<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 23, 1997
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NETSCAPE COMMUNICATIONS CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-26310 94-3200270
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification Number)
incorporation)
501 EAST MIDDLEFIELD ROAD, MOUNTAIN VIEW, CALIFORNIA 94043
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 254-1900
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N/A
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(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS
On July 22, 1997 Netscape Communications Corporation ("Netscape")
announced net income of $0.10 per share on revenue of $135.2 million for the
quarter ended June 30, 1997 before the effect of a $52.6 million
non-recurring charge for in-process research and development relating to the
acquisitions of DigitalStyle Corporation and Portola Communications, Inc.
After reflecting the non-recurring charge of in-process research and
development, the loss per share was $0.49. The press release announcing these
financial results is attached hereto as exhibit 20.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) EXHIBITS
20.1 Press Release of Netscape, dated July 22, 1997.
-2-
<PAGE>
SIGNATURES
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.
Dated: July 23, 1997 NETSCAPE COMMUNICATIONS CORPORATION
/s/ Peter L.S. Currie
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Peter L.S. Currie
Senior Vice President and Chief Financial Officer
-3-
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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20.1 Press Release of Netscape, dated July 22, 1997.
<PAGE>
Exhibit 20.1
FOR IMMEDIATE RELEASE
CONTACTS:
Media Jennifer O'Mahony (415) 937-3084
[email protected]
Financial Quincy Smith (415) 937-3757
[email protected]
NETSCAPE REPORTS REVENUES OF $135.2 MILLION FOR THE
SECOND QUARTER 1997
NEW COMMUNICATOR AND SUITESPOT PRODUCTS DRIVE ENTERPRISE MOMENTUM
MOUNTAIN VIEW, Calif. (July 22, 1997) - Netscape Communications Corporation
(NASDAQ: NSCP) today reported its financial results for the second quarter
ended June 30, 1997. Net revenues were $135.2 million, an 80 percent
increase over revenues of $75.0 million for the same period in 1996. Net
income for the second quarter 1997 was $8.8 million, or $0.10 per share,
before the effect of a $52.6 million non-recurring charge for purchased
in-process research and development relating to the previously announced
acquisitions of DigitalStyle Corporation and Portola Communications, Inc.
The growth in net income represents a 52% increase over net income of $5.8
million or $0.07 per share for the second quarter of 1996 before reflecting
merger related charges related to prior acquisitions. After reflecting the
non-recurring charge of purchased in-process research and development, the
net loss and loss per share for the second quarter of 1997 were $43.8 million
and $0.49, respectively.
"This quarter saw Netscape deliver its flagship enterprise products -
SuiteSpot 3.0 and Netscape Communicator, to resounding acclaim from
customers, partners and developers." said Jim Barksdale, president and
chief executive officer of Netscape. "With these new products Netscape has
once again proven its competitive edge and reinforced its role as an
Internet technology leader. In addition, we have expanded our enterprise
focus and begun the work with our channels partners to aggressively deliver
these products to customers ranging from small and medium businesses to
large corporate enterprises. "
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2-2-2-2
In the second quarter, Netscape shipped SuiteSpot 3.0 and Netscape
Communicator underscoring its drive to lead the market for Internet software
for the enterprise. Customers have already demonstrated strong demand for the
products through Netscape's Design Win program. Under the program, companies
such as Audi, Eastman Kodak, Knight Ridder, Prudential Healthcare and Shell
plan to deploy a total of two million seats of Netscape software for
messaging or Java/JavaScript applications. Each customer has committed to
deploy a minimum of 500 seats. At product launch Netscape leveraged the
reach of the Internet by banding with five of the largest sites on the
Internet to enable users to download Netscape Communicator from their sites
and an additional 30,000 Internet sites directed users to Netscape's own
download site.
In June, Netscape culminated a quarter of intense developer activity with its
third developer conference. DevCon III attracted the largest community of
in-house and enterprise developers of any Netscape conference to date.
Netscape used the occasion to lay out its platform roadmap and announce the
adoption of the JavaBeans component model enabling developers to rapidly snap
together components to build powerful Crossware applications. IBM, Oracle
and Sun joined with Netscape to announce they will also support JavaBeans,
ensuring interoperability between each company's respective software
products. All four companies will also promote a standards-based approach to
enterprise computing based on the OMG's CORBA Internet Inter-ORB Protocol
standard.
During the quarter, Netscape also concentrated on building relationships with
vendors of enterprise software. Focusing on working with vendors to
web-enable existing enterprise applications, Netscape announced relationships
with Forte to provide Internet-enabled distributed applications; with Aurum,
Clarify, Remedy, Scopus, Silknet, and Vantive in the help desk and customer
service arena; and with Arbor Software Corporation, Brio Technology, Business
Objects, Cognos, Information Advantage, Informix Software, MicroStrategy,
Inc., Oracle Corporation, PLATINUM technology, Prism Solutions, Inc. and Red
Brick Systems for OLAP and data warehousing products.
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<PAGE>
3-3-3-3
The reach and power of the Netscape Internet site as a mechanism for helping
the company communicate with and further serve both its enterprise customers
and consumers was again highlighted by a number of key announcements.
Together with over twenty content providers and a dozen software vendors,
Netscape announced Netscape Netcaster. Netcaster allows both enterprise
users and individuals to subscribe to and receive pushed dynamic Web content,
called "channels;" view Web sites and channels offline; and select from a
listing of some of the best channels on the Internet. The first preview
release of Netcaster included channels from ABCNEWS.com and CNNfn. Since
then Netscape has announced users will have access to more than 100 channels.
Subscriptions to Netscape In-box Direct, Netscape's program allowing users
to receive online content of their choice directly in their email inboxes,
also continue to grow and now total over 6.5 million subscriptions.
Using its Internet site to broaden distribution of third party software that
supports the Netscape ONE platform, Netscape announced Netscape Software
Depot by software.net, which will provide Internet-based electronic
distribution and software product sales. For the small business and small
office/home office (SOHO) market, Netscape and Concentric Network announced
Netscape Virtual Office by Concentric. This service will be accessible via
the Netscape Internet site and will offer customers hosted private Intranet
services that can be accessed from anywhere on the Internet.
In a move which reinforced its commitment to open standards and demonstrated
industry leadership Netscape, together with Firefly and VeriSign, encouraged
over 60 leading companies, including Microsoft, to band together to support
the Open Profiling Standard (OPS), a proposed standard that enables
personalization of Internet services while protecting users' privacy.
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4-4-4-4
Further demonstration of Netscape's role in driving open standards came with
the announcement from ECMA (a European association for standardizing
information and communications systems) of ECMAScript, a new Internet
scripting language standard that is based on Netscape's JavaScript.
Developed at Netscape, JavaScript was submitted to this standards body six
months ago so its standardization marks one of the most rapid implementations
of the standards process to date.
Finally, this quarter Netscape also announced two acquisitions as well as the
anticipated merger of its Navio affiliate with Oracle's Network Computer Inc.
affiliate. Netscape acquired DigitalStyle, a leading Web graphics tools
vendor and Portola Communications, known for its expertise in
high-performance messaging systems. Netscape and Oracle announced a
definitive agreement to merge their high-profile affiliates, Navio
Communications, Inc. and Network Computer, Inc. (NCI). The merged company
will develop software for open standards-based network computers and other
Internet appliances that will be used in homes, businesses and schools.
Netscape Communications Corporation is a leading provider of open software
for linking people and information over enterprise networks and the Internet.
The company offers a full line of clients, servers, development tools and
commercial applications to create a complete platform for next-generation,
live on-line applications. Traded on NASDAQ under the symbol "NSCP", Netscape
Communications Corporation in based in Mountain View, California.
###
Additional information on Netscape Communications Corporation is available on
the Internet at http://home.netscape.com, by sending email to
[email protected] or by calling 415-937-2555 (corporations) or 415-937-3777
(individuals).
Netscape, Netscape Navigator and the Netscape N logo are registered trademarks
of Netscape Communications Corporation. Other Netscape logos, product names,
and service names are also trademarks of Netscape Communications Corporation,
which may be registered in other countries.
Other product and brand names are trademarks of their respective owners.
<PAGE>
NETSCAPE COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, June 30,
1996 1997
------------ -----------
(In thousands) (Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 87,530 $ 59,813
Short-term investments 113,034 110,695
Accounts receivable, net 110,627 164,311
Deferred tax assets 20,347 24,508
Other current assets 16,892 17,605
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Total current assets 348,430 376,932
Property and equipment, net 86,567 110,895
Long-term investments 90,504 105,844
Other assets 11,949 16,663
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$ 537,450 $ 610,334
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 27,634 $ 36,684
Accrued compensation and related liabilities 17,162 21,395
Other accrued liabilities 12,781 19,975
Income taxes payable 7,731 9,088
Deferred revenues 80,294 101,221
Current portion of long-term obligations
and installment notes payable 714 905
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Total current liabilities 146,316 189,268
Deferred taxes and other long-term obligations 484 1,470
Stockholders' equity:
Preferred stock, common stock and additional paid-in capital 399,022 460,098
Deferred compensation (6,128) (4,900)
Accumulated deficit (2,227) (38,056)
Other (17) 2,454
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Total stockholders' equity 390,650 419,596
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$ 537,450 $ 610,334
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</TABLE>
<PAGE>
NETSCAPE COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
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(In thousands, except per share data) 1996 1997 1996 1997
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<S> <C> <C> <C> <C>
Revenues:
Product revenues $ 62,296 $ 99,056 $ 111,347 $ 188,825
Service revenues 12,710 36,151 19,780 66,623
--------- --------- --------- ---------
Total revenues 75,006 135,207 131,127 255,448
Cost of revenues:
Cost of product revenues 9,703 11,119 16,514 20,870
Cost of service revenues 2,325 6,198 4,008 12,265
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Total cost of revenues 12,028 17,317 20,522 33,135
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Gross profit 62,978 117,890 110,605 222,313
Operating expenses:
Research and development 17,826 31,836 31,952 60,811
Sales and marketing 32,506 61,736 58,311 115,778
General and administrative 6,018 10,832 11,224 20,523
Purchased in-process research and development
and merger related charges 6,100 52,587 6,100 52,587
--------- --------- --------- ---------
Total operating expenses 62,450 156,991 107,587 249,699
--------- --------- --------- ---------
Operating income (loss) 528 (39,101) 3,018 (27,386)
Interest income, net 1,878 2,443 4,309 4,838
Equity in net losses of joint ventures (416) (1,938) (416) (3,439)
--------- --------- --------- ---------
Interest and other income, net 1,462 505 3,893 1,399
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Operating income (loss) before income taxes 1,990 (38,596) 6,911 (25,987)
Provision for income taxes 1,084 5,177 2,416 9,842
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Net income (loss) $ 906 $ (43,773) $ 4,495 $ (35,829)
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Net income (loss) per share $ 0.01 $ (0.49) $ 0.05 $ (0.41)
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Shares used in computing net income (loss) per share 87,937 88,661 86,470 88,399
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EXCLUDING IN-PROCESS RESEARCH AND DEVELOPMENT AND MERGER RELATED CHARGES:
Net income $ 5,776 $ 8,814 $ 9,365 $ 16,758
--------- --------- --------- ---------
--------- --------- --------- ---------
Net income per share $ 0.07 $ 0.10 $ 0.11 $ 0.18
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--------- --------- --------- ---------
Shares used in computing net income per share 87,937 91,049 86,470 90,917
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</TABLE>
