UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended September 30, 2004
OR
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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 1-13317
DOT HILL SYSTEMS CORP.
(Exact name of registrant as specified in its charter)
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Delaware |
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13-3460176 |
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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6305 El Camino Real, Carlsbad, California |
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92009 |
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(Address of principal executive offices) |
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(Zip Code) |
(760) 931-5500
(Registrant’s
telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 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 ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Act of 1934). 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.
Common Stock, $0.001 par value, 43,601,417 shares outstanding as of November 5, 2004.
TABLE OF CONTENTS
2
Part I. Financial Information
DOT
HILL SYSTEMS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In Thousands, Except Per
Share Amounts)
(Unaudited)
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December 31, |
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September 30, |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
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$ |
138,563 |
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$ |
58,015 |
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Short-term investments |
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52,982 |
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56,632 |
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Accounts receivable, net of allowance of $467 and $569 |
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14,558 |
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37,809 |
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Inventories |
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3,158 |
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3,684 |
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Prepaid expenses and other |
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1,836 |
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2,713 |
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Total current assets |
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211,097 |
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158,853 |
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Property and equipment, net |
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4,791 |
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8,514 |
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Goodwill |
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343 |
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57,111 |
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Other intangible assets, net |
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— |
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8,441 |
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Other assets |
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2,212 |
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1,039 |
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Total assets |
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$ |
218,443 |
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$ |
233,958 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current Liabilities: |
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Accounts payable |
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$ |
24,533 |
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$ |
31,649 |
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Accrued compensation |
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4,459 |
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2,758 |
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Accrued expenses |
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2,052 |
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3,727 |
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Deferred revenue |
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1,028 |
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856 |
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Income taxes payable |
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1,005 |
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927 |
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Current portion of restructuring accrual |
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370 |
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143 |
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Total current liabilities |
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33,447 |
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40,060 |
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Restructuring accrual, net of current portion |
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554 |
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107 |
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Borrowings under lines of credit |
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247 |
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193 |
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Other long-term liabilities |
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62 |
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883 |
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Total liabilities |
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34,310 |
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41,243 |
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Commitments and Contingencies (Note 14) |
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Stockholders’ Equity: |
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Preferred stock, $0.001 par value, 10,000 shares authorized, no shares issued or outstanding at December 31, 2003 and September 30, 2004, respectively |
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— |
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— |
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Common stock, $0.001 par value, 100,000 shares authorized, 43,307 and 43,597 shares issued and outstanding at December 31, 2003 and September 30, 2004, respectively |
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43 |
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44 |
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Additional paid-in capital |
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275,827 |
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276,919 |
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Deferred compensation |
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(28 |
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(13 |
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Accumulated other comprehensive loss |
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(263 |
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(529 |
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Accumulated deficit |
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(91,446 |
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(83,706 |
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Total stockholders’ equity |
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184,133 |
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192,715 |
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Total liabilities and stockholders’ equity |
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$ |
218,443 |
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$ |
233,958 |
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See accompanying notes to condensed consolidated financial statements.
3
DOT
HILL SYSTEMS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS
AND COMPREHENSIVE INCOME
(In Thousands, Except Per
Share Amounts)
(Unaudited)
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Three Months Ended |
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Nine Months Ended |
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2003 |
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2004 |
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2003 |
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2004 |
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Net Revenue |
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$ |
50,979 |
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$ |
56,966 |
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$ |
129,928 |
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$ |
175,351 |
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Cost of Goods Sold |
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38,766 |
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41,439 |
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102,166 |
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129,204 |
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Gross Profit |
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12,213 |
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15,527 |
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27,762 |
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46,147 |
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Operating Expenses: |
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Sales and marketing |
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3,454 |
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4,571 |
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10,266 |
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13,809 |
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Research and development |
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2,795 |
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4,983 |
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7,692 |
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14,088 |
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General and administrative |
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1,851 |
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2,709 |
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4,921 |
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7,327 |
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Restructuring, net |
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— |
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