-----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, Q5NUZdAvBEhuVj4NSDl9pzyreMVCQkAHCil48hDa7hIlsMVvDruFJzwLm+cOIC4P ZE5iyPNuZFJylPp9oDNEsQ== 0000927016-97-001335.txt : 19970512 0000927016-97-001335.hdr.sgml : 19970512 ACCESSION NUMBER: 0000927016-97-001335 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970509 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: LIGHTBRIDGE INC CENTRAL INDEX KEY: 0001017172 STANDARD INDUSTRIAL CLASSIFICATION: RADIO TELEPHONE COMMUNICATIONS [4812] IRS NUMBER: 043065140 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-21319 FILM NUMBER: 97599577 BUSINESS ADDRESS: STREET 1: 281 WINTER ST CITY: WALTHAM STATE: MA ZIP: 02154 BUSINESS PHONE: 6178321134 MAIL ADDRESS: STREET 1: 281 WINTER ST CITY: WALTHAM STATE: MA ZIP: 02154 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (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, 1997 OR [_] 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: 000-21319 LIGHTBRIDGE, INC. (Exact name of registrant as specified in its charter) Delaware 04-3065140 (State or other jurisdiction of (I.R.S employer identification number) incorporation or jurisdiction) 281 Winter Street Waltham, Massachusetts 02154 (Address of principal executive offices, including Zip Code) (617) 890-2000 (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 1, 1997, there were 14,635,244 shares of the registrant's common stock, $.01 par value, outstanding. LIGHTBRIDGE, INC. FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1997 Table of Contents PART I. FINANCIAL INFORMATION Page No. -------- ITEM 1. Unaudited Condensed Consolidated Financial Statements: Balance Sheets as of March 31, 1997 and December 31, 1996....................................... 3 Income Statements for the three months ended March 31, 1997 and March 31, 1996................. 4 Statements of Cash Flow for the three months ended March 31, 1997 and March 31, 1996................................................ 5 Notes to Unaudited Condensed Consolidated Financial Statements....................... 6 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.............................................. 7 PART II. OTHER INFORMATION Page No. -------- ITEM 6. Exhibits and Reports on Form 8-K........................ 12 Signature............................................... 13 2 PART I. FINANCIAL INFORMATION ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS LIGHTBRIDGE, INC. AND SUBSIDIARY UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 1997 December 31, 1996 ----------------- ----------------- ASSETS ------ Current assets: Cash and cash equivalents $24,883,262 $27,900,802 Short-term investments 2,069,323 -- Accounts receivable - net 8,189,342 7,530,809 Other current assets 1,446,405 970,735 ----------------- ----------------- Total current assets 36,588,332 36,402,346 Fixed assets - net 4,542,967 4,271,880 Deferred tax asset 795,100 -- Other assets 903,196 1,091,429 ----------------- ----------------- Total assets $42,829,595 $41,765,655 ================= ================= LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current liabilities: Accounts payable and accrued liabilities $ 2,835,593 $ 3,254,421 Short-term borrowings and current portion of subordinated notes payable 680,205 567,705 Current portion of obligations under capital leases 1,031,292 1,533,899 Deferred revenues 833,952 422,875 Dividends payable on redeemable convertible preferred stock 166,876 166,876 ----------------- ----------------- Total current liabilities 5,547,918 5,945,776 Obligations under capital leases 56,196 100,301 Subordinated notes payable 1,841,150 2,120,935 ----------------- ----------------- Total liabilities 7,445,264 8,167,012 ----------------- ----------------- Commitments and contingencies Stockholders' equity: Preferred stock, $.01 par value; 500,000 shares authorized; no shares issued or outstanding at March 31, 1997 and December 31, 1996, respectively -- -- Common stock, $.01 par value; 60,000,000 shares authorized; 15,436,392 and 15,369,697 shares issued; 14,635,244 and 14,568,549 shares outstanding at March 31, 1997 and December 31, 1996, respectively 154,364 153,698 Additional paid-in capital 36,314,165 36,296,969 Warrants 605,125 605,125 Accumulated deficit (153,249) (1,921,075) ----------------- ----------------- Total 36,920,405 35,134,717 Less treasury stock, at cost (1,536,074) (1,536,074) ----------------- ----------------- Total stockholders' equity 35,384,331 33,598,643 ----------------- ----------------- Total liabilities and stockholders' equity $42,829,595 $41,765,655 ================= =================
See notes to unaudited condensed consolidated financial statements 3 LIGHTBRIDGE, INC. AND SUBSIDIARY UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENTS
Three months ended March 31, ---------------------------- 1997 1996 ------------- ------------- Revenues (includes sales to related party of $0 and $3,125, respectively) $ 8,822,838 $ 6,314,336 Cost of revenues 4,168,670 3,767,030 ------------- ------------- Gross profit 4,654,168 2,547,306 ------------- ------------- Operating expenses: Development 1,330,919 953,057 Sales and marketing 1,256,417 762,848 General and administrative 1,145,626 549,015 ------------- ------------- Total operating expenses 3,732,962 2,264,920 ------------- ------------- Income from operations 921,206 282,386 Other income (expense): Interest income 319,816 5,849 Interest expense (107,855) (255,886) Other non-operating expense (9,280) -- ------------- ------------- Income before provision for income taxes 1,123,887 32,349 Provision for (benefit from) income taxes (643,939) 9,458 ------------- ------------- Net income $ 1,767,826 $ 22,891 ============= ============= Net income per common share $0.11 ============= Weighted average number of shares of common and common equivalent shares outstanding 16,421,951 ============= Pro forma net income per common share $0.00 ============= Pro forma weighted average number of shares of common and common equivalent shares outstanding 13,333,827 =============
See notes to unaudited condensed consolidated financial statements 4 LIGHTBRIDGE, INC. AND SUBSIDIARY UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
Three months ended March 31, ---------------------------- 1997 1996 --------------- ----------- Cash Flows From Operating Activities: Net income $ 1,767,826 $ 22,891 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 986,904 896,725 Amortization of discount on notes 9,016 32,409 Deferred tax asset (795,100) -- Changes in assets and liabilities: Accounts receivable and other current assets (1,134,203) 649,844 Accounts payable and accrued liabilities (418,828) (715,585) Deferred revenues 411,077 701,757 Deposits 35,719 (187,434) --------------- ----------- Net cash provided by operating activities 862,411 1,400,607 --------------- ----------- Cash Flows Used in Investing Activities: Purchases of fixed assets (1,175,294) (185,123) Purchase of investments (2,069,323) -- --------------- ----------- Net cash used in investing activities (3,244,617) (185,123) --------------- ----------- Cash Flows From Financing Activities: Payments on the subordinated notes payable (176,301) -- Principal payments under capital lease obligations (476,895) (535,376) Proceeds from issuance of common stock 17,862 250 Payments toward the purchase of treasury stock -- (138,833) --------------- ----------- Net cash used in financing activities (635,334) (673,959) --------------- ----------- Net increase (decrease) in cash and cash equivalents (3,017,540) 541,525 Cash and cash equivalents, beginning of period 27,900,802 58,064 --------------- ----------- Cash and cash equivalents, end of period $24,883,262 $ 599,589 =============== ===========
See notes to unaudited condensed consolidated financial statements 5 LIGHTBRIDGE INC. AND SUBSIDIARY NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation: The financial statements included herein have been prepared by Lightbridge, Inc. (the "Company"), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Although certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, the Company believes that the disclosures are adequate to make the information presented not misleading and reflect all adjustments (consisting only of normal recurring adjustments) which are necessary for a fair presentation of results of operations for such periods. Results of interim periods may not be indicative of results for the full year. It is suggested that these financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1996. 2. Significant Accounting Policies: Net Income Per Common Share Net income per common and per common equivalent share are computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period, using the provisions of Accounting Principles Board Opinion No. 15, "Earnings per Share." Dilutive common equivalent shares represent shares issuable upon exercise of stock options and warrants, calculated using the treasury stock method. In February 1997, the Financial Accounting Standards Board released Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per Share," which the Company will adopt in the fourth quarter of 1997. Had SFAS No. 128 been effective for the quarters ended March 31, 1997 and 1996, reported earnings per share would have been as follows:
Three Months Ended March 31, ---------------------------- 1997 1996 ------------- ------------- Basic................... $0.12 $0.00 Diluted................. 0.11 0.00
Pro forma income per common share for the three month period ended March 31, 1996 is based on the weighted average number of common and dilutive common equivalent shares (common stock options and warrants) outstanding and assumes that all series of redeemable convertible preferred stock had been converted to common stock as of January 1, 1996. Common equivalent shares are not included in the per share calculations where the effect of their inclusion would be anti-dilutive, except in accordance with the requirements of Securities and Exchange Commission Staff Accounting Bulletin No. 83. That Bulletin requires all common shares issued and options or warrants to purchase common stock granted by the Company during the twelve-month period prior to the filing of a proposed initial public offering be included in the calculation as if they were outstanding for all periods. For purposes of applying the Bulletin, the Company has used the initial public offering price of $10 per share. Income Taxes In October 1993, the Company adopted SFAS No. 109. "Accounting for Income Taxes." As a result, the Company recorded a deferred tax asset relating to the tax benefit of operating losses, and differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. At that time the Company provided for a valuation allowance equal to the entire deferred tax asset as a result of the uncertainty of the Company's ability to utilize the benefit of the net operating loss and tax credit carryovers against future taxable income or payments. 6 During the three months ended March 31, 1997 the Company recorded a deferred tax asset from the release of the deferred tax valuation allowance and certain income tax credit carryovers. As a result of this, the Company also recorded an income tax benefit of approximately $1.1 million. The release of the allowance was based upon the Company's determination that, at March 31, 1997, the valuation allowance was no longer necessary. Reclassifications Certain reclassifications have been made to the 1996 financial statements to conform with the 1997 presentation. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THE DISCUSSION IN THIS FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934. THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THE RESULTS CONTEMPLATED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF A NUMBER OF FACTORS, INCLUDING THOSE SET FORTH UNDER "ITEM 1A. Risk Factors" IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996. PROFILE and SAMSPEN are registered trademarks of the Company, and ALLEGRO, CAS_COMM, CHANNEL WIZARD, CHURN PROPHET, CREDIT DECISION SYSTEM, CUSTOMER ACQUISITION SYSTEM, 800-FOR-CREDIT, FRAUD SENTINEL, INSIGHT, IRIS, LIGHTBRIDGE, POPS, POSTALPRO, SAMS and WIRELESS INTELLIGENCE are trademarks of the Company. Other trademarks or trade names referred to in this Form 10-Q are the property of their respective owners. RESULTS OF OPERATIONS Overview - -------- Lightbridge, Inc. ("Lightbridge" or the "Company") develops, markets and supports a suite of integrated products and services that enable wireless telecommunications carriers to improve their customer acquisition and retention processes. The Company's revenues consist of transaction revenues and software and consulting revenues. Historically, transaction revenues have accounted for substantially all of the Company's revenues, although software and consulting revenues have increased during recent periods primarily as a result of the initial licensing of certain software products and the demand for the Company's Business Integration consulting services. Lightbridge's transaction revenues are derived primarily from the processing of applications of subscribers for wireless telecommunications services and the activation of service for those subscribers. Over time, the Company has expanded its offerings from credit evaluation services to include screening for subscriber fraud, evaluating carriers' existing accounts, interfacing with carrier and third-party systems and providing teleservices call center services. These services are provided pursuant to contracts with carriers which specify the services to be utilized and the markets to be served. Generally, the Company's clients are charged on a per transaction or, to a lesser extent, on a per minute basis. Pricing varies depending primarily on the volume of transactions, the type and number of other products and services selected for integration with the services and the term of the contract under which services are provided. The volume of processed transactions varies depending on seasonal and retail trends, the success of the carriers utilizing the Company's services in attracting subscribers and the markets served by the Company for its clients. Revenues are recognized in the period when the services are performed. 7 The Company's software and consulting revenues have been derived primarily from developing customized software and providing Business Integration consulting services. The Company also began licensing its Channel Solutions software with the introduction of its POPS and Iris products in fiscal 1995 and its SAMS software in 1996. Lightbridge's Channel Solutions products and services are designed to assist customers in interfacing with the Company's systems and are being marketed primarily to wireless telecommunications carriers that utilize the Company's transaction processing services. The Company's Wireless Intelligence products are being designed to help carriers analyze their marketplace to improve their business operations. While its Channel Solutions products are, and its Wireless Intelligence products are currently expected to be, licensed as packaged software products, each of these products requires customization and integration with other products and systems to varying degrees. Revenues derived from consulting and other projects are recognized throughout the performance period of the contracts. Revenues from licensing software are recognized at the later of delivery of the licensed product or satisfaction of acceptance criteria. Lightbridge's software and other revenues depend primarily on the continuing need for integration of disparate systems and acceptance of the Company's software products by the Company's existing and new clients.
Results of Operations Data: Three Months Ended March 31, ------------------ 1997 1996 -------- -------- Revenues: Transaction........................... 68.3% 83.7% Software and consulting............... 31.7 16.3 -------- -------- 100.0 100.0 Cost of revenues........................ 47.3 59.7 -------- -------- Gross profit............................ 52.7 40.3 -------- -------- Operating expenses: Development........................... 15.1 15.1 Sales and marketing................... 14.2 12.0 General and administrative............ 13.0 8.7 -------- -------- Total operating expenses............ 42.3 35.8 -------- -------- Income from operations.................. 10.4 4.5 Other income (expense), net............. 2.3 (4.0) -------- -------- Income before income taxes.............. 12.7 0.5 Provision for (benefit from) income (7.3) 0.1 taxes.................................. -------- -------- Net income.............................. 20.0% 0.4% ======== ========
Revenues. Revenues increased by 39.7% to $8.8 million in the three months ended - --------- March 31, 1997 from $6.3 million in the three months ended March 31, 1996. Transaction revenues increased by 14.1% to $6.0 million in the three months ended March 31, 1997 from $5.3 million in the three months ended March 31, 1996. The increase in transaction revenues for the three month period ended March 31, 1997 was primarily due to increased volume of wireless customer qualification and activation transactions processed for existing carrier clients and additional new carrier clients. Software and consulting revenues increased by 171.5% to $2.8 million in the three months ended March 31, 1997 from $1.0 million in the three months ended March 31, 1996. The increase in software and consulting revenues for the three month period ended March 31, 1997 was principally a result of the increase in revenues attributable to customized software integration services. Cost of Revenues. Cost of revenues consists primarily of personnel costs, costs - ----------------- of maintaining systems and networks used in processing subscriber qualification and activation transactions (including depreciation and amortization of those systems and networks) and amortization of capitalized software. Cost of revenues may vary as 8 a percentage of total revenues in the future as a result of a number of factors, including changes in the mix of transaction revenues between revenues from on- line transaction processing and revenues from processing transactions through the Company's Teleservices Group and changes in the mix of total revenues between transaction revenues and software and consulting revenues. Cost of revenues increased by 10.7% to $4.2 million in the three months ended March 31, 1997 from $3.8 million in the three months ended March 31, 1996, while decreasing as a percentage of total revenues to 47.3% from 59.7%. The dollar increase in costs for the three month period ended March 31, 1997 resulted principally from increases in transaction volume and costs attributable to expansion of the Company's staff and systems capacity. The decreases in cost of revenues as a percentage of total revenues for the three month period ended March 31, 1997 primarily reflected a higher percentage of transaction revenues from on-line processing than Teleservices operations, a higher percentage of revenues from customized software integration services and increased utilization of the Company's operating and networking systems. Development. Development expenses consist primarily of personnel and outside - ------------ technical services costs related to developing new products and services, enhancing existing products and services, and implementing and maintaining new and existing products and services. Development expenses increased by 39.6% to $1.3 million in the three months ended March 31, 1997 from $1.0 million in the three months ended March 31, 1996, while remaining the same as a percentage of total revenues at 15.1%. The dollar increase in costs for the three month period ended March 31, 1997 resulted primarily from the addition of engineering personnel necessary to support the Company's growth. The Company expects to continue to increase its engineering and development efforts in order to continue enhancing its existing products and services, including its Customer Acquisition System, Wireless Intelligence, Business Integration and Channel Solutions products, as well as to develop new products and services. Sales and Marketing. Sales and marketing expenses consist primarily of - -------------------- salaries, commissions and travel expenses of direct sales and marketing personnel, as well as costs associated with advertising, trade shows and conferences. Sales and marketing expenses increased by 64.7% to $1.3 million in the three months ended March 31, 1997 from $0.8 million in the three months ended March 31, 1996, and increased as a percentage of total revenues to 14.2% from 12.0%. Both the dollar increase and the increase as a percentage of total revenues for the three month period ended March 31, 1997 was due to the addition of direct sales and product marketing personnel, increased commissions resulting from the higher level of revenues and increased use of marketing programs, including trade shows. The Company continues to invest in sales and marketing efforts in order to increase its penetration of existing accounts and to add new clients and markets. General and Administrative. General and administrative expenses consist - --------------------------- principally of salaries of administrative, executive, finance and human resources personnel, as well as outside professional fees. General and administrative expenses increased by 108.7% to $1.1 million in the three months ended March 31, 1997 from $0.5 million in the three months ended March 31, 1996, and increased as a percentage of total revenues to 13.0% from 8.7%. Both the dollar increase and the increase as a percentage of total revenues resulted primarily from the addition of finance and human resource personnel. Other Income (Expense) Net. Other income (expense) increased to a net - --------------------------- income of $0.2 million in the three months ended March 31, 1997 from a net expense of $0.3 million in the three months ended March 31, 1996. Other income (expense) in the three month period ended March 31, 1997 consisted predominantly of interest income and expense. Interest expense consists of interest, commitment fees and other similar fees payable with respect to the Company's bank lines of credit, subordinated notes and capital leases. Interest expense decreased by 57.9% to $0.1 million in the three months ended March 31, 1997 from $0.3 million in the three months ended March 31, 1996. Interest expense decreased by Interest income, which historically had not been significant, increased to $0.3 million in the three month period ended March 31, 1997 from $5,849 in the three months ended March 31, 1996 as a result of the investment of the proceeds from Company's initial public offering in October 1996. 9 Provision for (Benefit from) Income Taxes. During the three months ended - ------------------------------------------ March 31, 1997 the Company experienced a net income tax benefit of $0.6 million, which was derived from the release of a deferred tax valuation of $0.7 million, the utilization of the tax credits, which aggregated $0.4 million and a provision of $0.5 million. No significant provision for or benefit from income taxes was necessary in the three months ended March 31, 1996. LIQUIDITY AND CAPITAL RESOURCES Prior to its initial public offering, the Company funded its operations primarily through private placements of equity and debt securities, cash generated from operations, bank borrowings and equipment financings. In October 1996, the Company consummated an initial public offering in which 4,370,000 shares of the Company's Common Stock ($.01 par value) were sold at an initial public offering price of $10.00 per share. The total shares consisted of 3,021,868 shares sold by the Company, and 1,348,132 shares sold by selling shareholders. Proceeds to the Company, net of underwriters' discount and associated costs, were approximately $27.1 million. These proceeds were used to repay certain debt obligations of the Company, to repurchase certain shares of the common stock of the Company and to fund working capital and other general corporate purposes. Prior to its initial public offering, the Company financed its operations in part with the proceeds of four offerings of convertible preferred stock and two offerings of subordinated debt. The Company sold shares of its Series A Redeemable Convertible Preferred Stock in February 1991 for an aggregate purchase price of $1.0 million, shares of its Series B Redeemable Convertible Preferred Stock in December 1991 for an aggregate purchase price of $1.1 million and shares of its Series C Redeemable Convertible Preferred Stock in June, July and August of 1993 for an aggregate purchase price of $0.6 million. In August 1994, the Company sold $2.1 million in principal amount of its 8% subordinated notes, together with warrants exercisable to purchase up to 525,000 shares of Common Stock. In August 1995, the Company sold $1.2 million in principal amount of its 16% subordinated notes, together with warrants exercisable to purchase up to 287,750 shares of Common Stock. The Company sold shares of its Series D Preferred Stock in April 1996 for an aggregate purchase price of $6.0 million. A portion of the proceeds of the Series D Preferred Stock was applied to repay the 16% subordinated notes. The Company's capital expenditures in the three months ended March 31, 1997 and 1996 aggregated $1.2 million and $0.4 million, respectively. The capital expenditures consisted of purchases of fixed assets, principally for the Company's services delivery infrastructure, and teleservices call center and computer equipment for development activities. The Company expects capital expenditures for the remainder of 1997 to approximate $2.0 million which includes capital expenditures related to the move of the corporate headquarters. The Company leases its facilities and certain equipment under non-cancelable capital and operating lease agreements that expire at various dates through December 2004. The Company has a $4.0 million working capital line of credit and a $2.0 million equipment line of credit with Silicon Valley Bank (the "Bank"). The working capital line of credit is secured by a pledge of the Company's accounts receivable, equipment and intangible assets, and borrowing availability is based on the amount of qualifying accounts receivable. Advances under the working capital line of credit bear interest at the Bank's prime rate plus .25% (8.75% at March 31, 1997) and advances under the equipment line of credit bear interest at the Bank's prime rate plus .75% (9.25% at March 31, 1997). At March 31, 1997, there were no borrowings outstanding under the working capital line of credit and borrowings of $0.7 million were outstanding under the equipment line of credit. The agreements contain covenants that, among other things, prohibit the declaration or payment of dividends and require the Company to maintain certain financial ratios which the Company believes are not restrictive to the business operations. The working capital line of credit expires in June 1997, and the equipment line of credit expires in June 1999. The Company expects to renew the working capital line of credit with substantially the same terms that currently exist. On March 5, 1997 the Company entered into an amended credit agreement to provide for the issuance of letters of credit. Outstanding letters of credit reduce the amount the Company may borrow under the current credit agreement and are limited to $1,250,000 in the aggregate. 10 In March 1997 the Company entered into a seven year lease for approximately 46,000 square feet in Burlington, Massachusetts. It is the Company's intent to relocate its headquarters to the Burlington facility and sublease a portion of the 39,000 square foot facility in Waltham. As of March 31, 1997, the Company had cash and cash equivalents of $24.9 million, short-term investments of $2.1 million and working capital of $31.0 million. The Company believes that the current cash balances and funds available under existing lines of credit, will be sufficient to finance the Company's operations and capital expenditures for at least the next twelve months. INFLATION Although certain of the Company's expenses increase with general inflation in the economy, inflation has not had a material impact on the Company's financial results to date. RECENT ACCOUNTING PRONOUNCEMENT In February 1997, the Financial Accounting Standards Board released Statement of Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS 128), which is effective for fiscal 1997. SFAS 128 will require the Company to restate amounts previously reported as earnings per share to comply with the requirements of SFAS 128. See Note 2 to the Unaudited Condensed Consolidated Financial Statements included elsewhere herein. 11 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 11.1 Statement re: computation of per share earnings 27.1 Financial Data Schedule for the three months ended March 31, 1997. 99.1 Information set forth under the heading "ITEM 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 1996 is incorporated herein by reference. - -------------- (b) Reports on Form 8-K The Company did not file any Current Reports on Form 8-K during the quarter ended March 31, 1997. 12 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. LIGHTBRIDGE, INC. Dated: May 9, 1997 By: /s/ William G. Brown -------------------- William G. Brown Chief Financial Officer, Vice President of Finance and Administration and Treasurer (Authorized Officer and Principal Financial and Accounting Officer) 13 EX-11 2 COMPUTATION OF EARNINGS PER SHARE Exhibit 11 Computation of Earnings (Loss) per Common Share
Three Months Ended March 31, ------------------------ 1997 1996 ----------- ----------- PRO-FORMA: Weighted average number of common and common equivalent shares outstanding: Common stock 6,588,392 Assumed conversion of preferred stock 5,247,324 Common equivalent shares resulting from stock options and warrants (treasury stock method) 490,497 SAB 83 shares (treasury stock method) 1,007,615 ----------- Total 13,333,828 =========== Net income applicable to common stock $ 22,891 =========== Pro-forma income per common share $0.00 =========== PRIMARY: Weighted average number of common and common equivalent shares outstanding: Common stock 14,611,646 6,588,982 Common equivalent shares resulting from stock options and warrants (treasury 1,810,305 490,497 stock method) SAB 83 shares (treasury stock method) -- 1,007,615 ----------- ----------- Total 16,421,951 8,087,094 =========== =========== Net income $ 1,767,826 $ 22,891 Dividends accreted on preferred stock -- (45,635) ----------- ----------- Net income (loss) applicable to common stock $ 1,767,826 $ (22,744) =========== =========== Primary income (loss) per common share $ 0.11 $0.00 =========== =========== FULLY DILUTED: Weighted average number of common and common equivalent shares outstanding: Common stock 14,611,646 6,588,392 Assumed conversion of preferred stock -- 3,243,326 Common equivalent shares resulting from stock options and warrants (treasury stock method) 1,810,305 490,497 SAB 83 shares (treasury stock method) -- 1,007,615 ----------- ----------- Total 16,421,951 11,329,830 =========== =========== Net income applicable to common stock $ 1,767,826 $ 22,891 =========== =========== Fully diluted income per common share $ 0.11 $0.00 =========== ===========
EX-27 3 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 24,883,262 2,069,323 8,308,334 (118,992) 0 36,588,332 10,434,585 5,891,618 42,829,595 5,547,918 0 0 0 154,364 35,229,967 42,829,595 8,822,838 8,822,838 4,168,670 3,732,962 0 0 107,855 1,123,887 (643,939) 1,767,826 0 0 0 1,767826 0.11 0.11
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