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
June 24, 1994
Date of Report (Date of earliest event reported)
Novell, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-13351 87-0393339
(State of other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
122 East 1700 South
Provo, Utah 84606
(Address of principal executive offices)
(801) 429-7000
(Registrant's telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On June 24, 1994 Novell, Inc. ("Novell") issued 51,380,100 shares of its
Common Stock, $.10 par value, in connection with the merger (the
"Merger") of WordPerfect Corporation ("WordPerfect"), with and into Novell.
Originally, the combination of Novell and WordPerfect was to be effected by
the merger of Novell Acquisition Corp., a wholly owned subsidiary of Novell
("Sub"), with and into WordPerfect, with WordPerfect becoming a wholly owned
subsidiary of Novell, pursuant to the terms of the Agreement and Plan of
Reorganization, dated as of March 21, 1994 (the "Merger Agreement"), entered
in by and among Novell, Sub, WordPerfect, Alan C. Ashton, Bruce W. Bastian and
Melania L. Bastian. As of May 31, 1994, the Merger Agreement was amended by
the parties thereto to provide for the merger of WordPerfect directly into
Novell. All references herein to the Merger Agreement are to the Merger
Agreement as amended.
Pursuant to the Merger Agreement, Novell became the surviving corporation
and holders of the issued and outstanding shares of WordPerfect Common Stock
received an aggregate of 51,380,100 shares of Novell Common Stock. Each
shareholder of WordPerfect received one share of Novell Common Stock for
each share of WordPerfect Common Stock owned by such shareholder. Each
outstanding option to acquire shares of WordPerfect Common Stock were
assumed by Novell and became exercisable for an equivalent number of shares
of Novell Common Stock. The vesting of such options accelerated immediately
upon consummation of the Merger, based on existing contractual commitments to
holders of such options. As a result of the Merger, Novell has assumed options
which, at the time of the Merger, represent the right to purchase 7,820,000
shares of Common Stock of Novell.
The Merger Agreement provided that Dr. Ashton and Mr. Bastian (or
designees of each of them) be elected to the Novell Board of Directors.
Dr. Ashton and Mr. Bastian elected to defer joining the Novell Board of
Directors at this time. However, Dr. Ashton and Mr. Bastian are expected
to make a request to join the Novell Board of Directors in the latter part
of 1994. Certain "affiliates" (as that term is defined for purposes of
Rule 145 of the Securities Act) of WordPerfect have entered into agreements
restricting the sale or dispositions of their shares of Novell Common Stock
received by them in the Merger (including shares of Novell Common Stock
issued upon the exercise of options) so as to comply with the requirements
of securitieslaws, tax laws and pooling of interests accounting.
Additionally, on March 20, 1994, Novell entered into a Purchase and
License Agreement (the "Borland Agreement") with Borland International,
Inc. ("Borland"). Pursuant to such agreement, on June 24, 1994, Novell
acquired Borland's Quattro Pro spreadsheet product line for $110 million
of cash. Novell also acquired for $35 million of cash, a three-year license
to reproduce and distribute up to one million copies of current and future
versions of Borland's Paradox relational database products as part of a
suite of products including WordPerfect and any Quattro Pro product.
Novell is the leading provider of network server operating system
software that integrates desktop computers, servers, and mini-computer and
mainframe hosts for business-wide information sharing. Novell's NetWare
network computing products manage and control the sharing of data, applications
and services among personal computer work groups and departmental networks,
and across business-wide information systems. Novell's products support
standards to integrate DOS, IBM's OS/2, Microsoft Windows, Apple/Macintosh
and UNIX System desktop computers with each other and with IBM, Digital
Equipment Corporation ("DEC"), Hewlett-Packard Company ("HP") and UNIX System
hosts, among others.
WordPerfect Corporation is a leading provider of software applications
that enable users to create and process complex documents. WordPerfect also
produces a broad range of software in the areas of workgroup automations,
general business, electronic publishing and consumer products.
WordPerfect's products provide individuals, small businesses and large, global
organizations with information processing solutions that operate across complex
networked computing environments.
<PAGE>
Item 7. Financial Statements. Pro Forma Financial Information and
Exhibits.
(a) Financial statements of WordPerfect Corporation.
Page
(1) The Consolidated Financial Statements of WordPerfect, the
Notes to Consolidated Financial Statements, and the Report of
Independent Accountants listed below are incorporated herein
by reference to pages F-1 through F-18 of the Prospectus/Proxy
Statement dated June 22, 1994 contained in Novell's
Registration Statement on Form S-4 previously filed with the
Securities and Exchange Commission (Registration No. 33-53215).
Report of Independent Accountants.
Consolidated Balance Sheet as of December 31, 1993 and 1992.
Consolidated Statement of Income for the three years ended
December 31, 1993, 1992, and 1991.
Consolidated Statement of Shareholders' Equity for the three
years ended December 31, 1993, 1992, and 1991.
Consolidated Statement of Cash Flows for the three years ended
December 31, 1993, 1992, and 1991.
Notes to Consolidated Financial Statements - December 31,
1993, 1992, and 1991.
(2) The Consolidated Unaudited Condensed Financial Statements of
WordPerfect Corporation and related notes listed below are
incorporated herein by reference to pages F-19 through F-22 of
the Prospectus/Proxy Statement dated June 22, 1994 contained in
Novell's Registration Statement on S-4 previously filed with
the Securities and Exchange Commission (Registration No.
33-53215).
Consolidated Unaudited Condensed Balance Sheet as of March 31,
1994 and December 31, 1993.
Consolidated Unaudited Condensed Statement of Income for
the three months ended March 31, 1994 and 1993.
Consolidated Unaudited Condensed Statement of Cash Flows for
the three months ended March 31, 1994 and 1993.
Notes to Consolidated Unaudited Condensed Financial
Statements.
(b) Pro forma financial information
Unaudited Pro Forma Condensed Combining Financial Statements
of Novell, Inc. and WordPerfect Corporation. 6
Unaudited Pro Forma Condensed Combining Balance Sheets as of April
30, 1994, October 30, 1993, and October 31, 1992. 7
Unaudited Pro Forma Condensed Combining Statements of Income for
the six months ended April 30, 1994 and May 1, 1993. 10
Unaudited Pro Forma Condensed Combining Statements of Income
for the fiscal years ended October 30, 1993, October 31, 1992,
and October 26, 1991. 12
Unaudited Pro Forma Condensed Combining Statements of Income for
the fiscal quarters ended April 30, 1994, January 29, 1994,
October 30, 1993, July 31, 1993, May 1, 1993, and January 30, 1993. 15
Notes to Unaudited Pro Forma Condensed Combining Financial
Statements. 21
Unaudited Pro forma condensed combining financial statements of
Novell and WordPerfect give retroactive effect to the merger
which is being accounted for as pooling of interests and,
as a result, the unaudited pro forma condensed combining
balance sheets and statements of income are presented as if the
combining companies had been combined for all periods presented.
The unaudited pro forma condensed combining financial statements
will become the historical financial statements of Novell upon
issuance of the financial statements for the period that
includes the date of merger. These unaudited pro forma condensed
combining financial statements may not be indicative of the results
that actually may be obtained in the future. The unaudited pro
forma condensed combining financial statements, including the
notes thereto, should be read in conjunction with the historical
consolidated financial statements of Novell and WordPerfect.
(c) Exhibits
2.1 The Agreement and Plan of Reorganization dated March 21, 1994
among Novell, Novell Acquisition Corporation, WordPerfect,
Alan C. Ashton, Bruce W. Bastian and Melanie L. Bastian,
and the related exhibits, are incorporated herein by
reference to the Prospectus/Proxy Statement dated June 22, 1994
contained in Novell's Registration Statement on Form S-4
previously filed with the Securities and Exchange Commission
(Registration No. 33-53215).
2.2 The Amendment to the Agreement and Plan of Reorganization dated
May 31, 1994 among Novell, Novell Acquisition Corporation,
WordPerfect, Alan C. Ashton, Bruce W. Bastian, and Melania L.
Bastian is incorporated herein by reference to the
Prospectus/Proxy Statement dated June 22, 1994 contained in
Novell's Registration Statement on Form S-4 previously filed
with the Securities and Exchange Commission
(Registration No. 33-53215).
23 Consent of independent accountants. 22
<PAGE>
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.
Dated: July 7, 1994 NOVELL, INC.
By: /s/ James R. Tolonen
Chief Financial
Officer
<PAGE>
NOVELL, INC. AND WORDPERFECT CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINING FINANCIAL STATEMENTS
The following Unaudited Pro Forma Condensed Combining Balance Sheets as
of April 30, 1994, October 30, 1993, and October 31, 1992, and the Unaudited
Pro Forma Condensed Combining Statements of Income for the six months ended
April 30, 1994 and May 1, 1993 and for the fiscal years ended October 30, 1993,
October 31, 1992, and October 26, 1991 and for the fiscal quarters ended
April 30, 1994, January 29, 1994, October 30, 1993, July 31, 1993, May 1, 1993,
and January 30, 1993, have been prepared giving effect to the merger between
Novell and WordPerfect Corporation. Novell acquired 100% of the common
stock of WordPerfect in exchange for 51,380,100 shares of Novell Common Stock.
Also up to 7,820,000 Novell common shares may be issued upon the exercise of
WordPerfect stock options in the future. This transaction is being
accounted for as pooling of interests, and, as a result, the unaudited pro forma
condensed combining financial statements are presented as if the
combining companies had been combined for all periods presented.
<PAGE>
<TABLE>
Novell, Inc. and WordPerfect Corporation
Unaudited Pro forma Condensed Combining Balance Sheet
As of April 30, 1994
(In thousands)
<S> <C> <C> <C>
Novell WordPerfect
Apr. 30, 1994 Apr. 30, 1994 Combined
ASSETS
Current assets
Cash and cash equivalents $ 427,396 $ 51,194 $ 478,590
Short-term investments 502,158 0 502,158
Receivables, net 290,797 56,058 346,855
Other 72,460 93,566 166,026
Total current assets 1,292,811 200,818 1,493,629
Property, plant & equipment, net 225,799 180,244 406,043
Other assets 60,619 9,102 69,721
Total assets $1,579,229 $390,164 $1,969,393
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes payable $ 324 $ 28,447 $ 28,771
Accounts payable 34,033 21,618 55,651
Accrued salaries and wages 43,692 19,284 62,976
Accrued marketing liabilities 32,959 20,517 53,476
Other accrued liabilities 46,431 43,507 89,938
Income taxes payable 67,081 7,302 74,383
Deferred revenue 16,152 33,038 49,190
Total current liabilities 240,672 173,713 414,385
Deferred income taxes 11,711 0 11,711
Long-term debt 0 91,763 91,763
Minority interests 12,759 0 12,759
Shareholders' equity
Common stock 31,060 5,138 36,198
Additional paid-in capital 545,963 74,189 620,152
Retained earnings 739,964 46,490 786,454
Unearned stock compensation (7,007) 0 (7,007)
Cumulative translation adjustment 4,107 (1,129) 2,978
Total shareholders' equity 1,314,087 124,688 1,438,775
Total liabilities and
shareholders' equity $1,579,229 $390,164 $1,969,393
See notes to unaudited pro forma condensed combining financial statements.
/TABLE
<PAGE>
<TABLE>
Novell, Inc. and WordPerfect Corporation
Unaudited Pro forma Condensed Combining Balance Sheet
As of October 30, 1993
(In thousands)
<S> <C> <C> <C>
Novell WordPerfect
Oct. 30, 1993 Dec. 31, 1993 Combined
ASSETS
Current assets
Cash and cash equivalents $ 328,469 $ 55,127 $ 383,596
Short-term investments 335,601 0 335,601
Receivables, net 331,662 63,672 395,334
Other 56,474 86,404 142,878
Total current assets 1,052,206 205,203 1,257,409
Property, plant & equipment, net 216,849 186,903 403,752
Other assets 74,800 9,376 84,176
Total assets $1,343,855 $401,482 $1,745,337
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes payable $ 796 $ 8,640 $ 9,436
Accounts payable 37,998 37,472 75,470
Accrued salaries and wages 53,756 15,305 69,061
Accrued marketing liabilities 29,892 21,661 51,553
Other accrued liabilities 41,566 61,638 103,204
Income taxes payable 50,588 5,001 55,589
Deferred revenue 15,839 17,949 33,788
Total current liabilities 230,435 167,666 398,101
Deferred income taxes 0 0 0
Long-term debt 0 84,289 84,289
Minority interests 10,205 0 10,205
Put warrants 106,716 0 106,716
Shareholders' equity
Common stock 30,805 5,138 35,943
Additional paid-in capital 411,064 74,189 485,253
Retained earnings 562,238 73,313 635,551
Unearned stock compensation (9,814) 0 (9,814)
Cumulative translation adjustment 2,206 (3,113) (907)
Total shareholders' equity 996,499 149,527 1,146,026
Total liabilities and
shareholders' equity $1,343,855 $401,482 $1,745,337
See notes to unaudited pro forma condensed combining financial statements.
</TABLE>
<PAGE>
<TABLE>
Novell, Inc. and WordPerfect Corporation
Unaudited Pro forma Condensed Combining Balance Sheet
As of October 31, 1992
(In thousands)
<S> <C> <C> <C>
Novell WordPerfect
Oct. 31, 1992 Dec. 31, 1992 Combined
ASSETS
Current assets
Cash and cash equivalents $ 259,933 $ 86,569 $ 346,502
Short-term investments 285,327 0 285,327
Receivables, net 264,920 39,670 304,590
Other 55,805 29,078 84,883
Total current assets 865,985 155,317 1,021,302
Property, plant & equipment, net 181,765 175,157 356,922
Other assets 48,946 3,305 52,251
Total assets $1,096,696 $333,779 $1,430,475
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes payable $ 1,979 $ 0 $ 1,979
Accounts payable 33,198 37,448 70,646
Accrued salaries and wages 33,827 13,884 47,711
Accrued marketing liabilities 25,252 24,222 49,474
Other accrued liabilities 17,896 39,127 57,023
Income taxes payable 28,277 6,371 34,648
Deferred revenue 9,523 23,230 32,753
Total current liabilities 149,952 144,282 294,234
Deferred income taxes 0 0 0
Long-term debt 0 12,256 12,256
Minority interests 8,938 0 8,938
Shareholders' equity
Common stock 30,064 5,138 35,202
Additional paid-in capital 306,420 74,189 380,609
Retained earnings 601,078 97,056 698,134
Unearned stock compensation 0 0 0
Cumulative translation
adjustment 244 858 1,102
Total shareholders' equity 937,806 177,241 1,115,047
Total liabilities and
shareholders' equity $1,096,696 $333,779 $1,430,475
See notes to unaudited pro forma condensed combining financial statements.
</TABLE>
<PAGE>
<TABLE>
Novell, Inc. and WordPerfect Corporation
Unaudited Pro forma Condensed Combining Statement of Income
For the Six Months Ended April 30, 1994
(Amounts in thousands)
<S> <C> <C> <C>
Novell's WordPerfect's
Six Months Ended Six Months Ended
Apr. 30, 1994 Apr. 30, 1994 Combined
Net sales $717,975 $305,233 $1,023,208
Cost of sales 172,001 77,173 249,174
Gross profit 545,974 228,060 774,034
Operating expenses
Sales and marketing 141,452 111,429 252,881
Product development 110,350 56,110 166,460
General and administrative 45,382 41,009 86,391
Nonrecurring charges 0 14,969 14,969
297,184 223,517 520,701
Income from operations 248,790 4,543 253,333
Other income (expense)
Investment income 18,861 0 18,861
Other, net (394) (545) (939)
18,467 (545) 17,922
Income before taxes 267,257 3,998 271,255
Income taxes 89,531 (9,100) 80,431
Net income $177,726 $13,098 $190,824
Weighted average shares
outstanding 314,154 54,125 368,279
Net income per share $0.57 $0.24 $0.52
Additional unaudited pro
forma data:
Income before taxes $267,257 $3,998 $271,255
Pro forma income taxes 89,531 6,448 95,979
Pro forma net income (loss) $177,726 $(2,450) $175,276
Pro forma net income
(loss) per share $0.57 $(0.05) $0.48
See notes to unaudited pro forma condensed combining financial statements.
</TABLE>
<PAGE>
<TABLE>
Novell, Inc. and WordPerfect Corporation
Unaudited Pro forma Condensed Combining Statement of Income
For the Six Months Ended May 1, 1993
(Amounts in thousands)
<S> <C> <C> <C>
Novell's WordPerfect's
Six Months Ended Six Months Ended
May 1, 1993 Jun. 30, 1993 Combined
Net sales $540,894 $346,428 $877,322
Cost of sales 99,889 83,492 183,381
Gross profit 441,005 262,936 703,941
Operating expenses
Sales and marketing 115,051 111,804 226,855
Product development 71,368 62,696 134,064
General and administrative 39,442 40,783 80,225
225,861 215,283 441,144
Income from operations 215,144 47,653 262,797
Other income (expense)
Investment income 13,191 0 13,191
Other, net 965 1,197 2,162
14,156 1,197 15,353
Income before taxes 229,300 48,850 278,150
Income taxes 77,962 4,830 82,792
Net income $151,338 $44,020 $195,358
Weighted average shares
outstanding 311,399 52,795 364,194
Net income per share $0.49 $0.83 $0.54
Additional unaudited
pro forma data:
Income before taxes $229,300 $48,850 $278,150
Pro forma income taxes 77,962 15,632 93,594
Pro forma net income $151,338 $33,218 $184,556
Pro forma net income
per share $0.49 $0.63 $0.51
See notes to unaudited pro forma condensed combining financial statements.
/TABLE
<PAGE>
<TABLE>
Novell, Inc. and WordPerfect Corporation
Unaudited Pro forma Condensed Combining Statement of Income
For the Fiscal Year Ended October 30, 1993
(Amounts in thousands)
<S> <C> <C> <C>
Novell's WordPerfect's
Fiscal Year Ended Year Ended
Oct. 30, 1993 Dec. 31, 1993 Combined
Net sales $1,122,896 $707,515 $1,830,411
Cost of sales 224,531 178,071 402,602
Gross profit 898,365 529,444 1,427,809
Operating expenses
Sales and marketing 258,658 251,064 509,722
Product development 164,860 125,379 290,239
General and administrative 80,122 83,127 163,249
Nonrecurring charges 320,500 36,001 356,501
824,140 495,571 1,319,711
Income from operations 74,225 33,873 108,098
Other income (expense)
Investment income 28,131 0 28,131
Other, net 1,692 236 1,928
29,823 236 30,059
Income before taxes 104,048 34,109 138,157
Income taxes 139,208 (41,771) 97,437
Net income (loss) $(35,160) $75,880 $40,720
Weighted average shares
outstanding 314,409 53,491 367,900
Net income (loss) per share $(0.11) $1.42 $0.11
Additional unaudited
pro forma data:
Income before taxes $104,048 $34,109 $138,157
Pro forma income taxes 139,208 11,918 151,126
Pro forma net
income (loss) $(35,160) $22,191 $(12,969)
Pro forma net income
(loss) per share $(0.11) $0.41 $(0.04)
See notes to unaudited pro forma condensed combining financial statements.
/TABLE
<PAGE>
<TABLE>
Novell, Inc. and WordPerfect Corporation
Unaudited Pro forma Condensed Combining Statement of Income
For the Fiscal Year Ended October 31, 1992
(Amounts in thousands)
<S> <C> <C> <C>
Novell's WordPerfect's
Fiscal year Ended Year Ended
Oct. 31, 1992 Dec. 31, 1992 Combined
Net sales $933,370 $579,118 $1,512,488
Cost of sales 184,176 142,531 326,707
Gross profit 749,194 436,587 1,185,781
Operating expenses
Sales and marketing 219,399 148,209 367,608
Product development 120,849 100,168 221,017
General and administrative 52,084 67,602 119,686
Nonrecurring charges 0 49,324 49,324
392,332 365,303 757,635
Income from operations 356,862 71,284 428,146
Other income (expense)
Investment income 21,340 13,205 34,545
Other, net (884) 0 (884)
20,456 13,205 33,661
Income before taxes 377,318 84,489 461,807
Income taxes 128,288 11,541 139,829
Net income $249,030 $72,948 $321,978
Weighted average shares
outstanding 308,104 51,380 359,484
Net income per share $0.81 $1.42 $0.90
Additional unaudited
pro forma data:
Income before taxes $377,318 $84,489 $461,807
Pro forma income taxes 128,288 32,252 160,540
Pro forma net income $249,030 $52,237 $301,267
Pro forma net income
per share $0.81 $1.02 $0.84
See notes to unaudited pro forma condensed combining financial statements.
/TABLE
<PAGE>
<TABLE>
Novell, Inc. and WordPerfect Corporation
Unaudited Pro forma Condensed Combining Statement of Income
For the Fiscal Year Ended October 26, 1991
(Amounts in thousands)
<S> <C> <C> <C>
Novell's WordPerfect's
Fiscal Year Ended Year Ended
Oct. 26, 1991 Dec. 31, 1991 Combined
Net sales $640,079 $621,994 $1,262,073
Cost of sales 123,294 143,948 267,242
Gross profit 516,785 478,046 994,831
Operating expenses
Sales and marketing 177,657 110,023 287,680
Product development 77,924 83,281 161,205
General and administrative 35,066 82,207 117,273
290,647 275,511 566,158
Income from operations 226,138 202,535 428,673
Other income (expense)
Investment income 22,990 10,603 33,593
Other, net (1,054) 0 (1,054)
21,936 10,603 32,539
Income before taxes 248,074 213,138 461,212
Income taxes 85,586 12,310 97,896
Net income $162,488 $200,828 $363,316
Weighted average shares
outstanding 295,968 50,000 345,968
Net income per share $0.55 $4.02 $1.05
Additional unaudited
pro forma data:
Income before taxes $248,074 $213,138 $461,212
Pro forma income taxes 85,586 75,080 160,666
Pro forma net income $162,488 $138,058 $300,546
Pro forma net income
per share $0.55 $2.76 $0.87
See notes to unaudited pro forma condensed combining financial
statements.
/TABLE
<PAGE>
<TABLE>
Novell, Inc. and WordPerfect Corporation
Unaudited Pro forma Condensed Combining Statement of Income
For the Fiscal Quarter Ended April 30, 1994
(Amounts in thousands)
<S> <C> <C> <C>
Novell's Fiscal WordPerfect's Fiscal
Quarter Ended Quarter Ended
Apr. 30, 1994 Apr. 30, 1994 Combined
Net sales $406,591 $128,339 $534,930
Cost of sales 107,861 37,536 145,397
Gross profit 298,730 90,803 389,533
Operating expenses
Sales and marketing 72,233 54,428 126,661
Product development 53,820 29,097 82,917
General and administrative 22,568 19,796 42,364
148,621 103,321 251,942
Income from operations 150,109 (12,518) 137,591
Other income (expense)
Investment income 7,912 0 7,912
Other, net (258) (434) (692)
7,654 (434) 7,220
Income before taxes 157,763 (12,952) 144,811
Income taxes 52,851 (4,404) 48,447
Net income (loss) $104,912 ($8,548) $96,364
Weighted average shares
outstanding 314,371 54,111 368,482
Net income (loss) per share $0.33 $(0.16) $0.26
See notes to unaudited pro forma condensed combining financial statements.
/TABLE
<PAGE>
<TABLE>
Novell, Inc. and WordPerfect Corporation
Unaudited pro forma Condensed Combining Statement of Income
For the Fiscal Quarter Ended January 29, 1994
(Amounts in thousands)
<S> <C> <C> <C>
Novell's Fiscal WordPerfect's Fiscal
Quarter Ended Quarter Ended
Jan. 29, 1994 Jan. 29, 1994 Combined
Net sales $311,384 $176,894 $488,278
Cost of sales 64,140 39,637 103,777
Gross profit 247,244 137,257 384,501
Operating expenses
Sales and marketing 69,219 57,001 126,220
Product development 56,530 27,013 83,543
General and administrative 22,814 21,213 44,027
Nonrecurring charges 0 14,969 14,969
148,563 120,196 268,759
Income from operations 98,681 17,061 115,742
Other income (expense)
Investment income 10,949 0 10,949
Other, net (136) (111) (247)
10,813 (111) 10,702
Income before taxes 109,494 16,950 126,444
Income taxes 36,680 (4,696) 31,984
Net income $72,814 $21,646 $94,460
Weighted average shares
outstanding 313,937 54,139 368,076
Net income per share $0.23 $0.40 $0.26
Additional unaudited
pro forma data:
Income before taxes $109,494 $16,950 $126,444
Pro forma income taxes 36,680 10,852 47,532
Pro forma net income $72,814 $6,098 $ 78,912
Pro forma net income
per share $0.23 $0.11 $0.21
See notes to unaudited pro forma condensed combining financial statements.
/TABLE
<PAGE>
<TABLE>
Novell, Inc. and WordPerfect Corporation
Unaudited Pro forma Condensed Combining Statement of Income
For the Fiscal Quarter Ended October 30, 1993
(Amounts in thousands)
<S> <C> <C> <C>
Novell's Fiscal WordPerfect's
Quarter Ended Quarter Ended
Oct. 30, 1993 Dec. 31, 1993 Combined
Net sales $309,196 $200,021 $ 509,217
Cost of sales 67,926 49,833 117,759
Gross profit 241,270 150,188 391,458
Operating expenses
Sales and marketing 71,875 68,540 140,415
Product development 51,181 29,504 80,685
General and administrative 22,923 21,924 44,847
145,979 119,968 265,947
Income from operations 95,291 30,220 125,511
Other income (expense)
Investment income 8,325 0 8,325
Other, net 191 (1,488) (1,297)
8,516 (1,488) 7,028
Income before taxes 103,807 28,732 132,539
Income taxes 34,899 (5,143) 29,756
Net income $68,908 $33,875 $102,783
Weighted average shares
outstanding 316,617 54,216 370,833
Net income per share $0.22 $0.62 $0.28
Additional unaudited
pro forma data:
Income before taxes $103,807 $28,732 $132,539
Pro forma income taxes 34,899 9,237 44,136
Pro forma net income $68,908 $19,495 $ 88,403
Pro forma net income
per share $0.22 $0.36 $0.24
See notes to unaudited pro forma condensed combining financial statements.
/TABLE
<PAGE>
<TABLE>
Novell, Inc. and WordPerfect Corporation
Unaudited Pro forma Condensed Combining Statement of Operations
For the Fiscal Quarter Ended July 31, 1993
(Amounts in thousands)
<C> <C> <C> <C>
Novell's Fiscal WordPerfect's
Quarter Ended Quarter Ended
July 31, 1993 Sep. 30, 1993 Combined
Net sales $272,806 $161,066 $433,872
Cost of sales 56,716 44,746 101,462
Gross profit 216,090 116,320 332,410
Operating expenses
Sales and marketing 71,732 70,720 142,452
Product development 42,311 33,179 75,490
General and administrative 17,757 20,420 38,177
Nonrecurring charges 320,500 36,001 356,501
452,300 160,320 612,620
(Loss) from operations (236,210) (44,000) (280,210)
Other income (expense)
Investment income 6,615 0 6,615
Other, net 536 527 1,063
7,151 527 7,678
(Loss) before taxes (229,059) (43,473) (272,532)
Income taxes 26,347 (41,458) (15,111)
Net (loss) $(255,406) $(2,015) $(257,421)
Weighted average shares
outstanding 318,223 54,156 372,379
Net income per share $(0.80) $(0.04) $(0.69)
Additional unaudited
pro forma data:
(Loss) before taxes $(229,059) $(43,473) $(272,532)
Pro forma taxes 26,347 (12,951) 13,396
Pro forma net (loss) $(255,406) $(30,522) $(285,928)
Pro forma net (loss)
per share $(0.80) $(0.56) $(0.77)
See notes to unaudited pro forma condensed combining financial statements.
</TABLE>
<PAGE>
<TABLE>
Novell, Inc. and WordPerfect Corporation
Unaudited Pro forma Condensed Combining Statement of Income
For the Fiscal Quarter Ended May 1, 1993
(Amounts in thousands)
<S> <C> <C> <C>
Novell's Fiscal WordPerfect's
Quarter Ended Quarter Ended
May 1, 1993 Jun. 30, 1993 Combined
Net sales $280,720 $174,278 $454,998
Cost of sales 49,438 42,614 92,052
Gross profit 231,282 131,664 362,946
Operating expenses
Sales and marketing 61,466 57,966 119,432
Product development 37,123 32,784 69,907
General and administrative 18,395 22,432 40,827
116,984 113,182 230,166
Income from operations 114,298 18,482 132,780
Other income (expense)
Investment income 6,289 0 6,289
Other, net 1,316 (1) 1,315
7,605 (1) 7,604
Income before taxes 121,903 18,481 140,384
Income taxes 41,447 999 42,446
Net income $80,456 $17,482 $97,938
Weighted average shares
outstanding 311,940 53,555 365,495
Net income per share $0.26 $0.33 $0.27
Additional unaudited
pro forma data:
Income before taxes $121,903 $18,481 $140,384
Pro forma income taxes 41,447 5,914 47,361
Pro forma net income $80,456 $12,567 $93,023
Pro forma net income
per share $0.26 $0.23 $0.25
See notes to unaudited pro forma condensed combining financial statements.
</TABLE>
<PAGE>
<TABLE>
Novell, Inc. and WordPerfect Corporation
Unaudited Pro forma Condensed Combining Statement of Income
For the Fiscal Quarter Ended January 30, 1993
(Amounts in thousands)
<S> <C> <C> <C>
Novell's WordPerfect's
Fiscal Quarter Ended Quarter Ended
Jan. 30, 1993 Mar. 31, 1993 Combined
Net sales $260,174 $172,150 $432,324
Cost of sales 50,451 40,878 91,329
Gross profit 209,723 131,272 340,995
Operating expenses
Sales and marketing 53,585 53,838 107,423
Product development 34,245 29,912 64,157
General and administrative 21,047 18,351 39,398
108,877 102,101 210,978
Income from operations 100,846 29,171 130,017
Other income (expense)
Investment income 6,902 0 6,902
Other, net (351) 1,198 847
6,551 1,198 7,749
Income before taxes 107,397 30,369 137,766
Income taxes 36,515 3,831 40,346
Net income $70,882 $26,538 $ 97,420
Weighted average shares
outstanding 310,858 52,036 362,894
Net income per share $0.23 $0.51 $0.27
Additional unaudited
pro forma data:
Income before taxes $107,397 $30,369 $137,766
Pro forma income taxes 36,515 9,718 46,233
Pro forma net income $70,882 $20,651 $ 91,533
Pro forma net income
per share $0.23 $0.40 $0.25
See notes to unaudited pro forma condensed combining financial statements.
/TABLE
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINING FINANCIAL
STATEMENTS
Note A. The unaudited pro forma condensed combining financial statements
of Novell and WordPerfect give retroactive effect to the merger which is
being accounted for as a pooling of interests, and as a result, the unaudited
pro forma condensed combining balance sheets and statements of income are
presented as if the combining companies had been combined for all periods
presented. The unaudited pro forma condensed combining financial statements
will become the historical financial statements for Novell upon issuance
of the financial statements for the period that includes the date of the
acquisition. These unaudited pro forma condensed combining financial
statements may not be indicative of the results that may be obtained in
the future. The unaudited pro forma condensed combining financial
statements, including the notes thereto, should be read in conjunction with
the historical consolidated financial statements of Novell and WordPerfect.
The pro forma combined net income per share is based on the combined
weighted average number of common shares of Novell Common Stock and
WordPerfect Common Stock for each period, based on the Exchange Ratio
of one share of Novell Common Stock for each share of WordPerfect Common
Stock. The pro forma condensed combining balance sheet as of April 30, 1994
reflects the issuance of 51,380,100 shares of Novell Common Stock in exchange
for all of WordPerfect Common Stock outstanding at April 30, 1994 based on the
Exchange Ratio of one share of Novell Common Stock for each share of
WordPerfect Common Stock.
Note B. WordPerfect has a calendar year end and, accordingly the
WordPerfect statements of income for the years ended December 31, 1993,
1992, and 1991, have been combined with the Novell statements of income
for the fiscal years ended October 30, 1993, October 31, 1992 and October
26, 1991, respectively. In order to conform WordPerfect's year end to
Novell's fiscal year end, the unaudited pro forma combined data for the
six months ended April 30, 1994, includes two months (November and December
1993) for WordPerfect, which are also included in the pro forma combined
statement of income for the year ended October 30, 1993. Accordingly, an
adjustment has been made in the six months ended April 30, 1994 to retained
earnings for the duplication of net income of $39.9 million for such two
month period. Other results for such two month period of WordPerfect
included net sales of $136.6 million, income before taxes of $34.6 million
and income tax benefits of $5.3 million. The pro forma condensed combining
data for the six months ended May 1, 1993 combines Novell's financial
statements for the six months ended May 1, 1993 with the WordPerfect's
financial statements for the six months ended June 30, 1993.
Note C. The additional unaudited pro forma data are based upon
historical combined income before taxes, adjusted to reflect a provision
for income taxes as if WordPerfect and its S corporation subsidiaries
had never been S corporations.
Note D. Certain reclassifications, none of which are material, have been
made to the WordPerfect financial statements in the unaudited pro forma
condensed combining financial statements to conform to Novell
classifications.
There are no other material adjustments required to the historical
financial statements of Novell and WordPerfect to arrive at the unaudited
pro forma condensed combining balance sheets and statements of income.
Note E. Total costs to be incurred by Novell and WordPerfect in
connection with the Merger are estimated to be approximately $5.5 million.
These costs, relating to legal, printing, accounting, financial advisory
services and other related expenses will be charged against income in the
periods subsequent to the pro forma condensed combining financial statements.
Accordingly, the effects of these costs have not been reflected in these
pro forma condensed combining financial statements.
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this current
report on Form 8-K of Novell, Inc. dated June 24, 1994 of our report
dated March 22, 1994 included in Novell Inc.'s Registration Statement
on Form S-4 (No. 33-53215) dated June 23, 1994 relating to the financial
statements of WordPerfect Corporation for the three years ended December
31, 1993.
/s/ Price Waterhouse
PRICE WATERHOUSE
Salt Lake City, Utah
March 22, 1994
/PAGE
<PAGE>
