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 March 31, 2005
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) |
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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 (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 April 1, 2005 |
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28,074,438 Shares of Common Stock, $0.001 par value |
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TNS, INC.
INDEX
Item 1. Condensed Consolidated Financial Statements (Unaudited)
TNS, INC.
CONDENSED CONSOLIDATED
BALANCE SHEETS
(dollars in thousands, except share and per share data)
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December 31, |
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March 31, |
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(unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
19,788 |
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$ |
24,561 |
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Accounts receivable, net of allowance for doubtful accounts of $4,756 and $4,894, respectively |
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47,896 |
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45,879 |
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Other current assets |
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9,349 |
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10,516 |
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Total current assets |
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77,033 |
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80,956 |
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Property and equipment, net |
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50,587 |
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49,315 |
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Identifiable intangible assets, net |
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205,208 |
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198,260 |
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Goodwill |
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5,386 |
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5,849 |
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Other assets |
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18,198 |
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18,617 |
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Total assets |
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$ |
356,412 |
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$ |
352,997 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Current portion of long-term debt |
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$ |
9,000 |
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$ |
9,250 |
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Accounts payable, accrued expenses and other current liabilities |
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43,528 |
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46,050 |
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Deferred revenue |
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14,419 |
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11,260 |
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Total current liabilities |
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66,947 |
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66,560 |
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Long-term debt, net of current portion |
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42,000 |
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38,750 |
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Other liabilities |
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4,967 |
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4,505 |
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Total liabilities |
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113,914 |
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109,815 |
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Commitments and contingencies |
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Stockholders’ equity: |
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Common stock, $0.001 par value; 130,000,000 shares authorized; 27,996,053 and 28,074,438 shares issued and outstanding, respectively |
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28 |
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28 |
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Treasury stock |
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— |
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(462 |
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Additional paid-in capital |
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281,766 |
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281,795 |
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Accumulated deficit |
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(37,333 |
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(35,879 |
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Deferred stock compensation |
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(4,766 |
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(4,292 |
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Accumulated other comprehensive income |
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2,803 |
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1,992 |
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Total stockholders’ equity |
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242,498 |
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243,182 |
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Total liabilities and stockholders’ equity |
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$ |
356,412 |
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$ |
352,997 |
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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 |
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2004 |
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2005 |
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Revenues |
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$ |
60,156 |
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$ |
63,132 |
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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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30,692 |
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30,230 |
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Engineering and development |
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3,439 |
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3,906 |
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Selling, general, and administrative |
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11,019 |
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13,094 |
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Depreciation and amortization of property and equipment |
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4,806 |
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4,863 |
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Amortization of intangible assets |
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8,508 |
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6,265 |
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Total operating expenses |
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58,464 |
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58,358 |
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Income from operations |
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1,692 |
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4,774 |
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Interest expense |
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(4,433 |
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(811 |
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Interest income |
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36 |
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116 |
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Other income (expense), net |
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101 |
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(304 |
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Income (loss) before income taxes and equity in net loss of unconsolidated affiliates |
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(2,604 |
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3,775 |
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Income tax (provision) benefit |
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982 |
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(1,905 |
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Equity in net loss of unconsolidated affiliates |
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(37 |
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(416 |
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Net income (loss) |
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(1,659 |
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1,454 |
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Dividends on preferred stock |
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(3,428 |
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— |
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Net income (loss) attributable to common stockholders |
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$ |
(5,087 |
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$ |
1,454 |
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Basic net income (loss) per common share |
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$ |
(0.34 |
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$ |
0.05 |
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Diluted net income (loss) per common share |
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$ |
(0.34 |
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$ |
0.05 |
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Basic weighted average common shares outstanding |
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14,906,191 |
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28,007,946 |
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Diluted weighted average common shares outstanding |
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14,906,191 |
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28,384,837 |
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See accompanying notes to condensed consolidated financ