U.S. SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF |
For the quarterly period ended September 30, 2002
Commission file number 000-07438
ACTERNA CORPORATION
(Exact name of registrant as specified in its charter)
| DELAWARE |
|
04-2258582 |
| (State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification Number) |
12410 Milestone Center Drive
Germantown, Maryland 20876
(Address of principal executive offices)(Zip code)
Registrant’s telephone number, including area code: (800) 543-1550
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 |
x |
No |
o |
At November 8, 2002 there were 192,247,507 shares of common stock of the registrant outstanding.
PART I. Financial Information
Item 1. Financial Statements
ACTERNA CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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Three Months Ended |
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Six Months Ended |
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2002 |
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2001 |
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2002 |
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2001 |
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(In thousands, except per share data) |
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| Net sales |
|
$ |
163,941 |
|
$ |
298,895 |
|
$ |
334,286 |
|
$ |
637,814 |
| ||
| Cost of sales |
|
|
95,374 |
|
|
135,460 |
|
|
181,809 |
|
|
283,063 |
| ||
|
|
|
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|
|
|
|
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|
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|
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| Gross profit |
|
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68,567 |
|
|
163,435 |
|
|
152,477 |
|
|
354,751 |
| ||
| Selling, general and administrative expense |
|
|
70,555 |
|
|
113,681 |
|
|
151,673 |
|
|
238,528 |
| ||
| Product development expense |
|
|
27,132 |
|
|
40,033 |
|
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57,746 |
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81,240 |
| ||
| Impairment of goodwill and other assets |
|
|
388,396 |
|
|
17,918 |
|
|
388,396 |
|
|
17,918 |
| ||
| Restructuring expense |
|
|
19,215 |
|
|
7,045 |
|
|
25,371 |
|
|
7,045 |
| ||
| Amortization of intangibles |
|
|
259 |
|
|
10,599 |
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|
522 |
|
|
22,151 |
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| Total operating expenses |
|
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505,557 |
|
|
189,276 |
|
|
623,708 |
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|
366,882 |
| ||
|
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|
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| Operating loss |
|
|
(436,990 |
) |
|
(25,841 |
) |
|
(471,231 |
) |
|
(12,131 |
) | ||
| Interest expense |
|
|
(19,257 |
) |
|
(24,698 |
) |
|
(41,554 |
) |
|
(50,976 |
) | ||
| Interest income |
|
|
136 |
|
|
893 |
|
|
208 |
|
|
1,377 |
| ||
| Other income (expense), net |
|
|
89 |
|
|
(3,445 |
) |
|
(1,387 |
) |
|
(5,273 |
) | ||
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| Loss from continuing operations before income taxes and extraordinary item |
|
|
(456,022 |
) |
|
(53,091 |
) |
|
(513,964 |
) |
|
(67,003 |
) | ||
| Provision for (benefit from) income taxes |
|
|
(49,342 |
) |
|
84,008 |
|
|
(66,261 |
) |
|
79,119 |
| ||
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|
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| Loss from continuing operations before extraordinary item |
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(406,680 |
) |
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(137,099 |
) |
|
(447,703 |
) |
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(146,122 |
) | ||
| Discontinued operations: |
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Loss from discontinued operations, net of tax |
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(2,625 |
) |
|
(10,422 |
) |
|
(1,513 |
) |
|
(7,550 |
) | |
|
|
Gain on sale of discontinued operations, net of tax expense of $50,405 |
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|
74,902 |
|
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— |
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|
74,902 |
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— |
| |
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| |
| Net loss before extraordinary item |
|
|
(334,403 |
) |
|
(147,521 |
) |
|
(374,314 |
) |
|
(153,672 |
) | ||
| Extraordinary item, gain on early extinguishment of debt, net of tax expense of $27,852 |
|
|
50,082 |
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— |
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50,082 |
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— |
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| Net loss |
|
$ |
(284,321 |
) |
$ |
(147,521 |
) |
$ |
(324,232 |
) |
$ |
(153,672 |
) | ||
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| Net income (loss) per common share: |
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Basic and diluted |
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| |
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Continuing operations |
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$ |
(2.12 |
) |
$ |
(0.71 |
) |
$ |
(2.33 |
) |
$ |
(0.76 |
) | |
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|
Discontinued operations |
|
|
0.38 |
|
|
(0.06 |
) |
|
0.38 |
|
|
(0.04 |
) | |
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Extraordinary item |
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|
0.26 |
|
|
— |
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|
0.26 |
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— |
| |
|
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|
|
|
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| |
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$ |
(1.48) |
|
$ |
(0.77 |
) |
$ |
(1.69 |
) |
$ |
(0.80 |
) | ||
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| Weighted average number of common shares: |
|
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|
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Basic and diluted |
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192,248 |
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|
191,889 |
|
|
192,248 |
|
|
191,538 |
| |
See notes to unaudited consolidated financial statements.
2
ACTERNA CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
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September 30, |
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March 31, |
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(In thousands) |
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| ASSETS |
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| Current assets: |
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Cash and cash equivalents |
|
$ |
32,041 |
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$ |
42,739 |
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Accounts receivable, net of allowance of $6,912 and $7,136, respectively |
|
|
98,910 |
|
|
119,246 |
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Inventories, net: |
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Raw materials |
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30,494 |
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|
37,604 |
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Work in process |
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30,671 |
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35,885 |
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Finished goods |
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31,265 |
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|
35,250 |
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Total inventories |
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92,430 |
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108,739 |
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Deferred income taxes |
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21,650 |
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18,878 |
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Income tax receivable |
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|
9,517 |
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77,479 |
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Other current assets |
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|
35,429 |
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|
30,254 |
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Current assets of discontinued operations held for sale |
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|
— |
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15,430 |
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Total current assets |
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289,977 |
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|
412,765 |
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| Property, plant and equipment, net |
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|
110,670 |
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|
118,213 |
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| Goodwill, net |
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|
33,332 |
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408,922 |
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| Intangible assets, net |
|
|
1,306 |
|
|
1,828 |
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| Deferred debt issuance costs, net |
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|
18,427 |
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26,582 |
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| Other non-current assets |
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|
17,156 |
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|
19,979 |
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| Long-term assets of discontinued operations held for sale |
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|
— |
|
|
26,267 |
| |||
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Total assets |
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$ |
470,868 |
|
$ |
1,014,556 |
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| LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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| Current liabilities: |
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Notes payable |
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$ |
1,886 |
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$ |
2,523 |
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Current portion of long-term debt |
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|
18,768 |
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28,937 |
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Accounts payable |
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51,127 |
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|
68,262 |
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Accrued expenses: |
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Compensation and benefits |
|
|
29,308 |
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|
36,752 |
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Deferred revenue |
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|
40,359 |
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|
49,231 |
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Warranty |
|
|
17,669 |
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|
16,907 |
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Interest |
|
|
6,168 |
|
|
10,700 |
| ||
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Restructuring |
|
|
19,338 |
|
|
14,185 |
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Other |
|
|
27,593 |
|
|
31,657 |
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Taxes other than income taxes |
|
|
6,491 |
|
|
8,079 |
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Accrued income taxes |
|
|
41,382 |
|
|
31,262 |
| ||
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Current liabilities of discontinued operations held for sale |
|
|
3,077 |
|
|
10,644 |
| ||
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|
|
|
|
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| |||
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Total current liabilities |
|
|
263,166 |
|
|
309,139 |
| ||
| Long-term debt |
|
|
796,305 |
|
|
979,187 |
| |||
| Long-term notes payable - related party |
|
|
80,319 |
|
|
76,875 |
| |||
| Deferred income taxes |
|
|
19,565 |
|
|
17,581 |
| |||
| Other long-term liabilities |
|
|
65,313 |
|
|
68,549 |
| |||
| Commitments and contingencies |
|
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| Total stockholders’ deficit: |
|
|
|
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|
|
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|
|
Common stock |
|
|
1,922 |
|
|
1,922 |
| ||
|
|
Additional paid-in capital |
|
|
778,318 |
|
|
786,537 |
| ||
|
|
Accumulated deficit |
|
|
(1,494,871 |
) |
|
(1,170,639 |
) | ||
|
|
Unearned compensation |
|
|
(37,806 |
) |
|
(53,925 |
) | ||
|
|
Accumulated other comprehensive loss |
|
|
(1,363 |
) |
|
(670 |
) | ||
|
|
|
|
|
|
|
|
| |||
|
|
Total stockholders’ deficit |
|
|
(753,800 |
) |
|
(436,775 |
) | ||
|
|
|
|
|
|
|
|
| |||
| Total Liabilities and Stockholders’ deficit |
|
$ |
470,868 |
|
$ |
1,014,556 |
| |||
|
|
|
|
|
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See notes to unaudited consolidated financial statements.
3
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|
Six Months Ended |
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