-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QGvx4ytoWqdTpBsLA3tq8Z0ChhBOUrLLcx6z4p7OjioJ1bfzJPgiMdbYnmqtwpjL cOU6W+5eReqsw6P3TTLmPg== 0000891618-98-000511.txt : 19980211 0000891618-98-000511.hdr.sgml : 19980211 ACCESSION NUMBER: 0000891618-98-000511 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980120 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980210 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NETWORK ASSOCIATES INC CENTRAL INDEX KEY: 0000890801 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 770316593 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-20558 FILM NUMBER: 98527046 BUSINESS ADDRESS: STREET 1: 2805 BOWERS AVE CITY: SANTA CLARA STATE: CA ZIP: 95051 BUSINESS PHONE: 4089883832 FORMER COMPANY: FORMER CONFORMED NAME: MCAFEE ASSOCIATES INC DATE OF NAME CHANGE: 19930328 8-K 1 FORM 8-K 1 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): January 20, 1998 NETWORKS ASSOCIATES, INC. (FORMERLY MCAFEE ASSOCIATES, INC.) (Exact name of registrant as specified in its charter) Delaware 000-20558 77-0316593 (State or other (Commission File Number) (I.R.S. Employer jurisdiction of Identification No.) incorporation) 2805 Bowers Avenue Santa Clara, California 95051 (Address of principal executive offices) (408) 988-3832 (Registrant's telephone number, including area code) 2 ITEM 5. OTHER EVENTS On January 20, 1998 Networks Associates, Inc. issued a press release reporting revenue and earnings for the fourth quarter and the twelve months ended December 31, 1997. 3 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Exhibits: 99.1 Press Release dated January 20, 1998. 4 SIGNATURE 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 hereunto duly authorized. NETWORKS ASSOCIATES, INC. Dated: February 10, 1998 By:/s/ Prabhat K. Goyal -------------------------------- Prabhat K. Goyal Chief Financial Officer 5 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION - ----------- ----------- 99.1 Press Release dated January 20, 1998.
EX-99.1 2 PRESS RELEASE DATED JANUARY 20, 1998 1 [NETWORKS LETTERHEAD] NETWORK ASSOCIATES REPORTS RECORD FOURTH QUARTER REVENUE FOURTH QUARTER REVENUE RISES TO $173,305,000; FOURTH QUARTER NET INCOME EXCLUSIVE OF ACQUISITION AND NON-RECURRING CHARGES RISES TO $36,115,000 SANTA CLARA, Calif., Jan. 20, 1998 - Network Assoc. (NASDAQ: NETA), a leading supplier of enterprise network security and management software, today reported record revenue and earnings for the fourth quarter and twelve months ended December 31, 1997 excluding costs related to the previously announced acquisitions of Network General Corporation and Pretty Good Privacy, Inc. which both closed in December 1997. EARNINGS BEFORE CHARGES ASSOCIATED WITH THE ACQUISITIONS OF NETWORK GENERAL AND PGP Revenue for the fourth quarter reached $173,305,000, an increase of 39 percent over revenues of $124,662,000(1) in the same period a year ago, restated for the acquisition of Network General, which was accounted for as a pooling of interests. Net income exclusive of acquisition and non-recurring charges for the fourth quarter increased 26 percent to $36,115,000, or $0.49 per share, from $28,643,000(1), or $0.39 per share in the fourth quarter of 1996. Revenue for the twelve months ended December 31, 1997 was $612,193,000, an increase of 45 percent over revenue of $421,794,000(1) reported for the previous fiscal year. Net income exclusive of acquisition and non-recurring charges for the year ended December 31, 1997 increased 43 percent to $131,584,000, or $1.81 per share, compared to net income of $92,130,000(1), or $1.28 per share excluding acquisition charges in the previous year.
Three Months Ended December 31, Twelve Months Ended December 31, ------------------------------- -------------------------------- 1997 1996 1997 1996(1) ---- ---- ---- ------- Revenues $173,305,000 $124,662,000 $612,193,000 $421,794,000 Income Before Taxes $58,250,000 $44,811,000 $208,764,000 $146,063,000 Net Income $36,115,000 $28,643,000 $131,584,000 $92,130,000 Earnings Per Share $0.49 $0.39 $1.81 $1.28
2 REPORTED EARNINGS FOR THE FOURTH QUARTER OF 1997 In connection with the Network General and PGP acquisitions, the Company incurred a one-time charge for acquisition and non-recurring costs which resulted in a reported net loss for the fourth quarter of 1997 of $80,896,000, or $1.16 per share, compared to net income of $28,643,000, or $0.39 per share for the fourth quarter of 1996. After giving effect to acquisition and non-recurring charges incurred in each year, the reported net loss for the year ended December 31, 1997 was $28,356,000, or $0.41 per share, compared to net income of $64,110,000(1), or $0.89 per share for the year ended December 31, 1996. "In addition to closing the merger between McAfee and Network General and the acquisition of PGP ahead of schedule in the fourth quarter, Network Associates forged ahead to deliver record revenue and earnings for the quarter and the year," said Bill Larson, CEO and Chairman of Network Associates. "The final month of the quarter demonstrates the promise of the comprehensive McAfee, Network General and PGP product offerings, encompassed in enterprise network security and management solutions through an integrated suite strategy." QUARTER HIGHLIGHTS Network Associates was officially launched as the merger between McAfee Associates and Network General closed ahead of schedule on December 1, 1997. Network Associates also extended its enterprise network security and management software product lines with the acquisition of the leading applied cryptographic security solution provider, privately-held Pretty Good Privacy ("PGP"). Network Associates introduced four new product suites aimed at new and existing corporate customers: the McAfee Total Virus Defense Suite ("TVD"), the PGP Total Network Security Suite ("TNS"), the Sniffer (R) Total Network Visibility Suite ("TNV") and the McAfee Total ServiceDesk Suite ("TSD"). The TVD Suite delivers a multi-tiered approach to virus protection spanning client, server and Internet gateway. In the fourth quarter, components of the TVD Suite continued to accumulate industry awards and honors, including Secure Computing Labs' Checkmark certification, the latest of several benchmark tests where VirusScan overcame the most rigorous standards for virus detection, Windows NT Magazine's "Editor's Choice" award, finalist in PC/Computing's MVP awards, leading anti-virus technology for Windows NT by ENT magazine, top honors from CNET and PC Today, PC World's "Best Buy", Secure Computing's "Best Anti-Virus" and "Best Security Software", HomePC's "Editor's Choice" and Window Sources' "Stellar Award" for SecureCast. Further, the TVD Suite was named the top performer in CNET's Net security suites review in a head-to-head comparison against Symantec's Norton AntiVirus 4.0 Deluxe, EMD's Armor97 Security Suite, CyberMedia's GuardDog Deluxe and eSafe's Protect. Extending its line of server and client virus protection, the TVD Suite introduced GroupShield and GroupScan for Microsoft Exchange Server version 5.5, offering the first native anti-virus solution for Microsoft Exchange clients and servers. GroupShield protects Microsoft Exchange 3 servers with around-the-clock virus-scanning, flexible alerting and powerful "lights-out" administrative capabilities. GroupScan intercepts and scans incoming messages at the client side, allowing users to encrypt messages without sacrificing virus security. The installed base of GroupShield for Microsoft Exchange and Lotus Notes surpassed three million users in its first twelve months on the market. The TNV Suite expanded its product offerings during the fourth quarter, including the Sniffer(R) Decode Server as a cost-effective solution for network professionals who perform technical support, training or development. The Sniffer(R) Decode Server meets a critical need by making trace files available to Technical Assistance Center ("TAC") engineers for analysis through a Web Browser. The trace files document hard-to-solve problems and can be captured at end user sites by a portable Sniffer(R) Network Analyzer and submitted for in-depth analysis to TAC engineers. Also during the quarter, the HSSI Sniffer(R) Network Analyzer was launched, the only Expert Analysis tool for High-Speed Serial Interface links. The TSD Suite added a new web-based Self ServiceDesk, an integration of diagnostic and help-desk software designed to make desktop computers "help-desk-ready", giving PC's "self-healing" capabilities which empower employees to solve problems without calling the help desk. Self ServiceDesk is designed exclusively for Microsoft(R) Internet Information Server, Microsoft's comprehensive Web server solution, and represents an addition to the seamless integration of Microsoft's SQL Server with the latest release of McAfee HelpDesk announced in the third quarter of 1997. The TNS Suite was launched with the acquisition of PGP, incorporating the PGP public-key infrastructure, including the PGP Certificate Server, with the Cybercop, Webwall and NetCrypto products, enabling confidential communications and security across a corporate intranet, extranet or the public Internet. With headquarters in Santa Clara, California, Network Associates, Inc., formed by the merger of McAfee Associates and Network General, is a leading supplier of enterprise network security and management solutions. Network Associates' product offering includes four individual software suites, Total Virus Defense, Total Network Security, Total Network Visibility and Total ServiceDesk, which can be centrally managed from within the Network Associates' NetTools unified management environment. For more information, Network Associates can be reached at (408) 988-3832 or on the Internet at http://www.networkassociates.com. (1) For purposes of the comparative operating data, Network General's audited consolidated financial statements for the fiscal year ended March 31, 1997 and for the twelve months ended December 31, 1997 have been combined with McAfee's audited consolidated financial statements for the fiscal years ended December 31, 1996 and 1997, respectively. As a result, Network General's results for the three month period ended March 31, 1997 are included in the consolidated statement of operations data for both the twelve months ended December 31, 1996 and 1997. The information is not necessarily indicative of the operating results or financial position that would have occurred if the Merger had been consummated at the beginning of the periods indicated, nor is it necessarily indicative of future operating results or financial position. 4 NETWORK ASSOCIATES, INC. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) December 31, 1997 December 31, 1996(1) ----------------- -------------------- (unaudited) ASSETS Cash and investments $ 356,560 $ 305,653 Accounts receivable, net 125,284 77,391 Inventories 8,379 5,307 Prepaid expenses and current deferred taxes 52,774 26,113 Fixed assets, net 28,570 28,363 Long-term deferred taxes 7,247 7,719 Intangible and other assets, net 23,117 7,210 ----------------- -------------------- TOTAL ASSETS $ 601,931 $ 457,756 ================= ==================== LIABILITIES Accounts payable $ 18,439 $ 33,552 Accrued liabilities 141,083 36,360 Deferred revenue and taxes 82,650 58,921 ----------------- -------------------- Total liabilities 242,172 128,833 ----------------- -------------------- STOCKHOLDERS' EQUITY Common stock 690 668 Additional paid in capital 191,431 139,583 Retained earnings 167,638 188,672 ----------------- -------------------- Total stockholders' equity 359,759 328,923 ----------------- -------------------- $ 601,931 $ 457,756 ================= ==================== (1) For purposes of the comparative operating data, Network General's audited consolidated financial statements for the fiscal year ended March 31, 1997 and for the twelve months ended December 31, 1997 have been combined with McAfee's audited consolidated financial statements for the fiscal years ended December 31, 1996 and 1997, respectively. As a result, Network General's results for the three month period ended March 31, 1997 are included in the consolidated statement of operations data for both the twelve months ended December 31, 1996 and 1997. This information is not necessarily indicative of the operating results or financial position that would have occurred if the Merger had been consummated at the beginning of the periods indicated, nor is it necessarily indicative of future operating results or financial position. 5 NETWORK ASSOCIATES, INC. CONSOLIDATED INCOME STATEMENTS (IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended Twelve Months Ended ------------------------- ------------------------- December 31, December 31, December 31, December 31, 1997 1996 1997 1996(1) ------------ ------------ ------------ ------------ (unaudited) Net Revenues $173,305 $124,662 $612,193 $421,794 Operating Costs & Expenses: Cost of net revenues 31,967 21,972 108,216 76,913 Research & development 24,048 15,532 85,021 52,244 Marketing & sales 50,474 35,170 181,017 122,638 General & administrative 11,945 9,126 43,060 30,315 Amortization of intangibles 270 874 858 3,169 Acquisition and non-recurring charges 132,608 -- 175,800 30,669 -------- -------- -------- -------- Total operating costs and expenses 251,312 82,674 593,972 315,948 -------- -------- -------- -------- Income (loss) from operations (78,007) 41,988 18,221 105,846 Other income 3,649 2,823 14,743 9,548 -------- -------- -------- -------- Income (loss) before provision for income taxes (74,358) 44,811 32,964 115,394 Provision for Income Taxes 6,538 16,168 61,320 51,284 -------- -------- -------- -------- Net Income (Loss) $(80,896) $ 28,643 $(28,356) $ 64,110 ======== ======== ======== ======== Fully Diluted Earnings (Loss) Per Share $ (1.16) $ 0.39 $ (0.41) $ 0.89 ======== ======== ======== ======== Shares Used 69.714 73,480 68,748 72,221 ======== ======== ======== ========
(1) For purposes of the comparative operating data, Network General's audited consolidated financial statements for the fiscal year ended March 31, 1997 and for the twelve months ended December 31, 1997 have been combined with McAfee's audited consolidated financial statements for the fiscal years ended December 31, 1996 and 1997, respectively. As a result, Network General's results for the three month period ended March 31, 1997 are included in the consolidated statement of operations data for both the twelve months ended December 31, 1996 and 1997. This information is not necessarily indicative of the operating results or financial position that would have occurred if the Merger had been consummated at the beginning of the periods indicated, nor is it necessarily indicative of future operating results or financial position. -----END PRIVACY-ENHANCED MESSAGE-----