UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 QUARTERLY PERIOD ENDED DECEMBER 31, 2002
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:
000-33477
GENESIS MICROCHIP INC.
(Exact name of registrant as specified in its charter)
| DELAWARE |
77-0584301 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| 2150 GOLD STREET P.O. BOX 2150 ALVISO, CALIFORNIA |
95002 | |
| (Address of principal executive offices) |
(Zip Code) |
REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE: (408) 262-6599
Former name, former address and former fiscal year if changed since last report.
Former address: N/A
Former Fiscal Year: N/A
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 x No ¨
There were 31,203,639 shares of the registrant’s common shares issued and outstanding as of February 7, 2003.
FORM 10-Q
THREE MONTHS ENDED DECEMBER 31, 2002
Index
| Item Number |
Page | |
| Part I: Financial Information |
||
| Item 1. Financial Statements |
||
| Condensed Consolidated Balance Sheets at December 31, 2002 and March 31, 2002 |
1 | |
| 2 | ||
| 3 | ||
| 4 | ||
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
8 | |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk |
23 | |
| 24 | ||
| Part II: Other Information |
||
| 24 | ||
| Item 2. Changes in Securities |
* | |
| Item 3. Defaults Upon Senior Securities |
* | |
| Item 4. Submission of Matters to a Vote of Security Holders |
* | |
| 25 | ||
| 26 | ||
| 27 |
| * | No information has been provided because this item is not applicable. |
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except per share amounts)
| December 31, 2002 |
March 31, 2002 |
|||||||
| (unaudited) |
||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
118,096 |
|
$ |
106,564 |
| ||
| Short-term investments |
|
— |
|
|
4,802 |
| ||
| Accounts receivable trade, net of allowance for doubtful accounts of $463 at December 31 and $391 at March 31 |
|
24,490 |
|
|
32,326 |
| ||
| Inventories |
|
17,621 |
|
|
20,046 |
| ||
| Other |
|
6,812 |
|
|
6,185 |
| ||
| Total current assets |
|
167,019 |
|
|
169,923 |
| ||
| Property and equipment |
|
13,299 |
|
|
11,733 |
| ||
| Acquired intangibles |
|
39,580 |
|
|
47,248 |
| ||
| Goodwill |
|
193,546 |
|
|
198,909 |
| ||
| Other |
|
796 |
|
|
578 |
| ||
| Total assets |
$ |
414,240 |
|
$ |
428,391 |
| ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
16,825 |
|
$ |
14,318 |
| ||
| Accrued liabilities |
|
16,612 |
|
|
14,272 |
| ||
| Income taxes payable |
|
930 |
|
|
571 |
| ||
| Current portion of lease liability |
|
960 |
|
|
1,040 |
| ||
| Current portion of loan payable |
|
90 |
|
|
89 |
| ||
| Total current liabilities |
|
35,417 |
|
|
30,290 |
| ||
| Long-term liabilities: |
||||||||
| Deferred income taxes |
|
313 |
|
|
5,183 |
| ||
| Lease liability |
|
8,760 |
|
|
9,019 |
| ||
| Loan payable |
|
237 |
|
|
328 |
| ||
| Total liabilities |
|
44,727 |
|
|
44,820 |
| ||
| Stockholders’ equity: |
||||||||
| Capital Stock: |
||||||||
| Preferred stock: |
||||||||
| Authorized—5,000 preferred shares, $0.001 par value |
||||||||
| Issued and outstanding—none at December 31 or March 31 |
||||||||
| Common shares: |
||||||||
| Authorized—100,000 common shares, $0.001 par value |
||||||||
| Issued and outstanding—31,345 at December 31 and 31,133 at March 31 |
|
31 |
|
|
31 |
| ||
| Additional paid-in capital |
|
380,751 |
|
|
388,467 |
| ||
| Cumulative other comprehensive loss |
|
(94 |
) |
|
(94 |
) | ||
| Deferred stock-based compensation |
|
(8,273 |
) |
|
(17,587 |
) | ||
| Retained earnings (deficit) |
|
(2,902 |
) |
|
12,754 |
| ||
| Total stockholders’ equity |
|
369,513 |
|
|
383,571 |
| ||
| Total liabilities and stockholders’ equity |
$ |
414,240 |
|
$ |
428,391 |
| ||
See accompanying notes to condensed consolidated financial statements.
1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share amounts)
(unaudited)
| Three Months Ended |
Nine months ended | |||||||||||||
| December 31, 2002 |
December 31, 2001 |
December 31, 2002 |
December 31, 2001 | |||||||||||
| Revenues |
$ |
51,682 |
|
$ |
49,823 |
$ |
139,545 |
|
$ |
107,266 | ||||
| Cost of revenues |
|
32,623 |
|
|
27,109 |
|
88,283 |
|
|
58,019 | ||||
| Gross profit |
|
19,059 |
|
|
22,714 |
|
51,262 |
|
|
49,247 | ||||
| Operating expenses: |
||||||||||||||
| Research and development |
|
8,493 |
|
|
5,292 |
|
27,914 |
|
|
14,677 | ||||
| Selling, general and administrative |
|
8,942 |
|
|
5,380 |
|
26,752 |
|
|
14,134 | ||||
| Amortization of acquired intangibles |
|
2,654 |
|
|
— |
|
7,973 |
|
|
— | ||||
| Provision for costs associated with patent litigation |
|
9,671 |
|
|
— |
|
9,671 |
|
|
— | ||||
| Total operating expenses |
|
29,760 |
|
|
10,672 |
|
72,310 |
|
|
28,811 | ||||
| Income (loss) from operations |
|
(10,701 |
) |
|
12,042 |
|
(21,048 |
) |
|
20,436 | ||||
| Interest income |
|
590 |
|
|
378 |
|
1,422 |
|
|
1,131 | ||||
| Imputed interest on lease liability |
|
(160 |
) |
|
— |
|
(490 |
) |
|
— | ||||
| Net interest income |
|
430 |
|
|
378 |
|
932 |
|
|
1,131 | ||||
| Income (loss) before income taxes |
|
(10,271 |
) |
|
12,420 |
|
(20,116 |
) |
|
21,567 | ||||
| Provision for (recovery of) income taxes |
|
(3,244 |
) |
|
2,317 |
|
(4,461 |
) |
|
3,235 | ||||
| Net income (loss) |
$ |
(7,027 |
) |
$ |
10,103 |
$ |
(15,655 |
) |
$ |
18,332 | ||||
| Earnings (loss) per share: |
||||||||||||||
| Basic |
$ |
(0.22 |
) |
$ |
0.47 |
$ |
(0.50 |
) |
$ |
0.89 | ||||
| Diluted |
$ |
(0.22 |
) |
$ |
0.42 |
$ |
(0.50 |
) |
$ |
0.80 | ||||
| Weighted average number of common shares outstanding: |
||||||||||||||
| Basic |
|
31,306 |
|
|
21,623 |
|
31,445 |
|
|
20,683 | ||||
| Diluted |
|
31,306 |
|
|
23,798 |
|
31,445 |
|
|
22,817 | ||||
See accompanying notes to condensed consolidated financial statements.