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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): December 1, 2000
NETWORK EQUIPMENT TECHNOLOGIES, INC.
------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-15323 94-2904044
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
6530 Paseo Padre Parkway, Fremont, California 94555
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(Address of Principal Executive Offices)
(510) 713-7300
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(Registrant's Telephone Number, Including Area Code)
[Not Applicable]
(Former Name or Former Address, if Changed Since Last Report.)
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Item 2. Disposition of assets
On December 1, 2000, Network Equipment Technologies, Inc. doing business as
net.com sold the assets of its federal services business ("F.S.B.") to CACI
International, Inc. ("CACI") for a cash consideration of up to $40.0 million.
The assets sold are comprised mainly of federal government service contracts,
accounts receivable, spares inventory and fixed assets. The purchase price will
be paid out over time with $24.9 million paid at the closing, $1.0 million six
months after closing, $1.0 million held in escrow and payable one year after
closing (if no successful indemnification claims are made) and the remaining
$13.0 million payable contingent upon transfer to CACI of work performed under
certain net.com federal contracts. Additionally CACI and net.com have entered
into a royalty agreement whereby net.com and CACI will share in the increase in
maintenance revenue above an agreed upon base amount on net.com products.
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Item 7. Financial Statements, Pro Forma financial statements and exhibits
(b) Pro Forma Financial Statements and Notes to Pro Forma Financial Statements
NETWORK EQUIPMENT TECHNOLOGIES, INC.
Pro Forma Condensed Combining
Consolidated Balance Sheets
(in thousands - unaudited)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
September 29, 2000 net.com F.S.B. Adjustments Notes N.E.T.
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 22,570 $ -- $ 25,900 1 $ 48,470
Short term investments 102,278 -- -- 102,278
Accounts receivable 41,175 8,749 -- 32,426
Inventories 18,158 -- -- 18,158
Other current assets 6,486 -- 1,000 1 7,486
--------------------------------------------------------------------------------------------------
Total current assets 190,667 8,749 26,900 208,818
--------------------------------------------------------------------------------------------------
Property, plant and equipment, net 32,245 269 -- 31,976
Software production costs 3,240 -- -- 3,240
Goodwill and other intangible assets 14,758 -- -- 14,758
Other assets 7,861 3,967 -- 3,894
--------------------------------------------------------------------------------------------------
$ 248,771 $ 12,985 $ 26,900 $ 262,686
==================================================================================================
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 7,278 $ 928 $ -- $ 6,350
Other current liabilities 42,292 2,519 1,577 1 41,350
--------------------------------------------------------------------------------------------------
Total current liabilities 49,570 3,447 1,577 47,700
--------------------------------------------------------------------------------------------------
Long term liabilities 24,862 -- -- 24,862
Stockholders' equity
Common stock 217 -- -- 217
Additional paid in capital 182,460 -- -- 182,460
Treasury stock (5,620) -- -- (5,620)
Retained earnings (1,839) 9,538 25,323 1 13,946
Accumulated comprehensive loss (879) -- -- (879)
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Total stockholders' equity 174,339 9,538 25,323 190,124
--------------------------------------------------------------------------------------------------
$ 248,771 $ 12,985 $ 26,900 $ 262,686
==================================================================================================
</TABLE>
See accompanying notes describing pro forma adjustments
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NETWORK EQUIPMENT TECHNOLOGIES, INC.
Pro Forma Condensed Combining
Consolidated Statements of Operations
(in thousands, except per share data - unaudited)
<TABLE>
<CAPTION>
Six Months ended September 29, 2000
-----------------------------------
Pro Forma Pro Forma
net.com F.S.B. Adjustments Notes N.E.T.
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<S> <C> <C> <C> <C> <C>
Revenue:
Product revenue $ 43,135 $ -- $ -- $ 43,135
Service and other revenue 42,825 24,515 -- 18,310
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Total revenue 85,960 24,515 -- 61,445
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Cost of revenue:
Cost of product revenue 23,161 -- -- 23,161
Cost of service and other revenue 27,378 15,797 1,310 2 12,891
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Total cost of revenue 50,539 15,797 1,310 36,052
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Gross margin 35,421 8,718 (1,310) 25,393
Operating expense:
Sales and marketing 23,125 529 12 2 22,608
Research and development 19,781 -- -- 19,781
General and administrative 6,578 165 68 2 6,481
Other operating expense 1,504 -- -- 1,504
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Total operating expense 50,988 694 80 50,374
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Income (loss) from operations (15,567) 8,024 (1,390) (24,981)
Interest income 3,815 -- -- 3,815
Interest expense (1,114) -- -- (1,114)
Other expense (10) -- -- (10)
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Income (loss) before taxes (12,876) 8,024 (1,390) (22,290)
Income tax provision 24 -- -- 24
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Net income (loss) $(12,900) $ 8,024 (1,390) $(22,314)
===============================================================================================
Per share computation:
Basic loss per share $ (0.60) $ (1.03)
Diluted loss per share $ (0.60) $ (1.03)
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Shares used in per share computation:
Basic 21,574 21,574
Diluted 21,574 21,574
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</TABLE>
See accompanying notes describing pro forma adjustments
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NETWORK EQUIPMENT TECHNOLOGIES, INC.
Pro Forma Condensed Combining
Consolidated Statements of Operations
(in thousands, except per share data - unaudited)
<TABLE>
<CAPTION>
Fiscal year ended March 31, 2000
--------------------------------
Pro Forma Pro Forma
net.com F.S.B. Adjustments Notes N.E.T.
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<S> <C> <C> <C> <C> <C>
Revenue:
Product revenue $ 116,141 $ -- $ -- $ 116,141
Service and other revenue 109,545 49,687 -- 59,858
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Total revenue 225,686 49,687 -- 175,999
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Cost of revenue:
Cost of product revenue 51,920 -- -- 51,920
Cost of service and other revenue 70,939 31,090 2,215 2 42,064
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Total cost of revenue 122,859 31,090 2,215 93,984
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Gross margin 102,827 18,597 (2,215) 82,015
Operating expense:
Sales and marketing 70,243 1,030 25 2 69,238
Research and development 42,089 -- -- 42,089
General and administrative 12,601 325 136 2 12,412
Restructure expense 15,227 -- -- 15,227
Other operating expense 1,680 -- -- 1,680
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Total operating expense 141,840 1,355 161 140,646
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Income (loss) from operations (39,013) 17,242 (2,376) (58,631)
Other income (expense)
Interest income 7,306 -- -- 7,306
Interest expense (2,281) -- -- (2,281)
Other income 6,689 -- -- 6,689
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Income (loss) before taxes (27,299) 17,242 (2,376) (46,917)
Income tax provision 12,771 -- -- 12,771
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Net income (loss) $ (40,070) $ 17,242 (2,376) (59,688)
===================================================================================================
Per share computation:
Basic loss per share $ (1.86) $ (2.78)
Diluted loss per share $ (1.86) $ (2.78)
---------------------------------------------------------------------------------------------------
Shares used in per share computation:
Basic 21,489 21,489
Diluted 21,489 21,489
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</TABLE>
See accompanying notes describing pro forma adjustments
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NETWORK EQUIPMENT TECHNOLOGIES, INC.
Notes to Pro Forma Condensed Combining Financial Statements
1. Pro Forma Adjustments
The accompanying pro forma financial statements are presented in accordance with
Article 11 of Regulation S-X.
To prepare the pro forma unaudited condensed combining statements of operations,
the net.com statement of operations for the six months ended September 29, 2000
and the year ended March 31, 2000 has been disclosed net of its F.S.B.
operations. To prepare the pro forma unaudited condensed combining balance
sheet, the net.com balance sheet as of September 29, 2000 has been disclosed net
of the assets and liabilities sold to CACI. This method is only for the
presentation of pro forma unaudited condensed combining financial statements.
Actual statements of operations and balance sheets will be presented from the
effective date of the disposition, with no retroactive restatement.
The unaudited pro forma condensed combining financial statements should be read
in conjunction with the historical financial statements of net.com.
The following pro forma adjustments have been made to the pro forma condensed
combining financial statements:
1. This adjustment is to post the effect of the sale of net.com's F.S.B. to
CACI to retained earnings. The $25.9 million are the cash proceeds which
includes $1.0 million held in escrow. The $1.0 million other asset is the
amount receivable after six months. The $1.877 million liability reflects
accrued costs associated with the sale. Along with the net assets
reflected on the F.S.B. balance sheet, the gain on the transaction to date
is approximately $15.485 million.
2. This entry is to add back the effect of fixed corporate allocations
reflected in the F.S.B. statement of earnings.
(c) Exhibits
10. Asset Purchase Agreement among CACI, Inc.-Federal, CACI International,
Inc, Network Equipment Technologies, Inc. and N.E.T. Federal, Inc.
Incorporated by reference from the corresponding Exhibit (or the Exhibit
identified in parenthesis) previously filed as an Exhibit in the
Registrant's Interim Report on Form 10-Q for the quarter ending September
29, 2000, filed with the Securities and Exchange Commission on November
13, 2000.
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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 thereunto duly authorized.
NETWORK EQUIPMENT
TECHNOLOGIES, INC.
Dated December 15, 2000 /s/ John C. Batty
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John C. Batty
Senior Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
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