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Filed Pursuant to Rule 424(b)(3)
Registration Statement No. 333-78019
288,816 SHARES
INTUIT INC.
COMMON STOCK
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All of the 288,816 shares of common stock of Intuit Inc. are being sold by
stockholders of Intuit. Intuit will not receive any proceeds from the sale of
shares offered by the selling stockholders. See "Selling Stockholders" and "Plan
of Distribution."
The common stock is listed on the Nasdaq National Market under the symbol
"INTU." The shares of common stock offered will be sold as described under "Plan
of Distribution."
On June 10, 1999, the closing price per share of the common stock on the
Nasdaq National Market was $83.06.
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THE COMMON STOCK OFFERED INVOLVES A HIGH DEGREE OF
RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 2.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION, NOR ANY STATE SECURITIES
COMMISSION, HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS JUNE 14, 1999.
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FORWARD LOOKING STATEMENTS
This prospectus (including the documents incorporated by reference)
contains forward-looking statements regarding Intuit's plans, expectations,
estimates and beliefs. These statements involve risks and uncertainties, and
actual results could differ materially from those reflected in the
forward-looking statements. Forward-looking statements in this prospectus are
typically identified by words such as "believes," "anticipates," "expects,"
"intends," "will" and "may" and other similar expressions. In addition, any
statements that refer to expectations, projections or other characterizations of
future events or circumstances are forward-looking statements. Intuit will not
necessarily update the information in this prospectus if and when any
forward-looking statement later turns out to be inaccurate. Some of the
important risks and uncertainties that may affect Intuit's future results and
performance are described in "Risk Factors," below. Additional information about
factors that could affect Intuit's future results and events is included in
Intuit's reports filed with the SEC and incorporated by reference in this
prospectus.
INTUIT
Intuit develops, sells and supports small business accounting, tax
preparation and consumer finance desktop software, financial supplies (such as
computer checks, envelopes and invoices) and Internet products and services for
individuals, small businesses and financial professionals. Our products and
services are designed to automate commonly performed financial tasks and to
simplify the way individuals and small businesses manage their finances. Intuit
commenced operations in March 1983 and was incorporated in California in March
1984. In March 1993, Intuit was reincorporated in Delaware. Our principal
executive offices are located at 2535 Garcia Avenue, P.O. Box 7850, Mountain
View, California 94039-7850. Our telephone number is (650) 944-6000.
RISK FACTORS
This offering is risky. Anyone who may receive common stock under this
prospectus should carefully consider the following risk factors in addition to
the other information presented in or incorporated by reference into this
prospectus and any prospectus supplement.
OUR REVENUE AND EARNINGS ARE HIGHLY SEASONAL. Sales of tax products are
heavily concentrated from November through March. Sales of consumer finance and
small business products are typically strongest during the year-end holiday
buying season. These seasonal patterns mean that revenue is usually strongest
during the quarters ending January 31 and April 30. We experience lower revenues
for the quarters ending July 31 and October 31, while our operating expenses to
develop and manage products and services continue to be incurred at relatively
constant levels during these periods. This can result in significant operating
losses, particularly in the July 31 and October 31 quarters when revenues are
lower. The seasonality of our revenue patterns has been further intensified by
the June 1998 acquisition of Lacerte, a professional tax software company whose
product sales are also linked to the annual income tax return season.
OUR QUARTERLY AND ANNUAL FINANCIAL RESULTS FLUCTUATE SIGNIFICANTLY. Our
operating results can fluctuate for reasons other than seasonality, such as the
timing of product releases, non-recurring events such as acquisitions and
dispositions, and product price cuts in quarters that have relatively high fixed
expenses. For example, revenue for the second quarter of fiscal 1999 was up 46%
compared to the second quarter of fiscal 1998. The increase resulted mainly from
three factors. First, second quarter fiscal 1999 results include revenue from
Lacerte, which we acquired in June 1998. The second factor was the timing of
recent QuickBooks releases that occurred in June 1998 (version 6.0) and December
1998 (QuickBooks '99). Prior to these releases, Intuit had not launched a new
version of QuickBooks since December 1996 (version 5.0). The third factor was
the timing of Intuit's TurboTax state tax products. Most state tax products were
released in January (second quarter) in fiscal 1999, but in February (third
quarter) of fiscal 1998. Thus, the second quarter of fiscal 1999 benefited from
an acquisition and several important product releases. Similarly, nonrecurring
events can cause annual results to vary significantly from year to year. Because
of these factors, we believe that year-over-year quarterly or annual comparisons
of operating results may not be meaningful and results for any given quarter or
year do not necessarily predict future performance.
WE FACE INTENSE COMPETITION FROM MANY COMPANIES IN ALL OF OUR BUSINESS
AREAS, BOTH DOMESTICALLY AND INTERNATIONALLY. Many of our competitors have
significantly greater financial, technical and marketing resources and broader
product lines than we do. In particular, Microsoft currently competes with
Intuit in a number of product and service areas, and is expected to begin to
compete in other areas such as tax preparation software in the future. Microsoft
is a formidable competitor, and its presence in the personal tax market would
lead to additional pricing
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pressures, and could adversely impact Intuit's ability to negotiate advantageous
terms with major retailers. In addition, most computer users access computer
products and services and the Internet using certain key technologies, platforms
and standards, such as Microsoft Windows. The dominance of any technology,
platform or standard can limit the ability of software application vendors and
providers of Internet-related content and services, such as Intuit, to gain
access to customers. The provider of the dominant technology, standard or
service has the ability to give preferred placement to its own offerings or to
those of favored partners, or even to deny access to certain products or
companies.
Our major domestic competitor in small business accounting software is
currently Peachtree Software. Peachtree offers a multi-user accounting software
product that competes directly with the new multi-user version of QuickBooks
that we first released in late fiscal 1998. Peachtree was recently acquired by
Sage, which is one of our major competitors in Europe.
Our financial supplies business competes with a number of business forms
companies, and is experiencing increased pricing pressures from many of our
competitors.
In the personal tax area, our major competitor is currently Block
Financial Corporation, the makers of TaxCut software. Competition has been
fierce during fiscal 1999, and our TurboTax products experienced lower average
selling prices in response to increased price competition. We expect Microsoft
to be a competitor in the personal tax area in the next tax season.
We attempt to monitor regulatory and public policy developments that could
affect the current business climate and have recently focused our efforts on
developments that could affect the markets for our tax preparation products.
During calendar year 1998, for example, the federal government considered
extending current services provided by the IRS - specifically, the free
provision of certain tax forms using the Internet. The IRS also sought greater
authority in the future to permit taxpayers to fill out government-provided tax
forms and return them directly to the government, although this would require a
significant expansion of the current IRS infrastructure. In the future, federal
or state authorities may take actions that lead to greater government
competition with the private sector. In addition, frequently discussed
legislative simplification of federal or state income tax laws could reduce
demand for tax preparation software generally. These actions could impact Intuit
as well as others in the tax preparation industry.
In desktop consumer finance software, Microsoft is currently our primary
competitor. Quicken competes directly with Microsoft Money, which is
aggressively promoted with free product offers through various distribution
channels, and with advertising targeted to Quicken users. These competitive
pressures, as well as other factors, have negatively affected Quicken revenue
and profitability, particularly during fiscal 1997, when Quicken revenue
declined by over 20%.
Intuit faces intense competition in its Internet-based businesses. There
are very low barriers to entry, and the market is extremely fragmented, making
it difficult for any one company to acquire the scale that is necessary
(although not, by itself, sufficient) to begin generating any meaningful revenue
or profits. Many of our competitors are either large companies that can afford
major investments in this business, or small privately held companies that can
benefit from a much narrower product focus than Intuit, and whose shareholders
will tolerate significant and extended operating losses. We expect that
competition will increase as we expand our Internet offerings, and as more
companies expand their businesses onto the Internet.
Internationally, we face a number of competitors, including Sage and
Microsoft in the European small business market. Strong competition in this
market may have a more significant impact on our international business in the
future, as the focus of our business in Europe is shifting more toward the small
business market.
OUR INTERNET STRATEGY REQUIRES US TO SUCCESSFULLY ADOPT A NEW BUSINESS
MODEL AND TO ESTABLISH AND MAINTAIN NEW BUSINESS RELATIONSHIPS. The Internet
represents a new business model for us, where revenues come from advertising,
marketing, transaction and processing fees, instead of software product sales.
Website traffic is an important foundation for this business model. We may need
to establish additional relationships, such as our relationships with Excite,
now doing business as Excite@Home, America Online and others, to help us
continue to increase traffic, so that we can increase advertising revenue and
transaction and processing fees. However, such relationships may require us to
make significant financial commitments to these companies. For example, the
Excite agreement currently calls for us to share revenue generated from our
Quicken.com site and the America Online agreement calls for us to make
significant guaranteed payments to America Online over the term of the
agreement. We may not be able to establish these additional relationships,
especially given the relatively limited number of leading Internet portal
companies. In addition, if our competitors establish relationships with these
companies, particularly exclusive
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relationships, our ability to expand our Internet businesses could be
substantially hindered. Even if we establish these relationships, they may not
result in significant increases in traffic or revenue.
On May 28, 1999, At Home Corporation completed its merger with Excite. The
combined company is doing business as Excite@Home. We currently expect the
merger to have a neutral or positive impact on our business relationship with
Excite@Home. However, it is possible that the merger could have a negative
impact on our business relationship with Excite@Home.
WE NEED TO QUICKLY AND SUCCESSFULLY BUILD SKILLS AS A WEBSITE DEVELOPER
AND PUBLISHER, WHICH ARE COMPLEMENTARY BUT DIFFERENT SKILLS FROM DESKTOP
SOFTWARE DEVELOPMENT SKILLS. The operational requirements for online Internet
businesses are very different from the requirements of our desktop software
business. We must continue to develop new and continually evolving operational
infrastructures to support and manage our Internet-based businesses and the
complex operational requirements of our strategic Internet relationships. In
particular, development cycles for Web-based products are extremely short and
irregular, while desktop software products generally have much longer and more
predictable development and release cycles. The rapid pace of change in this
area creates unique risks, and we may be unable to manage costs effectively
and/or to meet customer expectations.
OUR INTERNET BUSINESSES REQUIRE SIGNIFICANT RESEARCH AND DEVELOPMENT AND
MARKETING EXPENDITURES. We believe that sales and marketing and research and
development expenses related to Internet-based products and services will
continue to increase as a percentage of our total net revenue during fiscal
1999. This could have an adverse effect on our operating results, particularly
if revenue from these services does not meet expectations.
THE EXPANSION OF OUR INTERNET-BASED PRODUCTS HAS HAD A SIGNIFICANT IMPACT
ON OUR DEVELOPMENT PROCESS. Our desktop software products tend to have a
predictable, structured development cycle of about 12-24 months. Once new
products are released, they generally are not modified (except to fix defects)
until the next scheduled product upgrade. The development process for
Internet-based products is much more rapid, much less predictable and has much
shorter development cycles. Getting products and services launched quickly is
crucial to competitive success, but this time pressure may result in lower
product quality. Once launched, Internet-based offerings must be continuously
and rapidly updated to incorporate changing technology and customer demands, as
well as to fix defects.
INTERNET BUSINESSES FACE RISKS RELATING TO CUSTOMER PRIVACY AND SECURITY
AND INCREASING REGULATION. Our Internet businesses are subject to the risks of
Internet businesses generally. For example, customers may refuse to transact
business over the Internet due to privacy or security concerns. A major breach
of customer privacy or security, even by another company, could have a
significant negative effect on our Internet-based businesses. We cannot be
assured that consumers' use of the Internet, particularly for commercial
transactions, will continue to increase as rapidly as it has during the past few
years. If Internet use does not grow as a result of privacy or security
concerns, or for other reasons, our Internet-based businesses would be seriously
adversely affected. In addition, because our Internet-based products are
available in many states and foreign countries, we may be subject to regulation
and taxation in many additional jurisdictions. Also, to the extent that states
or foreign countries are generally successful in their efforts to impose taxes
on Internet commerce, the growth of the use of the Internet could slow
substantially, which could have an adverse effect on the growth of our
Internet-based businesses. If Internet activity becomes heavily regulated in
other respects, that could have major negative consequences for our
Internet-based businesses.
EXPANSION OF OUR DESKTOP PRODUCT INTERNET CONNECTIVITY INITIATIVES DEPENDS
TO SOME EXTENT ON INDUSTRY ADOPTION OF OFX AS A CONNECTIVITY standard. In 1996,
we decided to move from a proprietary electronic communications link between our
software and financial institutions, to an Internet-based link based on a
standard called Open Financial Exchange(TM) (referred to as "OFX"). While we
believe that OFX is the right strategic approach for us, we face risks and
challenges in implementing it. Financial institutions may not accept and
implement OFX as rapidly as we would like, or they may adopt alternative
connectivity standards that may not support interoperability with OFX. If OFX is
not adopted by many financial institutions, we may need to incur significant
expenses to alter our products to conform to other evolving standards.
IN ORDER TO SUCCEED IN THE PAYROLL BUSINESS, WE MUST CONTINUE TO IMPROVE
THE INTEGRATION OF THE OPERATIONS OF OUR PAYROLL PROCESSING SERVICE PROVIDER AND
EXPAND AVAILABILITY FOR OUR ONLINE PAYROLL PROCESSING SERVICE. In October 1998,
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we launched our new online payroll processing service available through our
newer QuickBooks products. On May 3, 1999 we acquired Computing Resources, Inc.
("CRI"), the company that has been the payroll processing service provider for
this new business since October 1998. The acquisition will result in significant
acquisition-related costs, as well as business integration challenges common in
all acquisitions. The payroll processing business involves the time-sensitive
operation of computerized processing systems, and differs in many respects from
the operations of our current software and Internet businesses. We may be unable
to provide accurate and timely payroll information, cash deposits or tax return
filings, due to integration issues or other problems. Failure to provide high
quality service could be costly to correct. It could also have a significant
negative impact on our ability to attract and retain customers, who we believe
will have a low tolerance for payroll processing errors. In addition, we expect
this service to be unprofitable in its initial stages until we are able to
accumulate a large number of subscribers from our QuickBooks customer base to
offset the fixed costs of providing the payroll service. It will therefore be
necessary to maintain satisfactory relationships with CRI's existing key
customers to avoid unanticipated operating losses from this business. We are
managing the new customer activation process at a measured rate in order to
insure high quality service levels and to minimize the impact of any potential
service disruptions during the initial phases of the service. Though initial
customer reaction to this service has been positive, it has not been a
significant contributor to Intuit's financial performance in fiscal 1999, and
there is no assurance that it will be widely accepted. If subscriptions to this
service don't meet expectations, future operating results could suffer.
OUR FUTURE SUCCESS DEPENDS UPON OUR ABILITY TO QUICKLY INTRODUCE PRODUCT
ENHANCEMENTS AND NEW PRODUCTS THAT MEET CUSTOMER DEMANDS. The markets in which
we compete are characterized by rapidly changing customer demands, continuous
technological changes and improvements, shifting industry standards, frequent
new product introductions by other companies and the emergence of new
competitors. We must respond to these changes quickly in order to remain
competitive.
OUR TAX PRODUCTS MUST FOLLOW A DEMANDING AND RIGID ANNUAL DEVELOPMENT AND
RELEASE CYCLE. We must update our tax products each year to reflect tax law
changes. We cannot predict how complex the tax law changes will be each year,
when the changes will be made or when tax forms included in the products will be
available from the IRS and state tax agencies. The rigid development timetable
for tax products increases the risk of a product launch delay as well as the
risk of product errors. See "--Product bugs can be expensive to fix and can
cause Intuit to lose customers." Since the tax return preparation season is
brief, it is imperative that Intuit release tax products as early as possible.
Late release of tax products in any year could cause our current and prospective
customers not to purchase a tax preparation software product, or to choose a
competitive product for that year's tax season, making it more difficult for us
to sell our products to those customers in future tax seasons. If for any reason
we failed to release our tax products in time for use during the then current
tax year, we would lose substantially all of our revenues for that fiscal year,
and our ability to market tax preparation software successfully in the future
would be greatly impaired. In addition, we guarantee to our professional
customers that our state tax products will be released by specified dates. Late
release of such products could result in a significant loss of revenues in that
fiscal year as a result of the guarantee and the loss of future business.
OUR WEB-BASED TAX PREPARATION AND ELECTRONIC FILING SERVICES MUST HANDLE
EXTREMELY HEAVY CUSTOMER DEMAND DURING THE PEAK TAX SEASON. During fiscal 1999,
we have experienced significantly higher revenues from our Internet-based Web
TurboTax tax preparation service and our electronic tax return filing services
compared to fiscal 1998. In prior years we did not experience any significant
technical problems with the Web TurboTax or electronic tax return filing
systems. However, the risk of such problems increases with increased demand for
these services. During the 1999 tax-filing season, we experienced higher than
expected demand for Web TurboTax, and we were required to increase our capacity
quickly to handle the increased demand. In the electronic filing area, we
experienced an interruption in service in February 1999 caused by a power outage
at our facility. This outage was not material because it was fairly early in the
tax season. However, during the 1999 tax filing season we also determined that
the heavy volume of and peak filing periods for electronically filed returns
could cause routine server maintenance procedures to take longer than we
expected. In one instance, we decided to complete a routine back-up of our
electronic filing system as a precaution to avoid any loss of data prior to the
tax filing deadline. The heavy volume of returns in the database and related
technical matters caused routine server maintenance procedures to result in the
unavailability of the electronic filing system to customers for a period of 14
hours on April 11-12, 1999. This downtime affected the electronic filing of tax
returns from both our Web TurboTax service and our TurboTax desktop software
products. We do not believe that the service outage had a material impact on our
electronic filing revenue, prevented customers from completing and filing their
returns in a timely manner or posed a risk that customer data would be lost or
corrupted. However, we did experience negative publicity due to the outage. The
exact level of future demand for Web TurboTax and electronic filing services
will be very difficult to predict, and in future tax filing seasons we could
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experience significant financial and public relations consequences if our
capacity to handle online and electronic filing customers is insufficient during
the peak filing period, or if the service is unavailable for other reasons such
as technical difficulties at our data center. Although we believe we have
addressed the issues that caused our service outages, a similar interruption in
service during the tax filing season in future years could have significant
financial and public relations consequences.
PRODUCT BUGS CAN BE EXPENSIVE TO FIX AND CAN CAUSE INTUIT TO LOSE
CUSTOMERS. New software products often contain undetected errors or "bugs" that
can hinder product performance, give users incorrect results and/or damage a
user's data. These problems can be expensive to fix, particularly if we need to
provide a major corrective release or pay refunds to customers. Poor product
quality can cause Intuit to lose revenue, customers and market share or incur
higher technical support and warranty costs. The short development cycles
associated with our Internet-based products may result in lower product quality.
See "--We need to quickly and successfully build skills as a website developer
and publisher, which are complementary but different skills from desktop
software development skills." In addition, we guarantee the accuracy of the tax
calculations performed by our federal personal tax products and have agreed to
reimburse any penalties paid by a customer to the Internal Revenue Service
solely as a result of miscalculation on a form prepared using our personal tax
products. If these products contain a calculation error affecting a significant
number of consumer customers' returns, we could be subject to liability claims
and be required to make substantial payments.
Year 2000 and other date-related processing issues may also cause software
products to fail or malfunction unless the problems are corrected. If our
products have significant Year 2000 defects, we could suffer lost sales or other
negative consequences resulting from customer dissatisfaction, including
additional litigation. See "--Year 2000 poses risks and related litigation."
PRODUCT RETURNS MIGHT EXCEED RESERVES. Like most other software companies,
we have a generous return policy for our distributors and retailers, although we
encourage them to make returns promptly. We also have a generous return
policy for direct customers. We establish reserves for product returns in our
financial statements, based on estimated future returns of products. In
establishing reserves, we take into account promotional activities, the timing
of new product introductions, distributor and retailer inventories of our
products and other factors. In the past, returns have not generally exceeded the
reserves we have established for them. However, if in the future, retail
sell-through of a major product falls significantly below expectations, or if
competitors' promotional or other activities result in increased product returns
for Intuit, returns could exceed the reserves established for them. In addition,
the rate of product returns could increase as other changes in our distribution
channels occur or existing products become obsolete.
During the tax return preparation season, we generally ship significantly
more tax products to our distributors and retailers than we expect them to sell
during the tax season, in order to reduce the risk that distributors or
retailers will run out of product inventory during the short tax season. As a
result, we have historically accepted significant returns of our tax products
each year, principally from April to September, and expect to continue to do so
in the future.
WE FACE INCREASING COMPETITION FOR ACCESS TO DISTRIBUTION CHANNELS. There
are increasing numbers of companies competing for access to the distribution
channels that we use. Our arrangements with our distributors and retailers may
be terminated by either party at any time without cause. Distributors and
retailers generally carry competing products. Retailers typically have a limited
amount of shelf space and promotional resources, for which there is intense
competition. There can be no assurance that distributors and retailers will
continue to purchase our products or provide our products with adequate levels
of shelf space and promotional support. Any termination or significant
disruption of our relationship with any of our major distributors or retailers,
or a significant reduction in sales volume attributable to any of our principal
resellers, could materially adversely affect our results of operations and
financial condition. Also, the bankruptcy, deterioration in financial condition
or other business difficulties of a distributor or retailer could impact our
ability to collect accounts receivable from the affected party. This could have
an adverse effect on our operating results and financial condition if
uncollectable amounts exceed our bad debt reserves.
During the past few years, there has been increasing consolidation among
retailers, and we expect this consolidation trend to continue. Consolidation has
resulted in a number of large retailers with significant bargaining power. This
factor, combined with intense competition for access to retail shelf space and
promotional support, has made it challenging for us to negotiate financially
favorable terms with retailers. We expect to face even greater
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challenges in negotiating retail relationships in the future, particularly given
Microsoft's expected entrance into the personal tax market.
An element of our retail sales efforts that has been important over the
last several years is our original equipment manufacturer, or "OEM,"
relationships with hardware and software manufacturers. We sell our software to
OEMs to be combined with their products, which are then sold to consumers.
Although these OEM relationships have been a good source of new customers for
Intuit, the sale prices we receive for OEM sales are often much lower than
retail or direct sale prices, especially for consumer finance products. If
competitive pressures or other factors cause us to further increase the
percentage of our products that are sold through OEMs, our revenue and operating
margins could be adversely affected.
BUSINESSES THAT WE ACQUIRE MUST BE INTEGRATED INTO OUR BUSINESS. Our
recent acquisitions include Milkyway KK in January 1996; Interactive Insurance
Services (now Intuit Insurance Services) in June 1996; GALT Technologies, Inc.
in September 1996; Nihon Micom in March 1997; Lacerte Software Corporation and
Lacerte Educational Services Corporation in June 1998; and Computing Resources,
Inc. in May 1999. We may complete other acquisitions in the future. Acquisitions
expand Intuit's size, product lines, personnel and geographic locations.
Integrating and organizing new businesses requires extensive operational,
financial and management information systems.
OUR RECENT ACQUISITIONS HAVE RESULTED IN SIGNIFICANT ACQUISITION-RELATED
EXPENSES. During the past three years, we have recorded significant
acquisition-related expenses. These expenses have had, and will continue to
have, a negative impact on our operating results. Acquisition-related expenses
include amortization of purchased software (reflected in cost of goods sold) and
amortization of goodwill and purchased intangibles (reflected in operating
expenses), as well as charges for purchased research and development. These
expenses have resulted in a reduction in after-tax net income of $46.5 million
in fiscal 1996, $34.6 million in fiscal 1997, $44.3 million in fiscal 1998 and
$27.4 million in the first six months of fiscal 1999.
In particular, the acquisition of Lacerte resulted in a one-time charge
for in-process research and development of $53.8 million in fiscal 1998 and will
result in the amortization of $358.2 million of intangible assets over the five
years beginning with fiscal 1999. In the first quarter of fiscal 1999, we
changed the estimated life of goodwill for Lacerte from three to five years to
reflect the revised estimate of the period of time we expect to benefit from the
purchased assets of the acquired business. We began accounting for this change
in the first quarter of fiscal 1999. The change resulted in a $19.0 million
decrease in amortization expense and an increase in net income by approximately
$14.5 million, or $0.24 per share, for the six months ended January 31, 1999 but
will result in continuing amortization expenses (with a corresponding decrease
in net income) during fiscal 2002 and 2003.
Excluding the impact of our acquisition of CRI, and assuming no additional
acquisitions and no acceleration of amortization, future amortization will
reduce net income by approximately $55.9 million, $50.0 million, $43.3 million
and $40.1 million for the years ending July 31, 1999 through 2002, respectively.
We estimate that we will amortize approximately $190 million of intangible
assets in connection with our acquisition of CRI. We anticipate that the
majority of this amount will be amortized over five years. If we complete
additional acquisitions or accelerate amortization in the future, there would be
an incremental negative impact on operating results.
OUR RECENT ACQUISITION OF LACERTE POSES A NUMBER OF RISKS THAT COULD
AFFECT OUR ABILITY TO ACHIEVE THE ANTICIPATED BENEFITS OF THAT ACQUISITION. We
currently have Lacerte operating as a separate entity, with separate sales and
marketing, research and development, customer support and administrative
organizations. This may create operating inefficiencies and communication
difficulties. If, in the future, Intuit and Lacerte decide to integrate their
operations, the integration could present a number of risks and divert
management's attention from other matters. Intuit assumed substantially all of
the liabilities related to Lacerte's business with the exception of certain tax
liabilities. If unanticipated liabilities are discovered later, we will likely
have to satisfy those liabilities.
OUR RECENT ACQUISITION OF CRI POSES NEW RISKS ASSOCIATED WITH MANAGEMENT
OF A PAYROLL PROCESSING SERVICE. CRI provides payroll processing services to
small businesses. These services require the timely preparation of employee
paychecks, direct deposits of employee salaries, the deposit of state and
federal payroll taxes and certain tax return filings. Failure to make timely and
accurate paycheck deliveries, bank deposits, tax payments or tax returns is
likely to adversely affect our relationships and reputation with customers, who
we believe will have a low tolerance for payroll processing errors, and may
result in liability to customers or tax authorities. The time-sensitive
operation of a payroll processing business and its related systems differs in
many respects from
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the operations of our current software and Internet businesses. Though we have
had operating experience with CRI since October 1998 through the payroll
processing service associated with QuickBooks, we have not previously directly
operated and managed a payroll processing service. In addition, CRI's business
is currently significantly dependent on a financial institution that is
currently the largest source of CRI's customers. Failure to maintain a
satisfactory business and contractual relationship with that financial
institution would have a serious adverse impact on CRI's revenues and operating
results.
WE MUST PROVIDE RESPONSIVE CUSTOMER SERVICE AND TECHNICAL SUPPORT. We have
a full-time customer service and technical support staff that is supplemented by
seasonal employees and outsourcing during periods of peak call volumes, such as
during the tax return filing season, or shortly after a major product launch.
Despite our efforts to adequately staff and equip our customer service and
support operations, during peak periods, we cannot respond promptly to all
customer requests for assistance. During the past six months, customers
experienced significantly longer than expected "hold" times for customer service
because our staffing was inadequate to handle higher than anticipated call
volume. We may also have an unusually high volume of requests, and be unable to
respond promptly, if large numbers of customer order shipments are delayed or if
our products have bugs. When we experience customer service and support
problems, they can adversely affect customer relationships and our financial
performance.
BUSINESS CONDITIONS IN INTERNATIONAL MARKETS CAN NEGATIVELY IMPACT OUR
FINANCIAL PERFORMANCE. Our international revenues come primarily from Japan
(small business products) and Germany, Canada and the United Kingdom (small
business, consumer finance and personal tax products). We also operate in
smaller European and Asia/Pacific markets. Developing and localizing products
for foreign markets involves more risk, and is more time-consuming and costly
than developing products for the U.S. market. Delays or other problems in
product launches may be more likely because of these factors, and they can
impact our financial performance. For example, our German subsidiary experienced
a delay in releasing the German QuickBooks product during fiscal 1998, which
contributed to lower revenues in the first two quarters of fiscal 1998 compared
to fiscal 1997. We are also experiencing product launch delays in Germany in
fiscal 1999. Economic conditions in international markets can also negatively
affect our business, as they did in Europe in fiscal 1996. In addition, the
economic situation in Japan had a negative impact on international revenue and
profits during fiscal 1998 and continues to negatively impact fiscal 1999
international revenue and profits.
In response to disappointing results in Europe during fiscal 1998, we have
accelerated the process of refocusing our product development efforts toward
small business products in selected larger markets. As a result, we are devoting
fewer resources to consumer finance and tax products, and to smaller geographic
markets. This shift in strategy is negatively impacting international operating
results during fiscal 1999. We also introduced our first release of QuickBooks
in Japan in September 1998 in an effort to target a lower-priced market than our
other small business products reach in Japan. However, the overall market for
small business products and services in Japan continues to suffer due primarily
to poor economic conditions. While we expect that international revenues will be
slightly down for fiscal year 1999, there is a risk that they could be
significantly lower if our strategic initiatives are not effective, or if we
experience adverse currency fluctuations.
WE DEPEND ON A SINGLE SOURCE SUPPLIER OF CHECKS. Our financial supplies
business (which represented approximately 16% of our net revenues in fiscal
1998) has only one source for its domestic checks. In September 1995, we entered
into an exclusive five-year contract with John H. Harland Co. to print all of
our domestic check products. Checks accounted for approximately 75% of supplies
revenue in fiscal 1998. We believe our relationship with Harland is strong, and
the financial terms of the contract are favorable for Intuit. However, if we
experience any problems with Harland's performance, it could have a material
negative impact on sales of supplies and on Intuit as a whole.
WE FACE INTENSE COMPETITION FOR QUALIFIED EMPLOYEES. We believe that our
future success and growth will depend on our ability to attract and retain
qualified employees in all areas of our business. Like many of our competitors,
we have had difficulties during the past few years hiring and retaining
employees. Although we believe we offer competitive compensation and a good
working environment, we face intense competition for qualified employees,
particularly those with technical and marketing expertise.
OUR ABILITY TO PROTECT OUR PROPRIETARY TECHNOLOGY IS LIMITED. We rely on a
combination of copyright, patent, trademark and trade secret laws, and employee
and third-party nondisclosure agreements, to protect our software products and
other proprietary technology. We do not have any copy-protection mechanisms in
our
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<PAGE> 9
software because we do not believe they are practical or effective. Current U.S.
laws that prohibit copying give us only limited practical protection from
software "pirates," and the laws of many other countries provide almost no
protection for our intellectual property. Policing unauthorized use of our
products is difficult, expensive and time-consuming and we expect that software
piracy will be a persistent problem for our desktop software products. In
addition, the unique technology of the Internet may tend to increase, and
provide new methods for, illegal copying of the technology used in our
Internet-based products.
WE RELY ON THIRD PARTY LICENSES FOR SOME OF OUR PRODUCTS AND SERVICES. We
do not necessarily own all of the software and other technologies used in our
products and services, but we have all licenses that we believe are necessary
for using that technology. We do not believe that our products, trademarks and
other proprietary rights infringe anyone else's proprietary rights. However,
other parties occasionally claim that features or content of our products, or
our use of certain trademarks, may infringe their property rights. Past claims
have not resulted in any significant litigation, settlement or licensing
expenses, but future claims could. Third parties may assert infringement claims
against us in the future, and claims could result in costly litigation or
require us to obtain a license to intellectual property rights of third parties.
Third party licenses may not be available on reasonable terms, or at all.
SOME OF OUR PRODUCTS AND SERVICES ARE REGULATED BUSINESSES UNDER FEDERAL
OR STATE LAWS THAT DO NOT APPLY TO MOST SOFTWARE COMPANIES. We offer several
regulated products and services through separate subsidiary corporations.
Intuit's Quicken Investment Services, Inc. subsidiary (or "QISI") is registered
as an investment adviser with the SEC and is subject to certain state regulatory
laws as well. QISI is responsible for certain of the investment-related features
in our products and services. The business activities of Interactive Insurance
Services ("IIS"), which operates the Quicken InsureMarket website, are subject
to state insurance regulations. Intuit's QuickenMortgage service is offered by a
subsidiary called Intuit Lender Services, Inc. (or "ILSI"), which is subject to
state mortgage and loan broker regulations. Establishing and maintaining
regulated subsidiaries requires significant financial, legal and management
resources. If the subsidiaries fail to comply with applicable regulations, they
could face liability to customers and/or penalties and sanctions by government
regulators. In addition, federal and state regulations may restrict the business
practices of these subsidiaries in a variety of areas, including advertising and
distribution arrangements.
Our Quicken products allow customers of participating brokerages to trade
securities through their broker's website. Quicken InsureMarket may expand our
site to include other insurance products, such as variable annuities, that are
considered "securities" under federal and state laws. We believe we have
structured these services in a way that does not subject Intuit to direct
government regulation. However, it is possible that these services, or other
services we may offer in the future, may be regulated under federal and/or state
securities broker-dealer laws or other regulations. We continually analyze new
business opportunities, and any new businesses that we pursue may require
additional costs for regulatory compliance.
REGULATION OF ENCRYPTION TECHNOLOGY COULD ADVERSELY AFFECT OUR
INTERNATIONAL SALES AND SERVICES. Various Intuit products contain powerful
encryption technology. Government regulations currently prohibit this technology
from being exported outside of the United States and Canada. Some agencies of
the federal government are seeking to relax export laws, but others are seeking
to tighten export restrictions on software containing encryption technology.
These regulations may adversely affect international sales of our desktop
software as well as our ability to provide the level of security customers are
seeking in Internet-based products and services on a worldwide basis.
PROBLEMS RELATED TO THE YEAR 2000 COULD HAVE A SIGNIFICANT ADVERSE EFFECT
ON OUR OPERATIONS. Costs directly attributed our Year 2000 project are
currently estimated at approximately $6.5 million for fiscal 1999. This
estimate is comprised primarily of hardware, software, internal resources and
consulting fees necessary to undertake our Year 2000 testing activities during
fiscal year 1999. We currently anticipate direct costs in the range of $10 to
$16 million for fiscal year 2000, resulting from the completion of the Year
2000 project phases and the transition into an ongoing maintenance and support
activity in fiscal year 2000. We believe that the nature of our products and
the size and profile of our customer base is likely to lead to a significant
increase in the calls to our customer support centers throughout the remainder
of calendar 1999 and early 2000. These support operations may experience call
volumes not experienced to date and we are developing plans that will allow us
to handle the anticipated increase in calls in a manner that will not lead to
material incremental costs. Additionally, there will be costs associated with
the manufacture and distribution of free solutions for products that are not
Year 2000 ready or that will not be tested for Year 2000 readiness. We believe
the provision of free solutions may result in lost revenue for new product
upgrades to within a range of $10 to $17 million, although the exact amount
will depend on customer response to the Year 2000 issue.
While we are dedicating substantial resources toward attaining Year 2000
readiness, there is no assurance that we will be successful in our efforts to
address all Year 2000 issues. If we are not successful, there could be
significant adverse effects on our operations. For example, failure to achieve
Year 2000 readiness for our internal systems could delay our ability to
manufacture and ship products, disrupt our customer service and technical
support facilities, or interrupt customer access to our online products and
services. If our products are not Year
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<PAGE> 10
2000 ready, we could suffer lost sales or other negative consequences resulting
from customer dissatisfaction, including additional litigation (see discussion
below). We also rely heavily on third parties such as manufacturing suppliers,
service providers, financial institutions and a large retail distribution
channel. If these or other third parties experience Year 2000 failures or
malfunctions, there could be a material negative impact on our ability to
conduct ongoing operations. Many of our products are significantly
interconnected with heavily regulated financial institutions. Our relationships
with financial institutions could be impacted if we do not achieve Year 2000
readiness in a manner and on a time schedule that permits them to comply with
regulatory requirements. We may also incur additional costs if we are required
to accelerate our Year 2000 readiness to meet financial institution
requirements. As with all companies, we also rely on other more widely used
entities such as government agencies, public utilities and other external forces
common to business and industry. Consequently, if such entities experience Year
2000 failures, this could disrupt our ability to conduct ongoing operations.
In an effort to reduce the risks associated with the Year 2000, we have
incorporated contingency planning as part of our five-phase Year 2000 plan,
building upon disaster recovery and contingency planning that we already have in
place. This includes identifying areas where we are most vulnerable to Year 2000
risk and putting contingency plans in place before we experience potential
failures. Despite our efforts, there can be no assurance that all contingencies
can be anticipated or adequately provided for.
Several class action lawsuits have been filed against Intuit in California
and New York, alleging Year 2000 issues with the online banking functionality in
certain versions of our Quicken products, and it is possible that we will face
additional lawsuits. We do not believe the pending lawsuits have merit and
intend to defend them vigorously. We have been working with financial
institutions to provide solutions to their current online banking customers and
are planning to make such solutions available before customers experience any
Year 2000 problems.
The above discussion regarding costs and risks for the Year 2000 is based
on our best estimates given information that is currently available, and is
subject to change. As we continue to progress with this initiative, we may
discover that actual results will differ materially from these estimates.
WE HOLD INVESTMENTS THAT HAVE BEEN VERY VOLATILE. As of April 30, 1999 we
held 10,175,000 shares, or approximately 19.7%, of the outstanding common stock
of Checkfree Corporation, and 5,350,000 shares, or approximately 9.9%, of the
outstanding common stock of Excite, Inc. In May 1999, we entered into
contractual arrangements for a forward sale of 4,350,000 shares of our Excite
common stock. Also in May 1999, Excite and At Home merged and each Excite share
was exchanged for 1.041902 shares of At Home Class A common stock. Intuit
continues to have an economic risk associated with 1,041,902 shares of At Home
Class A common stock. Checkfree and At Home are in the Internet and electronic
commerce industries, in which stock prices have historically been volatile.
Accordingly, it is possible that the market price of one or both of these
companies' stock could decline substantially and quickly (as occurred during
August and September 1998), which could result in a material reduction in the
carrying value of these assets. The trading range for Checkfree's common stock
for the 52 weeks ended June 10, 1999 was $5.75 to $69.12, and its closing price
on June 10, 1999 was $36.88. The trading range for At Home's Class A common
stock for the 52 weeks ended June 10, 1999 was $28.50 to $182.00, and its
closing price on June 10, 1999 was $92.88.
Our ability to dispose of the Checkfree stock is restricted by volume
trading limitations and other contractual arrangements, which increases our
exposure to the risk of owning these securities. Our shares of At Home Class A
common stock are subject to regulatory restrictions on resale, which increases
our exposure to the risk of owning the shares.
Pursuant to an agreement entered into on May 17, 1999, we completed a $50
million investment in Security First Technologies on May 27, 1999. Security
First delivers enterprise-wide Internet applications for financial institutions.
We purchased 970,813 shares of common stock at a price of $51.50 per share,
which represents approximately 3.8% of Security First's outstanding common
stock. In connection with this agreement, we also received an option to purchase
3,629,187 additional shares of Security First common stock, which will become
exercisable if Security First completes its planned acquisition of Edify
Corporation (a publicly held California-based provider of Internet and voice
electronic commerce solutions), and an option to purchase an additional
1,800,000 shares of common stock if Security First completes its planned
acquisition of FICS Group, N.V. (a privately held Belgium-based provider of
regulatory financial reporting and remote electronic banking software). These
options are exercisable at a per share purchase price of $51.50. Our investment
in Security First was made in connection with establishing a strategic
relationship to deliver online financial software and services to financial
institutions. The common stock of Security First is quoted on the Nasdaq Stock
Market under the symbol "SONE." The closing price of Security First common stock
on June 10, 1999 was $36.25.
If our investments in Checkfree, Excite@Home or Security First, or other
future investments, become impaired (more than a temporary decline in value), or
if they are sold at a substantial loss, the decline in value or loss would
result in a charge that could have a material adverse impact on net income.
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<PAGE> 11
THE MARKET PRICE OF OUR COMMON STOCK HAS BEEN VOLATILE. In recent periods,
the stock market has experienced volatility that has particularly affected the
market prices of equity securities of many high technology companies, including
Intuit. Some of the volatility has been related to our operating results or
other events directly affecting Intuit, but some of the volatility does not
appear to be directly related to Intuit's performance. The trading prices of the
stocks of many technology companies, including Intuit, are at or near historical
highs and reflect price/earnings ratios substantially above historical levels.
The trading range for our common stock for the 52 weeks ended June 10, 1999 is
$34.18 to $110.75 and the closing price on June 10, 1999 was $83.06. In the
past, securities class action litigation has been filed against companies after
a period of volatility in the market prices of their securities. Litigation
against Intuit could result in substantial costs and a diversion of management's
attention and resources, which could materially adversely affect Intuit's
operations.
WE HAVE IMPLEMENTED A NUMBER OF ANTI-TAKEOVER PROVISIONS THAT MAY
ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON STOCK. In the future, Intuit may
issue shares of preferred stock without further stockholder approval. The Intuit
board of directors can determine the terms and conditions, and the rights,
privileges and preferences of any preferred stock. The rights of our common
stock holders will be subject to, and may be adversely affected by, the rights
of the holders of any preferred stock that may be issued in the future. The
issuance of preferred stock can provide desirable flexibility in connection with
possible acquisitions and other corporate purposes. However, it could make it
more difficult for a third party to acquire, or discourage a third party from
acquiring, a majority of our outstanding voting stock. Intuit does not have any
present plans to issue any shares of preferred stock. However, on April 29,
1998, the board of directors adopted a stockholder rights plan and amended
Intuit's bylaws to eliminate the right of stockholders holding 10% of Intuit's
outstanding common stock to call a special meeting of stockholders. In addition,
Section 203 of the Delaware General Corporation Law restricts certain business
combinations with any "interested stockholder" as defined under Delaware Law.
These provisions and Intuit's stockholder rights plan could discourage potential
acquisition proposals and could delay or prevent a change in control of Intuit.
They also may adversely affect the market price of our common stock, and may
prevent changes in the management of Intuit.
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USE OF PROCEEDS
Intuit will not receive any of the proceeds from the sale of shares by the
selling stockholders.
SELLING STOCKHOLDERS
The following table sets forth certain information known to Intuit with
respect to the beneficial ownership of the common stock as of May 3, 1999 by the
selling stockholders. The selling stockholders are the former shareholders of
CRI. They have not had any position, office or other material relationship with
Intuit within the three years before May 3, 1999, the date on which Intuit
acquired CRI, other than as a result of the business relationship between
Intuit and CRI. As of May 3, 1999, Ranson W. Webster was appointed a Vice
President of Intuit and Harry D. Hart became an employee of Intuit. Both Mr.
Webster and Mr. Hart have employment contracts with Intuit.
The table assumes that the selling stockholders sell all of the shares
offered by them in this offering. However, Intuit is unable to determine the
exact number of shares that will actually be sold or when or if such sales will
occur. This table also assumes that the selling stockholders do not acquire any
other shares of Intuit stock pending the offering.
The selling stockholders have advised Intuit that they are the beneficial
owners of the shares being offered.
<TABLE>
<CAPTION>
Shares Beneficially Shares Beneficially
Owned Before Offering Owned After Offering
--------------------- Shares Being ---------------------
Name Number Percent Offered Number Percent
- ---- ---------- --------- ------------ ------ -------
<S> <C> <C> <C> <C> <C>
Ranson W. Webster and Norma J. Webster JTWROS 216,233 * 216,233 0 --
Harry D. Hart and Carla J. Hart JTWROS 72,583 * 72,583 0 --
</TABLE>
- ---------------
* Less than 1%
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PLAN OF DISTRIBUTION
The selling stockholders are former stockholders of Computing Resources,
Inc., a company that Intuit acquired on May 3, 1999. The selling stockholders
are bound by a registration rights agreement with Intuit. To Intuit's knowledge,
the selling stockholders have not entered into any agreement, arrangement or
understanding with any particular broker or market maker with respect to the
shares offered hereby.
The shares of common stock may be offered and sold from time to time by
the selling stockholders or by pledgees, donees, transferees and other
successors in interest. The selling stockholders will act independently of
Intuit in making decisions with respect to the timing, manner and size of each
sale. Sales may be made over the Nasdaq National Market or otherwise, at then
prevailing market prices, at prices related to prevailing market prices or at
negotiated prices. The shares may be sold by one or more of the following:
- a block trade in which the broker-dealer engaged by a selling
stockholder will attempt to sell the shares as agent but may position
and resell a portion of the block as principal to facilitate the
transaction;
- purchases by the broker-dealer as principal and resale by the broker
or dealer for its account pursuant to this prospectus; and
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers.
Intuit has been advised by the selling stockholders that they have not, as
of the date of this prospectus, entered into any arrangement with a
broker-dealer for the sale of shares through a block trade, special offering, or
secondary distribution of a purchase by a broker-dealer. Broker-dealers engaged
by the selling stockholders may arrange for other broker-dealers to participate
in selling shares.
In connection with distributions of the shares or otherwise, the selling
stockholders may enter into hedging transactions with broker-dealers or other
financial institutions. In connection with these transactions, broker-dealers or
financial institutions may engage in short sales of the shares in the course of
hedging the positions they assume with selling stockholders. The selling
stockholders may also sell shares short and redeliver the shares to close out
such short positions. The selling stockholders may also enter into option or
other transactions with broker-dealers or other financial institutions that
require the delivery to the broker-dealer or financial institution of the
shares, which the broker-dealer or financial institution may resell or otherwise
transfer under this prospectus. The selling stockholders may also loan or pledge
the shares to a broker-dealer or other financial institution and the
broker-dealer or financial institution may sell the shares so loaned or, upon a
default, the broker-dealer may sell the pledged shares under this prospectus. In
addition, any securities covered by this prospectus that qualify for sale under
Rule 144 of the Securities Act may be sold under Rule 144 rather than under this
prospectus. The selling stockholders have agreed with Intuit in the registration
rights agreement not to sell any of the shares under this prospectus in an
underwritten offering without Intuit's prior written consent.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from the selling stockholders in amounts
to be negotiated in connection with the sale. Broker-dealers and any other
participating broker-dealers may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with the sales, and any commission,
discount or concession may be deemed to be underwriting discounts or commissions
under the Securities Act.
Intuit has advised the selling stockholders that the anti-manipulation
rules under the Exchange Act may apply to sales of shares in the market and to
the activities of the selling stockholders and their affiliates. The selling
stockholders have advised Intuit that during the time they may be engaged in the
attempt to sell registered shares, they will:
- not engage in any stabilization activity in connection with any of
Intuit's securities;
- not bid for or purchase any of Intuit's securities or any rights to
acquire Intuit's securities, or attempt to induce any person to purchase
any of Intuit's securities or rights to acquire Intuit's securities
other than as permitted under the Exchange Act;
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<PAGE> 14
- not sell or distribute the shares until after the prospectus has been
appropriately amended or supplemented, if required, to set forth the
terms thereof; and
- make all sales of shares in broker's transactions through broker-dealers
acting as agents, in transactions directly with market makers or in
privately negotiated transactions where no broker or other third party
(other than the purchaser) is involved.
The agreement between Intuit and the selling stockholders provides the
procedure that the selling stockholders must follow before they sell shares
under this prospectus. First, a selling stockholder must give written notice to
Intuit that he intends to sell shares. Then, within three trading days after
Intuit receives the notice, Intuit must either notify the selling stockholder
that Intuit believes that this prospectus is current or that it should be
amended before it is used in connection with any sales of shares. If this
prospectus should be amended, Intuit has agreed to file an amendment as soon as
practicable. If Intuit notifies the selling stockholder that it believes that
this prospectus is current, then the selling stockholder must sell the shares
during the next 20 trading days. There will be an interval of at least 3 trading
days between any two 20 trading day resale periods.
Intuit has the ability to suspend the use of this prospectus if, in the
good faith judgment of the board of directors of Intuit, it would be seriously
detrimental to Intuit and its stockholders for resales of shares to be made.
Each period of suspension may last up to 30 days, with a maximum of three
periods of suspension during this offering and a maximum of 60 consecutive days
of suspension.
This offering will terminate on the earlier of:
- May 3, 2000; or
- the date on which all shares offered have been sold by the selling
stockholders.
Intuit has agreed to pay the expenses of registering the shares under the
Securities Act, including registration and filing fees, printing expenses,
administrative expenses and certain legal and accounting fees. The selling
stockholders will bear all discounts, commissions or other amounts payable to
underwriters, dealers or agents as well as fees and disbursements for legal
counsel retained by any selling stockholder.
Intuit and the selling stockholders have agreed to indemnify each other
and certain other related parties for certain liabilities in connection with the
registration of the Shares offered hereby.
Upon the occurrence of any of the following events, a supplement to this
prospectus will be filed, if required, under Rule 424(b) under the Securities
Act to include additional disclosure before offers and sales of the securities
in question are made:
- to the extent the securities are sold at a fixed price or at a price
other than the prevailing market price, such price would be set forth in
the prospectus,
- if the securities are sold in block transactions and the purchaser acting
in the capacity of an underwriter wishes to resell, such arrangements
would be described in the prospectus,
- if the selling stockholders sell to a broker-dealer acting in the
capacity as an underwriter, such broker-dealer will be identified in the
prospectus
- if the compensation paid to broker-dealers is other than usual and
customary discounts, concessions or commissions, disclosure of the terms
of the transaction would be included in the prospectus; and
- if a selling stockholder notifies Intuit that a donee or pledgee intends
to sell more than 500 shares.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be passed upon
for Intuit by Fenwick & West LLP, Palo Alto, California.
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<PAGE> 15
EXPERTS
The consolidated financial statements of Intuit Inc. appearing in Intuit
Inc.'s Annual report (Form 10-K) for the year ended July 31, 1998, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
The combined financial statements of Lacerte Software Corporation and
Lacerte Educational Services Corporation incorporated in this prospectus by
reference to the audited historical financial statements as of March 31, 1997
and 1998 and for each of the three years in the period ended March 31, 1998
included as Exhibit 99.02 to Intuit Inc.'s Form 8-K dated May 18, 1998 have been
so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given upon the authority of said firm as experts in
auditing and accounting.
DOCUMENTS INCORPORATED BY REFERENCE IN THIS
PROSPECTUS
The SEC allows Intuit to "incorporate by reference" the information that
Intuit files with the SEC. This means that Intuit can disclose important
information by referring the reader to those SEC filings. The information
incorporated by reference is considered to be part of this prospectus, and later
information Intuit files with the SEC will update and supersede this
information. Intuit incorporates by reference the documents listed below and any
future filings made with the SEC under Section 13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934 until termination of the offering:
- Annual report on Form 10-K for the fiscal year ended July 31, 1998.
- Quarterly report on Form 10-Q for the quarter ended October 31,
1998.
- Quarterly report on Form 10-Q for the quarter ended January 31,
1999.
- Quarterly report on Form 10-Q for the quarter ended April 30, 1999.
- Current report on Form 8-K dated May 18, 1998.
- Current report on Form 8-K/A, Amendment No. 2, dated May 18, 1998
and filed on May 22, 1998.
- Current report on Form 8-K dated June 22, 1998 and filed on July 6,
1998.
- Current report on Form 8-K/A, Amendment No. 1, dated June 22, 1998
and filed on September 8, 1998.
- Current report on Form 8-K dated October 5, 1998.
- Current report on Form 8-K dated May 3, 1999.
- Current report on Form 8-K/A, Amendment No. 1, dated May 3, 1999
and filed on June 14, 1999.
- The description of Intuit's common stock contained in Intuit's
registration statement on Form 8-A, and any amendment or report
filed for the purpose of updating such description.
- The description of Intuit's Preferred Stock Purchase Rights
contained in Intuit's registration statement on Form 8-A, and any
amendment or report filed for the purpose of updating such
description.
SOME OF THE INFORMATION ABOUT INTUIT THAT MAY BE IMPORTANT TO AN
INVESTMENT DECISION IS NOT PHYSICALLY INCLUDED IN THIS PROSPECTUS. INSTEAD, THE
INFORMATION IS "INCORPORATED" INTO THIS PROSPECTUS BY REFERENCE TO ONE OR MORE
DOCUMENTS THAT INTUIT FILED WITH THE SEC. THESE DOCUMENTS (INCLUDING ANY
EXHIBITS THAT ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO THE INFORMATION
THAT THIS PROSPECTUS INCORPORATES) ARE AVAILABLE UPON REQUEST WITHOUT CHARGE
FROM INVESTOR RELATIONS, INTUIT INC., 2550 GARCIA AVENUE, P.O. BOX 7850 MOUNTAIN
VIEW CALIFORNIA 94039-7850 (TELEPHONE NUMBER (650) 944-2713). RECIPIENTS SHOULD
MAKE ALL REQUESTS FOR DOCUMENTS BY THE FIFTH BUSINESS DAY BEFORE THEY MAKE THEIR
FINAL INVESTMENT DECISION, TO BE SURE THE DOCUMENTS ARRIVE ON TIME. INFORMATION
THAT HAS BEEN INCORPORATED BY REFERENCE IS CONSIDERED PART OF THIS
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<PAGE> 16
PROSPECTUS AND DISCLOSED TO INVESTORS, WHETHER OR NOT INVESTORS OBTAIN A COPY OF
THE DOCUMENT CONTAINING THE INFORMATION.
This prospectus may contain information that updates, modifies or is
contrary to information in one or more of the documents incorporated by
reference in this prospectus. Reports Intuit files with the SEC after the date
of this prospectus may also contain information that updates, modifies or is
contrary to information in this prospectus or in documents incorporated by
reference in this prospectus. Investors should review these reports as they may
disclose a change in the business, prospects, financial condition or other
affairs of Intuit after the date of this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
The documents incorporated by reference into this prospectus are available
from us upon request. We will provide a copy of any and all of the information
that is incorporated by reference in this prospectus, not including exhibits to
the information unless those exhibits are specifically incorporated by reference
into this proxy statement prospectus, to any person, without charge, upon
written or oral request.
Requests for documents should be directed to Investor Relations, Intuit
Inc., 2550 Garcia Avenue, P.O. Box 7850 Mountain View California 94039-7850;
telephone number (650) 944-2713.
We file reports, proxy statements and other information with the
Securities and Exchange Commission. Copies of our reports, proxy statements and
other information may be inspected and copied at the public reference facilities
maintained by the SEC:
Judiciary Plaza Citicorp Center Seven World Trade Center
Room 1024 5000 West Madison Street 13th Floor
450 Fifth Street, N.W. Suite 1400 New York, New York 10048
Washington, D.C. 20549 Chicago, Illinois 60661
Copies of these materials can also be obtained by mail at prescribed rates
from the Public Reference Section of the SEC, 450 Fifth Street, N.W.,
Washington, D.C. 20549 or by calling the SEC at 1-800-SEC-0330. The SEC
maintains a Website that contains reports, proxy statements and other
information regarding each of us. The address of the SEC Website is
http://www.sec.gov.
Intuit has filed a registration statement under the Securities Act with
the Securities and Exchange Commission with respect to the shares to be sold by
the selling stockholders. This prospectus has been filed as part of the
registration statement. This prospectus does not contain all of the information
set forth in the registration statement because certain parts of the
registration statement are omitted in accordance with the rules and regulations
of the SEC. The registration statement is available for inspection and copying
as set forth above.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF
AN OFFER TO PURCHASE, THE SECURITIES OFFERED BY THIS PROSPECTUS IN ANY
JURISDICTION TO OR FROM ANY PERSON TO WHOM OR FROM WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER, SOLICITATION OF AN OFFER OR PROXY SOLICITATION IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY DISTRIBUTION OF SECURITIES
PURSUANT TO THIS PROSPECTUS SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH OR
INCORPORATED HEREIN BY REFERENCE OR IN OUR AFFAIRS SINCE THE DATE OF THIS
PROSPECTUS.
16
<PAGE> 17
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INTUIT INC.
288,816 Shares of
Common Stock
--------------------
PROSPECTUS
--------------------
JUNE 14, 1999
================================================================================
