UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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(Mark One) |
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ý 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 September 30, 2003 |
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OR |
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o 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: 0-24294 |
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Media Arts Group, Inc. |
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(Exact name of registrant as specified in its charter) |
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Delaware |
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77-0354419 |
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(State or other jurisdiction of |
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(I.R.S. Employer |
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900 Lightpost Way, Morgan Hill, CA 95037 |
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(Address of principal executive offices and zip code) |
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Registrant’s telephone number: (408) 201-5000 |
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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 Registrant’s Common Stock, $0.01 par value, was 13,226,832 at November 6, 2003.
Media Arts Group, Inc.
FORM 10-Q
INDEX
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Page |
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Part I: Financial Information |
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Item 1: |
Financial Statements (unaudited) |
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Condensed Consolidated Balance Sheets as of September 30, 2003 and December 31, 2002 |
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4 |
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5 |
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6 |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
11 |
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20 |
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22 |
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23 |
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2
Media Arts Group, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data, unaudited)
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September 30, |
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December 31, |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
22,555 |
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$ |
24,538 |
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Accounts receivable, net of allowance for doubtful accounts, adjustments and sales returns of $5,595 and $5,010 |
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9,054 |
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12,868 |
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Inventories |
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13,352 |
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12,563 |
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Prepaid expenses and other current assets |
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4,454 |
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6,473 |
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Deferred income taxes |
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6,260 |
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3,334 |
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Income taxes receivable |
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15 |
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1,585 |
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Total current assets |
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55,690 |
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61,361 |
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Property and equipment, net |
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15,463 |
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17,992 |
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Notes receivable |
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544 |
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613 |
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Notes receivable from related parties |
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— |
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96 |
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Long-term deferred income taxes |
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1,366 |
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2,174 |
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Other assets |
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71 |
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72 |
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Total assets |
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$ |
73,134 |
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$ |
82,308 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
5,136 |
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$ |
6,850 |
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Commissions payable |
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825 |
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1,145 |
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Accrued royalties |
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379 |
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496 |
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Accrued compensation costs |
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496 |
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3,114 |
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Deferred revenue and other accrued expenses |
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6,042 |
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3,920 |
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Capital lease obligation, current |
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216 |
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281 |
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Total current liabilities |
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13,094 |
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15,806 |
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Reserve for leases—long-term |
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— |
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2,268 |
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Capital lease obligation—long-term |
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23 |
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303 |
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Total liabilities |
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13,117 |
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18,377 |
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Commitments and contingencies (Notes 7, 8, 9, 10, 11 and 12) |
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Stockholders’ equity: |
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Preferred Stock, $0.01 par value; 1,000,000 shares authorized; none issued or outstanding |
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— |
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— |
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Common Stock, $0.01 par value; 80,000,000 shares authorized; 13,541,000 shares issued and 13,227,000 shares outstanding at September 30, 2003; 13,541,000 shares issued and 13,225,000 shares outstanding at December 31, 2002 |
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90 |
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90 |
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Additional paid-in capital |
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38,863 |
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38,862 |
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Retained earnings |
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24,736 |
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28,651 |
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Treasury Stock, 314,000 and 316,000 shares at cost at September 30, 2003 and December 31, 2002, respectively |
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(3,672 |
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(3,672 |
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Total stockholders’ equity |
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60,017 |
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63,931 |
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Total liabilities and stockholders’ equity |
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$ |
73,134 |
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$ |
82,308 |
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See accompanying notes to the condensed consolidated financial statements.
3
Media Arts Group, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts, unaudited)
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Three
Months Ended |
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Nine
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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Revenues: |
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Net product and other revenues |
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$ |
15,349 |
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$ |
19,666 |
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$ |
37,668 |
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$ |
68,707 |
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Licensing revenues |
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2,166 |
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1,437 |
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6,874 |
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5,826 |
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Net revenues |
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17,515 |
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21,103 |
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44,542 |
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74,533 |
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Cost of revenues: |
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Cost of product and other revenues |
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8,202 |
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10,703 |
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24,016 |
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39,649 |
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Cost of licensing revenues |
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143 |
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72 |
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378 |
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291 |
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Total cost of revenues |
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8,345 |
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10,775 |
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24,394 |
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39,940 |
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Gross margin |
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9,170 |
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