UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

For the Quarterly period ended September 30, 2003

 

Commission File Number 0-25882

 

 

EZENIA! INC.

(Exact name of registrant as specified in its charter)

 

 

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 Securities Exchange Act of 1934).      Yes  o    No  ý

 

The number of shares outstanding of the registrant’s Common Stock as of November 1, 2003 was 13,675,380.

 

 

EZENIA! INC.

 

INDEX

 

Part I.	Financial Information
Item 1	Condensed Consolidated Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets September 30, 2003 and December 31, 2002
	Condensed Consolidated Statements of Operations Three months and nine months ended September 30, 2003 and 2002
	Condensed Consolidated Statements of Cash Flows Nine months ended September 30, 2003 and 2002
	Notes to Condensed Consolidated Financial Statements
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3	Quantitative and Qualitative Disclosures About Market Risk
Item 4	Controls and Procedures
Part II.	Other Information
Item 6	Exhibits and Reports on Form 8-K
Signature

 

This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Such statements are subject to certain risks and uncertainties, including without limitation those discussed in the Management’s Discussion and Analysis section of Ezenia!’s 2002 Annual Report on Form 10-K for the year ended December 31, 2002, such as liquidity, dependence on major customers, reduced demand for traditional videoconferencing products, evolution of the real-time collaboration market, rapid technological change, competition, risks associated with the acquisition of InfoWorkSpace (including the Company’s ability to integrate the InfoWorkSpace product line and workforce) and other considerations.

 

The forward-looking statements contained in this report represent the Company’s judgment as of the date of this report.  Ezenia! cautions readers not to place undue reliance on such statements.  The Company undertakes no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

 

Note: Ezenia! is a registered trademark of Ezenia! Inc., and the Ezenia! Logo and InfoWorkSpace are trademarks of Ezenia! Inc.

 

2

 

EZENIA! INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share related data)

(Unaudited)

 

		September 30, 2003			December 31, 2002
Assets
Current assets
Cash and cash equivalents		$	964		$	2,403
Accounts receivable, less allowances of $842 at September 30, 2003 and $1,096 at December 31, 2002		688			1,780
Inventories		—			112
Prepaid software licenses		1,256			1,008
Prepaid expenses and other current assets		310			261
Total current assets		$	3,218		$	5,564
Liabilities and stockholders’ equity
Current liabilities
Accounts payable		265			681
Accrued expenses		448			584
Income taxes		263			285
Deferred revenue		2,252			2,643
Total current liabilities		3,228			4,193
Common stock subject to put; no shares issued or outstanding at September 30, 2003; 290,000 shares issued and outstanding at December 31, 2002		—			2,875
Stockholders’ equity (deficit)
Preferred stock, $.01 par value; 2,000,000 shares authorized, none issued and outstanding		—			—
Common stock, $.01 par value, 40,000,000 shares authorized,  14,310,817 issued and 13,650,380 outstanding at September 30, 2003; 14,294,067 issued and 13,633,630 outstanding December 31, 2002		139			139
Capital in excess of par value		63,545			60,666
Accumulated deficit		(60,833		)	(59,448		)
Treasury stock at cost 660,437 shares at September 30, 2003 and December 31, 2002		(2,861		)	(2,861		)
		(10		)	(1,504		)
		$	3,218		$	5,564

 

See accompanying notes.

 

3

 

EZENIA! INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for share and per share related data)

(Unaudited)

 

		Three Months Ended September 30,						Nine Months Ended September 30,
		2003			2002			2003			2002
Revenues
Product revenue		$	1,496		$	2,273		$	5,712		$	7,187
Service revenue		106			377			355			1,328
		1,602			2,650			6,067			8,515
Cost of revenues
Cost of product revenue		925			1,186			2,756			6,108
Cost of service revenue		79			182			252			773
		1,004			1,368			3,008			6,881
Gross profit		598			1,282			3,059			1,634
Operating expenses
Research and development		346			971			1,676			3,993
Sales and marketing		207			882			766			3,640
General and administrative		367			541			1,119			1,764
Depreciation and amortization		—			502			—			2,183
Occupancy and other facilities related expenses		297			598			889			2,551
Impairment of long-term assets		—			—