SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
Current Report Pursuant to Section 13 or 15(d) of
the Securities Act of 1934
Date of Report (Date of earliest event reported): July 10, 1996
----------------------
SunGard/(R)/ Data Systems Inc.
(Exact name of registrant as specified in its charter)
DELAWARE 7379 51-0267091
(State or other jurisdication (Primary Standard Industrial (I.R.S. Employer
incorporation or organization Classification Code Number) Identification No.)
1285 DRUMMERS LANE, WAYNE, PENNSYLVANIA 19087
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (610) 341-8700
------------------
- --------------------------------------------------------------------------------
(Former name and former address, if changed since last report)
Item 7. Financial Statements and Exhibits
---------------------------------
(a) Combined Financial Statements of NCS Financial Systems, Inc. and
NCS-IPB S.A. (collectively, "NCSF"), attached hereto as Appendix
I.
(1) Report of Independent Auditors dated July 25, 1996.
(2) Combined Balance Sheet as of June 30, 1996 (unaudited) and
January 31, 1996.
(3) Combined Statement of Income for the six months ended June
30, 1996 and 1995 (unaudited) and for the year ended January
31, 1996.
(4) Combined Statement of Cash Flows for the six months ended
June 30, 1996 and 1995 (unaudited) and for the year ended
January 31, 1996.
(5) Notes to Combined Financial Statements.
(b) Unaudited Pro Forma Condensed Combined Financial Information of
SunGard Data Systems Inc. and NCSF, attached hereto as Appendix
II.
(1) Unaudited Pro Forma Combined Statement of Income for the
year ended December 31, 1995.
(2) Unaudited Pro Forma Combined Statement of Income for the six
months ended June 30, 1996.
(3) Unaudited Pro Forma Condensed Combined Balance Sheet as of
June 30, 1996.
(4) Notes to Unaudited Pro Forma Condensed Combined Financial
Information.
(c) Exhibits.
2.1 Stock Purchase and Sale Agreement dated May 30, 1996 by and
among SunGard Data Systems Inc., National Computer Systems,
Inc. and NCS Holdings, Inc. (Incorporated by reference to
Exhibit 2.1 filed with SunGard's Current Report on Form 8-K
dated May 30, 1996.)
23.1 Consent of Ernst & Young LLP
APPENDIX I
Combined Financial Statements
NCS Financial Systems, Inc.
and NCS-IPB S.A.
Year ended January 31, 1996
NCS Financial Systems, Inc.
and NCS-IPB S.A.
Combined Financial Statements
Year ended January 31, 1996
Contents
Report of Independent Auditors.......................................... 1
Audited Combined Financial Statements
Combined Balance Sheet.................................................. 2
Combined Statement of Income............................................ 4
Combined Statement of Cash Flows........................................ 5
Notes to Combined Financial Statements.................................. 6
[LOGO FOR ERNST & YOUNG LLP APPEARS HERE]
[_]1400 Pillsbury Center [_]Phone 612 343 1000
Minneapolis
Minnesota 55402-1491
Report of Independent Auditors
Board of Directors
NCS Financial Systems, Inc.
and NCS-IPB S.A.
We have audited the accompanying combined balance sheet of NCS Financial
Systems, Inc. and NCS-IPB S.A. as of January 31, 1996, and the related combined
statements of income and cash flows for the year then ended. 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 in accordance with generally accepted auditing standards.
Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the combined financial position of NCS Financial Systems,
Inc. and NCS-IPB S.A. at January 31, 1996, and the combined results of their
operations and their cash flows for the year then ended, in conformity with
generally accepted accounting principles.
July 25, 1996 /s/Ernst & Young LLP
1
NCS Financial Systems, Inc.
and NCS-IPB S.A.
Combined Balance Sheet
(Dollars in thousands)
January 31, June 30,
1996 1996
-----------------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 20 $ 66
Receivables, less allowance for doubtful accounts
of $291:
Trade 11,612 9,299
Other 916 921
Inventories 404 337
Prepaid expenses and other 1,205 888
-----------------------
Total current assets 14,157 11,511
Property, plant and equipment:
Land, buildings and improvements 694 694
Machinery and equipment 11,459 12,091
Equipment held for lease 463 762
Accumulated depreciation (8,240) (9,448)
-----------------------
4,376 4,099
Other assets, net
Acquired and internally developed software (net) 11,357 11,567
Installment receivables 2,608 2,590
Other assets 601 540
-----------------------
14,566 14,697
-----------------------
Total assets $33,099 $30,307
=======================
2
January 31, June 30,
1996 1996
-------------------------
(Unaudited)
Liabilities and stockholders' equity
Current liabilities:
Notes payable $ 1,531 $ 1,412
Accounts payable 2,661 1,804
Accrued expenses 5,269 3,835
Deferred income 2,372 1,760
Income taxes 1,076 1,076
-------------------------
Total current liabilities 12,909 9,887
Deferred income taxes 4,010 4,010
Commitment and contingencies
Stockholders' equity:
Common Stock - NCS-IPB S.A.:
700 shares authorized, issued and outstanding 78 78
Paid-in capital - NCS-IPB S.A. 472 472
Accumulated deficit - NCS-IPB S.A. (481) (2,601)
NCS investment in Division 16,041 18,369
Cumulative translation adjustment 70 92
-------------------------
Total stockholders' equity 16,180 16,410
-------------------------
Total liabilities and stockholders' equity $33,099 $30,307
=========================
See accompanying notes.
3
NCS Financial Systems, Inc.
and NCS-IPB S.A.
Combined Statement of Income
(Dollars in thousands)
Year ended Six Months ended
January 31, June 30
1996 1996 1995
--------------------------------
(Unaudited)
Revenues:
Net sales $35,056 $17,424 $14,160
Maintenance and support 23,037 11,344 11,601
--------------------------------
Total revenues 58,093 28,768 25,761
Costs of revenues:
Cost of sales 18,700 10,511 7,369
Cost of maintenance and support 14,415 7,383 7,286
--------------------------------
Gross profit 24,978 10,874 11,106
Operating expenses:
Sales and marketing 6,229 3,345 3,021
Research and development 5,448 1,818 3,001
General and administrative 4,268 2,174 2,279
--------------------------------
Income from operations 9,033 3,537 2,805
Other income (expense):
Interest expense (35) (31) (11)
Other income (expense), net 251 106 (14)
--------------------------------
Income before income taxes 9,249 3,612 2,780
Provision for income taxes 3,570 1,369 1,065
--------------------------------
Net income $ 5,679 $ 2,243 $ 1,715
================================
See accompanying notes.
4
NCS Financial Systems, Inc.
and NCS-IPB S.A.
Combined Statement of Cash Flows
(Dollars in thousands)
Year ended Six Months ended
January 31, June 30,
1996 1996 1995
----------------------------------
(Unaudited)
Operating activities
Net income $ 5,679 $ 2,243 $ 1,715
Depreciation and amortization 4,446 2,541 1,976
Deferred income taxes 562 - -
Changes in operating assets
and liabilities:
Accounts receivable 550 (1,512) 2,433
Inventory and other current
assets (775) 308 (343)
Accounts payable and accrued
expenses (322) (623) (323)
Deferred income 351 413 310
-----------------------------------
Net cash provided by
operating activities 10,491 3,370 5,768
Investing activities
Purchases of property, plant
and equipment (1,630) (689) (919)
Product software development (4,606) (1,994) (1,926)
Net cash (invested in)
received from subsidiary (5,283) 1,132 (2,672)
Other - net 35 (1,524) (988)
-----------------------------------
Net cash used in investing
activities (11,484) (3,075) (6,505)
Financing activities
Net proceeds (repayments) of
other borrowings 870 (252) 616
-----------------------------------
Net cash provided by (used
in) financing activities 870 (252) 616
-----------------------------------
(Decrease) increase in cash
and cash equivalents (123) 43 (121)
Cash and cash equivalents -
beginning of period 143 23 123
-----------------------------------
Cash and cash equivalents -
end of period $ 20 $ 66 $ 2
===================================
See accompanying notes.
5
NCS Financial Systems, Inc.
and NCS-IPB S.A.
Notes to Combined Financial Statements
January 31, 1996
1. Accounting Policies
Description of Business
NCS Financial Systems, Inc. and NCS-IPB S.A. design, develop and market asset
management software, primarily for bank trust departments. This includes systems
for personal trust asset management for individuals and corporate trust
applications such as stock and bond transfer systems.
Basis of Presentation
The 1995 financial statements are presented on a combined basis and include the
accounts of NCS Financial Systems, Inc. and NCS-IPB S.A. (combined, the
"Company"), which are wholly-owned subsidiaries of National Computer Systems,
Inc. ("NCS"). Upon combination, all significant intercompany accounts and
transactions are eliminated. All numbers shown are in thousands, unless
otherwise indicated.
Use of Estimates
The combined financial statements have been prepared in accordance with
generally accepted accounting principles which require management to make
certain estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Those assumptions and estimates are
subject to constant revision, and actual results could differ from those
estimates.
Cash and Equivalents
All investments purchased with an original maturity of three months or less are
considered to be cash equivalents. Cash equivalents are carried at cost which
approximates fair market value.
6
NCS Financial Systems, Inc.
and NCS-IPB S.A.
Notes to Combined Financial Statements (continued)
1. Accounting Policies (continued)
Property, Plant and Equipment
Property, plant and equipment is stated at cost and depreciated over the
estimated useful lives of the assets using principally the straight-line method
for financial reporting purposes and accelerated methods for income tax
purposes. Significant improvements are capitalized to property, plant and
equipment accounts, while maintenance and repairs are expensed currently. Rental
income from equipment held for lease is recognized as earned using the operating
method of accounting for such leases. Depreciation is based on the assets'
estimated useful lives ranging from two to forty years.
Revenue Recognition
Revenue from software product sales, fixed fee software licensing and support,
and hardware maintenance is recognized in accordance with AICPA Statement of
Position 91-1, Software Revenue Recognition. Revenue from product sales and
software licensing is recognized at the time of shipment, except in instances
where material fulfillment obligations exist beyond shipment. In such cases,
revenue is not recognized until such obligations are substantially fulfilled or
is recognized in accordance with specific contract terms. Hardware maintenance
and software support revenues are recognized ratably over the contractual
period. Revenue from other services is recognized when such service is
performed. In addition, the Company periodically sells the contracts resulting
from software licensing agreements and hardware leases to third-party finance
companies.
Impairment of Long-Lived Assets
In March 1995, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of, which requires
impairment losses to be recorded on long-lived assets used in operations when
indicators of impairment are present. The Company will be subject to SFAS No.
121 in the quarter ending April 30, 1996 and, based on current estimates and
assumptions, believes the effect of adoption will not be material.
7
NCS Financial Systems, Inc.
and NCS-IPB S.A.
Notes to Combined Financial Statements (continued)
1. Accounting Policies (continued)
Allocated Expenses
The Company has certain expenses reflected in its financial statements which
have been allocated from National Computer Systems, Inc. These expenses include
employee benefits and computer systems charges, and are allocated based on gross
payroll and computer usage, respectively. Management believes that the
allocation method used is reasonable, and approximates the actual costs that
would have been incurred if the Company had operated as an unaffiliated entity.
Interim Financial Information
The accompanying financial statements as of June 30, 1996 and for the six-month
periods ended June 30, 1995 and 1996 are unaudited. In the opinion of the
management of the Company, these financial statements reflect all adjustments,
consisting only of normal and recurring adjustments, necessary for a fair
presentation of the financial statements. The results of operations for the
six-month period ended June 30, 1996 are not necessarily indicative of the
results that may be expected for the full year ending December 31, 1996.
2. Acquired and Internally Developed Software Products
Acquired software product amounts originate from the allocation of purchase
prices of acquired companies and direct acquisition of software or rights of
software. These products are generally large, complex, mission-critical
application software packages with established market positions. Products in
this category are generally assigned lives of five years. Internally developed
software products represent costs capitalized in accordance with Statement of
Financial Accounting Standards No. 86. Accordingly, software production costs
incurred subsequent to establishing technological feasibility, as defined, are
capitalized. Amortization of these products is computed on a product-by-product
basis ratably as a percentage of estimated revenue, subject to minimum straight-
line amortization over the products' estimated useful lives of two to five
years. Expected revenues and useful lives are estimates which are subject to
changes in technology and marketplace requirements and are, therefore, subject
to revision. The Company periodically evaluates its software products for
impairment by comparison of the carrying value of the product against
anticipated product margins. The carrying value is adjusted, if necessary.
8
NCS Financial Systems, Inc.
and NCS-IPB S.A.
Notes to Combined Financial Statements (continued)
2. Acquired and Internally Developed Software Products (continued)
A summary of software activity is as follows:
Internally Accumulated
Acquired Developed Amortization Total
-------------------------------------------
Balance at January 31, 1995 $10,720 $4,905 $(6,178) $ 9,447
Additions 516 4,090 - 4,606
Dispositions (381) - - (381)
Amortization - - (2,315) (2,315)
-------------------------------------------
Balance at January 31, 1996 $10,855 $8,995 $(8,493) $11,357
===========================================
3. Recourse Liability
The Company periodically sells certain hardware leases and software licensing
agreements to a finance company, which may include recourse provisions to the
Company. As of January 31, 1996, the Company's maximum recourse liability was
$1,850.
4. Leases
The Company leases office facilities under noncancelable operating leases which
expire in various years through 2001. Rental expense for all operating leases
was $2,151. Future minimum rental expense as of January 31, 1996, for
noncancelable operating leases with initial or remaining terms in excess of one
year is $4,881 and is payable in the years ending January 31, as follow: 1997--
$1,644; fiscal 1998--$1,511; fiscal 1999--$729; fiscal 2000--$465; fiscal 2001--
$180.
9
NCS Financial Systems, Inc.
and NCS-IPB S.A.
Notes to Combined Financial Statements (continued)
5. Credit Arrangements
The Company has an $825 unsecured revolving credit facility that terminates on
October 31, 1996. Interest on debt outstanding under this facility is fixed
monthly as a function of market conditions, based on the London Interbank
Offered Rate (LIBOR) in relation to the Swiss Franc. On January 31, 1996, the
interest rate was at 3.31%, which is approximately 1.50% above LIBOR. The
revolving credit facility is guaranteed by NCS.
The Company also has a $990 unsecured revolving credit facility with an open
ended termination date. Interest on debt outstanding under this credit facility
is 6.25%. The revolving credit facility allows the bank, on behalf of the
Company, to issue letters of credit against the facility. The letters of credit
reduce the available borrowings of the facility. As of January 31, 1996, letters
of credit totaling $206 had been issued. The revolving credit facility is
guaranteed by NCS.
6. Income Taxes
The components of the provision for income taxes are as follows:
Current
----------------------
Federal State Foreign Deferred Total
---------------------- ---------------
Year ended January 31, 1996 $2,844 $366 $(202) $562 $3,570
Deferred income taxes reflect the net effect of temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes. Significant components of the
Company's deferred tax assets and liabilities as of January 31, 1996 are as
follows:
Deferred tax assets:
Foreign operating loss carryforwards $100
Reserves for uncollectibles 109
Other 27
-----
Total deferred tax assets 236
10
NCS Financial Systems, Inc.
and NCS-IPB S.A.
Notes to Combined Financial Statements (continued)
6. Income Taxes (continued)
Deferred tax liabilities:
Net capitalized software $2,754
Accelerated depreciation 350
Installment sales 1,142
--------
Total deferred tax liabilities 4,246
--------
Net deferred tax liabilities $4,010
========
A reconciliation of the Company's statutory and effective tax rate is presented
below:
1995
-------
Statutory rate 35.0%
State income taxes net of federal benefit 4.0
Research and development credits (.3)
Foreign operating losses (2.2)
Other, net 2.1
--------
Effective rate 38.6%
========
7. Employee Benefit Plans
Employee Savings Plan
The Company participates in the qualified 401(k) Employee Savings Plan of
National Computer Systems, Inc. Employees can contribute a maximum of 15% of
their gross wages and NCS contributions are discretionary. The NCS matching
contributions to the Plan on behalf of the Company were $282.
Employee Stock Ownership Plan
The Company participates in the Employee Stock Ownership Plan (ESOP) of National
Computer Systems, Inc. covering substantially all employees. Benefits, to the
extent vested, become available upon retirement or termination of employment.
The NCS contribution to the Plan on behalf of the Company was $151.
11
NCS Financial Systems, Inc.
and NCS-IPB S.A.
Notes to Combined Financial Statements (continued)
8. Fair Values of Financial Instruments
Statement of Financial Accounting Standards No. 107 requires disclosure of fair
value information about financial instruments for which it is practicable to
estimate that value. In cases where quoted market prices are not available, fair
values are based on estimates using present value or other valuation techniques.
Those techniques are significantly affected by the estimates and assumptions
used, including the discount rate and estimates of future cash flows.
At January 31, 1996, the carrying value of the Company's financial investments
approximated their fair value at that date.
9. Geographic Information
Operating
Net Income
Revenue (Loss) Assets
----------------------------------------
Fiscal 1995:
United States $ 50,386 $ 9,563 $ 29,112
Foreign 7,707 (530) 3,987
-----------------------------------------
$ 58,093 $ 9,033 $ 33,099
=========================================
10. Subsequent Event
On July 10, 1996, NCS sold their interest in the Company to SunGard Data Systems
Inc.
12
APPENDIX II
Unaudited Pro Forma Condensed Combined Financial Information
The Unaudited Pro Forma Combined Statements of Income assume that the
acquisition of NCS Financial Systems, Inc. and NCS-IPB S.A.
(collectively,"NCSF") had occurred on January 1, 1995, combining the results of
SunGard Data Systems Inc. ("SunGard" or the "Company") and NCSF for the six
months ended June 30, 1996 and for the year ended December 31, 1995. The
Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 1996
reflects the acquisition as if it had occurred on June 30, 1996. The pro forma
information is based on the historical financial statements of the Company and
NCSF after giving effect to the acquisition using the purchase method of
accounting and assumptions and adjustments considered appropriate by the
Company, certain of which are described in the accompanying Notes to Unaudited
Pro Forma Condensed Combined Financial Information. The pro forma information
is provided for illustrative purposes only and is not necessarily indicative of
the results of operations or financial condition that actually would have been
obtained if the acquisition had occurred on the dates indicated or of the
results that may be obtained in the future.
The Unaudited Pro Forma Condensed Combined Financial Information should be
read in conjunction with the historical financial statements and the related
notes thereto of SunGard and NCSF. The historical financial statements of NCSF
and the related notes thereto are included herein. The historical financial
statements of SunGard and the related notes thereto have been previously filed
with the Securities and Exchange Commission and are available from SunGard
upon written request.
PF-1
SunGard Data Systems Inc.
Unaudited Pro Forma Combined Statement of Income
Year Ended December 31, 1995
(In thousands, except per share amounts)
-----------------------------------------------------------------------
SunGard Data NCS Financial Pro Forma Pro Forma
Systems Inc. Systems, Inc. (2) Adjustments (3) Combined
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Revenues................................................. $ 532,628 $ 58,093 $ - $ 590,721
-----------------------------------------------------------------------
Costs and expenses:
Cost of sales and direct operating..................... 234,011 28,669 - 262,680
Sales, marketing and administration.................... 109,226 10,497 - 119,723
Product development.................................... 50,338 5,448 - 55,786
Depreciation of property and equipment................. 30,807 2,131 - 32,938
Amortization of intangible assets...................... 23,932 2,315 4,700 (4) 30,947
Merger costs........................................... 4,238 - - 4,238
-----------------------------------------------------------------------
452,552 49,060 4,700 506,312
-----------------------------------------------------------------------
Income from operations................................... 80,076 9,033 (4,700) 84,409
Interest income, net................................... 5,036 216 (4,275)(5) 977
-----------------------------------------------------------------------
Income before income taxes............................... 85,112 9,249 (8,975) 85,386
Income taxes........................................... 36,440 3,570 (3,635)(6) 36,375
-----------------------------------------------------------------------
Net income............................................... $ 48,672 $ 5,679 $ (5,340) $ 49,011
=======================================================================
Fully diluted net income per common share (1)............ $ 1.23 $ 1.24
=======================================================================
Shares used to compute fully diluted net income per
common share (1)....................................... 39,668 39,668
=======================================================================
Fully diluted net income per common share excluding
merger costs (1)....................................... $ 1.33 $ 1.34
=======================================================================
See accompanying notes to unaudited pro forma condensed combined financial information.
PF-2
SunGard Data Systems Inc.
Unaudited Pro Forma Combined Statement of Income
Six Months Ended June 30, 1996
(In thousands, except per share amounts)
--------------------------------------------------------------------
SunGard Data NCS Financial Pro Forma Pro Forma
Systems Inc. Systems, Inc. Adjustments (3) Combined
--------------------------------------------------------------------
--------------------------------------------------------------------
Revenues............................................... $ 305,366 $ 28,768 $ - $ 334,134
--------------------------------------------------------------------
Costs and expenses:
Cost of sales and direct operating................... 136,761 15,651 - 152,412
Sales, marketing and administration.................. 61,410 5,519 - 66,929
Product development.................................. 26,857 1,818 - 28,675
Depreciation of property and equipment............... 17,636 1,075 - 18,711
Amortization of intangible assets.................... 13,857 1,168 2,350 (4) 17,375
Merger costs......................................... - - - -
--------------------------------------------------------------------
256,521 25,231 2,350 284,102
--------------------------------------------------------------------
Income from operations................................. 48,845 3,537 (2,350) 50,032
Interest income, net................................. 3,005 75 (2,375)(5) 705
--------------------------------------------------------------------
Income before income taxes............................. 51,850 3,612 (4,725) 50,737
Income taxes......................................... 20,999 1,369 (1,914)(6) 20,454
--------------------------------------------------------------------
Net income............................................. $ 30,851 $ 2,243 $ (2,811) $ 30,283
====================================================================
Fully diluted net income per common share (1).......... $ 0.72 $ 0.70
====================================================================
Shares used to compute fully diluted net income per
common share (1)....................................... $ 42,981 $ 42,981
====================================================================
Fully diluted net income per common share excluding
merger costs (1)...................................... $ 0.72 $ 0.70
====================================================================
See accompanying notes to unaudited pro forma condensed combined financial
information.
PF-3
SunGard Data Systems Inc.
Unaudited Pro Forma Condensed Combined Balance Sheet
June 30, 1996
(In thousands)
-------------------------------------------------------------------
SunGard Data NCS Financial Pro Forma Pro Forma
Systems Inc. Systems, Inc. Adjustments (3) Combined
-------------------------------------------------------------------
Assets:
Current:
Cash, equivalents and short-term investments....... $ 118,123 $ 66 $ (95,000)(7) $ 23,189
Accounts receivable, net........................... 130,901 10,220 - 141,121
Prepaid expenses and other current assets.......... 22,962 1,225 (382)(8) 23,805
Deferred income taxes.............................. 9,248 - - 9,248
--------------------------------------------------------------------
Total current assets........................... 281,234 11,511 (95,382) 197,363
Property and equipment, net........................... 97,497 4,099 674 (8) 102,270
Software products, net................................ 33,023 11,567 19,661 (8) 64,251
Goodwill and other intangible assets, net............. 185,836 3,130 24,938 (8) 213,904
--------------------------------------------------------------------
$ 597,590 $ 30,307 $ (50,109) $ 577,788
====================================================================
Liabilities and Stockholders' Equity:
Current:
Short-term and current portion of long-term debt... $ 3,098 $ 1,412 $ - $ 4,510
Accounts payable and accrued expenses.............. 50,111 5,639 7,168 (9) 62,918
Accrued income taxes............................... 10,462 1,076 - 11,538
Deferred revenues.................................. 70,970 1,760 5,792 (10) 78,522
--------------------------------------------------------------------
Total current liabilities...................... 134,641 9,887 12,960 157,488
Long-term debt........................................ 3,290 - - 3,290
Deferred income taxes................................. 4,514 4,010 (24,406)(11) (15,882)
Stockholders' equity.................................. 455,145 16,410 (38,663)(12) 432,892
--------------------------------------------------------------------
$ 597,590 $ 30,307 $ (50,109) $ 577,788
====================================================================
See accompanying notes to unaudited pro forma condensed combined financial
information.
PF-4
SunGard Data Systems Inc.
Notes to Unaudited Pro Forma Condensed Combined Financial Information
(1) Adjusted to reflect two-for-one stock split which occurred in July 1995.
(2) The NCS Financial Systems, Inc. (NCSF) fiscal year ends on January 31, 1996;
therefore, the combined statement of income for NCSF is for the period
February 1, 1995 through January 31, 1996.
(3) The Company has engaged a nationally recognized, independent appraisal firm
to express an opinion on the fair market value of the assets acquired to
serve as the basis for allocation of the purchase price to the various
classes of assets acquired. This appraisal is not yet completed; therefore,
the allocation and resulting purchase price amortization included in these
pro forma financial statements are preliminary estimates and are subject to
change. The Company expects to record a one-time charge of approximately
$37.0 million (approximately $22.0 million net of income tax benefit),
representing that portion of the purchase price related to acquired in-
process research and development. Acquired in-process research and
development represents the value of software products still in development
and not considered to have reached technological feasibility as of the date
of acquisition. This one-time charge is not included in the pro forma income
statement since this charge is non-recurring in nature, directly
attributable to the acquisition, and will be charged to operations by the
Company in the third quarter of 1996.
(4) Estimated increase in amortization of intangible assets resulting from the
purchase of NCSF.
(5) Estimated reduction in interest income resulting from the use of $95.0
million cash to acquire NCSF.
(6) Assumed income tax effect of the pro forma adjustments, using an effective
income tax rate of 40.5%.
(7) Represents cash purchase price of $95.0 million.
(8) Estimated adjustments to fair market value.
(9) Estimated costs associated with commitments for excess NCSF facilities,
reduction of NCSF employee workforce, costs directly associated with the
acquisition, and other items.
(10)Estimated obligations associated with future work to be performed in
connection with contractual commitments.
(11)Estimated tax effect of differences between book and tax basis of assets
acquired and liablilities assumed at the date of acquisition.
(12)Includes estimated acquired in-process research and development, net of
estimated income tax benefit (see 3 above).
PF-5
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.
Date: September 20, 1996
SUNGARD DATA SYSTEMS INC.
By: /s/ Michael J. Ruane
----------------------------------
Michael J. Ruane
Vice President-Finance and
Chief Financial Officer
Exhibit Index
-------------
Exhibit
- -------
2.1 Stock Purchase and Sale Agreement dated May 30, 1996 by and among
SunGard Data Systems Inc., National Computer Systems, Inc. and NCS
Holdings, Inc. (Incorporated by reference to Exhibit 2.1 filed with
SunGard's Current Report on Form 8-K dated May 30, 1996.)
23.1 Consent of Ernst & Young LLP