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As Of Filer Filing As/For/On Docs:Pgs Issuer Agent 11/09/05 Provide Commerce Inc 10-Q 9/30/05 5:72 1193125
Document/Exhibit Description Pages Size 1: 10-Q Quarterly Report HTML 479K 2: EX-10.40 Employment Agreement HTML 51K 3: EX-31.1 Certification of Chief Executive Officer HTML 13K 4: EX-31.2 Certification of Chief Financial Officer HTML 13K 5: EX-32 Certification of Ceo and Cfo HTML 9K
| Form 10-Q |
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 September 30, 2005
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: 000-20720
PROVIDE COMMERCE, INC.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 84-1450019 | |
| (State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) | |
| 5005 Wateridge Vista Drive San Diego, CA |
92121 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
Registrant’s Telephone Number, Including Area Code: (858) 638-4900
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
As of October 31, 2005, the registrant had 11,997,283 shares of common stock, par value $0.001 per share, outstanding.
QUARTERLY REPORT
FORM 10-Q
* No information provided due to inapplicability of item.
2
(Unaudited)
(in thousands, except share and per share data)
| 2005 |
2005 |
|||||||
| Assets | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 4,243 | $ | 12,308 | ||||
| Marketable securities |
55,741 | 53,116 | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $44 and $54 at September 30, 2005 and June 30, 2005, respectively |
1,931 | 1,649 | ||||||
| Inventory, net |
3,766 | 3,719 | ||||||
| Prepaid expenses and other current assets |
1,454 | 1,082 | ||||||
| Income tax receivable |
1,022 | 76 | ||||||
| Deferred tax assets |
4,800 | 4,810 | ||||||
| Total current assets |
72,957 | 76,760 | ||||||
| Property and equipment, net |
7,176 | 6,871 | ||||||
| Deferred tax assets |
1,775 | 1,775 | ||||||
| Other assets |
5,008 | 4,802 | ||||||
| Total assets |
$ | 86,916 | $ | 90,208 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: |
||||||||
| Accounts payable and other accrued liabilities |
$ | 10,477 | $ | 13,198 | ||||
| Accrued compensation |
2,766 | 3,416 | ||||||
| Deferred revenue |
443 | 592 | ||||||
| Total current liabilities |
13,686 | 17,206 | ||||||
| Accrued pension costs |
1,262 | 1,186 | ||||||
| Deferred compensation |
1,746 | 1,181 | ||||||
| Commitments and contingencies |
||||||||
| Stockholders’ equity: |
||||||||
| Preferred stock, $0.001 par value, 5,000,000 shares authorized, none issued and outstanding at September 30, 2005 and June 30, 2005. |
— | — | ||||||
| Common stock, $0.001 par value, 50,000,000 shares authorized, 11,984,985 and 12,356,220 shares issued and outstanding at September 30, 2005 and June 30, 2005, respectively. |
12 | 12 | ||||||
| Additional paid-in capital |
103,462 | 104,666 | ||||||
| Treasury stock, at cost |
(11,094 | ) | (8,849 | ) | ||||
| Deferred stock-based compensation |
— | (3,068 | ) | |||||
| Accumulated other comprehensive loss |
(105 | ) | (96 | ) | ||||
| Accumulated deficit |
(22,053 | ) | (22,030 | ) | ||||
| Total stockholders’ equity |
70,222 | 70,635 | ||||||
| Total liabilities and stockholders’ equity |
$ | 86,916 | $ | 90,208 | ||||
See accompanying notes.
3
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except share and per share data)
| Three Months Ended |
||||||||
| 2005 |
2004 |
|||||||
| Net sales |
$ | 26,782 | $ | 19,921 | ||||
| Cost of sales |
14,727 | 10,875 | ||||||
| Gross profit |
12,055 | 9,046 | ||||||
| Operating expenses: |
||||||||
| Selling and marketing |
5,983 | 4,843 | ||||||
| General and administrative |
5,703 | 4,196 | ||||||
| Information technology systems |
1,712 | 1,223 | ||||||
| Total operating expenses |
13,398 | 10,262 | ||||||
| Loss from operations |
(1,343 | ) | (1,216 | ) | ||||
| Other income, net |
509 | 270 | ||||||
| Loss from operations before income tax benefit |
(834 | ) | (946 | ) | ||||
| Income tax benefit |
(367 | ) | (449 | ) | ||||
| Net loss before cumulative effect of a change in accounting principle |
(467 | ) | (497 | ) | ||||
| Cumulative effect of a change in accounting principle |
444 | — | ||||||
| Net loss |
$ | (23 | ) | $ | (497 | ) | ||
| Net loss per share before cumulative effect of a change in accounting principle: |
||||||||
| Basic |
$ | (0.04 | ) | $ | (0.04 | ) | ||
| Diluted |
$ | (0.04 | ) | $ | (0.04 | ) | ||
| Cumulative effect of a change in accounting principle per share: |
||||||||
| Basic |
$ | 0.04 | $ | — | ||||
| Diluted |
$ | 0.03 | $ | — | ||||
| Net loss per share: |
||||||||
| Basic |
$ | — | $ | (0.04 | ) | |||
| Diluted |
$ | — | $ | (0.04 | ) | |||
| Weighted average common shares outstanding: |
||||||||
| Basic |
11,978,739 | 11,844,949 | ||||||
| Diluted |
13,454,914 | 11,844,949 | ||||||
See accompanying notes.
4
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands, except share and per share data)
| Three Months Ended |
||||||||
| 2005 |
2004 |
|||||||
| Operating activities: |
||||||||
| Net loss |
$ | (23 | ) | $ | (497 | ) | ||
| Adjustments to reconcile net loss to cash used in operating activities: |
||||||||
| Depreciation and amortization |
802 | 599 | ||||||
| Stock-based compensation |
839 | 626 | ||||||
| Cumulative effect of a change in accounting principle |
(444 | ) | — | |||||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
(282 | ) | (256 | ) | ||||
| Inventory |
(47 | ) | 142 | |||||
| Prepaid expenses and other current assets |
(372 | ) | (228 | ) | ||||
| Accounts payable and other accrued liabilities |
(2,722 | ) | (2,852 | ) | ||||
| Accrued compensation |
(650 | ) | (1,092 | ) | ||||
| Accrued pension costs |
76 | 98 | ||||||
| Long term deferred compensation |
565 | 502 | ||||||
| Deferred revenue |
(149 | ) | (80 | ) | ||||
| Accrued and deferred income taxes |
(946 | ) | (1,120 | ) | ||||
| Other assets |
(206 | ) | 248 | |||||
| Net cash used in operating activities |
(3,559 | ) | (3,910 | ) | ||||
| Investing activities: |
||||||||
| Purchases of property and equipment |
(1,107 | ) | (1,529 | ) | ||||
| Purchases of marketable securities |
(28,658 | ) | (7,599 | ) | ||||
| Sales/maturities of marketable securities |
26,019 | 13,950 | ||||||
| Net cash provided by (used in) investing activities |
(3,746 | ) | 4,822 | |||||
| Financing activities: |
||||||||
| Payment of long-term debt and capital lease obligations |
— | (32 | ) | |||||
| Common stock issued in connection with secondary public offering |
— | 1,299 | ||||||
| Tax benefit from the exercise of stock options |
555 | 340 | ||||||
| Proceeds from exercise of common stock options and warrants |
930 | 229 | ||||||
| Repurchase of common stock |
(2,245 | ) | — | |||||
| Net cash provided by (used in) financing activities |
(760 | ) | 1,836 | |||||
| Net increase (decrease) in cash and cash equivalents |
(8,065 | ) | 2,748 | |||||
| Cash and cash equivalents at beginning of the period |
12,308 | 18,210 | ||||||
| Cash and cash equivalents at end of the period |
$ | 4,243 | $ | 20,958 | ||||
| Supplemental disclosures of cash flow information: |
||||||||
| Cash paid during the period for: |
||||||||
| Interest |
$ | — | $ | 1 | ||||
| Income taxes |
$ | 23 | $ | 516 | ||||
| Non-cash financing activities: |
||||||||
| Stock-based compensation associated with employee and consultant stock options |
$ | 839 | $ | 626 | ||||
| Unrealized gain (loss) on marketable securities |
$ | (9 | ) | $ | 25 | |||
| Tax benefit from the exercise of stock options |
$ | 555 | $ | 340 | ||||
See accompanying notes.
5
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except share and per share data)
1. Description of Business
Provide Commerce, Inc. (the “Company”) was incorporated in the State of Delaware and commenced operations on February 6, 1998. The Company operates in one business segment. The Company operates an e-commerce marketplace for perishable goods, such as fresh-cut floral arrangements, potted plants, high quality meat, seafood and fruit, and related merchandise. The Company’s e-commerce marketplace currently consists of www.proflowers.com, www.cherrymoonfarms.com, www.flowerfarm.com, and www.uptownprime.com. Products are purchased by customers and shipped directly from the growers/producers for overnight or other prompt delivery.
2. Summary of Significant Accounting Policies
Basis of Presentation and Interim Financial Information
The accompanying unaudited financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission, and do not contain all information included in the audited financial statements and notes thereto. The interim unaudited financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 10-K. In the opinion of management, the information furnished herein reflects all adjustments (consisting only of normal, recurring adjustments) necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented.
The balance sheet at June 30, 2005 has been derived from the audited financial statements at that date.
Net Loss Per Share
Basic net loss per common share is calculated by dividing net loss for the period by the weighted average common shares outstanding during the period, less shares subject to repurchase. Diluted net loss per share is calculated by dividing the net loss for the period by the weighted average common shares outstanding, adjusted for all dilutive potential common shares, which includes shares issuable upon the exercise of outstanding common stock options, convertible preferred stock and other contingent issuances of common stock to the extent these shares are dilutive. The Company incurred losses for the three months ended September 30, 2005 and 2004,
6
PROVIDE COMMERCE, INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
and, accordingly, has excluded all shares issuable upon exercise of common stock options or warrants and shares subject to repurchase from the calculation of diluted net loss per share for that period, except for the cumulative effect of a change in accounting principle, as follows:
| Three Months Ended September 30, |
||||||||
| 2005 |
2004 |
|||||||
| Calculations for net losses |
||||||||
| Numerator |
||||||||
| Net loss before cumulative effect of a change in accounting principle |
$ | (467 | ) | $ | (497 | ) | ||
| Net loss |
(23 | ) | $ | (497 | ) | |||
| Denominator |
||||||||
| Basic for net loss before cumulative effect of a change in accounting principle and net loss: |
||||||||
| Weighted average common shares outstanding |
11,978,842 | 11,845,851 | ||||||
| Less: Weighted average shares subject to repurchase |
(103 | ) | (902 | ) | ||||
| Denominator on basic calculation |
||||||||