UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarter ended September 30, 2004 |
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OR |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from to |
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Commission File Number 000-1095478
INTERWAVE COMMUNICATIONS INTERNATIONAL LTD.
(Exact name of registrant as specified in its charter)
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BERMUDA |
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98-0155633 |
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(State or other jurisdiction of |
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(I.R.S. Employer Identification No.) |
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CLARENDON HOUSE, |
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NOT APPLICABLE |
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(Address of principal executive offices) |
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(Zip code) |
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(441) 295-5950 |
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(Registrant’s telephone number including area code) |
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NOT APPLICABLE |
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(Former name, former address and former fiscal year, if changed since last report.) |
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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, 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 o No ý
As of November 1, 2004, 9,407,805 common shares, par value $0.01 per share, of the registrant were outstanding.
INTERWAVE COMMUNICATIONS INTERNATIONAL LTD. AND SUBSIDIARIES
INDEX
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PART I—FINANCIAL INFORMATION |
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Item 1. Condensed Consolidated Financial Statements (unaudited) |
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Condensed Consolidated Balance Sheets as of September 30, 2004 and June 30, 2004 |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. Quantitative and Qualitative Disclosures About Market Risk |
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
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2
INTERWAVE COMMUNICATIONS INTERNATIONAL LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
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September 30, |
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June 30, |
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(unaudited) |
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ASSETS |
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Current assets: |
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Cash |
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$ |
2,072 |
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$ |
5,350 |
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Restricted cash, current portion |
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184 |
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382 |
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Trade receivables, net of allowance of $1,117 and $968 as of September 30, 2004 and June 30, 2004, respectively |
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7,356 |
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8,210 |
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Trade receivables from related parties |
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362 |
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593 |
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Inventories, net |
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8,935 |
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7,989 |
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Prepaid expenses and other current assets |
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2,626 |
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2,634 |
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Total current assets |
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21,535 |
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25,158 |
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Restricted cash, long term portion |
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199 |
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199 |
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Property and equipment, net |
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2,604 |
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2,747 |
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Purchased technology, net |
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2,346 |
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2,620 |
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Patents and other intangibles, net |
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3,124 |
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3,387 |
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Other assets |
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63 |
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113 |
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Total assets |
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$ |
29,871 |
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$ |
34,224 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Current liabilities: |
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Short-term borrowings |
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$ |
7,073 |
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$ |
3,588 |
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Current portion of notes and capital leases payable |
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145 |
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308 |
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Accounts payable |
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6,264 |
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6,933 |
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Accrued expenses |
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3,156 |
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3,283 |
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Accrued compensation |
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1,718 |
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2,034 |
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Income taxes payable |
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72 |
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172 |
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Accrued restructuring |
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1,018 |
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1,416 |
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Deferred revenue |
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317 |
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283 |
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Deferred revenue from related parties |
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— |
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95 |
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Advance customer deposits |
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3,940 |
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4,093 |
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Total current liabilities |
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23,703 |
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22,205 |
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Other long term liabilities |
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1,000 |
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1,000 |
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Total liabilities |
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24,703 |
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23,205 |
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Shareholders’ equity: |
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Common shares, $0.01 par value; 20,000,000 shares authorized; 9,261,236 and 9,164,605 shares issued and outstanding as of September 30, 2004 and June 30, 2004, respectively |
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92 |
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91 |
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Additional paid-in capital |
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345,128 |
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344,863 |
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Receivables from shareholders |
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— |
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(185 |
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Accumulated other comprehensive loss |
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(116 |
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(116 |
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Accumulated deficit |
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(339,936 |
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(333,634 |
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Total shareholders’ equity |
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5,168 |
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11,019 |
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Total liabilities and shareholders’ equity |
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$ |
29,871 |
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$ |
34,224 |
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See Notes to Condensed Consolidated Financial Statements
3
INTERWAVE COMMUNICATIONS INTERNATIONAL LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
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Three Months Ended |
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2004 |
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2003 |
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(unaudited) |
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Product revenues |
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$ |
3,868 |
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$ |
9.954 |
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Service revenues |
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264 |
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761 |
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Total revenues (inclusive of related party revenues of $55, and $37 for 2004 and 2003 respectively) |
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4,132 |
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$ |
10,715 |
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Product cost of revenues |
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2,932 |
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4,713 |
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Service cost of revenues |
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1,193 |
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1,027 |
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Amortization of intangible assets |
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537 |
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457 |
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Total cost of revenues |
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4,662 |
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6,197 |
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Gross profit (loss) |
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(530 |
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4,518 |
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Operating expenses: |
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Research and development |
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2,270 |
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2,235 |
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Selling, general and administrative |
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3,305 |
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5,518 |
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Restructuring charges |
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— |
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58 |
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Total operating expenses |
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5,575 |
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7,811 |
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Loss from operations |
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(6,105 |
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(3,293 |
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Interest income |
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3 |
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6 |
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Interest expense |
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(245 |
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(46 |
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Other expense, net |
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(48 |
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(79 |
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Loss before income taxes |
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(6,395 |
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