<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 10, 1999
NETMANAGE, INC.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
DELAWARE 0-22158 77-0252226
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
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10725 NORTH DE ANZA BOULEVARD, CUPERTINO, CALIFORNIA 95014
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (408) 973-7171
N/A
(Former name or former address, if changed since last report)
<PAGE> 2
The Registrant hereby amends Parts (a) and (b) of Item 7, Financial Statements
and Exhibits, of its report on Form 8-K filed on December 23, 1999, to read in
full as follows:
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of business acquired.
The consolidated financial statements of Simware for the
years ended April 30, 1997, 1998 and 1999 contained in
Simware's Form 20-F filed July 30, 1999, are incorporated
herein by this reference. The unaudited consolidated balance
sheet for Simware as of October 31, 1999 and the related
statements of earnings and retained earnings for the
six-month period ended October 31, 1999 are attached hereto
as Exhibit 99.1 and incorporated herein by this reference.
(b) Pro forma financial information.
The unaudited pro forma condensed consolidated balance sheet
of the Company and Simware as of September 30, 1999 and the
related statements of operations for the nine-month period
ended September 30, 1999 and the twelve-month period ended
December 31, 1998 are attached hereto as Exhibit 99.2 and
incorporated herein by this reference.
-2-
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NETMANAGE, INC.
/s/ ZVI ALON
-----------------------------------------------
Zvi Alon, President and Chief Executive Officer
Date: January 12, 2000
-3-
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EXHIBIT INDEX
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<CAPTION>
Exhibit No.
<S> <C>
99.1 Financial Statements of Simware
99.2 Pro Forma Financial Statements of the Company
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EXHIBIT 99.1
SIMWARE INC.
CONSOLIDATED BALANCE SHEET
(Canadian dollars, amounts in thousands)
(Unaudited)
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<CAPTION>
OCTOBER 31,
1999
- -----------------------------------------------------------------------------------
<S> <C>
ASSETS
Current assets
Cash and cash equivalents $ 3,221
Accounts receivable - net of allowance for doubtful
accounts of $640 (April 30, 1999 - $77) 6,840
Other receivables 2,504
Refundable investment tax credits 19
Prepaid expenses and other assets 1,764
- -----------------------------------------------------------------------------------
14,348
Investment tax credits 1,796
Capital assets 1,722
- -----------------------------------------------------------------------------------
$ 17,866
===================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 4,091
Deferred revenue 2,668
- -----------------------------------------------------------------------------------
6,759
- -----------------------------------------------------------------------------------
Shareholders' equity
Share capital
Common shares - 6,962 outstanding 24,142
Deficit (13,035)
- -----------------------------------------------------------------------------------
11,107
- -----------------------------------------------------------------------------------
$ 17,866
===================================================================================
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SIMWARE INC.
CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS
(Canadian dollars, amounts in thousands)
(Unaudited)
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<CAPTION>
SIX MONTHS ENDED
OCTOBER 31,
- ------------------------------------------------------------------------------------
1998 1999
<S> <C> <C>
Revenue
Product license $ 5,818 $ 3,620
Maintenance 3,353 2,984
Professional services 1,064 1,496
- ------------------------------------------------------------------------------------
10,235 8,100
- ------------------------------------------------------------------------------------
Cost of revenue
Product license 60 52
Maintenance and professional services 858 999
- ------------------------------------------------------------------------------------
918 1,051
- ------------------------------------------------------------------------------------
Gross profit 9,317 7,049
- ------------------------------------------------------------------------------------
Expenses
Selling and marketing 5,019 6,409
Research and development 2,020 2,319
General and administrative 1,220 2,273
Foreign exchange (gain) loss 122 (99)
- ------------------------------------------------------------------------------------
8,381 10,902
- ------------------------------------------------------------------------------------
Earnings (loss) from operations 936 (3,853)
Other income 142 169
- ------------------------------------------------------------------------------------
Earnings (loss) before income taxes 1,078 (3,684)
Provision for (recovery of) income taxes 54 (67)
- ------------------------------------------------------------------------------------
Net earnings (loss) 1,024 (3,617)
Deficit, beginning of period (11,533) (9,418)
- ------------------------------------------------------------------------------------
Deficit, end of period $(10,509) $(13,035)
====================================================================================
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EXHIBIT 99.2
On December 10, 1999, NetManage, Inc. (the "Company") acquired all of the assets
of Simware, Inc. ("Simware") for cash of approximately $32 million. The
transaction will be accounted for as a purchase. The accompanying unaudited
pro forma combined condensed financial statements should be read in conjunction
with the historical financial statements and related notes thereto for both the
Company and Simware, incorporated by reference or included elsewhere herein. The
unaudited pro forma combined condensed balance sheet has been prepared as if the
acquisition was consummated on September 30, 1999, and combines the Company's
balance sheet as of September 30, 1999, with Simware's balance sheet as of
October 31, 1999.
The unaudited pro forma combined condensed statement of operations for the year
ended December 31, 1998, has been prepared as if the acquisition was consummated
as of the beginning of the fiscal year and combines the Company's statement of
operations for the year ended December 31, 1998 with Simware's statement of
operations for the year ended January 31, 1999. The unaudited pro forma combined
condensed statement of operations for the nine months ended September 30, 1999,
combines the Company's statement of operations for the nine months ended
September 30, 1999 with Simware's statement of operations for the nine months
ended October 31, 1999.
This method of combining historical financial statements for the preparation of
the pro forma combined condensed financial statements is for presentation
purposes only. Actual statements of operations of the companies will be combined
from the closing date of the acquisition with no retroactive restatements.
Additionally, the unaudited pro forma combined condensed financial statements
are provided for illustrative purposes only and are not necessarily indicative
of the combined financial position or combined results of operations that would
have been reported had the acquisition occurred on the dates indicated, nor do
they represent a forecast of the combined financial position or results of
operations for any future period.
NETMANAGE, INC. AND SIMWARE, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 1999
(In thousands, except per share data)
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PRO FORMA PRO FORMA
ASSETS NETMANAGE, INC. SIMWARE, INC. ADJUSTMENTS COMBINED
--------------- ------------- ----------- ----------
(1)
<S> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents 44,361 266 (31,666)(a) 12,961
Short-term investments 39,568 1,923 41,491
Accounts receivable, net 11,099 6,347 17,446
Prepaid expenses and other current assets 13,686 1,198 (661)(a) 14,223
------------------------- --------
Total current assets 108,714 9,734 86,121
------------------------- --------
PROPERTY AND EQUIPMENT, at cost:
Computer software and equipment 4,118 6,399 10,517
Furniture and fixtures 4,965 1,617 6,582
Leasehold improvements 2,785 424 3,209
------------------------- --------
11,868 8,440 20,308
Less - Accumulated depreciation (7,806) (7,299) (15,105)
------------------------- --------
Net property and equipment 4,062 1,141 5,203
------------------------- --------
LONG-TERM INVESTMENTS 45,602 -- 45,602
GOODWILL AND OTHER INTANGIBLES, net 17,707 29 19,461(a) 37,197
OTHER ASSETS 1,965 1,233 3,198
------------------------- --------
178,050 12,137 177,321
========================= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 3,728 411 4,139
Accrued liabilities 8,339 1,677 1,679(a) 11,695
Accrued payroll and payroll-related expenses 3,442 691 4,133
Deferred revenue 9,613 1,813 11,426
Income taxes payable 6,238 -- 6,238
------------------------- --------
Total current liabilities 31,360 4,592 37,631
------------------------- --------
LONG-TERM LIABILITIES 1,232 -- 1,232
------------------------- --------
STOCKHOLDERS' EQUITY:
Common stock 697 16,400 (16,400)(a) 697
Treasury stock, at cost (15,559) -- (15,559)
Additional paid-in capital 168,740 -- 168,740
Accumulated deficit (5,423) (8,855) 1,855(a) (12,423)
Accumulated comprehensive loss (2,997) -- (2,997)
------------------------- --------
Total stockholders' equity 145,458 7,545 138,458
------------------------- --------
178,050 12,137 177,321
========================= ========
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(1) INCLUDES SIMWARE BALANCE SHEET AS OF OCTOBER 31, 1999
See accompanying notes to unaudited pro forma condensed
combined financial statements.
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NETMANAGE, INC. AND SIMWARE, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1999
(In thousands, except per share data)
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PRO FORMA PRO FORMA
NETMANAGE, INC. SIMWARE, INC. ADJUSTMENTS COMBINED
--------------- ------------- ----------- ---------
<S> <C> <C> <C> <C>
NET REVENUES: (1)
License fees $ 38,570 $ 4,599 $ 43,169
Services 14,783 4,664 19,447
------------------------- --------
Total net revenues 53,353 9,263 62,616
COST OF REVENUES 2,777 53 2,830
------------------------- --------
GROSS MARGIN 50,576 9,210 59,786
------------------------- --------
OPERATING EXPENSES
Research and development 12,843 2,378 15,221
Sales and marketing 30,375 7,145 37,520
General and administrative 7,920 2,052 9,972
Legal settlements 2,063 -- 2,063
Amortization of goodwill 3,264 -- 2,919(b) 6,183
------------------------- --------
Total operating expenses 56,465 11,575 70,959
------------------------- --------
LOSS FROM OPERATIONS (5,889) (2,365) (11,173)
INTEREST INCOME AND OTHER, NET 4,519 206 4,725
------------------------- --------
LOSS BEFORE PROVISION FOR INCOME TAXES (1,370) (2,159) (6,448)
PROVISION (BENEFIT) FOR INCOME TAXES 81 (20) 61
------------------------- --------
NET LOSS $ (1,451) $ (2,139) $ (6,509)
========================= ========
NET LOSS PER SHARE $ (0.02) $ (0.10)
======== ========
WEIGHTED AVERAGE COMMON SHARES AND EQUIVALENTS
BASIC 65,072 65,072
======== ========
DILUTED 65,072 65,072
======== ========
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(1) INCLUDES SIMWARE RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED OCTOBER 31,
1999
See accompanying notes to unaudited pro forma condensed
combined financial statements.
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NETMANAGE, INC. AND SIMWARE, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
(In thousands, except per share data)
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<CAPTION>
PRO FORMA PRO FORMA
NETMANAGE, INC. SIMWARE, INC. ADJUSTMENTS COMBINED
--------------- ------------- ----------- ---------
<S> <C> <C> <C> <C>
NET REVENUES: (1)
License fees $ 55,114 $ 8,003 $ 63,117
Services 16,613 5,792 22,405
-------------------------- ---------
Total net revenues 71,727 13,795 85,522
COST OF REVENUES 3,416 101 3,517
-------------------------- ---------
GROSS MARGIN 68,311 13,694 82,005
-------------------------- ---------
OPERATING EXPENSES
Research and development 18,882 2,677 21,559
Sales and marketing 39,453 7,675 47,128
General and administrative 12,445 1,931 14,376
Write-off of in-process research and development 9,500 -- 9,500
Amortization of goodwill 2,817 -- 3,892(b) 6,709
Restructuring charge 7,031 -- 7,031
-------------------------- ---------
Total operating expenses 90,128 12,283 106,303
-------------------------- ---------
INCOME (LOSS) FROM OPERATIONS (21,817) 1,410 (24,299)
INTEREST INCOME AND OTHER, NET 3,474 288 3,762
EQUITY IN INCOME OF UNCONSOLIDATED AFFILIATE 1,027 -- 1,027
GAIN ON SALE OF INVESTMENT IN UNCONSOLIDATED AFFILIATE 11,748 -- 11,748
-------------------------- ---------
LOSS BEFORE PROVISION FOR INCOME TAXES (5,568) 1,698 (7,762)
PROVISION (BENEFIT) FOR INCOME TAXES 4,400 78 4,478
-------------------------- ---------
NET INCOME (LOSS) $ (9,968) $ 1,621 $ (12,239)
========================== =========
NET LOSS PER SHARE $ (0.19) $ (0.23)
========= =========
WEIGHTED AVERAGE COMMON SHARES AND EQUIVALENTS
BASIC 53,205 53,205
========= =========
DILUTED 53,205 53,205
========= =========
</TABLE>
(1) INCLUDES SIMWARE RESULTS OF OPERATIONS FOR THE TWELVE MONTHS ENDED JANUARY
31, 1999
See accompanying notes to unaudited pro forma condensed
combined financial statements.
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NetManage, Inc and Simware, Inc.
Notes to Unaudited Pro Forma Condensed Combined Balance Sheet and
Statements of Operations
(Unaudited)
Note 1. Basis of Presentation
The unaudited pro forma condensed combined financial statements
included herein have been prepared by the Company, without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission. Certain
information and certain footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations. However,
the Company believes that the disclosures are adequate to make the information
presented not misleading.
Note 2. Pro Forma Adjustments
Certain pro forma adjustments have been made to the accompanying pro
forma condensed combined consolidated balance sheet and statements of operations
as described below. These adjustments are preliminary and are subject to the
final allocation of the purchase price by the Company.
(a) Reflects the elimination of Simware's stockholders' equity based
on the cash payment of $31,666,106 to the Simware stockholders,
estimated expenses of the merger of $2,340,000 and an adjustment
to retained earnings of $7,000,000 related to the write-off of
acquired in-process research and development that had not reached
technological feasibility and, in management's opinion, had no
probable alternative future use.
(b) Reflects amortization of goodwill and other intangibles related
to the acquisition of Simware, based on an estimated useful life
of five years.
