UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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(Mark One) |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended March 31, 2003 |
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or |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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Commission File Number 000-24289 |
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CLICK2LEARN, INC. |
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(Exact name of registrant as specified in its charter) |
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Delaware |
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91-1276003 |
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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110-110th Avenue NE, Bellevue, Washington |
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98004 |
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(Address of principal executive offices) |
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(Zip Code) |
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(425) 462-0501 |
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(Registrant’s telephone number, including area code) |
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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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý
The number of shares outstanding of the issuer’s Common Stock, par value $0.01, as of April 30, 2003 was 24,937,164 shares.
CLICK2LEARN, INC.
FORM 10 –Q
For the Quarter Ended March 31, 2003
TABLE OF CONTENTS
2
PART I – FINANCIAL INFORMATION
CLICK2LEARN, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
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March 31, |
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December
31, |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
4,058 |
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$ |
3,586 |
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Accounts receivable, net of allowance for returns and doubtful accounts of $726 in 2003 and $927 in 2002 |
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9,176 |
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10,785 |
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Prepaid royalties and licenses |
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103 |
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157 |
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Other |
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1,634 |
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1,619 |
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Total current assets |
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14,971 |
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16,147 |
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Property and equipment, net |
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1,109 |
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1,214 |
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Goodwill |
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2,877 |
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2,877 |
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Intangible assets, net |
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4,568 |
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4,636 |
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Other |
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632 |
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599 |
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Total assets |
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$ |
24,157 |
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$ |
25,473 |
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable |
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$ |
1,680 |
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$ |
2,934 |
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Accrued compensation and benefits |
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2,355 |
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2,294 |
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Deferred revenue |
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4,577 |
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4,435 |
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Short term debt |
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2,639 |
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2,400 |
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Other |
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908 |
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1,184 |
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Total current liabilities |
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12,159 |
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13,247 |
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Other noncurrent liabilities |
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366 |
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— |
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Total liabilities |
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12,525 |
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13,247 |
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Stockholders’ equity: |
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Preferred stock, $0.01 par value; authorized 5,000,000 shares; issued and outstanding no shares in 2002 and 2003 |
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— |
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Common stock, $0.01 par value; authorized 100,000,000 shares, issued and outstanding 24,600,114 shares in 2002 and 24,937,164 shares in 2003 |
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249 |
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246 |
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Additional paid-in capital |
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242,768 |
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242,570 |
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Accumulated deficit |
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(230,863 |
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(230,008 |
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Accumulated other comprehensive loss |
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(522 |
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(582 |
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Total stockholders’ equity |
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11,632 |
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12,226 |
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Total liabilities and stockholders’ equity |
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$ |
24,157 |
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$ |
25,473 |
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See accompanying notes to unaudited condensed Consolidated Financial Statements
3
CLICK2LEARN, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
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Three
Months Ended March |
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2003 |
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2002 |
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Revenue: |
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Platforms |
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$ |
6,552 |
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$ |
5,419 |
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Tools |
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774 |
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1,258 |
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Content services |
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674 |
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633 |
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Total revenue |
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8,000 |
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7,310 |
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Cost of revenue: |
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Platforms |
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1,574 |
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1,574 |
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Tools |
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125 |
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395 |
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Content services |
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572 |
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655 |
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Total cost of revenue |
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2,271 |
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2,624 |
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Gross margin |
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5,729 |
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4,686 |
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Operating expenses: |
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Research and development |
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1,484 |
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2,282 |
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Sales and marketing |
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3,678 |
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4,432 |
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General and administrative |
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1,340 |
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1,602 |
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Total operating expenses |
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6,502 |
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8,316 |
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Operating loss from continuing operations |
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(773 |
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(3,630 |
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Other income (expense) |
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(47 |
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16 |
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Equity in losses of affiliate |
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(25 |
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(75 |
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Loss from continuing operations before income taxes |
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(845 |
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(3,689 |
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Income tax |
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(10 |
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— |
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Loss from continuing operations |
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(855 |
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(3,689 |
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