UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 March 31, 2003.
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 000-30293
EMBARCADERO TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
| Delaware (State or other jurisdiction of incorporation or organization) |
68-0310015 (I.R.S. Employer Identification No.) |
425 MARKET STREET, SUITE 425
SAN FRANCISCO, CA 94105
(415)
834-3131
(Address of principal executive offices)
Indicate by check mark whether the registrant (1) 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 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. x Yes o No
The number of shares outstanding of the Registrant’s Common Stock as of March 31, 2003 was 26,484,323.
EMBARCADERO TECHNOLOGIES, INC.
INDEX
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| PART I. |
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FINANCIAL INFORMATION |
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ITEM 1. |
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FINANCIAL STATEMENTS |
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Condensed Consolidated Balance Sheets as of March 31, 2003 and December 31, 2002 |
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Condensed Consolidated Statements of Operations for the three months ended March 31, 2003 and 2002 |
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Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2003 and 2002 |
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6 | |
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ITEM 2. |
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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ITEM 3. |
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ITEM 4. |
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27 | |
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| PART II. |
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OTHER INFORMATION |
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ITEM 1. |
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28 | |
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ITEM 6. |
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2
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EMBARCADERO TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
(unaudited)
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March 31, |
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December 31, |
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| ASSETS |
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| Current Assets: |
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| Cash and cash equivalents |
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$ |
25,591 |
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$ |
15,870 |
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| Short-term investments |
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20,050 |
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27,893 |
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| Trade accounts receivable, net |
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6,340 |
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7,539 |
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| Prepaid expenses and other current assets |
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1,470 |
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1,532 |
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| Deferred income taxes |
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489 |
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489 |
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| Total current assets |
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53,940 |
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53,323 |
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| Property and equipment, net |
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3,486 |
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3,587 |
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| Goodwill |
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10,337 |
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10,337 |
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| Other intangible assets, net |
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1,298 |
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1,500 |
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| Deferred income taxes |
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2,840 |
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2,840 |
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| Other assets |
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4,867 |
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5,128 |
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| Total assets |
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$ |
76,768 |
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$ |
76,715 |
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| LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| Current Liabilities: |
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| Accounts payable |
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$ |
549 |
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$ |
379 |
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| Accrued liabilities |
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3,064 |
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3,431 |
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| Deferred revenue |
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11,101 |
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10,705 |
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| Total current liabilities |
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14,714 |
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14,515 |
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| Stockholders’ Equity: |
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| Common stock, $0.001 par value |
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27 |
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27 |
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| Treasury stock |
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(6,287 |
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(5,116 |
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| Additional paid-in capital |
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75,859 |
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75,858 |
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| Accumulated other comprehensive income |
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54 |
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184 |
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| Deferred stock-based compensation |
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(340 |
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(598 |
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| Accumulated deficit |
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(7,259 |
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(8,155 |
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| Total stockholders’ equity |
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62,054 |
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62,200 |
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| Total liabilities and stockholders’ equity |
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$ |
76,768 |
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$ |
76,715 |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
3
EMBARCADERO TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except
per share data)
(unaudited)
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Three Months Ended |
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2003 |
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2002 |
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| Revenues: |
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| License |
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$ |
6,347 |
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$ |
7,096 |
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| Maintenance |
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5,861 |
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5,406 |
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| Total revenues |
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12,208 |
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12,502 |
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| Cost of revenues: |
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| License |
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100 |
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129 |
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| Amortization of acquired technology |
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555 |
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269 |
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| Maintenance |
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588 |
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626 |
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| Total cost of revenues |
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1,243 |
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1,024 |
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| Gross profit |
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10,965 |
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11,478 |
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| Operating expenses: |
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| Research and development |
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3,790 |
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3,730 |
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| Sales and marketing |
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4,895 |
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4,875 |
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| General and administrative |
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1,302 |
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1,341 |
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| Amortization of other intangible assets |
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— |
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385 |
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| Total operating expenses |
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9,987 |
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10,331 |
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| Income from operations |
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978 |
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1,147 |
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| Other income, net |
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126 |
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176 |
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| Income before provision for income taxes and share in loss of joint venture |
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1,104 |
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1,323 |
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| Provision for income taxes |
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(208 |
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(370 |
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| Income before share in loss of joint venture |
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896 |
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953 |
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| Share in loss of joint venture, net |
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— |
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(300 |
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| Net income |
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$ |
896 |
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$ |
653 |
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| Net income per share: |
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| Basic |
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$ |
0.03 |
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$ |
0.02 |
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| Diluted |
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$ |
0.03 |
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$ |
0.02 |
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| Weighted average shares used in per share calculation: |
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| Basic |
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26,652 |
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27,132 |
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| Diluted |
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28,255 |
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29,639 |
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| Non-cash stock-based compensation included in the above expenses: |
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| Cost of revenues |
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$ |
— |
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$ |
1 |
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| Research and development |
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3 |
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13 |
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| Sales and marketing |
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105 |
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250 |
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| General and administrative |
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150 |
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417 |
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$ |
258 |
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$ |
681 |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
4
EMBARCADERO TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in
thousands)
(unaudited)
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Three Months Ended |
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2003 |
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2002 |
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| Cash Flows from Operating Activities: |
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| Net income |
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$ |
896 |
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$ |
653 |
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| Adjustments to reconcile net income to net cash provided by operating activities: |
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| Depreciation and amortization |
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535 |
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481 |
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| Provision for (recovery of) doubtful accounts |
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(47 |
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143 |
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| Amortization of developed technology |
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572 |
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314 |
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| Amortization of other intangible assets |
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— |
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385 |
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| Amortization of deferred stock-based compensation |
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258 |
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681 |
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| Share in loss of joint venture, net |
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— |
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300 |
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| Changes in assets and liabilities: |
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| Trade accounts receivable |
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1,218 |
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(1,203 |
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| Prepaid expenses and other assets |
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59 |
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19 |
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| Accounts payable and accrued liabilities |
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(191 |
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144 |
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| Deferred revenue |
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