UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES ACT OF 1934
For the Quarter Ended March 31, 2004
Commission File Number 000-26299
ARIBA, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 77-0439730 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
807 11th Avenue
Sunnyvale, California 94089
(Address of principal executive offices)
(650) 390-1000
(Registrant’s telephone number, including area code)
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 described in Exchange Act Rule 12b-2).
Yes x No ¨
On April 30, 2004, approximately 274,276,370 shares of the registrant’s common stock were issued and outstanding.
INDEX
2
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
| March 31, 2004 |
September 30, 2003 |
|||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 65,120 | $ | 70,819 | ||||
| Short-term investments |
47,345 | 56,323 | ||||||
| Restricted cash |
35,302 | 1,123 | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $1,181 and $1,356 as of March 31, 2004 and September 30, 2003, respectively |
13,208 | 8,669 | ||||||
| Prepaid expenses and other current assets |
12,635 | 10,747 | ||||||
| Total current assets |
173,610 | 147,681 | ||||||
| Property and equipment, net |
19,887 | 21,767 | ||||||
| Long-term investments |
69,661 | 78,329 | ||||||
| Restricted cash |
27,312 | 28,579 | ||||||
| Goodwill, net |
188,598 | 181,033 | ||||||
| Other intangible assets, net |
1,024 | — | ||||||
| Other assets |
2,188 | 1,741 | ||||||
| Total assets |
$ | 482,280 | $ | 459,130 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 12,153 | $ | 10,767 | ||||
| Accrued compensation and related liabilities |
22,031 | 26,674 | ||||||
| Accrued liabilities |
77,173 | 35,513 | ||||||
| Restructuring obligations |
10,423 | 13,764 | ||||||
| Deferred revenue |
51,345 | 57,470 | ||||||
| Current portion of long-term obligations |
43 | — | ||||||
| Total current liabilities |
173,168 | 144,188 | ||||||
| Restructuring obligations |
28,424 | 34,112 | ||||||
| Deferred revenue |
31,112 | 43,954 | ||||||
| Total liabilities |
232,704 | 222,254 | ||||||
| Minority interests |
21,225 | 20,019 | ||||||
| Commitments and contingencies (Note 4) |
||||||||
| Stockholders’ equity: |
||||||||
| Common stock |
548 | 540 | ||||||
| Additional paid-in capital |
4,510,661 | 4,500,974 | ||||||
| Deferred stock-based compensation |
(4,765 | ) | (314 | ) | ||||
| Accumulated other comprehensive income |
3,846 | 2,856 | ||||||
| Accumulated deficit |
(4,281,939 | ) | (4,287,199 | ) | ||||
| Total stockholders’ equity |
228,351 | 216,857 | ||||||
| Total liabilities and stockholders’ equity |
$ | 482,280 | $ | 459,130 | ||||
See accompanying notes to condensed consolidated financial statements.
3
CONDENSED 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: |
||||||||||||||||
| License |
$ | 15,940 | $ | 23,058 | $ | 32,742 | $ | 48,366 | ||||||||
| License—related party |
— | 4,691 | 1,874 | 9,832 | ||||||||||||
| Maintenance and services |
39,660 | 30,337 | 72,692 | 60,659 | ||||||||||||
| Maintenance and services—related party |
408 | 1,188 | 1,431 | 2,146 | ||||||||||||
| Total revenues |
56,008 | 59,274 | 108,739 | 121,003 | ||||||||||||
| Cost of revenues: |
||||||||||||||||
| License |
233 | 1,130 | 1,677 | 1,879 | ||||||||||||
| Maintenance and services |
16,016 | 11,916 | 27,500 | 22,053 | ||||||||||||
| Amortization of acquired core technology |
— | 1,163 | — | 4,000 | ||||||||||||
| Total cost of revenues |
16,249 | 14,209 | 29,177 | 27,932 | ||||||||||||
| Gross profit |
39,759 | 45,065 | 79,562 | 93,071 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Sales and marketing |
25,289 | 20,532 | 42,828 | 41,121 | ||||||||||||
| Research and development |
12,844 | 13,874 | 25,121 | 27,832 | ||||||||||||
| General and administrative |
5,401 | 13,769 | 9,944 | 20,833 | ||||||||||||
| Amortization of other intangible assets |
76 | 47,787 | 76 | 113,464 | ||||||||||||
| Stock-based compensation (1) |
838 | 1,197 | 868 | 1,472 | ||||||||||||
| Restructuring and lease abandonment costs |
(2,397 | ) | — | (2,397 | ) | — | ||||||||||
| Total operating expenses |
42,051 | 97,159 | 76,440 | 204,722 | ||||||||||||
| Income (loss) from operations |
(2,292 | ) | (52,094 | ) | 3,122 | (111,651 | ) | |||||||||
| Interest income |
894 | 1,365 | 1,832 | 2,942 | ||||||||||||
| Interest expense |
(3 | ) | (3 | ) | (5 | ) | (13 | ) | ||||||||
| Other income (expense) |
62 | 202 | (56 | ) | 396 | |||||||||||
| Net income (loss) before income taxes and minority interests |
(1,339 | ) | (50,530 | ) | 4,893 | (108,326 | ) | |||||||||
| Provision (benefit) for income taxes |
(255 | ) | 105 | (527 | ) | 443 | ||||||||||
| Minority interests in net income (loss) of consolidated subsidiaries |
(253 | ) | 948 | 160 | 1,476 | |||||||||||
| Net income (loss) |
$ | (831 | ) | $ | (51,583 | ) | $ | 5,260 | $ | (110,245 | ) | |||||
| Net income (loss) per share—basic |
$ | 0.00 | $ | (0.19 | ) | $ | 0.02 | $ | (0.42 | ) | ||||||
| Net income (loss) per share—diluted |
$ | 0.00 | $ | (0.19 | ) | $ | 0.02 | $ | (0.42 | ) | ||||||
| Weighted average shares used in computing net income (loss) per share—basic |
271,878 | 265,247 | 270,938 | 264,650 | ||||||||||||
| Weighted average shares used in computing net income (loss) per share—diluted |
271,878 | 265,247 | 277,678 | 264,650 | ||||||||||||
| (1) For the three and six month periods ended March 31, 2004 and 2003, stock-based compensation expense (benefit), net of the effects of cancellations, is attributable to various operating expense categories as follows (in thousands):
|
| |||||||||||||||
| Three Months Ended March 31, |
Six Months Ended March 31, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| Cost of revenues |
$ | 115 | $ | 35 | $ | 154 | $ | (708 | ) | |||||||
| Sales and marketing |
619 | 706 | 599 | 1,206 | ||||||||||||
| Research and development |
28 | 114 | 29 | 232 | ||||||||||||
| General and administrative |
76 | 342 | 86 | 742 | ||||||||||||
| Total |
$ | 838 | $ | 1,197 | $ | 868 | ||||||||||