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Table of Contents

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 10-Q
 

 
x
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE PERIOD ENDED JUNE 30, 2002
 
OR
 
¨
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Commission File Number: 000-25375
 
VIGNETTE CORPORATION
(Exact name of registrant as specified in its charter)
 
Delaware
 
74-2769415
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
1601 South MoPac Expressway
Austin, Texas 78746
(Address of principal executive offices)
 

 
(512) 741-4300
(Registrant’s telephone number, including area code)
 

 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days
 
(1)    Yes  x    No  ¨
(2)    Yes  x    No  ¨
 
As of July 31, 2002, there were 250,360,758 shares of the registrant’s common stock outstanding.
 

 


Table of Contents
 
VIGNETTE CORPORATION
FORM 10–Q QUARTERLY REPORT
FOR THE QUARTER ENDED JUNE 30, 2002
 
TABLE OF CONTENTS
 
         
Page

    
    Item 1.
       
       
2
       
3
       
4
       
5
    Item 2.
     
12
    Item 3.
     
35
    
    Item 1.
     
36
    Item 2.
     
36
    Item 4.
     
36
    Item 6.
     
37
  
38

1


Table of Contents
 
PART I — FINANCIAL INFORMATION
 
ITEM 1 — FINANCIAL STATEMENTS
 
VIGNETTE CORPORATION
 
CONDENSED CONSOLIDATED BALANCE SHEETS
in thousands
 
    
June 30,
2002

  
December 31, 2001

    
(Unaudited)
    
ASSETS
             
Current assets:
             
Cash and cash equivalents
  
$
224,511
  
$
348,916
Short-term investments
  
 
129,725
  
 
42,716
Accounts receivable, net
  
 
32,751
  
 
35,477
Prepaid expenses and other current assets
  
 
5,250
  
 
4,720
    

  

Total current assets
  
 
392,237
  
 
431,829
Property and equipment, net
  
 
34,587
  
 
43,475
Investments
  
 
19,378
  
 
22,414
Goodwill, net
  
 
146,830
  
 
144,420
Other intangibles, net
  
 
1,136
  
 
18,791
Other assets
  
 
2,538
  
 
2,097
    

  

Total assets
  
$
596,706
  
$
663,026
    

  

LIABILITIES AND STOCKHOLDERS’ EQUITY
             
Current liabilities:
             
Accounts payable and accrued expenses
  
$
61,031
  
$
73,456
Deferred revenue
  
 
42,878
  
 
46,051
Current portion of capital lease obligation
  
 
463
  
 
750
Other current liabilities
  
 
6,277
  
 
5,746
    

  

Total current liabilities
  
 
110,649
  
 
126,003
Long-term liabilities, less current portion
  
 
28,550
  
 
26,722
    

  

Total liabilities
  
 
139,199
  
 
152,725
Stockholders’ equity
  
 
457,507
  
 
510,301
    

  

Total liabilities and stockholders’ equity
  
$
596,706
  
$
663,026
    

  

 
The accompanying notes are an integral part of these condensed consolidated financial statements.

2


Table of Contents
VIGNETTE CORPORATION
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
in thousands, except per share data
 
    
Three Months Ended
June 30,

    
Six Months Ended
June 30,

 
    
2002

    
2001

    
2002

    
2001

 
Revenue:
                                   
Product license
  
$
12,610
 
  
$
44,529
 
  
$
33,101
 
  
$
92,533
 
Services
  
 
23,039
 
  
 
39,095
 
  
 
48,927
 
  
 
81,217
 
    


  


  


  


Total revenue
  
 
35,649
 
  
 
83,624
 
  
 
82,028
 
  
 
173,750
 
Cost of revenue:
                                   
Product license
  
 
486
 
  
 
1,135
 
  
 
1,312
 
  
 
2,612
 
Services (1)
  
 
10,945
 
  
 
22,101
 
  
 
24,027
 
  
 
47,455
 
    


  


  


  


Total cost of revenue
  
 
11,431
 
  
 
23,236
 
  
 
25,339
 
  
 
50,067
 
    


  


  


  


Gross profit
  
 
24,218
 
  
 
60,388
 
  
 
56,689
 
  
 
123,683
 
Operating expenses:
                                   
Research and development (1)
  
 
12,951
 
  
 
16,463
 
  
 
26,900
 
  
 
35,451
 
Sales and marketing (1)
  
 
18,787
 
  
 
50,117
 
  
 
47,776
 
  
 
102,789
 
General and administrative (1)
  
 
5,234
 
  
 
8,137
 
  
 
11,861
 
  
 
16,072
 
Purchased in-process research and development, acquisition-related and other charges
  
 
—  
 
  
 
663
 
  
 
—  
 
  
 
1,341
 
Business restructuring charges
  
 
—  
 
  
 
41,536
 
  
 
13,808
 
  
 
90,658
 
Amortization of deferred stock compensation
  
 
364
 
  
 
2,705
 
  
 
1,073
 
  
 
6,802
 
Amortization of goodwill and other intangibles
  
 
7,612
 
  
 
124,109
 
  
 
15,245
 
  
 
250,974
 
    


  


  


  


Total operating expenses
  
 
44,948
 
  
 
243,730
 
  
 
116,663
 
  
 
504,087
 
    


  


  


  


Loss from operations
  
 
(20,730
)
  
 
(183,342
)
  
 
(59,974
)
  
 
(380,404
)
Other income (expense), net
  
 
1,051
 
  
 
848
 
  
 
2,738
 
  
 
(31,652
)
    


  


  


  


Loss before provision for income taxes
  
 
(19,679
)
  
 
(182,494
)
  
 
(57,236
)
  
 
(412,056
)
Provision for income taxes
  
 
232
 
  
 
878
 
  
 
622
 
  
 
1,078
 
    


  


  


  


Net loss
  
$
(19,911
)
  
$
(183,372
)
  
$
(57,858
)
  
$
(413,134
)
    


  


  


  


Basic net loss per common share
  
$
(0.08
)
  
$
(0.76
)
  
$
(0.23
)
  
$
(1.73
)
    


  


  


  


Shares used in computing basic net loss per common share
  
 
248,860
 
  
 
241,224
 
  
 
248,044
 
  
 
238,895
 
    
Three Months Ended
June 30,

    
Six Months Ended
June 30,

 
    
2002

    
2001

    
2002

    
2001

 
(1) Excludes amortization of deferred stock compensation as follows:
                                   
Cost of revenue – services
  
$
48
 
  
$
651
 
  
$
146
 
  
$
1,409
 
Research and development
  
 
144
 
  
 
552
 
  
 
310
 
  
 
1,759
 
Sales and marketing
  
 
127
 
  
 
1,041
 
  
 
349
 
  
 
2,550
 
General and administrative
  
 
45
 
  
 
461
 
  
 
268
 
  
 
1,084
 
    


  


  


  


    
$
364
 
  
$
2,705
 
  
$
1,073
 
  
$
6,802
 
    


  


  


  


 
The accompanying notes are an integral part of these condensed consolidated financial statements.

3


Table of Contents
VIGNETTE CORPORATION
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
in thousands
 
    
Six Months Ended June 30,

 
    
2002

    
2001

 
Operating activities:
                 
Net loss
  
$
(57,858
)
  
$
(413,134
)
Adjustments to reconcile net loss to net cash used in operating activities:
                 
Depreciation
  
 
10,268
 
  
 
10,464
 
Noncash compensation expense
  
 
1,073
 
  
 
6,802
 
Amortization of goodwill and other intangibles
  
 
15,245
 
  
 
250,974
 
Purchased in-process research and development, acquisition-related and other charges (noncash)
  
 
—  
 
  
 
168
 
Noncash restructuring expense
  
 
803
 
  
 
24,649
 
Noncash investment impairments
  
 
458
 
  
 
41,397
 
Other noncash items
  
 
(105
)
  
 
198
 
Changes in operating assets and liabilities, net of effects from purchases of businesses:
                 
Accounts receivable, net
  
 
4,205
 
  
 
34,546
 
Prepaid expenses and other assets
  
 
(886