SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

(Mark One)

 

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

 

For the Quarterly Period Ended June 30, 2004

 

OR

 

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

 

For the transition period from          to          

 

Commission File Number: 0-25457

 

NEON Systems, Inc.

(Exact name of Registrant as specified in its charter)

 

 

 

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.01 per share

(Title of Class)

 

Indicate by check mark whether 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 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

 

The number of shares of the registrant’s common stock outstanding as of July 31, 2004, was 8,917,427.

 

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

 

 

NEON SYSTEMS, INC.

 

FORM 10-Q

 

FOR THE QUARTER ENDED JUNE 30, 2004

 

INDEX

 

		PAGE
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets at June 30, 2004 and March 31, 2004	3
	Consolidated Statements of Operations for the Three Months Ended June 30, 2004 and 2003	4
	Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2004 and 2003	5
	Condensed Notes to Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4.	Controls and Procedures	17
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	17
Item 2.	Changes in Securities and Use of Proceeds	17
Item 3.	Defaults Upon Senior Securities	17
Item 4.	Submission of Matters to a Vote of Security Holders	17
Item 5.	Other Information	17
Item 6.	Exhibits and Reports on Form 8-K	19
SIGNATURES		20

 

2

 

PART I - FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

NEON SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

 

		JUNE 30, 2004			MARCH 31, 2004
		(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	26,474		$	20,899
Accounts receivable, net		2,489			6,150
Other current assets		1,161			1,232
Total current assets		30,124			28,281
Property and equipment, net		540			475
Note receivable, net (Note 7)		4,260			7,760
Purchased technology, net		399			—
Other assets		487			341
Total assets		$	35,810		$	36,857
LIABILITIES & STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable		$	222		$	298
Accrued expenses		1,366			2,733
Deferred revenue		6,563			7,540
Total current liabilities		8,151			10,571
Deferred revenue – long term		1,298			931
Accrued restructuring expenses – long term (Note 6)		932			898
Total liabilities		10,381			12,400
STOCKHOLDERS’ EQUITY:
Preferred stock, $.01 par value. Authorized 10,000,000 shares; no shares issued and outstanding		—			—
Common stock, $.01 par value. Authorized 30,000,000 shares; 8,917,227 and 8,914,547 shares issued and outstanding at June 30, 2004 and March 31, 2004, respectively		98			98
Additional paid-in capital		51,703			51,696
Treasury Stock, 913,400 shares at cost		(2,649		)	(2,649		)
Accumulative other comprehensive loss		(423		)	(421		)
Accumulated deficit		(23,300		)	(24,267		)
Total stockholders’ equity		25,429			24,457
Commitments and contingencies (Note 5)
Total liabilities and stockholders’ equity		$	35,810		$	36,857

 

SEE ACCOMPANYING CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

3

 

NEON SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(UNAUDITED)

 

		THREE MONTHS ENDED JUNE 30,
		2004			2003
Revenues:
License		$	1,103		$	1,560
Maintenance		2,468			2,580
Total revenues		3,571			4,140
Cost of revenues:
Cost of licenses		32			83
Cost of maintenance		364			374
Total cost of revenues		396			457
Gross profit		3,175