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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): June 4, 1998
COMSHARE, INCORPORATED
(Exact name of Registrant as specified in its charter)
Michigan 0-4096 38-1804887
(State or other jurisdiction of (Commission File (IRS Employer
incorporation) Number) Identification No.)
555 Briarwood Circle
Ann Arbor, Michigan 48108
(Address of principal executive offices)
Registrant's telephone number, including area code: (734) 994-4800
N/A
(Former Name or Former Address, if Changed Since Last Report)
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 4, 1998, pursuant to that certain Asset
Purchase Agreement by and among JDA Software Group, Inc.
("JDA"), and JDA Software, Inc., a wholly-owned subsidiary of
JDA (the "Purchaser"), and the Registrant, dated as of the
same date (the "Purchase Agreement"), the Registrant sold
certain software products, accounts receivable, customer
contracts, intellectual property, intangibles, permits and
business records related to its Arthur(TM) strategic
merchandise management applications for the retail industry
and its Boost Sales and Margin Planning software product for
the consumer packaged goods industry (together, the "Retail
Business") to the Purchaser for $44 million in cash and the
assumption of certain liabilities related to the Retail
Business.
JDA is a global provider of integrated retail
software products and professional services for clients
worldwide.
The consideration paid in the sale was determined
through arms-length negotiations between the Registrant and
the Purchaser. Prior to the execution of the Purchase
Agreement, there was no material relationship between the
Registrant or any of its affiliates and the Purchaser or JDA
or between any officers or directors of the Registrant or any
of its affiliates and the officers or directors of the
Purchaser or JDA.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(a) Financial Statements.
Not applicable.
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(b) Pro Forma Financial Information.
The unaudited pro forma condensed consolidated
financial information furnished herein reflects the
disposition of the Retail Business on the
consolidated financial statements of the Registrant.
Page No.
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Unaudited Pro Forma Condensed Consolidated F-2
Statement of Operations for the
Fiscal Year Ended June 30, 1997
Unaudited Pro Forma Condensed Consolidated F-3
Statement of Operations for the
Nine Months Ended March 31, 1998
Unaudited Pro Forma Condensed Consolidated F-4
Balance Sheet as of March 31, 1998
(c) Exhibits.
Exhibit No. Description
----------- -----------
2.1 Asset Purchase Agreement by and
among JDA Software Group, Inc., and
JDA Software, Inc., and Comshare,
Incorporated, dated as of June 4,
1998.
2.2 Software License Agreement by and
between JDA Software, Inc., and
Comshare, Incorporated, dated as of
June 4, 1998.
99.1 Press Release issued June 4, 1998,
filed as Exhibit 99.1 to the
Registrant's Current Report on Form
8-K, filed June 9, 1998 and
incorporated herein by reference.
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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 thereunto duly authorized.
June 19, 1998 COMSHARE, INCORPORATED
/s/ Kathryn A. Jehle
-------------------------------------------
Kathryn A. Jehle
Senior Vice President, Chief Financial
Officer, Treasurer, and Assistant Secretary
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COMSHARE, INCORPORATED
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying Unaudited Pro Forma Condensed Consolidated Balance Sheet of
the Registrant as of March 31, 1998 reflects the financial position of the
Registrant after giving effect to the sale of the Retail Business as discussed
in Item 2 above and assumes that the sale took place on March 31, 1998. The
accompanying Unaudited Pro Forma Condensed Consolidated Statements of
Operations for the Nine Months Ended March 31, 1998 and for the Fiscal Year
Ended June 30, 1997 assumes that the sale occurred on July 1, 1996 and are
based on the operations of the Registrant and the Retail Business for those
periods.
The unaudited pro forma condensed consolidated financial statements have been
prepared by the Registrant based upon assumptions deemed proper in the
circumstances, are for illustrative purposes only and are not necessarily
indicative of the future financial position or future results of operations of
the Registrant or of the financial position or results of operations of the
Registrant that would have actually occurred had the transaction been in effect
as of the date of or for the periods presented. Management believes that the
assumptions used in preparing the unaudited pro forma condensed consolidated
financial statements provides a reasonable basis for presenting all of the
significant effects of the sale, that the pro forma adjustments give
appropriate effect to those assumptions, and that the pro forma adjustments are
properly applied in the unaudited pro forma condensed consolidated financial
information.
The unaudited pro forma condensed consolidated financial statements should be
read in conjunction with the Registrant's historical financial statements and
related footnotes to those statements.
F-1
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COMSHARE, INCORPORATED
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE FISCAL YEAR ENDED 6/30/97
------------------------------------------------------------
PRO FORMA PRO
AS REPORTED ADJUSTMENTS(1) FORMA
------------ ------------ ---------
Revenue
Software licenses $ 36,455 $ 7,764 $ 28,691
Software maintenance 35,983 5,688 30,295
Implementation, consulting & other services 20,393 4,361 16,032
--------- --------- ---------
Total revenue 92,831 17,813 75,018
Costs and expenses
Selling, marketing, agent and professional fees 53,552 11,361 42,191
Cost of revenue and support 30,594 2,107 28,487
Internal research and development 15,556 3,995 11,561
Internally capitalized software (6,966) (2,278) (4,688)
Software amortization 7,129 2,027 5,102
General and administrative 12,693 1,489 11,204
Restructuring related costs 6,245 - 6,245
--------- --------- ---------
Total costs and expenses 118,803 18,701 100,102
--------- --------- ---------
Loss from operations (25,972) (888) (25,084)
Interest income 494 - 494
Exchange loss (310) - (310)
--------- --------- ---------
Loss before taxes (25,788) (888) (24,900)
Benefit for income taxes (8,671) - (8,671)
--------- --------- ---------
Net loss $ (17,117) $ (888) $ (16,229)
========= ========= =========
Net income (loss) per common share (1.75) (0.09) (1.66)
========= ========= =========
(1) The Registrant estimated the revenues and expenses attributable to
the Retail Business for the period presented and included those
amounts in the pro forma adjustment column.
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COMSHARE, INCORPORATED
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE NINE MONTHS ENDED 3/31/98
-----------------------------------------------
PRO FORMA PRO
AS REPORTED ADJUSTMENTS (1) FORMA
----------- ----------- ---------
Revenue
Software licenses $ 26,391 $ 7,298 $ 19,093
Software maintenance 26,859 5,052 21,807
Implementation, consulting and other services 16,480 4,173 12,307
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Total revenue 69,730 16,523 53,207
Costs and expenses
Selling, marketing, agent and professional fees 31,805 9,069 22,736
Cost of revenue and support 21,715 1,979 19,736
Internal research and development 9,254 3,063 6,191
Internally capitalized software (4,999) (2,496) (2,503)
Software amortization 5,040 1,136 3,904
General and administrative 8,609 1,264 7,345
Unusual charge 1,614 - 1,614
-------- -------- ---------
Total costs and expenses 73,038 14,015 59,023
-------- -------- ---------
Income (loss) from operations (3,308) 2,508 (5,816)
Exchange loss (41) - (41)
-------- -------- ---------
Income (loss) before taxes (3,349) 2,508 (5,857)
Benefit for income taxes - - -
-------- -------- ---------
Net income (loss) $ (3,349) $ 2,508 $ (5,857)
======== ======== =========
Net income (loss) per common share (0.34) 0.25 (0.59)
======== ======== =========
(1) The Registrant estimated the revenues and expenses attributable to
the Retail Business for the period presented and included those
amounts in the pro forma adjustment column.
F-3
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COMSHARE, INCORPORATED
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF 3/31/98
UNAUDITED
(IN THOUSANDS)
PRO FORMA PRO
AS REPORTED ADJUSTMENTS FORMA
----------- ----------- -----
CURRENT ASSETS
Cash and cash equivalents $ 13,288 $ 44,000 (1) $ 57,288
Accounts receivable, net 25,748 - 25,748
Deferred income taxes 2,379 - 2,379
Prepaid expenses and other current
Assets 4,457 - 4,457
--------- --------- --------
TOTAL CURRENT ASSETS 45,872 44,000 89,872
Property and equipment, net 3,615 - 3,615
Computer software, net 9,254 (4,725) (2) 4,529
Goodwill, net 1,478 - 1,478
Deferred income taxes 15,580 (4,741) (3) 10,839
Other assets 4,613 - 4,613
TOTAL ASSETS 80,412 34,534 114,946
========= ========= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes payable 853 - 853
Accounts payable 12,414 - 12,414
Total accrued liabilities 8,077 14,300 (4) 22,377
Deferred revenue 19,949 (2,500) (5) 17,449
--------- --------- --------
TOTAL CURRENT LIABILITIES 41,293 11,800 53,093
Long-term debt 6,102 - 6,102
Other liabilities 3,785 - 3,785
Shareholders' equity 29,232 22,734 (6) 51,966
--------- --------- --------
TOTAL LIABILITIES AND STOCKHOLDERS
EQUITY $ 80,412 $ 34,534 $114,946
========= ========= ========
(1) To reflect the receipt of $44,000,000 in cash in connection with
the sale of the Retail Business, including $3.0 million held in
escrow for periods of up to 24 months.
(2) To reflect the sale of Capitalized Software Assets included in the
Retail Business recorded at the net book value of such assets (at
net book value).
(3) To reflect the estimate of income tax effects of the Retail
Business using a 35% statutory rate.
(4) To reflect the estimated expenses incurred by the Registrant in
connection with the sale of the Retail Business, including
estimated income taxes currently payable.
(5) To reflect the transfer to accrued liabilities of deferred revenue
associated with maintenance contracts assumed by the Purchaser in
connection with the sale of the Retail Business.
(6) To reflect estimated impact of the sale of the Retail Business on
Shareholder's Equity resulting from the gain on sale of the Retail
Business, net of income taxes.
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(1) To reflect the receipt of $44,000,000 in cash in sale of Retail
Business, including $3.0 million.
(2) To reflect the sale of Capitalized Software connection with the (at
net book value).
(3) To reflect the estimate of tax effects of the sale of the Retail
Business using a 35% statutory rate.
(4) Estimate of expenses incurred by the Registrant in connection with
the sale of the Retail Business, including estimated income taxes
currently payable.
(5) To reflect the transfer to accrued liabilities of deferred revenue
associated with maintenance contracts assumed by the Capital
Purchaser in connection with the sale of the Retail Business.
(6) To reflect estimated impact of the sale of the Retail Business on
Shareholder's Equity resulting from the gain on sale of the Retail
Business, net of income taxes.
(1) The Registrant estimated the revenues and expenses attributable to
the Retail Business ror the period presented and included those
amounts in the pro forma adjustment column.
F-5
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
2.1 Asset Purchase Agreement by and
among JDA Software Group, Inc., and
JDA Software, Inc., and Comshare,
Incorporated, dated as of June 4, 1998.
2.2 Software License Agreement by and
between JDA Software, Inc., and
Comshare, Incorporated, dated as of
June 4, 1998.
99.1 Press Release issued June 4, 1998,
filed as Exhibit 99.1 to the
Registrant's Current Report on Form
8-K, filed June 9, 1998 and
incorporated herein by reference.