-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R01fZBCtF+/a19Tue5cnEzquJ8mN/IvH+TZummbf47cjPbhoCf14GcKXvN2ZWHgI auqDs6kkFM+3P0Z02EIKUA== 0000950128-01-500471.txt : 20010820 0000950128-01-500471.hdr.sgml : 20010820 ACCESSION NUMBER: 0000950128-01-500471 CONFORMED SUBMISSION TYPE: 10-K405/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010817 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOLLGRADE COMMUNICATIONS INC \PA\ CENTRAL INDEX KEY: 0001002531 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-TELEPHONE INTERCONNECT SYSTEMS [7385] IRS NUMBER: 251537134 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-27312 FILM NUMBER: 1717969 BUSINESS ADDRESS: STREET 1: 493 NIXON RD CITY: CHESWICK STATE: PA ZIP: 15024 BUSINESS PHONE: 4122742156 10-K405/A 1 j9000501e10-k405a.txt TOLLGRADE COMMUNICATIONS, INC. FORM 10-K405/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000 COMMISSION FILE NUMBER 0-27312 TOLLGRADE COMMUNICATIONS, INC. (Exact name of registrant as specified in its charter) PENNSYLVANIA 25-1537134 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 493 NIXON ROAD, CHESWICK, PENNSYLVANIA 15024 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 412-820-1400 SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: COMMON STOCK, PAR VALUE $.20 PER SHARE (Title of Class) Indicate by a 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 Registration 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. __X__ The Registrant estimates that as of March 7, 2001, the aggregate market value of shares of the Registrant's Common Stock held by non-affiliates (excluding for purposes of this calculation only, 179,033 shares of Common Stock held of record or beneficially by the executive officers and directors of the Registrant as a group) of the Registrant was $324,406,770. As of March 7, 2001, the Registrant had outstanding 13,352,912 shares of its Common Stock. 2 PORTIONS AMENDED The Registrant hereby amends Item 8 contained in the Registrant's Report on Form 10-K for the fiscal year ended December 31, 2000 to reclassify certain tax benefits on the exercise of non-qualified stock options from "Cash Flows provided by Financing Activities" to "Cash Flows provided by Operating Activities" section of the Consolidated Statements of Cash Flows. On the Consolidated Statements of Cash Flows, in the section entitled "Adjustments to reconcile net income to net cash provided by operating activities", the line item description "Tax benefit from exercise of stock options" is added and the amounts of $1,163,441, $385,237 and $15,044,372 for 1998, 1999 and 2000, respectively, are reflected. The sub-totals "Net Cash Provided by Operating Activities" are amended to read $6,924,215, $9,281,220 and $21,907,169 for 1998, 1999 and 2000, respectively. In the section entitled "Cash Flows from Financing Activities", the line item description "Proceeds from the exercise of stock options, including related tax benefits", is amended to read "Proceeds from the exercise of stock options" and the amounts are amended to read $1,153,639, $2,175,922 and $11,825,857 for 1998, 1999 and 2000, respectively. Except as set forth in Item 8 below, no other changes are made to the Registrant's Report on Form 10-K for the fiscal year ended December 31, 2000. 3 PART II ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. REPORT OF INDEPENDENT ACCOUNTANTS January 19, 2001 To the Board of Directors and Shareholders of Tollgrade Communications, Inc. and Subsidiaries: In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, changes in shareholders' equity and cash flows present fairly, in all material respects, the financial position of Tollgrade Communications Inc. and its subsidiaries at December 31, 2000 and 1999, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2000 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. As indicated in Note 1, the 2000 consolidated statement of cash flows has been revised. PRICEWATERHOUSECOOPERS LLP Pittsburgh, Pennsylvania January 19, 2001, except for the last paragraph of Note 1, as to which the date is August 14, 2001 3 4 TOLLGRADE COMMUNICATIONS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 1998 1999 2000 - --------------------------------------------------------------------------------------------------------------------------------- Cash flows from operating activities: Net income $ 6,967,302 $ 10,622,877 $ 27,495,168 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,387,598 1,252,743 1,910,245 Tax benefit from exercise of stock options 1,163,441 385,237 15,044,372 Deferred income taxes (545,420) (253,512) (481,541) Provision for losses on inventory 88,000 393,000 743,129 Provision for allowance for doubtful accounts 50,000 100,000 22,189 Compensation expense for restricted stock 28,934 -- -- Changes in assets and liabilities: Increase in accounts receivable-trade (53,377) (3,077,184) (7,932,588) (Increase) decrease in accounts receivable-other 216,410 (34,475) (478,654) Increase in inventories (1,188,657) (4,526,976) (13,906,864) (Increase) decrease in prepaid expenses and deposits 56,839 (109,521) (325,164) Increase (decrease) in accounts payable (272,106) 224,690 962,559 Increase (decrease) in accrued expenses, salaries and wages, royalties payable and deferred income (816,995) 2,649,211 660,989 Increase (decrease) in income taxes payable (157,754) 1,655,130 (1,806,671) - --------------------------------------------------------------------------------------------------------------------------------- Net cash provided by operating activities 6,924,215 9,281,220 21,907,169 - --------------------------------------------------------------------------------------------------------------------------------- Cash flows from investing activities: Purchase of investments (17,380,104) (15,183,124) (38,637,741) Redemption/maturity of investments 17,844,566 14,618,612 23,848,762 Capital expenditures (1,695,975) (2,272,485) (4,076,074) Purchase of treasury stock (1,718,932) (1,375,688) -- - --------------------------------------------------------------------------------------------------------------------------------- Net cash used in investing activities (2,950,445) (4,212,685) (18,865,053) - --------------------------------------------------------------------------------------------------------------------------------- Cash flows from financing activities: Proceeds from the exercise of stock options 1,153,639 2,175,922 11,825,857 - --------------------------------------------------------------------------------------------------------------------------------- Net cash provided by financing activities 1,153,639 2,175,922 11,825,857 - --------------------------------------------------------------------------------------------------------------------------------- Net increase in cash and cash equivalents 5,127,409 7,244,457 14,867,973 Cash and cash equivalents at beginning of year 3,183,944 8,311,353 15,555,810 - --------------------------------------------------------------------------------------------------------------------------------- Cash and cash equivalents at end of year $ 8,311,353 $ 15,555,810 $ 30,423,783 - --------------------------------------------------------------------------------------------------------------------------------- Supplemental disclosure of cash flow information: Cash paid during the year for interest $ 107,694 $ 1,549 $ -- Cash paid during the year for income taxes $ 3,596,079 $ 4,078,830 $ 3,145,422 - --------------------------------------------------------------------------------------------------------------------------------- Supplemental disclosure of non-cash financing activity: Tax benefit from the exercise of stock options $ -- $ -- $ 10,890,328 - ---------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial statements. 4 5 TOLLGRADE COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revision to Financial Statements: The accompanying consolidated statements of cash flows have been revised to reflect tax benefits arising from the exercise of stock options as an operating cash flow rather than a financing cash flow. The effect was to increase cash flows from operations and decrease cash flows from financing for the year ended December 31, 2000 by $15,044,372. Prior periods presented have been reclassified for comparative purposes in accordance with Emerging Issues Task Force Issue 00-15. The consolidated balance sheets and consolidated statements of operations were not affected. 6 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K. (a)(3) The following exhibits are included herewith and made a part hereof: Exhibit Number Description ------ ----------- 23.1 Consent of PricewaterhouseCoopers LLP, filed herewith. 6 7 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized as of August 17, 2001. TOLLGRADE COMMUNICATIONS, INC. By /s/Christian L. Allison ---------------------------------------- Christian L. Allison Chairman and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities indicated as of August 17, 2001. SIGNATURE TITLE /s/ Christian L. Allison Director, Chairman and Chief - ---------------------------------- Executive Officer, Christian L. Allison (Principal Executive Officer) /s/ James J. Barnes Director - ---------------------------------- James J. Barnes /s/ Daniel P. Barry Director - ---------------------------------- Daniel P. Barry /s/ David S. Egan Director - ---------------------------------- David S. Egan /s/ Rocco L. Flaminio Director, Vice Chairman - ---------------------------------- and Chief Technology Officer Rocco L. Flaminio /s/ Richard H. Heibel, M.D. Director - ---------------------------------- Richard H. Heibel, M.D. /s/ Robert W. Kampmeinert Director - ---------------------------------- Robert W. Kampmeinert /s/ Samuel C. Knoch Chief Financial Officer and Treasurer - ---------------------------------- (Principal Financial Officer) Samuel C. Knoch /s/ Bradley N. Dinger Controller - ---------------------------------- (Principal Accounting Officer) Bradley N. Dinger 7 8 Report of Independent Accountants on Financial Statement Schedule To the Board of Directors Tollgrade Communications, Inc.: Our audits of the consolidated financial statements referred to in our report dated January 19, 2001, except for the last paragraph of Note 1, as to which the date is August 14, 2001 as appearing in Form 10-K/A also included an audit of the financial statement schedule listed in Item 14(a)(2) of this Form 10-K/A. In our opinion, this financial statement schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. /s/ PRICEWATERHOUSECOOPERS LLP Pittsburgh, Pennsylvania January 19, 2001, except for the last paragraph of Note 1, as to which the date is August 14, 2001 8 9 EXHIBIT INDEX (Pursuant to Item 601 of Regulation S-K) Exhibit Number Description ------ ----------- 23.1 Consent of PricewaterhouseCoopers LLP, filed herewith. 9 EX-23.1 3 j9000501ex23-1.txt CONSENT OF INDEPENDENT ACCOUNTANTS 1 Exhibit 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (Registration No. 333-4290, Registration No. 333-52907, Registration No. 333-83007, Registration No. 333-55470, and Registration No. 333-65502) of our report dated January 19, 2001, except for the last paragraph of Note 1, as to which the date is August 14, 2001, relating to the consolidated financial statements, which appears on Form 10-K/A. We also consent to the incorporation by reference of our report dated January 19, 2001, except for the last paragraph of Note 1, as to which the date is August 14, 2001, relating to the financial statement schedule, which appears on Form 10-K/A. /s/ PRICEWATERHOUSECOOPERS LLP Pittsburgh, Pennsylvania January 19, 2001, except for the last paragraph of Note 1, as to which the date is August 14, 2001 -----END PRIVACY-ENHANCED MESSAGE-----