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Table of Contents
 
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 June 30, 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: 000-30615
 
 
SIRENZA MICRODEVICES, INC.
(Exact name of registrant as specified in its charter)
 
Delaware
  
77-0073042
(State or other jurisdiction of
  
(I.R.S. Employer
incorporation or organization)
  
Identification No.)
522 Almanor Avenue, Sunnyvale, CA
  
94085
(Address of principal executive offices)
  
(Zip Code)
 
(408) 616-5400
(Registrant’s telephone number, including area code)
 
(Former name, former address and former fiscal year, if changed since last report)
 
 
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) had been subject to such filing requirements for the past 90 days.  Yes  x  No  ¨
 
As of July 28, 2002, there were 29,910,426 shares of registrant’s Common Stock outstanding.
 

Table of Contents
 
SIRENZA MICRODEVICES, INC.
INDEX
 
Part I
     
1
   
Item 1.     Financial Statements
   
1
      
11
      
39
Part II
     
39
   
Item 1.     Legal Proceedings
   
39
      
40
      
40
      
40
   
Item 5.     Other Information
   
41
      
41
      
42

Table of Contents
Part I.     Financial Information
 
Item 1.     Financial Statements
 
Sirenza Microdevices, Inc.
 
Condensed Consolidated Balance Sheets
 
(In thousands)
 
    
June 30,
2002
     
December 31, 2001
  
    
(unaudited)
         
Assets
                  
Current assets:
                  
Cash and cash equivalents
   
$
14,846
 
   
$
15,208
 
Short-term investments
   
 
16,043
 
   
 
27,118
 
Accounts receivable, net
   
 
1,320
 
   
 
1,158
 
Inventories
   
 
2,020
 
   
 
1,894
 
Other current assets
   
 
1,048
 
   
 
1,062
 
    
  
Total current assets
   
 
35,277
 
   
 
46,440
 
Property and equipment, net
   
 
6,061
 
   
 
7,285
 
Long-term investments
   
 
12,087
 
   
 
9,058
 
Investment in GCS
   
 
7,500
 
   
 
—  
 
Other assets
   
 
183
 
   
 
1,260
 
    
  
Total assets
   
$
61,108
 
   
$
64,043
 
    
  
Liabilities and stockholders’ equity
                  
Current liabilities:
                  
Accounts payable
   
$
988
 
   
$
1,464
 
Accrued expenses
   
 
1,668
 
   
 
1,745
 
Deferred margin on distributor inventory
   
 
2,809
 
   
 
3,631
 
Accrued restructuring
   
 
1,813
 
   
 
2,155
 
Capital lease obligations, current portion
   
 
519
 
   
 
634
 
    
  
Total current liabilities
   
 
7,797
 
   
 
9,629
 
Capital lease obligations and other long-term liabilities
   
 
115
 
   
 
401
 
Stockholders’ equity
                  
Common Stock
   
 
30
 
   
 
30
 
Additional paid-in capital
   
 
128,856
 
   
 
128,426
 
Deferred stock compensation
   
 
(1,309
)
   
 
(1,787
)
Accumulated deficit
   
 
(74,381
)
   
 
(72,656
)
    
  
Total stockholders’ equity
   
 
53,196
 
   
 
54,013
 
    
  
Total liabilities and stockholders’ equity
   
$
61,108
 
   
$
64,043
 
    
  
 
See accompanying notes.

1

Table of Contents
Sirenza Microdevices, Inc.
 
Condensed Consolidated Statements of Operations
 
(In thousands, except per share data)
(unaudited)
 
    
Three Months Ended
     
Six Months Ended
  
    
June 30, 2002
     
June 30, 2001
     
June 30, 2002
     
June 30, 2001
  
Net revenues
   
$
4,863
 
   
$
5,355
 
   
$
9,733
 
   
$
13,155
 
Cost of revenues (exclusive of amortization of deferred stock compensation of $31, $62, $37 and $74 for the three and six months ended June 30, 2002 and three and six months ended June 30, 2001, respectively)
   
 
1,941
 
   
 
3,716
 
   
 
3,621
 
   
 
7,616
 
    
  
  
  
Gross profit
   
 
2,922
 
   
 
1,639
 
   
 
6,112
 
   
 
5,539
 
Operating expenses:
                                    
Research and development (exclusive of amortization of deferred stock compensation of $48, $96, $68 and $143 for the three and six months ended June 30, 2002 and three and six months ended June 30, 2001, respectively)
   
 
1,394
 
   
 
1,972
 
   
 
3,056
 
   
 
4,503
 
Sales and marketing (exclusive of amortization of deferred stock compensation of $60, $120, $75 and $151 for the three and six months ended June 30, 2002 and three and six months ended June 30, 2001, respectively)
   
 
1,298
 
   
 
1,418
 
   
 
2,431
 
   
 
3,054
 
General and administrative (exclusive of amortization of deferred stock compensation of $100, $200, $154 and $307 for the three and six months ended June 30, 2002 and three and six months ended June 30, 2001, respectively)
   
 
1,226
 
   
 
1,175
 
   
 
2,381
 
   
 
2,229
 
Amortization of deferred stock compensation
   
 
239
 
   
 
334
 
   
 
478
 
   
 
675
 
    
  
  
  
Total operating expenses
   
 
4,157
 
   
 
4,899
 
   
 
8,346
 
   
 
10,461
 
    
  
  
  
Loss from operations
   
 
(1,235
)
   
 
(3,260
)
   
 
(2,234
)
   
 
(4,922
)
Interest expense
   
 
15
 
   
 
31
 
   
 
35
 
   
 
73
 
Interest income and other, net
   
 
277
 
   
 
1,192
 
   
 
544
 
   
 
2,067
 
    
  
  
  
Loss before taxes
   
 
(973
)
   
 
(2,099
)
   
 
(1,725
)
   
 
(2,928
)
Provision for (benefit from) income taxes
   
 
—  
 
   
 
(629
)
   
 
—  
 
   
 
(878
)
    
  
  
  
Net loss
   
$
(973
)
   
$
(1,470
)
   
$
(1,725
)
   
$
(2,050
)
    
  
  
  
Net loss per share
                                    
Basic
   
$
(0.03
)
   
$
(0.05
)
   
$
(0.06
)
   
$
(0.07
)
    
  
  
  
Diluted
   
$
(0.03
)
   
$
(0.05
)
   
$
(0.06
)
   
$
(0.07
)
    
  
  
  
Shares used to compute net loss per share
                                    
Basic
   
 
29,862
 
   
 
29,270
 
   
 
29,821
 
   
 
28,771
 
    
  
  
  
Diluted
   
 
29,862
 
   
 
29,270
 
   
 
29,821
 
   
 
28,771
 
    
  
  
  
 
See accompanying notes.

2

Table of Contents
Sirenza Microdevices, Inc.
 
Condensed Consolidated Statements of Cash Flows
 
(In thousands)
(unaudited)
 
    
Six Months Ended
  
    
June 30, 2002
     
June 30, 2001
  
Operating Activities
                  
Net loss
   
$
(1,725
)
   
$
(2,050
)
Adjustments to reconcile net loss to net cash used in operating activities:
                  
Depreciation and amortization
   
 
1,417
 
   
 
1,334
 
Amortization of deferred stock compensation
   
 
478
 
   
 
675
 
Changes in operating assets and liabilities:
                  
Accounts receivable
   
 
(162
)
   
 
2,198
 
Inventories
   
 
(126
)
   
 
(268
)
Other assets
   
 
(283
)
   
 
(404
)
Accounts payable
   
 
(476
)
   
 
94
 
Accrued expenses
   
 
(98
)
   
 
(831
)
Accrued restructuring
   
 
(342
)
   
 
—  
 
Deferred margin on distributor inventory
   
 
(822
)
   
 
(1,851
)
    
  
Net cash used in operating activities
   
 
(2,139
)
   
 
(1,103
)
Investing Activities
                  
Sales/maturities of available-for-sale securities, net
   
 
8,046
 
   
 
18,653
 
Purchases of property and equipment
   
 
(193
)
   
 
(2,341
)
Investment in GCS
   
 
(6,126
)
   
 
—  
 
    
  
Net cash provided by investing activities
   
 
1,727
 
   
 
16,312
 
Financing Activities
                  
Principal payments on capital lease obligations
   
 
(380
)
   
 
(385
)
Proceeds from employee stock plans
   
 
430
 
   
 
2,758
 
    
  
Net cash provided by financing activities
   
 
50