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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): OCTOBER 27, 1998
NETMANAGE, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 0-15067 77-0252226
(State of Incorporation) (Commission File Number) (IRS Employer Identification No.)
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10725 NORTH DE ANZA BOULEVARD
CUPERTINO, CALIFORNIA 95014
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (408) 973-7171
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ITEM 5. OTHER EVENTS.
On October 27, 1998, in connection with the announcement of its
financial results for the three- and nine-month periods ended September 30,
1998, NetManage, Inc., a Delaware corporation (the "Company"), announced that
its Board of Directors has authorized the Company to institute a stock
repurchase program whereby up to 4,000,000 shares of the Company's Common Stock
may be repurchased in the open market from time to time, as more particularly
described in such press release, a copy of which is filed as an exhibit hereto
and incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) EXHIBITS
99.1 The Company's press release dated October 27, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NETMANAGE, INC.
Date: October 27, 1998 By:/s/ Gary R. Anderson
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Gary R. Anderson,
Chief Financial Officer and Senior Vice
President, Finance
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EXHIBIT INDEX
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EXHIBIT NO. TITLE
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99.1 The Company's press release dated October 27, 1998.
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Contact: Gary Anderson
Chief Financial Officer
NetManage, Inc.
(408) 973-7171
[email protected]
NETMANAGE, INC. ANNOUNCES THIRD QUARTER FINANCIAL RESULTS
AND STOCK REPURCHASE PROGRAM
CUPERTINO, CALIF., OCTOBER 27, 1998 - NetManage, Inc. (Nasdaq: NETM), a
worldwide leader in complete PC Connectivity solutions, today announced its
results for the three- and nine- month periods ended September 30, 1998. The
results reflect the acquisition of FTP Software, Inc. and one month's
operational activity of the combined organization. Net revenues for the third
quarter of 1998 were $17.1 million, compared to net revenues of $13.6 million
for the same period in 1997, an increase of 26%. The net loss for the third
quarter of 1998 was $7.0 million, or $0.12 per share, compared to a net loss of
$26.9 million, or $0.62 per share, for the same period in 1997. The loss from
operations excluding $7.0 million of 1998 restructuring charges was $1.7 million
and $6.0 million for the three and nine months ended September 30, 1998,
respectively. The loss from operations for the same periods in 1997 excluding
the write-off of in-process R&D and the restructuring charge was $7.3 million
and $17.2 million for the three months and nine months ended September 30, 1997,
respectively.
For the nine months ended September 30, 1998, net revenues were $48.9
million, compared to net revenues of $42.6 million for the same period in 1997.
The net loss for the nine months ended September 30, 1998 was $9.2 million, or
$0.19 per share, compared to a net loss of $34.2 million, or $0.79 per share,
for the same period in 1997.
"The acquisition of FTP Software was completed on August 27, 1998 and
the integration of the organization into NetManage is proceeding as anticipated.
The combined strengths of NetManage and FTP Software create an organization with
expertise in traditional connectivity and web-to-host access as well as
centrally managed network administration and server-based connectivity
solutions. We believe the acquisition of FTP positions us ahead of the market as
it moves toward server-based and web information access solutions. In addition,
the combination has resulted in an even stronger balance sheet for the combined
Company, with $131.2 million in cash and investments," stated Zvi Alon,
president and CEO of NetManage. Other significant accomplishments in the quarter
include the release of Chameleon UNIX(R)Link v8.0 and Chameleon HostLink(TM)
v8.0, the recently announced agreement with Dell Computer Corporation to
factory-install OnNet(R) Host Suite on
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Dell PowerEdge(R) servers equipped with Microsoft Windows NT Server, Terminal
Server Edition (NTS/TSE) and the recently announced licensing of SupportNow(TM)
by DPI Services. The acquisition has been accounted for under the purchase
method of accounting. As a result, the Company recorded $27.8 million of
goodwill to be amortized over the next seven years.
NetManage also announced today that it has been authorized by its Board
of Directors to institute a stock repurchase program whereby up to 4 million
shares of its Common Stock may be repurchased in the open market from time to
time. "Our Board of Directors felt that an investment in our own stock would be
beneficial to the Company and its stockholders," Alon noted. "The Company
intends to use the reacquired shares for general uses as well as reissuance in
employee stock option programs."
ABOUT NETMANAGE, INC.
Founded in 1990, NetManage, Inc. provides complete PC Connectivity
solutions, offering world-class Windows applications for connecting to UNIX,
AS/400 midrange and IBM mainframe host systems. The Company also provides real
time support tools for independent software vendors and corporations. NetManage
helped drive the emergence of open networks through its TCP/IP applications and
its significant contributions to important industry standards including both
WinSock and NS/Router. NetManage is headquartered in Cupertino, California. The
Company's products are sold and serviced worldwide by NetManage's direct sales
force, international subsidiaries and authorized channel partners. Additional
information is available at http://www.netmanage.com, by sending e-mail to
[email protected] or by calling (408) 973-7171.
# # #
This press release contains, in addition to historical information,
forward-looking statements that involve risks and uncertainties, including
statements regarding improvement in the Company's competitive position, the
Company's entry into the market for real-time customer support over the
Internet, and the progress and benefits of the Company's execution on its
business plan. The Company's actual results could differ materially from the
results discussed in the forward-looking statements. The factors that could
cause or contribute to such differences include, among others, that the markets
for the Company's products, including but not limited to Chameleon UNIX Link 97,
Chameleon HostLink 97, OnNet(R) Host, OnWeb(TM) Host, InterDrive(R) and N/S
Portfolio(TM), could grow more slowly than the Company or market analysts
believe, or that the Company will not be able to take advantage of growth in the
Company's target markets. In addition, there is no assurance that the Company's
products for real-time customer support over the Internet will continue to
receive customer acceptance, especially in light of the early stage of
development of the markets for such Internet-based applications; that the
Company will not suffer increased competitive pressures; that corporate buying
decisions will not be influenced by the actions of the Company's competitors or
other market factors or by the Company's acquisition of FTP Software; that the
Company will be able to retain and hire sufficient qualified personnel following
the acquisition of FTP Software by NetManage and the restructuring of the
companies' operations effected in connection with the integration of the
companies; that Company will be able to realize on new business opportunities
that may exist as a result of the acquisition of FTP Software; or that the
Company will continue to progress in the execution of its business plan.
Additional information on these and other risk factors that could affect the
Company's financial results is included in the Company's Annual Report on Form
10-K, Forms 10-Q, Forms 8-K and other documents filed with the Securities and
Exchange Commission.
# # #
NetManage, Chameleon, Chameleon HostLink, N/S Portfolio, SupportNow, the
NetManage logo and the lizard-in-the-box logo are trademarks or registered
trademarks of NetManage, Inc. in the United States and elsewhere. FTP Software,
OnNet, OnWeb and InterDrive are trademarks or registered trademarks of FTP
Software, Inc. in the United States and elsewhere. UNIX is a registered
trademark in the U.S. and other countries, licensed exclusively through X/Open
Company, Limited. IBM and AS/400 are registered trademarks in the U.S. and other
countries of International Business Machines Corporation. All other trademarks
are the property of their respective owners.
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NETMANAGE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
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Three Months Ended Nine Months Ended
September 30, September 30,
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1998 1997 1998 1997
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Net revenues:
License fees $ 12,890 $ 9,774 $ 37,451 $ 31,017
Services 4,198 3,782 11,490 11,619
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Total net revenues 17,088 13,556 48,941 42,636
Cost of revenues 547 889 2,243 2,913
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Gross margin 16,541 12,667 46,698 39,723
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Operating expenses:
Research and development 4,160 5,585 13,264 16,453
Sales and marketing 9,812 10,927 28,714 31,744
General and administrative 3,504 3,186 8,927 8,020
Amortization of goodwill 802 228 1,759 748
Write-off of in process research and
development 16,001 16,001
Restructuring charge 7,034 5,172 7,034 5,172
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Total operating expenses 25,312 41,099 59,698 78,138
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Loss from operations* (8,771) (28,432) (13,000) (38,415)
Interest income and other, net 1,401 1,112 2,818 3,729
Equity in income of unconsolidated affiliate 374 418 1,027 497
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Loss before income taxes (6,996) (26,902) (9,155) (34,189)
Benefit (provision) for income taxes 7 - (8) -
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Net loss $ (6,989) $ (26,902) $ (9,163) $ (34,189)
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Net loss per share $ (0.12) $ (0.62) $ (0.19) $ (0.79)
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Weighted average common shares and equivalents 56,591 43,454 48,159 43,322
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* Excluding the effects of the 1998 restructuring charge, the loss from
operations was $1,737 and $5,966 for the three and nine months ended September
30, 1998, respectively. Excluding the effects of the 1997 write-off of in
process R&D and the 1997 restructuring charge, the loss from operations was
$7,259 and $17,242 for the three months and nine months ended September 30,
1997, respectively.
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CONDENSED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
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September 30, December 31,
1998 1997
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(Unaudited) (Audited)
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Cash and cash equivalents $ 57,408 $ 12,706
Short-term investments 31,302 36,845
Accounts receivable, net 13,065 13,408
Other current assets 21,506 15,726
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Total current assets 123,281 78,685
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Property and equipment, net 9,863 8,831
Long-term investments 42,489 19,734
Goodwill 29,513 3,185
Other assets 9,606 9,158
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$ 214,752 $ 119,593
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Current liabilities $ 52,209 $ 23,143
Long-term liabilities 247 363
Stockholders' equity 162,296 96,087
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$ 214,752 $ 119,593
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