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 April 4, 2003 |
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 |
65-0750100 | |
| (State or other jurisdiction of |
(I.R.S. Employer | |
| Incorporation or organization) |
Identification Number) |
|
1001 Brickell Bay Drive, Suite 3000 |
||
| Miami, Florida |
33131 | |
| (Address of principal executive offices) |
(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 by check mark whether registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2 of the Securities Exchange Act of 1934). 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 May 2, 2003, there were 45,447,365 shares of common stock outstanding.
Answerthink, Inc.
| PART I FINANCIAL INFORMATION |
||||
| Item 1. |
Financial Statements |
|||
| Consolidated Balance Sheets as of April 4, 2003 and January 3, 2003 |
3 | |||
| Consolidated Statements of Operations for the Quarters Ended April 4, 2003 and March 29, 2002 |
4 | |||
| Consolidated Statements of Cash Flows for the Quarters Ended April 4, 2003 and March 29, 2002 |
5 | |||
| 6 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
10 | ||
| Item 3. |
14 | |||
| Item 4. |
14 | |||
| PART II OTHER INFORMATION |
||||
| Item 1. |
15 | |||
| Item 6. |
15 | |||
| 16 | ||||
| 17 | ||||
| 19 | ||||
2
PART I – FINANCIAL INFORMATION
Answerthink, Inc.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
| April 4, 2003 |
January 3, 2003 |
|||||||
|
|
(unaudited |
) |
||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
58,040 |
|
$ |
63,419 |
| ||
| Restricted cash |
|
2,914 |
|
|
2,909 |
| ||
| Accounts receivable and unbilled revenue, net of allowance of $3,647 and $3,526 in 2003 and 2002, respectively |
|
22,852 |
|
|
24,159 |
| ||
| Prepaid expenses and other current assets |
|
12,891 |
|
|
14,678 |
| ||
| Total current assets |
|
96,697 |
|
|
105,165 |
| ||
| Property and equipment, net |
|
10,936 |
|
|
11,790 |
| ||
| Other assets |
|
1,675 |
|
|
1,686 |
| ||
| Goodwill, net |
|
26,720 |
|
|
26,720 |
| ||
| Total assets |
$ |
136,028 |
|
$ |
145,361 |
| ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
4,162 |
|
$ |
5,684 |
| ||
| Accrued expenses and other liabilities |
|
21,472 |
|
|
26,630 |
| ||
| Total current liabilities |
|
25,634 |
|
|
32,314 |
| ||
| 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: 47,728,129 shares at April 4, 2003; 47,728,129 shares at January 3, 2003 |
|
48 |
|
|
48 |
| ||
| Additional paid-in capital |
|
263,659 |
|
|
263,626 |
| ||
| Treasury stock, at cost, 1,858,664 shares at April 4, 2003 and 1,146,000 shares at January 3, 2003 |
|
(3,872 |
) |
|
(2,208 |
) | ||
| Accumulated deficit |
|
(149,441 |
) |
|
(148,419 |
) | ||
| Total shareholders’ equity |
|
110,394 |
|
|
113,047 |
| ||
| Total liabilities and shareholders’ equity |
$ |
136,028 |
|
$ |
145,361 |
| ||
The accompanying notes are an integral part of the consolidated financial statements.
3
Answerthink, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
| Quarter Ended |
||||||||
| April 4, 2003 |
March 29, 2002 |
|||||||
| Revenues: |
||||||||
| Revenues before reimbursements |
$ |
32,856 |
|
$ |
43,445 |
| ||
| Reimbursements |
|
3,929 |
|
|
6,243 |
| ||
| Total revenues |
|
36,785 |
|
|
49,688 |
| ||
| Costs and expenses: |
||||||||
| Project personnel and expenses: |
||||||||
| Project personnel and expenses before reimbursable expenses |
|
21,562 |
|
|
29,226 |
| ||
| Reimbursable expenses |
|
3,929 |
|
|
6,243 |
| ||
| Total project personnel and expenses |
|
25,491 |
|
|
35,469 |
| ||
| Selling, general and administrative expenses |
|
12,540 |
|
|
14,411 |
| ||
| Total costs and operating expenses |
|
38,031 |
|
|
49,880 |
| ||
| Loss from operations |
|
(1,246 |
) |
|
(192 |
) | ||
| Other income (expense): |
||||||||
| Interest income |
|
224 |
|
|
156 |
| ||
| Interest expense |
|
— |
|
|
(46 |
) | ||
| Loss before income taxes, loss from discontinued operations and cumulative effect of change in accounting principle |
|
(1,022 |
) |
|
(82 |
) | ||
| Income taxes |
|
— |
|
|
(616 |
) | ||
| Income (loss) from continuing operations |
|
(1,022 |
) |
|
534 |
| ||
| Loss from discontinued operations |
|
— |
|
|
(1,457 |
) | ||
| Loss before cumulative effect in change in accounting principle |
|
(1,022 |
) |
|
(923 |
) | ||
| Cumulative effect of change in accounting principle |
|
— |
|
|
(31,200 |
) | ||
| Net loss |
$ |
(1,022 |
) |
$ |
(32,123 |
) | ||
| Basic net income (loss) per common share: |
||||||||
| Income (loss) from continuing operations |
$ |
(0.02 |
) |
$ |
0.01 |
| ||
| Loss from discontinued operations |
$ |
— |
|
$ |
(0.03 |
) | ||
| Cumulative effect of change in accounting principle |
$ |
— |
|
$ |
(0.68 |
) | ||
| Net loss per common share |
$ |
(0.02 |
) |
$ |
(0.70 |
) | ||
| Weighted average common shares outstanding |
|
46,296 |
|
|
45,868 |
| ||
| Diluted net income (loss) per common share: |
||||||||
| Income (loss) from continuing operations |
$ |
(0.02 |
) |
$ |
0.01 |
| ||
| Loss from discontinued operations |
$ |
— |
|
$ |
(0.03 |
) | ||
| Cumulative effect of change in accounting principle |
$ |
— |
|
$ |
(0.66 |
) | ||
| Net loss per common share |
$ |
(0.02 |
) |
$ |
(0.68 |
) | ||
| Weighted average common and common equivalent shares outstanding |
|
46,296 |
|
|
47,211 |
| ||
The accompanying notes are an integral part of the consolidated financial statements.
4
Answerthink, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Quarter Ended |
||||||||
| April 4, 2003 |
March 29, 2002 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ |
(1,022 |
) |
$ |
(32,123 |
) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
||||||||
| Cumulative effect of change in accounting principle |
|
— |
|
|
31,200 |
| ||
| Depreciation and amortization |
|
1,226 |
|
|
1,342 |
| ||
| Provision for doubtful accounts |
|
150 |
|
|
4 |
| ||
| Deferred income taxes |
|
— |
|
|
(616 |
) | ||
| Changes in assets and liabilities, net of effects from acquisitions: |
||||||||
| Decrease in accounts receivable and unbilled revenue |
|
1,157 |
|
|
5,003 |
| ||
| Decrease in prepaid expenses and other assets |
|
1,700 |
|
|
995 |
| ||
| Increase (decrease) in accounts payable |
|
(1,522 |
) |
|
783 |
| ||
| Decrease in accrued expenses and other liabilities |
|
(5,126 |
) |
|
(6,569 |
) | ||
| Net cash provided by (used in) operating activities |
|
(3,437 |
) |
|
19 |
| ||
| Cash flows from investing activities: |
||||||||
| Purchases of property and equipment |
|
(273 |
) |
|
(1,026 |
) | ||
| Increase in restricted cash |
|
(5 |
) |
|
— |
| ||