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): January 21, 2005
PINNACLE SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
California | 000-24784 | 94-3003809 | ||
(State or other jurisdiction of incorporation) | (Commission File No.) | (I.R.S. Employer Identification No.) |
280 North Bernardo Avenue
Mountain View, California 94043
(Address of principal executive offices)
Registrant’s telephone number, including area code: (650) 526-1600
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)) |
Item 2.01 Completion of Acquisition or Disposition of Assets.
On January 21, 2005, Pinnacle Systems, Inc. (“Pinnacle”) completed the sale of its Hamburg, Germany-based Steinberg Media Technologies GmbH (“Steinberg”) to Yamaha Corporation (“Yamaha”) for $28.5 million in cash. The sale of Steinberg was pursuant to a Share Purchase and Transfer Agreement entered into on December 20, 2004 (the “Agreement”) between Pinnacle, Steinberg and Yamaha. A copy of the Agreement is attached hereto as Exhibit 2.1.
Item 9.01 Financial Statements and Exhibits.
(a) | Financial Statements of Business Acquired. |
Not | Applicable. |
(b) | Pro Forma Financial Information. |
The following unaudited pro forma consolidated balance sheet reflects Pinnacle’s disposition of Steinberg to Yamaha as if it had occurred on September 30, 2004. The accompanying unaudited pro forma condensed statements of operations for the year ended June 30, 2004 and for the three months ended September 30, 2004 and 2003 no longer reflect the Steinberg results of operations and charges as continuing operations. The pro forma financial information does not purport to represent what Pinnacle’s consolidated results would have been if the disposition had in fact occurred on these dates, nor does it purport to indicate the future consolidated financial position or future consolidated results of operations of Pinnacle. The pro forma adjustments are based on the operating results and related charges for Steinberg recorded for the periods.
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PINNACLE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
As of September 30, 2004 | ||||||||||||
As Reported | Steinberg Adjustments (1) | Pro Forma | ||||||||||
Assets | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 46,443 | $ | 24,905 | $ | 71,348 | ||||||
Marketable securities | 16,903 | — | 16,903 | |||||||||
Accounts receivable, net | 39,672 | (944 | ) | 38,728 | ||||||||
Inventories | 44,876 | (667 | ) | 44,209 | ||||||||
Prepaid expenses and other current assets | 6,374 | (407 | ) | 5,967 | ||||||||
Total current assets | 154,268 | 22,887 | 177,155 | |||||||||
Restricted cash | 16,850 | 16,850 | ||||||||||
Property and equipment, net | 16,031 | (796 | ) | 15,235 | ||||||||
Goodwill | 73,612 | (14,273 | ) | 59,339 | ||||||||
Other intangible assets, net | 15,029 | (7,029 | ) | 8,000 | ||||||||
Other assets | 8,205 | (158 | ) | 8,047 | ||||||||
$ | 283,995 | $ | 631 | $ | 284,626 | |||||||
Liabilities and Shareholders’ Equity | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable | $ | 12,562 | $ | (203 | ) | $ | 12,359 | |||||
Accrued and other liabilities | 50,849 | (2,709 | ) | 48,140 | ||||||||
Deferred revenue | 15,825 | (16 | ) | 15,809 | ||||||||
Total current liabilities | 79,236 | (2,928 | ) | 76,308 | ||||||||
Deferred income taxes | 1,786 | (1,786 | ) | 0 | ||||||||
Total liabilities | 81,022 | (4,714 | ) | 76,308 | ||||||||
Shareholders’ equity: | ||||||||||||
Common stock | 377,215 | 377,215 | ||||||||||
Accumulated deficit | (179,418 | ) | 5,345 | (174,073 | ) | |||||||
Accumulated other comprehensive income | 5,176 | 5,176 | ||||||||||
Total shareholders’ equity | 202,973 | 5,345 | 208,318 | |||||||||
$ | 283,995 | $ | 631 | $ | 284,626 | |||||||
(1) | Reflects the assets and liabilities of Steinberg and the related gain net of tax. |
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PINNACLE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
Twelve Months Ended June 30, 2004 | ||||||||||||
As Reported | Steinberg Adjustments (1) | Pro Forma | ||||||||||
Net sales | $ | 334,827 | $ | 23,532 | $ | 311,295 | ||||||
Costs and expenses: | ||||||||||||
Cost of sales | 174,883 | 9,742 | 165,141 | |||||||||
Engineering and product development | 42,336 | 3,508 | 38,828 | |||||||||
Sales, marketing and service | 104,406 | 7,420 | 96,986 | |||||||||
General and administrative | 23,033 | 1,009 | 22,024 | |||||||||
Amortization of other intangible assets | 8,329 | 3,469 | 4,860 | |||||||||
Impairment of goodwill | 12,311 | — | 12,311 | |||||||||
Impairment of other intangible assets | 10,294 | 10,294 | — | |||||||||
Restructuring costs | 5,338 | 1,698 | 3,640 | |||||||||
In-process research and development | 2,193 | 2,193 | ||||||||||
Total costs and expenses | 383,123 | 37,140 | 345,983 | |||||||||
Operating loss | (48,296 | ) | (13,608 | ) | (34,688 | ) | ||||||
Interest and other income (expense), net | (295 | ) | 77 | (372 | ) | |||||||
Loss from continuing operations before income taxes | (48,591 | ) | (13,531 | ) | (35,060 | ) | ||||||
Income tax expense (benefit) | (1,147 | ) | (5,869 | ) | 4,722 | |||||||
Loss from continuing operations | $ | (47,444 | ) | $ | (7,662 | ) | $ | (39,782 | ) | |||
Loss per share from continuing operations: | ||||||||||||
Basic and Diluted | $ | (0.71 | ) | $ | (0.11 | ) | $ | (0.59 | ) | |||
Shares used to compute net loss per share: | ||||||||||||
Basic and Diluted | 67,069 | 67,069 | 67,069 | |||||||||
(1) | Reflects the reversal of the results of operations for Steinberg and the related tax impacts. |
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PINNACLE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
Three Months Ended September 30, 2004 | Three Months Ended September 30, 2003 | |||||||||||||||||||||||
As Reported | Steinberg Adjustments (1) | Pro Forma | As Reported | Steinberg Adjustments (1) | Pro Forma | |||||||||||||||||||
Net sales | $ | 70,542 | $ | 4,567 | $ | 65,975 | $ | 69,343 | $ | 4,714 | $ | 64,629 | ||||||||||||
Costs and expenses: | ||||||||||||||||||||||||
Cost of sales | 39,871 | 1,601 | 38,270 | 38,316 | 1,789 | 36,527 | ||||||||||||||||||
Engineering and product development | 10,115 | 806 | 9,309 | 10,550 | 827 | 9,723 | ||||||||||||||||||
Sales, marketing and service | 19,399 | 1,444 | 17,955 | 22,184 | 2,216 | 19,968 | ||||||||||||||||||
General and administrative | 7,076 | 284 | 6,792 | 5,979 | 290 | 5,689 | ||||||||||||||||||
Amortization of other intangible assets | 1,381 | 535 | 846 | 2,735 | 1,210 | 1,525 | ||||||||||||||||||
Restructuring costs | 2,435 | — | 2,435 | — | — | |||||||||||||||||||
In-process research and development | — | — | 2,193 | 2,193 | ||||||||||||||||||||
Total costs and expenses | 80,277 | 4,670 | 75,607 | 81,957 | 6,332 | 75,625 | ||||||||||||||||||
Operating loss | (9,735 | ) | (103 | ) | (9,632 | ) | (12,614 | ) | (1,618 | ) | (10,996 | ) | ||||||||||||
Interest and other income, net | 508 | 18 | 490 | 334 | 38 | 296 | ||||||||||||||||||
Loss from continuing operations before income taxes | (9,227 | ) | (85 | ) | (9,142 | ) | (12,280 | ) | (1,580 | ) | (10,700 | ) | ||||||||||||
Income tax expense (benefit) | 704 | (200 | ) | 904 | 528 | (388 | ) | 916 | ||||||||||||||||
Loss from continuing operations | $ | (9,931 | ) | $ | 115 | $ | (10,046 | ) | $ | (12,808 | ) | $ | (1,192 | ) | $ | (11,616 | ) | |||||||
Loss per share from continuing operations: | ||||||||||||||||||||||||
Basic and Diluted | $ | (0.14 | ) | $ | 0.00 | $ | (0.15 | ) | $ | (0.20 | ) | $ | (0.02 | ) | $ | (0.18 | ) | |||||||
Shares used to compute net income (loss) per share: | ||||||||||||||||||||||||
Basic and Diluted | 69,043 | 69,043 | 69,043 | 65,086 | 65,086 | 65,086 | ||||||||||||||||||
(1) | Reflects the reversal of the results of operations for Steinberg and the related tax impacts. |
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(c) | Exhibits. |
Exhibit No. | Description | |
2.1 | Share Purchase and Transfer Agreement between Pinnacle Systems, Inc., Pinnacle Systems GmbH, Steinberg Media Technologies GmbH and Yamaha Corporation dated December 20, 2004. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
PINNACLE SYSTEMS, INC. | ||
By: | /s/ Scott E. Martin | |
Scott E. Martin | ||
Senior Vice President, Human Resources and Legal |
Date: January 27, 2005
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