SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended February 28, 2003
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________ to _____________
00030221
(Commission File number)
SABA SOFTWARE, INC.
(Exact Name of Registrant as Specified in Its Charter)
| Delaware |
94-3267638 | |
| (State or other jurisdiction of |
(I.R.S. Employer | |
| incorporation or organization) |
Identification No.) |
| 2400 Bridge Parkway, |
||||
| Redwood Shores, CA |
94065-1166 | |||
| (Address of principal executive offices) |
(Zip Code) | |||
(650) 696-3840
(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
On March 31, 2003, 53,298,727 shares of the registrant’s Common Stock, $.001 par value, were outstanding.
FORM 10-Q
QUARTER ENDED FEBRUARY 28, 2003
INDEX
| Page | ||||
| Part I. |
FINANCIAL INFORMATION |
|||
| Item 1. |
Financial Statements (Unaudited) |
|||
| Condensed Consolidated Balance Sheets as of February 28, 2003 and May 31, 2002 |
2 | |||
| 3 | ||||
| Condensed Consolidated Statements of Cash Flows for the nine months ended February 28, 2003 and 2002 |
4 | |||
| 5 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
11 | ||
| Item 3. |
29 | |||
| Item 4. |
30 | |||
| Part II. |
OTHER INFORMATION |
|||
| Item 1. |
30 | |||
| Item 2. |
31 | |||
| Item 3. |
31 | |||
| Item 4. |
31 | |||
| Item 5. |
31 | |||
| Item 6. |
31 | |||
| 32 | ||||
| 33 | ||||
1
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
| February 28, 2003 |
May 31, 2002 |
|||||||
| (Note 1) |
||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
15,520 |
|
$ |
9,523 |
| ||
| Short-term investments |
|
8,646 |
|
|
12,618 |
| ||
| Accounts receivable, net |
|
7,666 |
|
|
12,182 |
| ||
| Prepaid expenses and other current assets |
|
1,217 |
|
|
901 |
| ||
| Total current assets |
|
33,049 |
|
|
35,224 |
| ||
| Property and equipment, net |
|
2,888 |
|
|
4,575 |
| ||
| Goodwill, net |
|
5,288 |
|
|
5,288 |
| ||
| Purchased intangible assets, net |
|
840 |
|
|
2,755 |
| ||
| Other assets |
|
901 |
|
|
846 |
| ||
| Total assets |
$ |
42,966 |
|
$ |
48,688 |
| ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
1,354 |
|
$ |
1,547 |
| ||
| Accrued expenses |
|
7,051 |
|
|
7,844 |
| ||
| Deferred revenue |
|
9,158 |
|
|
10,127 |
| ||
| Short-term debt and current portion of capital lease obligations |
|
810 |
|
|
1,381 |
| ||
| Total current liabilities |
|
18,373 |
|
|
20,899 |
| ||
| Deferred revenue |
|
53 |
|
|
52 |
| ||
| Long-term debt and capital lease obligations, less current portion |
|
618 |
|
|
635 |
| ||
| Other long-term liabilities |
|
2,723 |
|
|
2,756 |
| ||
| Total liabilities |
|
21,767 |
|
|
24,342 |
| ||
| Stockholders’ equity: |
||||||||
| Preferred stock, issuable in series: $0.001 par value; 5,000,000 authorized shares at February 28, 2003; none issued or outstanding |
|
— |
|
|
— |
| ||
| Common stock: $0.001 par value; 200,000,000 authorized shares at February 28, 2003; 53,286,227 shares issued at February 28, 2003 and 48,264,537 shares issued at May 31, 2002 |
|
53 |
|
|
48 |
| ||
| Additional paid-in capital |
|
191,402 |
|
|
182,424 |
| ||
| Deferred stock compensation |
|
(146 |
) |
|
(2,578 |
) | ||
| Notes receivable from stockholders |
|
(33 |
) |
|
(188 |
) | ||
| Treasury stock: 402,500 shares held at February 28, 2003 and 377,500 shares held at May 31, 2002, at cost |
|
(225 |
) |
|
(201 |
) | ||
| Accumulated deficit |
|
(169,693 |
) |
|
(155,122 |
) | ||
| Accumulated other comprehensive loss |
|
(159 |
) |
|
(37 |
) | ||
| Total stockholders’ equity |
|
21,199 |
|
|
24,346 |
| ||
| Total liabilities and stockholders’ equity |
$ |
42,966 |
|
$ |
48,688 |
| ||
See Accompanying Notes to Condensed Consolidated Financial Statements.
2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
| Three Months Ended February 28, |
Nine Months Ended February 28, |
|||||||||||||||
| 2003 |
2002 |
2003 |
2002 |
|||||||||||||
| Revenues: |
||||||||||||||||
| License |
$ |
3,150 |
|
$ |
6,213 |
|
$ |
13,039 |
|
$ |
19,985 |
| ||||
| Services |
|
6,478 |
|
|
6,906 |
|
|
20,752 |
|
|
21,740 |
| ||||
| Total revenues |
|
9,628 |
|
|
13,119 |
|
|
33,791 |
|
|
41,725 |
| ||||
| Cost of revenues: |
||||||||||||||||
| Cost of license |
|
24 |
|
|
38 |
|
|
100 |
|
|
127 |
| ||||
| Cost of services |
|
3,001 |
|
|
3,080 |
|
|
9,787 |
|
|
11,279 |
| ||||
| Amortization of acquired developed technology |
|
388 |
|
|
388 |
|
|
1,164 |
|
|
1,148 |
| ||||
| Total cost of revenues |
|
3,413 |
|
|
3,506 |
|
|
11,051 |
|
|
12,554 |
| ||||
| Gross profit |
|
6,215 |
|
|
9,613 |
|
|
22,740 |
|
|
29,171 |
| ||||
| Operating expenses: |
||||||||||||||||
| Research and development |
|
3,002 |
|
|
3,331 |
|
|
9,027 |
|
|
11,339 |
| ||||
| Sales and marketing |
|
6,032 |
|
|
6,135 |
|
|
20,722 |
|
|
23,438 |
| ||||
| General and administrative |
|
1,723 |
|
|
1,416 |
|
|
4,845 |
|
|
5,097 |
| ||||
| Amortization (reversal) of deferred stock compensation and other stock charges |
|
(74 |
) |
|
1,539 |
|
|
1,890 |
|
|
5,848 |
| ||||
| Amortization of purchased intangible assets |
|
234 |
|
|
258 |
|
|
751 |
|
|
924 |
| ||||
| Amortization of goodwill |
|
— |
|
|
646 |
|
|
— |
|
|
1,829 |
| ||||
| Acquired in-process research and development |
|
— |
|
|
— |
|
|
— |
|
|
2,199 |
| ||||
| Total operating expenses |
|
10,917 |
|
|
13,325 |
|
|
37,235 |
|
|
50,674 |
| ||||
| Loss from operations |
|
(4,702 |
) |
|
(3,712 |
) |
|
(14,495 |
) |
|
(21,503 |
) | ||||
| Interest income (expense) and other, net |
|
45 |
| |||||||||||||