0001002517-19-000028.txt : 20191007 0001002517-19-000028.hdr.sgml : 20191007 20191007162548 ACCESSION NUMBER: 0001002517-19-000028 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20191001 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20191007 DATE AS OF CHANGE: 20191007 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Nuance Communications, Inc. CENTRAL INDEX KEY: 0001002517 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 943156479 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-36056 FILM NUMBER: 191141134 BUSINESS ADDRESS: STREET 1: 1 WAYSIDE ROAD CITY: BURLINGTON STATE: MA ZIP: 01803 BUSINESS PHONE: 781-565-5000 MAIL ADDRESS: STREET 1: 1 WAYSIDE ROAD CITY: BURLINGTON STATE: MA ZIP: 01803 FORMER COMPANY: FORMER CONFORMED NAME: SCANSOFT INC DATE OF NAME CHANGE: 19990312 FORMER COMPANY: FORMER CONFORMED NAME: VISIONEER INC DATE OF NAME CHANGE: 19951020 8-K 1 nuan8-kdiamondspinxoff1012.htm 8-K Document


UNITED STATES
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):
October 7, 2019 (October 1, 2019)
  _________________________________
NUANCE COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
 _________________________________
 
 
 
 
 
DE
 
000-27038
 
94-3156479
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
1 Wayside Road
Burlington, MA             01803
(Address of Principal Executive Offices)             (Zip Code)
(781) 565-5000
(Registrant’s telephone number, including area code)
 _________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common stock, $0.001 par value per share
NUAN
NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐




ITEM 2.01    Completion of Acquisition or Disposition of Assets.
As previously reported, on October 1, 2019 (the “Distribution Date”), Nuance Communications, Inc. (“Nuance” and, together with its consolidated subsidiaries, the “Company”) completed the previously announced complete legal and structural separation and distribution to its stockholders of all of the outstanding shares of Cerence Inc. (“Cerence”), in a tax free spin-off (the “Spin-Off”). The distribution was made in the amount of one share of Cerence common stock for every eight shares of Nuance common stock (the “Distribution”) owned by Nuance’s stockholders of record as of 5:00 p.m. Eastern Time on September 17, 2019 (the “Record Date”), of the Distribution.
Following the previously reported sale transaction to third party non-affiliate purchasers of approximately 1.8% of the shares of Cerence common stock, Nuance distributed all of the remaining 35,740,709 shares of Cerence common stock held by Nuance in the Distribution on the Distribution Date. As a result of the Distribution, Cerence is now an independent public company trading under the symbol “CRNC” on the NASDAQ Global Select Market. The Spin-Off was made without the payment of any consideration or the exchange of any shares by Nuance’s stockholders.
As previously reported, in connection with the Spin-Off, the Company entered into several agreements with Cerence that set forth the principal actions taken or to be taken in connection with the Spin-Off and that govern the relationship of the parties following the Spin-Off, including the following:
•
a Separation and Distribution Agreement;
•
a Tax Matters Agreement;
•
a Transition Services Agreement;
•
an Employee Matters Agreement;
•
an Intellectual Property Agreement; and
•
a Transitional Trademark License Agreement.
Following the Distribution, Nuance does not own any shares of Cerence common stock and Nuance will no longer consolidate Cerence in its financial results. Nuance’s unaudited pro forma financial information giving effect to the Distribution and related transactions is attached as Exhibit 99.1. The separation was completed pursuant to the Separation and Distribution Agreement.
The descriptions of the Spin-Off, the Separation and Distribution Agreement and the other related agreements included under Item 1.01 of the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 2, 2019, are incorporated herein by reference.





ITEM 9.01    Financial Statements and Exhibits.
Unaudited Pro Forma Condensed Consolidated Financial Statements of the Company for the nine months ended June 30, 2019 and the fiscal years ended September 30, 2018, September 30, 2017 and September 30, 2016 are filed as Exhibit 99.1 to this Current Report on Form 8-K and are incorporated herein by reference.
(d)    Exhibits.
Exhibit No.
 
Description
2.1
 
10.1
 
10.2
 
10.3
 
10.4
 
10.5
 
99.1
 
104
 
Cover Page Interactive Data File (embedded within the Inline XBRL document)




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.
 
 
 
 
 
 
 
 
 
 
 
 
NUANCE COMMUNICATIONS, INC.
 
 
 
 
 
 
 
Date:
October 7, 2019
 
 
By:
 
/s/ Daniel D. Tempesta
 
 
 
 
 
 
Daniel D. Tempesta
Executive Vice President and
Chief Financial Officer



 EX-99.1 2 ex991diamonddispositionpro.htm EXHIBIT 99.1 Exhibit

Exhibit 99.1

NUANCE COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On October 1, 2019 (the "Separation Date"), Nuance Communications, Inc. (NASDAQ: NUAN) (“Nuance” or the “Company”), a leading provider of conversational AI, completed the previously announced separation of its automotive technology business (the “Business” or "Cerence"), into a separate, independent publicly traded company, Cerence Inc. (NASDAQ: CRNC). This separation was effected by means of a distribution to each Nuance stockholder of record on September 17, 2019 (the “Record Date”) of one share of Cerence common stock for every eight shares of common stock, par value $0.001 per share, of Nuance, that it held on the Record Date (the entire transaction being referred to as the “Separation”). Nuance stockholders received cash in lieu of fractional shares of Cerence common stock. In addition, pursuant to the notice of redemption we issued on August 30, 2019, we also redeemed our 6.000% Senior Notes due 2024 (the "6.000% Senior Notes") on October 1, 2019.

The unaudited pro forma condensed consolidated statements of operations for fiscal years 2018, 2017, and 2016 are based upon the historical financial statements included within the Company's Current Report on Form 8-K filed June 13, 2019 (the "June 13 Form 8-K"). The unaudited pro forma condensed consolidated statement of operations for the nine months ended June 30, 2019 and the unaudited pro forma condensed consolidated balance sheet are based upon the historical financial statements included within the Company's Quarterly Report on Form 10-Q filed August 9, 2019 (The "Third Quarter Form 10-Q"). The unaudited pro forma condensed consolidated statements of operations give effect to the Separation as if the transaction had occurred on October 1, 2016. Additionally, the unaudited pro forma condensed consolidated statements of operations for the fiscal year ended September 30, 2018 and the nine months ended June 30, 2019 give effect to the cash distribution to Nuance from Cerence, and the redemption of the 6.000% Senior Notes as if the transactions had occurred on October 1, 2017. The unaudited pro forma condensed consolidated balance sheet as of June 30, 2019 gives effect to the Separation, the cash distribution to Nuance from Cerence, and the redemption of the 6.000% Senior Notes as if the transactions had occurred on that date.

The unaudited pro forma condensed consolidated financial statements do not reflect non-recurring charges resulting from the Separation, or future transactions that are not directly attributable to the Separation, such as restructuring activities and the resulting cost reduction.

The unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and do not purport to indicate the financial condition or results of operations of future periods or the financial condition for results of operations that actually would have been realized had the Separation occurred on the date or for the periods presented. The pro forma adjustments are based upon available information and assumptions that management believes are reasonable under the circumstances. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the Company's historical financial statements and notes included in the June 13 Form 8-K and the Third Quarter Form 10-Q.

Our actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to the following factors:

•
The pro forma adjustments are estimated based on the operating structure of the Business during each of the historical periods presented, which may differ from the operating structure at the Separation Date;
•
We did not track the assets and liabilities of the Business historically. The pro forma adjustments are based on our estimates of the assets, liabilities and employees related to the Business in each historical period presented, which may differ from the assets, liabilities and employees at the Separation Date;
•
We are still assessing the tax impacts of the assets and liabilities that we believe to be directly attributable to the Business for the historical periods; and
•
The Business was highly integrated with Nuance in all the historical periods, and we are still assessing the historical cost structures of the Business and the remainder of Nuance. The adjustments to the unaudited pro forma results of operations reflect our estimates of operating costs and expenses that we consider directly related to the Business for each historical period, which may differ from the actual amounts eliminated after the Separation.




1

Exhibit 99.1

NUANCE COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of June 30, 2019

 
 
 
 
 
Pro Forma Adjustments
 
 
 
 
 
As Reported
 
Removing the estimated assets and liabilities of Cerence (a)
 
Cash distribution to Nuance and the redemption of 6.000% Senior Notes (b)
 
Pro Forma Amounts
 
 
 
(ASC 606)
 
 
 
 
 
 
 
 
 
(In thousands)
ASSETS
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
536,377

 
$
—

 
$
(160,500
)
 
$
375,877

 
Marketable securities
 
136,986

 
—

 
—

 
136,986

 
Accounts receivable, net
 
313,599

 
(71,652
)
 
—

 
241,947

 
Prepaid expenses and other current assets
 
193,795

 
(18,361
)
 
—

 
175,434

 
Total current assets
 
1,180,757

 
(90,013
)
 
(160,500
)
 
930,244

 
 
 
 
 
 
 
 
 
 
Marketable securities
 
12,796

 
—

 
—

 
12,796

Land, building and equipment, net
 
138,466

 
(15,194
)
 
—

 
123,272

Goodwill
 
3,242,693

 
(1,118,243
)
 
—

 
2,124,450

Intangible assets, net
 
372,934

 
(71,373
)
 
—

 
301,561

Other assets
 
241,271

 
(40,887
)
 
—

 
200,384

 
Total assets
 
$
5,188,917

 
$
(1,335,710
)
 
$
(160,500
)
 
$
3,692,707

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Contingent and deferred acquisition payments
 
$
17,122

 
$
—

 
$
—

 
$
17,122

 
Accounts payable, accrued expenses and other current liabilities
 
340,284

 
(45,324
)
 
—

 
294,960

 
Deferred revenue
 
310,586

 
(78,194
)
 
—

 
232,392

 
Total current liabilities
 
667,992

 
(123,518
)
 
—

 
544,474

 
 
 
 
 
 
 
 
 
 
Long-term debt
 
1,923,716

 
—

 
(300,000
)
 
1,623,716

Deferred revenue, net of current portion
 
410,897

 
(277,232
)
 
—

 
133,665

Other liabilities
 
143,314

 
(22,776
)
 
—

 
120,538

 
Total liabilities
 
3,145,919

 
(423,526
)
 
(300,000
)
 
2,422,393

 
 
 
 
 
 
 
 
 
 
Stockholders' equity
 
2,042,998

 
(912,184
)
 
139,500

 
1,270,314

 
Total liabilities and stockholders' equity
 
$
5,188,917

 
$
(1,335,710
)
 
$
(160,500
)
 
$
3,692,707














See accompanying notes.

2

Exhibit 99.1

NUANCE COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the nine months ended June 30, 2019

 
 
 
 
Pro Forma Adjustments
 
 
 
 
As Reported
 
Removing estimated income
statement items (c) (d)
 
Pro Forma
 
 
(ASC 606)
 
 
 
 
 
 
(In thousands, except per share amounts)
Revenues:
 
 
Professional services and hosting
 
$
771,601

 
$
(93,497
)
 
$
678,104

Product and licensing
 
377,349

 
(125,050
)
 
252,299

Maintenance and support
 
203,484

 
(191
)
 
203,293

Total revenues
 
1,352,434

 
(218,738
)
 
1,133,696

Cost of revenues:
 
 

 
 
 
 

Professional services and hosting
 
471,204

 
(61,560
)
 
409,644

Product and licensing
 
61,897

 
(1,406
)
 
60,491

Maintenance and support
 
24,919

 
(110
)
 
24,809

Amortization of intangible assets
 
27,700

 
(7,094
)
 
20,606

Total cost of revenues
 
585,720

 
(70,170
)
 
515,550

Gross profit
 
766,714

 
(148,568
)
 
618,146

Operating expenses:
 
 

 
 
 
 

Research and development
 
201,774

 
(61,411
)
 
140,363

Sales and marketing
 
223,343

 
(23,029
)
 
200,314

General and administrative
 
130,892

 
(2,074
)
 
128,818

Amortization of intangible assets
 
50,426

 
(9,397
)
 
41,029

Acquisition-related costs, net
 
6,223

 
(783
)
 
5,440

Restructuring and other charges, net
 
60,668

 
(34,189
)
 
26,479

Total operating expenses
 
673,326

 
(130,883
)
 
542,443

Income from operations
 
93,388

 
(17,685
)
 
75,703

Other income (expense):
 
 

 
 
 
 

Interest income
 
9,987

 
(2,408
)
 
7,579

Interest expense
 
(91,777
)
 
13,500

 
(78,277
)
Other income, net
 
2,425

 
(101
)
 
2,324

Income before income taxes
 
14,023

 
(6,694
)
 
7,329

Provision for income taxes
 
7,814

 
(2,685
)
 
5,129

Net income from continuing operations

$
6,209

 
$
(4,009
)
 
$
2,200

 
 
 
 
 
 
 
Net income per share - continuing operations:
 
 

 
 
 
 

Basic
 
$
0.02

 
 
 
$
0.01

Diluted
 
$
0.02

 
 
 
$
0.01

 
 
 
 
 
 
 
Weighted average common shares outstanding:
 
 

 
 
 
 

Basic
 
285,064

 
 
 
285,064

Diluted
 
288,153

 
 
 
288,153









See accompanying notes.

3

Exhibit 99.1

NUANCE COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the fiscal year ended September 30, 2018

 
 
 
 
Pro Forma Adjustments
 
 
 
 
As Reported
 
Removing estimated income
statement items (c) (d)
 
Pro Forma
 
 
(ASC 605)
 
 
 
 
 
 
(In thousands, except per share amounts)
Revenues:
 
 
Professional services and hosting
 
$
1,045,722

 
$
(105,678
)
 
$
940,044

Product and licensing
 
544,019

 
(168,789
)
 
375,230

Maintenance and support
 
252,557

 
(231
)
 
252,326

Total revenues
 
1,842,298

 
(274,698
)
 
1,567,600

Cost of revenues:
 
 

 
 
 
 

Professional services and hosting
 
678,378

 
(70,014
)
 
608,364

Product and licensing
 
56,799

 
(1,129
)
 
55,670

Maintenance and support
 
39,324

 
(120
)
 
39,204

Amortization of intangible assets
 
50,886

 
(10,668
)
 
40,218

Total cost of revenues
 
825,387

 
(81,931
)
 
743,456

Gross profit
 
1,016,911

 
(192,767
)
 
824,144

Operating expenses:
 
 

 
 
 
 

Research and development
 
278,735

 
(71,482
)
 
207,253

Sales and marketing
 
311,712

 
(25,143
)
 
286,569

General and administrative
 
225,884

 
(11,392
)
 
214,492

Amortization of intangible assets
 
73,997

 
(8,840
)
 
65,157

Acquisition-related costs, net
 
16,093

 
(4,083
)
 
12,010

Restructuring and other charges, net
 
57,026

 
(4,151
)
 
52,875

Impairment of goodwill and other intangible assets
 
170,941

 
—

 
170,941

Total operating expenses
 
1,134,388

 
(125,091
)
 
1,009,297

Loss from operations
 
(117,477
)
 
(67,676
)
 
(185,153
)
Other income (expense):
 
 

 
 
 
 

Interest income
 
9,327

 
(3,210
)
 
6,117

Interest expense
 
(137,253
)
 
18,000

 
(119,253
)
Other expense, net
 
(1,821
)
 
54

 
(1,767
)
Loss before income taxes
 
(247,224
)
 
(52,832
)
 
(300,056
)
Benefit from income taxes
 
(62,320
)
 
(10,680
)
 
(73,000
)
Net loss from continuing operations
 
$
(184,904
)
 
$
(42,152
)
 
$
(227,056
)
 
 
 
 
 
 
 
Net loss per share - continuing operations:
 
 

 
 
 
 

Basic
 
$
(0.63
)
 
 
 
$
(0.78
)
Diluted
 
$
(0.63
)
 
 
 
$
(0.78
)
 
 
 
 
 
 
 
Weighted average common shares outstanding:
 
 

 
 
 
 

Basic
 
291,318

 
 
 
291,318

Diluted
 
291,318

 
 
 
291,318








See accompanying notes.

4

Exhibit 99.1

NUANCE COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the fiscal year ended September 30, 2017

 
 
 
 
Pro Forma Adjustments
 
 
 
 
As Reported
 
Removing estimated income
statement items (c)
 
Pro Forma
 
 
(ASC 605)
 
 
 
 
 
 
(In thousands, except per share amounts)
Revenues:
 
 
Professional services and hosting
 
$
966,566

 
$
(95,341
)
 
$
871,225

Product and licensing
 
493,911

 
(152,519
)
 
341,392

Maintenance and support
 
267,698

 
(585
)
 
267,113

Total revenues
 
1,728,175

 
(248,445
)
 
1,479,730

Cost of revenues:
 
 

 
 
 
 

Professional services and hosting
 
654,599

 
(57,867
)
 
596,732

Product and licensing
 
54,104

 
(766
)
 
53,338

Maintenance and support
 
37,243

 
(98
)
 
37,145

Amortization of intangible assets
 
57,892

 
(10,979
)
 
46,913

Total cost of revenues
 
803,838

 
(69,710
)
 
734,128

Gross profit
 
924,337

 
(178,735
)
 
745,602

Operating expenses:
 
 

 
 
 
 

Research and development
 
239,925

 
(50,493
)
 
189,432

Sales and marketing
 
324,370

 
(24,651
)
 
299,719

General and administrative
 
163,065

 
(2,222
)
 
160,843

Amortization of intangible assets
 
92,839

 
(5,763
)
 
87,076

Acquisition-related costs, net
 
27,708

 
(733
)
 
26,975

Restructuring and other charges, net
 
59,923

 
(1,867
)
 
58,056

Total operating expenses
 
907,830

 
(85,729
)
 
822,101

Income (loss) from operations
 
16,507

 
(93,006
)
 
(76,499
)
Other income (expense):
 
 

 
 
 
 

Interest income
 
6,922

 
—

 
6,922

Interest expense
 
(156,889
)
 
—

 
(156,889
)
Other expense, net
 
(21,210
)
 
483

 
(20,727
)
Loss before income taxes
 
(154,670
)
 
(92,523
)
 
(247,193
)
Provision for income taxes
 
23,671

 
(19,096
)
 
4,575

Net loss from continuing operations
 
$
(178,341
)
 
$
(73,427
)
 
$
(251,768
)
 
 
 
 
 
 
 
Net loss per share - continuing operations:
 
 

 
 
 
 

Basic
 
$
(0.62
)
 
 
 
$
(0.87
)
Diluted
 
$
(0.62
)
 
 
 
$
(0.87
)
 
 
 
 
 
 
 
Weighted average common shares outstanding:
 
 

 
 
 
 

Basic
 
289,348

 
 
 
289,348

Diluted
 
289,348

 
 
 
289,348









See accompanying notes.

5

Exhibit 99.1

NUANCE COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the fiscal year ended September 30, 2016

 
 
 
 
Pro Forma Adjustments
 
 
 
 
As Reported
 
Removing estimated income
statement items (c)
 
Pro Forma
 
 
(ASC 605)
 
 
 
 
 
 
(In thousands, except per share amounts)
Revenues:
 
 
Professional services and hosting
 
$
949,630

 
$
(79,765
)
 
$
869,865

Product and licensing
 
502,113

 
(129,516
)
 
372,597

Maintenance and support
 
268,584

 
(1,191
)
 
267,393

Total revenues
 
1,720,327

 
(210,472
)
 
1,509,855

Cost of revenues:
 
 

 
 
 
 

Professional services and hosting
 
621,060

 
(49,434
)
 
571,626

Product and licensing
 
61,584

 
(737
)
 
60,847

Maintenance and support
 
37,993

 
(84
)
 
37,909

Amortization of intangible assets
 
54,259

 
(12,275
)
 
41,984

Total cost of revenues
 
774,896

 
(62,530
)
 
712,366

Gross profit
 
945,431

 
(147,942
)
 
797,489

Operating expenses:
 
 

 
 
 
 

Research and development
 
246,826

 
(46,570
)
 
200,256

Sales and marketing
 
319,571

 
(22,482
)
 
297,089

General and administrative
 
164,335

 
(2,062
)
 
162,273

Amortization of intangible assets
 
85,523

 
(6,329
)
 
79,194

Acquisition-related costs, net
 
16,823

 
(20
)
 
16,803

Restructuring and other charges, net
 
24,205

 
(1,907
)
 
22,298

Total operating expenses
 
857,283

 
(79,370
)
 
777,913

Income from operations
 
88,148

 
(68,572
)
 
19,576

Other income (expense):
 
 

 
 
 
 

Interest income
 
4,438

 
—

 
4,438

Interest expense
 
(132,732
)
 
—

 
(132,732
)
Other expense, net
 
(8,327
)
 
535

 
(7,792
)
Loss before income taxes
 
(48,473
)
 
(68,037
)
 
(116,510
)
Provision for income taxes
 
10,230

 
(4,249
)
 
5,981

Net loss from continuing operations
 
$
(58,703
)
 
$
(63,788
)
 
$
(122,491
)
 
 
 
 
 
 
 
Net loss per share - continuing operations:
 
 

 
 
 
 

Basic
 
$
(0.20
)
 
 
 
$
(0.42
)
Diluted
 
$
(0.20
)
 
 
 
$
(0.42
)
 
 
 
 
 
 
 
Weighted average common shares outstanding:
 
 

 
 
 
 

Basic
 
292,129

 
 
 
292,129

Diluted
 
292,129

 
 
 
292,129









See accompanying notes.

6

Exhibit 99.1

NUANCE COMMUNICATIONS, INC.
NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Note 1. Basis of Presentation

The unaudited pro forma condensed consolidated statements of operations for fiscal years 2018, 2017, and 2016 are based upon the historical financial statements included within the Company's Current Report on Form 8-K filed June 13, 2019 (the "June 13 Form 8-K"). The unaudited pro forma condensed consolidated statement of operations for the nine months ended June 30, 2019 and the unaudited pro forma condensed consolidated balance sheet are based upon the historical financial statements included within the Company's Quarterly Report on Form 10-Q filed August 9, 2019 (The "Third Quarter Form 10-Q"). The unaudited pro forma condensed consolidated statements of operations give effect to the Separation as if the transaction had occurred on October 1, 2016. Additionally, the unaudited pro forma condensed consolidated statements of operations for the fiscal year ended September 30, 2018 and the nine months ended June 30, 2019 give effect to the cash distribution to Nuance from Cerence, and the redemption of the 6.000% Senior Notes as if the transactions had occurred on October 1, 2017. The unaudited pro forma condensed consolidated balance sheet as of June 30, 2019 gives effect to the Separation, the cash distribution to Nuance from Cerence, and the redemption of the 6.000% Senior Notes as if the transactions had occurred on that date.

The unaudited pro forma condensed consolidated financial statements have been prepared in accordance with Article 11 of Regulation S-X and, in the opinion of management, reflect all necessary adjustments that are: (i) directly attributable to the Separation; (ii) factually supportable; and (iii) with respect to the unaudited pro forma condensed consolidated statements of operations, expected to have a continuing impact on the results of the Company.

Note 2. Pro Forma Adjustments

Adjustments to the pro forma condensed consolidated balance sheet:

(a) Removes the estimated assets and liabilities of Cerence from the condensed consolidated balance sheet as of June 30, 2019.
(b) Reflects the redemption of all of the remaining $300.0 million aggregate principal amount of the 6.000% Senior Notes at a redemption price equal to $313.5 million, which was funded by the cash distribution from Cerence of $153.0 million and cash from the balance sheet of $160.5 million.
Adjustments to the pro forma condensed consolidated statements of operations:

(c) The pro forma adjustments for each of fiscal years 2018, 2017, and 2016 and nine months ended June 30, 2019 reflect the removal of the estimated revenues, costs and direct expenses of the Business, and the related tax effects of these adjustments.

(d)
The pro forma adjustments for the fiscal year ended September 30, 2018 and the nine months ended June 30, 2019 also reflect the reduction of interest expense and interest income had we redeemed the 6.000% Senior Notes on October 1, 2017. The reduction in interest expenses was estimated based upon the then remaining $300.0 million aggregate principal amount and the stated yield of the 6.000% Senior Notes; the reduction in interest income was estimated based upon the $160.5 million reduction in Nuance's cash on its the balance sheet, as described in Note (b), and an estimated yield of 2% per annum.


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