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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 June 30, 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 August 2, 2004 was 32,883,903.

 

Table of Contents

CONCUR TECHNOLOGIES, INC.

 

FORM 10-Q

JUNE 30, 2004

 

INDEX

 

          Page

PART I. FINANCIAL INFORMATION

   3

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

   3

Consolidated Statements of Operations for the three and nine months ended June 30, 2004 and 2003

    3

Consolidated Balance Sheets as of June 30, 2004 and September 30, 2003

    4

Consolidated Statements of Cash Flows for the three and nine months ended June 30, 2004 and 2003

    5

Notes to Consolidated Financial Statements

    6

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

   13

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   30

ITEM 4. CONTROLS AND PROCEDURES

   32

PART II. OTHER INFORMATION

   33

ITEM 1. LEGAL PROCEEDINGS

   33

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

   33

SIGNATURE

   34

 

2

Table of Contents

PART I. FINANCIAL INFORMATION

 

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

 

Concur Technologies, Inc.

 

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

 

     Three Months Ended
June 30,
     Nine Months Ended
June 30,
  
     2004
     2003
     2004
     2003
  

Revenues:

                                 

Subscription

    $ 10,365     $ 8,546     $ 29,239     $ 24,727  

Consulting

      2,985       3,085       8,212       11,300  

License

      1,107       2,543       3,639       6,553  
    
 
 
 

Total revenues (1)

      14,457       14,174       41,090       42,580  

Expenses:

                                 

Cost of operations (2)

      5,922       5,536       16,704       17,733  

Sales and marketing

      3,663       3,654       10,495       11,081  

Research and development

      2,177       2,627       6,661       8,008  

General and administrative

      1,814       1,750       5,145       5,078  

Amortization of intangible asset

      285       285       855       855  
    
 
 
 

Total expenses

      13,861       13,852       39,860       42,755  
    
 
 
 

Income (loss) from operations

      596       322       1,230       (175 )

Interest income

      64       55       167       165  

Interest expense

      (9 )     (28 )     (24 )     (105 )

Other income, net

      3       50       84       72  
    
 
 
 

Net income (loss)

    $ 654     $ 399     $ 1,457     $ (43 )
    
 
 
 

Net income (loss) per share:

                                 

Basic

    $ 0.02     $ 0.01     $ 0.04     $ (0.00 )
    
 
 
 

Diluted

    $ 0.02     $ 0.01     $ 0.04     $ (0.00 )
    
 
 
 

Shares used in calculation of net income (loss) per share:

                                 

Basic

      32,753       31,433       32,488       30,998  
    
 
 
 

Diluted

      36,892       35,630       36,816       30,998  
    
 
 
 
(1) Includes sales to related parties of $410 in the three months ended June 30, 2003, and $849 in the nine months ended June 30, 2003.
(2) Includes payments to related parties of $386 in the nine months ended June 30, 2003.

 

See accompanying notes.

 

3

Table of Contents

Concur Technologies, Inc.

 

Consolidated Balance Sheets

(In thousands, except per share amount)

(Unaudited)

 

     June 30,
2004
     September 30,
2003
  

Assets

                 

Current assets:

                 

Cash and cash equivalents

    $ 23,950     $ 21,607  

Accounts receivable, net of allowances of $568 and $499

      9,467       7,862  

Prepaid expenses

      1,312       1,425  

Other current assets

      1,781       1,238  
    
 

Total current assets

      36,510       32,132  

Property and equipment, net

      4,205       1,331  

Restricted cash

      550       550  

Acquired customer base intangible asset, net of amortization

      3,515       4,370  

Goodwill

      3,704       3,704  

Deposits and other assets

      2,003       886  
    
 

Total assets

    $ 50,487     $ 42,973  
    
 

Liabilities and stockholders’ equity

                 

Current liabilities:

                 

Accounts payable

    $ 1,350     $ 1,015  

Accrued compensation

      1,225       945  

Other accrued liabilities

      2,401       2,518  

Current portion of long-term obligations

      440       768  

Current portion of deferred revenues

      11,363       9,905  
    
 

Total current liabilities

      16,779       15,151  

Long-term obligations, net of current portion

      65       199  

Long-term deferred revenues, net of current portion

      4,349       2,015  
    
 

Total liabilities

      21,193       17,365  
    
 

Commitments and contingencies

                 

Stockholders’ equity:

                 

Common stock, par value $0.001 per share:

                 

Authorized – 60,000;

                 

Issued and Outstanding – 32,851 and 32,142

      239,554       237,402  

Accumulated other comprehensive income

      77       —    

Accumulated deficit

      (210,337 )     (211,794 )
    
 

Total stockholders’ equity

      29,294       25,608  
    
 

Total liabilities and stockholders’ equity

    $ 50,487     $ 42,973  
    
 

 

See accompanying notes.

 

4

Table of Contents

Concur Technologies, Inc.

 

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

     Three Months Ended
June 30,
     Nine Months Ended
June 30,
  
     2004
     2003
     2004
     2003
  

Operating activities:

                                 

Net income (loss)

    $ 654     $ 399     $ 1,457     $ (43 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities

                                 

Amortization of intangible asset

      285       285       855       855  

Depreciation

      535       601       1,344       2,372  

Provision for allowance for accounts receivable

      7       53       431       253  

Changes in operating assets and liabilities, net of acquisition:

                                 

Accounts receivable

      (1,372 )     (1,479 )     (2,019 )     829  

Prepaid expenses, deposits, and other assets

      (785 )     (75 )     (1,534 )     (605 )

Accounts payable

      40       46       325       (988 )

Accrued liabilities

      43       59       94       (805 )

Deferred revenues

      2,264       (588 )     3,771       1,594  
    
 
 
 

Net cash provided by (used in) operating activities

      1,671       (699 )     4,724       3,462  

Investing activities:

                                 

Purchases of property and equipment

      (1,608 )     (277 )     (4,209 )     (734 )

Maturities of marketable securities

      —         1,024       —         2,024  

Acquisition of Captura Software, Inc., net of cash acquired

      —         (41 )     —         (551 )
    
 
 
 

Net cash (used in) provided by investing activities

      (1,608 )     706       (4,209 )     739  

Financing activities:

                                 

Proceeds from issuance of common stock from exercise of stock options

      343       2,113       1,397       2,451  

Proceeds from issuance of common stock from employee stock purchase plan

      755       249       755       249  

Proceeds from borrowings

      —         —         289       915  

Payments on borrowings and capital leases

      (235 )     (381 )     (724 )