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
| ¨ | 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 000-27427
ALTIGEN COMMUNICATIONS, INC.
(Exact name of Registrant as specified in its charter)
| DELAWARE |
94-3204299 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) | |
| 47427 Fremont Boulevard Fremont, CA |
94538 | |
| (address of principal executive offices) |
(zip code) |
Registrant’s telephone number, including area code: (510) 252-9712
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
The number of shares of registrant’s common stock outstanding as of May 12, 2003 was: 13,682,814 shares
| Page | ||||
| PART I FINANCIAL INFORMATION |
||||
| Item 1. |
3 | |||
| Unaudited Condensed Consolidated Balance Sheets as of March 31, 2003 and September 30, 2002 |
3 | |||
| 4 | ||||
| 5 | ||||
| Notes to Unaudited Condensed Consolidated Financial Statements |
6 | |||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
12 | ||
| Item 3. |
27 | |||
| Item 4. |
27 | |||
| PART II OTHER INFORMATION |
||||
| Item 1. |
28 | |||
| Item 4. |
28 | |||
| Item 6. |
29 | |||
| 30 | ||||
| 31 | ||||
2
Item 1. Unaudited Condensed Consolidated Financial Statements
ALTIGEN COMMUNICATIONS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share and per share amounts)
| March 31, 2003 |
September 30, 2002 |
|||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
8,890 |
|
$ |
7,210 |
| ||
| Short-term investments |
|
1,490 |
|
|
4,938 |
| ||
| Accounts receivable, net of allowances of $192 and $227 at March 31, 2003 and September 30, 2002, respectively |
|
1,192 |
|
|
1,656 |
| ||
| Inventories |
|
1,361 |
|
|
1,263 |
| ||
| Prepaid expenses and other current assets |
|
511 |
|
|
213 |
| ||
| Promissory note from officer / stockholder (Note 3) |
|
— |
|
|
343 |
| ||
| Total current assets |
|
13,444 |
|
|
15,623 |
| ||
| Property and equipment: |
||||||||
| Furniture and equipment |
|
2,072 |
|
|
2,033 |
| ||
| Computer software |
|
922 |
|
|
922 |
| ||
|
|
2,994 |
|
|
2,955 |
| |||
| Less: Accumulated depreciation and amortization |
|
(2,558 |
) |
|
(2,320 |
) | ||
| Net property and equipment |
|
436 |
|
|
635 |
| ||
| Other non-current assets: |
||||||||
| Long-term investment |
|
195 |
|
|
195 |
| ||
| Long-term deposit |
|
— |
|
|
53 |
| ||
| Total other non-current assets |
|
195 |
|
|
248 |
| ||
| Total assets |
$ |
14,075 |
|
$ |
16,506 |
| ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
798 |
|
$ |
538 |
| ||
| Accrued liabilities: |
||||||||
| Payroll and related benefits |
|
295 |
|
|
316 |
| ||
| Warranty (Note 4) |
|
630 |
|
|
590 |
| ||
| Marketing |
|
367 |
|
|
436 |
| ||
| Other |
|
639 |
|
|
850 |
| ||
| Deferred revenue |
|
358 |
|
|
405 |
| ||
| Total current liabilities |
|
3,087 |
|
|
3,135 |
| ||
| Stockholders’ equity: |
||||||||
| Convertible preferred stock, $0.001 par value; Authorized—5,000,000 shares; Outstanding none at March 31, 2003 and September 30, 2002 |
|
— |
|
|
— |
| ||
| Common stock, $0.001 par value; Authorized—50,000,000 shares; Outstanding—14,607,475 shares at March 31, 2003 and 14,543,606 shares at September 30, 2002 |
|
14 |
|
|
14 |
| ||
| Treasury stock at cost—1,063,895 shares at March 31, 2003 and September 30, 2002 |
|
(1,014 |
) |
|
(1,014 |
) | ||
| Additional paid-in capital |
|
61,768 |
|
|
61,740 |
| ||
| Deferred stock compensation |
|
(28 |
) |
|
(55 |
) | ||
| Accumulated other comprehensive gain |
|
— |
|
|
— |
| ||
| Accumulated deficit |
|
(49,752 |
) |
|
(47,314 |
) | ||
| Total stockholders’ equity |
|
10,988 |
|
|
13,371 |
| ||
| Total liabilities and stockholders’ equity |
$ |
14,075 |
|
$ |
16,506 |
| ||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
ALTIGEN COMMUNICATIONS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share amounts)
| Three Months Ended March 31, |
Six Months Ended March 31, |
|||||||||||||||
| 2003 |
2002 |
2003 |
2002 |
|||||||||||||
| Revenues, net |
$ |
2,355 |
|
$ |
2,202 |
|
$ |
5,245 |
|
$ |
3,971 |
| ||||
| Cost of revenues |
|
1,014 |
|
|
1,099 |
|
|
2,343 |
|
|
2,000 |
| ||||
| Gross profit |
|
1,341 |
|
|
1,103 |
|
|
2,902 |
|
|
1,971 |
| ||||
| Operating expenses: |
||||||||||||||||
| Research and development |
|
1,053 |
|
|
1,006 |
|
|
2,000 |
|
|
2,052 |
| ||||
| Sales and marketing |
|
1,308 |
|
|
1,554 |
|
|
2,572 |
|
|
3,000 |
| ||||
| General and administrative |
|
467 |
|
|
504 |
|
|
914 |
|
|
1,075 |
| ||||
| Deferred stock compensation (Note 5) |
|
14 |
|
|
93 |
|
|
27 |
|
|
186 |
| ||||
| Total operating expenses |
|
2,842 |
|
|
3,157 |
|
|
5,513 |
|
|
6,313 |
| ||||
| Loss from operations |
|
(1,501 |
) |
|
(2,054 |
) |
|
(2,611 |
) |
|
(4,342 |
) | ||||
| Interest and other income, net |
|
48 |
|
|
70 |
|
|
173 |
|
|
169 |
| ||||
| Net loss |
$ |
(1,453 |
) |
$ |
(1,984 |
) |
$ |
(2,438 |
) |
$ |
(4,173 |
) | ||||
| Basic and diluted net loss per share |
$ |
(0.11 |
) |
$ |
(0.15 |
) |
$ |
(0.18 |
) |
$ |
(0.31 |
) | ||||
| Shares used in computing basic and diluted net loss per share |
|
13,544 |
|
|
13,148 |
|
|
13,532 |
|
|
13,307 |
| ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
ALTIGEN COMMUNICATIONS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
| Six Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
| Net loss |
$ |
(2,438 |
) |
$ |
(4,173 |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Depreciation and amortization |
|
238 |
|
|||||