SECURITIES AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period ended September 30, 2004
OR
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 0-020992
INSIGHTFUL CORPORATION
(Exact
name of registrant as specified in its charter)
|
Delaware |
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04-2842217 |
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(State or other jurisdiction of incorporation or |
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(I.R.S. employer identification no.) |
1700 Westlake Avenue North, Suite 500, Seattle, Washington
98109-3044
(Address
of principal executive offices) (Zip code)
(206) 283-8802
Registrant’s
telephone number, including area code
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.01 par value
(Title
of class)
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 x NO o
Indicate by check mark whether registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES o NO x
The number of shares outstanding of the Registrant’s Common Stock, $0.01 par value, was 12,366,842 shares as of November 1, 2004.
TABLE OF CONTENTS
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PART I. FINANCIAL INFORMATION |
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ITEM 1. |
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Condensed Consolidated Balance Sheets as of September 30, 2004 and December 31, 2003 |
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3 |
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4 |
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5 |
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ITEM 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
9 |
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ITEM 3. |
22 |
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ITEM 4. |
22 |
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PART II. OTHER INFORMATION |
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ITEM 1. |
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ITEM 4. |
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ITEM 5. |
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ITEM 6. |
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24 |
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Trademarks
Insightful, Insightful Corporation, the Insightful logo, “Insightful intelligence from data,” S-PLUS, S-PLUS Analytic Server, StatServer and InFact are registered trademarks of Insightful Corporation. S, SpatialStats, FinMetrics, GARCH, SeqTrial, Anatolytics, ArrayAnalyzer, and “Human-like Intelligence,” are trademarks of Insightful Corporation. All other brand names, trademarks or service marks referred to in the report are the property of their owners.
1
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
INSIGHTFUL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
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September 30, |
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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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$ |
8,568 |
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$ |
7,139 |
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Trade accounts receivable, net |
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3,468 |
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3,210 |
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Other receivables |
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448 |
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726 |
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Prepaid expenses and other current assets |
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478 |
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422 |
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Total current assets |
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12,962 |
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11,497 |
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Property and equipment, net |
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540 |
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984 |
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Purchased technology, net |
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1,373 |
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- |
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Goodwill |
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800 |
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800 |
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Other assets |
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60 |
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175 |
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$ |
15,735 |
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$ |
13,456 |
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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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$ |
129 |
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$ |
129 |
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Accounts payable |
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1,219 |
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914 |
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Accrued payroll and payroll-related items |
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1,350 |
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1,372 |
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Accrued expenses and other current liabilities |
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561 |
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1,390 |
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Deferred revenue |
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5,558 |
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5,633 |
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Total current liabilities |
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8,817 |
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9,438 |
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Long-term debt, less current portion |
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64 |
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161 |
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Commitments and contingencies |
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Stockholders’ equity: |
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Preferred stock, $0.01 par value– |
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Authorized–1,000,000 shares |
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Issued and outstanding–none |
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- |
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- |
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Common stock, $0.01 par value– |
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Authorized–20,000,000 shares |
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Issued
and outstanding–12,319,525 and 11,474,444, shares |
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123 |
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115 |
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Additional paid-in capital |
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36,177 |
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34,319 |
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Accumulated deficit |
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(29,320 |
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(30,454 |
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Other accumulated comprehensive loss-cumulative translation adjustment |
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(126 |
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(123 |
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Total stockholders’ equity |
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6,854 |
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3,857 |
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$ |
15,735 |
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$ |
13,456 |
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The accompanying notes are an integral part of these consolidated financial statements.
2
INSIGHTFUL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per share data)
(unaudited)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2004 |
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2003 |
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2004 |
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2003 |
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Revenues: |
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Software licenses |
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$ |
2,164 |
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$ |
1,855 |
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$ |
6,183 |
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$ |
5,566 |
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Software maintenance |
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1,626 |
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1,627 |
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4,879 |
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5,010 |
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Professional services and other |
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979 |
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555 |
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2,519 |
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2,100 |
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Total revenues |
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4,769 |
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4,037 |
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13,581 |
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12,676 |
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Cost of revenues: |
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Software related |
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390 |
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527 |
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1,255 |
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1,537 |
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Professional services and other |
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526 |
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511 |
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1,634 |
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2,027 |
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Total cost of revenues |
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916 |
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1,038 |
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2,889 |
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3,564 |
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Gross profit |
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3,853 |
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2,999 |
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10,692 |
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9,112 |
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Operating expenses: |
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Sales and marketing |
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1,678 |
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1,671 |
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4,830 |
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5,286 |
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Research and development |
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1,342 |
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1,646 |
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3,992 |
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5,095 |
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Less–Funded research |
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(650 |
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(1,180 |
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(2,439 |
) |
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(3,264 |
) |
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Research and development, net |
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692 |
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466 |
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1,553 |
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1,831 |
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General and administrative |
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961 |
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986 |
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3,199 |
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2,703 |
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Restructuring charges |
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- |
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911 |
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- |
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911 |
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Total operating expenses |
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