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 December 31, 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 No. 000-22688
MACROMEDIA, INC.
(A Delaware Corporation)
I.R.S. Employer Identification No. 94-3155026
600 Townsend Street
San Francisco, California 94103
(415) 252-2000
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 the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date: 62.2 million shares of Common Stock, $0.001 par value per common share, outstanding on February 7, 2003.
MACROMEDIA, INC. AND SUBSIDIARIES
REPORT ON FORM 10-Q
FOR THE QUARTER ENDED DECEMBER 31, 2002
INDEX
| PART I. FINANCIAL INFORMATION |
||||||
| Item 1. |
Financial Statements (Unaudited) |
|||||
|
Condensed Consolidated Balance Sheets |
3 | |||||
| 4 | ||||||
|
Condensed Consolidated Statements of Cash Flows |
5 | |||||
| 6 | ||||||
| Item 2. |
Management’s Discussion and Analysis of Financial |
15 | ||||
| Item 3. |
39 | |||||
| Item 4. |
40 | |||||
| PART II. OTHER INFORMATION |
||||||
| Item 1. |
41 | |||||
| Item 2. |
42 | |||||
| Item 3. |
42 | |||||
| Item 4. |
42 | |||||
| Item 5. |
42 | |||||
| Item 6. |
42 | |||||
| 43 | ||||||
| 44 | ||||||
MACROMEDIA, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
| December 31, |
March 31, 2002 |
|||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash, cash equivalents and short-term investments |
$ |
207,391 |
|
$ |
161,971 |
| ||
| Accounts receivable, net |
|
26,366 |
|
|
24,181 |
| ||
| Inventory |
|
1,364 |
|
|
3,032 |
| ||
| Prepaid expenses and other current assets |
|
23,061 |
|
|
27,513 |
| ||
| Total current assets |
|
258,182 |
|
|
216,697 |
| ||
| Property and equipment, net |
|
38,389 |
|
|
49,189 |
| ||
| Intangible assets, net |
|
202,121 |
|
|
226,579 |
| ||
| Restricted cash |
|
10,922 |
|
|
11,409 |
| ||
| Other non-current assets |
|
7,923 |
|
|
13,964 |
| ||
| Total assets |
$ |
517,537 |
|
$ |
517,838 |
| ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
4,358 |
|
$ |
6,719 |
| ||
| Accrued liabilities |
|
56,987 |
|
|
56,082 |
| ||
| Accrued restructuring |
|
7,864 |
|
|
12,224 |
| ||
| Unearned revenues |
|
28,015 |
|
|
24,791 |
| ||
| Total current liabilities |
|
97,224 |
|
|
99,816 |
| ||
| Accrued restructuring, non-current |
|
26,176 |
|
|
30,809 |
| ||
| Other non-current liabilities |
|
6,477 |
|
|
6,492 |
| ||
| Total liabilities |
|
129,877 |
|
|
137,117 |
| ||
| Stockholders’ equity: |
||||||||
| Common stock and additional paid-in capital, par value $0.001 per common
share; |
|
746,730 |
|
|
734,816 |
| ||
| Treasury stock at cost; 1,818 common shares at December 31, 2002 and March 31, 2002 |
|
(33,649 |
) |
|
(33,649 |
) | ||
| Deferred stock compensation |
|
— |
|
|
(281 |
) | ||
| Accumulated other comprehensive loss |
|
(54 |
) |
|
(158 |
) | ||
| Accumulated deficit |
|
(325,367 |
) |
|
(320,007 |
) | ||
| Total stockholders’ equity |
|
387,660 |
|
|
380,721 |
| ||
| Total liabilities and stockholders’ equity |
$ |
517,537 |
|
$ |
517,838 |
| ||
See accompanying notes to condensed consolidated financial statements.
3
MACROMEDIA, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| Three Months Ended |
Nine Months Ended |
|||||||||||||||
| 2002 |
2001 |
2002 |
2001 |
|||||||||||||
| Net revenues |
$ |
82,598 |
|
$ |
73,316 |
|
$ |
251,694 |
|
$ |
249,145 |
| ||||
| Cost of revenues |
|
8,179 |
|
|
11,472 |
|
|
26,347 |
|
|
32,496 |
| ||||
| Gross profit |
|
74,419 |
|
|
61,844 |
|
|
225,347 |
|
|
216,649 |
| ||||
| Operating expenses: |
||||||||||||||||
| Sales and marketing |
|
36,006 |
|
|
38,726 |
|
|
108,826 |
|
|
133,153 |
| ||||
| Research and development |
|
20,967 |
|
|
26,553 |
|
|
71,013 |
|
|
84,039 |
| ||||
| General and administrative |
|
7,731 |
|
|
10,157 |
|
|
28,105 |
|
|
32,780 |
| ||||
| Impairment of intangible assets |
|
— |
|
|
— |
|
|
17,316 |
|
|
— |
| ||||
| Amortization of intangible assets |
|
414 |
|
|
28,530 |
|
|
7,142 |
|
|
86,043 |
| ||||
| Restructuring expenses |
|
— |
|
|
— |
|
|
— |
|
|
39,539 |
| ||||
| Total operating expenses |
|
65,118 |
|
|
103,966 |
|
|
232,402 |
|
|
375,554 |
| ||||
| Operating income (loss) |
|
9,301 |
|
|
(42,122 |
) |
|
(7,055 |
) |
|
(158,905 |
) | ||||
| Other income (expense): |
||||||||||||||||
| Interest income and other, net |
|
9499 |
|
|
968 |
|
|
2,836 |
|
|
5,546 |
| ||||
| Gain (loss) on non-marketable investments, net |
|
602 |
|
|
200 |
|
|
(148 |
) |
|
(6,385 |
) | ||||
| Loss on equity affiliate |
|
— |
|
|
— |
|
|
— |
|
|
(36,016 |
) | ||||
| Gain on sale of acquired technology |
|
1,000 |
|
|
— |
|
|
1,000 |
|
|
— |
| ||||
| Litigation settlements |
|
(2,500 |
) |
|
— |
|
|
322 |
|
|
(28,500 |
) | ||||
| Total other income (expense) |
|
51 |
|
|
1,168 |
|
|
4,010 |
|
|
(65,355 |
) | ||||
| Income (loss) before income taxes |
|
9,352 |
|
|
(40,954 |
) |
|
(3,045 |
) |
|
(224,260 |
) | ||||
| Provision for income taxes |
|
(1,065 |
) |
|
(1,983 |
) |
|
(2,315 |
) |
|
(1,155 |
) | ||||
| Net income (loss) |
|
$ 8,287 |
|
|
$ (42,937 |
) |
||||||||||