-----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, WDk4J/9Tei6lRvA542mvx1gD0ytq+nRaPE6k+ZNISfICx7htK/5+m2T6MH4F/Mdi NDtPwijUi74a8TXl/8zriA== 0000950128-01-500472.txt : 20010820 0000950128-01-500472.hdr.sgml : 20010820 ACCESSION NUMBER: 0000950128-01-500472 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010331 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-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-27312 FILM NUMBER: 1717974 BUSINESS ADDRESS: STREET 1: 493 NIXON RD CITY: CHESWICK STATE: PA ZIP: 15024 BUSINESS PHONE: 4122742156 10-Q/A 1 j9000401e10-qa.txt TOLLGRADE COMMUNICATIONS, INC. FORM 10-Q/A 1 -------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC ------------------------------- FORM 10-Q/A (Mark One) [X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2001 [ ] Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ___________ to ____________ Commission file number 0-27312 TOLLGRADE COMMUNICATIONS, INC. (Exact Name of Registrant as Specified in its Charter) PENNSYLVANIA 25-1537134 (State or Other Jurisdiction (I.R.S. Employer of Incorporation or Organization) Identification Number) 493 NIXON RD. CHESWICK, PA 15024 (Address of Principal Executive Offices, including zip code) 412-820-1400 (Registrant's telephone number, including area code) 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 _______ As of April 30, 2001, there were 13,379,310 shares of the Registrant's Common Stock, $0.20 par value per share, and no shares of the Registrant's Preferred Stock, $1.00 par value per share, outstanding. - -------------------------------------------------------------------------------- This report consists of a total of 21 pages. The exhibit index is on page 20. 2 TOLLGRADE COMMUNICATIONS, INC. QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2001 TABLE OF CONTENTS
PAGE NO. PART I. FINANCIAL INFORMATION ITEM 1 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS: CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2001 AND DECEMBER 31, 2000 ........ 3 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2001 AND APRIL 1, 2000................................................... 4 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2001 AND APRIL 1, 2000................................................... 5 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS..................................... 6 REVIEW REPORT OF INDEPENDENT ACCOUNTANTS................................................. 10 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION................................................................................ 11 PART II. OTHER INFORMATION ITEM 1 LEGAL PROCEEDINGS........................................................................ 18 ITEM 2 CHANGES IN SECURITIES.................................................................... 18 ITEM 3 DEFAULTS UPON SENIOR SECURITIES.......................................................... 18 ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...................................... 18 ITEM 5 OTHER INFORMATION........................................................................ 18 ITEM 6 EXHIBITS AND REPORTS FILED ON FORM 8-K................................................... 18 SIGNATURE.............................................................................................. 19 EXHIBIT INDEX.......................................................................................... 20
3 PORTIONS AMENDED The Registrant hereby amends Part I, Item 1 contained in the Registrant's Report on Form 10-Q for the quarter ended March 31, 2001 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 Condensed Consolidated Statements of Cash Flows. On the Condensed 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 amount of $0 and $1,186,803 for the three- month periods ended March 31, 2001 and April 1, 2000, respectively, are reflected. In addition, the line item description "Refund of income taxes paid" is added and the amount of $8,150,170 and $0 for the three- month periods ended March 31, 2001 and April 1, 2000, respectively are reflected. The sub-totals "Net Cash Provided by Operating Activities" are amended to read $13,505,261, and $4,700,006 for the three-month periods ended March 31, 2001 and April 1, 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 $332,731 and $5,855,399 for the three month period ended March 31, 2001 and April 1, 2000, respectively. In addition, the line item description "Refund of prior year income taxes paid resulting from the tax benefit of the exercise of stock options" was reclassified from cash flows from financing activities to the section entitled "Adjustments to reconcile net income to net cash provided by operating activities" and amended to read "Refund of income taxes paid", as previously mentioned. Except as set forth in Part I, Item 1 below, no other changes are made to the Registrant's Report on Form 10-Q for the quarter ended March 31, 2001. 4 TOLLGRADE COMMUNICATIONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended March 31, 2001 April 1, 2000 - --------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 5,755,169 $ 5,224,614 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 581,485 375,036 Tax benefit from exercise of stock options -- 1,186,803 Refund of income taxes paid 8,150,170 -- Deferred income taxes (224,129) -- Provision for losses on inventory 23,218 -- Provision for allowance for doubtful accounts 175,000 -- Changes in assets and liabilities: Increase in accounts receivable-trade (1,407,256) (668,189) Decrease (increase) in accounts receivable-other 44,268 (158,468) Decrease (increase) in inventories 240,018 (2,823,494) Decrease (increase) in prepaid expenses and other assets 238,279 (63,747) (Decrease) increase in accounts payable (1,501,390) 1,296,659 Increase in accrued expenses and deferred income 222,613 1,379,729 Decrease in accrued salaries and wages (2,156,672) (1,166,093) (Decrease) increase in royalties payable (260,014) 150,837 Increase (decrease) in income taxes payable 3,624,502 (33,681) - --------------------------------------------------------------------------------------------------------------------- Net cash provided by operating activities 13,505,261 4,700,006 - --------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Redemption/maturity of investments 7,002,881 2,327,854 Purchase of investments (5,906,520) (9,191,819) Capital expenditures (1,071,479) (1,181,266) - --------------------------------------------------------------------------------------------------------------------- Net cash provided by (used in) investing activities 24,882 (8,045,231) - --------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options 332,731 5,855,399 - --------------------------------------------------------------------------------------------------------------------- Net cash provided by financing activities 332,731 5,855,399 - --------------------------------------------------------------------------------------------------------------------- Net increase in cash and cash equivalents 13,862,874 2,510,174 Cash and cash equivalents at beginning of period 30,423,783 15,555,810 - --------------------------------------------------------------------------------------------------------------------- Cash and cash equivalents at end of period $44,286,657 $18,065,984 - ---------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the condensed consolidated financial statements. 5 5 TOLLGRADE COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revision to Financial Statements: The accompanying condensed 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 three-months ended March 31, 2001 by $8,150,170. The prior period presented has been reclassified for comparative purposes in accordance with Emerging Issues Task Force Issue 00-15. The condensed consolidated balance sheets and condensed consolidated statements of operations were not affected. 6 6 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Shareholders of Tollgrade Communications, Inc. and Subsidiaries: We have reviewed the accompanying condensed consolidated balance sheet of Tollgrade Communications, Inc. and its subsidiaries as of March 31, 2001, and the related condensed consolidated statements of operations and cash flows for the three-month periods ended March 31, 2001 and April 1, 2000. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated interim financial statements for them to be in conformity with generally accepted accounting principles. We previously audited in accordance with generally accepted auditing standards, the consolidated balance sheet as of December 31, 2000, and the related consolidated statements of operations, shareholders' equity, and of cash flows for the year then ended (not presented herein), and in our report dated January 19, 2001, except for the last paragraph of Note 1, as to which the date is August 14, 2001, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2000, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. As indicated in Note 1, the 2001 condensed consolidated statement of cash flows has been revised. PricewaterhouseCoopers LLP Pittsburgh, Pennsylvania April 11, 2001, except for the last paragraph of Note 1, as to which the date is August 14, 2001 10 7 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: The following exhibits are being filed with this report: Exhibit Number Description ------ ----------- 15 Letter re unaudited interim financial information 18 8 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TOLLGRADE COMMUNICATIONS, INC. (REGISTRANT) Dated: August 17, 2001 /S/ CHRISTIAN L. ALLISON ---------------------------------------- CHRISTIAN L. ALLISON CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER Dated: August 17, 2001 /S/ SAMUEL C. KNOCH ---------------------------------------- SAMUEL C. KNOCH CHIEF FINANCIAL OFFICER AND TREASURER Dated: August 17, 2001 /S/ BRADLEY N. DINGER ---------------------------------------- BRADLEY N. DINGER CONTROLLER 19 9 EXHIBIT INDEX (Pursuant to Item 601 of Regulation S-K) Exhibit Number Description ------- ----------- 15 Letter re unaudited interim financial information 20 EX-15 3 j9000401ex15.txt LETTER RE UNAUDITED INTERIM FINANCIAL INFORMATION 1 EXHIBIT 15 August 14, 2001 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 RE: Tollgrade Communications, Inc. and subsidiaries ----------------------------------------------- 1). Form S-8 (Registration No. 333-4290 and Registration No. 333-83007) 1995 Long-Term Incentive Compensation Plan and Individual Stock Options Granted to Certain Directors and Employees Prior to the Adoption of the Plan 2). Form S-8 (Registration No. 333-52907 and Registration No. 333-55470) 1998 Employee Incentive Compensation Plan Commissioners: We are aware that our report dated April 11, 2001, except for the last paragraph of Note 1, as to which the date is August 14, 2001 on our review of interim financial information of Tollgrade Communications, Inc. and subsidiaries as of and for the three month period ended March 31, 2001 and included in the Company's quarterly report on Form 10-Q/A for the quarter then ended is incorporated by reference in the registration statements referred to above. Very truly yours, /s/ PricewaterhouseCoopers -----END PRIVACY-ENHANCED MESSAGE-----