UNITED STATES
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
OR
| ¨ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Commission File Number: 0-30925
BLUE MARTINI SOFTWARE, INC.
(Exact name of registrant as specified in its charter)
| Delaware |
94-3319751 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
2600 Campus Drive
San Mateo, California 94403
(Address of principal executive offices)
Telephone Number (650) 356-4000
(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 April 8, 2003, there were approximately 10,656,623 shares of the registrant’s common stock outstanding.
INDEX
| Page No. | ||||
| PART I. FINANCIAL INFORMATION | ||||
| Item 1. |
Condensed Consolidated Financial Statements: |
|||
| Condensed Consolidated Balance Sheets as of March 31, 2003 and December 31, 2002 |
3 | |||
| Condensed Consolidated Statements of Operations for the Three months ended March 31, 2003 and 2002 |
4 | |||
| Condensed Consolidated Statements of Cash Flows for the Three months ended March 31, 2003 and 2002 |
5 | |||
| 6 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
9 | ||
| Item 3. |
15 | |||
| Item 4. |
15 | |||
| PART II. OTHER INFORMATION | ||||
| Item 1. |
18 | |||
| Item 6. |
19 | |||
| 20 | ||||
| Certifications Pursuant to Securities and Exchange Act of 1934 Rules 13a-15 and 15d-15 |
21 | |||
2
| ITEM 1. | CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
BLUE MARTINI SOFTWARE, INC.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
| March 31, 2003 |
December 31, 2002 |
|||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents, including restricted cash of $1,357 in 2003 and 2002 |
$ |
14,676 |
|
$ |
7,729 |
| ||
| Short-term investments |
|
41,178 |
|
|
53,021 |
| ||
| Accounts receivable, net |
|
5,586 |
|
|
5,766 |
| ||
| Prepaid expenses and other current assets |
|
1,051 |
|
|
1,575 |
| ||
| Total current assets |
|
62,491 |
|
|
68,091 |
| ||
| Property and equipment, net |
|
586 |
|
|
599 |
| ||
| Intangible assets and other, net |
|
781 |
|
|
902 |
| ||
| Total assets |
$ |
63,858 |
|
$ |
69,592 |
| ||
| Liabilities And Stockholders’ Equity |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
448 |
|
$ |
706 |
| ||
| Accrued employee compensation |
|
5,386 |
|
|
5,603 |
| ||
| Other current liabilities |
|
4,739 |
|
|
5,396 |
| ||
| Accrued restructuring charges |
|
967 |
|
|
1,045 |
| ||
| Deferred revenues |
|
4,155 |
|
|
3,306 |
| ||
| Total current liabilities |
|
15,695 |
|
|
16,056 |
| ||
| Accrued restructuring, less current portion |
|
2,131 |
|
|
2,431 |
| ||
| Total liabilities |
|
17,826 |
|
|
18,487 |
| ||
| Stockholders’ equity: |
||||||||
| Common stock, $0.001 par value, authorized 500,000 shares, issued and outstanding 10,656 shares in 2003 and 10,564 shares in 2002 |
|
255,301 |
|
|
255,301 |
| ||
| Deferred stock compensation |
|
(605 |
) |
|
(1,311 |
) | ||
| Accumulated other comprehensive income (loss) |
|
(234 |
) |
|
114 |
| ||
| Accumulated deficit |
|
(208,430 |
) |
|
(202,999 |
) | ||
| Total stockholders’ equity |
|
46,032 |
|
|
51,105 |
| ||
| Total liabilities and stockholders’ equity |
$ |
63,858 |
|
$ |
69,592 |
| ||
See accompanying notes to condensed consolidated financial statements.
3
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Revenues: |
||||||||
| License |
$ |
1,756 |
|
$ |
1,029 |
| ||
| Service |
|
5,901 |
|
|
7,480 |
| ||
| Total revenues |
|
7,657 |
|
|
8,509 |
| ||
| Cost of revenues: |
||||||||
| License |
|
318 |
|
|
621 |
| ||
| Service* |
|
4,117 |
|
|
5,222 |
| ||
| Total cost of revenues |
|
4,435 |
|
|
5,843 |
| ||
| Gross profit |
|
3,222 |
|
|
2,666 |
| ||
| Operating expenses: |
||||||||
| Sales and marketing* |
|
4,253 |
|
|
6,931 |
| ||
| Research and development* |
|
2,484 |
|
|
3,545 |
| ||
| General and administrative* |
|
1,804 |
|
|
1,636 |
| ||
| Amortization of deferred stock compensation |
|
468 |
|
|
(2,018 |
) | ||
| Restructuring charges |
|
— |
|
|
703 |
| ||
| Total operating expenses |
|
9,009 |
|
|
10,797 |
| ||
| Loss from operations |
|
(5,787 |
) |
|
(8,131 |
) | ||
| Interest income and other, net |
|
356 |
|
|
877 |
| ||
| Net loss |
$ |
(5,431 |
) |
$ |
(7,254 |
) | ||
| Basic and diluted net loss per common share |
$ |
(0.51 |
) |
$ |
(0.76 |
) | ||
| Shares used in computing basic and diluted net loss per common share |
|
10,550 |
|
|
9,560 |
| ||
| * | Amounts exclude amortization of deferred stock compensation for the three months ended March 31, 2003 and 2002 as follows: |
Cost of service revenues: $128 in 2003 and $58 in 2002.
Sales and marketing: $(9) in 2003; $(476) in 2002.
Research and development: $105 in 2003; $204 in 2002.
General and administrative: $244 in 2003; $(1,804) in 2002.
See accompanying notes to condensed consolidated financial statements.
4
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Operating activities: |
||||||||
| Net loss |
$ |
(5,431 |
) |
$ |
(7,254 |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Depreciation of property and equipment and amortization of intangible and other assets |
|
332 |
|
|
2,294 |
| ||
| Amortization of deferred stock compensation |
|
468 |
|
|
(2,018 |
) | ||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
|
184 |
|
|
628 |
| ||
| Prepaid expenses and other current assets |
|
524 |
|
|
427 |
| ||
| Accrued restructuring charges |
|
(378 |
) |
|
(476 |
) | ||
| Accounts payable, accrued employee compensation and other current liabilities |
|
(1,132 |
) |
|
(2,009 |
) | ||
| Deferred revenues |
|
849 |
|
|
(819 |
) | ||
| Net cash used in operating activities |
|
(4,584 |
) |
|
(9,227 |
) | ||
| Cash flows from investing activities: |
||||||||
| Purchases of property and equipment |
|
(202 |
) |
|
(75 |
) | ||
| Purchases of short-term investments |
|
(19,096 |
) |
|
(20,404 |
) | ||
| Sales and maturities of short-term investments |
|
30,843 |
|
|
35,721 |
| ||
| Net cash provided by investing activities |
|
11,545 |
|
|
15,242 |
| ||
| Cash flows from financing activities: |
||||||||
| Net proceeds from issuance of common stock |
|
238 |
|
|
1,284 |
| ||
| Repayment of debt and capital lease obligations/other |
|
— |
|
|
(31 |
) | ||
| Net cash provided by financing activities |
|
238 |
|
|
1,253 |
| ||
| Effect of exchange rate changes on cash |
|
(252 |
) |
|
(30 |
) | ||
| Net increase in cash and cash equivalents |
|
6,947 |
|
|
7,238 |
|||