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, 2004

 

Commission File Number 0-25882

 

 

EZENIA! INC.

(Exact name of registrant as specified in its charter)

 

 

Northwest Park, 154 Middlesex Turnpike, Burlington, Massachusetts 01803

(Address of principal executive offices, including Zip Code)

 

(781) 505-2100

(Registrant’s telephone number, including area code)

 

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 October 26, 2004 was 14,163,880.

 

EZENIA! INC.

 

INDEX

 

Part I.	Financial Information
Item 1	Condensed Consolidated Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets September 30, 2004 and December 31, 2003
	Condensed Consolidated Statements of Operations three and nine months ended September 30, 2004 and 2003
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2004 and 2003
	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
Certifications

 

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 2003 Annual Report on Form 10-K for the year ended December 31, 2003, such as the evolution of Ezenia!’s market, its dependence on major customers, rapid technological change and competition within the collaborative software market, its reliance on third party technology, protection of its propriety technology, its history of liquidity concerns and operating losses, and other considerations that are discussed in this report.

 

The forward-looking statements contained in this report represent Ezenia!’s judgment as of the date of this report.  Ezenia! cautions readers not to place undue reliance on such statements.

 

Note: Ezenia!, the Ezenia! Logo, InfoWorkSpace, Launchpad and Encounter are trademarks of Ezenia! Inc.  All other trademarks are property of their respective companies.

 

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EZENIA! INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(Unaudited)

 

		September 30, 2004			December 31, 2003
Assets
Current assets
Cash and cash equivalents		$	4,389		$	2,316
Accounts receivable, less allowances of $498 at September 30, 2004 and $1,068 at December 31, 2003		1,284			2,745
Prepaid software licenses		2,060			1,724
Prepaid expenses and other current assets		276			297
Total current assets		8,009			7,082
Equipment and improvements, net of accumulated depreciation		52			—
Total assets		$	8,061		$	7,082
Liabilities and stockholders’ equity
Current liabilities
Accounts payable		420			185
Accrued expenses		346			205
Employee compensation and benefits		115			186
Accrued license costs		172			920
Deferred revenue		4,419			5,034
Total current liabilities		5,472			6,530
Stockholders’ equity
Preferred stock, $.01 par value; 2,000,000 shares authorized, none issued and none outstanding		—			—
Common stock, $.01 par value, 40,000,000 shares authorized, 14,824,317 issued and 14,163,880 outstanding at September 30, 2004; 14,360,817 issued and 13,700,380 outstanding at December 31, 2003		148			144
Capital in excess of par value		63,639			63,545
Accumulated deficit		(58,337		)	(60,276		)
Treasury stock at cost, 660,437 shares at September 30, 2004 and December 31, 2003		(2,861		)	(2,861		)
		2,589			552
Total liabilities and stockholders’ equity		$	8,061		$	7,082

 

See accompanying notes.

 

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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,
		2004			2003			2004			2003
Revenues
Product and service revenue		$	2,498		$	1,602		$	7,609		$	6,067
Cost of revenues
Cost of product and service revenue		876			1,004			2,803			3,008
Gross profit		1,622			598			4,806			3,059
Operating expenses
Research and development		263			346			847			1,676
Sales and marketing		366			207			993			766
General and administrative		450			480			1,302			1,490
Occupancy and other facilities related expenses		121			184			449			518
Total operating expenses		1,200			1,217			3,591			4,450
Income (loss) from operations		422			(619		)	1,215			(1,391		)
Other income (expense)
Interest income		5			—			80