<PAGE>
Exhibit 99.3
Active Software, Inc.
UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined financial statements
give effect to the acquisition by Active Software, Inc. (Active or the Company)
of all outstanding shares of Alier, Inc. (Alier), TransLink Software, Inc.
(TransLink) and Premier Software Technologies, Inc. (Premier) in a transaction
accounted for as a purchase.
The following unaudited pro forma combined financial information presents
the Unaudited Pro Forma Condensed Combined Balance Sheet as of March 31, 2000,
giving effect to the acquisition of TransLink and Premier as if it had been
consummated on that date. Also presented is the Unaudited Pro Forma Condensed
Combined Statements of Operations for the three months ended March 31, 2000
giving effect to the acquisition of TransLink and Premier and the year ended
December 31, 1999, giving effect to the acquisition of Alier, TransLink and
Premier as if such acquisition had been consummated as of the beginning of the
earliest period presented. The Unaudited Pro Forma Condensed Combined Balance
Sheet combines the respective balance sheets of the Company, TransLink and
Premier as of March 31, 2000.
The unaudited pro forma condensed combined information is presented for
illustrative purposes only and is not necessarily indicative of the operating
results or financial position that would have actually occurred if the
acquisition had been consummated as of the dates indicated, nor is it
necessarily indicative of future operating results or financial position. The
pro forma adjustments are based on the information available at the date of this
filing and are subject to change based on completion of the final purchase price
allocation, including completion of third-party appraisals.
Active Software's condensed consolidated financial information included in
these pro forma financial statements is derived from its December 31, 1999
audited consolidated financial statements included in its Form 10-K for the
period ended December 31, 1999 filed on March 30, 2000. Alier's condensed
financial information included in these pro forma financial statements is
derived from its December 31, 1999 audited financial statements included in its
Form 8-K/A filed on April 24, 2000. TransLink condensed financial information
included in these pro forma financial statements is derived from its December
31, 1999 audited financial statements included elsewhere in this filing.
Premier's condensed financial information included in these pro forma financial
statements is derived from its December 31, 1999 audited financial statements
included in its Form 8-K/A that will be file the same day as TransLink's Form
8-K/A.
<PAGE>
PRO FORMA UNAUDITED CONDENSED COMBINED BALANCE SHEET
AS OF MARCH 31, 2000
(IN THOUSANDS)
<TABLE>
<CAPTION>
Active Pro Forma Pro Forma Pro Forma
Software TransLink Adjustments Subtotal Premier Adjustments Combined
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 14,938 $ 251 $ (4,500) (B) $ 10,689 $ 8 $ (500) (F) $ 10,197
Short-term investments 16,916 - - 16,916 - - 16,916
Accounts receivable, net 9,336 - - 9,336 303 - 9,639
Prepaid expenses and other current assets 1,631 59 - 1,690 42 - 1,732
-------- ------- -------- -------- ------- --------- --------
Total current assets 42,821 310 (4,500) 38,631 353 (500) 38,484
Property and equipment, net 2,563 225 - 2,788 22 - 2,810
Long-term marketable securities 4,500 - - 4,500 - - 4,500
Goodwill and purchased intangibles 44,651 - 81,916 (A) 126,567 - 13,435 (E) 140,002
Other assets 2,281 30 - 2,311 - - 2,311
-------- ------- -------- -------- ------- -------- --------
Total assets $ 96,816 $ 565 $ 77,416 $174,797 $ 375 $ 12,935 $188,107
======== ======= ======== ======== ======= ======== ========
LIABILITIES AND STOCKHOLDER' EQUITY (DEFICIENCY)
Current Liabilities:
Accounts payable 2,166 20 - 2,186 22 - 2,208
Deferred revenues 6,220 248 - 6,468 91 - 6,559
Other accrued liabilities 5,552 30 248 (B) 5,830 10 166 (F) 6,006
Current portion of long-term obligations 609 - - 609 28 - 637
-------- ------- -------- -------- ------- -------- --------
Total current liabilities 14,547 298 248 15,093 151 166 15,410
Deferred rent - 68 - 68 - - 68
Stock compensation liability - - - - 2,768 (2,768) (F) -
Notes payable, net of current portion 267 - - 267 - - 267
Stockholders' equity (deficiency)
Series A convertible preferred stock - 1,500 (1,500) (B) - - - -
Common stock 118,173 2,594 (2,594) (B) 197,851 - 12,993 (F) 210,844
79,678 (B) - - - -
Deferred stock compensation (3,228) (253) 253 (B) (3,228) - - (3,228)
Notes receivable from stockholders - (28) 28 (B) - - - -
Accumulated other comprehensive loss (39) - - (39) - - (39)
Accumulated deficit (32,904) (3,614) 3,614 (B) (35,215) (2,544) 2,544 (F) (35,215)
- - (2,311) (B) - - - -
-------- ------- -------- -------- ------- -------- --------
Total stockholders' equity (deficiency) $ 82,002 199 77,168 159,369 (2,544) 15,537 172,362
-------- ------- -------- -------- ------- -------- --------
Total liabilities and stockholders'
equity (deficiency) $ 96,816 $ 565 $ 77,416 $174,797 $ 375 $ 12,935 $188,107
======== ======= ======== ======== ======= ======== ========
</TABLE>
See accompanying notes to unaudited pro forma condensed combined financial
statements
<PAGE>
Premier and TransLink
PRO FORMA UNAUDITED CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Active Pro Forma Pro Forma Pro Forma
Software TransLink Adjustments Subtotal Premier Adjustments Combined
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues:
License $10,170 $ 31 $ - $ 10,201 $ 43 $ - $ 10,244
Service 3,425 33 - 3,458 399 - 3,857
------- ----- ----------- -------- ---- ----------- --------
Total revenues 13,595 64 - 13,659 442 - 14,101
Costs of revenues:
License 404 1 - 405 27 - 432
Service 2,566 7 - 2,573 167 - 2,740
------- ----- ----------- -------- ---- ----------- --------
Total cost of revenues 2,970 8 - 2,978 194 - 3,172
------- ----- ----------- -------- ---- ----------- --------
Gross profit 10,625 56 - 10,681 248 - 10,929
Operating expenses:
Research and development 2,640 231 - 2,871 27 - 2,898
Sales and marketing 7,991 110 - 8,101 88 - 8,189
General and administrative 1,212 200 - 1,412 42 - 1,454
Amortization of deferred
stock compensation 302 17 - 319 131 - 450
Amortization of goodwill
and intangibles 2,018 - 7,665 (C) 9,683 - 1,435 (G) 11,118
Purchased in-process
technology 2,737 - - 2,737 - - 2,737
------- ----- ----------- -------- ---- ----------- --------
Total operating expenses 16,900 558 7,665 25,123 288 1,435 26,846
------- ----- ----------- -------- ---- ----------- --------
Loss from operations (6,275) (502) (7,665) (14,442) (40) (1,435) (15,917)
Other income (expense):
Interest income 533 7 (56) (D) 484 1 (7) (H) 478
Interest and other expense, net (53) - - (53) - - (53)
------- ----- ----------- -------- ---- ----------- --------
Total other income (expense), net 480 7 (56) 431 1 (7) 425
------- ----- ----------- -------- ---- ----------- --------
Loss before income taxes (5,795) (495) (7,721) (14,011) (39) (1,442) (15,492)
Income tax provision - - - - 28 - 28
------- ----- ----------- -------- ---- ----------- --------
Net loss $(5,795) $(495) $(7,721) $(14,011) $(67) $(1,442) $(15,520)
======= ===== =========== ======== ==== =========== ========
Basic and diluted net loss
per share $ (0.25) $ (0.63)
======= ========
Shares used in computing basic
and diluted net loss per share 23,560 24,477
======= ========
</TABLE>
See accompanying notes to unaudited pro forma condensed combined financial
statements
<PAGE>
Premier & TransLink
PRO FORMA UNAUDITED CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
Pro Forma
Active Effects of Alier Pro Forma
Software Alier Acquisition Combined TransLink
<S> <C> <C> <C> <C> <C>
Revenues:
License $ 20,491 $ 421 $ - $ 20,912 $ 120
Service 6,952 1,187 - 8,139 73
-------- ------- ----------- -------- -------
Total revenues 27,443 1,608 - 29,051 193
Costs of revenues:
License 1,376 196 - 1,572 13
Service 6,409 1,049 - 7,458 41
-------- ------- ----------- -------- -------
Total cost of revenues 7,785 1,245 - 9,030 54
-------- ------- ----------- -------- -------
Gross profit 19,658 363 - 20,021 139
Operating expenses:
Research and development 6,780 174 - 6,954 680
Sales and marketing 18,821 540 - 19,361 363
General and administrative 3,076 794 - 3,870 376
Amortization of deferred
stock compensation 1,170 1,911 - 3,081 42
Amortization of goodwill
and intangibles - - 15,513 (I) 15,513 -
-------- ------- ----------- -------- -------
Total operating expenses 29,847 3,419 15,513 48,779 1,461
-------- ------- ----------- -------- -------
Loss from operations (10,189) (3,056) (15,513) (28,758) (1,322)
Other income (expense):
Interest income 960 2 (100) (K) 862 33
Interest and other
expense, net (138) (85) - (223) (417)
-------- ------- ----------- -------- -------
Total other income
(expense), net 822 (83) (100) 639 (384)
-------- ------- ----------- -------- -------
Loss before income taxes (9,367) (3,139) (15,613) (28,119) (1,706)
Income tax provision - 21 - 21 -
-------- ------- ----------- -------- -------
Net loss $ (9,367) $(3,160) $ (15,613) $(28,140) $(1,706)
======== ======= =========== ======== =======
Basic and diluted net loss
per share $ (0.79) $ (2.30)
======== ========
Shares used in computing
basic and diluted
net loss per share 11,851 12,242
======== ========
<CAPTION>
Pro Forma Pro Forma Pro Forma
Adjustments Subtotal Premier Adjustments Combined
<S> <C> <C> <C> <C> <C>
Revenues: $ - $ 21,032 $ 129 $ - $ 21,161
License - 8,212 1,381 (69) (J) 9,524
Service ----------- -------- ------- ----------- --------
- 29,244 1,510 (69) 30,685
Total revenues
Costs of revenues: - 1,585 109 - 1,694
License - 7,499 646 - 8,145
Service ----------- -------- ------- ----------- --------
- 9,084 755 - 9,839
Total cost of revenues ----------- -------- ------- ----------- --------
- 20,160 755 (69) 20,846
Gross profit
Operating expenses: - 7,634 104 (69) (J) 7,669
Research and development - 19,724 350 - 20,074
Sales and marketing - 4,246 243 - 4,489
General and administrative
Amortization of deferred - 3,123 1,278 - 4,401
stock compensation
Amortization of goodwill 32,969 (C) 48,482 - 5,740 (G) 54,222
and intangibles ----------- -------- ------- ----------- --------
32,969 83,209 1,975 5,671 90,855
Total operating expenses ----------- -------- ------- ----------- --------
Loss from operations (32,969) (63,049) (1,220) (5,740) (70,009)
Other income (expense): (D) 670 9 (25) (H) 654
Interest income
Interest and other (225) (640) - - (640)
expense, net ----------- -------- ------- ----------- --------
Total other income (225) 30 9 (25) 14
(expense), net ----------- -------- ------- ----------- --------
(33,194) (63,019) (1,211) (5,765) (69,995)
Loss before income taxes
- 21 25 - 46
Income tax provision ----------- -------- ------- ----------- --------
$ (33,194) $(60,040) $(1,236) $ (5,765) $(70,041)
Net loss =========== ======== ======= =========== ========
Basic and diluted net loss
per share $ (5.32)
========
Shares used in computing
basic and diluted 13,159
net loss per share ========
</TABLE>
See accompanying notes to unaudited pro forma condensed combined financial
Statements
<PAGE>
Active Software, Inc.
NOTES TO THE UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL INFORMATION
TransLink
The total purchase price of TransLink reflects a cash payment of $4.5
million and the issuance of 796,363 shares of Active's common stock and the
assumption of options to purchase 43,041 shares of Active's common stock. The
total purchase price was determined as follows (in thousands):
Value of Active Software common stock and options $79,678
Cash payment 4,500
Other direct acquisition expenses 248
-------
$84,426
=======
The total purchase price of the TransLink acquisition will be allocated to
acquired assets based on estimates of their fair values. The purchase price of
approximately $84.4 million will be assigned to the assets acquired as follows
(in thousands):
Tangible net assets acquired $ 199
Acquired in-process research and development 2,311
Trained and assembled workforce 1,007
License Agreements 4,351
Non-compete agreements 2,923
Favorable Lease Terms 425
Goodwill 73,210
-------
$84,426
=======
We expect to allocate approximately $2.3 million of the purchase price to
TransLink's in-process research and development, which will be expensed upon
consummation of the merger as it has not reached technological feasibility and,
in the opinion of management, has no alternative future use. The estimated
amount is subject to adjustment based upon completion of third-party appraisals.
This amount has not been reflected in the accompanying pro forma statements of
operations as it is a nonrecurring charge, but has been reflected as an
adjustment to accumulated deficit in the accompanying pro forma balance sheet.
Premier
The total purchase price of Premier reflects a cash payment of $500,000 and
the issuance of 121,308 shares of Active Software's common stock and options to
purchase 11,548 shares of Active Software's common stock. The total purchase
price was determined as follows (in thousands):
Value of Active Software common stock and options $12,993
Cash payment 500
Other direct acquisition expenses 166
-------
$13,659
=======
The total purchase price of the Premier acquisition will be allocated to
acquired assets based on estimates of their fair values. The purchase price of
approximately $13.7 million will be assigned to the assets acquired as follows
(in thousands):
<PAGE>
Tangible net assets acquired $ 224
Trained and assembled workforce 475
License Agreements 1,891
Goodwill 11,069
-------
$13,659
=======
Pro forma adjustments are as follows:
(A) To reflect allocation of purchase price to goodwill and other intangible
assets of approximately $81.9 million identified in the purchase price
allocation resulting from the acquisition of TransLink.
(B) To reflect the purchase price paid as follows: issuance of our common stock
and options valued at approximately $80.0 million, a cash payment of $4.5
million and acquisition-related expenses of approximately $248,000.
(C) To reflect the amortization of estimated goodwill and other intangibles
resulting from the acquisition of TransLink. The intangible assets will be
amortized ratably over an estimated useful life by type as follows:
Trained and assembled workforce 3 years
License agreements 1 year
Non-compete agreements 2 years
Favorable lease terms 4 years
Goodwill 3 years
(D) Adjustment to record a decrease in interest income to reflect cash used for
the acquisition of TransLink. The reduction in interest income is recorded
assuming a rate of 5.0% per annum.
(E) To reflect allocation of purchase price to goodwill and other intangible
assets of approximately $13.4 million identified in the purchase price
allocation resulting from the acquisition of Premier.
(F) To reflect the purchase price paid as follows: issuance of our common stock
and options valued at approximately $13.0 million, a cash payment of
$500,000 and acquisition-related expenses of approximately $166,000.
(G) To reflect the amortization of estimated goodwill and other intangibles
resulting from the acquisition of Premier. The intangible assets will be
amortized ratably over an estimated useful life by type as follows:
Trained and assembled workforce 3 years
License agreements 1 year
Goodwill 3 years
(H) Adjustment to record a decrease in interest income to reflect cash used for
the acquisition of Premier. The reduction in interest income is recorded
assuming a rate of 5.0% per annum.
(I) To reflect the amortization of estimated goodwill and other intangibles
resulting from the acquisition of Alier. The intangible assets will be
amortized ratably over an estimated useful life by type as follows:
Trained and assembled workforce 3 years
License agreements 1 year
Non-compete agreements 2 years
Goodwill 3 years
(J) Adjustment to eliminate the intercompany sales for Premier.
(K) Adjustment to record a decrease in interest income to reflect cash used for
the acquisition of Alier. The reduction in interest income is recorded
assuming a rate of 5.0% per annum.
