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: 000-31545
SYNPLICITY, INC.
(Exact name of registrant as specified in its charter)
| California |
77-0368779 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
600 West California Avenue, Sunnyvale, CA 94086
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: (408) 215-6000
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 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 Securities Exchange Act of 1934, as amended). Yes ¨ No x
As of April 30, 2003, the registrant had 25,681,601 shares of common stock outstanding.
SYNPLICITY, INC.
| PART I. |
FINANCIAL INFORMATION |
PAGE NO. | ||
| Item 1. |
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 |
12 | ||
| Item 3. |
29 | |||
| Item 4. |
30 | |||
| PART II. |
OTHER INFORMATION |
|||
| Item 6. |
30 | |||
| 31 | ||||
| 32 | ||||
-2-
PART I—FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
| March 31, 2003 |
December 31, 2002(1) |
|||||||
| (unaudited) |
||||||||
| Assets: |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
6,713 |
|
$ |
8,858 |
| ||
| Short-term investments |
|
35,179 |
|
|
32,452 |
| ||
| Accounts receivable, net |
|
6,766 |
|
|
8,607 |
| ||
| Other current assets |
|
995 |
|
|
1,041 |
| ||
| Total current assets |
|
49,653 |
|
|
50,958 |
| ||
| Property and equipment, net |
|
3,233 |
|
|
3,439 |
| ||
| Goodwill |
|
1,272 |
|
|
1,272 |
| ||
| Intangible assets, net |
|
3,910 |
|
|
4,128 |
| ||
| Other assets |
|
712 |
|
|
711 |
| ||
| Total assets |
$ |
58,780 |
|
$ |
60,508 |
| ||
| Liabilities and Shareholders’ Equity: |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
914 |
|
$ |
1,045 |
| ||
| Accrued liabilities |
|
2,690 |
|
|
2,823 |
| ||
| Accrued compensation |
|
1,843 |
|
|
2,270 |
| ||
| Deferred revenue |
|
12,110 |
|
|
12,197 |
| ||
| Total current liabilities |
|
17,557 |
|
|
18,335 |
| ||
| Commitments |
||||||||
| Shareholders’ equity: |
||||||||
| Preferred stock |
|
— |
|
|
— |
| ||
| Common stock |
|
55,114 |
|
|
55,597 |
| ||
| Additional paid-in capital |
|
3,458 |
|
|
3,466 |
| ||
| Notes receivable from shareholders |
|
(294 |
) |
|
(294 |
) | ||
| Deferred stock-based compensation |
|
(584 |
) |
|
(731 |
) | ||
| Accumulated deficit |
|
(16,453 |
) |
|
(15,821 |
) | ||
| Accumulated other comprehensive loss |
|
(18 |
) |
|
(44 |
) | ||
| Total shareholders’ equity |
|
41,223 |
|
|
42,173 |
| ||
| Total liabilities and shareholders’ equity |
$ |
58,780 |
|
$ |
60,508 |
| ||
| (1) | Derived from the audited consolidated balance sheet of Synplicity, Inc. as of December 31, 2002, however, the balance sheet amounts at December 31, 2002 do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. |
The accompanying notes are an integral part of the condensed consolidated financial statements.
-3-
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Revenue: |
||||||||
| License |
$ |
6,387 |
|
$ |
6,206 |
| ||
| Maintenance |
|
5,176 |
|
|
4,617 |
| ||
| Total revenue |
|
11,563 |
|
|
10,823 |
| ||
| Cost of revenue: |
||||||||
| Cost of license |
|
56 |
|
|
39 |
| ||
| Cost of maintenance |
|
523 |
|
|
461 |
| ||
| Amortization of intangible assets from acquisitions |
|
218 |
|
|
— |
| ||
| Total cost of revenue |
|
797 |
|
|
500 |
| ||
| Gross profit |
|
10,766 |
|
|
10,323 |
| ||
| Operating expenses: |
||||||||
| Research and development |
|
5,237 |
|
|
4,519 |
| ||
| Sales and marketing |
|
4,886 |
|
|
4,702 |
| ||
| General and administrative |
|
1,146 |
|
|
1,086 |
| ||
| Stock-based compensation(1) |
|
139 |
|
|
189 |
| ||
| Total operating expenses |
|
11,408 |
|
|
10,496 |
| ||
| Loss from operations |
|
(642 |
) |
|
(173 |
) | ||
| Other income, net |
|
140 |
|
|
278 |
| ||
| Income (loss) before income taxes |
|
(502 |
) |
|
105 |
| ||
| Provision for income taxes |
|
130 |
|
|
16 |
| ||
| Net income (loss) |
$ |
(632 |
) |
$ |
89 |
| ||
| Basic earnings per share: |
||||||||
| Basic net income (loss) per share |
$ |
(0.02 |
) |
$ |
— |
| ||
| Shares used in per share calculation |
|
25,607 |
|
|
24,985 |
| ||
| Diluted earnings per share: |
||||||||
| Diluted net income (loss) per share |
$ |
(0.02 |
) |
$ |
— |
| ||
| Shares used in per share calculation |
|
25,607 |
|
|
26,964 |
| ||
(1) Amortization of deferred stock-based compensation relates to the following: | ||||||||
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Cost of maintenance |
$ |
3 |
|
$ |
6 |
| ||
| Research and development |
|
51 |
|
|
61 |
| ||
| Sales and marketing |
|
36 |
|
|
61 |
| ||
| General and administrative |
|
49 |
|
|
61 |
| ||
| Total |
$ |
139 |
|
$ |
189 |
| ||
The accompanying notes are an integral part of the condensed consolidated financial statements.
-4-
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Operating activities |
||||||||
| Net income (loss) |
$ |
(632 |
) |
$ |
89 |
| ||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||
| Depreciation |
|
529 |
|
|
471 |
| ||
| Amortization of deferred stock-based compensation |
|
139 |
|
|
189 |
| ||
| Amortization of intangible assets |
|
218 |
|
|
— |
| ||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
|
1,841 |
|
|
1,654 |
| ||
| Other current assets |
|
46 |
|
|
(110 |
) | ||
| Other assets |
|
(1 |
) |
|
— |
| ||
| Accounts payable and accrued liabilities |
|
(264 |
) |
|
(287 |
|||