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 March 31, 2003 |
Commission File Number: 000-25291
TUT SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
| Delaware |
394-2958543 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| 5200 Franklin Drive, Suite 100 Pleasanton, California |
94588 | |
| (Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (925) 490-3900
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 ¨
As of April 23, 2003, 19,805,041 shares of the Registrant’s common stock, par value $0.001 per share, were issued and outstanding.
TUT SYSTEMS, INC.
FORM 10-Q
| PART I. FINANCIAL INFORMATION |
||||
| Item 1. |
Condensed Consolidated Financial Statements (unaudited): |
|||
| Condensed Consolidated Balance Sheets as of March 31, 2003 and December 31, 2002 |
3 | |||
| 4 | ||||
| 5 | ||||
| Notes to Unaudited Condensed Consolidated Financial Statements |
6 | |||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
18 | ||
| Item 3. |
37 | |||
| Item 4. |
38 | |||
| PART II. OTHER INFORMATION | ||||
| Item 1. |
38 | |||
| Item 2. |
39 | |||
| Item 3. |
39 | |||
| Item 4. |
39 | |||
| Item 5. |
39 | |||
| Item 6. |
39 | |||
| 42 | ||||
| 43 | ||||
2
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
TUT SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
| March 31, 2003 |
December 31, 2002 |
|||||||
| (unaudited) |
||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
20,960 |
|
$ |
25,571 |
| ||
| Accounts receivable, net of allowance for doubtful accounts of $10 in 2003 and 2002 |
|
2,172 |
|
|
1,972 |
| ||
| Inventories, net |
|
3,840 |
|
|
3,888 |
| ||
| Prepaid expenses and other |
|
1,543 |
|
|
1,082 |
| ||
| Total current assets |
|
28,515 |
|
|
32,513 |
| ||
| Property and equipment, net |
|
1,662 |
|
|
1,630 |
| ||
| Intangibles and other assets |
|
5,131 |
|
|
5,586 |
| ||
| Total assets |
$ |
35,308 |
|
$ |
39,729 |
| ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
1,565 |
|
$ |
1,272 |
| ||
| Accrued liabilities |
|
3,596 |
|
|
5,924 |
| ||
| Deferred revenue |
|
716 |
|
|
921 |
| ||
| Total current liabilities |
|
5,877 |
|
|
8,117 |
| ||
| Deferred revenue, net of current portion |
|
11 |
|
|
35 |
| ||
| Note Payable |
|
3,326 |
|
|
3,262 |
| ||
| Other liabilities |
|
75 |
|
|
84 |
| ||
| Total liabilities |
|
9,289 |
|
|
11,498 |
| ||
| Commitments and contingencies (Note 6 ) |
||||||||
| Stockholders’ equity: |
||||||||
| Common stock, $0.001 par value, 100,000 shares authorized, 19,805 and 19,796 shares issued and outstanding in 2003 and 2002 |
|
20 |
|
|
20 |
| ||
| Additional paid-in capital |
|
304,899 |
|
|
304,888 |
| ||
| Accumulated other comprehensive loss |
|
(133 |
) |
|
(141 |
) | ||
| Accumulated deficit |
|
(278,767 |
) |
|
(276,536 |
) | ||
| Total stockholders’ equity |
|
26,019 |
|
|
28,231 |
| ||
| Total liabilities and stockholders’ equity |
$ |
35,308 |
|
$ |
39,729 |
| ||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
TUT SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Revenues: |
||||||||
| Product |
$ |
6,401 |
|
$ |
2,162 |
| ||
| License and royalty |
|
200 |
|
|
196 |
| ||
| Total revenues |
|
6,601 |
|
|
2,358 |
| ||
| Cost of goods sold: |
||||||||
| Product |
|
3,259 |
|
|
1,523 |
| ||
| Gross margin |
|
3,342 |
|
|
835 |
| ||
| Operating expenses: |
||||||||
| Sales and marketing |
|
1,927 |
|
|
2,316 |
| ||
| Research and development |
|
2,086 |
|
|
3,287 |
| ||
| General and administrative |
|
1,202 |
|
|
1,958 |
| ||
| Amortization of intangibles |
|
459 |
|
|
300 |
| ||
| Total operating expenses |
|
5,674 |
|
|
7,861 |
| ||
| Loss from operations |
|
(2,332 |
) |
|
(7,026 |
) | ||
| Interest and other income, net |
|
101 |
|
|
245 |
| ||
| Net loss |
$ |
(2,231 |
) |
$ |
(6,781 |
) | ||
| Net loss per share, basic and diluted (Note 3) |
$ |
(0.11 |
) |
$ |
(0.41 |
) | ||
| Shares used in computing net loss per share, basic and diluted (Note 3 ) |
|
19,801 |
|
|
16,407 |
| ||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
TUT SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ |
(2,231 |
) |
$ |
(6,781 |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Depreciation and other |
|
235 |
|
|
877 |
| ||
| Noncash interest income |
|
10 |
|
|
— |
| ||
| Recovery of allowance for doubtful accounts |
|
(15 |
) |
|
— |
| ||
| Provision for excess and obsolete inventory and abandoned products |
|
— |
|
|
265 |
| ||
| Amortization of intangibles |
|
459 |
|
|
300 |
| ||
| Change in operating assets and liabilities: |
||||||||
| Accounts receivable |
|
(185 |
) |
|
298 |
| ||
| Inventories |
|
48 |
|
|
886 |
| ||
| Prepaid expenses and other assets |
|
(467 |
) |
|
(578 |
) | ||
| Accounts payable and accrued liabilities |
|
(1,980 |
) |
|
(1,430 |
) | ||
| Deferred revenue |
|
(229 |
) |
|
(313 |
) | ||
| Net cash used in operating activities |
|
(4,355 |
) |
|
(6,476 |
) | ||
| Cash flows from investing activities: |
||||||||
| Purchase of property and equipment |
|
(267 |
) |
|
(241 |
) | ||
| Net cash used in investing activities |
|
(267 |
) |
|
(241 |
) | ||
| Cash flows from financing activities: |
||||||||
| Proceeds from issuances of common stock, net |
|
11 |
|
|
— |
| ||
| Net cash provided by financing activities |
|
11 |
|
|
— |
| ||
| Net decrease in cash and cash equivalents |
|
(4,611 |
) |
|
(6,717 |
) | ||
| Cash and cash equivalents, beginning of period |
|
25,571 |
|
|
46,338 |
| ||
| Cash and cash equivalents, end of period |
$ |
20,960 |
|
$ |
39,621 |
| ||
The accompanying notes are an integral part of these condensed consolidated financial statements.