-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OOKLhlLxLb/DMC4tYpSDKb8KgB8rRUgQGtTt1kTcnWsRnPMymJ/L1zlRntSH79EW bJxKgGiuK5oup6eqQttyow== 0000891618-99-002683.txt : 19990615 0000891618-99-002683.hdr.sgml : 19990615 ACCESSION NUMBER: 0000891618-99-002683 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990503 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990614 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTUIT INC CENTRAL INDEX KEY: 0000896878 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 770034661 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-21180 FILM NUMBER: 99645782 BUSINESS ADDRESS: STREET 1: 2535 GARCIA AVE CITY: MOUNTAIN VIEW STATE: CA ZIP: 94025 BUSINESS PHONE: 4159446000 MAIL ADDRESS: STREET 1: PO BOX 7850 CITY: MOUNTAIN VIEW STATE: CA ZIP: 94039-7850 8-K/A 1 FORM 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A AMENDMENT NO. 1 Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported): MAY 3, 1999 INTUIT INC. (Exact name of Registrant as specified in its charter) DELAWARE 0-21180 77-0034661 (State of incorporation) (Commission file no.) (I.R.S.employer identification no.) 2535 GARCIA AVENUE MOUNTAIN VIEW, CALIFORNIA 94043 (Address of principal executive offices, including zip code) (415) 944-6000 (Registrant's telephone number, including area code) 2 CONTENTS Item 2: Acquisition or Disposition of Assets ..............................................3 Item 7: Financial Statements and Exhibits .................................................3 (a) Financial Statements of Computing Resources Inc...........................3 (b) Pro Forma Financial Information..........................................14 (c) Exhibits.................................................................19 Signatures ...............................................................................20
-2- 3 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On May 5, 1999, Intuit Inc. filed a Form 8-K to report its completion of the acquisition of Computing Resources, Inc. ("CRI"). Pursuant to Item 7 of Form 8-K, Intuit indicated that it would file certain financial information no later than the date required by Item 7 of Form 8-K. This Amendment No. 1 is being filed to provide such financial information. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) FINANCIAL STATEMENTS OF COMPUTING RESOURCES, INC. -3- 4 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders Computing Resources, Inc. In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of operations, of retained earnings and of cash flows present fairly, in all material respects, the financial position of Computing Resources, Inc. (the Company) at December 31, 1998, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for the opinion expressed above. As discussed in Note 10, on March 2, 1999, the Company's stockholders agreed to sell 100% of the stock in the Company to Intuit Inc. PRICEWATERHOUSECOOPERS LLP Sacramento, California April 1, 1999 -4- 5 COMPUTING RESOURCES, INC. CONSOLIDATED BALANCE SHEET - -------------------------------------------------------------------------------- For the year ended December 31, 1998 ASSETS Current assets: Cash and cash equivalents $1,949,547 Accounts receivable - trade 488,216 Due from stockholders 185,389 Interest receivable 400,396 Prepaid expenses 180,637 Other 40,677 ---------- Total current assets 3,244,862 Property and equipment, net 2,941,976 Note receivable from employee 156,490 Other assets 34,155 ---------- Total assets $6,377,483 ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt $ 265,268 Line of credit 2,000,000 Accounts payable 1,081,401 Accrued payroll and related items 436,265 Accrued expenses 474,384 ---------- Total current liabilities 4,257,318 Long-term debt, net of current maturities 223,802 ---------- Total liabilities 4,481,120 ---------- Commitments and Contingencies (Notes 4 and 5) Minority interest 243,181 ---------- Stockholders' equity: CommKn stock, no par value, 2,500 shares authorized, 2,093 shares issued and outstanding 366,800 Retained earnings 1,286,382 ---------- Total stockholders' equity 1,653,182 ---------- Total liabilities and stockholders equity $6,377,483 ==========
The accompanying notes are an integral part of these financial statements. -5- 6 COMPUTING RESOURCES, INC. CONSOLIDATED STATEMENT OF OPERATIONS AND RETAINED EARNINGS - -------------------------------------------------------------------------------- For the year ended December 31, 1998 INCOME: Service income $ 31,992,985 Other income 484,785 ------------ Total income 32,477,770 ------------ EXPENSES: Operating 23,620,307 General and administrative 2,017,328 Depreciation and amortization 1,018,321 ------------ Total expenses 26,655,956 ------------ Income from operations 5,821,814 ------------ OTHER EXPENSE: Interest expense 74,562 Other 10,580 ------------ Total other expenses 85,142 ------------ Income before income taxes and minority interest 5,736,672 Income taxes 72,123 ------------ Income before minority interest 5,664,549 Minority interest in subsidiary net income 58,340 ------------ Net income 5,606,209 Retained earnings, beginning of year 6,284,226 Stockholder distributions (10,604,053) ------------ Retained earnings, end of year $ 1,286,382 ============ Basic and diluted earnings per share $ 2,679 ============ Basic and diluted shares outstanding 2,093 ============
The accompanying notes are an integral part of these financial statements. -6- 7 COMPUTING RESOURCES, INC. CONSOLIDATED STATEMENT OF CASH FLOWS - -------------------------------------------------------------------------------- FOR THE YEAR ENDED DECEMBER 31, 1998 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 5,606,209 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,018,321 Deferred income taxes, net 6,246 Gain on disposition of equipment (41,974) Minority interest in subsidiary net income 58,340 Changes in certain components of working capital (Increase) decrease in assets: Accounts receivable - trade (192,761) Due from stockholders (344,582) Interest receivable 120,573 Prepaid expenses 349,173 Other (14,445) Increase (decrease) in liabilities: Accounts payable (658,705) Accrued payroll taxes 4,693 Accrued expenses 181,062 ------------ Net cash provided by operating activities 6,092,150 ============ CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sales of available-for-sale securities 2,150,000 Proceeds from disposition of equipment 63,810 Purchase of property, plant and equipment (753,412) Collections on loan to employee 3,690 ------------ Net cash provided by investing activities 1,464,088 ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on long-term debt (336,661) Borrowing proceeds from line of credit 2,000,000 Stockholder distributions (10,362,935) ------------ Net cash used in financing activities (8,699,596) ------------ Net decrease in cash and cash equivalents (1,143,358) Cash and cash equivalents, beginning of year 3,092,905 ------------ Cash and cash equivalents, end of year $ 1,949,547 ============ SUPPLEMENTAL CASH FLOW DATA: Cash paid during the year for: Interest $ 75,594 ============ State income taxes $ 70,901 ============ SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES: Purchase of equipment financed under capital lease $ 52,541 ============ Distribution to stockholders by reduction of amounts due from stockholders $ 241,118 ============
The accompanying notes are an integral part of these financial statements. -7- 8 COMPUTING RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF BUSINESS Computing Resources, Inc. (Company) primarily provides payroll processing and payroll tax filing services to customers located throughout the United States. The Company establishes relationships with banks and provides its services to the banks' customers. The Company obtains new customers generally through the sales efforts of these banks. BASIS OF CONSOLIDATION The consolidated financial statements of the Company include the accounts of Computing Resources, Inc. and its 79% owned subsidiary, Computing Transaction Corporation. All significant intercompany accounts and transactions have been eliminated upon consolidation. PAYROLL TAX FILING SERVICES In connection with its payroll processing and payroll tax filing services, the Company files on behalf of customers federal and state tax returns, handles related regulatory correspondence and amendments, absorbs regulatory charges for certain penalties and interest, collects funds for payment of taxes due, holds such funds in trust until payment is due, and remits the funds to the appropriate taxing authority. For such services, the Company receives fees from customers and an investment return on funds which are held in trust. Funds held in trust are invested in various money market accounts and municipal securities. The amount of collected but unremitted funds varies significantly during the year and averaged $101.5 million in 1998. The amount of such funds as of December 31, 1998, approximated $160.5 million. The Company's payroll tax filing service is subject to various risks resulting from errors and omissions in the payment of payroll taxes and related payroll tax filings. Errors and omissions have occurred in the past and may occur in the future in connection with such services. The Company reimburses their customers for penalties imposed by tax authorities for late filings or underpayment of taxes which are a direct result of the Company's actions. To date such penalties have not been significant. However, there can be no assurance that any liabilities associated with such penalties will not have a material adverse effect on the Company's business, financial condition or results of operations. In 1998, the Company had incurred approximately $416,000 of payroll warranty costs as a result of errors made by the Company. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenue and expense during the period. Actual results could differ from these estimates. CASH AND CASH EQUIVALENTS The Company considers all highly liquid debt instruments purchased with original maturities of three months or less to be cash equivalents. CONCENTRATION OF CREDIT RISK The Company and its subsidiary maintain cash accounts in several commercial banks and with an investment services company. The bank accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to $100,000 per bank per company. The investment services company provides insurance by the Security Investors Protection Corporation (SIPC) which insures cash balances up to $100,000 and securities up to $400,000. At December 31, 1998, approximately $516,000 of the Company's cash deposit is insured. A significant portion of the Company's existing and new customers are derived from a single banking relationship; approximately 70% of the Company's service revenue is derived from services provided to this bank's customers. -8- 9 COMPUTING RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at cost. Depreciation is computed using both straight-line and accelerated methods. Purchased software is stated at cost. Amortization is computed using the straight-line method over lives ranging from three to five years. The estimated useful lives of the assets are:
YEARS ----- Computer rental equipment 5 Software 3 - 5 Machinery and equipment 3 - 10 Furniture and fixtures 3 - 10 Automobiles 3 - 5 Leasehold improvements 8 - 39
Maintenance, repairs and renewals that neither materially add to the value of the asset nor appreciably prolong its life are charged to expense as incurred. Gains and losses on dispositions of property and equipment are included in income. The Company capitalizes interest as a component of property, plant and equipment constructed for its own use. No interest was capitalized in 1998. REVENUE RECOGNITION Revenue from payroll processing and payroll tax filing services under client contracts is recognized as the services are performed. Interest income earned on unremitted payroll tax funds invested is recognized as earned and reflected as a component of service income. INCOME TAXES The Company has elected to be taxed under the provisions of Subchapter S of the Internal Revenue Code. Under those provisions, the Company does not pay federal corporate income taxes on its taxable income. Instead, the stockholders are liable for individual federal income taxes on their respective shares of the Company's taxable income. The Company has not made such an election for state income tax purposes and is, therefore, subject to state income taxes on cash basis income earned outside the State of Nevada, as Nevada has no state income tax. Computing Transaction Corporation, a subsidiary of the Company, has not elected Subchapter S status and calculates federal and state income taxes based on accrual basis income. The Company reports income taxes in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes, which requires the liability method in accounting for income taxes. Deferred tax assets and liabilities arise from the differences between the tax basis of an asset or liability and its reported amount in the financial statements. Deferred tax amounts are determined by using the tax rates expected to be in effect when the taxes will actually be paid or refunds received, as provided under currently enacted tax law. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. BASIC AND DILUTED EARNINGS PER SHARE Earnings per share is calculated using the weighted average number of shares of common stock outstanding. The Company has not issued any common stock options or warrants. As a result there is no difference between basic and diluted earnings per share. -9- 10 COMPUTING RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS In 1998, the Company adopted Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income (Statement 130). Statement 130 establishes new rules for the reporting and display of comprehensive income and its components; however, the adoption of this Statement had no impact on the Company's net income or stockholders' equity. The Company did not have any items required to be included in other comprehensive income during 1998. In 1998, the Company adopted Statement of Financial Accounting Standards No. 131, Disclosures About Segments of an Enterprise and Related Information (Statement 131). Statement 131 establishes standards for the way that enterprises subject to the reporting requirements of the U.S. Securities and Exchange Commission rules and regulations report selected information about operating segments in annual financial statements and interim financial reports. Statement 131 also establishes standards for related disclosures about products and services, geographic areas, and major customers. Inasmuch as the Company's activities are all directed at providing services related to payroll processing, the Company believes that it operates in a single business segment consistent with the objectives and basic principles of Statement 131. 2. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment is comprised of the following at December 31, 1998: Computer rental equipment $ 493,909 Software 1,933,283 Machinery and equipment 7,487,044 Furniture and fixtures 1,365,823 Leasehold improvements 636,256 11,916,315 ----------- Less accumulated depreciation and amortization 8,974,339 ----------- $ 2,941,976 ===========
3. LONG-TERM DEBT Long-term debt consists of the following at December 31, 1998: Note payable to a financing company, due November 2000; monthly principal and interest payments of $18,884; interest at various rates up to 9.75%; collateralized by various equipment $406,818 Note payable to a financing company, due December 1, 1999; monthly principal and interest payments of $3,892; interest at 8.94%; collateralized by equipment 40,233 Capital lease obligations 42,019 -------- 489,070 Less current maturities 265,268 -------- $223,802 ========
-10- 11 COMPUTING RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- Notes to Consolidated Financial Statements Notes payable and capital lease payments are as follows:
NOTES CAPITAL LEASE PAYABLE OBLIGATIONS TOTAL 1999 $268,635 $ 18,931 $287,566 2000 202,880 18,931 221,811 2001 5,589 5,589 2002 2,291 2,291 2003 2,100 2,100 -------- -------- -------- 471,515 47,842 519,357 -------- -------- -------- Less amounts representing interest 24,464 5,823 30,287 -------- -------- -------- 447,051 42,019 489,070 Less current maturities 249,594 15,674 265,268 -------- -------- -------- $197,457 $ 26,345 $223,802 ======== ======== ========
4. LINE OF CREDIT In September 1998, the Company entered into a line of credit agreement with a bank for a total commitment of $4 million which expires June 30, 2000. As of December 31, 1998, the Company had drawn $2 million on the line which bears interest at prime or LIBOR plus 1.35%, at the Company's option. During 1998, the Company elected to have interest calculated using the LIBOR option (7% at December 31, 1998). For the year ended December 31, 1998, interest expense on the line of credit totaled $33,064. The line of credit is personally guaranteed by the shareholders. The line of credit agreement contains certain restrictive covenants, which require, among other things, the maintenance of defined levels of tangible net worth and limitations on future indebtedness and payment of dividends. At December 31, 1998, the Company did not comply with the covenant requirements listed above for which the Company received waivers and amendments in February 1999. 5. COMMITMENTS AND CONTINGENCIES In addition to certain property leases with related parties as described in Note 9, the Company leases office space and equipment under terms of various operating leases. Certain leases contain renewal options ranging up to five years. -11- 12 COMPUTING RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- The Company's future minimum lease payments under noncancelable leases, including leases with related parties, are as follows: 1999 $1,191,967 2000 1,042,895 2001 844,598 2002 552,772 2003 528,282 Thereafter 214,846 ---------- $4,375,360 ==========
Rental expense charged to operations for all operating leases for the year ended December 31, 1998, approximated $1,129,000. In the normal course of business, the Company is subject to various claims and litigation. The Company does not believe that the resolution of these matters will have a material impact on the consolidated financial statements. 6. INCOME TAXES At December 31, 1998, the Company's income tax provision consists of current state income tax expense of approximately $66,000 and deferred tax expense of approximately $6,000. Temporary differences relate to prepaid expenses, accounts receivable, accumulated depreciation, accounts payable and accrued expenses. The net deferred tax amounts at December 31, 1998, consist of deferred tax assets and deferred tax liabilities of approximately $9,000 and $3,000, respectively. In 1998, the Company's subsidiary used $300,482 of available federal net operating loss carryforwards and $80,735 of available state net operating loss carryforwards to offset federal and state taxable income. At December 31, 1998, there were no available state net operating loss carryforwards. At December 31, 1998, available federal net operating loss carryforwards which may be applied against future taxable income approximated $256,000; these carryforwards expire from 2007 to 2010. As the utilization of these carryforwards is uncertain, a valuation allowance of 100% of these amounts has been recorded at December 31, 1998. Under the provisions of the Internal Revenue Code, the amount and benefit from net operating loss carryforwards may be limited in certain circumstances, including, but not limited to, a cumulative stock ownership change of more than 50% over a three year period, as defined. 7. HEALTH INSURANCE The Company maintains a partially self-insured health plan for qualified employees. The Company pays claims up to $35,000 per year per employee. Total annual claims exceeding $410,000 are covered by a third party insurance carrier. At December 31, 1998, the Company had accrued approximately $143,000 relating to claims payable and an estimate of incurred but unreported claims. 8. RETIREMENT PLAN The Company has a 401(k) plan and trust (Plan) for the benefit of salaried, hourly and commissioned employees. Eligible employees may elect to have their compensation reduced by up to 20% for contributions to the Plan. The Company may make discretionary contributions to the Plan. The Company did not make a contribution to the Plan in 1998. Employees contributed approximately $233,000 to the Plan during 1998. -12- 13 COMPUTING RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 9. RELATED PARTY TRANSACTIONS The principal stockholder of the Company is the owner of Nevada Typesetting, which provides printing services and supplies to the Company. The Company paid approximately $388,000 to Nevada Typesetting for services provided during 1998. At December 31, 1998, accounts payable included $15,000 owed to Nevada Typesetting. As discussed in Note 10, the Company acquired Nevada Typesetting in January 1999. The Company leases its principal facility from a company affiliated through common ownership. The triple net lease commenced in January, 1994 for a ten-year term. The current monthly rent of $31,782 is subject to annual increases based on the Consumer Price Index. The Company leases another building from a company affiliated through common ownership. The triple net lease commenced in September 1995 for a ten year term. The current monthly rent of $5,616 is subject to annual increases based on the Consumer Price Index. A disaster recovery facility, located in Fallon, Nevada is owned by a company affiliated through common ownership. The affiliate and the Company entered into a ten-year, triple net lease agreement to lease the property commencing in January, 1996. The current monthly rent of $3,940 is subject to annual increases based on the Consumer Price Index. Rent expense paid to affiliates during 1998 approximated $497,000. Management of the Company views the lease transactions with related parties as arms length, which reflect current rental rates for equivalent properties in the same location. During 1998, the stockholders received net advances from the Company of $120,573. Those advances bear interest at approximately 5.4%, which totaled $6,000 for 1998. 10. SUBSEQUENT EVENTS In January 1999, the Company purchased the assets of Nevada Typesetting from the majority stockholder for approximately $645,000. On March 2, 1999, the Company's stockholders agreed to sell 100% of their stock in the Company to Intuit Inc. The sale is expected to be finalized in May 1999. -13- 14 - -------------------------------------------------------------------------------- (b) PRO FORMA FINANCIAL INFORMATION The following pro forma financial information is set forth to give effect to the acquisition of CRI by Intuit Inc. as if the acquisition had taken place at January 31, 1999 for purposes of the Unaudited Pro Forma Condensed Combining Balance Sheet and at August 1, 1997 for purposes of the Unaudited Pro Forma Condensed Combining Statements of Operations being presented. Periods presented are being combined with CRI's Balance Sheet as of December 31, 1998 and Statements of Operations for the twelve and six months ended June 30, 1998 and December 31, 1998, respectively. The Unaudited Pro Forma Condensed Combining Balance Sheet and Statements of Operations are not necessarily indicative of the financial position or operating results that would have occurred if the acquisition had actually occurred on such dates and do not purport to project the results of operations of the Company for the current year or for any future period. The adjustments in the Unaudited Pro Forma Condensed Combining Financial Information are based on available information and on certain assumptions and best estimates available to management at the time of this filing. All information contained herein should be read in conjunction with the Consolidated Financial Statements and the Notes thereto of Intuit and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in Intuit's 1998 Annual Report, Form 10Q for the first and second quarters of fiscal 1999, the Financial Statements and Notes thereto of CRI included in this Form 8-K/A, and the Notes to the Unaudited Pro Forma Condensed Combining Balance Sheets and Statements of Operations. -14- 15 INTUIT INC. AND COMPUTING RESOURCES, INC. UNAUDITED PRO FORMA CONDENSED COMBINING BALANCE SHEET
PRO FORMA INTUIT CRI --------- 1/31/99 12/31/98 ADJUSTMENTS COMBINED ------- ------- ----------- -------- (in thousands) ASSETS Current assets: Cash and cash equivalents........... $ 163,030 $1,950 (100,000)(a) $ 64,980 Short-term investments.............. 282,300 -- 282,300 Marketable Securities .............. 1,110,919 -- 1,110,919 Accounts receivable, net............ 241,276 488 241,764 Due from stockholders .............. -- 185 185 Interest receivable ................ -- 401 401 Inventories......................... 5,865 -- 5,865 Prepaid expenses and other.......... 50,713 221 50,934 Deferred income..................... -- -- -- ---------- ------ ---------- Total current assets........ 1,854,103 3,245 1,757,348 Property and equipment, net........... 77,545 2,942 80,487 Purchased intangibles and Goodwill.... 329,220 199,847 (a) 529,067 Note receivable from employee......... -- 156 156 Investments .......................... 17,483 -- 17,483 Restricted Investments ............... 35,454 -- 35,454 Long-term deferred income tax asset... 21,006 -- 21,006 Other assets.......................... 9,984 34 -- 10,018 ---------- ------ -------- ---------- Total assets.......................... $2,344,795 $6,377 99,847 $2,451,019 ========== ====== ======== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable.................... $69,825 $1,081 $ 70,906 Accrued compensation and related liabilities........................ 28,611 436 29,047 Deferred revenue.................... 45,979 -- 45,979 Income taxes payable................ 575 -- 575 Deferred Income Taxes............... 366,112 -- 366,112 Line of credit...................... 2,000 2,000 Other accrued liabilities........... 229,739 740 76,500 (a) 306,979 ---------- ------ -------- ---------- Total current liabilities... 740,841 4,257 821,598 Deferred income taxes................. 883 -- 883 Long-term notes payable............... 39,276 224 39,500 Commitments and contingencies Minority interest .................... 243 243 Stockholders' equity: Common stock........................ 611 21 (21)(b) 3 (a) 614 Additional paid-in capital.......... 1,148,013 346 (346)(b) 24,997 (a) 1,173,010 Net unrealized gain on marketable securities......................... 552,413 -- 552,413 Cumulative translation adjustment and other.......................... (2,521) (2,521) Accumulated earnings (deficit)...... (134,721) 1,286 (1,286) (b) (134,721) ---------- ------ -------- ---------- Total stockholders' equity.................... 1,563,795 1,653 -- 1,588,795 ---------- ------ -------- ---------- Total liabilities and stockholders' equity.............................. $2,344,795 $6,377 99,847 $2,451,019 ========== ====== ======== ==========
See accompanying notes. -15- 16 INTUIT INC. AND COMPUTING RESOURCES, INC. UNAUDITED PRO FORMA CONDENSED COMBINING STATEMENT OF OPERATIONS
INTUIT CRI PRO FORMA FOR THE YEAR FOR THE 12 MO --------- ENDED ENDED 7/31/98 6/30/98 ADJUSTMENTS COMBINED ------- ------- ----------- -------- (in thousands, except per share data) Net revenue............................. $592,736 $31,118 $623,854 Costs and expenses: Cost of goods sold: Product............................ 120,538 7,781 128,319 Amortization of purchased software and other...................... 2,905 2,905 Customer service and technical support 117,714 14,346 132,060 Selling and marketing................. 164,834 164,834 Research and development.............. 108,604 108,604 General and administrative............ 36,719 2,759 39,478 Charge for purchased research and development........................ 53,800 53,800 Other acquisition costs, including amortization of goodwill and purchased intangibles........................ 24,204 -- 39,969(c) 64,173 --------- ------- -------- Total costs and expenses...... 629,318 24,886 694,173 --------- ------- -------- Income (loss) from operations. (36,582) 6,232 (70,319) --------- ------- -------- Interest and other income and expense, net.................................. 12,438 (65) 12,373 Gain on disposal of business ........... 4,321 -- 4,321 --------- ------- -------- Income/(loss) before income taxes....... (19,823) 6,167 (53,625) Provision (benefit) for income taxes.... (7,666) 42 (13,830)(e) (21,454) --------- ------- -------- Income/(loss) before minority interest.. (12,157) 6,125 (32,171) Minority interest....................... -- 18 18 Net income (loss)....................... $ (12,157) $ 6,107 $(32,189) ========= ======= ======== Basic net loss per share ............... $ (0.24) $ (0.64) ========= ======== Shares used in computing net loss per share............................ 49,676 289(d) 49,965 ========= ======== Diluted net loss per share.............. $ (0.24) $ (0.64) ========= ======== Shares used in computing net loss per share ........................... 49,676 289(d) 49,965 ========= ========
See accompanying notes. -16- 17 INTUIT INC. AND COMPUTING RESOURCES, INC. UNAUDITED PRO FORMA CONDENSED COMBINING STATEMENT OF OPERATIONS
INTUIT CRI PRO FORMA FOR THE 6 MO. FOR THE 6 MO. --------- ENDED ENDED 1/31/99 12/31/98 ADJUSTMENTS COMBINED --------- -------- ----------- -------- (in thousands, except per share data) Net revenue............................ $457,919 $15,725 $473,644 Costs and expenses: Cost of goods sold: Product........................... 101,030 3,788 104,818 Amortization of purchased software and other.............. 3,701 3,701 Customer service and technical support.......................... 69,755 8,183 77,938 Selling and marketing................ 107,636 107,636 Research and development............. 70,021 70,021 General and administrative........... 26,268 1,665 27,933 Amortization of goodwill and purchased intangibles............. 41,932 19,985 (c) 61,917 -------- ------- -------- Total costs and expenses..... 420,343 13,636 453,964 ======== ======= ======== Income from operations....... 37,576 2,089 19,680 Interest and other income and expense, net....................... 7,298 (77) 7,221 Realized gain on sale of marketable securities......................... 10,088 -- 10,088 -------- ------- -------- Net income before income taxes........ 54,962 2,012 36,989 Provision for income taxes............. 14,295 5 (7,290) (e) 7,010 -------- ------- -------- Net income before minority interest.... 40,667 2,007 29,979 Minority interest...................... -- 51 51 -------- ------- -------- Net income ............................ $ 40,667 $ 1,956 $ 29,928 ======== ======= ======== Basic net income per share............. $ 0.68 $ 0.50 ======== ======== Shares used in per share amounts....... 59,837 289 (d) 60,126 ======== ======== Diluted net income per share........... $ 0.65 $ 0.48 ======== ======== Shares used in per share amounts....... 62,379 289 (d) 62,668 ======== ========
See accompanying notes. -17- 18 INTUIT INC. AND COMPUTING RESOURCES INCORPORATED NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINING BALANCE SHEET AND STATEMENTS OF OPERATIONS The following pro forma adjustments are required to allocate the purchase price and acquisition cost to the assets acquired from Computing Resources Incorporated ("CRI") based on their fair value, as determined by Intuit. (a) Reflects the estimated allocation of the purchase price, based on fair market values, to the historical balance sheet. Purchase price represents $100 million cash payment, $25 million stock payment, three annual future cash payments of $25 million and estimated acquisition costs of $1.5 million. (b) Represents the elimination of CRI's equity accounts. (c) Amortization of intangible assets and goodwill are based on an estimated life of five years. Actual results may differ from these estimates upon completion of the purchase price allocation in Intuit's fiscal fourth quarter of 1999. (d) Reflects an increase in common stock for the shares issued in connection with the purchase price of CRI for the net assets acquired. (e) Reflects estimated tax effect of treating CRI as a C corporation instead of an S corporation combined with the estimated tax benefit of intangibles amortization. -18- 19 (c) EXHIBITS 23.01 Consent of Independent Accountants -19- 20 SIGNATURES Pursuant to the requirements of the securities Exchange Act of 1934, the Registrant has full caused this amendment to report to be signed on its behalf by the undersigned, thereunto fully authorized. INTUIT INC. Date: June 14, 1999 /s/ Greg Santora --------------------- ----------------------------- Greg Santora Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) -20- 21 EXHIBIT INDEX
Number Description 23.01 Consent of Independent Accountants
EX-23.01 2 CONSENT OF INDEPENDENT ACCOUNTANTS 1 EXHIBIT 23.01 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the use in Intuit Inc.'s Current Reports on Form 8-K/A dated June 14, 1999 of our report dated April 1, 1999 relating to the December 31, 1998 financial statements of Computing Resources, Inc. /s/ PRICEWATERHOUSECOOPERS LLP Sacramento, California June 14, 1999 -----END PRIVACY-ENHANCED MESSAGE-----