-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Cn+/40iVCsuWPzXz6iJZXq8RDu7wTKf6kAQfcyfbKf4MHOMkqhCubUKI5neqJ2I5 jnG0ZVSNnWfrarxO7/tINg== 0000758004-94-000010.txt : 19940715 0000758004-94-000010.hdr.sgml : 19940715 ACCESSION NUMBER: 0000758004-94-000010 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940624 ITEM INFORMATION: Acquisition or disposition of assets FILED AS OF DATE: 19940707 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NOVELL INC CENTRAL INDEX KEY: 0000758004 STANDARD INDUSTRIAL CLASSIFICATION: 7373 IRS NUMBER: 870393339 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-13351 FILM NUMBER: 94538166 BUSINESS ADDRESS: STREET 1: 122 EAST 1700 SOUTH CITY: PROVO STATE: UT ZIP: 84606 BUSINESS PHONE: 8014297000 MAIL ADDRESS: STREET 1: 122 E. 1700 S. CITY: PROVO STATE: UT ZIP: 84606 8-K 1 NOVELL/WP FILING 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 June 24, 1994 Date of Report (Date of earliest event reported) Novell, Inc. (Exact name of registrant as specified in its charter) Delaware 0-13351 87-0393339 (State of other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification No.) 122 East 1700 South Provo, Utah 84606 (Address of principal executive offices) (801) 429-7000 (Registrant's telephone number, including area code) Not applicable (Former name or former address, if changed since last report) Item 2. Acquisition or Disposition of Assets. On June 24, 1994 Novell, Inc. ("Novell") issued 51,380,100 shares of its Common Stock, $.10 par value, in connection with the merger (the "Merger") of WordPerfect Corporation ("WordPerfect"), with and into Novell. Originally, the combination of Novell and WordPerfect was to be effected by the merger of Novell Acquisition Corp., a wholly owned subsidiary of Novell ("Sub"), with and into WordPerfect, with WordPerfect becoming a wholly owned subsidiary of Novell, pursuant to the terms of the Agreement and Plan of Reorganization, dated as of March 21, 1994 (the "Merger Agreement"), entered in by and among Novell, Sub, WordPerfect, Alan C. Ashton, Bruce W. Bastian and Melania L. Bastian. As of May 31, 1994, the Merger Agreement was amended by the parties thereto to provide for the merger of WordPerfect directly into Novell. All references herein to the Merger Agreement are to the Merger Agreement as amended. Pursuant to the Merger Agreement, Novell became the surviving corporation and holders of the issued and outstanding shares of WordPerfect Common Stock received an aggregate of 51,380,100 shares of Novell Common Stock. Each shareholder of WordPerfect received one share of Novell Common Stock for each share of WordPerfect Common Stock owned by such shareholder. Each outstanding option to acquire shares of WordPerfect Common Stock were assumed by Novell and became exercisable for an equivalent number of shares of Novell Common Stock. The vesting of such options accelerated immediately upon consummation of the Merger, based on existing contractual commitments to holders of such options. As a result of the Merger, Novell has assumed options which, at the time of the Merger, represent the right to purchase 7,820,000 shares of Common Stock of Novell. The Merger Agreement provided that Dr. Ashton and Mr. Bastian (or designees of each of them) be elected to the Novell Board of Directors. Dr. Ashton and Mr. Bastian elected to defer joining the Novell Board of Directors at this time. However, Dr. Ashton and Mr. Bastian are expected to make a request to join the Novell Board of Directors in the latter part of 1994. Certain "affiliates" (as that term is defined for purposes of Rule 145 of the Securities Act) of WordPerfect have entered into agreements restricting the sale or dispositions of their shares of Novell Common Stock received by them in the Merger (including shares of Novell Common Stock issued upon the exercise of options) so as to comply with the requirements of securitieslaws, tax laws and pooling of interests accounting. Additionally, on March 20, 1994, Novell entered into a Purchase and License Agreement (the "Borland Agreement") with Borland International, Inc. ("Borland"). Pursuant to such agreement, on June 24, 1994, Novell acquired Borland's Quattro Pro spreadsheet product line for $110 million of cash. Novell also acquired for $35 million of cash, a three-year license to reproduce and distribute up to one million copies of current and future versions of Borland's Paradox relational database products as part of a suite of products including WordPerfect and any Quattro Pro product. Novell is the leading provider of network server operating system software that integrates desktop computers, servers, and mini-computer and mainframe hosts for business-wide information sharing. Novell's NetWare network computing products manage and control the sharing of data, applications and services among personal computer work groups and departmental networks, and across business-wide information systems. Novell's products support standards to integrate DOS, IBM's OS/2, Microsoft Windows, Apple/Macintosh and UNIX System desktop computers with each other and with IBM, Digital Equipment Corporation ("DEC"), Hewlett-Packard Company ("HP") and UNIX System hosts, among others. WordPerfect Corporation is a leading provider of software applications that enable users to create and process complex documents. WordPerfect also produces a broad range of software in the areas of workgroup automations, general business, electronic publishing and consumer products. WordPerfect's products provide individuals, small businesses and large, global organizations with information processing solutions that operate across complex networked computing environments. Item 7. Financial Statements. Pro Forma Financial Information and Exhibits. (a) Financial statements of WordPerfect Corporation. Page (1) The Consolidated Financial Statements of WordPerfect, the Notes to Consolidated Financial Statements, and the Report of Independent Accountants listed below are incorporated herein by reference to pages F-1 through F-18 of the Prospectus/Proxy Statement dated June 22, 1994 contained in Novell's Registration Statement on Form S-4 previously filed with the Securities and Exchange Commission (Registration No. 33-53215). Report of Independent Accountants. Consolidated Balance Sheet as of December 31, 1993 and 1992. Consolidated Statement of Income for the three years ended December 31, 1993, 1992, and 1991. Consolidated Statement of Shareholders' Equity for the three years ended December 31, 1993, 1992, and 1991. Consolidated Statement of Cash Flows for the three years ended December 31, 1993, 1992, and 1991. Notes to Consolidated Financial Statements - December 31, 1993, 1992, and 1991. (2) The Consolidated Unaudited Condensed Financial Statements of WordPerfect Corporation and related notes listed below are incorporated herein by reference to pages F-19 through F-22 of the Prospectus/Proxy Statement dated June 22, 1994 contained in Novell's Registration Statement on S-4 previously filed with the Securities and Exchange Commission (Registration No. 33-53215). Consolidated Unaudited Condensed Balance Sheet as of March 31, 1994 and December 31, 1993. Consolidated Unaudited Condensed Statement of Income for the three months ended March 31, 1994 and 1993. Consolidated Unaudited Condensed Statement of Cash Flows for the three months ended March 31, 1994 and 1993. Notes to Consolidated Unaudited Condensed Financial Statements. (b) Pro forma financial information Unaudited Pro Forma Condensed Combining Financial Statements of Novell, Inc. and WordPerfect Corporation. 6 Unaudited Pro Forma Condensed Combining Balance Sheets as of April 30, 1994, October 30, 1993, and October 31, 1992. 7 Unaudited Pro Forma Condensed Combining Statements of Income for the six months ended April 30, 1994 and May 1, 1993. 10 Unaudited Pro Forma Condensed Combining Statements of Income for the fiscal years ended October 30, 1993, October 31, 1992, and October 26, 1991. 12 Unaudited Pro Forma Condensed Combining Statements of Income for the fiscal quarters ended April 30, 1994, January 29, 1994, October 30, 1993, July 31, 1993, May 1, 1993, and January 30, 1993. 15 Notes to Unaudited Pro Forma Condensed Combining Financial Statements. 21 Unaudited Pro forma condensed combining financial statements of Novell and WordPerfect give retroactive effect to the merger which is being accounted for as pooling of interests and, as a result, the unaudited pro forma condensed combining balance sheets and statements of income are presented as if the combining companies had been combined for all periods presented. The unaudited pro forma condensed combining financial statements will become the historical financial statements of Novell upon issuance of the financial statements for the period that includes the date of merger. These unaudited pro forma condensed combining financial statements may not be indicative of the results that actually may be obtained in the future. The unaudited pro forma condensed combining financial statements, including the notes thereto, should be read in conjunction with the historical consolidated financial statements of Novell and WordPerfect. (c) Exhibits 2.1 The Agreement and Plan of Reorganization dated March 21, 1994 among Novell, Novell Acquisition Corporation, WordPerfect, Alan C. Ashton, Bruce W. Bastian and Melanie L. Bastian, and the related exhibits, are incorporated herein by reference to the Prospectus/Proxy Statement dated June 22, 1994 contained in Novell's Registration Statement on Form S-4 previously filed with the Securities and Exchange Commission (Registration No. 33-53215). 2.2 The Amendment to the Agreement and Plan of Reorganization dated May 31, 1994 among Novell, Novell Acquisition Corporation, WordPerfect, Alan C. Ashton, Bruce W. Bastian, and Melania L. Bastian is incorporated herein by reference to the Prospectus/Proxy Statement dated June 22, 1994 contained in Novell's Registration Statement on Form S-4 previously filed with the Securities and Exchange Commission (Registration No. 33-53215). 23 Consent of independent accountants. 22 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 7, 1994 NOVELL, INC. By: /s/ James R. Tolonen Chief Financial Officer NOVELL, INC. AND WORDPERFECT CORPORATION UNAUDITED PRO FORMA CONDENSED COMBINING FINANCIAL STATEMENTS The following Unaudited Pro Forma Condensed Combining Balance Sheets as of April 30, 1994, October 30, 1993, and October 31, 1992, and the Unaudited Pro Forma Condensed Combining Statements of Income for the six months ended April 30, 1994 and May 1, 1993 and for the fiscal years ended October 30, 1993, October 31, 1992, and October 26, 1991 and for the fiscal quarters ended April 30, 1994, January 29, 1994, October 30, 1993, July 31, 1993, May 1, 1993, and January 30, 1993, have been prepared giving effect to the merger between Novell and WordPerfect Corporation. Novell acquired 100% of the common stock of WordPerfect in exchange for 51,380,100 shares of Novell Common Stock. Also up to 7,820,000 Novell common shares may be issued upon the exercise of WordPerfect stock options in the future. This transaction is being accounted for as pooling of interests, and, as a result, the unaudited pro forma condensed combining financial statements are presented as if the combining companies had been combined for all periods presented. Novell, Inc. and WordPerfect Corporation Unaudited Pro forma Condensed Combining Balance Sheet As of April 30, 1994 (In thousands) Novell WordPerfect Apr. 30, 1994 Apr. 30, 1994 Combined ASSETS Current assets Cash and cash equivalents $ 427,396 $ 51,194 $ 478,590 Short-term investments 502,158 0 502,158 Receivables, net 290,797 56,058 346,855 Other 72,460 93,566 166,026 Total current assets 1,292,811 200,818 1,493,629 Property, plant & equipment, net 225,799 180,244 406,043 Other assets 60,619 9,102 69,721 Total assets $1,579,229 $390,164 $1,969,393 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Notes payable $ 324 $ 28,447 $ 28,771 Accounts payable 34,033 21,618 55,651 Accrued salaries and wages 43,692 19,284 62,976 Accrued marketing liabilities 32,959 20,517 53,476 Other accrued liabilities 46,431 43,507 89,938 Income taxes payable 67,081 7,302 74,383 Deferred revenue 16,152 33,038 49,190 Total current liabilities 240,672 173,713 414,385 Deferred income taxes 11,711 0 11,711 Long-term debt 0 91,763 91,763 Minority interests 12,759 0 12,759 Shareholders' equity Common stock 31,060 5,138 36,198 Additional paid-in capital 545,963 74,189 620,152 Retained earnings 739,964 46,490 786,454 Unearned stock compensation (7,007) 0 (7,007) Cumulative translation adjustment 4,107 (1,129) 2,978 Total shareholders' equity 1,314,087 124,688 1,438,775 Total liabilities and shareholders' equity $1,579,229 $390,164 $1,969,393 See notes to unaudited pro forma condensed combining financial statements. /TABLE
Novell, Inc. and WordPerfect Corporation Unaudited Pro forma Condensed Combining Balance Sheet As of October 30, 1993 (In thousands) Novell WordPerfect Oct. 30, 1993 Dec. 31, 1993 Combined ASSETS Current assets Cash and cash equivalents $ 328,469 $ 55,127 $ 383,596 Short-term investments 335,601 0 335,601 Receivables, net 331,662 63,672 395,334 Other 56,474 86,404 142,878 Total current assets 1,052,206 205,203 1,257,409 Property, plant & equipment, net 216,849 186,903 403,752 Other assets 74,800 9,376 84,176 Total assets $1,343,855 $401,482 $1,745,337 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Notes payable $ 796 $ 8,640 $ 9,436 Accounts payable 37,998 37,472 75,470 Accrued salaries and wages 53,756 15,305 69,061 Accrued marketing liabilities 29,892 21,661 51,553 Other accrued liabilities 41,566 61,638 103,204 Income taxes payable 50,588 5,001 55,589 Deferred revenue 15,839 17,949 33,788 Total current liabilities 230,435 167,666 398,101 Deferred income taxes 0 0 0 Long-term debt 0 84,289 84,289 Minority interests 10,205 0 10,205 Put warrants 106,716 0 106,716 Shareholders' equity Common stock 30,805 5,138 35,943 Additional paid-in capital 411,064 74,189 485,253 Retained earnings 562,238 73,313 635,551 Unearned stock compensation (9,814) 0 (9,814) Cumulative translation adjustment 2,206 (3,113) (907) Total shareholders' equity 996,499 149,527 1,146,026 Total liabilities and shareholders' equity $1,343,855 $401,482 $1,745,337 See notes to unaudited pro forma condensed combining financial statements.
Novell, Inc. and WordPerfect Corporation Unaudited Pro forma Condensed Combining Balance Sheet As of October 31, 1992 (In thousands) Novell WordPerfect Oct. 31, 1992 Dec. 31, 1992 Combined ASSETS Current assets Cash and cash equivalents $ 259,933 $ 86,569 $ 346,502 Short-term investments 285,327 0 285,327 Receivables, net 264,920 39,670 304,590 Other 55,805 29,078 84,883 Total current assets 865,985 155,317 1,021,302 Property, plant & equipment, net 181,765 175,157 356,922 Other assets 48,946 3,305 52,251 Total assets $1,096,696 $333,779 $1,430,475 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Notes payable $ 1,979 $ 0 $ 1,979 Accounts payable 33,198 37,448 70,646 Accrued salaries and wages 33,827 13,884 47,711 Accrued marketing liabilities 25,252 24,222 49,474 Other accrued liabilities 17,896 39,127 57,023 Income taxes payable 28,277 6,371 34,648 Deferred revenue 9,523 23,230 32,753 Total current liabilities 149,952 144,282 294,234 Deferred income taxes 0 0 0 Long-term debt 0 12,256 12,256 Minority interests 8,938 0 8,938 Shareholders' equity Common stock 30,064 5,138 35,202 Additional paid-in capital 306,420 74,189 380,609 Retained earnings 601,078 97,056 698,134 Unearned stock compensation 0 0 0 Cumulative translation adjustment 244 858 1,102 Total shareholders' equity 937,806 177,241 1,115,047 Total liabilities and shareholders' equity $1,096,696 $333,779 $1,430,475 See notes to unaudited pro forma condensed combining financial statements.
Novell, Inc. and WordPerfect Corporation Unaudited Pro forma Condensed Combining Statement of Income For the Six Months Ended April 30, 1994 (Amounts in thousands) Novell's WordPerfect's Six Months Ended Six Months Ended Apr. 30, 1994 Apr. 30, 1994 Combined Net sales $717,975 $305,233 $1,023,208 Cost of sales 172,001 77,173 249,174 Gross profit 545,974 228,060 774,034 Operating expenses Sales and marketing 141,452 111,429 252,881 Product development 110,350 56,110 166,460 General and administrative 45,382 41,009 86,391 Nonrecurring charges 0 14,969 14,969 297,184 223,517 520,701 Income from operations 248,790 4,543 253,333 Other income (expense) Investment income 18,861 0 18,861 Other, net (394) (545) (939) 18,467 (545) 17,922 Income before taxes 267,257 3,998 271,255 Income taxes 89,531 (9,100) 80,431 Net income $177,726 $13,098 $190,824 Weighted average shares outstanding 314,154 54,125 368,279 Net income per share $0.57 $0.24 $0.52 Additional unaudited pro forma data: Income before taxes $267,257 $3,998 $271,255 Pro forma income taxes 89,531 6,448 95,979 Pro forma net income (loss) $177,726 $(2,450) $175,276 Pro forma net income (loss) per share $0.57 $(0.05) $0.48 See notes to unaudited pro forma condensed combining financial statements.
Novell, Inc. and WordPerfect Corporation Unaudited Pro forma Condensed Combining Statement of Income For the Six Months Ended May 1, 1993 (Amounts in thousands) Novell's WordPerfect's Six Months Ended Six Months Ended May 1, 1993 Jun. 30, 1993 Combined Net sales $540,894 $346,428 $877,322 Cost of sales 99,889 83,492 183,381 Gross profit 441,005 262,936 703,941 Operating expenses Sales and marketing 115,051 111,804 226,855 Product development 71,368 62,696 134,064 General and administrative 39,442 40,783 80,225 225,861 215,283 441,144 Income from operations 215,144 47,653 262,797 Other income (expense) Investment income 13,191 0 13,191 Other, net 965 1,197 2,162 14,156 1,197 15,353 Income before taxes 229,300 48,850 278,150 Income taxes 77,962 4,830 82,792 Net income $151,338 $44,020 $195,358 Weighted average shares outstanding 311,399 52,795 364,194 Net income per share $0.49 $0.83 $0.54 Additional unaudited pro forma data: Income before taxes $229,300 $48,850 $278,150 Pro forma income taxes 77,962 15,632 93,594 Pro forma net income $151,338 $33,218 $184,556 Pro forma net income per share $0.49 $0.63 $0.51 See notes to unaudited pro forma condensed combining financial statements. /TABLE
Novell, Inc. and WordPerfect Corporation Unaudited Pro forma Condensed Combining Statement of Income For the Fiscal Year Ended October 30, 1993 (Amounts in thousands) Novell's WordPerfect's Fiscal Year Ended Year Ended Oct. 30, 1993 Dec. 31, 1993 Combined Net sales $1,122,896 $707,515 $1,830,411 Cost of sales 224,531 178,071 402,602 Gross profit 898,365 529,444 1,427,809 Operating expenses Sales and marketing 258,658 251,064 509,722 Product development 164,860 125,379 290,239 General and administrative 80,122 83,127 163,249 Nonrecurring charges 320,500 36,001 356,501 824,140 495,571 1,319,711 Income from operations 74,225 33,873 108,098 Other income (expense) Investment income 28,131 0 28,131 Other, net 1,692 236 1,928 29,823 236 30,059 Income before taxes 104,048 34,109 138,157 Income taxes 139,208 (41,771) 97,437 Net income (loss) $(35,160) $75,880 $40,720 Weighted average shares outstanding 314,409 53,491 367,900 Net income (loss) per share $(0.11) $1.42 $0.11 Additional unaudited pro forma data: Income before taxes $104,048 $34,109 $138,157 Pro forma income taxes 139,208 11,918 151,126 Pro forma net income (loss) $(35,160) $22,191 $(12,969) Pro forma net income (loss) per share $(0.11) $0.41 $(0.04) See notes to unaudited pro forma condensed combining financial statements. /TABLE
Novell, Inc. and WordPerfect Corporation Unaudited Pro forma Condensed Combining Statement of Income For the Fiscal Year Ended October 31, 1992 (Amounts in thousands) Novell's WordPerfect's Fiscal year Ended Year Ended Oct. 31, 1992 Dec. 31, 1992 Combined Net sales $933,370 $579,118 $1,512,488 Cost of sales 184,176 142,531 326,707 Gross profit 749,194 436,587 1,185,781 Operating expenses Sales and marketing 219,399 148,209 367,608 Product development 120,849 100,168 221,017 General and administrative 52,084 67,602 119,686 Nonrecurring charges 0 49,324 49,324 392,332 365,303 757,635 Income from operations 356,862 71,284 428,146 Other income (expense) Investment income 21,340 13,205 34,545 Other, net (884) 0 (884) 20,456 13,205 33,661 Income before taxes 377,318 84,489 461,807 Income taxes 128,288 11,541 139,829 Net income $249,030 $72,948 $321,978 Weighted average shares outstanding 308,104 51,380 359,484 Net income per share $0.81 $1.42 $0.90 Additional unaudited pro forma data: Income before taxes $377,318 $84,489 $461,807 Pro forma income taxes 128,288 32,252 160,540 Pro forma net income $249,030 $52,237 $301,267 Pro forma net income per share $0.81 $1.02 $0.84 See notes to unaudited pro forma condensed combining financial statements. /TABLE
Novell, Inc. and WordPerfect Corporation Unaudited Pro forma Condensed Combining Statement of Income For the Fiscal Year Ended October 26, 1991 (Amounts in thousands) Novell's WordPerfect's Fiscal Year Ended Year Ended Oct. 26, 1991 Dec. 31, 1991 Combined Net sales $640,079 $621,994 $1,262,073 Cost of sales 123,294 143,948 267,242 Gross profit 516,785 478,046 994,831 Operating expenses Sales and marketing 177,657 110,023 287,680 Product development 77,924 83,281 161,205 General and administrative 35,066 82,207 117,273 290,647 275,511 566,158 Income from operations 226,138 202,535 428,673 Other income (expense) Investment income 22,990 10,603 33,593 Other, net (1,054) 0 (1,054) 21,936 10,603 32,539 Income before taxes 248,074 213,138 461,212 Income taxes 85,586 12,310 97,896 Net income $162,488 $200,828 $363,316 Weighted average shares outstanding 295,968 50,000 345,968 Net income per share $0.55 $4.02 $1.05 Additional unaudited pro forma data: Income before taxes $248,074 $213,138 $461,212 Pro forma income taxes 85,586 75,080 160,666 Pro forma net income $162,488 $138,058 $300,546 Pro forma net income per share $0.55 $2.76 $0.87 See notes to unaudited pro forma condensed combining financial statements. /TABLE
Novell, Inc. and WordPerfect Corporation Unaudited Pro forma Condensed Combining Statement of Income For the Fiscal Quarter Ended April 30, 1994 (Amounts in thousands) Novell's Fiscal WordPerfect's Fiscal Quarter Ended Quarter Ended Apr. 30, 1994 Apr. 30, 1994 Combined Net sales $406,591 $128,339 $534,930 Cost of sales 107,861 37,536 145,397 Gross profit 298,730 90,803 389,533 Operating expenses Sales and marketing 72,233 54,428 126,661 Product development 53,820 29,097 82,917 General and administrative 22,568 19,796 42,364 148,621 103,321 251,942 Income from operations 150,109 (12,518) 137,591 Other income (expense) Investment income 7,912 0 7,912 Other, net (258) (434) (692) 7,654 (434) 7,220 Income before taxes 157,763 (12,952) 144,811 Income taxes 52,851 (4,404) 48,447 Net income (loss) $104,912 ($8,548) $96,364 Weighted average shares outstanding 314,371 54,111 368,482 Net income (loss) per share $0.33 $(0.16) $0.26 See notes to unaudited pro forma condensed combining financial statements. /TABLE
Novell, Inc. and WordPerfect Corporation Unaudited pro forma Condensed Combining Statement of Income For the Fiscal Quarter Ended January 29, 1994 (Amounts in thousands) Novell's Fiscal WordPerfect's Fiscal Quarter Ended Quarter Ended Jan. 29, 1994 Jan. 29, 1994 Combined Net sales $311,384 $176,894 $488,278 Cost of sales 64,140 39,637 103,777 Gross profit 247,244 137,257 384,501 Operating expenses Sales and marketing 69,219 57,001 126,220 Product development 56,530 27,013 83,543 General and administrative 22,814 21,213 44,027 Nonrecurring charges 0 14,969 14,969 148,563 120,196 268,759 Income from operations 98,681 17,061 115,742 Other income (expense) Investment income 10,949 0 10,949 Other, net (136) (111) (247) 10,813 (111) 10,702 Income before taxes 109,494 16,950 126,444 Income taxes 36,680 (4,696) 31,984 Net income $72,814 $21,646 $94,460 Weighted average shares outstanding 313,937 54,139 368,076 Net income per share $0.23 $0.40 $0.26 Additional unaudited pro forma data: Income before taxes $109,494 $16,950 $126,444 Pro forma income taxes 36,680 10,852 47,532 Pro forma net income $72,814 $6,098 $ 78,912 Pro forma net income per share $0.23 $0.11 $0.21 See notes to unaudited pro forma condensed combining financial statements. /TABLE
Novell, Inc. and WordPerfect Corporation Unaudited Pro forma Condensed Combining Statement of Income For the Fiscal Quarter Ended October 30, 1993 (Amounts in thousands) Novell's Fiscal WordPerfect's Quarter Ended Quarter Ended Oct. 30, 1993 Dec. 31, 1993 Combined Net sales $309,196 $200,021 $ 509,217 Cost of sales 67,926 49,833 117,759 Gross profit 241,270 150,188 391,458 Operating expenses Sales and marketing 71,875 68,540 140,415 Product development 51,181 29,504 80,685 General and administrative 22,923 21,924 44,847 145,979 119,968 265,947 Income from operations 95,291 30,220 125,511 Other income (expense) Investment income 8,325 0 8,325 Other, net 191 (1,488) (1,297) 8,516 (1,488) 7,028 Income before taxes 103,807 28,732 132,539 Income taxes 34,899 (5,143) 29,756 Net income $68,908 $33,875 $102,783 Weighted average shares outstanding 316,617 54,216 370,833 Net income per share $0.22 $0.62 $0.28 Additional unaudited pro forma data: Income before taxes $103,807 $28,732 $132,539 Pro forma income taxes 34,899 9,237 44,136 Pro forma net income $68,908 $19,495 $ 88,403 Pro forma net income per share $0.22 $0.36 $0.24 See notes to unaudited pro forma condensed combining financial statements. /TABLE
Novell, Inc. and WordPerfect Corporation Unaudited Pro forma Condensed Combining Statement of Operations For the Fiscal Quarter Ended July 31, 1993 (Amounts in thousands) Novell's Fiscal WordPerfect's Quarter Ended Quarter Ended July 31, 1993 Sep. 30, 1993 Combined Net sales $272,806 $161,066 $433,872 Cost of sales 56,716 44,746 101,462 Gross profit 216,090 116,320 332,410 Operating expenses Sales and marketing 71,732 70,720 142,452 Product development 42,311 33,179 75,490 General and administrative 17,757 20,420 38,177 Nonrecurring charges 320,500 36,001 356,501 452,300 160,320 612,620 (Loss) from operations (236,210) (44,000) (280,210) Other income (expense) Investment income 6,615 0 6,615 Other, net 536 527 1,063 7,151 527 7,678 (Loss) before taxes (229,059) (43,473) (272,532) Income taxes 26,347 (41,458) (15,111) Net (loss) $(255,406) $(2,015) $(257,421) Weighted average shares outstanding 318,223 54,156 372,379 Net income per share $(0.80) $(0.04) $(0.69) Additional unaudited pro forma data: (Loss) before taxes $(229,059) $(43,473) $(272,532) Pro forma taxes 26,347 (12,951) 13,396 Pro forma net (loss) $(255,406) $(30,522) $(285,928) Pro forma net (loss) per share $(0.80) $(0.56) $(0.77) See notes to unaudited pro forma condensed combining financial statements.
Novell, Inc. and WordPerfect Corporation Unaudited Pro forma Condensed Combining Statement of Income For the Fiscal Quarter Ended May 1, 1993 (Amounts in thousands) Novell's Fiscal WordPerfect's Quarter Ended Quarter Ended May 1, 1993 Jun. 30, 1993 Combined Net sales $280,720 $174,278 $454,998 Cost of sales 49,438 42,614 92,052 Gross profit 231,282 131,664 362,946 Operating expenses Sales and marketing 61,466 57,966 119,432 Product development 37,123 32,784 69,907 General and administrative 18,395 22,432 40,827 116,984 113,182 230,166 Income from operations 114,298 18,482 132,780 Other income (expense) Investment income 6,289 0 6,289 Other, net 1,316 (1) 1,315 7,605 (1) 7,604 Income before taxes 121,903 18,481 140,384 Income taxes 41,447 999 42,446 Net income $80,456 $17,482 $97,938 Weighted average shares outstanding 311,940 53,555 365,495 Net income per share $0.26 $0.33 $0.27 Additional unaudited pro forma data: Income before taxes $121,903 $18,481 $140,384 Pro forma income taxes 41,447 5,914 47,361 Pro forma net income $80,456 $12,567 $93,023 Pro forma net income per share $0.26 $0.23 $0.25 See notes to unaudited pro forma condensed combining financial statements.
Novell, Inc. and WordPerfect Corporation Unaudited Pro forma Condensed Combining Statement of Income For the Fiscal Quarter Ended January 30, 1993 (Amounts in thousands) Novell's WordPerfect's Fiscal Quarter Ended Quarter Ended Jan. 30, 1993 Mar. 31, 1993 Combined Net sales $260,174 $172,150 $432,324 Cost of sales 50,451 40,878 91,329 Gross profit 209,723 131,272 340,995 Operating expenses Sales and marketing 53,585 53,838 107,423 Product development 34,245 29,912 64,157 General and administrative 21,047 18,351 39,398 108,877 102,101 210,978 Income from operations 100,846 29,171 130,017 Other income (expense) Investment income 6,902 0 6,902 Other, net (351) 1,198 847 6,551 1,198 7,749 Income before taxes 107,397 30,369 137,766 Income taxes 36,515 3,831 40,346 Net income $70,882 $26,538 $ 97,420 Weighted average shares outstanding 310,858 52,036 362,894 Net income per share $0.23 $0.51 $0.27 Additional unaudited pro forma data: Income before taxes $107,397 $30,369 $137,766 Pro forma income taxes 36,515 9,718 46,233 Pro forma net income $70,882 $20,651 $ 91,533 Pro forma net income per share $0.23 $0.40 $0.25 See notes to unaudited pro forma condensed combining financial statements. /TABLE NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINING FINANCIAL STATEMENTS Note A. The unaudited pro forma condensed combining financial statements of Novell and WordPerfect give retroactive effect to the merger which is being accounted for as a pooling of interests, and as a result, the unaudited pro forma condensed combining balance sheets and statements of income are presented as if the combining companies had been combined for all periods presented. The unaudited pro forma condensed combining financial statements will become the historical financial statements for Novell upon issuance of the financial statements for the period that includes the date of the acquisition. These unaudited pro forma condensed combining financial statements may not be indicative of the results that may be obtained in the future. The unaudited pro forma condensed combining financial statements, including the notes thereto, should be read in conjunction with the historical consolidated financial statements of Novell and WordPerfect. The pro forma combined net income per share is based on the combined weighted average number of common shares of Novell Common Stock and WordPerfect Common Stock for each period, based on the Exchange Ratio of one share of Novell Common Stock for each share of WordPerfect Common Stock. The pro forma condensed combining balance sheet as of April 30, 1994 reflects the issuance of 51,380,100 shares of Novell Common Stock in exchange for all of WordPerfect Common Stock outstanding at April 30, 1994 based on the Exchange Ratio of one share of Novell Common Stock for each share of WordPerfect Common Stock. Note B. WordPerfect has a calendar year end and, accordingly the WordPerfect statements of income for the years ended December 31, 1993, 1992, and 1991, have been combined with the Novell statements of income for the fiscal years ended October 30, 1993, October 31, 1992 and October 26, 1991, respectively. In order to conform WordPerfect's year end to Novell's fiscal year end, the unaudited pro forma combined data for the six months ended April 30, 1994, includes two months (November and December 1993) for WordPerfect, which are also included in the pro forma combined statement of income for the year ended October 30, 1993. Accordingly, an adjustment has been made in the six months ended April 30, 1994 to retained earnings for the duplication of net income of $39.9 million for such two month period. Other results for such two month period of WordPerfect included net sales of $136.6 million, income before taxes of $34.6 million and income tax benefits of $5.3 million. The pro forma condensed combining data for the six months ended May 1, 1993 combines Novell's financial statements for the six months ended May 1, 1993 with the WordPerfect's financial statements for the six months ended June 30, 1993. Note C. The additional unaudited pro forma data are based upon historical combined income before taxes, adjusted to reflect a provision for income taxes as if WordPerfect and its S corporation subsidiaries had never been S corporations. Note D. Certain reclassifications, none of which are material, have been made to the WordPerfect financial statements in the unaudited pro forma condensed combining financial statements to conform to Novell classifications. There are no other material adjustments required to the historical financial statements of Novell and WordPerfect to arrive at the unaudited pro forma condensed combining balance sheets and statements of income. Note E. Total costs to be incurred by Novell and WordPerfect in connection with the Merger are estimated to be approximately $5.5 million. These costs, relating to legal, printing, accounting, financial advisory services and other related expenses will be charged against income in the periods subsequent to the pro forma condensed combining financial statements. Accordingly, the effects of these costs have not been reflected in these pro forma condensed combining financial statements. EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in this current report on Form 8-K of Novell, Inc. dated June 24, 1994 of our report dated March 22, 1994 included in Novell Inc.'s Registration Statement on Form S-4 (No. 33-53215) dated June 23, 1994 relating to the financial statements of WordPerfect Corporation for the three years ended December 31, 1993. /s/ Price Waterhouse PRICE WATERHOUSE Salt Lake City, Utah March 22, 1994 /PAGE -----END PRIVACY-ENHANCED MESSAGE-----