<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 15, 2000
CAERE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-18090 94-2250509
(Commission File No.) (IRS Employer Identification No.)
100 COOPER COURT, LOS GATOS, CALIFORNIA 95032
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (408) 395-7000
<PAGE> 2
ITEM 5. OTHER EVENTS.
This Current Report on Form 8-K contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. The
forward-looking statements contained herein involve risks and uncertainties,
including those relating to the completion of the merger transaction (the
"Merger") involving Caere Corporation ("Caere") and ScanSoft, Inc. ("ScanSoft"),
as scheduled, if at all, and various technological and competitive factors, such
as: the introduction and acceptance of rival products; acceptance of Caere's new
products; pricing pressures; success of the "bundle and upgrade" business model,
including Caere's maintenance of its relationships with scanner manufacturers
along with customers' opting to upgrade to newer or more fully featured
products; changes in customer order patterns, including the maintenance of
relationships with retail distributors and dealers; manufacturing
considerations, including the maintenance of margins in a declining-price
environment, as well as risk of inventory obsolescence due to shifts in market
demand and new product introductions; and other risk factors listed from time to
time in Caere's SEC reports. Actual results and developments may differ
materially from those described or incorporated by reference in this Report. For
more information about Caere and ScanSoft and the risks associated with
investing in Caere or ScanSoft, investors are directed to the respective annual
reports of each company on Form 10-K and each company's most recent report on
Form 10-Q filed with the Securities and Exchange Commission (the "SEC").
(a) PROPOSED MERGER WITH SCANSOFT, INC.
On January 15, 2000, Caere entered into an Agreement and Plan of
Reorganization (the "Reorganization Agreement") with ScanSoft and Scorpion
Acquisitions Corporation, a Delaware corporation and a wholly owned subsidiary
of ScanSoft ("Merger Sub").
Subject to the terms and conditions of the Reorganization Agreement, Caere
will be merged with and into Merger Sub at the effective time of the Merger (the
"Effective Time"), and Caere will become a wholly owned subsidiary of ScanSoft.
At the Effective Time, each then-outstanding share of Caere Common Stock ($.001
par value) will be converted into $4.00 in cash and a number of shares of
ScanSoft Common Stock equal to $7.75, divided by the average closing sale price
of a share of ScanSoft Common Stock for the ten trading days ending on the day
prior to the consummation of the Merger, provided, however, that in no event
will the average closing price be deemed to be an amount greater than $8.50 or
less than $4.50. In addition, ScanSoft will assume outstanding options to
acquire Caere Common Stock.
The Merger is intended to be a tax-free reorganization under the Internal
Revenue Code of 1986, as amended, and is intended to be accounted for as a
purchase. The Merger is subject to the approval by the stockholders of Caere and
the stockholders of ScanSoft and other customary closing conditions.
A copy of the press release issued by ScanSoft and Caere on January 17,
2000 is attached hereto as Exhibit 99.1 and is hereby incorporated by reference
herein.
1.
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A registration statement relating to the ScanSoft Common Stock to be issued
in connection with the Merger has not yet been filed with the SEC. This report
shall not constitute an offer to sell or the solicitation of an offer to buy any
ScanSoft Common Stock or any other security, and shall not constitute the
solicitation of any vote with respect to the Merger.
(b) FOURTH QUARTER FINANCIAL RESULTS OF CAERE.
On February 1, 2000, Caere reported its revenues and net earnings for the
fourth quarter of 1999 and for the fiscal year ended December 31, 1999. A copy
of the press release issued by Caere on February 1, 2000 is attached hereto as
Exhibit 99.2 and is hereby incorporated by reference herein.
ITEM 7. EXHIBITS.
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<S> <C>
99.1 Press Release, dated as of January 17, 2000, entitled "ScanSoft Enters
Into Agreement To Acquire Caere Corp."
99.2 Press Release, dated as of February 1, 2000, entitled "Caere
Corporation Reports Fourth Quarter and 1999 Year End Revenues and Net
Earnings"
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2.
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SIGNATURE
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.
CAERE CORPORATION
Dated: February 1, 2000 By: /s/ Blanche M. Sutter
------------------------------------
Blanche M. Sutter
Executive Vice President and
Chief Financial Officer
3.
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INDEX TO EXHIBITS
<TABLE>
<S> <C>
99.1 Press Release, dated as of January 17, 2000, entitled "ScanSoft
Enters Into Agreement To Acquire Caere Corp."
99.2 Press Release, dated as of February 1, 2000, entitled "Caere
Corporation Reports Fourth Quarter and 1999 Year End Revenues and
Net Earnings"
</TABLE>
4.
<PAGE> 1
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACTS:
JOHN J. ROGERS, JR., CFO BLANCHE SUTTER, CFO
ScanSoft, Inc. Caere Corp.
Tel: (978) 977-2000 Tel: (408) 395-7000
Email: [email protected] Email: [email protected]
EMILY FARMER PATRICK CRISP, DIRECTOR, PR
Collaborative Communications Caere Corp.
Tel: (617) 520-9105 Tel: (408) 395-5148 X2049
Email: [email protected] Email: [email protected]
SCANSOFT ENTERS INTO AGREEMENT TO ACQUIRE CAERE CORP.
CREATES WORLD-CLASS PROVIDER OF DIGITAL IMAGING SOFTWARE PRODUCTS
PEABODY, MA AND LOS GATOS, CA, JANUARY 17, 2000--ScanSoft, Inc. (NASDAQ:
SSFT) and Caere Corp. (NASDAQ: CAER) today jointly announced that the companies
have entered into a definitive agreement whereby ScanSoft will acquire Caere in
a transaction valued at more than $140 million. The transaction is expected to
be completed by the end of April, subject to the approval of the stockholders of
each company.
Under the terms of the definitive merger agreement, which was unanimously
approved by the Boards of both companies, the holders of Caere common stock will
receive $4 in cash and $7.75 in ScanSoft common stock. The number of ScanSoft
shares received by each Caere shareholder will be determined based on the 10-day
average closing price prior to the closing of the transaction, provided that
such ratio shall be no more than 1.72222 and no less than 0.91176.
"This transaction will allow us to create a world-class digital imaging
company by combining the strengths of two organizations at the forefront of
their field," said Michael Tivnan, ScanSoft's President and Chief Executive
Officer. "The complementary offerings between the two companies' award-winning
product lines will help us better meet the needs of the flourishing, global
digital imaging market. As we integrate the two companies, I am confident
5.
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that we will become a far more efficient and effective competitor than either
company could be on its own."
"We are excited to be aligned with ScanSoft which, like Caere, has achieved
an excellent reputation for providing superior software products," said Robert
G. Teresi, Chairman and Chief Executive Officer of Caere. "And, with more than
23 years of experience in the field of digital imaging, Caere brings a number of
complementary benefits to this union, such as broad brand awareness, well
established international distribution, strong technical teams, and leadership
in the electronic forms market."
Growth in the digital imaging market, largely driven by scanner,
multifunction peripheral (MFP), and digital camera sales, is expected to
continue due mainly to lower hardware prices, wider mass market awareness, and
improved integration of image capture peripherals with operating systems and
applications. In addition, the Internet has given rise to applications that
include the sharing of photographs and documents, and the use of captured images
to create web content.
"The leading-edge software technologies supplied by ScanSoft
and Caere have been catalysts to the growth and acceptance of digital imaging
across a wide spectrum," said Kristy Holch, Principal of InfoTrends Research
Group in Boston. "By combining their resources, the companies have a significant
opportunity to take the market for digital imaging products and services to a
new level."
According to research firm International Data Corporation (IDC), worldwide
shipments of scanners will grow from 18.9 million in 1999 to 39.4 million in
2003. IDC also expects that worldwide multifunction peripheral units will grow
from 3.7 million in 1999 to 6.5 million in 2003, representing a compound annual
growth rate of 20%. InfoTrends Research Group projects that digital camera
shipments will grow at a compound annual growth rate of 47% through the same
period, with shipments increasing from 4.9 million to 23 million units.
ScanSoft and Caere's line of software products, which have received many
prestigious awards from leading industry publications around the world, allow
users of digital imaging hardware to capture, organize, edit, and share
documents and photographs. These product lines include ScanSoft's TextBridge
Pro, Pagis Pro Scanning Suite, PaperPort Deluxe, Kai's PhotoSoap2, Kai's
SuperGoo, Kai's PowerShow, and PhotoFactory, as well as Caere's
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OmniPage Pro, OmniForm, PageKeeper Pro, ImageAXS Professional, and OmniPage Pro
Scanner Suite.
ScanSoft's acquisition of Caere will create a digital imaging company with
a worldwide presence. ScanSoft has enjoyed its greatest international marketing
success in the U.K., while Caere has traditionally performed well in France,
Germany, and the Netherlands, as well as Eastern Europe. The combination also
will provide ScanSoft with the opportunity to effectively utilize a global R&D
team as the companies have offices in the top technical centers of the world,
including California's Silicon Valley and Massachusetts' Route 128 Technology
Belt, as well as Fort Collins, Colorado and Budapest, Hungary.
ScanSoft and Caere have long-standing relationships with original equipment
manufacturers (OEMs) which bundle ScanSoft and Caere's digital imaging software
with their own scanning, capture, and multifunction devices. The combined
company will have OEM relationships with many of the industry's leaders,
including Agfa, Apple, Brother, Canon, Compaq, Epson, Hewlett-Packard, IBM,
Mattel, Microtek, Mustek, Olivetti-Lexikon, Primax, Smith Micro, Umax,
Visioneer, and Xerox. ScanSoft also has key technology partnerships with several
companies, including a recent alliance with Microsoft. These relationships and
strong channel sales have resulted in significant registered user databases for
both companies that will total approximately 6 million users.
"The combined company will also benefit from significant cost synergies,"
added Mr. Tivnan. "Upon full integration, we expect to record at least $10
million in annual cost savings, primarily through the elimination of redundant
functions and the use of economies of scale for product distribution."
The combined company will retain the ScanSoft name, with headquarters in
Peabody, MA, and plans to continue to sell the full ScanSoft and Caere product
lines. Michael Tivnan will continue in his role as President and Chief Executive
Officer of ScanSoft, while Robert Teresi will become a member of the Board of
Directors and will assist in the integration of the companies. Paul Ricci will
continue as the Chairman of the Board of ScanSoft. By the second half of 2000,
the combined company expects to be producing revenue at an annualized rate of
approximately $100 million.
7.
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The acquisition will be accounted for under purchase accounting. Excluding
one-time charges and acquisition-related costs, the transaction is expected to
be immediately accretive to earnings per share.
ABOUT CAERE CORP.
Caere Corporation is a developer of software solutions for scanners and
digital cameras. The company develops optical character recognition (OCR),
electronic forms, Web publishing, document management, and media asset
management software. Caere products bridge the gap between the paper and digital
worlds by converting static paper documents into dynamic electronic information.
Caere products include OmniPage(R) OCR software; OmniForm(R) and OmniForm
Internet Publisher electronic forms software; PageKeeper(R) personal document
management software; ImageAXS media asset management products; and Production
OCR solutions and Developers Kits. Caere is headquartered in Los Gatos, Calif.
Caere corporate and product information is available at http://www.caere.com.
ABOUT SCANSOFT, INC.
Headquartered in Peabody, MA, ScanSoft, Inc. (NASDAQ: SSFT) is a developer
of digital imaging software that enables users to leverage the power of their
scanners, digital cameras, and other electronic devices. ScanSoft's
award-winning product line - Pagis Pro, TextBridge Pro, PaperPort Deluxe,
PaperPort ScannerSuite, ScanWorks, Kai's Photo Soap2, Kai's SuperGoo, Kai's
PowerShow and PhotoFactory - enables users to capture, recognize, edit, manage
and share documents and photos electronically by taking advantage of ScanSoft's
cutting-edge technology.
ScanSoft software is sold and marketed worldwide through retail, dealer and
OEM channels and the Internet, capturing the consumer, small office/home office
(SOHO) and corporate markets. There are approximately 2.9 million registered
users of ScanSoft products. For additional information, visit www.scansoft.com.
###
Except for the historical information contained herein, this press release
includes forward-looking statements within the meaning of Section 21(e) of the
Securities Exchange Act of 1934. These statements are based on the companies'
current expectations and estimates as to prospective events and circumstances
which may or may not be in the companies' control and as to which there can be
no firm assurances given. These forward-looking statements are subject to
8.
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risks and uncertainties and there can be no assurance that any of these
forward-looking statements may prove to be correct and actual results may differ
materially. These risks and uncertainties include, but are not limited to,
market acceptance of the companies' products, competitive products, pricing
pressures, maintenance of distribution channels, the completion of the
transaction and successful integration of the acquired company including cost
reductions associated with the elimination of redundant functions, and other
risks detailed from time to time in ScanSoft's and Caere's SEC reports. The
companies disclaim any intent or obligation to update these forward-looking
statements.
9.
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EXHIBIT 99.2
INVESTOR RELATIONS CONTACT: FOR IMMEDIATE RELEASE
Blanche M. Sutter
Executive Vice President and CFO
Caere Corporation
408/395-7000
Heidi Flannery
President
Fi.Comm
503/844-8888
[email protected]
CAERE CORPORATION REPORTS
FOURTH QUARTER AND 1999 YEAR END REVENUES AND NET EARNINGS
LOS GATOS, CA -- FEBRUARY 1, 2000 -- Caere Corporation (NASDAQ: CAER) today
reported fourth quarter 1999 net earnings of $1,536,000 or $.13 per share, net
of $1,235,000, related to the discontinued operation of its hardware business
and a one-time charge of $1,150,000 for the settlement of a patent claim.
Excluding the effect of the discontinued operation and the one-time charge,
earnings and earnings per share would have been $3,576,000 and $.30,
respectively. Net earning and earnings per share from continuing operations for
the fourth quarter of 1999 were $2,771,000 and $ .23, respectively, compared to
net earnings and earnings per share from continuing operations for the fourth
quarter of 1998 of $3,307,000, and $.26, respectively. Net revenues from
continuing operations for the fourth quarter of 1999 were $16,603,000, compared
to $16,482,000 for the fourth quarter of 1998.
During the fourth quarter of 1999, Caere discontinued the operations of its
hardware business. Accordingly, all the information in the income statement
reflects the effect of the discontinued operations. As part of the
discontinuance, the company sold manufacturing rights, remaining inventory, and
fixed assets related to the hardware operation to a former distributor of the
products. Additionally, the purchaser is assuming all future product support
obligations for the hardware products.
10.
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For the full year 1999, Caere's revenues, net earnings and earnings per
share from continuing operations were $58,793,000, $8,236,000, and $.67,
respectively, compared to $57,351,000, $9,260,000, and $.70, respectively, for
1998.
"We are extremely pleased with our software revenue in the last quarter,
which represents our best quarter ever," said Bob Teresi, Caere's chairman and
CEO. "Our growing installed base of over 20 million customers has responded very
positively to the introduction of OmniPage Pro 10.0. This new version offers
many enhancements that increase OmniPage Pro's technological and value
advantage. In addition, we are impressed with the continued growth we see with
OmniForm, both as a stand-alone forms application and as an integrated component
for corporate enterprise solutions."
The Company notes that, except for the historical information contained
herein, the matters discussed above contain forward-looking statements subject
to risks and uncertainties that may cause the Company's actual results to differ
materially. These risks and uncertainties include, but are not limited to,
various technological and competitive factors such as the introduction and
acceptance of rival products; acceptance of the Company's new products; pricing
pressures; success of the "bundle and upgrade" business model, including the
Company's maintaining its relationships with scanner manufacturers along with
customers' opting to upgrade to newer or more fully featured products; changes
in customer order patterns, including the maintenance of relationships with
retail distributors and dealers; manufacturing considerations, including the
maintenance of margins in a declining-price environment, as well as risk of
inventory obsolescence due to shifts in market demand and new product
introductions; and other risk factors listed from time to time in the Company's
SEC reports, including but not limited to, the Company's 1998 Annual Report on
Form 10-K for the year ended December 31, 1998, and the 1999 Quarterly Reports
on Form 10-Q.
About The Company
Caere Corporation a worldwide leader in software solutions for scanners and
digital cameras. Caere develops optical character recognition (OCR) technology,
electronic forms, document and digital camera management products, Web
publishing software, and media asset management software. Caere's products
bridge the gap between the paper and digital worlds by converting static paper
documents into dynamic electronic information. Caere products include the
OmniPage(R), WordScan(R), M/Series(TM), and Recognita families of OCR software;
OmniForm(R), and OmniForm Internet Publisher family of electronic forms
software; PageKeeper(R)family of personal document management software;
ImageAXS(TM) family of media asset management products, and Production OCR
solutions and Developer's kits. Caere is headquartered in Los Gatos, California.
Subsidiaries are located in Amsterdam, Budapest, Munich, and Paris. Caere
corporate and product information is available at http://www.caere.com on the
World Wide Web.
Caere product names and features referred to herein are trademarks of the
Company. Trade names, product names, and marks other than those identified as
trademarks of Caere are trademarks of their respective holder(s) and are hereby
recognized.
-financial tables to follow-
11.
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CAERE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1999 1998
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<S> <C> <C>
ASSETS:
CASH AND SHORT-TERM INVESTMENTS $50,883 $44,337
RECEIVABLES, NET 7,760 7,336
INVENTORIES, NET 199 1,953
OTHER CURRENT ASSETS 876 422
PROPERTY AND EQUIPMENT, NET 3,302 3,640
DEFERRED TAX ASSETS 5,919 4,578
OTHER ASSETS 1,078 1,618
------- -------
TOTAL ASSETS $70,017 $63,884
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY:
ACCRUED EXPENSES AND OTHER PAYABLES $ 7,394 $ 7,711
COMMON STOCK 41,708 42,421
RETAINED EARNINGS 20,915 13,752
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $70,017 $63,884
======= =======
</TABLE>
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CAERE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
NET REVENUES $ 16,603 $ 16,482 $ 58,793 $57,351
COST OF REVENUES 2,103 2,395 8,995 9,963
-------- -------- -------- -------
14,500 14,087 49,798 47,388
-------- -------- -------- -------
OPERATING EXPENSES:
RESEARCH AND DEVELOPMENT 3,009 3,191 11,914 11,298
SELLING, GENERAL AND ADMINISTRATIVE 7,148 6,973 27,573 26,364
SETTLEMENT OF PATENT LITIGATION 1,150 -- 1,150 --
-------- -------- -------- -------
11,307 10,164 40,637 37,662
-------- -------- -------- -------
OPERATING EARNINGS 3,193 3,923 9,161 9,726
INTEREST AND OTHER INCOME 766 656 2,604 2,621
-------- -------- -------- -------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 3,959 4,579 11,765 12,347
INCOME TAX EXPENSE 1,188 1,272 3,529 3,087
-------- -------- -------- -------
INCOME FROM CONTINUING OPERATIONS 2,771 3,307 8,236 9,260
DISCONTINUED OPERATIONS:
INCOME (LOSS) FROM OPERATION OF HARDWARE (ADE) GROUP
(NET OF TAX EXPENSE (BENEFIT) OF $(24), $59, $46, AND $338)
AND $338) (56) 152 106 1,016
LOSS ON DISPOSAL OF HARDWARE (ADE) GROUP (NET OF TAX
BENEFIT OF $505 FOR BOTH THE QUARTER ENDED AND YEAR ENDED
DECEMBER 31, 1999) (1,179) (1,179)
-------- -------- -------- -------
(1,235) 152 (1,073) 1,016
-------- -------- -------- -------
NET INCOME $ 1,536 $ 3,459 $ 7,163 $10,276
======== ======== ======== =======
BASIC EARNINGS PER SHARE FROM:
CONTINUING OPERATIONS $ 0.23 $ 0.27 $ 0.68 $ 0.73
DISCONTINUED OPERATIONS:
INCOME (LOSS) FROM OPERATION OF HARDWARE (ADE) GROUP $ 0.00 $ 0.01 $ 0.01 $ 0.08
LOSS FROM DISPOSAL OF HARDWARE (ADE) GROUP $ (0.10) $ 0.00 $ (0.10) $ 0.00
-------- -------- -------- -------
BASIC EARNINGS PER SHARE $ 0.13 $ 0.28 $ 0.59 $ 0.81
======== ======== ======== =======
DILUTED EARNINGS PER SHARE FROM:
CONTINUING OPERATIONS $ 0.23 $ 0.26 $ 0.67 $ 0.70
DISCONTINUED OPERATIONS:
INCOME (LOSS) FROM OPERATION OF HARDWARE (ADE) GROUP $ 0.00 $ 0.01 $ 0.01 $ 0.08
LOSS FROM DISPOSAL OF HARDWARE (ADE) GROUP $ (0.10) $ 0.00 $ (0.10) $ 0.00
-------- -------- -------- -------
DILUTED EARNINGS PER SHARE $ 0.13 $ 0.27 $ 0.58 $ 0.78
======== ======== ======== =======
WEIGHTED AVERAGE SHARES USED IN:
BASIC EARNINGS PER SHARE CALCULATION 12,096 12,315 12,082 12,687
DILUTED EARNINGS PER SHARE CALCULATION 12,112 12,769 12,336 13,246
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