<PAGE> 1
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)
September 9, 1998
NETWORKS ASSOCIATES, INC.
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware
----------------------------------------------
(State or other jurisdiction of incorporation)
<TABLE>
<S> <C>
0-20558 77-0316593
- - --------------------- ------------------------------------
(Commission File No.) (IRS Employer Identification Number)
</TABLE>
3965 Freedom Circle
Santa Clara, California 95054
----------------------------------------
(Address of Principal Executive Offices)
(408) 988-3832
----------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
<PAGE> 2
Item 2. Acquisition or Disposition of Assets
On September 11, 1998, Networks Associates, Inc. (the "Company") filed
Amendment No. 3 to the Tender Offer Statement on Schedule 14D-1 dated August 3,
1998 reporting its acquisition of control of CyberMedia, Inc. ("CyberMedia"), a
provider of desktop utility software solutions. Pursuant to the tender offer, on
September 9, 1998, the Company accepted for payment approximately 97% of the
outstanding CyberMedia shares in exchange for $9.50 per share in cash. On
September 10, 1998, a subsidiary of the Company merged into CyberMedia in a
transaction in which CyberMedia shares not tendered were converted into the
right to receive the same per share cash price paid in the tender offer. Total
cash paid to former CyberMedia stockholders was approximately $130.9 million.
The total purchase price including transaction costs and assumed net liabilities
was approximately $160.9 million.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
The financial statements of CyberMedia required pursuant to Rule 3-05
of Regulation S-X were previously reported in CyberMedia's Registration
Statement on Form 10-K, as filed with the Securities and Exchange Commission on
March 30, 1998, CyberMedia's Registration Statement on Form 10-Q, as filed with
the Securities and Exchange Commission on May 15, 1998, and CyberMedia's
Registration Statement on Form 10-Q, as filed with the Securities and Exchange
Commission on August 14, 1999 and pursuant to General Instruction B.3. of Form
8-K are not additionally reported herein.
(b) Pro Forma Financial Information
Pro forma financial statements for Networks Associates, Inc., showing
the pro forma effects of the acquisition of CyberMedia are submitted herewith
as shown in Item 7(c) following.
(c) Exhibits
2.1 Agreement and Plan of Merger by and among Networks Associates, Inc.,
CyberMedia, Inc. and Cyclone Acquisition Corp. dated July 28, 1998. Incorporated
by reference from CyberMedia, Inc.'s Schedule 14D-1, filed by the Company on
August 3, 1998. CyberMedia, Inc.'s filings with the Securities and Exchange
Commission were made under file number 0-21289.
<TABLE>
<S> <C>
99.1 Pro Forma Financial Statements of Networks Associates, Inc.
(a) Pro Forma Condensed Consolidated Statement of Operations
for the Year Ended December 31, 1997 (Unaudited)
(b) Notes to Pro Forma Condensed Consolidated Statement of
Operations for the Year Ended December 31, 1997 (Unaudited)
(c) Pro Forma Condensed Consolidated Statement of Operations
for the Nine Months Ended September 30, 1998 (Unaudited)
(d) Notes to Pro Forma Condensed Consolidated Statement of
Operations for the Nine Months Ended September 30, 1998
(Unaudited)
</TABLE>
-2-
<PAGE> 3
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 hereunto duly authorized.
NETWORKS ASSOCIATES, INC.
Dated: November 23, 1998 By: /s/ PRABHAT K GOYAL
-----------------------
Prabhat K. Goyal
Chief Financial Officer
-3-
<PAGE> 4
NETWORKS ASSOCIATES, INC.
CURRENT REPORT ON FORM 8-K
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
- - ----------- -----------
<S> <C>
2.1 Agreement and Plan of Merger by and among Networks
Associates, Inc., CyberMedia, Inc. and Cyclone Acquisition
Corp. dated July 28, 1998. Incorporated by reference from
CyberMedia, Inc.'s Schedule 14D-1, filed by the Company. on
August 3, 1998. CyberMedia, Inc.'s filings with the
Securities and Exchange Commission were made under file
number 0-21289.
99.1 Pro Forma Financial Statements of Networks Associates, Inc.
(a) Pro Forma Condensed Consolidated Statement of Operations
for the Year Ended December 31, 1997 (Unaudited)
(b) Notes to Pro Forma Condensed Consolidated Statement of
Operations for the Year Ended December 31, 1997 (Unaudited)
(c) Pro Forma Condensed Consolidated Statement of Operations
for the Nine Months Ended September 30, 1998 (Unaudited)
(d) Notes to Pro Forma Condensed Consolidated Statement of
Operations for the Nine Months Ended September 30, 1998
(Unaudited)
</TABLE>
-4-
<PAGE> 1
EXHIBIT 99.1
NETWORKS ASSOCIATES, INC.
PRO FORMA INFORMATION
The accompanying pro forma condensed consolidated statements of operations
have been derived from the historical financial statements of Networks
Associates, Inc. and Cybermedia, Inc. and adjust such information to give effect
to the acquisition of Cybermedia.
The pro forma condensed consolidated statements of operations for the year
ended December 31, 1997 and the nine months ended September 30, 1998 assume that
the acquisition of Cybermedia occurred on January 1, 1997.
The pro forma information is not necessarily indicative of the actual
results that would have occurred had the transactions been in effect on the
dates and for the periods indicated or which may result in the future. This pro
forma information should be read in conjunction with the notes thereto and the
historical financial information.
<PAGE> 2
NETWORKS ASSOCIATES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
NETWORKS PRO FORMA PRO FORMA
ASSOCIATES CYBERMEDIA ADJUSTMENTS COMBINED
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Net Revenue $ 727,229 $ 71,227 $ 798,456
--------- --------- ---------
Cost of Revenue 132,952 14,477 147,429
Research and Development 100,597 9,333 109,930
Sales and Marketing 208,356 39,464 247,820
General and Administrative 78,817 6,940 85,757
Amortization of Intangibles 6,135 $ 8,725 (1) 14,140
(720)(2)
Acquisition and related costs 188,671 11,341 200,012
--------- --------- --------- ---------
Total operating expenses 715,528 81,555 8,005 805,088
Income (loss) from operations 11,701 (10,328) (8,005) (6,632)
Interest and other income/exp, net 20,366 1,170 -- 21,536
--------- --------- --------- ---------
Income (loss) before taxes 32,067 (9,158) (8,005) 14,904
Provision for taxes 68,982 2,582 10,104 (3) 81,668
--------- --------- --------- ---------
Net loss $ (36,915) $ (11,740) $ (18,109) $ (66,764)
========= ========= ========= =========
Net loss per share - basic $ (0.30) -- $ (0.53)
========= =========
Shares used in per share calculation - basic 124,901 -- 124,901
========= =========
Net loss per share - diluted $ (0.30) -- $ (0.53)
========= =========
Shares used in per share calculation - diluted 124,901 -- 124,901
========= =========
</TABLE>
<PAGE> 3
NETWORKS ASSOCIATES, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE YEAR
ENDED DECEMBER 31, 1997
(UNAUDITED)
(1) Represents amortization of goodwill and other intangibles associated with
the CyberMedia acquisition over a seven and a three year amortization
period, respectively.
(2) Represents the reduction in CyberMedia's executive compensation costs to
reflect the acquisition.
(3) Represents income tax effects of including CyberMedia's operating results
and the pro forma adjustments set forth above.
<PAGE> 4
NETWORKS ASSOCIATES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
NETWORKS PRO FORMA PRO FORMA
ASSOCIATES CYBERMEDIA ADJUSTMENTS COMBINED
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Net Revenue $ 699,850 $ 7,418 $ 707,268
--------- --------- --------- ---------
Cost of Revenue 132,245 7,738 139,983
Research and Development 95,202 7,771 102,973
Sales and Marketing 198,677 34,731 233,408
General and Administrative 53,557 23,780 (1,701)(1) 61,876
(13,760)(2)
Amortization of Intangibles 9,932 6,544 (3) 16,476
Acquisition and related costs 339,772 339,772
--------- --------- --------- ---------
Total operating expenses 829,385 74,020 (8,917) 894,488
Income (loss) from operations (129,535) (66,602) 8,917 (187,220)
Interest and other income and
expense, net 13,689 431 -- 14,120
--------- --------- --------- ---------
Income (loss) before taxes (115,846) (66,171) 8,917 (173,100)
Provision for taxes 77,241 199 (20,772)(4) 56,668
--------- --------- --------- ---------
Net income (loss) $(193,087) $ (66,370) $ 29,689 $(229,768)
========= ========= ========= =========
Net income (loss) per share - basic $ (1.47) -- $ (1.75)
========= ========= =========
Shares used in per share
calculation - basic 131,428 -- 131,428
========= ========= =========
Net income (loss) per share - diluted $ (1.47) -- $ (1.75)
========= ========= =========
Shares used in per share
calculation - diluted 131,428 -- 131,428
========= ========= =========
</TABLE>
<PAGE> 5
NETWORKS ASSOCIATES, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1998
(UNAUDITED)
(1) Represents the reduction in CyberMedia's executive compensation costs to
reflect the acquisition
(2) Represents elimination of legal expenses incurred by CyberMedia related to
various shareholder class action lawsuits.
(3) Represents amortization of goodwill and other intangibles associated with
the CyberMedia acquisition over a seven and a three year amortization
period, respectively.
(4) Represents income tax effects of including CyberMedia's operating results
and the pro forma adjustments set forth above.
