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 March 31, 2003 |
| ¨ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Commission file number: 000-31863
COMPUTER ACCESS TECHNOLOGY CORPORATION
(exact name of registrant as specified in its charter)
| Delaware |
77-0302527 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| 2403 Walsh Avenue, Santa Clara California |
95051 | |
| (Address of principal executive offices) |
(Zip Code) |
(408) 727-6600
(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 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 ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act.)
Yes ¨ No x
As of May 1, 2003, there were 19,414,006 shares of the registrant’s Common Stock outstanding.
Part I—FINANCIAL INFORMATION
Item 1. Financial Statements
COMPUTER ACCESS TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
| March 31, 2003 |
December 31, 2002 |
|||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
26,086 |
|
$ |
30,846 |
| ||
| Short-term investments |
|
16,179 |
|
|
12,905 |
| ||
| Trade accounts receivable, net |
|
1,507 |
|
|
1,144 |
| ||
| Related party receivable |
|
534 |
|
|
580 |
| ||
| Inventories |
|
935 |
|
|
1,032 |
| ||
| Other current assets |
|
2,557 |
|
|
2,632 |
| ||
| Total current assets |
|
47,798 |
|
|
49,139 |
| ||
| Property and equipment, net |
|
928 |
|
|
999 |
| ||
| Purchased intangibles, including goodwill |
|
270 |
|
|
305 |
| ||
| Other assets |
|
85 |
|
|
87 |
| ||
| $ |
49,081 |
|
$ |
50,530 |
| |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
693 |
|
$ |
1,326 |
| ||
| Accrued expenses |
|
970 |
|
|
1,247 |
| ||
| Accrued restructuring |
|
157 |
|
|
270 |
| ||
| Deferred revenue |
|
422 |
|
|
485 |
| ||
| Total current liabilities |
|
2,242 |
|
|
3,328 |
| ||
| Stockholders’ equity: |
||||||||
| Common stock |
|
19 |
|
|
19 |
| ||
| Additional paid-in capital |
|
53,193 |
|
|
53,210 |
| ||
| Deferred stock-based compensation |
|
(207 |
) |
|
(324 |
) | ||
| Accumulated deficit |
|
(6,166 |
) |
|
(5,703 |
) | ||
| Total stockholders’ equity |
|
46,839 |
|
|
47,202 |
| ||
| $ |
49,081 |
|
$ |
50,530 |
| |||
See accompanying notes.
2
COMPUTER ACCESS TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)
| Three Month Period Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Revenue |
$ |
3,262 |
|
$ |
3,422 |
| ||
| Cost of revenue (inclusive of amortization of deferred stock-based compensation of $3 and $49 in the three month period ended March 31, 2003 and 2002, respectively) |
|
664 |
|
|
684 |
| ||
| Amortization of acquired developed technology |
|
9 |
|
|
— |
| ||
| Gross profit |
|
2,589 |
|
|
2,738 |
| ||
| Operating expenses: |
||||||||
| Research and development (exclusive of amortization of deferred stock-based compensation of $32 and $299 in the three month period March 31, 2003 and 2002, respectively) |
|
1,308 |
|
|
1,913 |
| ||
| Sales and marketing (exclusive of amortization of deferred stock-based compensation (recovery) of $19 and $(123) in the three month period ended March 31, 2003 and 2002, respectively) |
|
1,144 |
|
|
1,265 |
| ||
| General and administrative (exclusive of amortization of deferred stock-based compensation of $8 and $132 in the three month period ended March 31, 2003 and 2002, respectively) |
|
676 |
|
|
1,122 |
| ||
| Amortization of purchased intangibles |
|
26 |
|
|
— |
| ||
| Amortization of deferred stock-based compensation |
|
59 |
|
|
308 |
| ||
| Total operating expenses |
|
3,213 |
|
|
4,608 |
| ||
| Loss from operations |
|
(624 |
) |
|
(1,870 |
) | ||
| Other income, net |
|
161 |
|
|
173 |
| ||
| Loss before benefit from income taxes |
|
(463 |
) |
|
(1,697 |
) | ||
| Benefit from income taxes |
|
— |
|
|
(690 |
) | ||
| Net loss |
$ |
(463 |
) |
$ |
(1,007 |
) | ||
| Net loss per share: |
||||||||
| Basic and diluted |
$ |
(0.02 |
) |
$ |
(0.05 |
) | ||
| Weighted average shares outstanding: |
||||||||
| Basic and diluted |
|
19,443 |
|
|
18,911 |
| ||
See accompanying notes.
3
COMPUTER ACCESS TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
| Three Month Period Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ |
(463 |
) |
$ |
(1,007 |
) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
||||||||
| Depreciation and amortization |
|
195 |
|
|
141 |
| ||
| Amortization of acquired developed technology |
|
9 |
|
|
— |
| ||
| Amortization of purchased intangibles |
|
26 |
|
|
— |
| ||
| Amortization of deferred stock-based compensation |
|
62 |
|
|
357 |
| ||
| Changes in assets and liabilities: |
||||||||
| Trade accounts receivable |
|
(317 |
) |
|
145 |
| ||
| Inventories |
|
97 |
|
|
(160 |
) | ||
| Deferred tax assets |
|
— |
|
|
(195 |
) | ||
| Other assets |
|
77 |
|
|
213 |
| ||
| Accounts payable |
|
(633 |
) |
|
279 |
| ||
| Accrued expenses |
|
(276 |
) |
|
601 |
| ||
| Accrued restructuring |
|
(113 |
) |
|
— |
| ||
| Deferred revenue |
|
(63 |
) |
|
77 |
| ||
| Deferred rent |
|
— |
|
|
1 |
| ||
| Net cash provided by (used in) operating activities |
|
(1,399 |
) |
|
452 |
| ||
| Cash flows from investing activities: |
||||||||
| Acquisition of property and equipment |
|
(124 |
) |
|
(305 |
) | ||
| Purchase of other long-term assets |
|
— |
|
|
(100 |
) | ||
| Purchase of short-term investments |
|
(4,274 |
) |
|
(2,901 |
) | ||
| Sale of short-term investments |
|
1,000 |
|
|
870 |
| ||
| Net cash used in investing activities |
|
(3,398 |
) |
|
(2,436 |
) | ||
| Cash flows from financing activities: |
||||||||
| Proceeds from exercise of stock options |
|
7 |
|
|
116 |
| ||
| Proceeds from employee stock purchase plan |
|
70 |
|
|
117 |
| ||
| Repurchases of common stock |
|
(40 |
) |
|
— |
| ||
| Net cash provided by financing activities |
|
37 |
|
|
233 |
| ||
| Net decrease in cash and cash equivalents |
|
(4,760 |
) |
|
(1,751 |
) | ||
| Cash and cash equivalents at beginning of period |
|
30,846 |
|
|
42,941 |
| ||
| Cash and cash equivalents at end of period |
$ |
26,086 |
|
$ |
41,190 |
| ||
See accompanying notes.
4
NOTE 1—BUSINESS
Business
Computer Access Technology Corporation is a provider of advanced verification systems for existing and emerging digital communications standards. Our products are used by semiconductor, device, system and software companies at each phase of their products’ lifecycles from development through production and market deployment.
We have expertise in the Bluetooth, Ethernet, Fibre Channel, IEEE 1394, InfiniBand, PCI Express, SCSI, Serial ATA and USB standards and are actively engaged with our customers throughout their development and production processes. Utilizing our easy to use, color-coded, expert analysis software, the CATC Trace™, our development products generate, capture, filter and analyze high-speed communications traffic, allowing our customers to quickly discover and correct persistent and intermittent errors and flaws in their product design. Our production products are used in manufacturing to ensure that products comply with standards and operate with other devices, as well as assist system manufacturers in downloading software onto new computers.
We have two reportable segments: development products and production products. Further segment and geographic information is included in Note 9 of the Notes to Condensed Consolidated Financial Statements included in this report.
Computer Access Technology Corporation was incorporated in California in 1992 and reincorporated in Delaware in 2000. Our headquarters are located at 2403 Walsh Avenue, Santa Clara, California 95051. We maintain a World Wide Web site at www.catc.com. The reference to this World Wide Web site address does not constitute incorporation by reference of the information contained therein.
Our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports