Back to GetFilings.com



 

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

FORM 10-Q

     
þ   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
     
    For the quarterly period ended March 31, 2003
     
o   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 000-26867

PIVOTAL CORPORATION

(Exact name of registrant as specified in its charter)
     
BRITISH COLUMBIA, CANADA
(State or other Jurisdiction of incorporation)		   98-0366456
(I.R.S. Employer Identification No.)

SUITE 700 – 858 BEATTY STREET
VANCOUVER, BRITISH COLUMBIA, V6B 1C1
CANADA

(Address of principal executive offices and zip code)

Telephone (604) 699-8000

(Registrant’s telephone number, including area code)

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 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   o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

     
Yes   o   No   þ

Common shares outstanding at April 1, 2003: 25,482,591

 

 

PIVOTAL CORPORATION

FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2003

TABLE OF CONTENTS

             
        Page No.
       
Part I — FINANCIAL INFORMATION        
   ITEM 1.
   Condensed Consolidated Financial Statements     1  
 
   Condensed Consolidated Balance Sheets as of March 31, 2003 and June 30, 2002     1  
 
   Condensed Consolidated Statements of Operations for the Three and the Nine Months Ended March 31, 2003 and 2002     2  
 
   Condensed Consolidated Statements of Shareholders' Equity for the Nine Months ended March 31, 2003     3  
 
   Condensed Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2003 and 2002     4  
 
   Notes to Condensed Consolidated Financial Statements     5  
   ITEM 2.
   Management's Discussion and Analysis of Financial Condition and Results of Operations     14  
   ITEM 3.
   Quantitative and Qualitative Disclosures About Market Risk     28  
   ITEM 4.
   Controls and Procedures     29  
PART II — OTHER INFORMATION        
   ITEM 1.
   Legal Proceedings     30  
   ITEM 2.
   Changes in Securities and Use of Proceeds     30  
   ITEM 3.
   Defaults Upon Senior Securities     30  
   ITEM 4.
   Submissions of Matters to a Vote of Security Holders     30  
   ITEM 5.
   Other Information     30  
   ITEM 6.
   Exhibits and Reports On Form 8-K     30  
SIGNATURES
     35  
CERTIFICATION
     36  

 

 

PART I — ITEM 1: CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PIVOTAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS
(EXPRESSED IN UNITED STATES DOLLARS; ALL AMOUNTS IN THOUSANDS)

                     
        March 31,   June 30,
        2003   2002
       
 
        (unaudited)        
ASSETS
                
Current assets:
                
 
Cash and cash equivalents
   $ 11,633     $ 20,322  
 
Short-term investments
     12,242       20,961  
 
Accounts receivable
     6,379       11,100  
 
Prepaid expenses and other
     2,464       2,546  
 
    
     
 
   
Total current assets
     32,718       54,929  
Property and equipment, net
     3,486       4,201  
Goodwill
     10,037       7,308  
Acquired intangibles, net
     780       324  
Other assets
     1,233       1,883  
 
    
     
 
Total assets
   $ 48,254     $ 68,645  
 
    
     
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
Current liabilities:
                
 
Accounts payable and accrued liabilities
   $ 14,697     $ 16,414  
 
Current portion of accrued restructuring costs
     4,549       2,296  
 
Current portion of restructuring costs assumed on acquisition
     1,491       —  
 
Deferred revenue
     12,296       12,327  
 
Current portion of obligations under capital leases and long-term debt
     496       320  
 
    
     
 
   
Total current liabilities
     33,529       31,357  
Non-current portion of accrued restructuring costs
     3,242       3,082  
Non-current portion of restructuring costs assumed on acquisition
     726       —  
Non-current portion of obligations under capital leases and long-term debt
     76       423  
 
    
     
 
Total liabilities
     37,573       34,862  
Shareholders’ equity:
                
 
Preferred shares, undesignated, no par value; authorized shares – 20,000 at March 31, 2003 and June 30, 2002; no shares issued and outstanding Common shares, no par value; authorized shares – 200,000 at March 31, 2003 and June 30, 2002; issued and outstanding shares – 25,480 and 24,096 at March 31, 2003 and June 30, 2002, respectively
     179,663       178,084  
 
Deferred share-based compensation
     (5 )     (23 )
 
Accumulated other comprehensive loss
     —       (90 )
 
Accumulated deficit
     (168,977 )     (144,188 )
 
    
     
 
Total shareholders’ equity
     10,681       33,783  
 
    
     
 
Total liabilities and shareholders’ equity
   $ 48,254     $ 68,645  
 
    
     
 

See accompanying notes.

1

 

PIVOTAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(EXPRESSED IN UNITED STATES DOLLARS,
ALL AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)

                                     
        Three months ended   Nine months ended
        March 31,   March 31,
       
 
        2003   2002   2003   2002
       
 
 
 
Revenues:
                                
 
License
   $ 3,554     $ 7,510     $ 13,786     $ 20,433  
 
Services and maintenance
     9,581       10,206       27,751       30,111  
 
    
     
     
     
 
   
Total revenues
     13,135       17,716       41,537       50,544  
 
    
     
     
     
 
Cost of Revenues:
                                
 
License
     332       385       1,485       1,434  
 
Services and maintenance
     5,003       5,025       15,068       16,888  
 
    
     
     
     
 
   
Total cost of revenues
     5,335       5,410       16,553       18,322  
 
    
     
     
     
 
Gross profit
     7,800       12,306       24,984       32,222  
 
    
     
     
     
 
Operating Expenses:
                                
 
Sales and marketing
     5,414       8,734       21,550       32,614  
 
Research and development
     4,276       3,636       12,305       13,243  
 
General and administrative
     1,999       2,060       6,424       10,046  
 
Restructuring costs and other charges
     —       —       8,596       51,429  
 
Amortization of goodwill
     —       1,505       —       14,163  
 
Amortization of acquired intangibles
     206       88       254       400  
 
    
     
     
     
 
   
Total operating expenses
     11,895       16,023       49,129       121,895  
 
    
     
     
     
 
Loss from operations
     (4,095 )     (3,717 )     (24,145 )     (89,673 )
Interest and other income (loss)
     (174 )     345       (447 )     1,044  
 
    
     
     
     
 
Loss before income taxes
     (4,269 )     (3,372 )     (24,592 )     (88,629 )
Income taxes (recovery)
     18       (8 )     197       326  
 
    
     
     
     
 
Net loss
   $ (4,287 )   $ (3,364 )   $ (24,789 )   $ (88,955 )
 
    
     
     
     
 
Loss per share:
                                
 
Basic and diluted
   $ (0.17 )   $ (0.14 )   $ (0.99 )   $ (3.70 )
 
    
     
     
     
 
Weighted average number of shares used to calculate loss per share:
                                
 
Basic and diluted
     25,478       24,075       24,982       24,022  
 
    
     
     
     
 

See accompanying notes.

2

 

PIVOTAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE NINE MONTHS ENDED MARCH 31, 2003
(EXPRESSED IN UNITED STATES DOLLARS; ALL AMOUNTS IN THOUSANDS)
(UNAUDITED)

                                                 
    Common Shares and                                
    Additional Paid-In           Accumulated                
    Capital   Deferred   Other           Total
   
  Share-Based   Comprehensive   Accumulated   Shareholders'
    Shares   Amount   Compensation   Loss   (Deficit)   Equity
   
 
 
 
 
 
Balance June 30, 2002
     24,096     $ 178,084     $ (23 )   $ (90 )   $ (144,188 )   $ 33,783  
Net loss for the three months ended September 30, 2002
     —       —       —       —       (8,751 )     (8,751 )
Change in net unrealized loss on available-for-sale investment
     —       —       —       (22 )     —       (22 )
 
                                            
 
Comprehensive loss
                                             (8,773 )
 
                                            
 
Issuance of common shares on exercise of stock options
     4       3       —       —       —       3  
Issuance of common shares related to Employee Stock Purchase Plan
     62       195       —       —       —       195  
Issuance of common shares related to prior year acquisitions
     448       970       —       —       —       970  
Amortization of share-based compensation
     —       —       6       —       —       6  
 
    
     
     
     
     
     
 
Balance at September 30, 2002
     24,610     $ 179,252     $ (17 )   $ (112 )   $ (152,939 )   $ 26,184  
Net loss for the three months ended December 31, 2002
     —       —       —       —       (11,751 )     (11,751 )
Change in net unrealized loss on available-for-sale investment
     —       —       —       112       —       112  
 
                                            
 
Comprehensive loss
                                             (11,639 )
 
                                            
 
Issuance of common shares on exercise of stock options
     2       1       —       —       —       1  
Issuance of common shares on acquisition of MarketFirst
     725       319       —       —       —       319  
Amortization of deferred share-based compensation
     —       —       6       —       —       6  
 
    
     
     
     
     
     
 
Balance at December 31, 2002
     25,337     $ 179,572     $ (11 )     —     $ (164,690 )   $ 14,871  
Net loss for the three months ended March 31, 2003
     —       —       —       —       (4,287 )     (4,287 )
 
                                            
 
Comprehensive loss
                                             (4,287 )
 
                                            
 
Issuance of common shares on exercise of stock options
     1       1       —       —       —       1  
Issuance of common shares related to Employee Stock Purchase Plan
     142       90       —       —       —       90  
Amortization of deferred share-based compensation
     —       —       6       —       —       6  
 
    
     
     
     
     
     
 
Balance at March 31, 200