UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
ý Quarterly Report pursuant to Section 13 or
15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 2005
o 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 000-50849
KANBAY INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in its Charter)
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Delaware |
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36-4387594 |
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(State or Other Jurisdiction of |
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(I.R.S. Employer Identification No.) |
6400 Shafer Court, Suite 100
Rosemont, Illinois 60018
Phone: (847) 384-6100
(Address, including zip code, and telephone number (including area code) of registrant’s principal executive office)
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: o No: ý
As of May 10, 2005, the Registrant had 34,009,234 shares of Common Stock, $0.001 par value per share, outstanding.
KANBAY INTERNATIONAL, INC.
TABLE OF CONTENTS
1
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Kanbay International, Inc.
(dollars in thousands)
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March 31, |
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December 31, |
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(unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
12,268 |
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$ |
29,126 |
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Restricted cash |
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2,478 |
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2,478 |
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Short term investments, held to maturity at amortized cost |
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42,177 |
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35,730 |
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Accounts receivable—related parties |
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18,224 |
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10,007 |
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Accounts receivable—third parties |
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21,137 |
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14,657 |
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Employee and other receivables |
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1,262 |
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1,599 |
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Deferred income taxes |
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1,106 |
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1,084 |
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Prepaid expenses and other |
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11,968 |
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14,416 |
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Total current assets |
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110,620 |
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109,097 |
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Property and equipment (at cost): |
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Land and building |
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7,822 |
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6,291 |
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Computer equipment |
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18,536 |
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17,538 |
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Computer software |
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5,655 |
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5,407 |
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Furniture and fixtures |
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6,005 |
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5,691 |
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Leasehold improvements |
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4,095 |
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3,105 |
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42,113 |
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38,032 |
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Less accumulated depreciation |
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18,910 |
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17,141 |
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23,203 |
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20,891 |
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Investment in affiliate |
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24,710 |
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25,094 |
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Long term investments, held to maturity at amortized cost |
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18,195 |
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24,424 |
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Goodwill |
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1,347 |
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— |
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Other intangibles, net |
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3,189 |
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— |
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Deferred income taxes |
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660 |
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660 |
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Other assets |
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336 |
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— |
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Total assets |
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$ |
182,260 |
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$ |
180,166 |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
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$ |
4,303 |
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$ |
3,973 |
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Amounts due to subcontractors |
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613 |
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565 |
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Deferred revenue |
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3,846 |
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4,017 |
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Customer deposit—related party |
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2,580 |
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4,106 |
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Accrued liabilities |
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18,700 |
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24,425 |
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Total current liabilities |
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30,042 |
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37,086 |
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Total liabilities |
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30,042 |
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37,086 |
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Stockholders’ equity: |
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Common Stock, par value $0.001 per share, 200,000,000 shares authorized, 33,920,521 and 32,989,935 shares issued and outstanding at March 31, 2005 and December 31, 2004 respectively |
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34 |
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33 |
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Additional paid-in capital |
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122,192 |
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120,641 |
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Retained earnings |
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24,761 |
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16,554 |
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Cumulative foreign currency translation adjustments |
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5,231 |
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5,852 |
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Total stockholders’ equity |
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152,218 |
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143,080 |
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Total liabilities and stockholders’ equity |
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$ |
182,260 |
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$ |
180,166 |
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See accompanying notes to the unaudited consolidated financial statements.
2
Kanbay International, Inc.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(dollars in thousands except per share amounts)
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Three months ended |
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March 31 |
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2005 |
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2004 |
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Net revenues—related parties |
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$ |
33,240 |
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$ |
25,760 |
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Net revenues—third parties |
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20,220 |
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11,245 |
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Total revenues |
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53,460 |
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37,005 |
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Cost of revenues |
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28,097 |
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18,765 |
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Gross profit |
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25,363 |
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18,240 |
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Sales and marketing expenses |
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4,640 |
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3,966 |
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General and administrative expenses |
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8,477 |
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7,178 |
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Stock compensation expense |
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132 |
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299 |
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Total selling, general and administrative expenses |
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13,249 |
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11,443 |
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Depreciation and amortization |
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1,908 |
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1,037 |
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(Gain) loss on sale of fixed assets |
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40 |
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(10 |
) |
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Income from operations |
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10,166 |
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5,770 |
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Other income (expense): |
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Interest expense |
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(7 |
) |
(16 |
) |
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Interest income |
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478 |
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20 |
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Foreign exchange gain (loss) |
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(139 |
) |
93 |
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Equity in earnings of affiliate |
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239 |
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770 |
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Other, net |
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