Symantec 2000 Annual Report Download - page 41

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We made no acquisitions during fiscal 1998.
Pro Forma The following unaudited pro forma results of opera-
tions for fiscal 2000 and 1999 are as if the acquisitions of Binary,
Quarterdeck, URLabs, L-3and 20/20 had occurred at the beginning
of fiscal 1999. The pro forma information excludes approximately
$19.7million of acquired in-process research and development.
The pro forma information has been prepared for comparative pur-
poses only and is not indicative of what operating results would
have been if the acquisitions had taken place at the beginning of
fiscal 1999 or of future operating results. Financial information for
IBM’s and Intel’s anti-virus businesses were not available and as
such have not been included in this pro forma information.
Year Ended March 31,
(In thousands, except per share data; unaudited) 2000 1999
Net revenues $ 748,930 $ 619 , 947
Net income $ 158,586 $ 22 , 494
Basic net income per share $ 2.74 $ 0.40
Diluted net income per share $ 2.55 $ 0.38
Divestiture of the Visual Café and ACT! Product Lines
On December 31, 1999, we entered into an Asset Purchase Agree-
ment, whereby we sold the principal assets and liabilities of the
Visual Café product line to WebGain, Inc. (“WebGain”). The assets
primarily consisted of fixed assets and intangible assets. The lia-
bilities related to certain revenue deferrals recorded on our
balance sheet as of December 31, 1999. In exchange for the assets
and liabilities sold, we received $75.0million in a lump-sum cash
payment on December 31, 1999. We wrote-off or transferred
approximately $4.7million of capitalized software, fixed assets and
inventory related to the Visual Café product line. In addition, we
accrued approximately $1.4million in transaction costs and $0.4
million in retention packages for the affected employees. As a
result, we recorded a pre-tax gain of approximately $68.5million on
the divestiture, which is recorded in income, net of expenses, from
sale of technologies and product lines on the Consolidated State-
ments of Income.
On December 31, 1999, we entered into an exclusive Software
License Agreement (“License”) and licensed, on an exclusive
basis, to Interact Commerce Corporation, previously SalesLogix
(“Interact”), substantially all of the ACT! product line technology for
a period of four years. In addition, the inventory and fixed assets
related to the ACT! product line were sold to Interact. In consider-
ation for the license and assets, Interact transferred to us 623,247
shares of its unregistered common stock. These shares were val-
ued at approximately $20.0million as of December 6, 1999, the date
the License was signed and the date the number of shares were
determined. In addition to these shares received, we will receive
quarterly royalty payments for four years, and the first payment of
$5.0million was due and payable on March 31, 2000. The payment
was subsequently received in the June 2000 quarter. Interact will
pay these royalties based on a formula set forth in the License, up
to an aggregate maximum of $57.0million, which will be recorded
in income, net of expenses, from sale of technologies and product
lines on the Consolidated Statements of Income.
Because the royalties from Interact are not guaranteed and the
quarterly amounts to be received were not determinable at
December 31, 1999, we will recognize the royalties as earned. At
the end of the four-year period, Interact has the exclusive option,
for a period of 30 days, to purchase the licensed technology from
us for $60.0million less all royalties paid to us to date. As a result
of the License, we recognized approximately $20.0million from
the shares received and wrote-off or transferred to Interact
$0.4million of inventory and fixed assets attributed to the ACT!
product line. In addition, we accrued approximately $1.3million for
transaction related costs. After recognizing these above amounts,
we recorded a pre-tax gain of approximately $18.3million, which is
recorded in income, net of expenses, from sale of technologies
and product lines on the Consolidated Statements of Income.
Transition Fees In accordance with individual transition agree-
ments, WebGain and Interact will pay us a fee for invoicing,
collecting receivables, shipping and other operational and support
activities, until such time as they have the ability to take over these
Fiscal 1999 Acquisitions
Allocated Purchase Price Components
Acquired Acquired Deferred
(in thousands) Purchase In-Process Product Other Prepaid Tax
Price R&D Rights Goodwill Intangibles R&D Asset
IBM $ 20 ,250 $ 7 ,100 $ — $ 11,850 $ 100 $ 1,200 $ —
Binary 25 ,571 7 ,100 16 , 900 1,451 120 — —
Intel 15 ,625 5 ,017 9 , 797 — 811 — —
Quarterdeck 83 ,732 8 ,300 8 , 480 38,223 2 ,729 — 26,000
Total $ 145 ,178 $ 27 ,517 $ 35 , 177 $ 51,524 $ 3 ,760 $ 1,200 $ 26,000