UNITED
STATES
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 June 30, 2004
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 000-50849
KANBAY INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in its Charter)
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Delaware |
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36-4387594 |
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(State
or Other Jurisdiction of |
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(I.R.S. Employer Identification No.) |
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6400 Shafer Court, Suite 100 |
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(Address, including zip code, and telephone number (including area code) of registrant’s principal executive office) |
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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: o No: ý
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
As of September 2, 2004, the Registrant has 32,359,870 shares of Common Stock, $0.001 par value per share, outstanding.
KANBAY INTERNATIONAL, INC.
TABLE OF CONTENTS
1
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Kanbay International, Inc.
(dollars in thousands)
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June 30, |
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December |
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(unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
6,621 |
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$ |
17,419 |
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Accounts receivable—related parties |
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16,507 |
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2,820 |
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Accounts receivable—third parties |
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12,883 |
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7,649 |
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Employee and other receivables |
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745 |
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590 |
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Deferred income taxes |
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844 |
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844 |
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Prepaid expenses and other |
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4,939 |
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3,628 |
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Total current assets |
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42,539 |
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32,950 |
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Property and equipment: |
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Land and building |
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3,797 |
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3,486 |
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Computer equipment |
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13,348 |
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10,675 |
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Computer software |
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4,087 |
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3,365 |
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Furniture and fixtures |
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4,362 |
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3,687 |
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Leasehold improvements |
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2,632 |
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1,754 |
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28,226 |
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22,967 |
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Less: accumulated depreciation |
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13,734 |
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11,652 |
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14,492 |
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11,315 |
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Investment in affiliate |
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23,006 |
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22,185 |
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Deferred income taxes |
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1,350 |
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1,350 |
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Other assets |
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2,594 |
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559 |
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Total assets |
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$ |
83,981 |
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$ |
68,359 |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
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$ |
3,435 |
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$ |
2,312 |
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Amounts due to subcontractors |
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834 |
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368 |
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Deferred revenue |
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3,355 |
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2,629 |
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Accrued liabilities |
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15,846 |
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15,542 |
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Total current liabilities |
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23,470 |
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20,851 |
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Total liabilities |
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23,470 |
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20,851 |
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Stockholders’ equity: |
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Series A-1 Preferred Stock, par value $0.001 per share, 402,857 shares authorized, 35,000 shares issued and outstanding in 2003 (liquidation preference of $139 in 2003) |
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— |
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— |
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Series A-2 Preferred Stock, par value $0.001 per share, 3,298,333 shares authorized, issued and outstanding in 2003 (liquidation preference of $13,119 in 2003) |
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— |
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3 |
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Preferred Stock, par value $0.001 per share, no shares authorized, in 2003; 5,000,000 shares authorized, no shares issued and outstanding, at June 30, 2004 |
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— |
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— |
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Common Stock, par value $0.001 per share, 200,000,000 shares authorized, 20,725,776 and 26,997,370 shares issued and outstanding at December 31, 2003 and June 30, 2004, respectively |
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27 |
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21 |
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Additional paid-in capital |
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55,464 |
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54,570 |
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Retained earnings (accumulated deficit) |
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959 |
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(10,800 |
) |
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Cumulative foreign currency translation adjustments |
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4,061 |
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3,714 |
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Total stockholders’ equity |
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60,511 |
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47,508 |
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Total liabilities and stockholders’ equity |
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$ |
83,981 |
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$ |
68,359 |
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See accompanying notes to the unaudited consolidated financial statements.
2
Kanbay International, Inc.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(dollars in thousands except per share amounts)
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Three
months ended |
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Six months
ended |
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2004 |
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2003 |
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2004 |
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2003 |
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Net revenues—related parties |
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$ |
29,331 |
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$ |
16,690 |
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$ |
55,091 |
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$ |
30,904 |
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Net revenues—third parties |
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15,419 |
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9,208 |
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26,664 |
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17,109 |
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Total revenues |
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44,750 |
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25,898 |
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81,755 |
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48,013 |
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Cost of revenues |
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24,149 |
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14,347 |
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42,914 |
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26,493 |
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Gross profit |
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20,601 |
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11,551 |
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38,841 |
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21,520 |
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Sales and marketing expenses |
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4,183 |
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2,796 |
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8,149 |
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4,930 |
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General and administrative expenses |
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7,378 |
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5,922 |
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14,556 |
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10,993 |
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Stock compensation expense |
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307 |
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357 |
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606 |
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668 |
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Total selling, general and administrative expenses |
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11,868 |
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9,075 |
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23,311 |
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16,591 |
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Depreciation and amortization |
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1,185 |
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773 |
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2,222 |
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1,524 |
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Gain on sale of fixed assets |
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(10 |
) |
— |
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(20 |
) |
(7 |
) |
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Income from operations |
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7,558 |
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1,703 |
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13,328 |
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3,412 |
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Other income (expense): |
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Interest expense |
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(1 |
) |
(66 |
) |
(17 |
) |
(147 |
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Interest income | |||||||||||||