x |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| Delaware |
91-1718107 | |
| (State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification
No.) | |
| 601 108th Avenue NE, Suite 1200 Bellevue, Washington |
98004 | |
| (Address of principal executive offices) |
(Zip Code) |
| Class |
Outstanding at October 31,
2002 | |
| Common Stock, Par Value $.0001 |
30,941,023 |
| Item 1. |
Financial Statements |
|||
| 3 | ||||
| 4 | ||||
| 5 | ||||
| 6 | ||||
| Item 2. |
Managements Discussion and Analysis of Financial Condition and Results of Operations |
|||
| 19 | ||||
| 25 | ||||
| 31 | ||||
| 33 | ||||
| Item 3. |
50 | |||
| Item 4. |
50 | |||
| Part II Other Information |
||||
| Item 1. |
51 | |||
| Item 2. |
54 | |||
| Items 3 and 5 are not applicable with respect to the current reporting period. |
||||
| Item 4. |
54 | |||
| Item 6. |
54 | |||
| 56 | ||||
| 57 | ||||
| September 30, 2002 |
December 31, 2001 (audited) |
|||||||
| (Amounts in thousands, except share data) |
||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
134,160 |
|
$ |
118,561 |
| ||
| Short-term investments, available-for-sale |
|
141,042 |
|
|
80,319 |
| ||
| Accounts receivable, net |
|
17,322 |
|
|
16,305 |
| ||
| Notes receivable, net |
|
1,842 |
|
|
2,888 |
| ||
| Other receivables, net |
|
9,311 |
|
|
11,095 |
| ||
| Payroll tax receivable |
|
13,214 |
|
|
13,214 |
| ||
| Prepaid expenses and other current assets |
|
5,169 |
|
|
8,239 |
| ||
| |
|
|
|
|
| |||
| Total current assets |
|
322,060 |
|
|
250,621 |
| ||
| Long-term investments, available-for-sale |
|
|
|
|
94,891 |
| ||
| Property and equipment, net |
|
29,830 |
|
|
39,443 |
| ||
| Other long term assets |
|
781 |
|
|
1,403 |
| ||
| Other investments |
|
23,981 |
|
|
47,087 |
| ||
| Goodwill, net |
|
153,948 |
|
|
356,476 |
| ||
| Other intangible assets, net |
|
17,881 |
|
|
47,084 |
| ||
| |
|
|
|
|
| |||
| Total assets |
$ |
548,481 |
|
$ |
837,005 |
| ||
| |
|
|
|
|
| |||
| LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
3,495 |
|
$ |
9,139 |
| ||
| Accrued expenses and other current liabilities |
|
19,877 |
|
|
25,791 |
| ||
| Short-term deferred revenue |
|
11,589 |
|
|
15,794 |
| ||
| |
|
|
|
|
| |||
| Total current liabilities |
|
34,961 |
|
|
50,724 |
| ||
| Long-term deferred revenue |
|
1,590 |
|
|
3,693 |
| ||
| |
|
|
|
|
| |||
| Total liabilities |
|
36,551 |
|
|
54,417 |
| ||
| Contingencies (Note 9) |
|
|
|
|
|
| ||
| Stockholders equity: |
||||||||
| Preferred stock, par value $.0001Authorized, 15,000,000 shares; issued and outstanding, 2 shares,
respectively |
|
|
|
|
|
| ||
| Common stock, par value $.0001Authorized, 900,000,000 shares; issued and outstanding, 30,927,107 and 30,778,930
shares, respectively |
|
3 |
|
|
3 |
| ||
| Additional paid-in capital |
|
1,704,356 |
|
|
1,702,550 |
| ||
| Accumulated deficit |
|
(1,191,565 |
) |
|
(910,725 |
) | ||
| Deferred expensewarrants |
|
(155 |
) |
|
(680 |
) | ||
| Unearned compensation |
|
(1,264 |
) |
|
(7,881 |
) | ||
| Accumulated other comprehensive income (loss) |
|
555 |
|
|
(679 |
) | ||
| |
|
|
|
|
| |||
| Total stockholders equity |
|
511,930 |
|
|
782,588 |
| ||
| |
|
|
|
|
| |||
| Total liabilities and stockholders equity |
$ |
548,481 |
|
$ |
837,005 |
| ||
| |
|
|
|
|
| |||
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2002 |
2001 |
2002 |
2001 |
|||||||||||||
| (Amounts in thousands, except per share data) |
||||||||||||||||
| Revenues (including related party revenues of $654, $3,819, $2,162 and $28,376 respectively) |
$ |
33,571 |
|
$ |
33,051 |
|
$ |
99,981 |
|
$ |
130,558 |
| ||||
| Cost of revenue |
|
8,661 |
|
|
9,460 |
|
|
28,045 |
|
|
31,795 |
| ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Gross profit |
|
24,910 |
|
|
23,591 |
|
|
71,936 |
|
|
98,763 |
| ||||
| Operating expenses: |
||||||||||||||||
| Product development |
|
8,372 |
|
|
9,051 |
|
|
27,315 |
|
|
31,407 |
| ||||
| Sales, general and administrative |
|
19,564 |
|
|
27,694 |
|
|
69,351 |
|
|
95,472 |
| ||||
| Impairment of intangible assets |
|
15,474 |
|
|
99,157 |
|
|
15,474 |
|
|
99,157 |
| ||||
| Amortization of goodwill |
|
|
|
|
51,153 |
|
|
|
|
|
162,688 |
| ||||
| Amortization of other intangible assets |
|
3,120 |
|
|
6,830 |
|
|
14,784 |
|
|
18,299 |
| ||||
| Acquisition and other related charges |
|
|
|
|
(4,504 |
) |
|
|
|
|
(3,504 |
) | ||||
| Other charges, net |
|
22 |
|
|
1,660 |
|
|
821 |
|
|
1,827 |
| ||||
| Restructuring charges |
|
1,056 |
|
|
13,755 |
|
|
1,056 |
|
|
15,410 |
| ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Total operating expenses |
|
47, 608 |
|
|
204,796 |
|
|
128,801 |
|
|
420,756 |
| ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Loss from operations |
|
(22,698 |
) |
|
(181,205 |
) |
|
(56,865 |
) |
|
(321,993 |
) | ||||
| Loss on investments |
|
(5,532 |
) |
|
(26,753 |
) |
|
(22,788 |
) |
|
(88,451 |
) | ||||
| Other income, net |
|
1,706 |
|
|
3,764 |
|
|
5,765 |
|
|
14,327 |
| ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Loss before income tax expense, minority interest and cumulative effect of changes in accounting principle
|
|
(26,524 |
) |
|
(204,194 |
) |
|
(73,888 |
) |
|
(396,117 |
) | ||||
| Minority interest |
|
|
|
|
|
|
|
|
|
|
(17 |
) | ||||
| Income tax expense |
|
(93 |
) |
|
(557 |
) |
|
(333 |
) |
|
(744 |
) | ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Loss before cumulative effect of changes in accounting principle |
|
(26,617 |
) |
|
(204,751 |
) |
|
(74,221 |
) |
|
(396,878 |
) | ||||
| Cumulative effect of changes in accounting principle |
|
|
|
|
|
|
|
(206,619 |
) |
|
(3,171 |
) | ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Net loss |
$ |
(26,617 |
) |
$ |
(204,751 |
) |
$ |
(280,840 |
) |
$ |
(400,049 |
) | ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Basic and diluted net loss per share: |
||||||||||||||||
| Prior to cumulative effect of changes in accounting principle |
$ |
(0.86 |
) |
$ |
(6.38 |
) |
$ |
(2.40 |
) |
$ |
(12.29 |
) | ||||
| Cumulative effect of changes in accounting principle |
|
|
|
|
|
|
|
(6.69 |
) |
|
(0.10 |
) | ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Basic and diluted net loss per share |
$ |
(0.86 |
) |
$ |
(6.38 |
) |
$ |
(9.09 |
) |
$ |
(12.39 |
) | ||||
| |
|
|
|
|
|
|
|
|
|
|
| |||||
| Shares used in basic and diluted net loss per share calculations |
|
30,912 |
|
|
32,072 |
|
|
30,892 |
< | |||||||