UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 2004
Commission file number: 0-25137
CONCUR TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
State of Incorporation: Delaware
I.R.S. Employer I.D. No.: 91-1608052
Address of principal executive offices: 6222 185th Avenue NE
Redmond, Washington 98052
Telephone number, including area code: 425-702-8808
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 x No ¨
The number of shares outstanding of the registrant’s common stock as of May 5, 2004 was 32,788,028.
FORM 10-Q
MARCH 31, 2004
INDEX
2
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| Three Months Ended March 31, |
Six Months Ended March 31, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| Revenues: |
||||||||||||||||
| Subscription |
$ | 9,664 | $ | 8,569 | $ | 18,874 | $ | 16,181 | ||||||||
| Consulting |
2,220 | 3,997 | 5,227 | 8,215 | ||||||||||||
| License |
1,356 | 1,244 | 2,532 | 4,010 | ||||||||||||
| Total revenues (1) |
13,240 | 13,810 | 26,633 | 28,406 | ||||||||||||
| Expenses: |
||||||||||||||||
| Cost of operations (2) |
5,354 | 5,932 | 10,782 | 12,197 | ||||||||||||
| Sales and marketing |
3,595 | 3,620 | 6,832 | 7,427 | ||||||||||||
| Research and development |
2,279 | 2,674 | 4,484 | 5,381 | ||||||||||||
| General and administrative |
1,610 | 1,774 | 3,331 | 3,328 | ||||||||||||
| Amortization of intangible asset |
285 | 285 | 570 | 570 | ||||||||||||
| Total expenses |
13,123 | 14,285 | 25,999 | 28,903 | ||||||||||||
| Income (loss) from operations |
117 | (475 | ) | 634 | (497 | ) | ||||||||||
| Interest income |
55 | 54 | 103 | 111 | ||||||||||||
| Interest expense |
(6 | ) | (34 | ) | (15 | ) | (78 | ) | ||||||||
| Other income, net |
39 | 26 | 81 | 22 | ||||||||||||
| Net income (loss) |
$ | 205 | $ | (429 | ) | $ | 803 | $ | (442 | ) | ||||||
| Net income (loss) per share: |
||||||||||||||||
| Basic |
$ | 0.01 | $ | (0.01 | ) | $ | 0.02 | $ | (0.01 | ) | ||||||
| Diluted |
$ | 0.01 | $ | (0.01 | ) | $ | 0.02 | $ | (0.01 | ) | ||||||
| Shares used in calculation of net income (loss) per share: |
||||||||||||||||
| Basic |
32,482 | 30,989 | 32,357 | 30,709 | ||||||||||||
| Diluted |
36,803 | 30,989 | 36,750 | 30,709 | ||||||||||||
| (1) | Includes sales to related parties of $133 in the three months ended March 31, 2003, and $439 in the six months ended March 31, 2003. |
| (2) | Includes payments to related parties of $386 in the six months ended March 31, 2003. |
See accompanying notes.
3
Consolidated Balance Sheets
(In thousands, except per share amount)
(Unaudited)
| March 31, 2004 |
September 30, 2003 |
|||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 23,053 | $ | 21,607 | ||||
| Accounts receivable, net of allowances of $739 and $499 |
8,120 | 7,862 | ||||||
| Prepaid expenses |
1,606 | 1,425 | ||||||
| Other current assets |
1,401 | 1,238 | ||||||
| Total current assets |
34,180 | 32,132 | ||||||
| Property and equipment, net |
3,134 | 1,331 | ||||||
| Restricted cash |
550 | 550 | ||||||
| Acquired customer base intangible asset, net of amortization |
3,800 | 4,370 | ||||||
| Goodwill |
3,704 | 3,704 | ||||||
| Deposits and other assets |
1,305 | 886 | ||||||
| Total assets |
$ | 46,673 | $ | 42,973 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 1,311 | $ | 1,015 | ||||
| Accrued compensation |
1,371 | 945 | ||||||
| Other accrued liabilities |
2,204 | 2,518 | ||||||
| Current portion of long-term obligations |
675 | 768 | ||||||
| Current portion of deferred revenues |
10,437 | 9,905 | ||||||
| Total current liabilities |
15,998 | 15,151 | ||||||
| Long-term obligations, net of current portion |
76 | 199 | ||||||
| Long-term deferred revenues, net of current portion |
3,005 | 2,015 | ||||||
| Total liabilities |
19,079 | 17,365 | ||||||
| Commitments and contingencies |
||||||||
| Stockholders’ equity: |
||||||||
| Common stock, par value $0.001 per share: Authorized – 60,000; Issued and Outstanding – 32,586 and 32,142 |
238,456 | 237,402 | ||||||
| Accumulated other comprehensive income |
129 | — | ||||||
| Accumulated deficit |
(210,991 | ) | (211,794 | ) | ||||
| Total stockholders’ equity |
27,594 | 25,608 | ||||||
| Total liabilities and stockholders’ equity |
$ | 46,673 | $ | 42,973 | ||||
See accompanying notes.
4
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Three Months Ended March 31, |
Six Months Ended March 31, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| Operating activities: |
||||||||||||||||
| Net income (loss) |
$ | 205 | $ | (429 | ) | $ | 803 | $ | (442 | ) | ||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities |
||||||||||||||||
| Amortization of intangible asset |
285 | 285 | 570 | 570 | ||||||||||||
| Depreciation |
403 | 752 | 809 | 1,771 | ||||||||||||
| Provision for allowance for accounts receivable |
220 | 213 | 424 | 200 | ||||||||||||
| Changes in operating assets and liabilities, net of acquisition: |
||||||||||||||||
| Accounts receivable |
(1,939 | ) | 2,465 | (647 | ) | 2,308 | ||||||||||
| Prepaid expenses, deposits, and other assets |
(799 | ) | 623 | (749 | ) | (530 | ) | |||||||||
| Accounts payable |
268 | (544 | ) | 285 | (1,034 | ) | ||||||||||
| Accrued liabilities |
516 | (735 | ) | 51 | (864 | ) | ||||||||||
| Deferred revenues |
2,032 | 514 | 1,507 | 2,182 | ||||||||||||
| Net cash provided by operating activities |
1,191 | 3,144 | 3,053 | 4,161 | ||||||||||||
| Investing activities: |
||||||||||||||||
| Purchases of property and equipment |
(1,798 | ) | (218 | ) | (2,601 | ) | (457 | ) | ||||||||
| Maturities of marketable securities |
— | 1,000 | — | 1,000 | ||||||||||||
| Acquisition of Captura Software, Inc., net of cash acquired |
— | (95 | ) | — | (510 | ) | ||||||||||
| Net cash (used in) provided by investing activities |
(1,798 | ) | 687 | (2,601 | ) | 33 | ||||||||||
| Financing activities: |
||||||||||||||||
| Proceeds from issuance of common stock from exercise of stock options |
590 | 230 | 1,054 | 338 | ||||||||||||
| Proceeds from borrowings |
289 | — | 289 | 915 | ||||||||||||
| Payments on borrowings and capital leases |
(147 | ) | (351 | ) | (489 | ) | (1,127 | ) | ||||||||
| Increase in restricted cash balances |
— | — | — | (700 | ) | |||||||||||