UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
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QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES |
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For the Period Ended September 30, 2003 |
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Or |
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TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES |
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Commission File Number: 000-27707 |
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AETHER SYSTEMS, INC.
(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 |
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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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act) 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 11, 2003, 42,879,983 shares of the Registrant’s common stock, $.01 par value per share, were outstanding.
AETHER SYSTEMS, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2003
INDEX
2
AETHER SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
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September 30, |
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December 31, |
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(Unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
32,727 |
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$ |
68,593 |
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Investments available for sale |
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20 |
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255,825 |
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Trade accounts receivable, net |
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26,349 |
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22,788 |
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Inventory, net |
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10,368 |
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19,664 |
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Assets held for sale |
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— |
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5,250 |
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Net investment in sales-type leases (current) |
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2,168 |
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1,656 |
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Prepaid expenses and other current assets |
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11,342 |
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16,002 |
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Total current assets |
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82,974 |
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389,778 |
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Restricted cash |
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16,786 |
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— |
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Investments available for sale |
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245,183 |
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— |
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Property and equipment, net |
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11,993 |
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19,301 |
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Investments |
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1,753 |
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2,228 |
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Goodwill |
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25,369 |
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25,369 |
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Intangibles, net |
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13,034 |
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15,027 |
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Net investment in sales-type leases (non-current) |
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8,372 |
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6,691 |
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Other noncurrent assets, net |
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21,025 |
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15,015 |
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$ |
426,489 |
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$ |
473,409 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Current portion of notes payable |
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$ |
17 |
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$ |
4 |
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Accounts payable |
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3,378 |
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1,902 |
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Accrued expenses |
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11,877 |
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19,963 |
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Accrued employee compensation and benefits |
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4,570 |
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7,336 |
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Deferred revenue |
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17,619 |
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14,234 |
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Current portion of restructuring reserve |
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25,225 |
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8,651 |
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Accrued interest payable |
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205 |
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2,529 |
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Total current liabilities |
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62,891 |
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54,619 |
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Convertible subordinated notes payable and other notes payable, less current portion |
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154,929 |
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154,942 |
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Deferred revenue |
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17,058 |
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11,789 |
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Restructuring reserve |
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99 |
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23,801 |
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Other long term liabilities |
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677 |
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858 |
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Total liabilities |
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235,654 |
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246,009 |
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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, 2003 and December 31, 2002 |
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— |
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— |
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Common stock, $0.01 par value; 1,000,000,000 shares authorized; 42,798,128 and 42,249,280 shares issued and outstanding at September 30, 2003 and December 31, 2002, respectively |
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428 |
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422 |
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Additional paid-in capital |
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2,588,982 |
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2,586,613 |
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Accumulated deficit |
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(2,401,895 |
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(2,364,831 |
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Foreign currency translation adjustment |
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3,015 |
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3,722 |
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Unrealized gain on investments available for sale |
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305 |
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1,474 |
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Total stockholders’ equity |
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190,835 |
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227,400 |
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Commitments and Contingencies |
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Total liabilities and stockholders’ equity |
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$ |
426,489 |
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$ |
473,409 |
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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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2003 |
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2002 |
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2003 |
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2002 |
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Subscriber revenue |
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$ |
16,765 |
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$ |
18,767 |
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$ |
53,529 |
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$ |
50,957 |
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Software and related services revenue |
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6,340 |
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6,889 |
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18,086 |
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20,879 |
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Device sales |
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4,088 |
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6,055 |
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12,570 |
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15,165 |
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Total revenue |
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27,193 |
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31,711 |
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84,185 |
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87,001 |
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Cost of subscriber revenue |
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10,150 |
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