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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 quarterly period ended June 30, 2002
 
or
 
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from                      to                         
 
Commission file number 000-31861
 
OPTICAL COMMUNICATION PRODUCTS, INC.
(Exact Name of Registrant as Specified in Its Charter)
 

 
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
     
95-4344224
(I.R.S. Employer
Identification No.)
 
20961 Knapp Street
Chatsworth, California 91311
(Address of principal executive offices, including zip code)
 
Registrant’s Telephone Number, Including Area Code: (818) 701-0164
 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 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.    Yes  þ    No  ¨
 
As of August 8, 2002, there were approximately 42,832,400 shares of Class A common stock outstanding.
 


Table of Contents
 
OPTICAL COMMUNICATION PRODUCTS, INC.
 
INDEX TO FORM 10-Q FOR THE
QUARTERLY PERIOD ENDED JUNE 30, 2002
 
        
PAGE

PART I.    FINANCIAL INFORMATION
    
Item 1.
 
Financial Statements
    
      
1
      
2
      
3
      
4
Item 2.
    
7
Item 3.
    
23
PART II.    OTHER INFORMATION AND SIGNATURES
    
Item 1.
    
25
Item 2.
    
25
Item 3.
    
25
Item 4.
    
26
Item 5.
    
26
Item 6.
    
26
  
27
 

1


Table of Contents
 
PART I.
FINANCIAL INFORMATION
 
ITEM 1.    FINANCIAL STATEMENTS
 
OPTICAL COMMUNICATION PRODUCTS, INC.
 
BALANCE SHEET
(Dollars In thousands)
 
    
June 30, 2002

  
September 30, 2001

    
(unaudited)
    
ASSETS
             
CURRENT ASSETS:
             
Cash and cash equivalents
  
$
71,682
  
$
62,529
Marketable securities
  
 
75,874
  
 
76,102
Accounts receivable less allowance for doubtful accounts:
             
$559 at June 30, 2002 and $1,156 at September 30, 2001
  
 
2,970
  
 
8,004
Income taxes receivable
  
 
509
      
Inventories
  
 
9,350
  
 
15,852
Deferred income taxes
  
 
9,296
  
 
9,296
Prepaid expenses and other current assets
  
 
2,336
  
 
2,306
    

  

Total current assets
  
 
172,017
  
 
174,089
PROPERTY, PLANT AND EQUIPMENT, Net
  
 
30,487
  
 
30,179
    

  

TOTAL
  
$
202,504
  
$
204,268
    

  

LIABILITIES AND STOCKHOLDERS’ EQUITY
             
CURRENT LIABILITIES:
             
Current portion of long-term debt
  
$
471
  
$
471
Accounts payable
  
 
797
  
 
1,365
Accounts payable to related parties
  
 
89
  
 
1,260
Accrued bonus
  
 
2,372
  
 
1,900
Accrued expenses
  
 
2,007
  
 
2,249
Income taxes payable
         
 
428
    

  

Total current liabilities
  
 
5,736
  
 
7,673
    

  

LONG-TERM DEBT
  
 
1,471
  
 
1,825
    

  

DEFERRED INCOME TAXES
  
 
57
  
 
57
    

  

STOCKHOLDERS’ EQUITY:
             
Class A—common stock, $.001 par value; 200,000,000 shares authorized, 42,802,510 and 42,006,602 shares issued and outstanding at June 30, 2002 and September 30, 2001, respectively.
  
 
43
  
 
42
Class B—common stock $.001 par value; 66,000,000 shares authorized, 66,000,000 shares issued and outstanding at June 30, 2002 and September 30, 2001, respectively.
  
 
66
  
 
66
Additional paid-in capital
  
 
130,252
  
 
129,707
Retained earnings
  
 
64,879
  
 
64,898
    

  

Total stockholders’ equity
  
 
195,240
  
 
194,713
    

  

TOTAL
  
$
202,504
  
$
204,268
    

  

 

1


Table of Contents
 
OPTICAL COMMUNICATION PRODUCTS, INC.
 
STATEMENTS OF INCOME (LOSS)
(In thousands, except per share data)
 
    
Three Months Ended June 30,

    
Nine Months Ended
June 30,

 
    
2002

    
2001

    
2002

    
2001

 
    
(Unaudited)
    
(Unaudited)
 
REVENUE
  
$
9,837
 
  
$
39,364
 
  
$
28,298
 
  
$
129,161
 
COST OF REVENUE
  
 
7,145
 
  
 
26,296
 
  
 
20,594
 
  
 
74,870
 
    


  


  


  


GROSS PROFIT
  
 
2,692
 
  
 
13,068
 
  
 
7,704
 
  
 
54,291
 
    


  


  


  


EXPENSES:
                                   
Research and development
  
 
1,424
 
  
 
780
 
  
 
3,652
 
  
 
2,301
 
Selling and marketing
  
 
1,024
 
  
 
1,070
 
  
 
2,904
 
  
 
3,577
 
General and administritive
  
 
1,499
 
  
 
1,589
 
  
 
3,883
 
  
 
3,540
 
    


  


  


  


Total expenses
  
 
3,947
 
  
 
3,439
 
  
 
10,439
 
  
 
9,418
 
    


  


  


  


INCOME (LOSS) FROM OPERATIONS
  
 
(1,255
)
  
 
9,629
 
  
 
(2,735
)
  
 
44,873
 
    


  


  


  


OTHER INCOME (EXPENSE):
                                   
Interest income
  
 
758
 
  
 
1,919
 
  
 
2,527
 
  
 
4,822
 
Interest expense
  
 
(20
)
  
 
(42
)
  
 
(65
)
  
 
(148
)
Other income
  
 
75
 
  
 
36
 
  
 
241
 
  
 
108
 
    


  


  


  


OTHER INCOME, Net
  
 
813
 
  
 
1,913
 
  
 
2,703
 
  
 
4,782
 
    


  


  


  


INCOME (LOSS) BEFORE INCOME TAXES
  
 
(442
)
  
 
11,542
 
  
 
(32
)
  
 
49,655
 
INCOME TAX PROVISION (BENEFIT)
  
 
(177
)
  
 
4,617
 
  
 
(13
)
  
 
19,862
 
    


  


  


  


NET INCOME (LOSS)
  
$
(265
)
  
$
6,925
 
  
$
(19
)
  
$
29,793
 
    


  


  


  


BASIC EARNINGS (LOSS) PER SHARE
  
$
0.00
 
  
$
0.06
 
  
$
0.00
 
  
$
0.31
 
    


  


  


  


DILUTED EARNINGS (LOSS) PER SHARE
  
$
0.00
 
  
$
0.06
 
  
$
0.00
 
  
$
0.27
 
    


  


  


  


BASIC SHARES OUTSTANDING
  
 
108,460
 
  
 
107,613
 
  
 
108,195
 
  
 
97,667
 
    


  


  


  


DILUTED SHARES OUTSTANDING
  
 
108,460
 
  
 
112,613
 
  
 
108,195
 
  
 
111,279
 
    


  


  


  


2


Table of Contents
 
OPTICAL COMMUNICATION PRODUCTS, INC.
 
STATEMENTS OF CASH FLOWS
(In thousands)
 
    
Nine Months Ended

 
    
June 30, 2002

    
June 30, 2001

 
    
(Unaudited)
 
Operating Activities:
                 
Net Income (Loss)
  
$
(19
)
  
$
29,793
 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
                 
Depreciation
  
 
1,787
 
  
 
919
 
Amortization of premium on marketable securities
  
 
1,554
 
        
Tax benefit from exercise of non-qualified stock options
  
 
398
 
  
 
4,760
 
Changes in operating assets and liabilities:
                 
Accounts receivable, net
  
 
5,034
 
  
 
(1,029
)
Income taxes receivable
  
 
(509
)
        
Inventories
  
 
6,502
 
  
 
(14,761
)
Prepaid expense and other current assets
  
 
(30
)
  
 
(1,762
)
Other assets
           
 
460
 
Accounts payable
  
 
(568
)
  
 
(448
)
Accounts payable to related parties
  
 
(1,171
)
  
 
9,035
 
Accrued bonus
  
 
472
 
  
 
683
 
Accrued expenses
  
 
(242
)
  
 
1,474
 
Income taxes payable
  
 
(428
)
  
 
(4,207
)
    


  


Net cash provided by operating activities
  
 
12,780
 
  
 
24,917
 
    


  


Investing Activities:
                 
Purchase of marketable securities
  
 
(46,326
)
  
 
(141,200
)
Maturities of marketable securities
  
 
45,000
 
  
 
79,500
 
Purchase of property, plant and equipment
  
 
(2,095
)
  
 
(22,801
)
    


  


Net Cash used in investing activities