-----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, VIbmlIUK62ytXvkwsrG5V2lfR2KMl+hgiRs8jy+u2sbALMOnMYV8UKpP/mZs+s/3 fhgb6WBunY/kJobgFKffrg== 0001047469-98-022775.txt : 19980605 0001047469-98-022775.hdr.sgml : 19980605 ACCESSION NUMBER: 0001047469-98-022775 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980604 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: APPLIED DIGITAL ACCESS INC CENTRAL INDEX KEY: 0000919048 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825] IRS NUMBER: 680132939 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 000-23698 FILM NUMBER: 98642087 BUSINESS ADDRESS: STREET 1: 9855 SCRANTON RD CITY: SAN DIEGO STATE: CA ZIP: 92121 BUSINESS PHONE: 6196232200 10-Q/A 1 FORM 10-Q/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q/A [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER 000-23698 APPLIED DIGITAL ACCESS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 68-0132939 (STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION NO.) INCORPORATION OR ORGANIZATION) 9855 SCRANTON ROAD, SAN DIEGO, CALIFORNIA 92121 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, ZIP CODE) (619) 623-2200 (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 [ ] There were 12,674,294 shares of the registrant's Common Stock, $0.001 par value, outstanding on April 30, 1998. PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS APPLIED DIGITAL ACCESS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31, 1998 1997 --------- ------------ (UNAUDITED) (DOLLARS IN THOUSANDS) ASSETS Current assets: Cash and cash equivalents $ 3,291 $ 4,400 Investments - current 9,320 8,779 Accounts receivable, net 9,132 12,981 Inventory, net 5,345 5,859 Deferred income taxes 130 130 Prepaid expenses and other current assets 3,611 3,775 --------- -------- Total current assets 30,829 35,924 Property and equipment, net 6,216 6,165 Deferred income taxes 1,372 1,372 Other, net 2,538 2,822 --------- -------- $40,955 $46,283 --------- -------- --------- -------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 4,334 $ 3,478 Accrued expenses 1,281 2,864 Accrued warranty 1,318 1,323 Deferred revenue 1,695 1,471 --------- -------- Total current liabilities 8,628 9,136 Obligations under capital leases, net of current portion 10 15 --------- -------- Total liabilities 8,638 9,151 Shareholders' equity: Preferred stock, $0.001 par value, 7,500,000 shares authorized, no shares issued - - Common stock, $0.001 par value, 30,000,000 shares authorized, 12,671,267 and 12,605,082 shares issued and outstanding at March 31, 1998 and December 31, 1997, respectively 51,894 51,610 Additional paid-in capital 2,519 2,492 Unrealized gain on investments 166 84 Accumulated deficit (22,262) (17,054) --------- -------- Total shareholders' equity 32,317 37,132 --------- -------- $40,955 $46,283 --------- -------- --------- --------
The accompanying notes are an integral part of the consolidated financial statements. 2 APPLIED DIGITAL ACCESS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, ----------------------------- 1998 1997 ------------ ------------ (AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNT)
Revenue $5,272 $6,388 Cost of revenue 3,664 3,211 --------- --------- Gross profit 1,608 3,177 Operating expenses: Research and development 3,544 2,001 Sales and marketing 2,280 1,458 General and administrative 1,119 1,355 --------- --------- Total operating expenses 6,943 4,814 --------- --------- Operating loss (5,335) (1,637) Interest income 175 243 Other income (expense), net (11) (4) --------- --------- Loss before income taxes (5,171) (1,398) Provision for income taxes 37 51 --------- --------- Net loss ($5,208) ($1,449) --------- --------- Net loss per basic and diluted share ($0.41) ($0.12) --------- --------- --------- --------- Number of shares used in per share computations 12,624 12,310 Comprehensive Loss ($5,127) ($1,465) --------- -------- --------- --------
The accompanying notes are an integral part of the consolidated financial statements. 3 APPLIED DIGITAL ACCESS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, ----------------------------- 1998 1997 ------------ ------------ (DOLLARS IN THOUSANDS)
Cash flows from operating activities: Net loss ($5,208) ($1,449) Adjustments to reconcile net loss to net cash provided (used) by operating activities: Depreciation and amortization 918 661 Other 17 51 Changes in assets and liabilities: Accounts receivable 3,849 645 Inventory 514 240 Prepaid expenses and other current 164 80 assets Accounts payable 856 145 Accrued expenses (1,584) (251) Accrued warranty (5) (5) Deferred revenue 224 (91) -------- -------- Net cash provided (used) by operating activities: (255) 26 -------- -------- Cash flows from investing activities: Purchases of investments (3,413) (6,789) Maturities of investments 2,935 6,944 Purchases of property and equipment (684) (249) -------- -------- Net cash used by investing activities (1,162) (94) Cash flows from financing activities: Principal payments on capital leases (4) (3) Proceeds from the issuance of common stock under stock option plans 312 298 -------- -------- Net cash provided by financing activities 308 295 -------- -------- Net increase (decrease) in cash and (1,109) 227 cash equivalents Cash and cash equivalents, beginning of 4,400 1,504 period -------- -------- Cash and cash equivalents, end of period $3,291 $1,731 -------- -------- -------- --------
The accompanying notes are an integral part of the consolidated financial statements. 4 APPLIED DIGITAL ACCESS, INC. Notes to Condensed Consolidated Financial Statements March 31, 1998 (Unaudited) 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Applied Digital Access, Inc. (the "Company" or "ADA") and its wholly owned subsidiary: Applied Digital Access - Canada, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. These financial statements have been prepared in accordance with the interim reporting requirements of Form 10-Q, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 1998 are not necessarily indicative of the results that may be expected for the year ending December 31, 1998. These financial statements should be read in conjunction with the Company's audited financial statements and notes thereto, together with Management's Discussion and Analysis of Financial Condition and Results of Operations, and Risks and Uncertainties, contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997 filed with the SEC. 2. New Accounting Pronouncements The Company has adopted the provisions of Statement of Financial Accounting Standards No. 130, "Reporting of Comprehensive Income," effective January 1, 1998. This statement requires the disclosure of comprehensive income and its components in a full set of general-purpose financial statements. Comprehensive income is defined as net income plus revenues, expenses, gains and losses that, under generally accepted accounting principles, are excluded from net income. The components of comprehensive income, which are excluded from net income are foreign currency gains/losses and unrealized gains/losses on securities and have been included in the calculation of comprehensive income. In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information" ("SFAS 131"), which supersedes Statement of Financial Accounting Standards, "Financial Reporting of Segments of a Business Enterprise" ("SFAS 14"). SFAS 131 changes current practice under SFAS 14 by establishing a new framework on which to base segment reporting and also requires interim reporting of segments information. This statement is effective for fiscal years beginning after December 15, 1997. This statement's interim reporting disclosures are not required until the first quarter immediately subsequent to the fiscal year in which SFAS 131 is effective. 3. Inventory Inventory is valued at the lower of cost (determined using the first-in, first-out method) or market. Inventory was as follows:
MARCH 31, 1998 DECEMBER 31, 1997 -------------- ----------------- (DOLLARS IN THOUSANDS) Raw materials $2,855 $3,419 Work-in-process 2,220 2,223 Finished goods 716 787 ------- ------- 5,791 6,429 Less inventory reserve (446) (570) ------- ------- $5,345 $5,859 ------- ------- ------- -------
5 4. Per Share Information The Company has adopted the provisions of SFAS No. 128, EARNINGS PER SHARE, effective December 31, 1997. SFAS No. 128 requires the presentation of basic and diluted earnings per share. Basic EPS is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed giving effect to all dilutive potential common shares that were outstanding during the period. Dilutive potential common shares consist of the incremental common shares issuable upon the conversion of convertible preferred stock (using the "if converted") method and exercise of stock options and warrants for all periods. All prior period earnings per share amounts have been restated to comply with SFAS No. 128. In accordance with the disclosure requirements of SFAS No. 128, a reconciliation of the numerator and denominator of basic and diluted EPS is provided as follows (dollars in thousands, except per share amounts).
THREE MONTHS ENDED MARCH 31, ---------------------------- 1998 1997 -------- -------- Numerator - basic and diluted EPS: Net loss $(5,208) $(1,449) Denominator - basis and diluted EPS: Weighted average common stock outstanding 12,624 12,310 Basic and diluted earnings per share $ (0.41) $ (0.12)
6 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this Amendment to the Company's report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized. Applied Digital Access, Inc. Date: June 4, 1998 /s/ PETER P. SAVAGE ---------------------------- Peter P. Savage Director President and Chief Executive Officer 7 -----END PRIVACY-ENHANCED MESSAGE-----