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Table of Contents
 

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

 
Form 10-Q
 
 
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES ACT OF 1934
 
For the Quarter Ended June 30, 2002
 
Commission File Number 000-26299
 

 
ARIBA, INC.
(Exact name of registrant as specified in its charter)
 
Delaware
  
77-0439730
(State or other jurisdiction of
incorporation or organization)
  
(I.R.S. Employer
Identification Number)
 
807 11th Avenue
Sunnyvale, California 94089
(Address of principal executive offices)
 
(650) 390-1000
(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    ¨
 
On July 31, 2002, 265,526,532 shares of the registrant’s common stock were issued and outstanding.
 


Table of Contents
 
ARIBA, INC.
 
INDEX
 
         
Page No.

PART I.
  
FINANCIAL INFORMATION
    
Item 1.
  
Financial Statements (Unaudited)
    
       
3
       
4
       
5
       
6
Item 2.
     
18
Item 3.
     
43
PART II.
  
OTHER INFORMATION
    
Item 1.
     
45
Item 2.
     
45
Item 3.
     
45
Item 4.
     
45
Item 5.
     
45
Item 6.
     
46
       
47


Table of Contents
 
PART I:    FINANCIAL INFORMATION
 
Item 1.    Financial Statements
 
ARIBA, INC. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
 
    
June 30,
2002

    
September 30,
2001

 
ASSETS

             
Current assets:
                 
Cash and cash equivalents
  
$
104,094
 
  
$
71,971
 
Short-term investments
  
 
63,508
 
  
 
145,931
 
Restricted cash
  
 
800
 
  
 
2,800
 
Accounts receivable, net
  
 
6,965
 
  
 
27,336
 
Prepaid expenses and other current assets
  
 
17,756
 
  
 
35,963
 
    


  


Total current assets
  
 
193,123
 
  
 
284,001
 
Property and equipment, net
  
 
34,048
 
  
 
50,353
 
Long-term investments
  
 
80,245
 
  
 
43,109
 
Restricted cash
  
 
29,782
 
  
 
29,771
 
Other assets
  
 
2,493
 
  
 
3,007
 
Goodwill and other intangible assets, net
  
 
442,764
 
  
 
877,806
 
    


  


Total assets
  
$
782,455
 
  
$
1,288,047
 
    


  


LIABILITIES AND STOCKHOLDERS’ EQUITY

             
Current liabilities:
                 
Accounts payable
  
$
16,009
 
  
$
28,395
 
Accrued compensation and related liabilities
  
 
41,426
 
  
 
53,285
 
Accrued liabilities
  
 
51,363
 
  
 
56,072
 
Restructuring costs
  
 
18,660
 
  
 
18,339
 
Deferred revenue
  
 
66,863
 
  
 
70,006
 
Current portion of other long-term liabilities
  
 
180
 
  
 
296
 
    


  


Total current liabilities
  
 
194,501
 
  
 
226,393
 
Restructuring costs, net of current portion
  
 
47,461
 
  
 
12,855
 
Deferred revenue, net of current portion
  
 
94,950
 
  
 
107,055
 
Other long-term liabilities, net of current portion
  
 
2
 
  
 
106
 
    


  


Total liabilities
  
 
336,914
 
  
 
346,409
 
    


  


Minority interests
  
 
15,165
 
  
 
15,720
 
    


  


Commitments and contingencies (Note 4)
                 
Stockholders’ equity:
                 
Common stock
  
 
528
 
  
 
520
 
Additional paid-in capital
  
 
4,476,829
 
  
 
4,477,971
 
Deferred stock-based compensation
  
 
(8,260
)
  
 
(33,023
)
Accumulated other comprehensive loss
  
 
(2,024
)
  
 
(1,172
)
Accumulated deficit
  
 
(4,036,697
)
  
 
(3,518,378
)
    


  


Total stockholders’ equity
  
 
430,376
 
  
 
925,918
 
    


  


Total liabilities and stockholders’ equity
  
$
782,455
 
  
$
1,288,047
 
    


  


 
See accompanying notes to condensed consolidated financial statements.


Table of Contents
 
ARIBA, INC. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
 
    
Three Months Ended
June 30,

    
Nine Months
Ended June 30,

 
    
2002

    
2001

    
2002

    
2001

 
Revenues:
                                   
License
  
$
26,636
 
  
$
47,885
 
  
$
75,272
 
  
$
229,316
 
Maintenance and service
  
 
31,907
 
  
 
36,245
 
  
 
95,713
 
  
 
109,615
 
    


  


  


  


Total revenues
  
 
58,543
 
  
 
84,130
 
  
 
170,985
 
  
 
338,931
 
    


  


  


  


Cost of revenues:
                                   
License
  
 
538
 
  
 
2,527
 
  
 
2,710
 
  
 
16,979
 
Maintenance and service (exclusive of stock-based compensation expense of $450 and $955 for the three months ended June 30, 2002 and 2001 and $1,471 and $3,814 for the nine month periods ended June 30, 2002 and 2001, respectively)
  
 
11,024
 
  
 
12,965
 
  
 
31,009
 
  
 
56,635
 
    


  


  


  


Total cost of revenues
  
 
11,562
 
  
 
15,492
 
  
 
33,719
 
  
 
73,614
 
    


  


  


  


Gross profit
  
 
46,981
 
  
 
68,638
 
  
 
137,266
 
  
 
265,317
 
    


  


  


  


Operating expenses:
                                   
Sales and marketing (exclusive of stock-based compensation expense of $1,247 and $3,190 for the three months ended June 30, 2002 and 2001 and $3,820 and $15,455 for the nine month periods ended June 30, 2002 and 2001, respectively and exclusive of business partner warrants expense of $0 and $18,975 for the three months ended June 30, 2002 and 2001 and $5,562 and $26,833 for the nine month periods ended June 30, 2002 and 2001, respectively)
  
 
21,840
 
  
 
59,448
 
  
 
68,930
 
  
 
223,090
 
Research and development (exclusive of stock-based compensation expense of $(34) and $2,363 for the three months ended June 30, 2002 and 2001 and $(203) and $7,929 for the nine month periods ended June 30, 2002 and 2001, respectively)
  
 
16,772
 
  
 
25,372
 
  
 
48,572
 
  
 
71,740
 
General and administrative (exclusive of stock-based compensation expense of $1,378 and $6,492 for the three months ended June 30, 2002 and 2001 and $6,181 and $21,830 for the nine month periods ended June 30, 2002 and 2001, respectively)
  
 
7,351
 
  
 
14,520
 
  
 
27,564
 
  
 
49,687
 
Amortization of goodwill and other intangible assets
  
 
144,776
 
  
 
144,208
 
  
 
434,964
 
  
 
800,307
 
Business partner warrants, net
  
 
 
  
 
18,975
 
  
 
5,562
 
  
 
26,833
 
Stock-based compensation, net
  
 
3,041
 
  
 
13,000
 
  
 
11,269
 
  
 
49,028
 
Restructuring and lease abandonment costs
  
 
57,125
 
  
 
70,041
 
  
 
62,609
 
  
 
70,041
 
Impairment of goodwill, other intangible assets and equity investments
  
 
 
  
 
 
  
 
 
  
 
1,433,292
 
Merger related costs
  
 
 
  
 
 
  
 
 
  
 
9,185
 
    


  


  


  


Total operating expenses
  
 
250,905
 
  
 
345,564
 
  
 
659,470
 
  
 
2,733,203
 
    


  


  


  


Loss from operations
  
 
(203,924
)
  
 
(276,926
)
  
 
(522,204
)
  
 
(2,467,886
)
Interest income
  
 
1,801
 
  
 
4,090
 
  
 
6,257
 
  
 
15,650
 
Interest expense
  
 
(7
)
  
 
(18
)
  
 
(126
)
  
 
(191
)
Other income
  
 
55
 
  
 
1,503
 
  
 
749
 
  
 
828
 
    


  


  


  


Net loss before income taxes
  
 
(202,075
)
  
 
(271,351
)
  
 
(515,324
)
  
 
(2,451,599
)
Income tax provision
  
 
(1,000
)
  
 
(2,173
)
  
 
(2,995
)
  
 
(4,725
)
    


  


  


  


Net loss
  
$
(203,075
)
  
$
(273,524
)
  
$
(518,319
)
  
$
(2,456,324
)
    


  


  


  


Basic and diluted net loss per share
  
$
(0.78
)
  
$
(1.10
)
  
$
(2.01
)
  
$
(10.15
)
    


  


  


  


Shares used in computing net loss per share—basic and diluted