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 quarterly period ended June 30, 2004
OR
| ¨ | 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: 000-50391
SIGMATEL, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 74-2691412 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
3815 South Capital of Texas Highway
Building 3, Suite 300
Austin, Texas 78704
(512) 381-3700
(Address and telephone number of principal executive offices)
Indicate by check mark whether 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 Exchange Act Rule 12b-2). Yes ¨ No x
The number of shares outstanding of the Registrant’s Common Stock, $0.0001 par value, was 35,348,710 as of July 15, 2004.
FORM 10-Q
TABLE OF CONTENTS
| Page No. | ||||
| PART I: INTERIM FINANCIAL INFORMATION |
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| Item 1. |
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| Condensed Balance Sheets as of June 30, 2004 and December 31, 2003 |
3 | |||
| 4 | ||||
| Condensed Statements of Cash Flows for the Six months ended June 30, 2004 and June 30, 2003 |
5 | |||
| 6 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
12 | ||
| Item 3. |
21 | |||
| Item 4. |
31 | |||
| PART II: OTHER INFORMATION |
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| Item 1. |
32 | |||
| Item 2. |
Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities |
32 | ||
| Item 3. |
33 | |||
| Item 4. |
33 | |||
| Item 5. |
33 | |||
| Item 6. |
34 | |||
| 35 | ||||
2
CONDENSED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
| June 30, 2004 |
December 31, 2003 |
|||||||
| ASSETS |
||||||||
| Current Assets: |
||||||||
| Cash and cash equivalents |
$ | 38,002 | $ | 61,841 | ||||
| Short-term investments |
90,812 | 49,420 | ||||||
| Accounts receivable, net |
19,170 | 15,989 | ||||||
| Inventories, net |
16,518 | 9,904 | ||||||
| Prepaid expenses and other current assets |
2,004 | 1,333 | ||||||
| Total current assets |
166,506 | 138,487 | ||||||
| Property, equipment and software, net |
4,989 | 3,792 | ||||||
| Intangible assets, net |
4,333 | 4,476 | ||||||
| Other assets |
473 | 122 | ||||||
| Total assets |
$ | 176,301 | $ | 146,877 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| Current Liabilities: |
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| Accounts payable |
$ | 13,110 | $ | 13,466 | ||||
| Accrued payroll |
1,177 | 870 | ||||||
| Other accrued expenses |
3,342 | 2,561 | ||||||
| Deferred revenue |
6,572 | 3,645 | ||||||
| Current portion of capital lease obligations |
52 | 48 | ||||||
| Total current liabilities |
24,253 | 20,590 | ||||||
| Capital lease obligations, net of current portion |
36 | 63 | ||||||
| Other liabilities |
115 | 116 | ||||||
| Total liabilities |
24,404 | 20,769 | ||||||
| Stockholders’ equity: |
||||||||
| Common stock, $.0001 par value; 170,000,000 shares authorized; shares issued and outstanding: 35,372,761 and 35,282,805 at 2004 and 34,270,961 and 34,181,005 at 2003, respectively |
4 | 3 | ||||||
| Additional paid-in capital |
182,025 | 173,737 | ||||||
| Notes receivable from stockholders |
(8 | ) | (115 | ) | ||||
| Deferred stock-based compensation |
(2,037 | ) | (3,678 | ) | ||||
| Treasury stock, 89,956 common shares, at cost |
(741 | ) | (741 | ) | ||||
| Accumulated deficit |
(27,346 | ) | (43,098 | ) | ||||
| Total stockholders’ equity |
151,897 | 126,108 | ||||||
| Total liabilities and stockholders’ equity |
$ | 176,301 | $ | 146,877 | ||||
The accompanying notes are an integral part of these condensed financial statements.
3
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except share data)
(unaudited)
| Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| Revenues |
$ | 36,608 | $ | 19,672 | $ | 68,108 | $ | 32,548 | ||||||||
| Cost of goods sold (1) |
16,778 | 10,870 | 31,562 | 18,208 | ||||||||||||
| Gross Profit |
19,830 | 8,802 | 36,546 | 14,340 | ||||||||||||
| Operating Expenses: |
||||||||||||||||
| Research and development (1) |
7,170 | 4,154 | 13,253 | 7,816 | ||||||||||||
| Selling, general and administrative (1) |
3,603 | 2,717 | 6,502 | 4,255 | ||||||||||||
| Amortization of deferred stock-based compensation |
402 | 889 | 1,397 | 1,128 | ||||||||||||
| Total operating expenses |
11,175 | 7,760 | 21,152 | 13,199 | ||||||||||||
| Operating income |
8,655 | 1,042 | 15,394 | 1,141 | ||||||||||||
| Other income (expense): |
||||||||||||||||
| Interest income |
353 | 13 | 694 | 22 | ||||||||||||
| Interest expense |
(8 | ) | (282 | ) | (16 | ) | (1,005 | ) | ||||||||
| Total other income (expense) |
345 | (269 | ) | 678 | (983 | ) | ||||||||||
| Income before income taxes |
9,000 | 773 | 16,072 | 158 | ||||||||||||
| Income taxes |
179 | 8 | 320 | 8 | ||||||||||||
| Net income |
8,821 | 765 | 15,752 | 150 | ||||||||||||
| Deemed dividends on preferred stock |
— | (79 | ) | — | (8,255 | ) | ||||||||||
| Net income (loss) attributable to common stockholders |
$ | 8,821 | $ | 686 | $ | 15,752 | $ | (8,105 | ) | |||||||
| BASIC NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS PER SHARE |
$ | 0.25 | $ | 0.12 | $ | 0.45 | $ | (1.39 | ) | |||||||
| DILUTED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS PER SHARE |
$ | 0.23 | $ | 0.03 | $ | 0.41 | $ | (1.39 | ) | |||||||
| WEIGHTED AVERAGE SHARES USED TO COMPUTE: |
||||||||||||||||
| Basic net income (loss) attributable to common stockholders per share |
35,146,977 | 5,853,738 | 34,820,403 | 5,849,838 | ||||||||||||
| Diluted net income (loss) attributable to common stockholders per share |
38,767,712 | 30,142,756 | 38,606,967 | 5,849,838 | ||||||||||||
| (1) | Amounts exclude amortization of deferred stock-based compensation as follows: |
| Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||
| 2004 |
2003 |
2004 |
2003 | |||||||||
| Cost of goods sold |
$ | 17 | $ | 36 | $ | 67 | $ | 42 | ||||
| Research and development |
281 | 479 | 887 | 659 | ||||||||
| Selling, general & administrative |
104 | 374 | 443 | 427 | ||||||||
| Total |
$ | 402 | $ | 889 | $ | 1,397 | $ | 1,128 | ||||
The accompanying notes are an integral part of these condensed financial statements.
4
CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Six Months Ended June 30, |
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| 2004 |
2003 |
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| Cash flows from operating activities: |
||||||||
| Net income |
$ | 15,752 | $ | 150 | ||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
||||||||
| Depreciation and amortization |
2,098 | 2,104 | ||||||
| Amortization of deferred stock-based compensation |
1,397 | 1,128 | ||||||
| Other non-cash expenses |
409 | 730 | ||||||
| Changes in assets and liabilities: |
||||||||
| Accounts receivable, net |
(3,182 | ) | (6,537 | ) | ||||
| Inventories, net |
(6,613 | ) | (1,998 | ) | ||||
| Prepaid expenses and other assets |
(1,021 | ) | (275 | ) | ||||
| Accounts payable |
3,141 | 704 | ||||||
| Accrued expenses |
1,151 | 1,135 | ||||||
| Deferred revenue and other liabilities |
2,863 | 2,579 | ||||||
| Net cash provided by (used in) operating activities |
15,995 | (280 | ) | |||||
| Cash flows from investing activities: |
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| Maturities of short-term investments |
48,250 | — | ||||||
| Purchase of short-term investments |
(89,832 | ) | — | |||||
| Purchase of property, equipment, software and intangible assets |
(6,649 | ) | (1,460 | ) | ||||
| Net cash used in investing activities |
(48,231 | ) | (1,460 | ) | ||||
| Cash flows from financing activities: |
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