ 609,753 $ 759,453
========= ========= ========= ========= =========
</TABLE>
The combined balance sheets above have been restated to give retroactive effect
to acquisitions accounted for using the pooling-of-interests method.
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<PAGE> 7
Unaudited Condensed Pro Forma Combined Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
Mar. 31, June 30, Sept. 30, Dec. 31,
1998 1998 1998 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 39,604 $ 87,411 $ 52,172 $ 77,555
Short-term investments 796 3,729 16,684 34,344
Accounts receivable, net 17,504 27,870 26,023 42,463
Inventory 7,593 11,478 5,884 7,325
Deferred taxes 1,226 1,093 1,093 6,184
Prepaid expenses and other current assets 1,252 2,155 5,993 10,144
--------- --------- --------- ---------
Total current assets 67,975 133,736 107,849 178,015
Property and equipment, net 15,377 19,181 27,770 32,899
Long-term investments -- 25,094 43,152 42,826
Deferred taxes 1,319 1,904 2,720 9,552
Other assets 2,643 2,058 3,306 7,855
--------- --------- --------- ---------
Total assets $ 87,314 $ 181,973 $ 184,797 $ 271,147
========= ========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 19,486 $ 16,705 $ 15,362 $ 22,506
Wages and related benefits 1,484 2,060 3,159 3,201
Accrued liabilities 7,018 3,506 7,169 8,232
Current portion of long-term debt 2,629 3,648 7,105 7,735
--------- --------- --------- ---------
Total current liabilities 30,617 25,919 32,795 41,674
Long-term debt, less current portion 2,240 1,031 4,931 5,049
Shareholders' equity:
Common stock 65,748 159,905 147,690 221,250
Notes receivable from employees (3,513) (3,571) (3,123) (2,743)
Deferred compensation (7,074) (5,956) (5,664) (8,078)
Retained earnings (deficit) (704) 4,645 8,168 13,995
--------- --------- --------- ---------
Total shareholders' equity 54,457 155,023 147,071 224,424
--------- --------- --------- ---------
Total liabilities and shareholders' equity $ 87,314 $ 181,973 $ 184,797 $ 271,147
========= ========= ========= =========
</TABLE>
The combined balance sheets above have been restated to give retroactive effect
to acquisitions accounted for using the pooling-of-interests method.
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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
June 30, 2000 By: /s/ WILLIAM J. RUEHLE
---------------------------------
William J. Ruehle
Vice President and
Chief Financial Officer
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