UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

 

INTRADO INC.

(Exact name of registrant as specified in its charter)

 

Delaware		84-0796285
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
1601 Dry Creek Drive, Longmont, Colorado		80503
(Address of principal executive offices)		(Zip Code)
Registrant’s Telephone Number, Including Area Code:  (720) 494-5800
(Former name or former address, if changed since last report)

 

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 Exchange Act). Yes ý    No o

 

As of November 1, 2004, there were 17,404,265 shares of common stock outstanding.

 

 

CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend the forward-looking statements throughout the Quarterly Report on Form 10-Q and the information incorporated by reference to be covered by the safe harbor provisions for forward-looking statements.  All projections and statements regarding our expected financial position and operating results, our business strategy, our financing plans and the outcome of any contingencies are forward-looking statements. These statements can sometimes be identified by our use of forward-looking words such as “may,” “believe,” “plan,” “will,” “anticipate,” “estimate,” “expect,” “intend,” and other words and phrases of similar meaning.  Known and unknown risks, uncertainties and other factors could cause the actual results to differ materially from those contemplated by the statements.  The forward-looking information is based on information available as of the date of this report on Form 10-Q and on numerous assumptions and developments that are not within our control.  Although we believe these forward-looking statements are reasonable, we cannot assure you they will turn out to be correct.  Actual results could be materially different from our expectations due to a variety of factors, including the following:

 

•                  Our reliance on large contracts from a limited number of significant telecommunications customers and their ability to pay for our services, especially in light of recent competitive pressures in the telecommunications industry;

 

•                  Our ability to integrate businesses and assets that we have acquired or may acquire;

 

•                  Whether our efforts to expand into European and other international markets will prove to be economically viable and whether we will be able to generate revenue sufficient to recover our investment in bmd wireless AG;

 

•                  Adverse trends in the telecommunications industry in general, including bankruptcy filings by our customers and other factors that are beyond our control;

 

•                  Whether our investments in research and development and capitalized software will expand our service offerings and prove to be economically viable;

 

•                  Competition in service, price and technological innovation from entities with substantially greater resources;

 

•                  Constraints on our sales and marketing channels because many of our customers compete with each other;

 

•                  Our ability to accurately predict, control and recoup the large amount of up-front expenditures necessary to serve new customers and possible delays in sales cycles;

 

•                  Our ability to expand beyond our traditional business and into highly competitive notification and data management sectors, including, but not limited to, our efforts to employ our IntelliCast^SM Target Notification and Commercial Database services;

 

•                  The unpredictable rate of adoption of wireless 9-1-1 services, including further delays in the Federal Communications Commission’s mandated deployment of Phase I and Phase II wireless location services;

 

•                  The potential for liability claims, including product liability claims relating to our software;

 

•                  Technical difficulties and network downtime, including those caused by sabotage or unauthorized access to our systems;

 

•                  Changes in interest rates, including the LIBOR and prime rate and their potentially adverse effect on our results of operations and cash flows;

 

•                  The possibility that we will not generate taxable income in an amount sufficient to allow us to utilize previously generated net operating loss carryforwards and/or research and development tax credits;

 

 

•                  Our ability to economically attract, motivate and retain high-quality employees with skills that match our business needs;

 

•                  Developments in telecommunications regulation and the unpredictable manner in which existing or new legislation and regulation may be applied to our business;

 

•                  The potential impacts on our prospective and historical financial statements resulting from recent accounting pronouncements related to share based payments and our implementation strategy and effective date; and

 

•                  Developments in governance, accounting and financial regulations, including Section 404 of the Sarbanes-Oxley Act of 2002 and their unpredictable impact on general and administrative expenses and our ability to comply.

 

This list is intended to identify some of the principal factors that could cause actual results to differ materially from those described in the forward-looking statements included elsewhere in this report. These factors are not intended to represent a complete list of all risks and uncertainties inherent in our business, and should be read in conjunction with the more detailed risks included in our 2003 Annual Report on Form 10-K under the caption “Item 1. Business—Risk Factors,” our other Securities and Exchange Commission filings and our press releases.

 

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INDEX

 

PART I – FINANCIAL INFORMATION
Item 1 – Financial Statements (unaudited):
Consolidated Statements of Operations for the three and nine months ended September 30, 2004 and 2003
Consolidated Balance Sheets as of September 30, 2004 and December 31, 2003
Consolidated Statements of Cash Flows for the three and nine months ended September 30, 2004 and 2003.
Notes to 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 4 – Submission of Matters to a Vote of Security Holders
Item 6 – Exhibits and Reports on Form 8-K
Signatures
Certifications

 

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PART I - FINANCIAL INFORMATION

 

INTRADO INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in Thousands, Except Per Share Data; Unaudited)

 

		Three Months Ended September 30,						Nine Months Ended September 30,
		2004			2003			2004			2003
Revenues:
Wireline		$	21,393		$	20,779		$	60,602		$	61,828
Wireless		13,884			10,466			37,671			28,682
New Markets		789			438			2,266			1,193
Total revenues		36,066			31,683			100,539			91,703
Costs and expenses:
Direct costs—Wireline		11,161			9,725			32,035			29,305
Direct costs—Wireless		6,535			5,611			19,344			16,004
Direct costs—New Markets		982			1,082			5,333			3,457
Sales and marketing		5,168			4,008			14,735			12,450
General and administrative		4,633			5,535			16,203			17,214
Research and development		787			580			2,126			1,820
Total costs and expenses		29,266			26,541			89,776			80,250
Income from operations		6,800			5,142			10,763			11,453
Other income (expense):
Interest and other income		102			59			282			147
Interest and other expense		(277		)	(392		)	(971		)	(1,014		)
Income before income taxes		6,625			4,809			10,074			10,586
Income tax expense		2,629			1,707			3,986			3,758
Net income		$	3,996		$	3,102		$	6,088		$	6,828
Net income per share:
Basic		$	0.23		$	0.20		$	0.36		$	0.44
Diluted		$	0.22