UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended December 31, 2002
Commission file number: 0-25137
CONCUR TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
| Delaware |
91-1608052 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
6222 185th Avenue NE
Redmond, Washington 98052
(Address of principal executive offices)
(425) 702-8808
(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 requirements for the past 90 days: Yes x No ¨
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act): Yes ¨ No x
As of February 5, 2003, there were 30,995,680 shares of the Registrant’s Common Stock outstanding.
CONCUR TECHNOLOGIES, INC.
FORM 10-Q
DECEMBER 31, 2002
| Page | ||||||
| PART I. |
3 | |||||
| ITEM 1. |
3 | |||||
| Consolidated Balance Sheets as of December 31, 2002 and September 30, 2002 |
3 | |||||
| Consolidated Statements of Operations for the three months ended December 31, 2002 and 2001 |
4 | |||||
| Consolidated Statements of Cash Flows for the for the three months ended December 31, 2002 and 2001 |
5 | |||||
| 6 | ||||||
| ITEM 2. |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
12 | ||||
| ITEM 3. |
28 | |||||
| ITEM 4. |
28 | |||||
| PART II. |
29 | |||||
| ITEM 2: |
29 | |||||
| ITEM 6. |
29 | |||||
2
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
Concur Technologies, Inc.
(In thousands, except share and per share data)
(Unaudited)
| December 31, 2002 |
September 30, 2002 |
|||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
13,656 |
|
$ |
13,746 |
| ||
| Marketable securities |
|
2,024 |
|
|
2,024 |
| ||
| Accounts receivable (1), net of allowance for doubtful accounts of $577 and $681 at December 31, 2002 and September 30, 2002, respectively |
|
9,089 |
|
|
8,918 |
| ||
| Prepaid expenses and other current assets |
|
2,436 |
|
|
1,299 |
| ||
| Total current assets |
|
27,205 |
|
|
25,987 |
| ||
| Property and equipment, net |
|
2,223 |
|
|
3,003 |
| ||
| Restricted cash |
|
1,950 |
|
|
1,250 |
| ||
| Acquired customer base intangible asset, net of amortization |
|
5,225 |
|
|
5,510 |
| ||
| Goodwill relating to acquisition |
|
2,996 |
|
|
2,179 |
| ||
| Deposits and other assets |
|
217 |
|
|
339 |
| ||
| Total assets |
$ |
39,816 |
|
$ |
38,268 |
| ||
| Liabilities and stockholders’ equity |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
1,246 |
|
$ |
2,817 |
| ||
| Accrued payroll and benefits |
|
896 |
|
|
773 |
| ||
| Accrued commissions |
|
502 |
|
|
588 |
| ||
| Other accrued liabilities (2) |
|
3,579 |
|
|
4,162 |
| ||
| Current portion of long-term obligations |
|
1,320 |
|
|
1,079 |
| ||
| Deferred revenues |
|
9,936 |
|
|
8,406 |
| ||
| Total current liabilities |
|
17,479 |
|
|
17,825 |
| ||
| Long-term obligations, net of current |
|
646 |
|
|
746 |
| ||
| Stockholders’ equity: |
||||||||
| Common stock, par value $0.001 per share: |
||||||||
| Authorized shares — 60,000,000; Issued and outstanding shares — 30,913,056 and 26,155,592 at December 31, 2002 and September 30, 2002, respectively |
|
234,459 |
|
|
223,500 |
| ||
| Common stock to be issued — 4,160,410 shares at September 30, 2002 |
|
— |
|
|
8,952 |
| ||
| Accumulated deficit |
|
(212,768 |
) |
|
(212,755 |
) | ||
| Total stockholders’ equity |
|
21,691 |
|
|
19,697 |
| ||
| Total liabilities and stockholders’ equity |
$ |
39,816 |
|
$ |
38,268 |
| ||
(1) Includes amounts due from related parties of $240,000 and $226,000 at December 31, 2002 and September 30, 2002, respectively.
(2) Includes amounts due to related parties of $314,000 and $145,000 at December 31, 2002 and September 30, 2002, respectively.
See accompanying notes.
3
Concur Technologies, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| Three Months Ended December 31, |
||||||||
| 2002 |
2001 |
|||||||
| Revenues: |
||||||||
| License |
$ |
2,766 |
|
$ |
2,157 |
| ||
| Subscription |
|
4,902 |
|
|
2,002 |
| ||
| Service |
|
6,928 |
|
|
6,187 |
| ||
| Total revenues (1) |
|
14,596 |
|
|
10,346 |
| ||
| Cost of revenues: |
||||||||
| License |
|
174 |
|
|
111 |
| ||
| Subscription |
|
3,018 |
|
|
2,400 |
| ||
| Service |
|
3,073 |
|
|
3,056 |
| ||
| Total cost of revenues (2) |
|
6,265 |
|
|
5,567 |
| ||
| Gross profit |
|
8,331 |
|
|
4,779 |
| ||
| Operating expenses: |
||||||||
| Sales and marketing |
|
3,807 |
|
|
4,402 |
| ||
| Research and development |
|
2,707 |
|
|
2,535 |
| ||
| General and administrative |
|
1,554 |
|
|
2,167 |
| ||
| Amortization of intangible assets |
|
285 |
|
|
— |
| ||
| Total operating expenses |
|
8,353 |
|
|
9,104 |
| ||
| Loss from operations |
|
(22 |
) |
|
(4,325 |
) | ||
| Interest income |
|
57 |
|
|
142 |
| ||
| Interest expense |
|
(44 |
) |
|
(70 |
) | ||
| Other income (expense), net |
|
(4 |
) |
|
14 |
| ||
| Net loss |
$ |
(13 |
) |
$ |
(4,239 |
) | ||
| Basic and diluted net loss per share |
$ |
(0.00 |
) |
$ |
(0.16 |
) | ||
| Shares used in calculation of basic and diluted net loss per share |
|
30,435 |
|
|
25,817 |
| ||
(1) Includes sales to related parties of $306,000 and $584,000 in the three months ended December 31, 2002 and 2001, respectively.
(2) Includes payments to related parties of $386,000 and $236,000 in the three months ended December 31, 2002 and 2001, respectively.
See accompanying notes.
4
Concur Technologies, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Three Months Ended December 31, |
||||||||
| 2002 |
2001 |
|||||||
| Operating activities |
||||||||
| Net loss |
$ |
(13 |
) |
$ |
(4,239 |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Amortization of intangible assets |
|
285 |
|
|
— |
| ||
| Depreciation |
|
1,019 |
|
|
1,555 |
| ||
| Provision for bad debts |
|
(105 |
) |
|
— |
| ||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
|
(65 |
) |
|
1,414 |
| ||
| Prepaid expenses, deposits, and other assets |
|
(1,015 |
) |
|
(172 |
) | ||
| Accounts payable |
|
(490 |
) |
|
125 |
| ||
| Accrued liabilities and accrued commissions |
|
(129 |
) |
|
(2,507 |
) | ||
| Deferred revenues |
|
1,530 |
|
|
592 |
| ||
| Net cash provided by (used in) operating activities |
|
1,017 |
|
|
(3,232 |
) | ||
| Investing activities |
||||||||
| Purchases of property and equipment |
|
(239 |
) |
|
(995 |
) | ||
| Purchases of marketable securities |
|
— |
|
|
(2,000 |
) | ||
| Maturities of marketable securities |
|
— |
|
|
4,064 |
| ||
| Increase in restricted cash balances |
|
(700 |
) |
|
— |
| ||
| Payments of acquisition costs |
|
(415 |
) |
|
— |
| ||
| Net cash (used in) provided by investing activities |
|
(1,354 |
) |
|
1, | |||