UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Period Ended September 30, 2002
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number: 000-27707
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AETHER SYSTEMS, INC. |
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(Exact name of registrant as specified in its charter) |
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Delaware |
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52-2186634 |
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(State or other jurisdiction of incorporation or organization) |
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(IRS Employer Identification Number) |
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11460 Cronridge Dr., Owings Mills, MD |
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21117 |
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(Address of principal executive offices) |
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(Zip Code) |
(Registrant’s telephone number, including area code): (410) 654-6400
Securities registered Pursuant to Section 12(b) of the Act: NONE.
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, Par Value $.01
Convertible Subordinated Notes Due 2005
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 ý No o
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
As of November 7, 2002, 42,224,185 shares of the Registrant’s common stock, $.01 par value per share, were outstanding.
The aggregate market value of the voting stock held by non affiliates of the registrant as of November 7, 2002 was $109,360,639.
AETHER SYSTEMS, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2002
INDEX
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Condensed consolidated balance sheets as of September 30, 2002-unaudited and December 31, 2001 |
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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PART I—FINANCIAL INFORMATION
AETHER SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
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September
30, |
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December
31, |
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(Unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
35,639 |
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$ |
522,177 |
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Restricted cash |
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5,266 |
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5,253 |
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Short-term investments |
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333,873 |
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2,490 |
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Trade accounts receivable, net |
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24,752 |
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24,802 |
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Inventory, net |
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23,438 |
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27,178 |
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Assets held for sale |
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5,500 |
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— |
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Prepaid expenses and other current assets |
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17,767 |
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19,521 |
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Total current assets |
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446,235 |
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601,421 |
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Property and equipment, net |
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28,808 |
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61,304 |
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Investments |
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3,002 |
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32,350 |
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Intangibles, net |
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41,264 |
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226,774 |
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Other noncurrent assets, net |
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21,005 |
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27,571 |
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$ |
540,314 |
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$ |
949,420 |
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LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Current portion of notes payable |
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$ |
56 |
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$ |
15,493 |
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Accounts payable |
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1,168 |
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8,560 |
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Accrued expenses |
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24,329 |
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27,666 |
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Accrued employee compensation and benefits |
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9,457 |
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9,983 |
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Deferred revenue |
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14,365 |
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15,145 |
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Current portion of restructuring reserve |
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14,207 |
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15,452 |
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Accrued interest payable |
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275 |
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5,249 |
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Total current liabilities |
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63,857 |
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97,548 |
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Convertible subordinated notes payable and other notes payable, less current portion |
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207,382 |
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290,645 |
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Deferred revenue, less current portion |
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10,432 |
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6,380 |
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Restructuring reserve, less current portion |
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8,465 |
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12,365 |
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Other long term liabilities |
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1,998 |
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— |
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Total liabilities |
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292,134 |
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406,938 |
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Minority interest in net assets of a subsidiary |
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— |
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(45 |
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Stockholders’ equity: |
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Preferred stock, $0.01 par value; 1,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2002 and December 31, 2001 |
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— |
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Common stock, $0.01 par value; 1,000,000,000 shares authorized; 42,143,262 and 41,864,646 shares issued and outstanding at September 30, 2002 and December 31, 2001, respectively |
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421 |
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419 |
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Additional paid-in capital |
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2,585,781 |
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2,579,445 |
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Accumulated deficit |
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(2,340,710 |
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(2,039,409 |
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Foreign currency translation adjustment |
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1,269 |
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487 |
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Unrealized gain on investments available for sale |
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1,419 |
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1,585 |
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Total stockholders’ equity |
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248,180 |
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542,527 |
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Commitments and Contingencies |
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Total liabilities and stockholders’ equity |
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$ |
540,314 |
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$ |
949,420 |
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See accompanying notes to condensed consolidated financial statements.
3
AETHER SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(unaudited)
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Three Months Ended |
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Nine Months
Ended |
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2002 |
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2001 |
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2002 |
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2001 |
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Subscriber revenue |
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$ |
18,767 |
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$ |
11,179 |
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$ |
50,957 |
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$ |
32,987 |
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Engineering services revenue |
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703 |
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642 |
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3,038 |
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5,786 |
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Software and related services revenue |
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6,186 |
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8,205 |
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17,841 |
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29,874 |
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Device sales |
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6,055 |
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4,922 |
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15,165 |
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19,045 |
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Total revenue |
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31,711 |
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24,948 |
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