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 March 31, 2003
OR
¨ 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) | |
| 10500 Metric Drive, Suite 128 Dallas, Texas |
75243 | |
| (Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code:
(214) 379-6000
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 ¨
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES ¨ 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 May 9, 2003 | |
| Common Stock, $0.01 Par Value |
19,419,240 |
TABLE OF CONTENTS
| Form 10-Q Item |
Page | |||
| Part I. Financial Information |
||||
| Item 1. |
Financial Statements |
|||
| Condensed Balance Sheets as of March 31, 2003 (unaudited) and December 31, 2002. |
3 | |||
| 4 | ||||
| 5 | ||||
| Notes to the Interim Condensed Financial Statements (unaudited) |
6 | |||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
11 | ||
| Item 3. |
18 | |||
| Item 4. |
19 | |||
| Part II. Other Information |
||||
| Item 1. |
19 | |||
| Item 2. |
19 | |||
| Item 3. |
20 | |||
| Item 4. |
20 | |||
| Item 5. |
20 | |||
| Item 6. |
20 | |||
| 21 | ||||
2
Condensed Balance Sheets
(Amounts in Thousands, Except Share Data)
| March 31, 2003 |
December 31, 2002 |
|||||||
| (Unaudited) |
||||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash |
$ |
139 |
|
$ |
629 |
| ||
| Accounts receivable net of allowance for doubtful accounts of $169 at March 31, 2003 and December 31, 2002 |
|
2,046 |
|
|
1,682 |
| ||
| Accounts receivable—other |
|
735 |
|
|
735 |
| ||
| Inventory |
|
1,385 |
|
|
1,954 |
| ||
| Prepaid expenses |
|
53 |
|
|
79 |
| ||
| Total current assets |
|
4,358 |
|
|
5,079 |
| ||
| Property and equipment, net |
|
130 |
|
|
170 |
| ||
| Other assets |
|
134 |
|
|
138 |
| ||
| Total assets |
$ |
4,622 |
|
$ |
5,387 |
| ||
| Liabilities and Stockholders’ Deficit |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
1,075 |
|
$ |
1,113 |
| ||
| Accounts payable—other |
|
1,445 |
|
|
1,445 |
| ||
| Accrued expenses |
|
301 |
|
|
583 |
| ||
| Notes payable |
|
1,359 |
|
|
1,359 |
| ||
| Accrued upgrade and warranty costs |
|
1,037 |
|
|
1,046 |
| ||
| Total current liabilities |
|
5,217 |
|
|
5,546 |
| ||
| Commitments and contingencies (Notes 2 and 3) |
||||||||
| Stockholders’ deficit: |
||||||||
| Preferred stock, $1.00 par value and $100.00 stated value. Authorized 5,000,000 shares. 30,000 issued at March 31, 2003 and December 31, 2002, respectively |
|
2,430 |
|
|
2,430 |
| ||
| Common stock, $.01 par value. Authorized 50,000,000 shares. Issued 19,419,240 and 19,058,526 shares at March 31, 2003 and December 31, 2002, respectively |
|
194 |
|
|
191 |
| ||
| Additional paid-in capital |
|
46,755 |
|
|
46,513 |
| ||
| Accumulated deficit |
|
(46,960 |
) |
|
(46,312 |
) | ||
| Notes receivable for stock issuances |
|
(2,563 |
) |
|
(2,530 |
) | ||
| Treasury stock—at cost 32,130 shares in 2003 and 2002 |
|
(451 |
) |
|
(451 |
) | ||
| Total stockholders’ deficit |
|
(595 |
) |
|
(159 |
) | ||
| Total liabilities and stockholders’ deficit |
$ |
4,622 |
|
$ |
5,387 |
| ||
The accompanying notes are an integral part of these financial statements.
3
Unaudited Interim Condensed Statements of Operations
(Amounts in Thousands, Except Share Data)
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Revenue—Product sales |
$ |
2,566 |
|
$ |
1,829 |
| ||
| Costs and expenses: |
||||||||
| Cost of goods sold |
|
1,370 |
|
|
999 |
| ||
| Research and development expenses |
|
220 |
|
|
105 |
| ||
| Selling, general and administrative expenses |
|
1,604 |
|
|
2,004 |
| ||
| Total costs and expenses |
|
3,194 |
|
|
3,108 |
| ||
| Operating loss |
|
(628 |
) |
|
(1,279 |
) | ||
| Other income (expense): |
||||||||
| Interest income |
|
34 |
|
|
43 |
| ||
| Other income |
|
5 |
|
|
1 |
| ||
|
|
39 |
|
|
44 |
| |||
| Net loss |
$ |
(589 |
) |
$ |
(1,235 |
) | ||
| Preferred stock dividends |
|
(59 |
) |
|
(95 |
) | ||
| Net loss applicable to common stockholders |
$ |
(648 |
) |
$ |
(1,330 |
) | ||
| Loss per common share—basic and diluted |
$ |
(0.03 |
) |
$ |
(0.07 |
) | ||
| Weighted average number of common shares outstanding—basic and diluted |
|
19,062,534 |
|
|
18,442,666 |
| ||
The accompanying notes are an integral part of these financial statements.
4
Unaudited Interim Condensed Statements of Cash Flows
(Amounts in Thousands)
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ |
(589 |
) |
$ |
(1,235 |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Depreciation and amortization |
|
124 |
|
|
138 |
| ||
| Non-cash interest on notes receivable from employees and directors |
|
(33 |
) |
|
(32 |
) | ||
| Non-cash compensation expense |
|
6 |
|
|
12 |
| ||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
|
(364 |
) |
|
(1,516 |
) | ||
| Inventories |
|
494 |
|
|
(365 |
) | ||
| Prepaid expenses and other assets |
|
26 |
|
|
(31 |
) | ||
| Accounts payable |
|
(38 |
) |
|
64 |
| ||
| Accrued expenses |
|
(111 |
) |
|
175 |
| ||
| Net cash used in operating activities |
|
(485 |
) |
|
(2,790 |
) | ||
| Net cash used in investing activities—Purchase of equipment and leasehold improvements |
|
(5 |
) |
|
(11 |
) | ||
| Cash flows from financing activities: |
||||||||
| Payment of broker commission on the sale of common stock |
|
— |
|
|
(25 |
) | ||
| Repayments of notes receivable from employees |
|
— |
|
|
8 |
| ||
| Proceeds from the exercise of stock options |
|
— |
|
|
35 |
| ||
| Net cash provided by financing activities |
|
— |
|
|
18 |
| ||
| Net increase (decrease) in cash and cash equivalents |
|
(490 |
) |
|
(2,783 |
) | ||
| Cash and cash equivalents at beginning of period |
|
629 |
|
|
4,498 |
| ||
| Cash and cash equivalents at end of period |
$ |
139 |
|
$ |
1,715 |
| ||
| Supplemental disclosures of noncash activities: |
||||||||
| Noncash investing activity—accrued preferred stock dividend |
$ |
59 |
|
$ |
95 |
| ||