TURBOCHEF TECHNOLOGIES INC - 10-Q Quarterly Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Form 10-Q

(Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Quarter ended September 30, 2004

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

___________to___________

Commission File Number 0-23478

TurboChef Technologies, Inc.
(Exact name of Registrant as specified in its Charter)

DELAWARE		48-1100390
(State or other jurisdiction of incorporation or organization)		(IRS employer identification number)

Suite 1900, Six Concourse Parkway
Atlanta, Georgia		30328
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code:
(678) 987-1700

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 the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES o NO x

Indicate the number of shares outstanding of each of the Registrant’s classes of Common Stock, as of the latest practicable date.

Title of Each Class		Number of Shares Outstanding at November 19, 2004


Common Stock, $0.01 Par Value		72,638,814

TURBOCHEF TECHNOLOGIES, INC.
TABLE OF CONTENTS

Form 10-Q Item		Page


PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Unaudited Condensed Consolidated Balance Sheets as of September 30, 2004 and December 31, 2003	1

	Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2004 and 2003	2

	Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2004 and 2003	3

	Notes to Unaudited Condensed Consolidated Financial Statements	4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	16

Item 4.	Controls and Procedures	17

Part II. Other Information		18

Item 1.	Legal Proceedings	18

Item 2.	Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities	18

Item 3.	Defaults Upon Senior Securities	18

Item 4.	Submission of Matters to a Vote of Security Holders	18

Item 5.	Other Information	19

Item 6.	Exhibits and Reports on Form 8-K	19

	Signatures	20

TURBOCHEF TECHNOLOGIES, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

	September 30, 2004				December 31, 2003

					(As Restated)
Assets:

Current assets:
Cash and cash equivalents (includes $880 and $0 of restricted cash, respectively)		$	3,470			$	8,890
Accounts receivable, net of allowance of $174 and $219, respectively			16,881				515
Other receivables, net			260				5
Inventory			6,664				1,514
Prepaid expenses			233				311


Total current assets			27,508				11,235

Property and equipment, net			2,300				101

Developed technology, net			10,236				-
Goodwill			2,775				-
Other assets			184				84


Total assets		$	43,003			$	11,420


Liabilities and Stockholders’ Equity (Deficit):

Current liabilities:
Accounts payable		$	7,035			$	424
Other payables			1,445				1,445
Accrued expenses			4,947				1,007
Notes payable			-				380
Deferred revenue			1,333				1,366
Accrued warranty and upgrade costs			2,768				928


Total current liabilities			17,528				5,550

Other liabilities			59				-


Total liabilities			17,587				5,550

Commitments and contingencies

Convertible, redeemable preferred stock			-				12,605

Stockholders’ equity (deficit):

Convertible preferred stock			11,319				-
Preferred membership units exchangeable for TurboChef common stock			6,351				-
Common stock, $.01 par value, authorized 100,000,000 shares at September 30, 2004 and 50,000,000 shares at December 31, 2003, issued 31,063,648 and 25,474,018 shares at September 30, 2004 and December 31, 2003, respectively			311				255
Additional paid-in capital			67,225				55,460
Accumulated deficit			(59,744	)			(61,956	)
Notes receivable for stock issuances			(46	)			(43	)
Treasury stock-at cost -0- shares at September 30, 2004 and 32,130 shares at December 31, 2003			-				(451	)


Total stockholders’ equity (deficit)			25,416				(6,735	)


Total liabilities and stockholders’ equity (deficit)		$	43,003			$	11,420

The accompanying notes are an integral part of these financial statements.

TURBOCHEF TECHNOLOGIES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

	Three Months Ended September 30,								Nine Months Ended September 30,

	2004				2003				2004				2003

					(As Restated)								(As Restated)
Revenues:
Product sales		$	30,335			$	507			$	33,390			$	2,828
Royalties and services			671				-				982				-

Total revenues			31,006				507				34,372				2,828

Costs and expenses:
Cost of product sales			19,302				239				20,923				1,450
Research and development expenses			308				194				816				680
Selling, general and administrative expenses			4,527				683				9,743				3,701
Depreciation and amortization			438				5				699				234

Total costs and expenses			24,575				1,121				32,181				6,065


Operating income (loss)			6,431				(614	)			2,191				(3,237	)

Other income:
Interest income			3				33				43				99
Other income (expense), net			(15	)			3				(22	)			7