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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report October 1, 1998
(Date of earliest event reported): September 30, 1998
HARBINGER CORPORATION
(Exact name of Company specified in its charter)
GEORGIA 0-26298 58-1817306
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation or organization) Identification No.)
1277 LENOX PARK BOULEVARD, ATLANTA, GEORGIA 30319
(Address of principal executive offices) (Zip Code)
(404) 467-3000
(Company's telephone number, including area code)
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Item 5. Other Events.
Harbinger Corporation issued a press release on September 30, 1998, the
text of which is attached hereto as Exhibit 99.1.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
99.1 Text of Press Release of Harbinger Corporation, dated
September 30, 1998.
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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.
HARBINGER CORPORATION
/s/ Joel G. Katz
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JOEL G. KATZ
Chief Financial Officer
(Principal Financial Officer;
Principal Accounting Officer)
Date: October 1, 1998
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EXHIBIT INDEX
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Exhibit
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<S> <C>
99.1 Text of Press Release of Harbinger Corporation, dated September 30,
1998.
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EXHIBIT 99.1
Contacts: Rebecca Metzger Barbara Smith
Harbinger Corporation GCI Group
404-467-3211 404-870-3768
[email protected] [email protected]
For Immediate Release ...
HARBINGER ANNOUNCES REFINED STRATEGY, ORGANIZATIONAL RE-STRUCTURING, AND
PRELIMINARY THIRD QUARTER RESULTS
ATLANTA, GA - SEPTEMBER 30, 1998 - Harbinger Corporation (NASDAQ:HRBC),
a worldwide supplier of Electronic Commerce software, services and solutions,
announced today that the company will re-structure, concentrate its current
product lines and expand certain investment areas to further secure its industry
leading position in the transition from EDI to Internet EC. The company also
announced preliminary third quarter results including a one time charge for
restructuring of $15 to $20 million.
Also, due to a refocusing of the business on electronic connectivity
and to eliminate duplicate departments and roles, the company will reduce its
workforce by 10 percent and realign its executive team. As part of the
realignment, founder and Chairman C. Tycho Howle will re-assume responsibility
as Chief Executive Officer.
STRATEGY REVIEW
In August, a board-appointed strategic review committee, headed by
Howle and including leading industry analysts, was formed to review Harbinger's
product lines, organization and resource allocations, and to examine the
acceleration of changes in the company's markets during the first half of 1998.
The committee's findings drive how the company will be positioning itself to
lead the transition to Internet Electronic Commerce.
"Harbinger's rapid growth has historically outpaced the Electronic
Commerce market, especially in the area of EDI," said Howle. "While we have been
focused on meeting our high growth expectations and maximizing revenue from our
acquisitions subtle changes have emerged in the market."
Harbinger's recent acquisitions and new product additions have
generated a complex portfolio of products and services. In some cases, because
of unique market requirements, Harbinger kept in existence overlapping products
and services from acquired companies. These overlapping products required
multiple R&D and customer support resources and distracted and diluted the
efforts of the company. The company is now moving quickly to consolidate these
products and transition customers.
"As a part of this reorganization, a separate business unit will be
created with its sole focus on meeting the needs of Harbinger's more than 40,000
existing customers," Howle said. "Harbinger believes its customers are the
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company's most important assets and even though recent customer surveys indicate
customer satisfaction and loyalty are already one of Harbinger's strong suits,
the company intends to strive to increase its competitive advantage derived from
this area. The new organization will allow for a more concentrated and focused
effort on meeting our customer's current and future needs. Further details on
Harbinger's new organization and its product plans will be made available in the
fourth quarter."
"We have always been proud of high marks from our customers regarding
performance, service and satisfaction levels," Howle continued. "Our
acquisitions have presented some challenges, and in some cases required the
transfer of resources away from what we do best, which is building and
supporting comprehensive EC solutions for our customers. By reducing the number
of products and refocusing our best resources on Harbinger's key core
competencies, we believe that the company will benefit over the long term."
Harbinger expects the portion of the business focusing on enabling
applications for business-to-business Internet EC, some of which may include
EDI, will grow between 50 to 100 percent through 1999, as will certain segments
of the company's traditional EDI business, notably Windows NT. Key investment
areas include electronic catalog supplier content, next generation EC
technologies, enhanced software for secure Internet messaging and the company's
Internet Value-Added Server (IVAS) both as a service and licensable technology.
Harbinger expects that traditional EDI will remain a significant part of its
business for the foreseeable future; however, due to year 2000 initiatives and
emerging EC solutions, the company projects flat to minimal growth in the "pure
EDI" segment of its business through 1999.
Ahead, Harbinger intends to focus on business to business electronic
connectivity through the Internet. The company's key services will be trading
community management, mass deployment, the professional services necessary to
implement Electronic Commerce, and enterprise and small business software
necessary to enable EC transaction exchange. Harbinger's EC solutions will cover
all sizes of companies, from the enterprise to middle market companies to small
businesses. The company expects its solutions-driven approach, and streamlined
products and services to make its business simpler to manage. The goal is to
achieve a more predictable revenue stream over time, with 50 percent from
recurring services, 30 percent from software and 20 percent from professional
services solutions.
NEW ORGANIZATIONAL STRUCTURE
As a result of the strategy review, Harbinger has re-aligned its
executive management team to enable greater focus on building operational
excellence and to address its new market opportunities. C. Tycho Howle, current
Chairman of Harbinger, will take on the additional responsibility of Chief
Executive Officer (CEO), a position that he has held for most of Harbinger's
history. David Leach, former Chief Executive Officer, will become Vice Chairman
and will help manage the re-organization effort and then focus his efforts on
improving the performance of Harbinger's international business.
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James M. Travers, formerly President and General Manager of Harbinger's
Software Solutions Division, has been promoted to President and Chief Operating
Officer (COO) of Harbinger. Mr. Travers will be responsible for day-to-day
operations of the company. James Davis, former President and Chief Operating
Officer of Harbinger, has been named Group Executive, Business Development and
Strategic Alliances, focusing on new businesses including Electronic Catalog.
Harbinger is also reducing its workforce by approximately 10 percent
representing a total of 110 positions. The headcount reduction is principally
related to operational efficiencies in its U.S. and European operations as
Harbinger moves to complete the integration of major acquisitions and realigns
investment priorities.
"A decision on workforce reduction is never made easily and certainly
one that Harbinger reached only after considering numerous options," said
Travers, COO. "But we must take the necessary steps to address our most exciting
opportunities and have the organizational focus we need to continue to lead in
the EC market. Now and going forward, our longstanding commitment to operational
excellence across all areas of our business, particularly customer service and
satisfaction, will continue to drive Harbinger's day-to-day operations."
Additionally, Harbinger will focus future operations in its Catalog
Solutions Division towards supplying electronic catalog data and managing
electronic catalog based trading communities rather than developing and
marketing procurement applications. The company currently is involved in both
areas of the electronic catalog market. Harbinger entered this developing market
via acquisition of ACQUION, Inc. and the Materials Management Division of
MACTEC, Inc. Given recent announcements by ERP vendors and other TrustedLink(TM)
Procurement competitors, Harbinger will focus on being the leading provider of
data enriched supplier content services. The company will now seek to leverage
its advantage in trading partner management, including data and data
rationalization services, and look to expand its relationships with catalog
application providers for the use of Harbinger's electronic MRO catalog data
library. The company is actively seeking a buyer for its TrustedLink(TM)
Procurement application.
PRELIMINARY THIRD QUARTER RESULTS
The company expects to report revenues for the third quarter ending
September 30, 1998, of between $34.0 and $36.5 million and earnings per share
from continuing operations of between $.04 and $.08 per share, before
non-recurring charges and a specific provision to the allowance for doubtful
accounts. General and administrative expenses include a provision of
approximately $6 million principally related to accounts receivable associated
with indirect channels. Earnings (losses) per share from continuing operations
before non-recurring charges are expected to be between ($.04) to $.00 per
share. The company anticipates non-recurring charges to include restructuring
and integration charges totaling $15 to $20 million, which includes
approximately $3 million in remaining integration charges previously announced
at the end of our first quarter associated with our merger with Premenos, and
charges associated with product consolidation, discontinuation and/or
divestiture. In addition to the charges above, the company also expects to
record a loss associated with discontinuing the TrustedLink(TM) Procurement
application of between $3 million and $6 million.
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ABOUT HARBINGER
Harbinger Corporation is a worldwide, single-source provider of
Electronic Commerce software, services and solutions serving the industry's
largest software and network customer community. The company is dedicated to
providing comprehensive and scalable E-Commerce software and Value Added Network
services for computing platforms ranging from desktops to mainframes and meeting
the emerging market needs for Internet and Web commerce solutions, including
electronic catalog services and secure EDI over the Internet. Harbinger is
headquartered in Atlanta, Georgia and provides worldwide support to its customer
community from multiple U.S. and overseas operations facilities. For additional
information on this announcement and Harbinger's full line of products and
services, visit the World Wide Web at www.harbinger.com.
This press release contains statements which may constitute "forward-looking
statements" within the meaning of the Securities Act of 1933 and the Securities
Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act
of 1995. Those statements include statements regarding the intent, belief or
current expectations of Harbinger Corporation and members of its management as
well as the assumptions on which such statements are based. Prospective
investors are cautioned that any such forward-looking statements are not
guarantees of future performance and involve risks and uncertainties, and that
actual results may differ materially from those contemplated by such
forward-looking statements. Important factors currently known to management that
could cause actual results to differ materially from those in forward-looking
statements include integration of recent acquisitions, intense competition and
adverse developments with respect to the company's domestic or foreign
operations, dependence on new products, industry standards and risks of product
development. Additional factors are set forth in the Safe Harbor Compliance
Statement for Forward-Looking Statements included as Exhibit 99.1 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1997. The
Company undertakes no obligation to update or revise forward-looking statements
to reflect changed assumptions, the occurrence of unanticipated events or
changes to future operating results.
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Harbinger and the Harbinger logo are registered trademarks and TrustedLink
Procurement is a trademark of Harbinger Corporation. All other company and
product names referenced herein are registered trademarks or trademarks of their
respective owners.
