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EXHIBIT 99.1
(b) PRO FORMA FINANCIAL DATA
ACCRUE SOFTWARE, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA
The following unaudited pro forma combined condensed statement of operations for
Accrue Software, Inc. ("Accrue") consists of the unaudited pro forma combined
condensed statement of operations for the six months ended September 30, 2000.
This pro forma financial data gives effect to Accrue's acquisition of
InfoCharger (a Business Unit of Tantau Software, Inc.) ("InfoCharger") in a
business combination accounted for as a purchase, which closed on July 14, 2000.
In exchange for the assets and liabilities of InfoCharger, Accrue issued
InfoCharger approximately 1.7 million shares of its common stock and paid $5.0
million in cash.
Pro forma amounts have been derived by applying pro forma adjustments to the
historical consolidated financial information of Accrue and InfoCharger.
The purchase price of InfoCharger was $59.2 million based upon the average
market price of a share of Accrue common stock in a range four trading days
before the merger was consummated on July 14, 2000, as quoted on the NASDAQ
National Market, and included $5.0 million in cash consideration and $0.2
million of estimated direct acquisition costs. The excess of the purchase price
over the fair value of net assets has been allocated to goodwill and
intangibles.
The unaudited pro forma combined condensed statement of operations combine
Accrue's historical results of operations for the six months ended September 30,
2000 with InfoCharger's historical results of operations for the six months
ended June 30, 2000 and have been prepared as if the InfoCharger acquisition
occurred on April 1, 1999.
The unaudited pro forma combined condensed financial data is not necessarily
indicative of what the actual operating results would have been for the combined
company had the transaction taken place on April 1, 1999, and do not purport to
indicate the results of future operations.
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ACCRUE SOFTWARE, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
(in thousands)
<TABLE>
<CAPTION>
Pro Forma
Accrue InfoCharger Combined
for the six for the six for the six
months ended months ended Pro Forma months ended
September 30, 2000 June 30, 2000 Adjustments September 30, 2000
<S> <C> <C> <C> <C>
Net revenue
Software license $ 13,650 $ 310 $ -- $ 13,980
Maintenance and service 6,136 75 -- 6,210
--------- --------- --------- ---------
Total revenue 19,785 385 -- 20,170
Cost of revenues
Software license 480 10 -- 489
Maintenance and service 3,194 -- -- 3,194
--------- --------- --------- ---------
Total cost of revenue 3,683 10 -- 3,693
--------- --------- --------- ---------
Gross profit 16,102 375 -- 16,477
--------- --------- --------- ---------
Operating expenses
Research and development 3,995 540 -- 4,538
Sales, general and administrative 9,683 340 -- 10,023
Amortization of intangibles and goodwill 27,103 -- 4,783 (A) 31,885
In-process research and development 4,503
Stock-based compensation expense 1,347 -- -- 1,347
--------- --------- --------- ---------
Total operating expenses 46,631 680 4,783 62,284
--------- --------- --------- ---------
Loss from operations (30,529) (505) (4,783) (35,617)
Other, net 405 (16) -- 387
--------- --------- --------- ---------
Net loss $ (30,124) $ (523) $ (4,783) $ (35,400)
--------- --------- --------- ---------
Net loss per share, basic and diluted $ (1.13) $ (1.26)
========= =========
Shares used in computing net loss per
share, basic and diluted 28,705 1,657 (B) 28,573
========= ========= =========
</TABLE>
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Data for explanation of Pro Forma acquisition adjustments.
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ACCRUE SOFTWARE, INC.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA
SIX MONTHS ENDED SEPTEMBER 30, 2000
1. BASIS OF PRO FORMA PRESENTATION
The unaudited pro forma combined condensed statement of operations give effect
to Accrue's acquisition of InfoCharger, in a business combination accounted for
as a purchase, which was consummated on July 14, 2000. At that date, Accrue
issued 1,666,667 shares of its common stock and paid $5.0 million in cash for
the assets and liabilities of InfoCharger.
The pro forma statement of operations has been prepared on the basis of
assumptions described in the following notes and include the allocation of the
consideration paid for the assets and liabilities of InfoCharger based on
independent third party valuations of their fair value. In the opinion of
Accrue's management, all adjustments necessary to present fairly such pro forma
statement of operations have been made based on the terms and structure of the
InfoCharger acquisition.
The pro forma statement of operations are not necessarily indicative of what the
actual financial results would have been had the transaction taken place on
April 1, 1999, and do not purport to indicate the results of future operations.
Below is a table of the acquisition consideration, purchase price allocation and
annual amortization of the intangible assets and goodwill acquired (in
thousands):
<TABLE>
<CAPTION>
Amortization Annual
Period Amortization
<S> <C> <C> <C>
Purchase price allocation:
Tangible net assets acquired $ 273 --
Intangible net assets acquired:
Developed technology 2,349 3 783
In-process research and development 1,514 --
Assembled workforce 331 3 110
Goodwill 54,721 3 18,240
-------
Total $59,188
=======
</TABLE>
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Tangible assets of InfoCharger principally include accounts receivable and
property and equipment. Liabilities of InfoCharger assumed principally include
accounts payable and deferred revenue.
To determine the value of the developed technology, the expected future cash
flows attributable to all existing technology was discounted, taking into
account risks related to the characteristics and applications of the developed
technology, existing and future markets, and assessments of the stage of the
technology's life cycle. The analysis resulted in a valuation for developed
technology that had reached technological feasibility and therefore was
capitalizable. The developed technology will be amortized on a straight-line
basis over three years.
The value of $1.5 million allocated to a project identified as in-process
research and development will be charged to expense during the second quarter of
fiscal 2001 but has not been reflected in the Accrue unaudited pro forma
combined condensed statement of operations as it is non-recurring in nature.
The write-off was necessary because the acquired in-process research and
development has not yet reached technological feasibility and has no future
alternative uses. The product under development may not achieve commercial
viability. The nature of the efforts required to develop the purchased
in-process research and development into a commercially viable product
principally relate to the completion of all planning, designing, prototyping,
verification and testing activities that are necessary to establish that the
product can be produced to meet its designed specifications, including
functions, features, and technical performance requirements.
The value of the purchased in-process research and development was determined by
estimating the projected net cash flows related to the product, including costs
to complete the development of the technology and the future revenue to be
earned upon commercialization of the product. The estimated stage of completion
(expressed as a percentage of completion) for the project was calculated and
then the percentage was applied to the expected net cash flows. The percentage
of completion for the InfoCharger project was 37%. These cash flows were then
discounted back to their net present value at a discount rate of 25%, which is
consistent with industry averages. The projected net cash flows from the
project were based on management's estimates of revenues and operating profits
related to the project.
To determine the revenue attributable to the in-process research technology,
consideration was also given to the contribution of the existing technology
which will be utilized in the development of the in-process technology, referred
to as "core technology". The value allocated to the core technology was
determined by assigning a leverage factor to the estimated projected net cash
flows related to the product under development after analysis of both the
effort and work completed as well as the expected value of the in-process
technology. The projected net cash flows from the products assigned to core
technology using the leverage factor were then discounted back to their net
present value.
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The value allocated to the assembled workforce is attributable to the
InfoCharger workforce in place after the acquisition which eliminates the need
to hire new replacement employees. The value was determined by estimating the
cost involved in assembling a new workforce including costs of salaries,
benefits, training and recruiting.
Goodwill is determined based on the residual difference between the amount of
consideration to be paid and the values assigned to identified net tangible and
intangible assets.
2. PRO FORMA NET LOSS PER SHARE
Pro forma basic and diluted net loss per share are based on the weighted average
number of shares of Accrue common stock outstanding during the period and the
number of shares of Accrue common stock to be issued in connection with the
InfoCharger acquisition. The following options have not been included in the
computation of pro forma diluted net loss per share because their effect would
be antidilutive.
<TABLE>
<CAPTION>
Potential Common Securities As of September 30, 2000
<S> <C>
Antidilutive options, warrant and
shares subject to repurchase not
included in loss per share calculations 1,283
-----
</TABLE>
3. PRO FORMA ADJUSTMENTS
A. To record the amortization of acquired intangible assets and goodwill.
B. To reflect the number of Accrue shares exchanged for the affiliate
investment in InfoCharger.
