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Table of Contents

 
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 June 28, 2002
 
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 Number 0-24343
 

 
ANSWERTHINK, INC.
(Exact name of Registrant as specified in its charter)
 
Florida
(State or other jurisdiction of
incorporation or organization)
 
65-0750100
(I.R.S. Employer
Identification Number)
 
1001 Brickell Bay Drive, Suite 3000
Miami, Florida
(Address of principal executive offices)
 
33131
(Zip Code)
 
(305) 375-8005
(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 requirement for the past 90 days.  Yes  x  No  ¨
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
 
As of July 31, 2002, there were 47,370,052 shares of common stock outstanding.
 


Table of Contents
 
ANSWERTHINK, INC.
 
TABLE OF CONTENTS
 
PART I
 
FINANCIAL INFORMATION
    
Item 1.
 
Financial Statements
    
      
3
      
4
      
5
      
6
Item 2.
    
9
Item 3.
    
12
PART II
 
OTHER INFORMATION
    
Item 1.
    
13
Item 4.
    
13
Item 6.
    
13
  
14
INDEX TO EXHIBITS
  
15

2


Table of Contents
 
PART I—FINANCIAL INFORMATION
 
Item 1.    Financial Statements
 
ANSWERTHINK, INC.
 
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
 
    
June 28,
2002

    
December 28,
2001

 
    
(unaudited)
        
ASSETS
                 
Current assets:
                 
Cash and cash equivalents
  
$
60,956
 
  
$
59,888
 
Accounts receivable and unbilled revenue, net of allowance of $6,514 and $6,810 in 2002 and 2001, respectively
  
 
32,970
 
  
 
39,164
 
Other receivables
  
 
783
 
  
 
851
 
Prepaid expenses and other current assets
  
 
17,308
 
  
 
15,628
 
    


  


Total current assets
  
 
112,017
 
  
 
115,531
 
Property and equipment, net
  
 
18,175
 
  
 
18,468
 
Goodwill, net
  
 
46,720
 
  
 
77,920
 
    


  


Total assets
  
$
176,912
 
  
$
211,919
 
    


  


LIABILITIES AND SHAREHOLDERS’ EQUITY
                 
Current liabilities:
                 
Accounts payable
  
$
6,207
 
  
$
5,187
 
Accrued expenses and other liabilities
  
 
21,146
 
  
 
27,992
 
Media payable
  
 
706
 
  
 
1,039
 
    


  


Total current liabilities
  
 
28,059
 
  
 
34,218
 
Commitments and contingencies
                 
Shareholders’ equity
                 
Preferred stock, $.001 par value, 1,250,000 authorized, none issued and outstanding
  
 
—  
 
  
 
—  
 
Common stock, $.001 par value, authorized 125,000,000 shares; issued and outstanding: 46,970,052 shares at June 28, 2002; 45,880,118 shares at December 28, 2001
  
 
47
 
  
 
46
 
Additional paid-in capital
  
 
261,927
 
  
 
257,115
 
Accumulated deficit
  
 
(113,121
)
  
 
(79,460
)
    


  


Total shareholders’ equity
  
 
148,853
 
  
 
177,701
 
    


  


Total liabilities and shareholders’ equity
  
$
176,912
 
  
$
211,919
 
    


  


 
 
The accompanying notes are an integral part of the consolidated financial statements.

3


Table of Contents
 
ANSWERTHINK, INC.
 
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
 
    
Quarter Ended

    
Six Months Ended

 
    
June 28, 2002

    
June 29, 2001

    
June 28, 2002

    
June 29, 2001

 
Revenues:
                                   
Revenues before reimbursements (Net revenues)
  
$
42,678
 
  
$
65,276
 
  
$
89,091
 
  
$
137,291
 
Reimbursements
  
 
5,341
 
  
 
8,092
 
  
 
11,745
 
  
 
17,756
 
    


  


  


  


Total revenues
  
 
48,019
 
  
 
73,368
 
  
 
100,836
 
  
 
155,047
 
Costs and expenses:
                                   
Project personnel and expenses:
                                   
Project personnel and expenses before reimbursable expenses
  
 
30,123
 
  
 
40,668
 
  
 
62,471
 
  
 
86,049
 
Reimbursable expenses
  
 
5,341
 
  
 
8,092
 
  
 
11,745
 
  
 
17,756
 
    


  


  


  


Total project personnel and expenses
  
 
35,464
 
  
 
48,760
 
  
 
74,216
 
  
 
103,805
 
Selling, general and administrative expenses
  
 
15,255
 
  
 
23,600
 
  
 
30,983
 
  
 
48,001
 
Stock compensation expense
  
 
  —  
 
  
 
1,613
 
  
 
—  
 
  
 
4,644
 
    


  


  


  


Total costs and operating expenses
  
 
50,719
 
  
 
73,973
 
  
 
105,199
 
  
 
156,450
 
    


  


  


  


Loss from operations
  
 
(2,700
)
  
 
(605
)
  
 
(4,363
)
  
 
(1,403
)
Other income (expense):
                                   
Interest income
  
 
184
 
  
 
259
 
  
 
354
 
  
 
735
 
Interest expense
  
 
(47
)
  
 
(42
)
  
 
(93
)
  
 
(84
)
    


  


  


  


Loss before income taxes
  
 
(2,563
)
  
 
(388
)
  
 
(4,102
)
  
 
(752
)
Income taxes
  
 
(1,025
)
  
 
(453
)
  
 
(1,641
)
  
 
(617
)
    


  


  


  


Income (loss) before cumulative effect of change in accounting principle
  
 
(1,538
)
  
 
65
 
  
 
(2,461
)
  
 
(135
)
Cumulative effect of change in accounting principle
  
 
—  
 
  
 
—  
 
  
 
(31,200
)
  
 
—  
 
    


  


  


  


Net income (loss)
  
$
(1,538
)
  
$
65
 
  
$
(33,661
)
  
$
(135
)
    


  


  


  


Basic net income (loss) per common share:
                                   
Income (loss) before cumulative effect of change in accounting principle
  
$
(0.03
)
  
$
—  
 
  
$
(0.05
)
  
$
—  
 
Cumulative effect of change in accounting principle
  
$
—  
 
  
$
—  
 
  
$
(0.68
)
  
$
—  
 
Net income (loss) per common share
  
$
(0.03
)
  
$
—  
 
  
$
(0.73
)
  
$
—  
 
Weighted average common shares outstanding
  
 
46,547
 
  
 
44,030
 
  
 
46,207
 
  
 
43,106
 
Diluted net income (loss) per common share:
                                   
Income (loss) before cumulative effect of change in accounting principle
  
$
(0.03
)
  
$
—  
 
  
$
(0.05
)
  
$
—  
 
Cumulative effect of change in accounting principle
  
$
—  
 
  
$
—  
 
  
$
(0.68
)
  
$
—  
 
Net income (loss) per common share
  
$
(0.03
)
  
$
—  
 
  
$
(0.73
)
  
$
—  
 
Weighted average common and common equivalent shares outstanding
  
 
46,547
 
  
 
46,214
 
  
 
46,207
 
  
 
43,106
 
 
 
The accompanying notes are an integral part of the consolidated financial statements.

4


Table of Contents
 
ANSWERTHINK, INC.
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 
    
Six Months Ended

 
    
June 28,
2002

    
June 29,
2001

 
Cash flows from operating activities:
                 
Net loss
  
$
(33,661
)
  
$
(135
)
Adjustments to reconcile net loss to net cash used in operating activities:
                 
Cumulative effect of change in accounting principle
  
 
31,200
 
  
 
—  
 
Non-cash compensation expense
  
 
—  
 
  
 
4,644
 
Depreciation and amortization
  
 
2,618
 
  
 
6,035
 
Provision for doubtful accounts
  
 
58
 
  
 
2,732
 
Deferred income taxes
  
 
1,579
 
  
 
(83
)
Changes in assets and liabilities, net of effects from acquisitions:
                 
Decrease in accounts receivable and unbilled revenue
  
 
6,136
 
  
 
4,694
 
Decrease in other receivables
  
 
68
 
  
 
2,585
 
Increase in prepaid expenses and other assets
  
 
(2,074
)
  
 
(1,440
)
Increase (decrease) in accounts payable
  
 
1,020
 
  
 
(4,054
)
Decrease in accrued expenses and other liabilities
  
 
(7,529
)
  
 
(12,616
)
Decrease in media pa