UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
for the period ended March 31, 2003
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 000-25315
Sagent Technology, Inc.
(Exact name of Registrant as specified in its Charter)
| Delaware |
94-3225290 | |
| (State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification Number) |
800 W. El Camino Real, Suite 300
Mountain View, CA 94040
(Address of Principal Executive Offices including Zip Code)
(650) 815-3100
(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 reports), and (2) has been subject to such filing requirements for the past 90 days. YES ¨ NO x
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 12, 2003, Registrant had 46,423,512 shares of common stock issued and outstanding.
SAGENT TECHNOLOGY, INC. QUARTERLY REPORT ON FORM 10-Q
FOR THE PERIOD ENDED MARCH 31, 2003
TABLE OF CONTENTS
| Page No. | ||||
| PART I. FINANCIAL INFORMATION |
||||
| Item 1. |
Financial Statements: |
|||
| 3 | ||||
| 4 | ||||
| 5 | ||||
| Notes to Condensed Consolidated Financial Statements (Unaudited) |
6 | |||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
20 | ||
| Item 3. |
39 | |||
| Item 4. |
40 | |||
| PART II. OTHER INFORMATION |
||||
| Item 1. |
41 | |||
| Item 6. |
43 | |||
| 44 | ||||
| 45 | ||||
| 47 | ||||
2
PART I. FINANCIAL INFORMATION
| Item 1. | Financial Statements |
SAGENT TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except per share data)
| March 31, 2003 |
December 31, 2002 |
|||||||
| ASSETS |
||||||||
| Current Assets |
||||||||
| Cash and cash equivalents |
$ |
2,147 |
|
$ |
9,711 |
| ||
| Restricted cash |
|
875 |
|
|
875 |
| ||
| Accounts receivable, net of allowance for doubtful accounts of $1,450 in 2003 and $1,389 in 2002 |
|
6,196 |
|
|
6,957 |
| ||
| Other current assets |
|
1,237 |
|
|
2,202 |
| ||
| Total current assets |
|
10,455 |
|
|
19,745 |
| ||
| Property and equipment, net |
|
2,442 |
|
|
3,159 |
| ||
| Goodwill, net |
|
6,718 |
|
|
6,718 |
| ||
| Notes receivable from officers |
|
873 |
|
|
1,000 |
| ||
| Other assets |
|
602 |
|
|
638 |
| ||
| Total assets |
$ |
21,090 |
|
$ |
31,260 |
| ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current Liabilities |
||||||||
| Accounts payable |
$ |
2,626 |
|
$ |
2,811 |
| ||
| Accrued liabilities |
|
4,300 |
|
|
6,388 |
| ||
| Deferred revenue |
|
8,484 |
|
|
8,499 |
| ||
| Current portion of capital lease obligation |
|
985 |
|
|
1,380 |
| ||
| Short-term debt |
|
2,566 |
|
|
5,285 |
| ||
| Total current liabilities |
|
18,961 |
|
|
24,363 |
| ||
| Other long-term liabilities |
|
100 |
|
|
142 |
| ||
| Total liabilities |
|
19,061 |
|
|
24,505 |
| ||
| Minority interest |
|
235 |
|
|
366 |
| ||
| Stockholders’ Equity |
||||||||
| Convertible preferred stock, par value $.001 per share; Authorized: 6,011 shares at March 31, 2003 and December 31, 2002; Issued and outstanding: none at March 31, 2003 and December 31, 2002 |
|
0 |
|
|
0 |
| ||
| Common stock, par value $.001 per share; Authorized: 70,000 shares at March 31, 2003 and December 31, 2002; Issued and outstanding: 46,424 at March 31, 2003 and December 31, 2002 |
|
46 |
|
|
46 |
| ||
| Additional paid-in capital |
|
135,778 |
|
|
135,778 |
| ||
| Accumulated other comprehensive loss |
|
(14 |
) |
|
(46 |
) | ||
| Accumulated deficit |
|
(134,016 |
) |
|
(129,389 |
) | ||
| Total stockholders’ equity |
|
1,794 |
|
|
6,389 |
| ||
| Total liabilities and stockholders’ equity |
$ |
21,090 |
|
$ |
31,260 |
| ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share data)
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Revenue: |
||||||||
| License |
$ |
3,858 |
|
$ |
6,116 |
| ||
| Service |
|
3,563 |
|
|
5,167 |
| ||
| Total revenue |
|
7,421 |
|
|
11,283 |
| ||
| Cost of revenue: |
||||||||
| License |
|
505 |
|
|
614 |
| ||
| Service |
|
1,457 |
|
|
2,335 |
| ||
| Total cost of revenue |
|
1,962 |
|
|
2,949 |
| ||
| Gross profit |
|
5,459 |
|
|
8,334 |
| ||
| Operating expenses: |
||||||||
| Sales and marketing |
|
3,977 |
|
|
6,971 |
| ||
| Research and development |
|
2,202 |
|
|
3,425 |
| ||
| General and administrative |
|
1,215 |
|
|
1,336 |
| ||
| Stock-based compensation |
|
0 |
|
|
189 |
| ||
| Restructuring credit |
|
(5 |
) |
|
(50 |
) | ||
| Total operating expenses |
|
7,389 |
|
|
11,871 |
| ||
| Loss from operations |
|
(1,930 |
) |
|
(3,537 |
) | ||
| Interest income (expense), net |
|
(2,624 |
) |
|
18 |
| ||
| Other income (expense), net |
|
98 |
|
|
(60 |
) | ||
| Net loss before income taxes |
|
(4,456 |
) |
|
(3,579 |
) | ||
| Provision for income taxes |
|
171 |
|
|
144 |
| ||
| Net loss |
$ |
(4,627 |
) |
$ |
(3,723 |
) | ||
| Basic and diluted net loss per share |
$ |
(0.10 |
) |
$ |
(0.08 |
) | ||
| Shares used in computing basic and diluted net loss per share |
|
46,424 |
|
|
46,154 |
| ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Cash flows from operations: |
||||||||
| Net loss |
$ |
(4,627 |
) |
$ |
(3,723 |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Depreciation and amortization |
|
723 |
|
|
809 |
| ||
| Amortization of warrant costs |
|
1,715 |
|
|
0 |
| ||
| Accrued interest on short-term loan |
|
204 |
|
|
0 |
| ||
| Restructuring credit |
|
(5 |
) |
|
(50 |
) | ||
| Loss on disposal of property and equipment |
|
0 |
|
|
80 |
| ||
| Stock-based compensation |
|
0 |
|
|
189 |
| ||
| Minority interest in losses of subsidiary |
|
(131 |
) |
|
(37 |
) | ||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
|
761 |
|
|
1,599 |
| ||
| Other current assets |
|
965 |
|
|
572 |
| ||
| Other assets |
|
163 |
|
|
13 |
| ||
| Accounts payable |
|
(185 |
) |
|
(381 |
) | ||
| Accrued liabilities |
|
(2,145 |
) |
|
(1,797 |
) | ||
| Deferred revenue |
|
(15 |
) |
|
678 |
| ||
| Other long-term liabilities |
|
(25 |
) |
|
(3 |
) | ||
| Net cash used in operating activities |
|
(2,60 | ||||||