UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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 quarter ended September 30, 2004
Commission File Number: 001–32033
TNS, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE |
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36–4430020 |
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(State or jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification Number) |
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11480 Commerce Park Drive,
Suite 600 |
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(Address of principal executive offices) |
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(703) 453–8300 |
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(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 requirement for the past 90 days. ý Yes o No
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b–2 of the Exchange Act). o Yes ý No
Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.
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Shares Outstanding as of November 1, 2004 |
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27,986,193 Shares of Common Stock, $0.001 par value |
TNS, INC.
INDEX
Item 1. Condensed Consolidated Financial Statements (Unaudited)
TNS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share and per share data)
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December 31, 2003 |
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September 30, 2004 |
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(unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
11,074 |
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$ |
12,966 |
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Accounts receivable, net of allowance for doubtful accounts of $4,313 and $4,628, respectively |
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41,490 |
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47,537 |
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Other current assets |
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7,457 |
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10,683 |
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Total current assets |
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60,021 |
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71,186 |
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Property and equipment, net |
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45,745 |
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47,649 |
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Identifiable intangible assets, net |
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223,919 |
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212,613 |
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Goodwill |
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4,453 |
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4,453 |
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Other assets |
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8,221 |
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14,919 |
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Total assets |
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$ |
342,359 |
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$ |
350,820 |
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LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY |
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Current liabilities: |
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Current portion of long–term debt |
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$ |
28,731 |
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$ |
11,750 |
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Accounts payable, accrued expenses and other current liabilities |
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42,072 |
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44,105 |
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Deferred revenue |
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7,320 |
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9,927 |
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Total current liabilities |
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78,123 |
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65,782 |
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Long–term debt, net of current portion |
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121,664 |
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66,510 |
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Other liabilities |
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3,614 |
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4,470 |
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Total liabilities |
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203,401 |
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136,762 |
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Commitments and contingencies |
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Class A redeemable convertible preferred stock, $0.01 par value; 5,000,000 shares authorized; 134,846 shares issued and outstanding as of December 31, 2003, and no shares issued or outstanding as of September 30, 2004 |
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176,470 |
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— |
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Stockholders’ (deficit) equity: |
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Common stock, $0.001 par value; 130,000,000 shares authorized; 12,373,370 and 26,783,312 shares issued and outstanding, respectively |
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12 |
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27 |
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Additional paid–in capital |
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2,277 |
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259,374 |
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Accumulated deficit |
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(38,889 |
) |
(39,762 |
) |
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Deferred stock compensation |
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(173 |
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(5,142 |
) |
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Accumulated other comprehensive loss |
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(739 |
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(439 |
) |
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Total stockholders’ (deficit) equity |
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(37,512 |
) |
214,058 |
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Total liabilities and stockholders’ (deficit) equity |
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$ |
342,359 |
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$ |
350,820 |
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See accompanying notes to condensed consolidated financial statements (unaudited).
2
TNS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(dollars in thousands, except share and per share data)
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Three months ended September 30, |
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Nine months ended September 30, |
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2003 |
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2004 |
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2003 |
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2004 |
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Revenues |
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$ |
57,245 |
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$ |
64,584 |
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$ |
161,996 |
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$ |
185,680 |
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Operating expenses: |
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Cost of network services, exclusive of the items shown separately below |
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29,715 |
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31,344 |
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87,128 |
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91,170 |
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Engineering and development |
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2,416 |
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3,748 |
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8,385 |
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10,680 |
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Selling, general, and administrative |
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8,902 |
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12,690 |
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27,528 |
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36,515 |
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Depreciation and amortization of property and equipment |
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4,926 |
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4,989 |
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14,533 |
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14,746 |
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Amortization of intangible assets |
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6,285 |
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6,151 |
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18,856 |
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20,855 |
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Total operating expenses |
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52,244 |
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58,922 |
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156,430 |
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173,966 |
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Income from operations |
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5,001 |
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5,662 |
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5,566 |
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11,714 |
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Interest expense |
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