UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the period ended June 30, 2002
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 000-29357
Chordiant Software, Inc.
(Exact name of Registrant as specified in its Charter)
|
Delaware |
93-105328 |
|
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification Number) |
20400 Stevens Creek Boulevard, Suite 400
Cupertino, CA 95014
(Address of Principal Executive Offices including Zip Code)
(408) 517-6100
(Registrant's Telephone Number, Including Area Code)
(Former name, former address and former fiscal year if changed
since last report)
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 reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ]
The number of shares of the Registrant's Common Stock outstanding as of July 25, 2002 was 55,072,080.
CHORDIANT SOFTWARE, INC.
QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 2002
TABLE OF CONTENTS
PART I -- FINANCIAL INFORMATION
CHORDIANT SOFTWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In
thousands)
(Unaudited)
| |
June 30, 2002 |
December
31, 2001 |
|||||||
|---|---|---|---|---|---|---|---|---|---|
| ASSETS | |||||||||
Current assets: |
|||||||||
| Cash and cash equivalents(1) | $ | 30,127 | $ | 27,068 | |||||
| Short-term investments and restricted cash(1) | 13,466 | 24,072 | |||||||
| Accounts receivable, net | 14,277 | 21,573 | |||||||
| Other current assets | 3,307 | 5,267 | |||||||
|
|
|
||||||||
| Total current assets | 61,177 | 77,980 | |||||||
| Property and equipment, net | 6,674 | 7,083 | |||||||
| Goodwill, net | 24,782 | 17,922 | |||||||
| Other intangible assets, net | 6,865 | 9,870 | |||||||
| Other assets | 2,309 | 2,010 | |||||||
|
|
|
||||||||
| Total assets | $ | 101,807 | $ | 114,865 | |||||
|
|
|
||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||||
Current liabilities: |
|||||||||
| Borrowings | $ | 1,697 | $ | 75 | |||||
| Accounts payable | 4,540 | 5,575 | |||||||
| Accrued expenses | 11,176 | 10,142 | |||||||
| Deferred revenue(2) | 15,742 | 22,457 | |||||||
|
|
|
||||||||
| Total current liabilities | 33,155 | 38,249 | |||||||
| Deferred revenue, long-term(2) |
8,257 |
4,406 |
|||||||
| Other liabilities |
519 |
910 |
|||||||
|
|
|
||||||||
|
41,931 |
43,565 |
||||||||
|
|
|
||||||||
| Stockholders' equity: | |||||||||
| Common stock | 55 | 55 | |||||||
| Treasury stock | (332 | ) | (332 | ) | |||||
| Additional paid-in capital | 223,384 | 217,395 | |||||||
| Notes receivable from stockholders | (1,457 | ) | (961 | ) | |||||
| Deferred stock-based compensation | (3,087 | ) | (4,045 | ) | |||||
| Accumulated other comprehensive gain (loss) | 252 | (630 | ) | ||||||
| Accumulated deficit | (158,939 | ) | (140,182 | ) | |||||
|
|
|
||||||||
| Total stockholders' equity | 59,876 | 71,300 | |||||||
|
|
|
||||||||
| Total liabilities and stockholders' equity | $ | 101,807 | $ | 114,865 | |||||
|
|
|
||||||||
(1) Total cash, cash equivalents, short-term investments and restricted cash as of June 30, 2002 and December 31, 2001 was $43,593 and $51,140, respectively.
(2) Total deferred revenue as of June 30, 2002 and December 31, 2001 was $23,999 and $26,863, respectively.
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
CHORDIANT SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In
thousands, except per share data)
(Unaudited)
|
Three Months Ended |
Six Months Ended |
||||||||||||
|
|
|
||||||||||||
|
June 30, 2002 |
June 30, 2001 |
June 30, 2002 |
June 30, 2001 |
||||||||||
|
Revenues: |
|
|
|
|
|||||||||
|
License |
$ |
6,038 |
$ |
9,816 |
$ |
17,122 |
$ |
16,602 |
|||||
|
Service |
9,037 |
9,158 |
20,762 |
15,757 |
|||||||||
|
|
|
|
|
||||||||||
|
Total revenues |
15,075 |
18,974 |
37,884 |
32,359 |
|||||||||
|
Cost of revenues: |
|||||||||||||
|
License |
488 |
329 |
1,055 |
766 |
|||||||||
|
Service |
6,606 |
8,372 |
16,159 |
13,659 |
|||||||||
|
Non-cash compensation expense |
74 |
161 |
171 |
403 |
|||||||||
|
|
|
|
|
||||||||||
|
Total cost of revenues |
7,168 |
8,862 |
17,385 |
14,828 |
|||||||||
|
|
|
|
|
||||||||||
|
Gross profit |
7,907 |
10,112 |
20,499 |
17,531 |
|||||||||
|
|
|
|
|
||||||||||
|
Operating expenses: |
|||||||||||||
|
Sales and marketing |
|||||||||||||
|
Non-cash compensation expense |
100 |
229 |
236 |
637 |
|||||||||
|
Other sales and marketing expense |
8,305 |
10,400 |
17,419 |
18,752 |
|||||||||
|
Research and development |
|||||||||||||
|
Non-cash compensation expense |
193 |
311 |
390 |
528 |
|||||||||
|
Other research and development expense |
5,166 |
5,448 |
10,101 |
9,902 |
|||||||||
|
Purchased in-process research and development |
997 |
1,206 |
997 |
2,692 |
|||||||||
|
General and administrative |
|||||||||||||
|
Non-cash compensation expense |
74 |
122 |
160 |
215 |
|||||||||
|
Other general and administrative expense |
1,935 |
2,823 |
4,126 |
4,727 |
|||||||||
|
Amortization of intangible assets |
954 |
2,473 |
1,778 |
3,013 |
|||||||||
| Restructuring expense |
939 |
737 |
4,498 |
1,669 |
|||||||||
|
|
|
|
|
||||||||||
|
Total operating expenses |
18,663 |
23,749 |
39,705 |
42,135 |
|||||||||
|
|
|
|
|
||||||||||
|
Loss from operations |
(10,756) |
(13,637) |
(19,206) |
(24,604) |
|||||||||
|
Interest expense |
(88) |
(7) |
(92) |
(22) |
|||||||||
|
Other income, net |
296 |
944 |
541 |
2,233 |
|||||||||
|
|
|
|
|
||||||||||
|
Net loss |
$ |
(10,548) |
$ |
(12,700) |
$ |
(18,757) |
$ |
(22,393) |
|||||
|
|
|
|
|
||||||||||
|
Net loss per share: |
|||||||||||||
|
Basic and diluted |
$ |
(0.19) |
$ |
(0.25) |
$ |
(0.35) |
$ |
(0.49) |
|||||
|
|
|
|
|
||||||||||
|
Shares used in computing net loss per share |
54,756 |
51,510 |
54,307 |
45,336 |
|||||||||
|
|
|
|
|
||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
CHORDIANT SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
(Unaudited)
| |
Six
Months Ended |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| |
June 30, 2002 |
June
30, 2001 |
||||||||
| Cash flows from operating activities: | ||||||||||
| Net loss | $ | (18,757 | ) | $ | (22,393 | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||
| Depreciation and amortization | 1,965 | 1,653 | ||||||||
| Purchased in-process research and development | 997 | 2,692 | ||||||||
| Loss on disposal of assets | -- | 52 | ||||||||
| Amortization of intangibles | 1,778 | 3,013 | ||||||||
| Stock-based compensation expense | 957 | 1,784 | ||||||||
| Provision for doubtful accounts | 554 | 20 | ||||||||
| Changes in assets and liabilities: | ||||||||||
| Accounts receivables | 6,927 | 4,413 | ||||||||
| Other current assets | 2,025 | 134 | ||||||||
| Other assets | (206 | ) | 2,724 | |||||||
| Accounts payable | (1,133 | ) | (5,124 | ) | ||||||
| Accrued expenses | 385 | (3,561 | ) | |||||||
| Deferred revenue | (2,969) | (3,407 | ) | |||||||
| Other liabilities | (699 | ) | 705 | |||||||
|
|
|
|||||||||
| Net cash used in operating activities | (8,176 | ) | (17,295 | ) | ||||||
|
|
|
|||||||||
| Cash flows from investing activities: | ||||||||||
| Property and equipment purchases | (836 | ) | (877 | ) | ||||||
| Proceeds from disposal of property and equipment | 88 | -- | ||||||||
| Cash acquired (used) from acquisitions, net | (4,772 | ) | 10,899 | |||||||
| Purchases of short-term investments | (9,044 | ) | (1,413 | ) | ||||||
| Sales of short-term investments | 19,650 | 4,860 | ||||||||
|
|
|
|||||||||
| Net cash provided by investing activities | 5,086 | 13,469 | ||||||||
|
|
|
|||||||||
| Cash flows from financing activities: | ||||||||||
| Exercise of stock options | 1,463 | 118 | ||||||||
| Repurchase of Common Stock | -- | 1 | ||||||||
| Proceeds from issuance of Common Stock | 3,029 | -- | ||||||||
| Proceeds from issuance of Common Stock for Employee Stock Purchase Plan | 981 | 731 | ||||||||
| Proceeds from borrowings | 444 | -- | ||||||||
| Repayment of notes receivable | -- | 134 | ||||||||
| Repayment of borrowings | (669 | ) | (345 | ) | ||||||
|
|
|
|||||||||
| Net cash provided by financing activities | 5,248 | 639 | ||||||||
|
|
|
|||||||||
| Effect of foreign currency exchange rates on cash and cash equivalents | 901 | (324 | ) | |||||||
|
|
|
|||||||||
| Net increase (decrease) in cash and cash equivalents | 3,059 | (3,511 | ) | |||||||
|
|
|
|||||||||
| Cash and cash equivalents at beginning of period | 27,068 | 41,465 | ||||||||
|
|
|
|||||||||
| Cash and cash equivalents at end of period | $ | 30,127 | $ | 37,954 | ||||||
|
|
|
|||||||||
| Supplemental cash flow information: | ||||||||||
| Cash paid for interest | $ | 88 | $ | 12 | ||||||
|
|
|
|||||||||
| Cash paid for taxes | $ | -- | $ | 18 | ||||||
|
|
|
|||||||||
| Supplemental noncash activities: | ||||||||||
| Common Stock issued for stockholder notes | $ | 496 | $ | 96 | ||||||
|
|
|
|||||||||
| Issuance of Common Stock in connection with acquisitions | $ | -- | $ | 39,579 | ||||||
|
|
|
|||||||||
| Warrants and options assumed in connection with acquisitions | ||||||||||