UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| 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
| ¨ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the period from to
Commission file number 0-5404
ANALEX CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 71-0869563 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
5904 Richmond Highway
Suite 300
Alexandria, Virginia 22303
(Address of principal executive offices)
Registrant’s Telephone number including area code
(703) 329-9400
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 Act) Yes ¨ No x
As of August 11, 2004, 15,292,512 shares of the common stock of the registrant were outstanding.
TABLE OF CONTENTS
| Page No. | ||||||
| Part I Financial Information: |
||||||
| Item 1. | Financial Statements | |||||
| Consolidated Balance Sheets at June 30, 2004 (unaudited) and December 31, 2003 |
3 | |||||
| 5 | ||||||
| Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2004 and 2003 (unaudited) |
6 | |||||
| 7 | ||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 21 | ||||
| Item 3. | Quantitative and Qualitative Disclosure About Market Risk | 37 | ||||
| Item 4. | Controls and Procedures | 38 | ||||
| Part II Other Information: |
||||||
| Item 1. Legal Proceedings | 38 | |||||
| Item 6. Exhibits and Reports on Form 8-K | 39 | |||||
| 41 | ||||||
2
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2004 AND DECEMBER 31, 2003
| June 30, 2004 (unaudited) |
December 31, 2003 | |||||
| ASSETS |
||||||
| Current assets: |
||||||
| Cash and cash equivalents |
$ | 1,276,900 | $ | 14,177,500 | ||
| Accounts receivable, net |
20,303,800 | 10,068,100 | ||||
| Deferred tax asset |
556,100 | 150,000 | ||||
| Prepaid expenses and other |
643,300 | 483,600 | ||||
| Current assets of business held for sale |
93,200 | 658,100 | ||||
| Total current assets |
22,873,300 | 25,537,300 | ||||
| Fixed assets, net |
1,108,400 | 546,100 | ||||
| Contract rights and other intangibles, net |
7,353,500 | 1,753,000 | ||||
| Goodwill |
41,648,100 | 15,281,600 | ||||
| Other assets |
874,000 | 514,100 | ||||
| Total other assets |
50,984,000 | 18,094,800 | ||||
| Total assets |
$ | 73,857,300 | $ | 43,632,100 | ||
See Notes to Consolidated Financial Statements
3
ANALEX CORPORATION
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2004 AND DECEMBER 31, 2003
| June 30, 2004 (unaudited) |
December 31, 2003 |
|||||||
| LIABILITIES, CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 915,700 | $ | 736,200 | ||||
| Note payable - line of credit |
8,254,700 | — | ||||||
| Note payable - convertible note |
8,398,700 | — | ||||||
| Note payable - bank term note |
— | 700,000 | ||||||
| Notes payable - other |
953,900 | 1,487,400 | ||||||
| Other current liabilities |
8,870,000 | 5,387,500 | ||||||
| Current liabilities of business held for sale |
93,200 | 116,000 | ||||||
| Total current liabilities |
27,486,200 | 8,427,100 | ||||||
| Note payable - bank term note |
— | 1,341,700 | ||||||
| Notes payable - other |
651,700 | 1,209,300 | ||||||
| Deferred tax liability |
2,325,300 | — | ||||||
| Convertible note |
3,785,500 | 2,881,400 | ||||||
| Other |
17,700 | 43,800 | ||||||
| Total long-term liabilities |
6,780,200 | 5,476,200 | ||||||
| Total liabilities |
34,266,400 | 13,903,300 | ||||||
| Commitments and contingencies |
||||||||
| Series A convertible preferred stock |
2,112,900 | 236,300 | ||||||
| Shareholders’ equity: |
||||||||
| Common stock $.02 par; authorized 65,000,000 shares; issued and outstanding - June 30, 2004, 15,292,512 shares and December 31, 2003, 13,036,666 shares |
305,900 | 260,700 | ||||||
| Additional paid in capital |
38,725,200 | 28,519,100 | ||||||
| Warrants outstanding |
6,482,800 | 5,762,900 | ||||||
| Accumulated other comprehensive loss |
(17,700 | ) | (43,800 | ) | ||||
| Accumulated deficit |
(8,018,200 | ) | (5,006,400 | ) | ||||
| Total shareholders’ equity |
37,478,000 | 29,492,500 | ||||||
| Total liabilities, convertible preferred stock and shareholders’ equity |
$ | 73,857,300 | $ | 43,632,100 | ||||
See Notes to Consolidated Financial Statements
4
ANALEX CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003
| Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| (unaudited) | ||||||||||||||||
| Revenues |
$ | 22,215,200 | $ | 15,425,200 | $ | 38,846,600 | $ | 30,703,500 | ||||||||
| Operating costs and expenses: |
||||||||||||||||
| Costs of revenue |
17,357,200 | 12,924,600 | 31,408,600 | 25,731,500 | ||||||||||||
| Selling, general and administrative |
2,552,500 | 1,432,800 | 4,353,900 | 2,750,500 | ||||||||||||
| Amortization of intangible assets |
277,300 | 104,300 | 426,500 | 204,500 | ||||||||||||
| Total operating costs and expenses |
20,187,000 | 14,461,700 | 36,189,000 | 28,686,500 | ||||||||||||
| Operating income |
2,028,200 | 963,500 | 2,657,600 | 2,017,000 | ||||||||||||
| Other income (expense): |
||||||||||||||||
| Interest income |
29,600 | — | 42,900 | 1,100 | ||||||||||||
| Interest expense |
(1,698,900 | ) | (84,200 | ) | (2,400,000 | ) | (196,600 | ) | ||||||||
| Total other expense, net |
(1,669,300 | ) | (84,200 | ) | (2,357,100 | ) | (195,500 | ) | ||||||||
| Income from continuing operations before income taxes |
358,900 | 879,300 | 300,500 | 1,821,500 | ||||||||||||
| Provision for income taxes |
459,500 | 250,300 | 384,700 | 518,900 | ||||||||||||
| Income (loss) from continuing operations |
(100,600 | ) | 629,000 | (84,200 | ) | 1,302,600 | ||||||||||
| Income (loss) from discontinued operations, net of income taxes |
(50,700 | ) | 45,200 | (79,200 | ) | 107,000 | ||||||||||
| Loss on disposal of discontinued operations, net of income taxes |
(521,800 | ) | — | (521,800 | ) | — | ||||||||||
| Net income (loss) |
(673,100 | ) | 674,200 | (685,200 | ) | 1,409,600 | ||||||||||
| Dividends on convertible preferred stock |
(225,000 | ) | — | (450,000 | ) | — | ||||||||||
| Accretion of convertible preferred stock |
(939,100 | ) | — | (1,876,600 | ) | — | ||||||||||
| Net income (loss) available to common shareholders |
$ | (1,837,200 | ) | $ | 674,200 | $ | (3,011,800 | ) | $ | 1,409,600 | ||||||
| Net income (loss) available to common shareholders per share: |
||||||||||||||||
| Continuing operations |
||||||||||||||||
| Basic |
$ | (0.09 | ) | $ | 0.05 | $ | (0.18 | ) | $ | 0.09 | ||||||
| Diluted |
$ | (0.09 | ) | $ | 0.04 | $ | (0.18 | ) | $ | 0.07 | ||||||
| Discontinued operations |
||||||||||||||||
| Basic |
$ | (0.04 | ) | $ | 0.00 | $ | (0.04 | ) | $ | 0.01 | ||||||
| Diluted |
$ | (0.04 | ) | $ | 0.00 | $ | (0.04 | ) | $ | 0.01 | ||||||
| Net income (loss) available to common shareholders: |
||||||||||||||||
| Basic |
$ | (0.13 | ) | $ | 0.05 | $ | (0.22 | ) | $ | 0.10 | ||||||
| Diluted |
$ | (0.13 | ) | $ | 0.04 | $ | (0.22 | ) | $ | 0.08 | ||||||
| Weighted average number of shares: |
||||||||||||||||
| Basic |
14,049,715 | 14,577,663 | 13,547,203 | 14,511,875 | ||||||||||||
| Diluted |
14,049,715 | 17,169,313 | 13,547,203 | 17,496,504 | ||||||||||||