(Mark
One)
|
||||
x |
Quarterly
Report Pursuant to Section 13 or 15(d) of
|
|||
the
Securities Exchange Act of 1934
|
||||
For
the Quarterly Period Ended September 30, 2009
|
||||
or
|
||||
o |
Transition
Report Pursuant to Section 13 or 15(d) of
|
|||
the
Securities Exchange Act of 1934
|
||||
For
the Transition Period from ____ to ____
|
||||
Commission
File No. 0-13150
|
Delaware
|
04-2735766
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(State
or other jurisdiction
|
(I.R.S.
Employer Identification No.)
|
of
incorporation or organization)
|
Large
accelerated filer ¨
|
|
Accelerated
filer ¨
|
Non-accelerated
filer ¨ (Do not check if
a smaller reporting company)
|
|
Smaller
reporting company x
|
Page
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Part I – Financial
Information
|
||
Item
1.
|
2
|
|
2
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||
3
|
||
4
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5
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||
Item
2.
|
12
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|
Item
3.
|
18
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Item
4.
|
18
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Part II – Other Information
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||
Item
1.
|
19
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Item
1A.
|
19
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Item 5. | Other Information | 19 |
Item
6.
|
19
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Part
I
|
Financial
Information
|
Condensed
Consolidated Financial Statements
|
September 30,
|
June 30,
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|||||||
2009
|
2009
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 27,184 | $ | 29,110 | ||||
Accounts
receivable, less allowance for doubtful accounts of $84 at September 30,
2009 and $97 at June 30, 2009
|
10,997 | 14,546 | ||||||
Inventories,
net
|
4,134 | 3,060 | ||||||
Prepaid
expenses and other current assets
|
1,887 | 1,444 | ||||||
Total
current assets
|
44,202 | 48,160 | ||||||
Property,
plant and equipment, net
|
4,560 | 3,860 | ||||||
Intangible
- purchased technology, net
|
2,937 | 3,166 | ||||||
Intangible
- customer relationships, net
|
1,214 | 1,257 | ||||||
Other
long-term assets, net
|
748 | 692 | ||||||
Total
assets
|
$ | 53,661 | $ | 57,135 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable and accrued expenses
|
$ | 8,969 | $ | 10,582 | ||||
Deferred
revenue
|
6,679 | 7,870 | ||||||
Total
current liabilities
|
15,648 | 18,452 | ||||||
Long-term
liabilities:
|
||||||||
Deferred
revenue
|
836 | 1,041 | ||||||
Revolving
bank line of credit
|
949 | 949 | ||||||
Pension
liability
|
1,971 | 1,868 | ||||||
Other
|
1,568 | 1,297 | ||||||
Total
liabilities
|
20,972 | 23,607 | ||||||
Commitments
and contingencies (Note 12)
|
||||||||
Stockholders'
equity:
|
||||||||
Shares
of common stock, par value $.01; 100,000,000 authorized;8,324,416 and
8,321,916 issued and outstanding at September 30, 2009 and June 30, 2009,
respectively
|
83 | 83 | ||||||
Capital
in excess of par value
|
205,232 | 205,222 | ||||||
Accumulated
deficit
|
(173,274 | ) | (172,259 | ) | ||||
Treasury
stock, at cost; 37,788 at September 30, 2009and June 30,
2009
|
(255 | ) | (255 | ) | ||||
Accumulated
other comprehensive income
|
903 | 737 | ||||||
Total
stockholders' equity
|
32,689 | 33,528 | ||||||
Total
liabilities and stockholders' equity
|
$ | 53,661 | $ | 57,135 |
Three
Months Ended
|
||||||||
September 30,
|
||||||||
2009
|
2008
|
|||||||
Revenues:
|
||||||||
Product
|
$ | 6,682 | $ | 12,049 | ||||
Service
|
6,068 | 6,286 | ||||||
Total
revenues
|
12,750 | 18,335 | ||||||
Cost
of sales:
|
||||||||
Product
|
2,890 | 5,635 | ||||||
Service
|
2,121 | 2,418 | ||||||
Total
cost of sales
|
5,011 | 8,053 | ||||||
Gross
margin
|
7,739 | 10,282 | ||||||
Operating
expenses:
|
||||||||
Sales
and marketing
|
3,805 | 3,568 | ||||||
Research
and development
|
3,100 | 3,839 | ||||||
General
and administrative
|
1,917 | 2,323 | ||||||
Total
operating expenses
|
8,822 | 9,730 | ||||||
Operating
(loss) income
|
(1,083 | ) | 552 | |||||
Interest
income
|
26 | 111 | ||||||
Interest
expense
|
(28 | ) | (29 | ) | ||||
Other
income (expense)
|
100 | (291 | ) | |||||
(Loss)
income before income taxes
|
(985 | ) | 343 | |||||
Provision
for income taxes
|
30 | 250 | ||||||
Net
(loss) income
|
$ | (1,015 | ) | $ | 93 | |||
Net
(loss) income per share
|
||||||||
Basic
|
$ | (0.12 | ) | $ | 0.01 | |||
Diluted
|
$ | (0.12 | ) | $ | 0.01 | |||
Weighted
average shares outstanding - basic
|
8,286 | 8,292 | ||||||
Weighted
average shares outstanding - diluted
|
8,286 | 8,308 |
Three
Months Ended
|
||||||||
September 30,
|
||||||||
2009
|
2008
|
|||||||
OPERATING
ACTIVITIES
|
||||||||
Net
(loss) income
|
$ | (1,015 | ) | $ | 93 | |||
Adjustments
to reconcile net (loss) income to net cash (used in) provided by operating
activities:
|
||||||||
Depreciation
and amortization
|
766 | 775 | ||||||
Share-based
compensation
|
10 | 82 | ||||||
Other
non-cash expenses
|
(59 | ) | 362 | |||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
3,549 | (3,089 | ) | |||||
Inventories
|
(1,101 | ) | 1,656 | |||||
Prepaid
expenses and other current assets
|
(427 | ) | (434 | ) | ||||
Other
long-term assets
|
(48 | ) | 99 | |||||
Accounts
payable and accrued expenses
|
(1,613 | ) | (3,652 | ) | ||||
Deferred
revenue
|
(1,396 | ) | 1,892 | |||||
Other
long-term liabilities
|
293 | (29 | ) | |||||
Total
adjustments to net (loss) income
|
(26 | ) | (2,338 | ) | ||||
Net
cash used in operating activities
|
(1,041 | ) | (2,245 | ) | ||||
INVESTING
ACTIVITIES
|
||||||||
Capital
expenditures
|
(1,126 | ) | (646 | ) | ||||
Net
cash used in investing activities
|
(1,126 | ) | (646 | ) | ||||
FINANCING
ACTIVITIES
|
||||||||
Purchase
of treasury stock
|
- | (252 | ) | |||||
Net
cash used in financing activities
|
- | (252 | ) | |||||
Effect
of exchange rates on cash and cash equivalents
|
241 | (360 | ) | |||||
Decrease
in cash and cash equivalents
|
(1,926 | ) | (3,503 | ) | ||||
Cash
and cash equivalents at beginning of period
|
29,110 | 27,359 | ||||||
Cash
and cash equivalents at end of period
|
$ | 27,184 | $ | 23,856 | ||||
Cash
paid during the period for:
|
||||||||
Interest
|
$ | 16 | $ | 15 | ||||
Income
taxes (net of refunds)
|
$ | 426 | $ | 412 |
1.
|
Overview
of Business and Basis of
Presentation
|
2.
|
Basic
and Diluted Net Income per Share
|
Three
Months Ended
|
||||||||
September 30,
|
||||||||
2009
|
2008
|
|||||||
Basic
and diluted earnings per share (EPS) calculation:
|
||||||||
Net
(loss) income
|
$ | (1,015 | ) | $ | 93 | |||
Basic
weighted average number of shares outstanding
|
8,286 | 8,292 | ||||||
Effect
of dilutive securities:
|
||||||||
Restricted
stock
|
- | 16 | ||||||
Diluted
weighted average number of shares outstanding
|
8,286 | 8,308 | ||||||
Basic
EPS
|
$ | (0.12 | ) | $ | 0.01 | |||
Diluted
EPS
|
$ | (0.12 | ) | $ | 0.01 |
3.
|
Share-Based
Compensation
|
4.
|
Inventories
|
September 30,
|
June 30,
|
|||||||
2009
|
2009
|
|||||||
Raw
materials, net
|
$ | 3,083 | $ | 2,239 | ||||
Work-in-process
|
327 | 289 | ||||||
Finished
goods
|
724 | 532 | ||||||
$ | 4,134 | $ | 3,060 |
5.
|
Fair
Value Measurements
|
●
|
Level
1
|
Quoted
prices (unadjusted) in active markets for identical assets or
liabilities;
|
●
|
Level
2
|
Inputs
other than quoted prices included within Level 1 that are either directly
or indirectly observable;
|
●
|
Level
3
|
Assets
or liabilities for which fair value is based on valuation models with
significant unobservable pricing inputs and which result in the use of
management estimates.
|
6.
|
Other
Intangible Assets
|
|
Intangible
assets consist of the following (in
thousands):
|
September 30,
|
June 30,
|
|||||||
2009
|
2009
|
|||||||
Cost
of amortizable intangibles:
|
||||||||
Purchased
technology
|
$ | 7,700 | $ | 7,700 | ||||
Customer
relationships
|
1,900 | 1,900 | ||||||
Total
cost of intangibles
|
9,600 | 9,600 | ||||||
Less
accumulated amortization:
|
||||||||
Purchased
technology
|
(4,763 | ) | (4,534 | ) | ||||
Customer
relationships
|
(686 | ) | (643 | ) | ||||
Total
accumulated amortization
|
(5,449 | ) | (5,177 | ) | ||||
Total
intangible assets, net
|
$ | 4,151 | $ | 4,423 |
7.
|
Accounts
Payable and Accrued Expenses
|
September 30,
|
June 30,
|
|||||||
2009
|
2009
|
|||||||
Accounts
payable, trade
|
$ | 4,760 | $ | 4,175 | ||||
Accrued
payroll, vacation, severance and other employee
expenses
|
2,892 | 4,682 | ||||||
Other
accrued expenses
|
1,317 | 1,725 | ||||||
$ | 8,969 | $ | 10,582 |
8.
|
Comprehensive
Income (Loss)
|
Three
Months Ended
|
||||||||
September 30,
|
||||||||
2009
|
2008
|
|||||||
Net
income (loss)
|
$ | (1,015 | ) | $ | 93 | |||
Other
comprehensive income (loss):
|
||||||||
Foreign
currency translation adjustment
|
164 | 71 | ||||||
Adjustment
in pensions
|
1 | 11 | ||||||
Total
comprehensive income (loss)
|
$ | (850 | ) | $ | 175 |
9.
|
Concentration
of Credit Risk, Segment, and Geographic
Information
|
Three
Months Ended
|
||||||||
September 30,
|
||||||||
2009
|
2008
|
|||||||
United
States
|
$ | 10,085 | $ | 15,228 | ||||
Japan
|
869 | 1,989 | ||||||
Other
Asia Pacific countries
|
923 | 222 | ||||||
Asia
Pacific
|
1,792 | 2,211 | ||||||
Europe
|
873 | 896 | ||||||
Total
revenue
|
$ | 12,750 | $ | 18,335 |
Three
Months Ended
|
||||||||
September 30,
|
||||||||
2009
|
2008
|
|||||||
Customer
A
|
15 | % |
<10
|
% | ||||
Customer
B
|
12 | % | 27 | % | ||||
Customer
C
|
10 | % | 20 | % |
10.
|
Term
Loan and Revolving Credit Facility
|
11.
|
Retirement
Plans
|
Three
Months Ended
|
||||||||
September 30,
|
||||||||
2009
|
2008
|
|||||||
Service
cost
|
$ | 4 | $ | 5 | ||||
Interest
cost
|
69 | 68 | ||||||
Expected
return on plan assets
|
(29 | ) | (35 | ) | ||||
Amortization
of transition amount
|
1 | 10 | ||||||
Net
periodic benefit cost
|
$ | 45 | $ | 48 |
12.
|
Commitments
and Contingencies
|
Asserting
Party
|
Jurisdiction
|
Patents
at Issue
|
||
Acacia
Media Technologies, Corp.
|
U.S.
District Court
|
U.S.
Patent Nos. 5,132,992; 5,253,275;
|
||
Northern
District of California
|
5,550,863,
6,002,720 and 6,144,702
|
|||
U.S.A
Video Inc.
|
U.S.
District Court
|
U.S.
Patent No. 5,130,792
|
||
Eastern
District of Texas
|
||||
Vtran
Media Technologies, LLC
|
U.S.
District Court
|
U.S.
Patent Nos. 4,890,320 and
|
||
Eastern
District of Texas
|
4,995,078
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
Three
Months Ended
|
||||||||||||||||
September 30,
|
||||||||||||||||
(Dollars
in Thousands)
|
2009
|
2008
|
$
Change
|
%
Change
|
||||||||||||
Product
revenues
|
$ | 6,682 | $ | 12,049 | $ | (5,367 | ) | (44.5 | %) | |||||||
Service
revenues
|
6,068 | 6,286 | (218 | ) | (3.5 | %) | ||||||||||
Total
revenues
|
12,750 | 18,335 | (5,585 | ) | (30.5 | %) | ||||||||||
Product
cost of sales
|
2,890 | 5,635 | (2,745 | ) | (48.7 | %) | ||||||||||
Service
cost of sales
|
2,121 | 2,418 | (297 | ) | (12.3 | %) | ||||||||||
Total
cost of sales
|
5,011 | 8,053 | (3,042 | ) | (37.8 | %) | ||||||||||
Product
gross margin
|
3,792 | 6,414 | (2,622 | ) | (40.9 | %) | ||||||||||
Service
gross margin
|
3,947 | 3,868 | 79 | 2.0 | % | |||||||||||
Total
gross margin
|
7,739 | 10,282 | (2,543 | ) | (24.7 | %) | ||||||||||
Operating
expenses:
|
||||||||||||||||
Sales
and marketing
|
3,805 | 3,568 | 237 | 6.6 | % | |||||||||||
Research
and development
|
3,100 | 3,839 | (739 | ) | (19.2 | %) | ||||||||||
General
and administrative
|
1,917 | 2,323 | (406 | ) | (17.5 | %) | ||||||||||
Total
operating expenses
|
8,822 | 9,730 | (908 | ) | (9.3 | %) | ||||||||||
Operating
(loss) income
|
(1,083 | ) | 552 | (1,635 | ) |
NM
|
(1) | |||||||||
Interest
(expense) income - net
|
(2 | ) | 82 | (84 | ) |
NM
|
(1) | |||||||||
Other
income (expense) - net
|
100 | (291 | ) | 391 |
NM
|
(1) | ||||||||||
(Loss)
income before income taxes
|
(985 | ) | 343 | (1,328 | ) |
NM
|
(1) | |||||||||
Provision
for income taxes
|
30 | 250 | (220 | ) |
NM
|
(1) | ||||||||||
Net
(loss) income
|
$ | (1,015 | ) | $ | 93 | $ | (1,108 | ) |
NM
|
(1) |
|
·
|
the
impact of the global economic recession on our business and our
customers;
|
|
·
|
the
rate of growth or decline, if any, of video solutions market expansions
and the pace that broadband companies implement, upgrade or replace video
technology;
|
|
·
|
the
rate of growth or decline, if any, of deployment of our real-time
operating systems and tools;
|
|
·
|
the
actual versus anticipated decline in revenue from maintenance and product
sales of real-time proprietary
systems;
|
|
·
|
our
ability to manage expenses consistent with the rate of growth or decline
in our markets;
|
|
·
|
the
success of our strategy to sell our solutions to the internet and mobile
video markets;
|
|
·
|
our
ability to implement our strategy to develop and sell solutions to the
internet and mobile device markets;
|
|
·
|
ongoing
cost control actions and expenses, including capital
expenditures;
|
|
·
|
the
margins on our product sales;
|
|
·
|
our
ability to leverage the potential of our media data management
to serve advanced advertising and other related data
initiatives;
|
|
·
|
our
ability to raise additional capital, if
necessary;
|
|
·
|
our
ability to obtain additional or replacement bank financing, if
necessary;
|
|
·
|
our
ability to meet the covenants contained in our Credit
Agreement;
|
|
·
|
timing
of product shipments, which typically occur during the last month of the
quarter;
|
|
·
|
our
reliance on a small customer base (2 of our video customers accounted for
37% of our revenue in fiscal year 2009, and three customers accounted for
37% of our revenue in fiscal year 2010 first quarter ended September 30,
2009);
|
|
·
|
the
percentage of sales derived from outside the United States where there are
generally longer accounts receivable collection cycles;
and
|
|
·
|
the
number of countries in which we operate, which may require maintenance of
minimum cash levels in each country and, in certain cases, may restrict
the repatriation of cash, such as maintained levels of
capital.
|
Quantitative
and Qualitative Disclosures About Market
Risk
|
Controls
and Procedures
|
Legal
Proceedings
|
Risk
Factors
|
Item 5.
|
Other
Information
|
Exhibits
|
3.1
|
Restated
Certificate of Incorporation of the Registrant (incorporated by reference
to the Registrant's Registration Statement on Form S-2 (No.
33-62440)).
|
3.2
|
Amended
and Restated Bylaws of the Registrant (incorporated by reference to the
Registrant’s Quarterly Report on Form 10-Q for the period ended March 31,
2003).
|
3.3
|
Certificate
of Correction to Restated Certificate of Incorporation of the Registrant
(incorporated by reference to the Registrant’s Annual Report on Form 10-K
for the fiscal year ended June 30,
2002).
|
3.4
|
Certificate
of Amendment of the Restated Certificate of Incorporation of the
Registrant (incorporated by reference to the Registrant’s Proxy on Form
DEFR14A filed on June 2, 2008).
|
3.5
|
Amended
Certificate of Designations of Series A Participating Cumulative Preferred
Stock (incorporated by reference to the Form 8-A/A, dated August 9,
2002).
|
3.6
|
Amendment
to Amended Certificate of Designations of Series A Participating
Cumulative Preferred Stock (incorporated by reference to the Form 8-A/A,
dated August 9, 2002).
|
4.1
|
Form
of Common Stock Certificate (incorporated by reference to the Registrant’s
Quarterly Report on Form 10-Q for the period ended March 31,
2003).
|
4.2
|
Form
of Rights Certificate (incorporated by reference to the Registrant’s
Current Report on Form 8-K/A filed on August 12,
2002).
|
4.3
|
Amended
and Restated Rights Agreement dated as of August 7, 2002 between the
Registrant and American Stock Transfer & Trust Company, as Rights
Agent (incorporated by reference to the Registrant’s Current Report on
Form 8-K/A filed on August 12,
2002).
|
4.4
|
Form
of Warrant (filed as Exhibit 4.1 to the Registrant’s Current Report on
Form 8-K dated May 15, 2007 and incorporated herein by
reference).
|
4.5
|
Form
of Warrant (filed as Exhibit 4.1 to the Registrant’s Current Report on
Form 8-K dated May 15, 2007 and incorporated herein by
reference).
|
10.1**
|
Fourth Amendment to Amended And Restated Loan and Security
Agreement.
|
11.1*
|
Statement
Regarding Computation of Per Share
Earnings.
|
31.1**
|
Certification
of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
31.2**
|
Certification
of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
32.1**
|
Certification
of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
32.2**
|
Certification
of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
*
|
Data
required by Statement of Financial Accounting Standards No. 128, “Earnings
per Share,” is provided in the Notes to the condensed consolidated
financial statements in this
report.
|
Date: November
2, 2009
|
CONCURRENT
COMPUTER CORPORATION
|
||
By:
|
/s/
Emory O. Berry
|
||
Emory
O. Berry
|
|||
Chief
Financial Officer and Executive Vice President of
Operations
|
|||
|
(Principal
Financial and Accounting Officer)
|
3.1
|
Restated
Certificate of Incorporation of the Registrant (incorporated by reference
to the Registrant's Registration Statement on Form S-2 (No.
33-62440)).
|
3.2
|
Amended
and Restated Bylaws of the Registrant (incorporated by reference to the
Registrant’s Quarterly Report on Form 10-Q for the period ended March 31,
2003).
|
3.3
|
Certificate
of Correction to Restated Certificate of Incorporation of the Registrant
(incorporated by reference to the Registrant’s Annual Report on Form 10-K
for the fiscal year ended June 30,
2002).
|
3.4
|
Certificate
of Amendment of the Restated Certificate of Incorporation of the
Registrant (incorporated by reference to the Registrant’s Proxy on Form
DEFR14A filed on June 2, 2008).
|
3.5
|
Amended
Certificate of Designations of Series A Participating Cumulative Preferred
Stock (incorporated by reference to the Form 8-A/A, dated August 9,
2002).
|
3.6
|
Amendment
to Amended Certificate of Designations of Series A Participating
Cumulative Preferred Stock (incorporated by reference to the Form 8-A/A,
dated August 9, 2002).
|
4.1
|
Form
of Common Stock Certificate (incorporated by reference to the Registrant’s
Quarterly Report on Form 10-Q for the period ended March 31,
2003).
|
4.2
|
Form
of Rights Certificate (incorporated by reference to the Registrant’s
Current Report on Form 8-K/A filed on August 12,
2002).
|
4.3
|
Amended
and Restated Rights Agreement dated as of August 7, 2002 between the
Registrant and American Stock Transfer & Trust Company, as Rights
Agent (incorporated by reference to the Registrant’s Current Report on
Form 8-K/A filed on August 12,
2002).
|
4.4
|
Form
of Warrant (filed as Exhibit 4.1 to the Registrant’s Current Report on
Form 8-K dated May 15, 2007 and incorporated herein by
reference).
|
4.5
|
Form
of Warrant (filed as Exhibit 4.1 to the Registrant’s Current Report on
Form 8-K dated May 15, 2007 and incorporated herein by
reference).
|
Fourth Amendment to Amended And Restated Loan and Security
Agreement.
|
11.1*
|
Statement
Regarding Computation of Per Share
Earnings.
|
Certification
of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
Certification
of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
Certification
of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
Certification
of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
*
|
Data
required by Statement of Financial Accounting Standards No. 128, “Earnings
per Share,” is provided in the Notes to the condensed consolidated
financial statements in this
report.
|