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

o

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  0-27560

ACT Teleconferencing, Inc.

(Exact name of registrant as specified in its charter)

Colorado

84-1132665

(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification No.)

1658 Cole Blvd., Suite 130, Golden, Colorado  80401

(Address of principal executive offices, zip code)

(303) 235-9000

(Registrant’s telephone number, including area code)

Yes   x

No   o

Yes   o

No   x

Page No.

PART I.

Financial Information

Item 1.

Financial Statements (Unaudited)

Consolidated Balance Sheets

3

Consolidated Statements of Operations

4

Consolidated Statements of Shareholders’ Equity

5

Consolidated Statements of Cash Flow

6

Notes to Consolidated Financial Statements

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

15

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

21

Item 4.

Controls and Procedures

21

PART II.

Other Information

Item 6.

Exhibits and Reports on Form 8-K

22

SIGNATURE

23

CERTIFICATIONS

24

In Thousands (000s) – except for share data

March 31
2003

December 31
2002

Assets

Current assets:

Cash and cash equivalents

$

1,907

$

3,176

Accounts receivable (net of allowance for doubtful accounts of $867 and $1,029 in 2003 and 2002, respectively)

11,871

11,498

Short term note receivable and accrued interest from a related party

273

268

Prepaid expenses and other current assets

1,764

1,285

Total current assets

15,815

16,227

Equipment:

Telecommunications equipment

21,968

21,684

Software

5,772

5,510

Office equipment

10,218

10,024

Less: accumulated depreciation

(15,043

)

(13,773

)

Total equipment – net

22,915

23,445

Other assets:

Goodwill

18,264

18,264

Other intangible assets (net of accumulated amortization of $672 and $527 in 2003 and 2002, respectively)

893

1,104

Investments

100

100

Other long term assets

316

320

Total assets

$

58,303

$

59,460

Liabilities and shareholders’ equity

Current liabilities:

Accounts payable

$

7,275

$

7,448

Accrued liabilities

4,276

3,849

Deferred revenue – current

1,680

1,728

Current debt due to a related party

500

—  

Current portion of debt

5,071

5,019

Capital lease obligations due in one year

1,255

1,243

Income taxes payable

369

560

Total current liabilities

20,426

19,847

Long-term debt

4,525

4,676

Long-term debt due to related party

4,019

4,019

Capital lease obligations due after one year

1,029

1,358

Deferred revenue – long term

1,234

1,643

Deferred income taxes

400

378

Convertible, redeemable preferred stock, 500 shares authorized, Issued, and outstanding, net of discount

1,880

2,698

Shareholders’ equity:

Common stock, no par value; 25,000,000 shares authorized 10,132,660 and 8,972,623 shares issued and outstanding in 2003 and 2002, respectively

39,600

38,370

Treasury stock, at cost

(241

)

(236

)

Accumulated deficit

(13,499

)

(12,453

)

Accumulated other comprehensive loss

(1,070

)

(840

)

Total shareholders’ equity

24,790

24,841

Total liabilities and shareholder’s equity

$

58,303

$

59,460

For the three months ended
March 31,

In thousands (000s) except for per share amounts

2003

2002

Net revenues

$

14,908

12,770

Cost of services

9,857

8,345

Gross profit

5,051

4,425

Selling, general and administration expense

5,527

5,500

Operating loss

(476

)

(1,075

)

Interest expense, net

311

344

Loss before income taxes

(787

)

(1,419

)

Provision for income taxes

31

122

Net loss

(818

)

(1,541

)

Preferred stock dividends

228

—  

Net loss available to common shareholders

$

(1,046

)

$

(1,541

)

Weighted average number of shares outstanding - basic

9,479,998

8,978,257

Weighted average number of shares outstanding - diluted

9,479,998

8,978,257

Loss per share

Basic and diluted

$

(0.11

)

$

(0.17

)

In Thousands (000s) – except for share data

Common Stock

Accumulated
Deficit

Accumulated
other
comprehensive
income (loss)

Treasury
stock

Total

Shares

Amount

Balance at January 1, 2003

8,972,623

$

38,370

$

(12,453

)

$

(840

)

$

(236

)

$

24,841

Issue of shares in redemption payment of preferred stock

861,504

831

831

Shares purchased by employees

15,427

17

17

Purchase of treasury stock

(5,500

)

(5

)

(5

)

Value of stock issued to employees and directors as compensation

288,606

382

382

Preferred dividend and accretion to redemption value of convertible, redeemable, preferred stock

(228

)

(228

)

Comprehensive loss

Net loss

(818

)

(818

)

Other comprehensive loss, net of tax Foreign currency translation

(230

)

(230

)

Total comprehensive loss

(1,048

)

Balance at March 31, 2003

10,132,660

$

39,600

$

(13,499

)

$

(1,070

)

$

(241

)

$

24,790

For the three months ended
March 31

In thousands (000s)

2003

2002

Operating activities

Net (loss)

$

(818

)

$

(1,541

)

Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:

Depreciation