<PAGE> 1
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): SEPTEMBER 29, 2000
HNC SOFTWARE INC.
(Exact name of Registrant as Specified in its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-26146 33-0248788
(Commission File Number) (I.R.S. Employer Identification Number)
5935 CORNERSTONE COURT WEST, SAN DIEGO, CA 92121
(Address of Principal Executive Offices)
(858) 546-8877
(Registrant's Telephone Number, Including Area Code)
1
<PAGE> 2
ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS
On September 29, 2000, HNC Software Inc. ("HNC") distributed 40 million shares
of the outstanding common stock of Retek Inc. (Nasdaq: RETK) ("Retek") then
owned by HNC as a dividend (the "Retek Spin-off") to HNC shareholders who were
record holders of HNC common stock on September 15, 2000. Pursuant to the Retek
Spin-off, each holder of record of HNC common stock on September 15, 2000 was
distributed as a dividend 1.243 shares of Retek Inc. common stock for each share
of HNC common stock held on September 15, 2000. Cash will be issued in lieu of
fractional shares. The shares of Retek common stock that were distributed by HNC
to its shareholders in the Retek Spin-off constituted all of the shares of Retek
owned by HNC and represented approximately 83.9% of Retek's outstanding shares
as of September 29, 2000. As a result of HNC's distribution of its shares of
Retek Inc. common stock, Retek is no longer affiliated with HNC. For more
information about the Retek dividend, see the Information Statement filed on
Form 8-K on September 22, 2000 listed herein as Exhibit 99.1.
Retek provides Internet-based, business-to-business software solutions for
retailers and their trading partners. Its software solutions enable retailers to
use the Internet to communicate and collaborate efficiently with their
suppliers, distributors, wholesalers, logistics providers, brokers,
transportation companies, consolidators and manufacturers. Prior to the
completion of its initial public offering on November 23, 1999, Retek was a
wholly-owned subsidiary of HNC. The completion of the Retek Spin-off represents
the completion of the separation of the businesses of HNC and Retek.
ITEM 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
Not applicable.
(b) PRO FORMA FINANCIAL INFORMATION.
(1) UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS OF HNC
SOFTWARE INC.
The following unaudited pro forma consolidated financial
information is being filed herewith:
<TABLE>
<CAPTION>
Page
----
<S> <C>
Unaudited pro forma balance sheet of HNC Software Inc. as of
June 30, 2000 4
Unaudited pro forma statement of operations of HNC Software Inc.
for the six months ended June 30, 2000 5
Unaudited pro forma statement of operations of HNC Software Inc.
for the year ended December 31, 1999 6
Notes to unaudited pro forma financial information 7
</TABLE>
(c) EXHIBITS.
INFORMATION STATEMENT
The Information Statement related to the Retek dividend is listed as
Exhibit 99.1 to this Form 8-K.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma consolidated financial information
has been prepared to give retroactive effect to the distribution of
our wholly owned subsidiary, Retek Inc. (Retek) to our stockholders.
The financial information is based on our unaudited historical
condensed consolidated financial statements as of June 30, 2000 and
for the six month period then ended and on our audited historical
consolidated financial statements for the fiscal year ended December
31, 1999. The pro forma condensed consolidated statements of income
for the six months ended June 30, 2000 and the fiscal year ended
December 31, 1999 give effect to the distribution and the
transactions described below as if they occurred as of January 1,
1999 and 2000, respectively. The related adjustments are described in
the accompanying notes.
The unaudited pro forma consolidated financial information is based
upon available information and certain assumptions set forth in the
notes to the unaudited pro forma consolidated financial information,
which have been made solely for purposes of developing such pro forma
financial information. The distribution of Retek common stock to our
stockholders occurred on September 29, 2000. For more information on
the final distribution, please see the Form 8-K filed on October 6,
2000 listed as Exhibit 99.2 to this Form 8-K. The
2
<PAGE> 3
unaudited pro forma consolidated financial information does not
purport to represent what our results of operations or financial
condition would actually have been had the distribution of our
investment in Retek to our stockholders and the transactions
described below occurred as of January 1, 1999 or 2000, respectively,
or to project our results of operations or financial condition for
any future period or date.
3
<PAGE> 4
HNC SOFTWARE INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2000
(IN THOUSANDS)
<TABLE>
<CAPTION>
HNC DISTRIBUTION
AS REPORTED OF RETEK PRO FORMA
----------- ------------ ---------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 80,983 $ (38,379)(a) $ 42,604
Short-term investments available for sale-debt 55,397 (3,898)(a) 51,499
Short-term investments available for sale-equity 1,833 -- 1,833
Trade accounts receivable, net 62,938 (22,044)(a) 40,894
Current portion of deferred income taxes 1,454 (1,589)(a) 1,333
1,468 (b)
Other current assets 16,040 (9,861)(a) 6,179
--------- --------- ---------
Total current assets 218,645 (74,303) 144,342
--------- --------- ---------
Long term investments available for sale-debt 76,654 (6,045)(a) 70,609
Equity investments 11,469 -- 11,469
Property and equipment, net 34,585 (17,078)(a) 17,507
Intangible assets, net 137,501 (32,978)(a) 104,523
Deferred income taxes, less current portion 54,719 (34,746)(a) 18,031
(1,942)(b)
Other assets 4,883 (59)(a) 5,298
474 (b)
--------- --------- ---------
Total assets $ 538,456 $(166,677) $ 371,779
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 33,276 $ (9,094)(a) $ 24,182
Deferred revenue 45,286 (33,766)(a) 11,520
Other current liabilities 3,539 (4,256)(a) (717)
--------- --------- ---------
Total current liabilities 82,101 (47,116) 34,985
--------- --------- ---------
Noncurrent liabilities 5,325 -- 5,325
--------- --------- ---------
Convertible Subordinated Notes 100,000 -- 100,000
--------- --------- ---------
Deferred revenue, net of current portion -- -- --
--------- --------- ---------
Contingencies
Minority interest in consolidated subsidiaries 14,855 (14,855)(a) --
--------- --------- ---------
Total liabilities 202,281 (61,971) 140,310
--------- --------- ---------
Stockholders' equity:
Preferred stock, $0.001 par value --- 4,000 shares authorized:
no shares issued or outstanding -- -- --
Common stock, $0.001 par value --- 120,000 shares authorized:
27,180 and 25,704 shares issued and outstanding, respectively 27 -- 27
Common stock in treasury at cost --- 233 and 882 shares, respectively (15,507) -- (15,507)
Paid-in capital 389,214 (120,500)(a) 268,714
Retained earnings (deficit) (20,152) -- (20,152)
Accumulated other comprehensive income (loss) (2,120) 1,240 (a) (880)
Unearned stock-based compensation (15,287) 14,554 (a) (733)
--------- --------- ---------
Total stockholders' equity 336,175 (104,706) 231,469
--------- --------- ---------
Total liabilities and stockholders' equity $ 538,456 $(166,677) $ 371,779
========= ========= =========
</TABLE>
See accompanying notes to unaudited pro forma
consolidated financial information.
4
<PAGE> 5
HNC SOFTWARE INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
HNC DISTRIBUTION
AS REPORTED OF RETEK PRO FORMA
----------- ------------ ---------
<S> <C> <C> <C>
Revenues:
License and maintenance $ 74,184 $ (17,938)(c) $ 56,246
Services and other 47,811 (15,615)(c) 32,196
--------- --------- ---------
Total revenues 121,995 (33,553) 88,442
========= ========= =========
Operating expenses:
License and maintenance 26,288 (9,473)(c) 16,815
Services and other 33,462 (11,387)(c) 22,075
Research and development 35,186 (16,794)(c) 18,392
Sales and marketing 35,160 (18,313)(c) 16,847
General and administrative 16,832 (5,018)(c) 11,814
Stock-based compensation 4,537 (5,424)(c) (887)
Acquisiton-related amortization 15,512 (2,542)(c) 12,970
Acquired in-process research and development 6,472 (4,000)(c) 2,472
--------- --------- ---------
Total operating expenses 173,449 (72,951) 100,498
Operating income (loss) (51,454) 39,398 (12,056)
Other income (expense):
Interest and other income, net 6,335 (1,451)(c) 4,884
Interest expense (2,684) -- (2,684)
Minority interest in income (loss) of
consolidated subsidiary 5,419 (5,419)(c) --
--------- --------- ---------
Income (loss) before income taxes (42,384) 32,528 (9,856)
Income tax provision (benefit) (10,023) 11,447 (c) 1,426
2 (c)
--------- --------- ---------
Net income (loss) $ (32,361) $ 21,079 $ (11,282)
========= ========= =========
Earnings per share:
Basic net income (loss) per common share $ (1.22) $ (0.43)
========= =========
Diluted net income (loss) per common share $ (1.22) $ (0.43)
========= =========
Shares used in computing basic net income (loss) per
common share 26,529 26,529
========= =========
Shares used in computing diluted net income (loss) per
common share 26,529 26,529
========= =========
</TABLE>
See accompanying notes to unaudited pro forma
consolidated financial information.
5
<PAGE> 6
HNC SOFTWARE INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
HNC DISTRIBUTION
AS REPORTED OF RETEK PRO FORMA
----------- ------------ ---------
<S> <C> <C> <C>
Revenues:
License and maintenance $ 155,948 $ (45,965)(d) $ 109,983
Services and other 60,941 (23,194)(d) 37,747
--------- --------- ---------
Total revenues 216,889 (69,159) 147,730
========= ========= =========
Operating expenses:
License and maintenance 41,272 (6,358)(d) 34,914
Services and other 40,917 (16,625)(d) 24,292
Research and development 49,055 (22,612)(d) 26,443
Sales and marketing 45,818 (19,625)(d) 26,193
General and administrative 24,547 (6,257)(d) 18,290
Stock-based compensation 11,985 (1,908)(d) 10,077
Acquisiton-related amortization 8,599 (1,390)(d) 7,209
Acquired in-process research and development 1,480 (1,480)(d) --
--------- --------- ---------
Total operating expenses 223,673 (76,255) 147,418
Operating income (loss) (6,784) 7,096 312
Other income (expense):
Interest and other income, net 6,149 (30)(d) 6,119
Interest expense (5,823) -- (5,823)
Minority interest in income (loss) of
consolidated subsidiary 722 (722)(d) --
--------- --------- ---------
Income (loss) before income taxes (5,736) 6,344 608
Income tax provision (benefit) 536 1,697 (d) 2,648
415 (d)
--------- --------- ---------
Net income (loss) $ (6,272) $ 4,232 $ (2,040)
========= ========= =========
Earnings per share:
Basic net income (loss) per common share $ (0.25) $ (0.08)
========= =========
Diluted net income (loss) per common share $ (0.25) $ (0.08)
========= =========
Shares used in computing basic net income (loss) per
common share 24,969 24,969
========= =========
Shares used in computing diluted net income (loss) per
common share 24,969 24,969
========= =========
</TABLE>
See accompanying notes to unaudited pro forma
consolidated financial information.
6
<PAGE> 7
HNC SOFTWARE INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS)
(a) Reflects the distribution to our stockholders of Retek common stock in the
form of a dividend.
(b) Reflects pro forma income tax adjustments to present HNC Software Inc. on
a stand-alone basis.
(c) Reflects the reported results of operations of Retek Inc. as if our
distribution of Retek Inc. common stock to our stockholders occurred as of
January 1, 2000.
(d) Reflects the reported results of operations of Retek Inc. as if our
distribution of Retek Inc. common stock to our stockholders occurred as of
January 1, 1999.
7
<PAGE> 8
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 thereunto duly authorized.
HNC SOFTWARE INC.
Date: October 13, 2000 By: /s/ Kenneth J. Saunders
------------------------------------
Kenneth J. Saunders,
Chief Financial Officer and
Secretary
By: /s/ Russell C. Clark
------------------------------------
Russell C. Clark,
Vice President, Corporate Finance
and Assistant Secretary
8
<PAGE> 9
EXHIBIT INDEX
Exhibit Description Page
------- ----------- ----
99.1 Information Statement dated September 22, 2000 (Incorporated
by reference to Exhibit 99 of HNC Software Inc.'s Form 8-K
filed on September 22, 2000).
99.2 Final distribution release dated October 2, 2000
(Incorporated by reference to Exhibit 99.1 of HNC Software
Inc.'s Form 8-K filed on October 6, 2000).
