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EXHIBIT 99.4
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
AND THE NINE MONTHS ENDED SEPTEMBER 30, 2000
The following unaudited pro forma condensed consolidated statements of
operations for the year ended December 31, 1999 and the nine months ended
September 30, 2000 give effect to acquisitions by Caminus Corporation
("Caminus") of DC Systems, Inc. ("DCS") on July 31, 1999 and substantially all
the assets and the assumption of certain liabilities of Nucleus Corporation and
Nucleus Energy Consulting Corporation (collectively "Nucleus") on August 30,
2000. The unaudited pro forma condensed consolidated statements of operations
assume the DCS and Nucleus acquisition had occurred on January 1, 1999. The
unaudited pro forma condensed consolidated statement of operations for the year
ended December 31, 1999 is based on the historical audited consolidated
statement of operations of Caminus for 1999, which includes the results of DCS
from July 31, 1999, the historical unaudited statement of operations of DCS for
the period of January 1, 1999 through July 30, 1999 and the historical
audited statement of operations of Nucleus for the year ended December 31,
1999. The unaudited pro forma statement of operations for the nine months
ended September 30, 2000 is based on the historical unaudited statement of
operations of Caminus as well as the statement of operations of Nucleus for the
period from January 1, 2000 through July 31, 2000. The unaudited pro forma
condensed consolidated financial statements reflect the purchase method of
accounting and the adjustments and assumptions described in the accompanying
notes. There is no requirement for any unaudited pro forma balance sheet since
all the acquisitions are reflected in the historical unaudited consolidated
balance sheet of Caminus at September 30, 2000, included in Caminus' Quarterly
Report on Form 10-Q.
The pro forma adjustments are based upon fair values of the acquired
companies at the time of their acquisition, as used in Caminus' purchase
accounting for these acquisitions. The pro forma results are not necessarily
indicative of future results or the results that actually would have occurred
if the acquisitions had taken place on January 1, 1999.
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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1999
(In Thousands, Except Per Share Amounts)
DC Pro Forma Pro Forma
Caminus(a) Systems, Inc.(b) Nucleus(c) Adjustments Caminus
---------- ---------------- ---------- ----------- ---------
Statement of Operations Data:
Revenue:
Licenses .......................... $12,538 $ 41 $2,496 $ -- $ 15,075
Software services ................. 7,816 302 1,334 -- 9,452
Strategic consulting .............. 6,556 -- -- -- 6,556
------- ------- ------ ------- --------
Total revenue ................... 26,910 343 3,830 -- 31,083
------- ------- ------ ------- --------
Gross profit ........................ 18,525 61 2,364 -- 20,950
Operating expenses:
Research and development .......... 3,929 25 1,246 -- 5,200
Selling, general and
administrative .................. 12,771 428 2,141 -- 15,340
DCS equity participation
compensation .................... -- 5,023 -- -- 5,023
Acquired in-process research
and development ................. 1,000 -- -- (1,000) --
Amortization of intangibles ....... 8,560 -- -- 6,147 14,707
------- ------- ------ ------- --------
Total operating expenses ........ 26,260 5,476 3,387 5,147 40,270
Operating loss ...................... (7,735) (5,415) (1,023) (5,147) (19,320)
Other income (expense), net ......... (228) (3) 17 -- (214)
Provision for income taxes .......... 646 -- -- (352) 294
------- ------- ------ ------- --------
Net loss ............................ $(8,609) $(5,418) $(1,006) $(4,795) $(19,828)
======= ======= ======== ======= ========
Basic and diluted net loss
per share ......................... $ (1.01) -- -- -- $ (2.22)
======= ========
Weighted average common shares --
basic and diluted ................. 8,514 -- -- -- 8,917
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Periods included:
(a) Year ended December 31, 1999
(b) Seven months ended July 31, 1999
(c) Year ended December 31, 1999
See accompanying notes to the unaudited pro forma financial statements
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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
PRO FORMA PRO FORMA
CAMINUS(a) NUCLEUS(b) ADJUSTMENTS CAMINUS
----------- ----------- ----------- -----------
Statement of Operations Data:
Revenue:
Licenses....................... $ 15,767 $ 4,519 $ $ 20,286
Software services.............. 12,482 2,305 -- 14,787
Strategic consulting........... 6,195 6,195
----------- ----------- ----------- -----------
Total revenue................ 34,444 6,824 -- 41,268
----------- ----------- ----------- -----------
Gross profit..................... 24,166 4,539 -- 28,705
Operating expenses:
Research and development....... 4,544 2,215 -- 6,759
Selling, general and
administrative................ 14,542 1,973 -- 16,515
IPO-related expenses........... 12,335 -- -- 12,335
Amortization of intangibles.... 8,023 -- 2,999 11,022
----------- ----------- ----------- -----------
Total operating expenses.... 39,444 4,188 2,999 46,631
Operating income (loss).......... (15,278) 351 (2,999) (17,926)
Other income, net................ 1,796 25 1,821
Provision for income taxes....... 1,486 -- 9 1,495
----------- ----------- ----------- -----------
Net income (loss)................ $ (14,968) $ 376 $ (3,008) $ (17,600)
=========== =========== =========== ===========
Basic and diluted net loss per
share.......................... (1.02) -- -- (1.18)
=========== ===========
Weighted average common
shares - basic and diluted..... 14,682 -- -- 14,914
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Periods included:
(a) Nine months ended September 30, 2000
(b) Seven months ended July 31, 2000
See accompanying notes to the unaudited pro forma financial statements
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NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
The following facts and assumptions in notes (a) through (b) were used in
determining the pro forma effect of the various acquisitions by Caminus.
a) On July 31, 1999, Caminus acquired DC Systems, Inc. for $10.0 million in
cash, plus common stock valued at $3.0 million. There were $0.5 million of other
direct acquisition costs. A summary of the allocation of the purchase price
appears below (in thousands):
Tangible net assets acquired................................. $ (954)
Acquired in-process research and development................. 1,000
Developed technology......................................... 1,800
Other intangible assets...................................... 3,030
Goodwill..................................................... 8,624
-------
$13,500
=======
The useful lives for the acquired intangible costs range from three to
five years.
The pro forma adjustments for the year ended December 31, 1999 assume an
additional seven months of amortization of intangible assets. This resulted in
additional amortization of approximately $1.7 million for the year ended
December 31, 1999. Also, the acquired in-process research and development
charges of $1.0 million were eliminated via a pro forma adjustment since this
expense is directly attributable to the DC Systems acquisition and is not
expected to have a continuing impact on the operating results of Caminus.
b) In August 2000, Caminus acquired certain assets and assumed certain
liabilities of Nucleus Corporation and Nucleus Energy Consulting Corporation
(collectively, "Nucleus"), a provider of software solutions to the energy
industry. The purchase price of $17.6 million consisted of $13.6 million in
cash, the issuance of 261,334 shares of common stock with a fair value of $3.8
million and approximately $0.3 million of other direct acquisition costs. A
summary of the allocation of the purchase price is as follows (in thousands):
Fair value of liabilities assumed net of assets acquired............ $ (391)
Goodwill............................................................ 17,997
-------
$17,606
=======
The acquisition was accounted for under the purchase method of accounting.
A fair value appraisal of the net liabilities assumed has not yet been
completed. Accordingly, all of the excess of purchase price over net
liabilities assumed has been attributed to goodwill. Goodwill is being
amortized over a four-year period. Upon completion of the fair value appraisal,
the composition of the excess of purchase price over net liabilities assumed
may change.
The pro forma adjustments for the year ended December 31, 1999 and nine
months ended September 30, 2000 assume an additional year and eight months of
amortization of goodwill, respectively. This resulted in additional amortization
of approximately $4.4 million and $3.0 million, respectively. Additionally, the
pro forma adjustment column includes provision of income taxes on the pre-tax
income of Nucleus for the year ended December 31, 1999 and the seven months
ended July 31, 2000, respectively.
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