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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 SEPTEMBER 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 October 31, 2002, there were 250,558,406 shares of the registrant’s common stock outstanding.


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

Part I.    Financial Information
    
   
Item 1.
  
Financial Statements
    
           
2
           
3
           
4
           
5
   
Item 2.
     
13
   
Item 3.
     
37
   
Item 4.
     
38
Part II.    Other Information
    
   
Item 1.
     
39
   
Item 6.
     
40
  
41
  
42


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

  
December 31, 2001

    
(Unaudited)
    
ASSETS
             
Current assets:
             
Cash and cash equivalents
  
$
225,237
  
$
348,916
Short-term investments
  
 
109,774
  
 
42,716
Accounts receivable, net
  
 
25,635
  
 
35,477
Prepaid expenses and other current assets
  
 
5,409
  
 
4,720
    

  

Total current assets
  
 
366,055
  
 
431,829
Property and equipment, net
  
 
25,009
  
 
43,475
Investments
  
 
14,610
  
 
22,414
Goodwill, net
  
 
146,830
  
 
144,420
Other intangibles, net
  
 
802
  
 
18,791
Other assets
  
 
2,623
  
 
2,097
    

  

Total assets
  
$
555,929
  
$
663,026
    

  

LIABILITIES AND STOCKHOLDERS’ EQUITY
             
Current liabilities:
             
Accounts payable and accrued expenses
  
$
60,898
  
$
73,456
Deferred revenue
  
 
38,895
  
 
46,051
Current portion of capital lease obligation
  
 
326
  
 
750
Other current liabilities
  
 
5,073
  
 
5,746
    

  

Total current liabilities
  
 
105,192
  
 
126,003
Long-term liabilities, less current portion
  
 
24,785
  
 
26,722
    

  

Total liabilities
  
 
129,977
  
 
152,725
Stockholders’ equity
  
 
425,952
  
 
510,301
    

  

Total liabilities and stockholders’ equity
  
$
555,929
  
$
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
September 30,

    
Nine Months Ended
September 30,

 
    
2002

    
2001

    
2002

    
2001

 
Revenue:
                                   
Product license
  
$
11,354
 
  
$
40,276
 
  
$
44,455
 
  
$
132,809
 
Services
  
 
21,362
 
  
 
30,220
 
  
 
70,289
 
  
 
111,437
 
    


  


  


  


Total revenue
  
 
32,716
 
  
 
70,496
 
  
 
114,744
 
  
 
244,246
 
Cost of revenue:
                                   
Product license
  
 
394
 
  
 
1,639
 
  
 
1,706
 
  
 
4,251
 
Services (1)
  
 
9,701
 
  
 
17,021
 
  
 
33,728
 
  
 
64,476
 
    


  


  


  


Total cost of revenue
  
 
10,095
 
  
 
18,660
 
  
 
35,434
 
  
 
68,727
 
    


  


  


  


Gross profit
  
 
22,621
 
  
 
51,836
 
  
 
79,310
 
  
 
175,519
 
Operating expenses:
                                   
Research and development (1)
  
 
11,757
 
  
 
15,570
 
  
 
38,657
 
  
 
51,021
 
Sales and marketing (1)
  
 
16,681
 
  
 
44,867
 
  
 
64,457
 
  
 
147,656
 
General and administrative (1)
  
 
5,107
 
  
 
6,932
 
  
 
16,968
 
  
 
23,004
 
Acquisition-related and other charges
  
 
—  
 
  
 
578
 
  
 
—  
 
  
 
1,919
 
Business restructuring charges
  
 
18,064
 
  
 
—  
 
  
 
31,872
 
  
 
90,658
 
Amortization of deferred stock compensation
  
 
137
 
  
 
1,731
 
  
 
1,210
 
  
 
8,533
 
Amortization of goodwill and other intangibles
  
 
334
 
  
 
125,530
 
  
 
15,579
 
  
 
376,504
 
    


  


  


  


Total operating expenses
  
 
52,080
 
  
 
195,208
 
  
 
168,743
 
  
 
699,295
 
    


  


  


  


Loss from operations
  
 
(29,459
)
  
 
(143,372
)
  
 
(89,433
)
  
 
(523,776
)
Other income (expense), net
  
 
(4,676
)
  
 
(4,248
)
  
 
(1,938
)
  
 
(35,900
)
    


  


  


  


Loss before provision for income taxes
  
 
(34,135
)
  
 
(147,620
)
  
 
(91,371
)
  
 
(559,676
)
Provision for income taxes
  
 
70
 
  
 
297
 
  
 
692
 
  
 
1,375
 
    


  


  


  


Net loss
  
$
(34,205
)
  
$
(147,917
)
  
$
(92,063
)
  
$
(561,051
)
    


  


  


  


Basic net loss per common share
  
$
(0.14
)
  
$
(0.61
)
  
$
(0.37
)
  
$
(2.33
)
    


  


  


  


Shares used in computing basic net loss per common share
  
 
250,112
 
  
 
243,930
 
  
 
248,741
 
  
 
240,895
 

(1)
 
Excludes amortization of deferred stock compensation as follows:
 
    
Three Months Ended
September 30,

  
Nine Months Ended
September 30,

    
2002

  
2001

  
2002

  
2001

Cost of revenue—services
  
$
18
  
$
527
  
$
163
  
$
1,936
Research and development
  
 
62
  
 
496
  
 
372
  
 
2,255
Sales and marketing
  
 
40
  
 
576
  
 
390
  
 
3,127
General and administrative
  
 
17
  
 
132
  
 
285
  
 
1,215
    

  

  

  

    
$
137
  
$
1,731
  
$
1,210
  
$
8,533
    

  

  

  

 
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
 
    
Nine Months Ended
September 30,

 
    
2002

    
2001

 
Operating activities:
                 
Net loss
  
$
(92,063
)
  
$
(561,051
)
Adjustments to reconcile net loss to net cash used in operating activities:
                 
Depreciation
  
 
14,660
 
  
 
15,936
 
Noncash compensation expense
  
 
1,210
 
  
 
8,533
 
Amortization of goodwill and other intangibles
  
 
15,579
 
  
 
377,033
 
Acquisition-related and other charges (noncash)
  
 
—  
 
  
 
207
 
Noncash restructuring expense
  
 
7,514
 
  
 
24,649
 
Noncash investment impairments
  
 
6,496
 
  
 
49,063
 
Loss on disposal of fixed assets
  
 
777
 
  
 
—  
 
Other noncash items
  
 
(156
)
  
 
167
 
Changes in operating assets and liabilities
  
 
(14,025
)
  
 
49,340
 
    


  


Net cash used in operating activities
  
 
(60,008
)
  
 
(36,123
)
Investing activities:
                 
Purchase of property and equipment
  
 
(4,044
)
  
 
(17,521
)
Maturity (purchase) of short-term investments, net
  
 
(67,058
)
  
 
3,740
 
Maturity of restricted investments
  
 
1,148
 
  
 
1,018
 
Purchase of equity securities
  
 
(1,067
)
  
 
(555
)