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EXHIBIT 99.4
F-23
Page 28 of 33
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HARBINGER CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
The following unaudited pro forma consolidated statements of operations
of Harbinger Corporation (the "Company") set forth below for the year ended
December 31, 1996 and for the nine months ended September 30, 1997 give effect
to the Company's acquisition of Acquion, Inc. ("Acquion") which has been
accounted for using the purchase method of accounting.
The unaudited pro forma consolidated statement of operations for the
nine months ended September 30, 1997 also reflects the elimination of the charge
of $2.7 million for acquired in-process product development costs and the $2.4
million loss on extinguishment of the Debenture related to the acquisition of
the minority interest of HNS since this purchase business combination occurred
on January 1, 1997 (see page F-19). The operations of HNS have been included in
the Company's historical operations since January 1, 1997.
The unaudited pro forma consolidated statements of operations should be
read in conjunction with the historical financial statements and notes thereto
of the Company and Acquion. The unaudited pro forma consolidated statements of
operations do not necessarily represent results which would have occurred if the
transactions had taken place on the dates indicated nor are they necessarily
indicative of the results of future operations.
F-24
Page 29 of 33
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HARBINGER CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
Adjusted
Company Historical Pro Forma Pro Forma
Subtotal (1) Acquion (2) Adjustments Consolidated
------------ ----------- ------------ ------------
Revenues:
Services $ 39,168 $ 41 $ 39,209
Software 22,441 82 22,523
----------- ------- --------
Total revenues 61,609 123 61,732
----------- ------- --------
Direct costs:
Services 14,703 1,074 15,777
Software 3,341 10 3,351
----------- ------- --------
Total direct costs 18,044 1,084 19,128
----------- ------- --------
Gross margin 43,565 (961) 42,604
----------- ------- --------
Operating costs:
Selling and marketing 16,294 1,467 17,761
General and administrative 15,068 1,297 16,365
Depreciation and amortization 3,981 98 330 (3) 4,409
Product development 13,527 1,251 14,778
Charge for purchased in-process product
development and acquisition-related
charges 626 - 626
----------- ------- --------
Total operating costs 49,496 4,113 53,939
----------- ------- --------
Operating loss (5,931) (5,074) (11,335)
Interest expense (income), net 50 - 959 (4) 1,009
Foreign currency exchange loss 18 - 18
Equity in losses of joint ventures 119 - 119
----------- ------- --------
Loss before income tax (benefit) (6,118) (5,074) (12,481)
Income tax expense (benefit) 168 - 168
----------- ------- --------
Net loss (6,286) (5,074) (12,649)
Preferred stock dividends (28) - (28)
----------- ------- --------
Net loss applicable to common shareholders $ (6,314) (5,074) $(12,677)
=========== ======= ========
Net loss per common share $ (0.34) $ (0.68)
=========== ========
Weighted average common and common
equivalent shares outstanding 18,707 18,707
=========== ========
See Notes to Unaudited Pro Forma Consolidated Statements of Operations.
F-25
Page 30 of 33
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HARBINGER CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
Historical Historical Pro Forma Pro Forma
Company Acquion (5) Adjustments Consolidated
----------- ----------- ----------- ------------
Revenues:
Services $ 37,892 460 $ 38,352
Software 20,307 24 20,331
---------- --------- --------
Total revenues 58,199 484 58,683
---------- --------- --------
Direct costs:
Services 12,921 1,448 14,369
Software 2,520 - 2,520
---------- --------- --------
Total direct costs 15,441 1,448 16,889
---------- --------- --------
Gross margin 42,758 (964) 41,794
---------- --------- --------
Operating costs:
Selling and marketing 11,614 1,537 13,151
General and administrative 10,999 649 11,648
Depreciation and amortization 5,700 78 248 (3) 6,026
Product development 3,033 1,145 4,178
Charge for purchased in-process product
development and acquisition-related
charges 31,185 - (10,917) (6) 17,568
(2,700) (7)
---------- --------- --------
Total operating costs 62,531 3,409 52,571
---------- --------- --------
Operating loss (19,773) (4,373) (10,777)
Interest expense (income), net (426) - 720 (4) 294
Foreign currency exchange loss - - -
Equity in losses of joint ventures 38 - 38
---------- --------- --------
Loss before income tax expense (19,385) (4,373) (11,109)
Income tax expense 1,419 - 1,419
---------- --------- --------
Net loss (20,804) (4,373) (12,528)
Extraordinary loss on debt extinguishment (2,419) - 2,419 (7) -
========== ========= ========
Net loss applicable to common shareholders $ (23,223) $ (4,373) $(12,528)
========== ========= ========
Net loss per share of common stock $ (1.19) $ (0.64)
========== =======
Weighted average common and common
equivalent shares outstanding 19,587 19,587
========== =======
See Notes to Unaudited Pro Forma Consolidated Statements of Operations.
F-26
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HARBINGER CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
Effective August 22, 1997, Harbinger (the "Company") acquired all of
the outstanding shares of Acquion, Inc. ("Acquion"), a California corporation
based in Greenville, South Carolina for $13.6 million, consisting of $12.0
million in cash and the assumption of $1.6 million in liabilities including
transaction costs. The Company recorded the acquisition using the purchase
method of accounting with $10.9 million of the purchase price allocated to
in-process product development costs, $641,000 allocated to purchased
technology, and $2.0 million allocated to goodwill. The Company determined that
certain of the acquired technologies had not reached technological feasibility
and therefore expensed the portion of the purchase price allocable to such
in-process product development to the consolidated statement of operations on
August 22, 1997.
The unaudited pro forma consolidated statements of operations for the
year ended December 31, 1996 and the nine months ended September 30, 1997
illustrate the estimated effects on the Company's consolidated statements of
operations of the acquisition as if it had occurred as of the beginning of those
two periods.
The unaudited pro forma consolidated statements of operations have been
prepared using the purchase method of accounting, whereby the total cost of the
acquisition is allocated to the tangible and intangible assets acquired and
liabilities assumed based upon their respective fair values at the effective
date of the acquisition. For purposes of the unaudited pro forma consolidated
statements of operations, such allocations have been made based upon currently
available information and management's estimates.
The historical statements are derived from the audited consolidated
financial statements of the Company as of and for the year ended December 31,
1996, the audited statements of Acquion as of and for the year ended October 31,
1996 and the unaudited financial statements of the Company and Acquion for the
nine months ended September 30, 1997.
The unaudited pro forma consolidated statements of operations do not
purport to represent what the results of operations of the Company would
actually have been if the acquisition had occurred on such dates or to project
the results of operations of the Company for any future date or period. The
unaudited pro forma consolidated statements of operations should be read
together with the historical financial statements and notes thereto of the
Company and Acquion. The unaudited pro forma consolidated statements of
operations reflect the following pro forma adjustments:
1) Reflects the pro forma operating results of the Company for the year
ended December 31, 1996 as combined with HNS, HNV, NTEX and INOVIS.
2) Reflects the historical operating results of Acquion for the year ended
October 31, 1996.
3) Reflects the additional amortization of intangible assets recorded as a
result of the allocation of the purchase price. These intangible assets
and their lives are as follows:
Goodwill $ 2,014,000 10 years
Acquired technology $ 641,000 5 years
4) Reflects interest expense on the borrowings to fund the cash portion of
the purchase price of Acquion at the rate of 8% per annum.
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HARBINGER CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
5) Reflects the historical unaudited operating results of Acquion for the
period from January 1, 1997 through August 22, 1997. The operating results
of Acquion for the period from August 23, 1997 to September 30, 1997 are
included in the Company's unaudited operating results.
6) Reflects the elimination of the charge of $10.9 million for acquired
in-process product development costs resulting from the acquisition of
Acquion and the Company's purchase price allocation.
7) Reflects the elimination of the charge of $2.7 million for acquired
in-process product development costs and the $2.4 million loss on
extinguishment of the Debenture related to the acquisition of the minority
interest of HNS recorded in the first quarter of 1997.
The unaudited pro forma consolidated statements of operations do not
reflect the $10.9 million charge for in-process product development related
to the acquisition of Acquion, or the $2.7 million charge for the
in-process product development and $2.4 million loss on the extinguishment
of the Debenture related to the acquisition of the minority interest in
HNS, all of which were directly attributable to the transactions.
F-28
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