SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
ý QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 2004
OR
o TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
Commission File Number 0-24707
INET TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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75-2269056 |
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(State or other jurisdiction |
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(I.R.S. employer |
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1500 North Greenville Avenue |
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(Address of principal executive offices, including zip code) |
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(469) 330-4000 |
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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 Exchange Act Rule 12b-2). Yes ý No o
Number of shares of common stock outstanding at April 20, 2004: 39,220,388
Inet Technologies, Inc.
Index
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Management’s Discussion and Analysis of Financial Condition and |
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Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities |
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2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
INET TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(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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$ |
72,898 |
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$ |
118,527 |
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Short-term investments |
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99,267 |
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55,034 |
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Trade accounts receivable, net of allowance for doubtful accounts of $514 at March 31, 2004 and December 31, 2003 |
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15,066 |
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10,870 |
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Unbilled receivables |
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236 |
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146 |
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Inventories |
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8,957 |
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7,924 |
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Deferred income taxes |
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1,829 |
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1,628 |
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Other current assets |
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6,007 |
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5,055 |
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Total current assets |
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204,260 |
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199,184 |
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Property and equipment, net |
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10,741 |
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11,330 |
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Deferred income taxes |
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201 |
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217 |
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Other assets |
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614 |
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613 |
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Total assets |
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$ |
215,816 |
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$ |
211,344 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
2,037 |
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$ |
1,919 |
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Income taxes payable |
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3,181 |
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2,408 |
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Accrued compensation and benefits |
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2,593 |
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4,115 |
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Deferred revenues |
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20,977 |
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21,554 |
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Other accrued liabilities |
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4,365 |
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3,724 |
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Total current liabilities |
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33,153 |
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33,720 |
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Commitments and contingencies |
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Stockholders’ equity: |
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Preferred stock, $.001 par value: |
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Authorized shares — 25,000,000 |
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— |
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— |
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Common stock, $.001 par value: |
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Authorized shares — 175,000,000 |
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47 |
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47 |
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Additional paid-in capital |
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78,191 |
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77,866 |
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Unearned compensation |
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(2,423 |
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(2,610 |
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Retained earnings |
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138,208 |
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134,932 |
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Treasury stock, 7,939,255 common shares at March 31, 2004 and 8,240,060 common shares at December 31, 2003, at cost |
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(31,360 |
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(32,611 |
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Total stockholders’ equity |
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182,663 |
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177,624 |
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Total liabilities and stockholders’ equity |
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$ |
215,816 |
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$ |
211,344 |
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See accompanying notes to our condensed consolidated financial statements.
3
INET TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share data)
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Three months ended |
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2004 |
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2003 |
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Revenues: |
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Product and license fees |
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$ |
19,647 |
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$ |
17,518 |
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Services |
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7,565 |
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7,524 |
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Total revenues |
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27,212 |
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25,042 |
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Cost of revenues: |
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Product and license fees |
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5,227 |
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2,902 |
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Services |
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3,188 |
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4,167 |
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Total cost of revenues |
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8,415 |
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7,069 |
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Gross profit |
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18,797 |
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17,973 |
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Operating expenses: |
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Research and development |
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8,126 |
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7,685 |
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Sales and marketing |
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4,307 |
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3,515 |
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General and administrative |
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2,261 |
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2,419 |
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14,694 |
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13,619 |
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Income from operations |
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4,103 |
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4,354 |
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Other income (expense): |
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Interest income |
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369 |
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426 |
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Other income (expense) |
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(155 |
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16 |
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214 |
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442 |
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Income before provision for income taxes |
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4,317 |
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4,796 |
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