<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
MAY 3, 1999
INTUIT INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 0-21180 77-0034661
(State of incorporation) (Commission file no.) (I.R.S.employer
identification no.)
2535 GARCIA AVENUE
MOUNTAIN VIEW, CALIFORNIA 94043
(Address of principal executive offices, including zip code)
(415) 944-6000
(Registrant's telephone number, including area code)
<PAGE> 2
<TABLE>
CONTENTS
<S> <C> <C>
Item 2: Acquisition or Disposition of Assets ..............................................3
Item 7: Financial Statements and Exhibits .................................................3
(a) Financial Statements of Computing Resources Inc...........................3
(b) Pro Forma Financial Information..........................................14
(c) Exhibits.................................................................19
Signatures ...............................................................................20
</TABLE>
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<PAGE> 3
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On May 5, 1999, Intuit Inc. filed a Form 8-K to report its
completion of the acquisition of Computing Resources, Inc. ("CRI"). Pursuant to
Item 7 of Form 8-K, Intuit indicated that it would file certain financial
information no later than the date required by Item 7 of Form 8-K. This
Amendment No. 1 is being filed to provide such financial information.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF COMPUTING RESOURCES, INC.
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<PAGE> 4
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
Computing Resources, Inc.
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of retained earnings and of cash flows
present fairly, in all material respects, the financial position of Computing
Resources, Inc. (the Company) at December 31, 1998, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our audit
of these statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
As discussed in Note 10, on March 2, 1999, the Company's stockholders agreed to
sell 100% of the stock in the Company to Intuit Inc.
PRICEWATERHOUSECOOPERS LLP
Sacramento, California
April 1, 1999
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<PAGE> 5
COMPUTING RESOURCES, INC.
CONSOLIDATED BALANCE SHEET
- --------------------------------------------------------------------------------
For the year ended December 31, 1998
<TABLE>
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents $1,949,547
Accounts receivable - trade 488,216
Due from stockholders 185,389
Interest receivable 400,396
Prepaid expenses 180,637
Other 40,677
----------
Total current assets 3,244,862
Property and equipment, net 2,941,976
Note receivable from employee 156,490
Other assets 34,155
----------
Total assets $6,377,483
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 265,268
Line of credit 2,000,000
Accounts payable 1,081,401
Accrued payroll and related items 436,265
Accrued expenses 474,384
----------
Total current liabilities 4,257,318
Long-term debt, net of current maturities 223,802
----------
Total liabilities 4,481,120
----------
Commitments and Contingencies (Notes 4 and 5)
Minority interest 243,181
----------
Stockholders' equity:
CommKn stock, no par value, 2,500 shares authorized,
2,093 shares issued and outstanding 366,800
Retained earnings 1,286,382
----------
Total stockholders' equity 1,653,182
----------
Total liabilities and stockholders equity $6,377,483
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE> 6
COMPUTING RESOURCES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS AND RETAINED EARNINGS
- --------------------------------------------------------------------------------
For the year ended December 31, 1998
<TABLE>
<S> <C>
INCOME:
Service income $ 31,992,985
Other income 484,785
------------
Total income 32,477,770
------------
EXPENSES:
Operating 23,620,307
General and administrative 2,017,328
Depreciation and amortization 1,018,321
------------
Total expenses 26,655,956
------------
Income from operations 5,821,814
------------
OTHER EXPENSE:
Interest expense 74,562
Other 10,580
------------
Total other expenses 85,142
------------
Income before income taxes and minority interest 5,736,672
Income taxes 72,123
------------
Income before minority interest 5,664,549
Minority interest in subsidiary net income 58,340
------------
Net income 5,606,209
Retained earnings, beginning of year 6,284,226
Stockholder distributions (10,604,053)
------------
Retained earnings, end of year $ 1,286,382
============
Basic and diluted earnings per share $ 2,679
============
Basic and diluted shares outstanding 2,093
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-6-
<PAGE> 7
COMPUTING RESOURCES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C>
Net income $ 5,606,209
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 1,018,321
Deferred income taxes, net 6,246
Gain on disposition of equipment (41,974)
Minority interest in subsidiary net income 58,340
Changes in certain components of working capital
(Increase) decrease in assets:
Accounts receivable - trade (192,761)
Due from stockholders (344,582)
Interest receivable 120,573
Prepaid expenses 349,173
Other (14,445)
Increase (decrease) in liabilities:
Accounts payable (658,705)
Accrued payroll taxes 4,693
Accrued expenses 181,062
------------
Net cash provided by operating activities 6,092,150
============
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of available-for-sale securities 2,150,000
Proceeds from disposition of equipment 63,810
Purchase of property, plant and equipment (753,412)
Collections on loan to employee 3,690
------------
Net cash provided by investing activities 1,464,088
------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt (336,661)
Borrowing proceeds from line of credit 2,000,000
Stockholder distributions (10,362,935)
------------
Net cash used in financing activities (8,699,596)
------------
Net decrease in cash and cash equivalents (1,143,358)
Cash and cash equivalents, beginning of year 3,092,905
------------
Cash and cash equivalents, end of year $ 1,949,547
============
SUPPLEMENTAL CASH FLOW DATA:
Cash paid during the year for:
Interest $ 75,594
============
State income taxes $ 70,901
============
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Purchase of equipment financed under capital lease $ 52,541
============
Distribution to stockholders by reduction of amounts due from stockholders $ 241,118
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE> 8
COMPUTING RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS
Computing Resources, Inc. (Company) primarily provides payroll processing
and payroll tax filing services to customers located throughout the United
States. The Company establishes relationships with banks and provides its
services to the banks' customers. The Company obtains new customers
generally through the sales efforts of these banks.
BASIS OF CONSOLIDATION
The consolidated financial statements of the Company include the accounts of
Computing Resources, Inc. and its 79% owned subsidiary, Computing
Transaction Corporation. All significant intercompany accounts and
transactions have been eliminated upon consolidation.
PAYROLL TAX FILING SERVICES
In connection with its payroll processing and payroll tax filing services,
the Company files on behalf of customers federal and state tax returns,
handles related regulatory correspondence and amendments, absorbs regulatory
charges for certain penalties and interest, collects funds for payment of
taxes due, holds such funds in trust until payment is due, and remits the
funds to the appropriate taxing authority. For such services, the Company
receives fees from customers and an investment return on funds which are
held in trust. Funds held in trust are invested in various money market
accounts and municipal securities. The amount of collected but unremitted
funds varies significantly during the year and averaged $101.5 million in
1998. The amount of such funds as of December 31, 1998, approximated $160.5
million.
The Company's payroll tax filing service is subject to various risks
resulting from errors and omissions in the payment of payroll taxes and
related payroll tax filings. Errors and omissions have occurred in the past
and may occur in the future in connection with such services. The Company
reimburses their customers for penalties imposed by tax authorities for late
filings or underpayment of taxes which are a direct result of the Company's
actions. To date such penalties have not been significant. However, there
can be no assurance that any liabilities associated with such penalties will
not have a material adverse effect on the Company's business, financial
condition or results of operations. In 1998, the Company had incurred
approximately $416,000 of payroll warranty costs as a result of errors made
by the Company.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities and the reported amounts of
revenue and expense during the period. Actual results could differ from
these estimates.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid debt instruments purchased with
original maturities of three months or less to be cash equivalents.
CONCENTRATION OF CREDIT RISK
The Company and its subsidiary maintain cash accounts in several commercial
banks and with an investment services company. The bank accounts are insured
by the Federal Deposit Insurance Corporation (FDIC) up to $100,000 per bank
per company. The investment services company provides insurance by the
Security Investors Protection Corporation (SIPC) which insures cash balances
up to $100,000 and securities up to $400,000. At December 31, 1998,
approximately $516,000 of the Company's cash deposit is insured. A
significant portion of the Company's existing and new customers are derived
from a single banking relationship; approximately 70% of the Company's
service revenue is derived from services provided to this bank's customers.
-8-
<PAGE> 9
COMPUTING RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost. Depreciation is computed
using both straight-line and accelerated methods. Purchased software is
stated at cost. Amortization is computed using the straight-line method over
lives ranging from three to five years.
The estimated useful lives of the assets are:
<TABLE>
<CAPTION>
YEARS
-----
<S> <C>
Computer rental equipment 5
Software 3 - 5
Machinery and equipment 3 - 10
Furniture and fixtures 3 - 10
Automobiles 3 - 5
Leasehold improvements 8 - 39
</TABLE>
Maintenance, repairs and renewals that neither materially add to the value
of the asset nor appreciably prolong its life are charged to expense as
incurred. Gains and losses on dispositions of property and equipment are
included in income. The Company capitalizes interest as a component of
property, plant and equipment constructed for its own use. No interest was
capitalized in 1998.
REVENUE RECOGNITION
Revenue from payroll processing and payroll tax filing services under client
contracts is recognized as the services are performed. Interest income
earned on unremitted payroll tax funds invested is recognized as earned and
reflected as a component of service income.
INCOME TAXES
The Company has elected to be taxed under the provisions of Subchapter S of
the Internal Revenue Code. Under those provisions, the Company does not pay
federal corporate income taxes on its taxable income. Instead, the
stockholders are liable for individual federal income taxes on their
respective shares of the Company's taxable income.
The Company has not made such an election for state income tax purposes and
is, therefore, subject to state income taxes on cash basis income earned
outside the State of Nevada, as Nevada has no state income tax.
Computing Transaction Corporation, a subsidiary of the Company, has not
elected Subchapter S status and calculates federal and state income taxes
based on accrual basis income.
The Company reports income taxes in accordance with Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes, which requires
the liability method in accounting for income taxes. Deferred tax assets and
liabilities arise from the differences between the tax basis of an asset or
liability and its reported amount in the financial statements.
Deferred tax amounts are determined by using the tax rates expected to be in
effect when the taxes will actually be paid or refunds received, as provided
under currently enacted tax law. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be
realized.
BASIC AND DILUTED EARNINGS PER SHARE
Earnings per share is calculated using the weighted average number of shares
of common stock outstanding. The Company has not issued any common stock
options or warrants. As a result there is no difference between basic and
diluted earnings per share.
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<PAGE> 10
COMPUTING RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In 1998, the Company adopted Statement of Financial Accounting Standards No.
130, Reporting Comprehensive Income (Statement 130). Statement 130
establishes new rules for the reporting and display of comprehensive income
and its components; however, the adoption of this Statement had no impact on
the Company's net income or stockholders' equity. The Company did not have
any items required to be included in other comprehensive income during 1998.
In 1998, the Company adopted Statement of Financial Accounting Standards No.
131, Disclosures About Segments of an Enterprise and Related Information
(Statement 131). Statement 131 establishes standards for the way that
enterprises subject to the reporting requirements of the U.S. Securities and
Exchange Commission rules and regulations report selected information about
operating segments in annual financial statements and interim financial
reports. Statement 131 also establishes standards for related disclosures
about products and services, geographic areas, and major customers. Inasmuch
as the Company's activities are all directed at providing services related
to payroll processing, the Company believes that it operates in a single
business segment consistent with the objectives and basic principles of
Statement 131.
2. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is comprised of the following at December 31,
1998:
<TABLE>
<S> <C>
Computer rental equipment $ 493,909
Software 1,933,283
Machinery and equipment 7,487,044
Furniture and fixtures 1,365,823
Leasehold improvements 636,256
11,916,315
-----------
Less accumulated depreciation and amortization 8,974,339
-----------
$ 2,941,976
===========
</TABLE>
3. LONG-TERM DEBT
Long-term debt consists of the following at December 31, 1998:
<TABLE>
<S> <C>
Note payable to a financing company, due November 2000; monthly principal
and interest payments of $18,884; interest at various
rates up to 9.75%; collateralized by various equipment $406,818
Note payable to a financing company, due December 1, 1999; monthly
principal and interest payments of $3,892; interest
at 8.94%; collateralized by equipment 40,233
Capital lease obligations 42,019
--------
489,070
Less current maturities 265,268
--------
$223,802
========
</TABLE>
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<PAGE> 11
COMPUTING RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Notes to Consolidated Financial Statements
Notes payable and capital lease payments are as follows:
<TABLE>
<CAPTION>
NOTES CAPITAL LEASE
PAYABLE OBLIGATIONS TOTAL
<S> <C> <C> <C>
1999 $268,635 $ 18,931 $287,566
2000 202,880 18,931 221,811
2001 5,589 5,589
2002 2,291 2,291
2003 2,100 2,100
-------- -------- --------
471,515 47,842 519,357
-------- -------- --------
Less amounts
representing interest 24,464 5,823 30,287
-------- -------- --------
447,051 42,019 489,070
Less current maturities 249,594 15,674 265,268
-------- -------- --------
$197,457 $ 26,345 $223,802
======== ======== ========
</TABLE>
4. LINE OF CREDIT
In September 1998, the Company entered into a line of credit agreement with
a bank for a total commitment of $4 million which expires June 30, 2000. As
of December 31, 1998, the Company had drawn $2 million on the line which
bears interest at prime or LIBOR plus 1.35%, at the Company's option. During
1998, the Company elected to have interest calculated using the LIBOR option
(7% at December 31, 1998). For the year ended December 31, 1998, interest
expense on the line of credit totaled $33,064. The line of credit is
personally guaranteed by the shareholders.
The line of credit agreement contains certain restrictive covenants, which
require, among other things, the maintenance of defined levels of tangible
net worth and limitations on future indebtedness and payment of dividends.
At December 31, 1998, the Company did not comply with the covenant
requirements listed above for which the Company received waivers and
amendments in February 1999.
5. COMMITMENTS AND CONTINGENCIES
In addition to certain property leases with related parties as described in
Note 9, the Company leases office space and equipment under terms of various
operating leases. Certain leases contain renewal options ranging up to five
years.
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<PAGE> 12
COMPUTING RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The Company's future minimum lease payments under noncancelable leases,
including leases with related parties, are as follows:
<TABLE>
<S> <C>
1999 $1,191,967
2000 1,042,895
2001 844,598
2002 552,772
2003 528,282
Thereafter 214,846
----------
$4,375,360
==========
</TABLE>
Rental expense charged to operations for all operating leases for the year
ended December 31, 1998, approximated $1,129,000.
In the normal course of business, the Company is subject to various claims
and litigation. The Company does not believe that the resolution of these
matters will have a material impact on the consolidated financial
statements.
6. INCOME TAXES
At December 31, 1998, the Company's income tax provision consists of current
state income tax expense of approximately $66,000 and deferred tax expense
of approximately $6,000. Temporary differences relate to prepaid expenses,
accounts receivable, accumulated depreciation, accounts payable and accrued
expenses.
The net deferred tax amounts at December 31, 1998, consist of deferred tax
assets and deferred tax liabilities of approximately $9,000 and $3,000,
respectively.
In 1998, the Company's subsidiary used $300,482 of available federal net
operating loss carryforwards and $80,735 of available state net operating
loss carryforwards to offset federal and state taxable income. At December
31, 1998, there were no available state net operating loss carryforwards. At
December 31, 1998, available federal net operating loss carryforwards which
may be applied against future taxable income approximated $256,000; these
carryforwards expire from 2007 to 2010. As the utilization of these
carryforwards is uncertain, a valuation allowance of 100% of these amounts
has been recorded at December 31, 1998. Under the provisions of the Internal
Revenue Code, the amount and benefit from net operating loss carryforwards
may be limited in certain circumstances, including, but not limited to, a
cumulative stock ownership change of more than 50% over a three year period,
as defined.
7. HEALTH INSURANCE
The Company maintains a partially self-insured health plan for qualified
employees. The Company pays claims up to $35,000 per year per employee.
Total annual claims exceeding $410,000 are covered by a third party
insurance carrier. At December 31, 1998, the Company had accrued
approximately $143,000 relating to claims payable and an estimate of
incurred but unreported claims.
8. RETIREMENT PLAN
The Company has a 401(k) plan and trust (Plan) for the benefit of salaried,
hourly and commissioned employees. Eligible employees may elect to have
their compensation reduced by up to 20% for contributions to the Plan. The
Company may make discretionary contributions to the Plan. The Company did
not make a contribution to the Plan in 1998. Employees contributed
approximately $233,000 to the Plan during 1998.
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<PAGE> 13
COMPUTING RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
9. RELATED PARTY TRANSACTIONS
The principal stockholder of the Company is the owner of Nevada Typesetting,
which provides printing services and supplies to the Company. The Company
paid approximately $388,000 to Nevada Typesetting for services provided
during 1998. At December 31, 1998, accounts payable included $15,000 owed to
Nevada Typesetting. As discussed in Note 10, the Company acquired Nevada
Typesetting in January 1999.
The Company leases its principal facility from a company affiliated through
common ownership. The triple net lease commenced in January, 1994 for a
ten-year term. The current monthly rent of $31,782 is subject to annual
increases based on the Consumer Price Index.
The Company leases another building from a company affiliated through common
ownership. The triple net lease commenced in September 1995 for a ten year
term. The current monthly rent of $5,616 is subject to annual increases
based on the Consumer Price Index.
A disaster recovery facility, located in Fallon, Nevada is owned by a
company affiliated through common ownership. The affiliate and the Company
entered into a ten-year, triple net lease agreement to lease the property
commencing in January, 1996. The current monthly rent of $3,940 is subject
to annual increases based on the Consumer Price Index.
Rent expense paid to affiliates during 1998 approximated $497,000.
Management of the Company views the lease transactions with related parties
as arms length, which reflect current rental rates for equivalent properties
in the same location.
During 1998, the stockholders received net advances from the Company of
$120,573. Those advances bear interest at approximately 5.4%, which totaled
$6,000 for 1998.
10. SUBSEQUENT EVENTS
In January 1999, the Company purchased the assets of Nevada Typesetting from
the majority stockholder for approximately $645,000.
On March 2, 1999, the Company's stockholders agreed to sell 100% of their
stock in the Company to Intuit Inc. The sale is expected to be finalized in
May 1999.
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<PAGE> 14
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(b) PRO FORMA FINANCIAL INFORMATION
The following pro forma financial information is set forth to give effect to the
acquisition of CRI by Intuit Inc. as if the acquisition had taken place at
January 31, 1999 for purposes of the Unaudited Pro Forma Condensed Combining
Balance Sheet and at August 1, 1997 for purposes of the Unaudited Pro Forma
Condensed Combining Statements of Operations being presented. Periods presented
are being combined with CRI's Balance Sheet as of December 31, 1998 and
Statements of Operations for the twelve and six months ended June 30, 1998 and
December 31, 1998, respectively. The Unaudited Pro Forma Condensed Combining
Balance Sheet and Statements of Operations are not necessarily indicative of the
financial position or operating results that would have occurred if the
acquisition had actually occurred on such dates and do not purport to project
the results of operations of the Company for the current year or for any future
period. The adjustments in the Unaudited Pro Forma Condensed Combining Financial
Information are based on available information and on certain assumptions and
best estimates available to management at the time of this filing. All
information contained herein should be read in conjunction with the Consolidated
Financial Statements and the Notes thereto of Intuit and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included in Intuit's 1998 Annual Report, Form 10Q for the first and second
quarters of fiscal 1999, the Financial Statements and Notes thereto of CRI
included in this Form 8-K/A, and the Notes to the Unaudited Pro Forma Condensed
Combining Balance Sheets and Statements of Operations.
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<PAGE> 15
INTUIT INC. AND
COMPUTING RESOURCES, INC.
UNAUDITED PRO FORMA CONDENSED COMBINING BALANCE SHEET
<TABLE>
<CAPTION>
PRO FORMA
INTUIT CRI ---------
1/31/99 12/31/98 ADJUSTMENTS COMBINED
------- ------- ----------- --------
(in thousands)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........... $ 163,030 $1,950 (100,000)(a) $ 64,980
Short-term investments.............. 282,300 -- 282,300
Marketable Securities .............. 1,110,919 -- 1,110,919
Accounts receivable, net............ 241,276 488 241,764
Due from stockholders .............. -- 185 185
Interest receivable ................ -- 401 401
Inventories......................... 5,865 -- 5,865
Prepaid expenses and other.......... 50,713 221 50,934
Deferred income..................... -- -- --
---------- ------ ----------
Total current assets........ 1,854,103 3,245 1,757,348
Property and equipment, net........... 77,545 2,942 80,487
Purchased intangibles and Goodwill.... 329,220 199,847 (a) 529,067
Note receivable from employee......... -- 156 156
Investments .......................... 17,483 -- 17,483
Restricted Investments ............... 35,454 -- 35,454
Long-term deferred income tax asset... 21,006 -- 21,006
Other assets.......................... 9,984 34 -- 10,018
---------- ------ -------- ----------
Total assets.......................... $2,344,795 $6,377 99,847 $2,451,019
========== ====== ======== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.................... $69,825 $1,081 $ 70,906
Accrued compensation and related
liabilities........................ 28,611 436 29,047
Deferred revenue.................... 45,979 -- 45,979
Income taxes payable................ 575 -- 575
Deferred Income Taxes............... 366,112 -- 366,112
Line of credit...................... 2,000 2,000
Other accrued liabilities........... 229,739 740 76,500 (a) 306,979
---------- ------ -------- ----------
Total current liabilities... 740,841 4,257 821,598
Deferred income taxes................. 883 -- 883
Long-term notes payable............... 39,276 224 39,500
Commitments and contingencies
Minority interest .................... 243 243
Stockholders' equity:
Common stock........................ 611 21 (21)(b)
3 (a) 614
Additional paid-in capital.......... 1,148,013 346 (346)(b)
24,997 (a) 1,173,010
Net unrealized gain on marketable
securities......................... 552,413 -- 552,413
Cumulative translation adjustment
and other.......................... (2,521) (2,521)
Accumulated earnings (deficit)...... (134,721) 1,286 (1,286) (b) (134,721)
---------- ------ -------- ----------
Total stockholders'
equity.................... 1,563,795 1,653 -- 1,588,795
---------- ------ -------- ----------
Total liabilities and stockholders'
equity.............................. $2,344,795 $6,377 99,847 $2,451,019
========== ====== ======== ==========
</TABLE>
See accompanying notes.
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<PAGE> 16
INTUIT INC. AND
COMPUTING RESOURCES, INC.
UNAUDITED PRO FORMA CONDENSED COMBINING STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
INTUIT CRI PRO FORMA
FOR THE YEAR FOR THE 12 MO ---------
ENDED ENDED
7/31/98 6/30/98 ADJUSTMENTS COMBINED
------- ------- ----------- --------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Net revenue............................. $592,736 $31,118 $623,854
Costs and expenses:
Cost of goods sold:
Product............................ 120,538 7,781 128,319
Amortization of purchased software
and other...................... 2,905 2,905
Customer service and technical support 117,714 14,346 132,060
Selling and marketing................. 164,834 164,834
Research and development.............. 108,604 108,604
General and administrative............ 36,719 2,759 39,478
Charge for purchased research and
development........................ 53,800 53,800
Other acquisition costs, including
amortization of goodwill and purchased
intangibles........................ 24,204 -- 39,969(c) 64,173
--------- ------- --------
Total costs and expenses...... 629,318 24,886 694,173
--------- ------- --------
Income (loss) from operations. (36,582) 6,232 (70,319)
--------- ------- --------
Interest and other income and expense,
net.................................. 12,438 (65) 12,373
Gain on disposal of business ........... 4,321 -- 4,321
--------- ------- --------
Income/(loss) before income taxes....... (19,823) 6,167 (53,625)
Provision (benefit) for income taxes.... (7,666) 42 (13,830)(e) (21,454)
--------- ------- --------
Income/(loss) before minority interest.. (12,157) 6,125 (32,171)
Minority interest....................... -- 18 18
Net income (loss)....................... $ (12,157) $ 6,107 $(32,189)
========= ======= ========
Basic net loss per share ............... $ (0.24) $ (0.64)
========= ========
Shares used in computing net loss
per share............................ 49,676 289(d) 49,965
========= ========
Diluted net loss per share.............. $ (0.24) $ (0.64)
========= ========
Shares used in computing net loss
per share ........................... 49,676 289(d) 49,965
========= ========
</TABLE>
See accompanying notes.
-16-
<PAGE> 17
INTUIT INC. AND
COMPUTING RESOURCES, INC.
UNAUDITED PRO FORMA CONDENSED COMBINING STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
INTUIT CRI PRO FORMA
FOR THE 6 MO. FOR THE 6 MO. ---------
ENDED ENDED
1/31/99 12/31/98 ADJUSTMENTS COMBINED
--------- -------- ----------- --------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Net revenue............................ $457,919 $15,725 $473,644
Costs and expenses:
Cost of goods sold:
Product........................... 101,030 3,788 104,818
Amortization of purchased
software and other.............. 3,701 3,701
Customer service and technical
support.......................... 69,755 8,183 77,938
Selling and marketing................ 107,636 107,636
Research and development............. 70,021 70,021
General and administrative........... 26,268 1,665 27,933
Amortization of goodwill and
purchased intangibles............. 41,932 19,985 (c) 61,917
-------- ------- --------
Total costs and expenses..... 420,343 13,636 453,964
======== ======= ========
Income from operations....... 37,576 2,089 19,680
Interest and other income and
expense, net....................... 7,298 (77) 7,221
Realized gain on sale of marketable
securities......................... 10,088 -- 10,088
-------- ------- --------
Net income before income taxes........ 54,962 2,012 36,989
Provision for income taxes............. 14,295 5 (7,290) (e) 7,010
-------- ------- --------
Net income before minority interest.... 40,667 2,007 29,979
Minority interest...................... -- 51 51
-------- ------- --------
Net income ............................ $ 40,667 $ 1,956 $ 29,928
======== ======= ========
Basic net income per share............. $ 0.68 $ 0.50
======== ========
Shares used in per share amounts....... 59,837 289 (d) 60,126
======== ========
Diluted net income per share........... $ 0.65 $ 0.48
======== ========
Shares used in per share amounts....... 62,379 289 (d) 62,668
======== ========
</TABLE>
See accompanying notes.
-17-
<PAGE> 18
INTUIT INC. AND
COMPUTING RESOURCES INCORPORATED
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINING
BALANCE SHEET AND STATEMENTS OF OPERATIONS
The following pro forma adjustments are required to allocate the purchase price
and acquisition cost to the assets acquired from Computing Resources
Incorporated ("CRI") based on their fair value, as determined by Intuit.
(a) Reflects the estimated allocation of the purchase price, based on fair
market values, to the historical balance sheet. Purchase price represents
$100 million cash payment, $25 million stock payment, three annual future
cash payments of $25 million and estimated acquisition costs of $1.5
million.
(b) Represents the elimination of CRI's equity accounts.
(c) Amortization of intangible assets and goodwill are based on an estimated
life of five years. Actual results may differ from these estimates upon
completion of the purchase price allocation in Intuit's fiscal fourth
quarter of 1999.
(d) Reflects an increase in common stock for the shares issued in connection
with the purchase price of CRI for the net assets acquired.
(e) Reflects estimated tax effect of treating CRI as a C corporation instead of
an S corporation combined with the estimated tax benefit of intangibles
amortization.
-18-
<PAGE> 19
(c) EXHIBITS
23.01 Consent of Independent Accountants
-19-
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the securities Exchange Act of 1934, the
Registrant has full caused this amendment to report to be signed on its behalf
by the undersigned, thereunto fully authorized.
INTUIT INC.
Date: June 14, 1999 /s/ Greg Santora
--------------------- -----------------------------
Greg Santora
Senior Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
-20-
<PAGE> 21
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number Description
<S> <C>
23.01 Consent of Independent Accountants
</TABLE>
<PAGE> 1
EXHIBIT 23.01
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in Intuit Inc.'s Current Reports on Form 8-K/A
dated June 14, 1999 of our report dated April 1, 1999 relating to the December
31, 1998 financial statements of Computing Resources, Inc.
/s/ PRICEWATERHOUSECOOPERS LLP
Sacramento, California
June 14, 1999
