UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): March 5, 1998
------------------
3Com Corporation
(Exact name of registrant as specified in its charter)
Delaware 0-12867 94-2605794
(State or other jurisdiction of (Commission File (I.R.S. Employer)
incorporation or organization) Number) Identification No.)
5400 Bayfront Plaza 95052
Santa Clara, California (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (408) 764-5000
Item 5. Other Events
On March 5, 1998, 3Com Corporation announced that it is
revising previously reported financial results relating to the
accounting combination and merger restructuring charge for the
June 12, 1997 merger of 3Com and U.S. Robotics.
Item 7. Financial Statements and Exhibits
(c) Exhibits in accordance with Item 601
of Regulation S-K:
Exhibits
--------
Exhibit No. Description
----------- -----------
99.1 Press release dated
March 5, 1998.
SIGNATURES
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.
3COM CORPORATION
March 5, 1998 By: /s/ Christopher B. Paisley
---------------------------
Christopher B. Paisley
Senior Vice President, Finance
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
EXHIBIT 99.1
For more information, contact:
Shirley Stacy
3Com Investor Relations
408-764-6301
[email protected]
or
Leslie Davis
3Com Public Relations
408-764-7187
[email protected]
FOR IMMEDIATE RELEASE
3Com Recombines 3Com/USR Fiscal 1997 Results and Adjusts
Merger Restructuring Charge
SANTA CLARA, Calif., March 5, 1998 - 3Com Corporation
(Nasdaq:COMS) today announced that it is revising previously
reported financial results relating to the accounting
combination and merger restructuring charge for the June
1997 merger of 3Com and U.S. Robotics (USR).
The fiscal 1997 results of the combined company were
accounted for as a pooling of interests. Because the
companies had different fiscal periods, the previously
reported combined results included heritage 3Com's May 1997
fiscal year with heritage USR's four fiscal quarters ended
March 1997, as permitted under General Accepted Accounting
Principles (GAAP). April and May 1997 results were
previously reported as an adjustment to 3Com's retained
earnings in the first quarter of fiscal 1998, and not
included in fiscal 1997 operating results.
Today, the company is recombining historical results, using
the 12 months ended May 1997 for heritage 3Com, added to the
period July 1996 through May 1997 for heritage USR, and then
adding in March 1997 a second time in order to have a
complete 12-month year for USR. This methodology includes
USR's April and May 1997 financial results in the recombined
fiscal 1997 operating results.
Further, the company has reviewed its merger restructuring
charge which, at the time the merger closed in the first
quarter of fiscal 1998, was an estimated $426 million. As a
result of a complete reassessment of this charge, the
company is making adjustments primarily to reflect three
factors: a change in the timing and costs associated with
product swap-outs; a more accurate recording of costs
associated with the elimination of duplicate facilities; and
a revision of goodwill write-offs related to acquisitions by
USR prior to the 3Com merger. 3Com is reducing the merger
restructuring charge recorded in the first quarter to $270
million.
"We have made these revisions principally in response to the
Securities and Exchange Commission's review of our Form 10-Q
filings since the time of the merger," said Chris Paisley,
3Com's senior vice president and chief financial officer.
"The company will be revising its Form 10-Q filings for the
first and second quarters of fiscal 1998 as soon as
practicable."
The attached schedules highlight the original and revised
results for fiscal 1997 and revised statements of operations
for the first and second quarters of fiscal 1998.
About 3Com
3Com Corporation enables individuals and organizations
worldwide to communicate and share information and resources
at anytime from anywhere. As one of the world's preeminent
suppliers of data, voice and video communications
technology, 3Com has delivered networking solutions to more
than 100 million customers worldwide. The company provides
enterprises, network service providers and carriers, small
businesses and consumers with comprehensive, innovative
information access products and system solutions for
building intelligent, reliable and high performance local
and wide area networks. For further information, visit
3Com's World Wide Web site at http://www.3com.com, or the
press site at http://www.3com.com/pressbox.
####
3Com is a registered trademark of 3Com Corporation and its
subsidiaries.
-tables follow -
<TABLE>
3Com Corporation
Consolidated Statements of Operations for the Year Ended May 31, 1997
(In thousands, except per share data.)
<CAPTION>
Twelve Months Ended Quarter Ended
---------------------- ----------------------------------------------
May 31, 1997 Aug. 31, 1996 Nov. 30, 1996
---------------------- ---------------------- ----------------------
Previously Previously Previously
Reported Revised Reported Revised Reported Revised
<S> <C> <C> <C> <C> <C> <C>
Sales $5,604,146 $5,606,077 $1,250,060 $1,311,504 $1,421,660 $1,459,939
Cost of
sales 2,906,229 2,918,966 658,204 693,593 738,252 756,916
---------- ---------- ---------- ---------- ---------- ----------
Gross
margin 2,697,917 2,687,111 591,856 617,911 683,408 703,023
Total
opera-
ting exp-
enses 1,770,229 1,894,890 354,615 424,266 467,137 429,505
Operating
income 927,688 792,221 237,241 193,645 216,271 273,518
Income
before
income
taxes 944,683 800,701 240,214 195,923 220,404 277,050
Income
tax
provision 347,060 300,168 88,250 90,879 101,363 102,452
---------- ---------- ---------- ---------- ---------- ----------
Net
income $ 597,623 $ 500,533 $ 151,964 $ 105,044 $ 119,041 $ 174,598
================== ====================== ======================
<CAPTION>
Net income
per common
and equiva-
lent share:
<S> <C> <C> <C> <C> <C> <C>
Primary $1.69 $1.42 $0.43 $0.30 $0.34 $0.49
Fully
diluted $1.69 $1.41 $0.43 $0.30 $0.34 $0.49
</TABLE>
Note: Quarter periods
combined: Q1'97 Q2'97 Q3'97** Q4'97**
----- ----- ------- -------
3Com quarters ended August `96 November `96 February `97 May `97
USR quarters ended:
Original combination
(quarters ended) June `96 September `96 December `96 March `97
Recombination
(quarters ended) September `96 December `96 March `97 May `97*
*Three-month period;
March, April, May
**Both quarters include
heritage USR's March results
<TABLE>
<CAPTION>
Quarter Ended
Feb. 28, 1997 May 31, 1997
---------------------- ----------------------
Previously Previously
Reported Revised Reported Revised
<S> <C> <C> <C> <C>
Sales $1,426,421 $1,462,891 $1,506,005 $1,371,743
Cost of
sales 743,926 725,116 762,881 743,341
---------- ---------- ---------- ----------
Gross
margin 682,495 737,775 743,124 628,402
Total
operating
expenses 442,124 489,494 492,630 551,625
Operating
income 240,371 248,281 250,494 76,777
Income before
income taxes 245,628 252,771 255,126 74,957
Income tax
provision 88,954 73,667 74,503 33,170
---------- ---------- ---------- ----------
Net income $ 156,674 $ 179,104 $ 180,623 $ 41,787
====================== ======================
<CAPTION>
Net income per
common and
equivalent
share:
<S> <C> <C> <C> <C>
Primary $0.44 $0.50 $0.51 $0.12
Fully
diluted $0.44 $0.50 $0.51 $0.12
</TABLE>
Consolidated Statements of Operations
For the Three Months Ended August 31 and November 30, 1997
(In thousands, except per share data.)
Quarter Ended
Aug. 31, 1997 Nov. 30, 1997
------------------------- -------------------------
Previously Previously
Reported Revised Reported Revised
---------- ---------- ---------- ----------
Sales $1,600,862 $1,597,516 $1,220,253 $1,197,189
Cost
of sales 832,808 831,429 651,094 645,344
---------- ---------- ---------- ----------
Gross margin 768,054 766,087 569,159 551,845
Operating
expenses
Sales and
marketing 301,307 302,378 337,594 338,334
Research
and development 142,117 142,798 145,491 144,978
General and
administrative 62,589 62,865 70,507 71,265
Merger-related
charges and
other 426,000 269,787 - (1,229)
---------- ---------- ---------- ----------
Total
operating
expenses 932,013 777,828 553,592 553,348
---------- ---------- ---------- ----------
Operating income
(loss) (163,959) (11,741) 15,567 (1,503)
Other income
- net 2,961 2,961 7,637 7,637
---------- ---------- ---------- ----------
Income (loss)
before income
taxes (160,998) (8,780) 23,204 6,134
Income tax
provision
(benefit) (14,178) 42,453 8,121 2,113
---------- ---------- ---------- ----------
Net income
(loss) $ (146,820) $ (51,233) $ 15,083 $ 4,021
========== ========== ========== ==========
Net income
(loss) per share
Primary $ (0.43) $ (0.15) $ 0.04 $ 0.01
Fully
-diluted $ (0.43) $ (0.15) $ 0.04 $ 0.01
---------- ---------- ---------- ----------
