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 SEPTEMBER 30, 2004
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 |
For The Transition Period From To
Commission file number 0-22292
Captiva Software Corporation
(Exact name of Registrant as specified in its charter)
| Delaware | 77-0104275 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
10145 Pacific Heights Boulevard
San Diego, CA 92121
(858) 320-1000
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Former name, former address and former fiscal year, if changed since last report:
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 ¨
As of October 31, 2004, there were 12,187,592 shares of the registrant’s common stock, par value $0.01, outstanding.
CAPTIVA SOFTWARE CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2004
| Page No. | ||||
| PART I. FINANCIAL INFORMATION | ||||
| Item 1. |
||||
| Consolidated Condensed Balance Sheets at September 30, 2004 and December 31, 2003 (unaudited) |
3 | |||
| 4 | ||||
| 5 | ||||
| 6 | ||||
| Notes to Consolidated Condensed Financial Statements (unaudited) |
7 | |||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 15 | ||
| Item 3. |
Quantitative and Qualitative Disclosures About Market Risk | 31 | ||
| Item 4. |
Controls and Procedures | 31 | ||
| PART II. OTHER INFORMATION | ||||
| Item 1. |
Legal Proceedings | 32 | ||
| Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds | 32 | ||
| Item 3. |
Defaults Upon Senior Securities | 32 | ||
| Item 4. |
Submission of Matters to a Vote of Security Holders | 32 | ||
| Item 5. |
Other Information | 32 | ||
| Item 6. |
Exhibits | 32 | ||
| 33 | ||||
2
PART I – FINANCIAL INFORMATION
CONSOLIDATED CONDENSED BALANCE SHEETS*
(UNAUDITED)
(IN THOUSANDS)
| September 30, 2004 |
December 31, 2003 | |||||
| ASSETS |
||||||
| Current assets: |
||||||
| Cash and cash equivalents |
$ | 23,020 | $ | 16,038 | ||
| Accounts receivable, net |
8,321 | 10,780 | ||||
| Prepaid expenses and other current assets |
2,084 | 3,314 | ||||
| Total current assets |
33,425 | 30,132 | ||||
| Property and equipment, net |
1,303 | 924 | ||||
| Other assets |
3,656 | 2,354 | ||||
| Goodwill |
10,312 | 6,082 | ||||
| Other intangible assets, net |
3,780 | 3,762 | ||||
| Total assets |
$ | 52,476 | $ | 43,254 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||
| Current liabilities: |
||||||
| Accounts payable |
$ | 436 | $ | 891 | ||
| Accrued compensation and related liabilities |
2,710 | 2,793 | ||||
| Other liabilities |
3,361 | 3,166 | ||||
| Deferred revenue |
11,431 | 11,264 | ||||
| Total current liabilities |
17,938 | 18,114 | ||||
| Deferred revenue |
458 | 519 | ||||
| Other liabilities |
262 | 235 | ||||
| Commitments |
||||||
| Stockholders’ equity: |
||||||
| Preferred stock |
— | — | ||||
| Common stock |
121 | 108 | ||||
| Additional paid-in capital |
31,683 | 24,171 | ||||
| Retained earnings |
1,950 | 38 | ||||
| Accumulated other comprehensive income |
64 | 69 | ||||
| Total stockholders’ equity |
33,818 | 24,386 | ||||
| Total liabilities and stockholders’ equity |
$ | 52,476 | $ | 43,254 | ||
*The accompanying notes are an integral part of these consolidated condensed financial statements.
3
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS*
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| Net revenues: |
||||||||||||||||
| Software |
$ | 6,562 | $ | 7,092 | $ | 21,666 | $ | 19,452 | ||||||||
| Services |
6,979 | 5,558 | 20,787 | 16,455 | ||||||||||||
| Hardware and other |
1,466 | 1,867 | 5,218 | 5,096 | ||||||||||||
| Total revenues |
15,007 | 14,517 | 47,671 | 41,003 | ||||||||||||
| Cost of revenues: |
||||||||||||||||
| Software |
862 | 741 | 2,887 | 1,881 | ||||||||||||
| Services |
2,591 | 2,502 | 7,762 | 7,540 | ||||||||||||
| Hardware and other |
1,183 | 1,465 | 4,236 | 4,106 | ||||||||||||
| Amortization of purchased intangible assets |
654 | 523 | 1,919 | 1,571 | ||||||||||||
| Total cost of revenues |
5,290 | 5,231 | 16,804 | 15,098 | ||||||||||||
| Gross profit |
9,717 | 9,286 | 30,867 | 25,905 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Research and development |
2,242 | 2,181 | 7,439 | 6,406 | ||||||||||||
| Sales and marketing |
4,858 | 4,294 | 15,504 | 13,188 | ||||||||||||
| General and administrative |
1,919 | 1,609 | 4,891 | 4,521 | ||||||||||||
| Merger costs |
(181 | ) | (10 | ) | (181 | ) | (54 | ) | ||||||||
| Write-off of in-process research and development |
— | — | 66 | — | ||||||||||||
| Write-off of withdrawn stock offering costs |
— | — | 205 | — | ||||||||||||
| Total operating expenses |
8,838 | 8,074 | 27,924 | 24,061 | ||||||||||||
| Income from operations |
879 | 1,212 | 2,943 | 1,844 | ||||||||||||
| Other income (expense), net |
62 | (35 | ) | 191 | (28 | ) | ||||||||||
| Income before income taxes |
941 | 1,177 | 3,134 | 1,816 | ||||||||||||
| Provision for income taxes |
367 | 471 | 1,222 | 727 | ||||||||||||
| Net income |
$ | 574 | $ | 706 | $ | 1,912 | $ | 1,089 | ||||||||
| Basic net income per share |
$ | 0.05 | $ | 0.07 | $ | 0.17 | $ | 0.12 | ||||||||
| Diluted net income per share |
$ | 0.04 | $ | 0.06 | $ | 0.15 | $ | 0.10 | ||||||||
| Basic common equivalent shares |
11,969 | 9,607 | 11,486 | 9,162 | ||||||||||||
| Diluted common equivalent shares |
13,225 | 11,516 | 13,116 | 10,442 | ||||||||||||
*The accompanying notes are an integral part of these consolidated condensed financial statements.
4
CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS’ EQUITY AND TOTAL
COMPREHENSIVE INCOME*
(UNAUDITED)
(IN THOUSANDS)
| Common Stock |
Additional Paid-in Capital |
Retained Earnings |
Accumulated Other Comprehensive Income (Loss) |
Total Stockholders’ Equity |
|||||||||||||||
| Number of Shares |
Amount |
||||||||||||||||||
| Balance at December 31, 2003 |
10,790 | $ | 108 | $ | 24,171 | $ | 38 | $ | 69 | $ | 24,386 | ||||||||
| Exercise of stock options |
512 | 5 | 2,512 | 2,517 | |||||||||||||||
| Tax benefit of stock option exercises |
1,077 | 1,077 | |||||||||||||||||
| Comprehensive income: |
|||||||||||||||||||
| Equity adjustment from foreign currencies |
(13 | ) | (13 | ) | |||||||||||||||
| Net income |
477 | 477 | |||||||||||||||||
| Total comprehensive income |
464 | ||||||||||||||||||
| Balance at March 31, 2004 |
11,302 | $ | 113 | $ | 27,760 | $ | 515 | $ | 56 | $ | 28,444 | ||||||||
| Exercise of stock options |
422 | 4 | 1,068 | 1,072 | |||||||||||||||
| Issuance of common stock under employee stock purchase plan |
116 | 1 | 294 | 295 | |||||||||||||||
| Tax benefit of stock option exercises |
1,084 | 1,084 | |||||||||||||||||
| Comprehensive income: |
|||||||||||||||||||
| Equity adjustment from foreign currencies |
(18 | ) | (18 | ) | |||||||||||||||
| Net income |
861 | 861 | |||||||||||||||||
| &n | |||||||||||||||||||