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 FOR THE TRANSITION PERIOD FROM TO . |
COMMISSION FILE NO. 000-23767
SYMPHONIX DEVICES, INC.
(Exact name of registrant as specified in its charter)
| DELAWARE |
77-0376250 | |
| (State or other jurisdiction of |
(I.R.S. Employer | |
| incorporation or organization) |
Identification No.) |
1735 N. First St., Suite 311
SAN JOSE, CALIFORNIA 95112
(Address of principal executive offices, including zip code)
(408) 232-0710
(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 Exchange Act Rule 12b-2). Yes ¨ No x
As of May 12, 2003, 35,886,442 shares of the Registrant’s Common Stock were outstanding.
SYMPHONIX DEVICES, INC.
| PART I. |
FINANCIAL INFORMATION |
|||
| Item 1. |
Financial Statements (unaudited) |
|||
| Condensed Consolidated Balance Sheets as of March 31, 2003 and December 31, 2002 |
1 | |||
| Condensed Consolidated Statements of Operations for the three months ended March 31, 2003 and 2002 |
2 | |||
| 3 | ||||
| Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2003 and 2002 |
4 | |||
| 5 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
8 | ||
| Item 3. |
15 | |||
| Item 4. |
16 | |||
| PART II. |
OTHER INFORMATION |
|||
| Item 1. |
16 | |||
| Item 6. |
16 |
i
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
SYMPHONIX DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
| March 31, 2003 |
December 31, 2002 |
|||||||
| (unaudited) |
||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
1,102 |
|
$ |
1,966 |
| ||
| Restricted cash |
|
— |
|
|
10 |
| ||
| Accounts receivable, net |
|
41 |
|
|
175 |
| ||
| Inventories |
|
661 |
|
|
676 |
| ||
| Prepaid expenses and other current assets |
|
99 |
|
|
222 |
| ||
| Total current assets |
|
1,903 |
|
|
3,049 |
| ||
| Property and equipment, net |
|
525 |
|
|
603 |
| ||
| Total assets |
$ |
2,428 |
|
$ |
3,652 |
| ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
169 |
|
$ |
218 |
| ||
| Accrued compensation |
|
58 |
|
|
291 |
| ||
| Other accrued liabilities |
|
984 |
|
|
971 |
| ||
| Total current liabilities |
|
1,211 |
|
|
1,480 |
| ||
| Deferred revenue |
|
264 |
|
|
357 |
| ||
| Total liabilities |
|
1,475 |
|
|
1,837 |
| ||
| Stockholders’ equity: |
||||||||
| Common stock |
|
36 |
|
|
36 |
| ||
| Notes receivable from stockholders |
|
(320 |
) |
|
(320 |
) | ||
| Additional paid-in capital |
|
92,053 |
|
|
92,053 |
| ||
| Accumulated other comprehensive income |
|
28 |
|
|
65 |
| ||
| Accumulated deficit |
|
(90,844 |
) |
|
(90,019 |
) | ||
| Total stockholders’ equity |
|
953 |
|
|
1,815 |
| ||
| Total liabilities and stockholders’ equity |
$ |
2,428 |
|
$ |
3,652 |
| ||
The accompanying notes are an integral part of these condensed consolidated financial statements.
1
SYMPHONIX DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
| Three months ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Revenue |
$ |
119 |
|
$ |
480 |
| ||
| Costs and expenses: |
||||||||
| Cost of goods sold |
|
99 |
|
|
636 |
| ||
| Research and development |
|
81 |
|
|
876 |
| ||
| Selling, general and administrative |
|
787 |
|
|
1,323 |
| ||
| Total costs and expenses |
|
967 |
|
|
2,835 |
| ||
| Operating loss |
|
(848 |
) |
|
(2,355 |
) | ||
| Interest and other income |
|
23 |
|
|
266 |
| ||
| Interest expense |
|
— |
|
|
(22 |
) | ||
| Net loss |
$ |
(825 |
) |
$ |
(2,111 |
) | ||
| Basic and diluted net loss per common share |
$ |
(0.02 |
) |
$ |
(0.06 |
) | ||
| Shares used in computing basic and diluted net loss per common share |
|
35,872 |
|
|
35,595 |
| ||
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
SYMPHONIX DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)
(unaudited)
| Three months ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Net loss |
$ |
(825 |
) |
$ |
(2,111 |
) | ||
| Change in unrealized gain on short-term investments |
|
— |
|
|
(130 |
) | ||
| Translation adjustments |
|
(37 |
) |
|
(9 |
) | ||
| Comprehensive loss |
$ |
(862 |
) |
$ |
(2,250 |
) | ||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
SYMPHONIX DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Three months ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ |
(825 |
) |
$ |
(2,111 |
) | ||
| Adjustments to reconcile net loss to cash used in operating activities: |
||||||||
| Depreciation and amortization |
|
78 |
|
|
166 |
| ||
| Amortization of premium on short-term investments |
|
— |
|
|
32 |
| ||
| Gain on sale of short-term investments |
|
— |
|
|
(40 |
) | ||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
|
134 |
|
|
109 |
| ||
| Inventories |
|
15 |
|
|
(36 |
) | ||
| Prepaid expenses and other current assets |
|
123 |
|
|
(188 |
) | ||
| Accounts payable |
|
(49 |
) |
|
(100 |
) | ||
| Accrued compensation |
|
(233 |
) |
|
(482 |
) | ||
| Deferred revenue |
|
(93 |
) |
|
(87 |
) | ||
| Other accrued liabilities |
|
13 |
|
|
(245 |
) | ||
| Net cash used in operating activities |
|
(837 |
) |
|
(2,982 |
) | ||
| Cash flows from investing activities |
||||||||
| Sales and maturities of short-term and long-term investments |
|
— |
|
|
3,125 |
| ||
| Purchases of property and equipment |
|
— |
|
|
(11 |
) | ||
| Change in restricted cash |
|
10 |
|
|
(926 |
) | ||
| Net cash provided by investing activities |
|
10 |
|
|
2,188 |
| ||
| Cash flows from financing activities |
||||||||
| Payments on bank borrowings |
|
— |
|
|
(125 |
) | ||
| Proceeds (issuance costs) from issuance of common stock, net |
|
— |
|
|
(39 |
) | ||
| Net cash used in financing activities |
|
— |
|
|
(164 |
) | ||
| Net decrease in cash and cash equivalents |
|
(827 |
) |
|
(958 |
) | ||
| Effect of exchange rates on cash and cash equivalents |
|
(37 |
) |
|
(9 |
) | ||
| Cash and cash equivalents, beginning of period |
|
1,966 |
|
|
1,343 |
| ||