UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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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 June 30, 2003 |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the Transition Period from to
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Commission File Number 000-29423
FAIRMARKET, INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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04-3351937 |
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(State or other jurisdiction of |
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(I.R.S. Employer |
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500 Unicorn Park Drive, Woburn, MA 01801-3341 |
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(Address of principal executive offices) (Zip Code) |
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Registrant’s telephone number, including area code: (781) 376-5600
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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 126-2 of the Exchange Act).
Yes o No ý
The number of shares outstanding of the registrant’s common stock as of August 4, 2003 was 26,728,683
FAIRMARKET, INC.
FORM 10-Q
For the Quarter Ended June 30, 2003
INDEX
FAIRMARKET and MarketSelect are registered service marks, and the FairMarket Network, AutoMarkdown, Quick Win and the FairMarket logo are service marks, of FairMarket, Inc. The names of other companies and products mentioned in this Report may be the trademarks of their respective owners.
2
ITEM 1. Financial Statements
FAIRMARKET, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
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June 30, |
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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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$ |
25,239 |
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$ |
32,743 |
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Marketable securities |
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14,967 |
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6,991 |
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Restricted cash |
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549 |
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548 |
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Accounts receivable, net of allowance for doubtful accounts of $193 and $267 at June 30, 2003 and December 31, 2002, respectively |
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758 |
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1,328 |
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Prepaid expenses |
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961 |
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610 |
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Other current assets |
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503 |
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534 |
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Total current assets |
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42,977 |
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42,754 |
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Long-term marketable securities |
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12,468 |
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15,000 |
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Long-term prepaid expenses |
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— |
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35 |
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Property and equipment, net |
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660 |
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1,478 |
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Total assets |
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$ |
56,105 |
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$ |
59,267 |
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Liabilities, Preferred Stock and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable |
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$ |
546 |
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$ |
133 |
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Accrued expenses |
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1,377 |
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1,489 |
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Deferred revenue |
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917 |
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520 |
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Current portion of accrual for unutilized office space |
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1,040 |
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1,040 |
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Liquidation preference on preferred stock |
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2,000 |
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— |
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Total current liabilities |
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5,880 |
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3,182 |
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Long-term portion of accrual for unutilized office space |
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542 |
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1,040 |
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Other long-term liabilities |
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85 |
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169 |
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Total liabilities |
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6,507 |
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4,391 |
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Preferred stock |
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— |
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1,967 |
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Stockholders’ equity: |
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Common stock |
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30 |
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30 |
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Additional paid-in capital |
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188,352 |
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188,747 |
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Treasury stock |
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(3,431 |
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(3,795 |
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Deferred compensation and equity-related charges |
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(26 |
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(159 |
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Accumulated other comprehensive income, net |
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71 |
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12 |
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Accumulated deficit |
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(135,398 |
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(131,926 |
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Total stockholders’ equity |
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49,598 |
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52,909 |
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Total liabilities, preferred stock and stockholders’ equity |
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$ |
56,105 |
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$ |
59,267 |
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See accompanying notes to condensed consolidated financial statements.
3
FAIRMARKET, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
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Three
Months Ended |
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Six Months
Ended |
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2003 |
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2002 |
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2003 |
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2002 |
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Revenue |
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$ |
1,516 |
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$ |
1,346 |
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$ |
2,873 |
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$ |
2,657 |
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Operating expenses: |
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Cost of revenue (exclusive of $4 and $9 in 2003 and $6 and $45 in 2002, for the three- and six-month periods, respectively, reported below as equity-related charges) |
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566 |
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1,018 |
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1,325 |
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2,042 |
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Sales and marketing (exclusive of $16 and $40 in 2003 and $4,242 and $8,564 in 2002, for the three- and six-month periods, respectively, reported below as equity-related charges) |
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581 |
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674 |
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1,143 |
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1,308 |
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Development and engineering (exclusive of $11 and $27 in 2003 and $35 and $107 in 2002, for the three- and six-month periods, respectively, reported below as equity-related charges) |
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298 |
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675 |
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650 |
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1,469 |
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General and administrative (exclusive of $7 and $14 in 2003 and $12 and $58 in 2002, for the three- and six-month periods, respectively, reported below as equity-related charges) |
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2,135 |
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