UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE 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: 000-23649
ARTISAN COMPONENTS, INC.
(Exact name of registrant as specified in its charter)
| DELAWARE |
77-0278185 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
141 Caspian Court
Sunnyvale, California 94089
(Address of principal executive offices)
Telephone number (408) 734-5600
(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 Securities Exchange Act). Yes x No ¨
As of April 30, 2003, there were 18,394,348 shares of the Registrant’s Common Stock outstanding.
FORM 10-Q
INDEX
| Page | ||||
| PART I—Financial Information | ||||
| Index |
i | |||
| Item 1. |
1 | |||
| Condensed Consolidated Balance Sheets as of March 31, 2003, Unaudited, and September 30, 2002 |
1 | |||
| 2 | ||||
| 3 | ||||
| Notes To Unaudited Condensed Consolidated Financial Statements |
4 | |||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
13 | ||
| Item 3. |
42 | |||
| Item 4. |
43 | |||
| PART II—Other Information | ||||
| Item 1. |
44 | |||
| Item 2. |
44 | |||
| Item 3. |
44 | |||
| Item 4. |
44 | |||
| Item 6. |
45 | |||
| 46 | ||||
| 47 | ||||
i
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
| March 31, 2003 |
September 30, 2002 |
|||||||
| (unaudited) |
||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
33,290 |
|
$ |
29,159 |
| ||
| Marketable securities |
|
22,506 |
|
|
23,085 |
| ||
| Accounts receivable, net |
|
16,489 |
|
|
7,232 |
| ||
| Prepaid expenses and other current assets |
|
2,525 |
|
|
2,345 |
| ||
| Total current assets |
|
74,810 |
|
|
61,821 |
| ||
| Property and equipment, net |
|
6,149 |
|
|
3,499 |
| ||
| Goodwill |
|
34,923 |
|
|
13,741 |
| ||
| Purchased intangible assets, net |
|
11,362 |
|
|
2,271 |
| ||
| Other assets |
|
1,738 |
|
|
1,116 |
| ||
| Total assets |
$ |
128,982 |
|
$ |
82,448 |
| ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
3,597 |
|
$ |
861 |
| ||
| Accrued liabilities |
|
6,955 |
|
|
4,081 |
| ||
| Deferred revenue, current portion |
|
11,728 |
|
|
5,924 |
| ||
| Total current liabilities |
|
22,280 |
|
|
10,866 |
| ||
| Deferred revenue |
|
850 |
|
|
812 |
| ||
| Other liabilities |
|
1,200 |
|
|
1,610 |
| ||
| Deferred tax liability |
|
4,196 |
|
|
— |
| ||
| Total liabilities |
|
28,526 |
|
|
13,288 |
| ||
| Commitments and contingencies (Note 4) |
||||||||
| Stockholders’ equity: |
||||||||
| Common stock, $0.001 par value: |
||||||||
| Authorized: 50,000; Issued and outstanding: 18,309 and 16,898 shares at March 31, 2003 and September 30, 2002, respectively |
|
18 |
|
|
17 |
| ||
| Additional paid in capital |
|
107,370 |
|
|
77,170 |
| ||
| Stockholders’ note receivable |
|
(240 |
) |
|
— |
| ||
| Deferred stock-based compensation |
|
(637 |
) |
|
— |
| ||
| Treasury stock |
|
(1,399 |
) |
|
— |
| ||
| Accumulated deficit |
|
(4,656 |
) |
|
(8,027 |
) | ||
| Total stockholders’ equity |
|
100,456 |
|
|
69,160 |
| ||
| Total liabilities and stockholders’ equity |
$ |
128,982 |
|
$ |
82,448 |
| ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
| Three months ended March 31, |
Six months ended March 31, |
|||||||||||||
| 2003 |
2002 |
2003 |
2002 |
|||||||||||
| (unaudited) |
||||||||||||||
| Revenue: |
||||||||||||||
| License |
$ |
13,945 |
$ |
5,492 |
|
$ |
25,914 |
$ |
11,091 |
| ||||
| Net royalty |
|
2,177 |
|
2,512 |
|
|
4,192 |
|
4,481 |
| ||||
| Total revenue |
|
16,122 |
|
8,004 |
|
|
30,106 |
|
15,572 |
| ||||
| Costs and expenses: |
||||||||||||||
| Cost of revenue |
|
3,581 |
|
1,541 |
|
|
7,487 |
|
3,121 |
| ||||
| Product development |
|
4,756 |
|
3,215 |
|
|
7,691 |
|
6,118 |
| ||||
| Sales and marketing |
|
3,226 |
|
2,027 |
|
|
6,330 |
|
4,071 |
| ||||
| General and administrative |
|
1,838 |
|
594 |
|
|
3,233 |
|
1,202 |
| ||||
| Provision for unused lease facility |
|
— |
|
1,197 |
|
|
— |
|
1,197 |
| ||||
| In-process research and development |
|
520 |
|
— |
|
|
520 |
|
— |
| ||||
| Amortization of purchased intangible assets |
|
907 |
|
492 |
|
|
1,399 |
|
984 |
| ||||
| Total costs and expenses |
|
14,828 |
|
9,066 |
|
|
26,660 |
|
16,693 |
| ||||
| Operating income (loss) |
|
1,294 |
|
(1,062 |
) |
|
3,446 |
|
(1,121 |
) | ||||
| Interest and other income |
|
175 |
|
146 |
|
|
378 |
|
402 |
| ||||
| Income (loss) before provision for income taxes |
|
1,469 |
|
(916 |
) |
|
3,824 |
|
(719 |
) | ||||
| Provision for income taxes |
|
263 |
|
38 |
|
|
453 |
|
117 |
| ||||
| Net income (loss) |
$ |
1,206 |
$ |
(954 |
) |
$ |
3,371 |
$ |
(836 |
) | ||||
| Net income (loss) per share: |
||||||||||||||
| Basic |
$ |
0.07 |
$ |
(0.06 |
) |
$ |
0.19 |
$ |
(0.05 |
) | ||||
| Diluted |
$ |
0.06 |
$ |
(0.06 |
) |
$ |
0.17 |
$ |
(0.05 |
) | ||||
| Shares used in computing net income (loss) per share: |
||||||||||||||
| Basic |
|
17,831 |
|
16,703 |
|
|
17,792 |
|
16,613 |
| ||||
| Diluted |
|
19,896 |
|
16,703 |
|
|
19,803 |
|
16,613 |
| ||||