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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 28, 1996
RADIUS INC.
(Exact name of registrant as specified in its charter)
California
(State or other jurisdiction of incorporation)
0-18690 68-0101300
(Commission (IRS Employer
File Number) Identification No.)
215 Moffett Park Drive, Sunnyvale, CA 94089
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (408) 541-6100
This report on Form 8-K consists of 8 pages.
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ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS.
In January 1996, the Company completed the sale (the "Disposition") of
its Color Server Group ("CSG") to Splash Merger Company, Inc. (the "Buyer"), a
wholly owned subsidiary of Splash Technology Holdings, Inc. (the "Parent"), a
corporation formed by various investment entities associated with Summit
Partners. The Company received approximately $17.2 million in cash and $4.7
million was placed in escrow for certain post-closing adjustments and to secure
certain indemnification obligations, and also received 4,282 shares of the
Parent's 6% Series B Redeemable and Convertible Preferred Stock. The net cash
proceeds of the CSG transaction were used to repay certain indebtedness of the
Company. Reference is made to the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1995 and the Company's Quarterly Reports on Form
10-Q for the quarters ended December 30, 1995 and March 30, 1996 for a further
description of the CSG transaction.
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ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS.
(b) Proforma financial information.
Set forth below are the Unaudited Pro Forma Consolidated Balance Sheet
at December 30, 1995 and the Unaudited Pro Forma Statements of Operations for
the three months ended December 30, 1995 and for the twelve months ended
September 30, 1995 reflecting the Disposition of CSG in January 1996. The
Company received approximately $17.2 million and 4,282 shares of Splash
Technology Holdings, Inc. Series B Redeemable and Convertible Preferred Stock.
The Company may receive up to an additional $4.7 million upon close of escrow
subject to certain post-closing adjustments and indemnification provisions.
The Unaudited Pro Forma Balance Sheet as of December 30, 1995 reflects
the elimination of the assets sold and the liabilities assumed and the repayment
of certain of the Company's indebtedness to two lenders, assuming the
Disposition was consummated on December 30, 1995.
The Unaudited Pro Forma Statements of Operations for the three months
ended December 30, 1995 and the twelve months ended September 30, 1995 reflect
the elimination of net revenue, cost of sales and operating expenses related to
CSG. The Unaudited Pro Forma Statements of Operations assumes that the
Disposition and the other referenced events were completed at the beginning of
the relevant reporting period.
The pro forma financial information does not purport to be indicative
of the results of operations that would actually have been reported had the
transactions underlying the pro forma adjustments actually been consummated on
such dates or of the results of operations that may be reported by the Company
in the future.
(c) Exhibits.
10.1 Merger Agreement dated as of December 21, 1995 among the Company,
Splash Technology, Inc. ("Splash"), Summit Subordinated Debt Fund, L.P., Summit
Ventures IV, L.P., Summit Investors II, L.P. (collectively, the "Investors"),
Splash Technology Holdings, Inc. ("Holdings") and Splash Merger Company, Inc.
("Merger Company").*
10.2 Amendment No. 1 to Merger Agreement among the Company, Splash,
Holdings, Merger Company and the Investors.*
- --------
* Previously filed as exhibits to the Company's Quarterly Report on Form 10-Q
for the quarter ended December 30, 1995.
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RADIUS INC.
Unaudited Pro Forma Consolidated Balance Sheets
December 30, 1995
(in thousands)
LESS:
RADIUS INC. COLOR SERVER TOTAL
CONSOLIDATED GROUP AS ADJUSTED
------------ ------------ -----------
Cash $ 6,990 $ 807 (C) $ 7,797
Accounts receivable, net 25,308 (3,594) (B) 21,714
Inventories 12,564 (780) (B) 11,784
Prepaid expenses and other current assets 12,091 12,091
Income tax receivable 517 517
--------- --------- ---------
Total current assets 57,470 (3,567) 53,903
Property and equipment, net 2,572 2,572
Deposits and other assets 512 512
--------- --------- ---------
Total assets $ 60,554 $ (3,567) $ 56,987
========= ========= =========
Accounts payable 42,886 (3,531) (B) 40,162
807 (A)
Accrued payroll and related expenses 6,083 (144) (B) 5,939
Accrued warranty costs 2,510 (110) (B) 2,400
Other accrued liabilities 11,231 (1,144) (B) 10,087
Accrued income taxes 1,636 1,636
Accrued restructuring and other charges 16,980 16,980
Short-term borrowings 43,795 (16,438) (C) 27,357
Obligations under capital leases - current portion 1,524 1,524
--------- --------- ---------
Total current liabilities 126,645 (20,560) 106,085
Obligations under capital leases - noncurrent portion 831 831
Common stock 117,127 117,127
Common stock to be issued 8,695 8,695
Accumulated translation adjustment 32 32
Accumulated deficit (192,776) 16,993 (A) (175,783)
--------- --------- ---------
Total shareholders' equity (Net capital deficiency) (66,922) 16,993 (49,929)
--------- --------- ---------
Total liabilities & shareholders' equity (Net capital
deficiency) $ 60,554 $ (3,567) $ 56,987
========= ========= =========
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RADIUS INC.
Unaudited Pro Forma Consolidated Statements of Operations
Three Months Ended December 30, 1995
(in thousands, except per share data)
LESS:
RADIUS INC. COLOR SERVER LESS: TOTAL
CONSOLIDATED GROUP INTEREST AS ADJUSTED
------------ ------------ -----------
Net revenue $ 32,652 $ 6,967 $ 25,685
Cost of sales 28,607 4,722 23,885
-------- -------- --------
Gross margin 4,045 2,245 1,800
Operating expenses 13,591 1,302 12,289
-------- -------- --------
Operating income (loss) (9,546) 943 (10,489)
Other income (expense) (46) -- 593 (D) 547
-------- -------- -------- --------
Income (loss) before income taxes (9,592) 943 593 (9,942)
Provision for income taxes 191 -- -- 191
-------- -------- -------- --------
Net income (loss) ($ 9,783) $ 943 593 ($10,133)
======== ======== ======== ========
Net loss per share:
Net loss per share ($ 0.57) ($ 0.59)
======== ========
Common and common equivalent
shares used in computing net loss
per share 17,248 17,248
======== ========
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RADIUS INC.
Unaudited Pro Forma Consolidated Statements of Operations
Twelve Months Ended September 30, 1995
(in thousands, except per share data)
LESS:
RADIUS INC. COLOR SERVER LESS: TOTAL
CONSOLIDATED GROUP INTEREST AS ADJUSTED
------------ ------------ -----------
Net revenue $ 308,133 $ 29,328 $ 278,805
Cost of sales 302,937 19,559 283,378
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Gross margin 5,196 9,769 (4,573)
Operating expenses 109,378 6,300 103,078
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Operating income (loss) (104,182) 3,469 (107,651)
Other income (expense) (6,068) -- 1,675 (D) (4,393)
Litigation settlement (12,422) -- (12,422)
--------- --------- --------- ---------
Income (loss) before income taxes (122,672) 3,469 1,675 (124,466)
Provision for income taxes 9,070 -- -- 9,070
--------- --------- --------- ---------
Net income (loss) ($131,742) $ 3,469 $ 1,675 ($133,536)
========= ========= ========= =========
Net loss per share:
Net loss per share ($ 8.75) ($ 8.87)
========= =========
Common and common equivalent
shares used in computing net loss
per share 15,049 15,049
========= =========
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NOTES TO UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS
(in thousands)
(A) Represents the gain on the sale of the Color Server Group
("CSG")
Cash paid to Radius Inc. $ 17,245
Net working capital of CSG at December 30, 1995 555 (B)
Estimated fees and expenses (807)
---------
Gain (subject to post closing adjustments) at December 30, 1995
value to be assigned to the 4,282 shares of Splash Technology
Holdings, Inc. Series B Redeemable and Convertible Preferred
Stock is deemed to be immaterial: $ 16,993
---------
(B) Assets sold and liabilities assumed by Purchasers as of December 30,
1995 were as follows:
Receivables $ 3,594
Inventory 780
Accounts payable (3,531)
Accrued payroll (144)
Accrued warranty costs (110)
Other accrued liabilities (1,144)
---------
$ (555)
---------
(C) Cash received for the sale of CSG $ 17,245
Paid to: Short-term borrowings to IBMCC $16,017
Short-term borrowings to Silicon Valley Bank 421
-------
(16,438)
--------
Added to cash to pay for fees and expenses $ 807
---------
(D) Reduction of $593,000 and $1,675,000 in interest expense
recorded by the Company during the three months ended
December 30, 1995 and the twelve months ended September 30,
1995, respectively, to reflect the use of the proceeds to reduce
outstanding obligations under the Company's line of credit
agreements.
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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 thereunto duly authorized.
Date: June 11, 1996
RADIUS INC.
By: /s/ Charles W. Berger
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Charles W. Berger
Chairman, President, Chief Executive
Officer and Acting Chief Financial
Officer