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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 Quarterly Period Ended March 31, 2005

 

Commission File Number: 0-22065

 

 

RADIANT SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

 

 

Georgia   11-2749765

(State or other jurisdiction of

incorporation or organization)

  

(I.R.S. Employer

Identification No.)

 

3925 Brookside Parkway, Alpharetta, Georgia   30022
(Address of principal executive offices)   (Zip Code)

 

Issuer’s telephone number, including area code: (770) 576-6000

 

 

(Former name, former address and former fiscal year, if changed since last report)

 

 

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 of the registrant’s common stock outstanding as of April 22, 2005 was 29,175,110.

 

 

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RADIANT SYSTEMS, INC. AND SUBSIDIARIES

 

FORM 10-Q

 

TABLE OF CONTENTS

 

         PAGE NO.
PART I:   FINANCIAL INFORMATION    3

Item 1:

   Financial Statements    3
    Condensed Consolidated Balance Sheets as of March 31, 2005 (unaudited) and December 31, 2004    4
    Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2005 (unaudited) and 2004 (unaudited)    5
    Condensed Consolidated Statement of Shareholders’ Equity for the Three Months Ended March 31, 2005 (unaudited)    6
    Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2005 (unaudited) and 2004 (unaudited)    7
    Notes to Condensed Consolidated Financial Statements (unaudited)    8

Item 2:

   Management’s Discussion and Analysis of Financial Condition and Results of Operations    15

Item 3:

   Quantitative and Qualitative Disclosures About Market Risks    21

Item 4:

   Controls and Procedures    21
PART II:   OTHER INFORMATION    22

Item 2:

   Unregistered Sales of Equity Securities and Use of Proceeds    22

Item 6:

   Exhibits    22

Signatures:

   23

 

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PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

The information contained in this report is furnished for the Registrant, Radiant Systems, Inc. (“Radiant” or the “Company”). In the opinion of management, the information in this report contains all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair statement of the results for the interim periods presented. The financial information presented herein should be read in conjunction with the financial statements included in the Registrant’s Form 10-K for the year ended December 31, 2004, as filed with the Securities and Exchange Commission.

 

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RADIANT SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

     March 31,
2005
     December 31,
2004
  
     (unaudited)        
ASSETS                 

Current assets

                 

Cash and cash equivalents

    $ 15,114     $ 15,067  

Accounts receivable, net of allowances for doubtful accounts of $3,536 and $3,624, respectively

      26,015       25,730  

Receivable due from BlueCube

      475       267  

Inventories, net

      18,164       18,647  

Other short-term assets

      2,772       2,122  
    
 

Total current assets

      62,540       61,833  

Property and equipment, net

      8,428       8,590  

Software development costs, net

      2,298       2,344  

Goodwill

      34,860       34,927  

Intangibles, net

      20,746       22,029  

Other long-term assets

      256       31  
    
 
     $ 129,128     $ 129,754  
    
 
LIABILITIES AND SHAREHOLDERS’ EQUITY                 

Current liabilities

                 

Accounts payable

    $ 11,612     $ 12,198  

Accrued liabilities

      11,090       11,925  

Accrued contractual obligations and payables due to BlueCube

      2,589       2,982  

Client deposits and unearned revenue

      13,351       9,881  

Current portion of capital lease payments

      55       218  

Current portion of long-term debt

      3,712       5,443  
    
 

Total current liabilities

      42,409       42,647  

Client deposits and unearned revenue, less current portion

      517       564  

Long-term portion of capital lease payments

      73       64  

Long-term debt, less current portion

      11,878       12,828  

Other long-term liabilities

      261       344  
    
 

Total liabilities

      55,138       56,447  

Shareholders’ equity

                 

Preferred stock, no par value; 5,000,000 shares authorized, no shares issued

      —         —    

Common stock, no par value; 100,000,000 shares authorized; 29,157,593 and 29,321,360 shares issued and outstanding, respectively

      —         —    

Additional paid-in capital

      118,041       118,649  

Accumulated other comprehensive income

      363       244  

Accumulated deficit

      (44,414 )     (45,586 )
    
 

Total shareholders’ equity

      73,990       73,307  
    
 
     $ 129,128     $ 129,754  
    
 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

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RADIANT SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

    

For the three

months ended

  
     March 31,
2005
    March 31,
2004
  
Revenues:                

System sales

    $ 20,402    $ 11,890  

Client support, maintenance and other services

      16,937      14,951  
    
  

Total revenues

      37,339      26,841  
Cost of revenues:                

System sales

      10,629      5,309  

Client support, maintenance and other services

      11,260      8,645  
    
  

Total cost of revenues

      21,889      13,954  
    
  
Gross profit      15,450      12,887  
    
  

Operating Expenses:

                

Product development

      2,973      3,472  

Sales and marketing

      4,211      4,518  

Depreciation of fixed assets

      811      964  

Amortization of intangible assets

      1,283      1,044  

General and administrative

      4,560      3,606  
    
  

Total operating expenses

      13,838      13,604  
    
  
Income (loss) from operations      1,612      (717 )

Interest expense, net

      244      202  

Other expense, net

      13      11  
    
  
Income (loss) from continuing operations before income tax provision      1,355      (930 )

Income tax provision

      183      34  
    
  
Income (loss) from continuing operations      1,172      (964 )
    
  
Income from discontinued Enterprise business (Note 2):                

Loss from operations of Enterprise business, net

      —        (913 )

Gain on disposal of Enterprise business, net

      —        3,809  
    
  
Income from discontinued Enterprise business, net      —        2,896  
    
  
Net income    $ 1,172    $ 1,932  
    
  
Income (loss) per share from continuing operations:                

Basic and diluted income (loss) per share

    $ 0.04    $ (0.03 )
    
  

Income per share from discontinued Enterprise business, net:

                

Basic and diluted income (loss) per share

    $ —      $ 0.10  
    
  
Net income per share:                

Basic and diluted income per share

    $ 0.04    $ 0.07  
    
  
Weighted average shares outstanding:                

Basic

      29,247      28,906  
    
  

Diluted

      30,302      28,906  
    
  

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

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RADIANT SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2005

(in thousands)

(Unaudited)

 

     Common Stock
    APIC
     Accumulated
Deficit
     Accumulated
Other
Comprehensive
Income
    Total
  
     Shares
     Amount
          

BALANCE, December 31, 2004

    29,321     $ —      $ 118,649     $ (45,586 )   $ 244    $ 73,307  
    
 
  
 
 
  

Components of comprehensive income:

                                             

Net income

    —         —        —         1,172       —        1,172  

Foreign currency translation adjustment

    —         —        —         —         119      119  
    
 
  
 
 
  

Total comprehensive income:

    —         —        —         1,172       119      1,291  

Treasury stock purchase and retirement

    (238 )     —        (1,000 )     —         —        (1,000 )

Exercise of employee stock options

    75       —        392       —         —        392  
    
 
  
 
 
  

BALANCE, March 31, 2005

    29,158     $ —      $ 118,041     $ (44,414 )   $ 363    $ 73,990  
    
 
  
 
 
  

 

The accompanying notes are an integral part of these consolidated statements.

 

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RADIANT SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

 

    

For the three months ended

March 31,

  
     2005
     2004
  
CASH FLOWS FROM OPERATING ACTIVITIES:                 

Net income

    $ 1,172     $ 1,932  

Adjustments to reconcile net income to net cash provided by operating activities:

                 

Gain on sale of Enterprise business

      —         (3,809 )

Depreciation and amortization

      2,311       2,008  

Changes in assets and liabilities, excluding the effects of acquisitions:

                 

Accounts receivable

      (396 )     2,547  

Inventories

      499       (1,867 )

Other assets

      (629 )     (273 )

Accounts payable

      (586 )     2,389  

Accrued liabilities

      465       2,760  

Payables due to BlueCube (see Note 2)

      (181 )     —    

Client deposits and deferred revenue

      3,423       1,515  

Other liabilities

      (83 )     —    
    
 

Net cash provided by operating activities

      5,995