EXHIBIT 99.1
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following unaudited pro forma condensed combined financial information of
XOOM.com, Inc. ("XOOM.com") gives effect to the acquisition of Paralogic
Software Corporation. The historical financial information has been derived
from the historical financial statements of XOOM.com and Paralogic Software
Corporation, and should be read in conjunction with such financial statements
and the notes thereto included in or incorporated by reference in this Form
8-K/A.
The unaudited pro forma condensed combined balance sheet as of March 31, 1999
has been prepared assuming the Paralogic Software Corporation acquisition
took place as of that date and includes the allocation of the total purchase
consideration to the fair values of the assets and liabilities of Paralogic
Software Corporation.
The unaudited pro forma condensed combined statements of operations combine
XOOM.com's and Paralogic Software Corporation's historical statements of
operations for the year ended December 31, 1998 and the three months ended
March 31, 1999 and give effect to the merger, including the amortization of
goodwill and other intangible assets, as if it occurred on January 1, 1998
and 1999, respectively.
The unaudited pro forma condensed combined 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 transactions had
been consummated as of the dates indicated, nor is it necessarily indicative of
future operating results or financial condition of XOOM.com.
XOOM.com, Inc.
UNAUDITED PRO FORMA
CONDENSED COMBINED BALANCE SHEETS
(in thousands, per share data)
As of March 31, 1999
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Historical
----------------------------------------- Pro Forma
Paralogic Business
Software Combination
Xoom.com, Inc. Corporation Combined Adjustments Pro Forma
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ASSETS
Current assets
Cash and cash equivalents $ 43,381 $ 199 $ 43,580 $ - $ 43,580
Short-term investments 9,290 - 9,290 - 9,290
Accounts receivable, net 1,610 109 1,719 - 1,719
Inventories 282 - 282 - 282
Other current assets 477 5 482 - 482
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-
Total current assets 55,040 313 55,353 - 55,353
-
Fixed assets, net 3,248 21 3,269 - 3,269
Goodwill, net 3,165 - 3,165 28,511 (2) 31,676
Intangibles, net 1,490 - 1,490 5,066 (2) 6,556
Investments 1,004 - 1,004 1,004
Other assets 843 - 843 - 843
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-
Total assets $ 64,790 $ 334 $ 65,124 $ 33,577 $ 98,701
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-
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,097 $ 27 $ 2,124 $ 315 (1) $ 2,439
Accrued compensation and related expenses 863 - 863 - 863
Other accrued liabilities 1,303 - 1,303 - 1,303
Deferred revenue 411 266 677 (254) (5) 423
Notes payable 1,191 1 1,192 - 1,192
Contingency accrual 1,000 - 1,000 - 1,000
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-
Total current liabilities 6,865 294 7,159 61 7,220
Notes payable, less current portion 370 - 370 - 370
Capital lease obligations, less current portion 105 - 105 - 105
Stockholders' equity:
Preferred stock - 165 165 (165) (3) -
Common stock 75,801 3,862 79,663 31,219 (1), (3) 110,882
Notes receivable from shareholder - (3) (3) - (3)
Deferred compensation (674) (3,230) (3,904) 3,230 (3) (674)
Accumulated deficit (17,677) (754) (18,431) (768) (3), (4) (19,199)
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Total stockholders' equity 57,450 40 57,490 33,516 91,006
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Total liabilities and stockholders' equity $ 64,790 $ 334 $ 65,124 $ 33,577 $ 98,701
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XOOM.com, Inc.
UNAUDITED PRO FORMA CONDENSED COMBINED
STATEMENTS OF OPERATIONS
(In thousands, except per share data)
For the Year Ended December 31, 1998
------------------------------------------------------------------------
Historical
------------------------------------------ Pro Forma
Paralogic Business
Software Combination
Xoom.com, Inc. Corporation Combined Adjustments Pro Forma
------------------------------------------------------------------------
Net revenue $ 8,318 $ 239 $ 8,557 $ - $ 8,557
Cost of net revenue 3,584 13 3,597 - 3,597
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Gross profit 4,734 226 4,960 - 4,960
Operating expenses:
Operating and development 3,840 145 3,985 - 3,985
Sales and marketing 2,835 73 2,908 - 2,908
General and administrative 3,366 35 3,401 - 3,401
Purchased in-process research and development 790 - 790 - (A) 790
Amortization of deferred compensation 1,416 182 1,598 - 1,598
Amortization of goodwill and other intangible
assets 1,843 - 1,843 8,394 (B) 10,237
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Total operating expenses 14,090 435 14,525 8,394 22,919
Loss from operations (9,356) (209) (9,565) (8,394) (17,959)
Other income (expense):
Interest income 187 - 187 - 187
Interest expense (135) (1) (136) - (136)
Interest expense related to warrant (1,494) - (1,494) - (1,494)
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Net loss $ (10,798) $ (210) $ (11,008) $ (8,394) $ (19,402)
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Basic and diluted net loss per share (C)$ (2.27)
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Shares used in per share calculation (C) 8,533
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XOOM.com, Inc.
UNAUDITED PRO FORMA CONDENSED COMBINED
STATEMENTS OF OPERATIONS
(In thousands, except per share data) For the Three Months Ended March 31, 1999
------------------------------------------------------------------------
Historical
--------------------------------------- Pro Forma
Paralogic Business
Software Combination
Xoom.com, Inc. Corporation Combined Adjustments Pro Forma
------------------------------------------------------------------------
Net revenue $ 4,422 $ 73 $ 4,495 $ - $ 4,495
Cost of net revenue 2,042 7 2,049 - 2,049
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Gross profit 2,380 66 2,446 - 2,446
Operating expenses:
Operating and development 1,149 94 1,243 - 1,243
Sales and marketing 2,434 47 2,481 - 2,481
General and administrative 1,623 23 1,646 - 1,646
Purchased in-process research and development - - - - (A) -
Amortization of deferred compensation 230 447 677 - 677
Amortization of goodwill and other intangible
assets 862 - 862 2,099 (B) 2,961
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Total operating expenses 6,298 611 6,909 2,099 9,008
Loss from operations (3,918) (545) (4,463) (2,099) (6,562)
Other income (expense):
Interest income 640 1 641 - 641
Interest expense (30) - (30) - (30)
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Net loss $ (3,308) $ (544) $ (3,852) (2,099) $ (5,951)
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Basic and diluted net loss per share (C) $ (0.40)
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Shares used in per share calculation (C) 14,865
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XOOM.COM, INC.
UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL INFORMATION
The total estimated purchase consideration of the Paralogic Software
Corporation merger has been allocated on a preliminary basis to assets and
liabilities based on management's estimate of their fair values. The excess
of the purchase cost over the fair value of the net assets acquired has been
allocated to goodwill. This allocation is subject to change pending the
completion of the final analysis of the fair value of the assets acquired and
liabilities assumed. The impact of these changes could be material.
The adjustments to the unaudited pro forma condensed combined balance sheet as
of March 31, 1999 have been calculated as if the merger occurred on March 31,
1999 and are as follows:
(1) To reflect the acquisition of Paralogic Software Corporation for a total
estimated purchase price of approximately $35,396,000. The purchase
consideration consists of the following:
- Issuance of 654,018 shares of Xoom.com's Common Stock, with an
estimated fair value of $30,824,000. The fair value per share of
XOOM.com's common stock issued is based on the average closing price
of XOOM.com's common stock on June 17, 1999 (the day the merger was
announced) and the three days prior and subsequent to such date.
- Assumption of options to purchase 94,734 shares, respectively, of
XOOM.com's Common Stock with a fair value of $4,257,000. The fair
value of the options assumed is based on the Black-Scholes model
using the following assumptions:
- Fair market value of the underlying shares is based on the
average closing price of XOOM.com's common stock on June 17, 1999
(the day the merger was announced) and the three days prior and
subsequent to such date
- Expected life of 3 years
- Expected volatility of 1.0
- Risk-free interest rate of 5.16%
- Expected dividend rate of 0%
- Other related transaction and merger costs estimated to be $315,000.
(2) Recognition of the excess purchase cost of $33,577,000 over the fair value
of the net assets acquired, have been recorded as goodwill and other intangible
assets as follows:
- Developed Technology $ 1,212,000
- Core Technology 3,774,000
- Acquired workforce 80,000
- Goodwill 28,511,000
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$33,577,000
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(3) To reflect the elimination of the historical stockholders' equity accounts
of Paralogic
(4) Recognition of purchased in-process research and development charge of
$1,522,000
(5) To eliminate the estimated gross margin associated with the Paralogic
Software Corporation deferred revenue
The adjustments to the unaudited pro forma condensed combined consolidated
statements of operations for the year ended December 31, 1998 and the three
months ended March 31, 1999 have been calculated assuming that the merger
occurred as of January 1, 1998 and January 1, 1999, respectively and are as
follows:
(A) The purchased in-process research and development charge of $1,522,000 has
been excluded from net loss for the year ended December 31, 1998 and the
three months ended March 31, 1999, as it represents a non-recurring charge.
The charge will be recorded in the three months ended June 30, 1999.
(B) To reflect the amortization of goodwill and other intangible assets
resulting from the merger. The goodwill and other intangible assets are
being amortized over periods of four years.
(C) Basic and diluted net loss per share reflects the issuance of 654,018
shares of XOOM.com's common stock, as if the shares had been outstanding
for the entire period. The effect of stock options issued assumed in the
merger have not been included, as their inclusion would be anti-dilutive.