1
EXHIBIT 99.3
UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
The following unaudited pro forma combined financial statements assume
a business combination between Shiva and AirSoft, Inc. accounted for as a
pooling of interests and are based on the respective historical financial
statements and the notes thereto. The unaudited pro forma combined balance
sheet gives effect to the AirSoft Acquisition as if it had occurred on March
30, 1996, combining the balance sheets of Shiva and AirSoft at March 30, 1996.
The unaudited pro forma combined statements of operations give effect to the
AirSoft Acquisition as if it had occurred at the beginning of each of the
periods presented.
The pro forma information is presented for illustrative purposes only
and is not necessarily indicative of the operating results or financial
position that would have occurred if the AirSoft Acquisition had been
consummated at the beginning of the earliest period presented, nor is it
necessarily indicative of future operating results or financial position.
These unaudited pro forma combined financial statements are based on,
and should be read in conjunction with, Shiva's Annual Report on Form 10-K for
the year ended December 30, 1995 and quarterly report on Form 10-Q for the
quarter ended March 30, 1996, incorporated herein by reference, and the
financial statements of AirSoft, Inc. included elsewhere in this Form 8-K/A.
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UNAUDITED PRO FORMA COMBINED
BALANCE SHEET
MARCH 30, 1996
(IN THOUSANDS)
HISTORICAL PRO FORMA (1)
------------------- ---------------------
SHIVA AIRSOFT NOTES ADJUSTMENTS COMBINED
-------- ------- ----- ----------- --------
Assets
Current assets:
Cash and cash equivalents $ 93,398 $ 1,286 $ - $ 94,684
Short-term investments 7,065 - - 7,065
Accounts receivable, net 26,524 1,159 (2) (1,120) 26,563
Inventories 11,591 12 11,603
Prepaid expenses and other current assets 2,264 - 2,264
-------- ------- ------- --------
Total current assets 140,842 2,457 (1,120) 142,179
Property, plant and equipment, net 15,124 136 - 15,260
Deferred income taxes 548 - - 548
Other assets 1,388 6 - 1,394
-------- ------- ------- --------
Total assets $157,902 $ 2,599 $(1,120) $159,381
======== ======= ======= ========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt and capital lease
obligations $ 588 $ - $ - $ 588
Accounts payable 10,403 113 - 10,516
Accrued compensation and benefits 4,366 57 - 4,423
Accrued expenses 8,100 112 - 8,212
Deferred revenue 3,609 1,677 (2) (1,120) 4,166
-------- ------- ------- --------
Total current liabilities 27,066 1,959 (1,120) 27,905
Long-term debt and capital lease obligations 244 - - 244
Other long-term obligations 391 - - 391
Deferred income taxes 232 - - 232
-------- ------- ------- --------
Total liabilities 27,933 1,959 (1,120) 28,772
-------- ------- ------- --------
Stockholders' equity:
Convertible preferred stock - 4,486 (3) (4,486) -
Common stock 277 5 (3) 2 284
Additional paid-in capital 131,922 482 (3) 4,484 136,888
Unrealized gains on investments 87 - - 87
Cumulative translation adjustment (605) - - (605)
Accumulated deficit (1,712) (4,333) - (6,045)
-------- ------- ------- --------
Total stockholders' equity 129,969 640 - 130,609
-------- ------- ------- --------
Total liabilities and stockholders' equity $157,902 $ 2,599 $(1,120) $159,381
======== ======= ======= ========
See accompanying Notes to Unaudited Pro Forma Combined Financial
Statements.
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UNAUDITED PRO FORMA COMBINED
STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED MARCH 30, 1996
HISTORICAL PRO FORMA (1)
------------------- ----------------------
SHIVA AIRSOFT NOTES ADJUSTMENTS COMBINED
------- ------- ----- ----------- --------
Revenues $42,513 $ 796 $ - $43,309
Cost of revenues 17,385 - - 17,385
------- ------ ----- -------
Gross profit 25,128 796 - 25,924
------- ------ ----- -------
Operating expenses:
Research and development 4,831 363 5,194
Selling, general and administrative 14,236 470 14,706
------- ------ ----- -------
Total operating expenses 19,067 833 - 19,900
------- ------ ----- -------
Income (loss) from operations 6,061 (37) - 6,024
Interest income 1,334 10 - 1,344
Interest expense (117) - - (117)
------- ------ ----- -------
Income (loss) before income taxes 7,278 (27) - 7,251
Income tax provision 2,912 - - 2,912
------- ------ ----- -------
Net income (loss) $ 4,366 $ (27) $ - $ 4,339
======= ====== ===== =======
Net income (loss) per share $ 0.14 $(0.01) (4) $ 0.14
======= ====== =======
Shares used in computing net income (loss)
per share 30,230 5,013 30,525
======= ====== =======
See accompanying Notes to Unaudited Pro Forma Combined Financial Statements.
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UNAUDITED PRO FORMA COMBINED
STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED APRIL 1, 1995
HISTORICAL PRO FORMA (1)
------------------- ----------------------
SHIVA AIRSOFT NOTES ADJUSTMENTS COMBINED
------- ------- ----- ----------- --------
Revenues $25,703 $ 34 $- $25,737
Cost of revenues 11,067 11 - 11,078
------- ------ -- -------
Gross profit 14,636 23 - 14,659
------- ------ -- -------
Operating expenses:
Research and development 2,522 298 2,820
Selling, general and administrative 9,221 530 9,751
------- ------ -- -------
Total operating expenses 11,743 828 - 12,571
------- ------ -- -------
Income (loss) from operations 2,893 (805) - 2,088
Interest income 476 30 - 506
Interest expense (247) - - (247)
------- ------ -- -------
Income (loss) before income taxes 3,122 (775) - 2,347
Income tax provision 965 - - 965
------- ------ -- -------
Net income (loss) $ 2,157 $ (775) $- $ 1,382
======= ====== == =======
Net income (loss) per share $ 0.08 $(0.15) (4) $ 0.05
======= ====== =======
Shares used in computing net income
(loss) per share 26,766 5,007 27,061
======= ====== =======
See accompanying Notes to Unaudited Pro Forma Combined Financial Statements.
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UNAUDITED PRO FORMA COMBINED
STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
TWELVE MONTHS ENDED DECEMBER 30, 1995
HISTORICAL PRO FORMA (1)
-------------------- -----------------------
SHIVA AIRSOFT NOTES ADJUSTMENTS COMBINED
-------- ------- ----- ----------- --------
Revenues $117,721 $ 860 $- $118,581
Cost of revenues 49,151 35 - 49,186
-------- ------- -- --------
Gross profit 68,570 825 - 69,395
-------- ------- -- --------
Operating expenses:
Research and development 13,610 1,177 14,787
Selling, general and administrative 42,975 1,687 44,662
Merger expenses 13,986 - 13,986
-------- ------- -- --------
Total operating expenses 70,571 2,864 - 73,435
-------- ------- -- --------
Loss from operations (2,001) (2,039) - (4,040)
Interest income 2,213 66 - 2,279
Interest expense (705) - - (705)
-------- ------- -- --------
Loss before income taxes (493) (1,973) - (2,466)
Income tax provision 2,386 - - 2,386
-------- ------- -- --------
Net loss $ (2,879) $(1,973) $- $ (4,852)
======== ======= == ========
Net loss per share $ (0.11) $ (0.39) (4) $ (0.18)
======== ======= ========
Shares used in computing net loss
per share 26,645 5,013 26,940
======== ======= ========
See accompanying Notes to Unaudited Pro Forma Combined Financial Statements.
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UNAUDITED PRO FORMA COMBINED
STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
TWELVE MONTHS ENDED DECEMBER 31, 1994
HISTORICAL PRO FORMA (1)
-------------------- ----------------------
SHIVA AIRSOFT NOTES ADJUSTMENTS COMBINED
------- ------- ----- ----------- --------
Revenues $80,971 $ 87 $ - $81,058
Cost of revenues 34,784 16 - 34,800
------- ------- ----- -------
Gross profit 46,187 71 - 46,258
------- ------- ----- -------
Operating expenses:
Research and development 9,199 773 9,972
Selling, general and administrative 31,252 1,175 32,427
------- ------- ----- -------
Total operating expenses 40,451 1,948 - 42,399
------- ------- ----- -------
Income (loss) from operations 5,736 (1,877) - 3,859
Interest income 188 36 - 224
Interest expense (1,122) - - (1,122)
------- ------- ----- -------
Income (loss) before income taxes 4,802 (1,841) - 2,961
Income tax provision 921 - - 921
------- ------- ----- -------
Net income (loss) $ 3,881 $(1,841) $ - $ 2,040
======= ======= ===== =======
Net income (loss) per share $ 0.17 $ (0.37) (4) $ 0.09
======= ======= =======
Shares used in computing net income
(loss) per share 22,254 5,000 22,548
======= ======= =======
See accompanying Notes to Unaudited Pro Forma Combined Financial Statements.
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UNAUDITED PRO FORMA COMBINED
STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
TWELVE MONTHS ENDED JANUARY 1, 1994
HISTORICAL PRO FORMA (1)
-------------------- ----------------------
SHIVA AIRSOFT NOTES ADJUSTMENTS COMBINED
------- ------- ----- ----------- --------
Revenues $61,259 $ 3 $ - $61,262
Cost of revenues 27,969 - - 27,969
------- ------ ----- -------
Gross profit 33,290 3 - 33,293
------- ------ ----- -------
Operating expenses:
Research and development 7,881 281 8,162
Selling, general and administrative 23,152 215 23,367
------- ------ ----- -------
Total operating expenses 31,033 496 - 31,529
------- ------ ----- -------
Income (loss) from operations 2,257 (493) - 1,764
Interest expense (1,048) - - (1,048)
------- ------ ----- -------
Income (loss) before income taxes 1,209 (493) - 716
Income tax provision 300 - - 300
------- ------ ----- -------
Net income (loss) $ 909 $ (493) $ - $ 416
======= ====== ===== =======
Net income (loss) per share $ 0.05 $(0.12) (4) $ 0.02
======= ====== =======
Shares used in computing net income
(loss) per share 16,538 4,266 16,789
======= ====== =======
See accompanying Notes to Unaudited Pro Forma Combined Financial Statements.
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Notes to Unaudited Pro Forma Combined Financial Statements
1. The unaudited pro forma combined financial statements of Shiva (the
"Company") and AirSoft give retroactive effect to the acquisition of
AirSoft which is being accounted for as a pooling of interests, and as a
result, such statements are presented as if the combining companies had
been combined for all periods presented.
The pro forma financial data combines the Company's financial data for the
three months ended March 30, 1996 and April 1, 1995, and the three years
ended December 30, 1995, December 31, 1994 and January 1, 1994 with
AirSoft's financial data for the three months ended March 31, 1996 and
1995, and the three fiscal years ended December 31, 1995, 1994 and 1993,
respectively.
Certain amounts have been reclassified to conform to the pro forma
presentation.
2. These pro forma adjustments reflect the elimination of accounts receivable
and deferred revenue related to a contract for which the receivable is not
contractually due, in order to conform AirSoft's accounting policies to
those of the Company.
3. These pro forma adjustments reflect the exchange of AirSoft's capital
stock for an aggregate of approximately 691,587 shares of Shiva Common
Stock to effect the AirSoft Acquisition.
4. Pro forma per share amounts are based on weighted average shares
outstanding during each period, assuming each then outstanding share of
AirSoft stock is exchanged for .058848195 shares of Common Stock.