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 September 30, 2003
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 No. 0-13150
_____________
CONCURRENT COMPUTER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 04-2735766
(State of Incorporation) (I.R.S. Employer Identification No.)
4375 River Green Parkway, Duluth, GA 30096
(Address of principal executive offices)
Telephone: (678) 258-4000
(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
--- ---
Indicate by a check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes X No
--- ---
Number of shares of the Registrant's Common Stock, par value $0.01 per share,
outstanding as of November 12, 2003 was 62,337,025.
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONCURRENT COMPUTER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED
SEPTEMBER 30,
2003 2002
-------- --------
Revenues:
Product
Real-time systems $ 4,394 $ 4,092
VOD systems 9,147 12,449
-------- --------
Total product revenues 13,541 16,541
Service
Real-time systems 4,146 4,678
VOD systems 1,215 922
-------- --------
Total service revenues 5,361 5,600
-------- --------
Total revenues 18,902 22,141
Cost of sales:
Product
Real-time systems 1,356 1,776
VOD systems 3,657 5,241
-------- --------
Total product cost of sales 5,013 7,017
Service
Real-time systems 2,184 2,607
VOD systems 755 660
-------- --------
Total service cost of sales 2,939 3,267
-------- --------
Total cost of sales 7,952 10,284
-------- --------
Gross margin 10,950 11,857
Operating expenses:
Sales and marketing 4,080 4,404
Research and development 4,668 4,447
General and administrative 2,169 2,328
-------- --------
Total operating expenses 10,917 11,179
-------- --------
Operating income 33 678
Recovery of previously recognized
impairment loss 1,060 -
Interest income - net 60 196
Other expense - net (134) (47)
-------- --------
Income before income taxes 1,019 827
Provision for income taxes 407 207
-------- --------
Net income $ 612 $ 620
======== ========
Net income per share
Basic $ 0.01 $ 0.01
======== ========
Diluted $ 0.01 $ 0.01
======== ========
Basic average shares outstanding 62,085 61,860
======== ========
Diluted average shares outstanding 62,722 62,368
======== ========
The accompanying notes are an integral part of the condensed consolidated
financial statements.
-1-
CONCURRENT COMPUTER CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(DOLLARS IN THOUSANDS)
SEPTEMBER 30, JUNE 30,
2003 2003
--------------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 25,181 $ 30,697
Accounts receivable - net 13,335 10,371
Inventories 6,483 7,174
Deferred tax asset 998 998
Prepaid expenses and other current assets 1,597 879
--------------- ----------
Total current assets 47,594 50,119
Property, plant and equipment - net 11,806 11,862
Purchased developed computer software - net 1,156 1,203
Goodwill 10,744 10,744
Investment in minority owned company 553 553
Deferred tax asset 1,749 1,749
Other long-term assets - net 1,464 1,609
--------------- ----------
Total assets $ 75,066 $ 77,839
=============== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 11,147 $ 14,644
Deferred revenue 5,556 5,433
--------------- ----------
Total current liabilities 16,703 20,077
Long-term liabilities:
Deferred revenue 2,562 2,212
Deferred tax liability 1,960 2,107
Pension liability 9,842 9,617
Other 438 368
--------------- ----------
Total liabilities 31,505 34,381
Stockholders' equity:
Common stock 623 623
Capital in excess of par value 173,717 174,396
Accumulated deficit (122,317) (122,929)
Treasury stock (58) (58)
Unearned compensation (491) (576)
Accumulated other comprehensive loss (7,913) (7,998)
--------------- ----------
Total stockholders' equity 43,561 43,458
--------------- ----------
Total liabilities and stockholders' equity $ 75,066 $ 77,839
=============== ==========
The accompanying notes are an integral part of the condensed consolidated
financial statements.
-2-
CONCURRENT COMPUTER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(DOLLARS IN THOUSANDS)
THREE MONTHS ENDED
SEPTEMBER 30,
2003 2002
-------- --------
OPERATING ACTIVITIES
Net income $ 612 $ 620
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Reduction in accrual of non-cash warrants (970) (54)
Depreciation and amortization 1,257 1,183
Other non cash expenses 559 289
Changes in operating assets and liabilities:
Accounts receivable (2,653) 5,405
Inventories 230 66
Prepaid expenses and other current assets (718) (1,210)
Other long-term assets 144 6
Accounts payable and accrued expenses (3,497) (3,415)
Deferred revenue 473 276
Pension liability 225 244
-------- --------
Total adjustments to net income (4,950) 2,790
-------- --------
Net cash provided by (used in) operating activities (4,338) 3,410
INVESTING ACTIVITIES
Net additions to property, plant and equipment (1,198) (1,533)
Note receivable from minority owned company - (3,000)
Other - (29)
-------- --------
Net cash used in investing activities (1,198) (4,562)
FINANCING ACTIVITIES
Net repayment of capital lease obligation (22) (21)
Proceeds from sale and issuance of common stock 8 4
-------- --------
Net cash used in financing activities (14) (17)
Effect of exchange rates on cash and cash equivalents 34 (226)
-------- --------
Decrease in cash and cash equivalents (5,516) (1,395)
Cash and cash equivalents at beginning of period 30,697 30,519
-------- --------
Cash and cash equivalents at end of period $25,181 $29,124
======== ========
Cash paid during the period for:
Interest $ 3 $ 5
======== ========
Income taxes (net of refunds) $ 78 $ 56
======== ========
The accompanying notes are an integral part of the condensed consolidated
financial statements.
-3-
CONCURRENT COMPUTER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. OVERVIEW OF BUSINESS AND BASIS OF PRESENTATION
Concurrent Computer Corporation ("Concurrent" or the "Company") is a
leading supplier of high-performance computer systems, software, and services
and operates in two segments, the Video-On-Demand ("VOD") division, Xstreme,
located in Duluth, Georgia, and the Integrated Solutions division located in
Fort Lauderdale, Florida. Concurrent also provides sales and support from
offices and subsidiaries throughout North America, Europe, Asia, and Australia.
Concurrent's Xstreme division provides VOD systems consisting of hardware
and software as well as integration services, primarily to residential cable
companies that have upgraded their networks to support interactive, digital
services. Concurrent's Integrated Solutions division provides high-performance,
real-time computer systems to commercial and government customers for use in
applications such as simulation and data acquisition.
The condensed, consolidated interim financial statements of Concurrent are
unaudited and reflect all adjustments (consisting of only normal recurring
adjustments) necessary for a fair statement of Concurrent's financial position,
results of operations and cash flows at the dates and for the periods indicated.
These financial statements should be read in conjunction with the Annual Report
on Form 10-K for the year ended June 30, 2003. There have been no significant
changes to Concurrent's Accounting Policies as disclosed in the Annual Report on
Form 10-K for the year ended June 30, 2003. Certain reclassifications have been
made to prior year amounts to conform with the current year presentation. The
results reported in these condensed, consolidated quarterly financial statements
should not be regarded as necessarily indicative of results that may be expected
for the entire year.
2. BASIC AND DILUTED NET INCOME PER SHARE
Basic net income per share is computed by dividing net income by the
weighted average number of common shares outstanding during each period.
Diluted net income per share is computed by dividing net income by the weighted
average number of shares including dilutive common share equivalents. Under the
treasury stock method, incremental shares representing the number of additional
common shares that would have been outstanding if the dilutive potential common
shares had been issued are included in the computation. Common share
equivalents of 5,635,000 and 4,509,000 for the three month periods ended
September 30, 2003 and 2002, respectively, were excluded from the calculation as
their effect was antidilutive. The following table presents a reconciliation of
the numerators and denominators of basic and diluted net income per share for
the periods indicated:
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 2003 SEPTEMBER 30, 2002
----------------- -----------------
BASIC DILUTED BASIC DILUTED
------- -------- ------- --------
Average outstanding shares 62,085 62,085 61,860 61,860
Dilutive effect of options and warrants - 637 - 508
------- -------- ------- --------
Equivalent shares 62,085 62,722 61,860 62,368
======= ======== ======= ========
Net income $ 612 $ 612 $ 620 $ 620
======= ======== ======= ========
Net income per share $ 0.01 $ 0.01 $ 0.01 $ 0.01
======= ======== ======= ========
-4-
3. STOCK-BASED COMPENSATION
At September 30, 2003, Concurrent had stock-based employee compensation
plans which are described in Note 15 in our annual report on Form 10-K for the
year ended June 30, 2003. The Company accounts for these plans under the
recognition and measurement principles of Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees," and related interpretations.
For the quarter ended September 30, 2003, Concurrent recognized $32,000 of stock
compensation expense for the issuance of restricted stock awards. There is no
other stock-based employee compensation expense reflected in net income for the
quarter ended September 30, 2003. For the quarter ended September 30, 2002,
there was no stock-based employee compensation expense reflected in net income,
as all options granted had an exercise price equal to the market value of the
underlying stock on the grant date.
In accordance with Statement of Financial Accounting Standards ("SFAS") No.
148, "Accounting for Stock Based Compensation - Transition and Disclosure - An
Amendment of FASB Statement No. 123," the following table illustrates the effect
on net income (loss) and earnings (loss) per share if the Company had applied
the fair value recognition provisions of SFAS No. 123, "Accounting for
Stock-Based Compensation", to stock-based employee compensation:
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED
SEPTEMBER 30,
2003 2002
-------- --------
Net income as reported $ 612 $ 620
Deduct: Total stock-based employee compensation
expense determined under the fair value method,
net of related taxes (1,057) (1,919)
-------- --------
Pro forma net loss $ (445) $(1,299)
======== ========
Earnings (loss) per share
Basic-as reported $ 0.01 $ 0.01
======== ========
Basic-pro forma $ (0.01) $ (0.02)
======== ========
Diluted-as reported $ 0.01 $ 0.01
======== ========
Diluted-pro forma $ (0.01) $ (0.02)
======== ========
4. REVENUE RECOGNITION AND RELATED MATTERS
VOD and real-time system revenues are recognized based on the guidance in
American Institute of Certified Public Accountants Statement of Position ("SOP")
97-2, "Software Revenue Recognition" ("SOP 97-2") and related amendments, SOP
98-4, "Deferral of the Effective Date of a Provision of SOP 97-2, Software
Revenue Recognition" and SOP 98-9, "Modification of SOP 97-2, Software Revenue
Recognition, With Respect to Certain Transactions." Concurrent recognizes
revenue from VOD and real-time systems when persuasive evidence of an
arrangement exists, the system has been shipped, the fee is fixed or
determinable and collectibility of the fee is probable. Under multiple element
arrangements, Concurrent allocates revenue to the various elements based on
vendor-specific objective evidence ("VSOE") of fair value. Concurrent's VSOE of
fair value is determined based on the price charged when the same element is
sold separately. If evidence of fair value does not exist for all elements in a
multiple arrangement, Concurrent recognizes revenue using the residual method.
Under the residual method, the fair value of the undelivered elements is
deferred and the remaining portion of the arrangement is recognized as revenue.
-5-
5. INVENTORIES
Inventories are valued at the lower of cost or market, with cost being
determined by using the first-in, first-out method. The components of
inventories are as follows:
(DOLLARS IN THOUSANDS)
SEPTEMBER 30, JUNE 30,
2003 2003
-------------- ---------
Raw materials, net $ 4,634 $ 5,933
Work-in-process 1,499 1,024
Finished goods 350 217
-------------- ---------
$ 6,483 $ 7,174
============== =========
6. INVESTMENTS IN AND RECEIVABLE FROM MINORITY OWNED COMPANIES
In March 2002, Concurrent purchased a 14.4% equity ownership interest in
Thirdspace Living Limited ("Thirdspace"). Thirdspace is a closely held United
Kingdom global software services corporation that offered interactive and
on-demand television solutions for digital subscriber line ("DSL") and other
broadband networks. Concurrent invested cash of $4 million and issued 291,461
shares of its common stock (valued at $10.29 per share) in exchange for
1,220,601 series C shares of Thirdspace, giving Concurrent a 14.4% ownership
interest in all shares outstanding as of the investment date. As part of this
transaction, Concurrent capitalized approximately $300,000 in various
transaction costs and as a result, the total equity investment in Thirdspace was
$7.3 million. This investment was accounted for under the cost method of
accounting.
In addition to the equity investment, Concurrent also loaned Thirdspace
$6.0 million in exchange for two $3.0 million long-term convertible notes
receivable.
In the third and fourth quarters of fiscal 2003, Concurrent recorded, in
the aggregate, a $13.0 million net impairment charge due to an other than
temporary decline in the market value of the investment in Thirdspace, which
included a $6.1 million charge for the write-off of two $3.0 million notes
receivable and related accrued interest. The impairment of the investment and
write-off of the related notes receivable and accrued interest was based upon
Thirdspace's deteriorating financial condition and actual performance relative
to expected performance, the status of Thirdspace's capital raising initiatives,
the market conditions of the telecommunications sector, the uncertainty of the
collectibility of the notes, the state of the overall economy and the reduced
market value of Thirdspace. In May 2003, Thirdspace sold the majority of its
assets to Alcatel Telecom Ltd. As a result of the sale of these certain assets,
Concurrent received $471,000 in proceeds, net of legal costs of $75,000, and an
additional $275,000 was placed in escrow for the benefit of Concurrent, pending
resolution of certain outstanding items. In return for these proceeds and a
perpetual, royalty-free license to the patents and patent applications
previously owned by Thirdspace, Concurrent relinquished its security interest in
the intellectual assets of Thirdspace; however, Concurrent still remains a
secured party to all other assets retained by Thirdspace.
In the quarter ended September 30, 2003, the majority of Thirdspace's
remaining assets were sold and as a result, Concurrent received $1.1 million in
additional proceeds and recorded the proceeds in the line item "Recovery of
previously recognized impairment loss" in the Condensed Consolidated Statements
of Operations. As of September 30, 2003, uncertainty remained as to the amount
and timing of receipt of additional proceeds as a result of further liquidation
of Thirdspace's remaining assets.
In April 2002, Concurrent invested cash of $500,000 in Everstream Holdings,
Inc. ("Everstream") in exchange for 480,770 shares of Series C Preferred stock
giving Concurrent a 4.9% ownership interest. Everstream is a privately held
company specializing in broadband advertising systems, software, infrastructure
and related integration services. Concurrent is accounting for its investment
in the Series C Preferred stock of Everstream using the cost method, as
Concurrent does not believe it exercises significant influence on Everstream.
This investment is reviewed quarterly for impairment, and as of September 30,
2003, there has been no impairment of the Everstream investment.
-6-
All of Concurrent's equity investments and related notes receivable are
reviewed for impairment on a quarterly basis in accordance with Accounting
Principles Board Opinion No. 18, "The Equity Method of Accounting for
Investments in Common Stock" and SFAS 115, "Accounting for Certain Investments
in Debt and Equity Securities," respectively.
7. RESTRUCTURING ACTIVITIES
During the fourth quarter of fiscal 2003, Concurrent implemented a
restructuring plan to realign resources to focus on more strategic and immediate
growth opportunities and to align the Company's cost structure with revenue
projections. As part of the restructuring plan, Concurrent terminated
approximately 7% of its global workforce and reduced office space in certain
international locations. The restructuring plan was accounted for in accordance
with SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities." The activities related to this restructuring plan for the quarter
ended September 30, 2003 were as follows:
(DOLLARS IN THOUSANDS)
LEASE
WORKFORCE TERMINATIONS
REDUCTION AND OTHER TOTAL
---------- ------------- ------
Restructuring accrual at June 30, 2003 $ 866 $ 223 $1,089
Cash payments 411 129 540
---------- ------------- ------
Restructuring accrual at September 30, 2003 $ 455 $ 94 $ 549
========== ============= ======
8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
The components of accounts payable and accrued expenses are as follows:
(DOLLARS IN THOUSANDS)
SEPTEMBER 30, JUNE 30,
2003 2003
-------------- ---------
Accounts payable, trade $ 2,900 $ 4,138
Accrued payroll, vacation and
other employee expenses 3,838 4,760
Warranty accrual 1,429 2,131
Restructuring accrual 549 1,089
Other accrued expenses 2,431 2,526
-------------- ---------
$ 11,147 $ 14,644
============== =========
-7-
9. COMPREHENSIVE INCOME
Concurrent's total comprehensive income (loss) is as follows:
(DOLLARS IN THOUSANDS)
THREE MONTHS ENDED
SEPTEMBER 30,
2003 2002
----- ------
Net income $ 612 $ 620
Other comprehensive income (loss):
Foreign currency translation income (loss) 85 (218)
----- ------
Total comprehensive income $ 697 $ 402
===== ======
10. SEGMENT INFORMATION
Concurrent operates its business in two segments: Integrated Solutions and
Xstreme. Concurrent's Integrated Solutions division is a leading provider of
high-performance, real-time computer systems, solutions and software for
commercial and government markets focusing on strategic market areas that
include hardware-in-the-loop and man-in-the-loop simulation, data acquisition,
industrial systems, and software and embedded applications. Concurrent's
Xstreme division is a leading supplier of interactive digital video streaming
systems primarily to the broadband cable television market. Shared expenses are
primarily allocated based on either revenues or headcount. Corporate costs
include costs related to the offices of the Chief Executive Officer, Chief
Financial Officer, General Counsel, Investor Relations, Human Resources and
other administrative costs including annual audit and tax fees, legal fees,
Board of Directors fees and similar costs.
-8-
The following summarizes the operating income (loss) by segment for the three
month periods ended September 30, 2003 and September 30, 2002, respectively:
(DOLLARS IN THOUSANDS)
THREE MONTHS ENDED SEPTEMBER 30, 2003
(UNAUDITED)
---------------------------------------------
INTEGRATED
SOLUTIONS XSTREME CORPORATE TOTAL
----------- ---------- ----------- -------
Revenues:
Product $ 4,394 $ 9,147 $ - $13,541
Service 4,146 1,215 - 5,361
----------- ---------- ----------- -------
Total 8,540 10,362 - 18,902
Cost of sales:
Product 1,356 3,657 - 5,013
Service 2,184 755 - 2,939
----------- ---------- ----------- -------
Total 3,540 4,412 - 7,952
----------- ---------- ----------- -------
Gross margin 5,000 5,950 - 10,950
Operating expenses:
Sales and marketing 1,807 2,156 117 4,080
Research and development 1,482 3,186 - 4,668
General and administrative 419 173 1,577 2,169
----------- ---------- ----------- -------
Total operating expenses 3,708 5,515 1,694 10,917
----------- ---------- ----------- -------
Operating income (loss) $ 1,292 $ 435 $ (1,694) $ 33
=========== ========== =========== =======
THREE MONTHS ENDED SEPTEMBER 30, 2002
(UNAUDITED)
---------------------------------------------
INTEGRATED
SOLUTIONS XSTREME CORPORATE TOTAL
----------- ---------- ----------- -------
Revenues:
Product $ 4,092 $ 12,449 $ - $16,541
Service 4,678 922 - 5,600
----------- ---------- ----------- -------
Total 8,770 13,371 - 22,141
Cost of sales:
Product 1,776 5,241 - 7,017
Service 2,607 660 - 3,267
----------- ---------- ----------- -------
Total 4,383 5,901 - 10,284
----------- ---------- ----------- -------
Gross margin 4,387 7,470 - 11,857
Operating expenses:
Sales and marketing 1,844 2,404 156 4,404
Research and development 1,399 3,048 - 4,447
General and administrative 429 563 1,336 2,328
----------- ---------- ----------- -------
Total operating expenses 3,672 6,015 1,492 11,179
----------- ---------- ----------- -------
Operating income (loss) $ 715 $ 1,455 $ (1,492) $ 678
=========== ========== =========== =======
-9-
11. ISSUANCE AND ACCRUAL OF NON-CASH WARRANTS
Comcast Cable Communications, Inc. Warrants
On March 29, 2001, Concurrent entered into a three-year definitive purchase
agreement with Comcast Cable Communications, Inc., or Comcast, providing for the
purchase of VOD equipment. As part of that agreement, Concurrent agreed to issue
three different types of warrants.
Concurrent issued a warrant to purchase 50,000 shares of its Common Stock
on March 29, 2001, exercisable at $5.196 per share over a four-year term. This
warrant is referred to as the "Initial Warrant."
Concurrent is also generally obligated to issue new warrants to purchase
shares of its Common Stock to Comcast at the end of each quarter through March
31, 2004, based upon specified performance goals which are measured by the
number of Comcast basic cable subscribers that have the ability to utilize the
VOD service. The incremental number of subscribers that have access to VOD at
each quarter end as compared to the prior quarter end multiplied by a specified
percentage is the number of additional warrants that were earned during the
quarter. These warrants are referred to as the "Performance Warrants".
Concurrent issued to Comcast a performance warrant for 4,431 shares on October
9, 2001, exercisable at $6.251 per share over a four-year term, a performance
warrant for 52,511 shares on January 15, 2002, exercisable at $15.019 per share
over a four year term, and a performance warrant for 1,502 shares on August 10,
2002, exercisable at $5.707 per share over a four year term.
Concurrent will also issue additional warrants to purchase shares of its
Common Stock, if at the end of any quarter the then total number of Comcast
basic cable subscribers with the ability to utilize the VOD services exceeds
specified threshold levels. These warrants are referred to as the "Cliff
Warrants".
Concurrent is recognizing the value of the Performance Warrants and the
Cliff Warrants over the term of the agreement as Comcast purchases additional
VOD equipment from Concurrent and makes the service available to its customers.
The value of the warrants is determined using the Black-Scholes valuation model.
The weighted-average assumptions used for the quarters ended September 30, 2003
and 2002, respectively, were: expected dividend yield of 0% for both periods;
risk-free interest rate of 2.40% and 2.57%; expected life of 4 years for both
periods; and an expected volatility of 112% and 116%. Concurrent will adjust
the value of the earned but unissued warrants on a quarterly basis using the
Black-Scholes valuation model until the warrants are actually issued. The value
of the new warrants earned and any adjustments in value for warrants previously
earned will be determined using the Black-Scholes valuation model and recognized
as part of revenue on a quarterly basis.
The exercise price of the warrants is subject to adjustments for stock
splits, combinations, stock dividends, mergers, and other similar
recapitalization events. The exercise price is also subject to adjustment for
issuance of additional equity securities at a purchase price less than the then
current fair market value of Concurrent's Common Stock. Based on the
information that is currently available, Concurrent does not expect the warrants
to be issued to Comcast to exceed 1% of its outstanding shares of Common Stock
over the term of the agreement. The exercise price of the warrants to be issued
to Comcast will equal the average closing price of Concurrent's Common Stock for
the 30 trading days prior to the applicable warrant issuance date and will be
exercisable over a four year term.
For the three months ended September 30, 2003, Concurrent recognized
$351,000 as a reduction in revenue for the Performance Warrants and Cliff
Warrants that have been earned but unissued as of September 30, 2003. The
decrease in revenue during the three month period ended September 30, 2003 is
due from the increase in the number of Comcast basic cable subscribers that have
the ability to utilize VOD services and the increase in the Black-Scholes value
of the warrants earned but unissued. For the three months ended September 30,
2002, Concurrent recorded an increase in revenue of $57,000 for the Performance
Warrants and Cliff Warrants that were earned but unissued due primarily to a
decrease in the Black-Scholes value of the warrants earned but unissued as of
September 30, 2002.
-10-
Scientific Atlanta, Inc. Warrants
In accordance with a five year definitive agreement with Scientific
Atlanta, Inc. ("SAI") executed in August of 1998, Concurrent agreed to issue
warrants to SAI upon achievement of pre-determined revenue targets. The value
of these warrants could not exceed 5% of applicable revenue and the number of
shares of Concurrent common stock related to the warrants are determined using
the Black-Scholes valuation model and could not exceed 888,888 shares for every
$30 million of revenue from the sale of VOD servers using the SAI platform. The
Black-Scholes value of these warrants could not impact gross margin by more than
$1.5 million per $30 million of applicable revenue. Concurrent accrued for this
cost as a part of cost of sales at the time of recognition of applicable
revenue. Concurrent issued warrants to SAI upon reaching the first $30 million
threshold on April 1, 2002, exercisable at $7.106 per share over a four-year
term, all of which are still outstanding as of September 30, 2003.
The five year definitive agreement with SAI expired on August 17, 2003, and
at that time Concurrent had not reached the second $30 million threshold of
revenue using the SAI platform. As a result, Concurrent was not obligated to
issue a warrant under the agreement regarding the second $30 million threshold,
and accordingly, reversed $1.3 million of expense during the three month period
ended September 30, 2003, which had been previously accrued in anticipation of
reaching the next $30 million threshold. This reversal was recorded in VOD
systems cost of sales. For the three month period ended September 30, 2002,
Concurrent recognized $3,000, as part of VOD product cost of sales for the SAI
warrants that had been earned but unissued.
12. RECENT ACCOUNTING PRONOUNCEMENTS
In December 2002, the FASB issued Interpretation No. ("FIN") 45,
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others," which provides for additional
disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations and requires, under certain circumstances, a
guarantor to recognize at the inception of a guarantee a liability for the fair
value of the obligation undertaken in issuing the guarantee. Concurrent adopted
the disclosure requirements for fiscal year ended June 30, 2003. The adoption
of FIN 45 has not had a material impact on Concurrent's consolidated financial
statements.
In May 2003, FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity." SFAS No. 150
clarifies the definition of a liability as currently defined in FASB Concepts
Statement No. 6, "Elements of Financial Statements," as well as other planned
revisions. This statement requires a financial instrument that embodies an
obligation of an issuer to be classified as a liability. In addition, the
statement establishes standards for the initial and subsequent measurement of
these financial instruments and disclosure requirements. SFAS No. 150 became
effective for Concurrent on July 1, 2003. The adoption of this standard did not
have a material impact on Concurrent's consolidated financial statements.
In January 2003, the FASB issued FIN 46, "Consolidation of Variable
Interest Entities." This interpretation clarifies the application of Accounting
Research Bulletin No. 51, "Consolidated Financial Statements," in determining
whether a reporting entity should consolidate certain legal entities, including
partnerships, limited liability companies, or trusts, among others, collectively
defined as variable interest entities. This interpretation applies to variable
interest entities created or obtained after January 31, 2003, and as of July 1,
2003, to variable interest entities in which an enterprise holds a variable
interest that it acquired before February 1, 2003. The FASB subsequently issued
FASB Staff Position FIN 46-6, which defers the effective date for applying the
provisions of FIN 46 to financial statements for (1) interests held by public
entities in variable interest entities or potential variable interest entities
created before February 1, 2003 and (2) non-registered investment companies.
Concurrent does not have any variable interest entities; therefore, management
believes this statement will not have a material impact on Concurrent's
consolidated financial statements.
-11-
13. CONTINGENCIES
Concurrent, from time to time, is involved in litigation incidental to the
conduct of its business. Concurrent believes that such pending litigation will
not have a material adverse effect on Concurrent's results of operations or
financial condition.
-12-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
SELECTED OPERATING DATA AS A PERCENTAGE OF TOTAL REVENUE
The following table sets forth selected operating data as a percentage of
total revenue, unless otherwise indicated, for certain items in our consolidated
statements of operations for the periods indicated.
THREE MONTHS ENDED
SEPTEMBER 30,
2003 2002
------ ------
(Unaudited)
Revenues:
Product sales
Real-time systems 23.2% 18.5%
VOD systems 48.4 56.2
------ ------
Total product sales 71.6 74.7
Service
Real-time systems 21.9 21.1
VOD systems 6.5 4.2
------ ------
Total service sales 28.4 25.3
------ ------
Total 100.0 100.0
Cost of sales (% of respective sales category):
Product
Real-time systems 30.9 43.4
VOD systems 40.0 42.1
------ ------
Total product cost of sales 37.0 42.4
Service
Real-time systems 52.7 55.7
VOD systems 62.1 71.6
------ ------
Total service cost of sales 54.8 58.3
------ ------
Total cost of sales 42.1 46.4
------ ------
Gross margin 57.9 53.6
Operating expenses:
Sales and marketing 21.6 19.9
Research and development 24.7 20.1
General and administrative 11.4 10.5
------ ------
Total operating expenses 57.7 50.5
------ ------
Operating income 0.2 3.1
Recovery of previously recognized
impairment loss 5.6 -
Interest income - net 0.3 0.9
Other expense - net (0.7) (0.2)
------ ------
Income before income taxes 5.4 3.7
Provision for income taxes 2.2 0.9
------ ------
Net income 3.2% 2.8%
====== ======
-13-
RESULTS OF OPERATIONS
THE QUARTER ENDED SEPTEMBER 30, 2003 COMPARED TO THE QUARTER ENDED SEPTEMBER 30,
2002
Product Sales. Total product sales were $13.5 million for the three months
ended September 30, 2003, a decrease of $3.0 million, or 18.1%, from $16.5
million for the same period of the prior year. The decrease in product sales
resulted primarily from the decrease in VOD product sales of $3.3 million, or
26.5%, to $9.1 million in the three month period ended September 30, 2003 from
$12.4 million for same period of the prior year. The decrease in VOD product
sales for the three months ended September 30, 2003 was due primarily to a
different mix of customers and products, including decreased sales of QAMs and
Upconverters and a decrease in prices of certain system components in the three
months ended September 30, 2003 as compared to the prior year period. The
decrease in VOD product sales was also due to an increase of approximately
$400,000 in revenue reductions resulting from additional warrants being earned
by Comcast as compared to the same period of the prior year. The decrease in VOD
product sales was partially offset by software sales of our newly released
Real-Time Media content ingestion product as compared to the prior year period.
Sales of real-time products increased $0.3 million, or 7.4%, to $4.4
million for the three month period ended September 30, 2003 from $4.1 million
for the same period of the prior year. The increase in real-time product
revenue was due to a more favorable product mix in the three month period ended
September 30, 2003 as compared to same period of the prior year.
Service Revenue. Service revenue decreased $0.2 million, or 4.3%, to $5.4
million for the three month period ended September 30, 2003, from $5.6 million
for the same period of the prior year. VOD service revenue increased $0.3
million, or 31.8%, to $1.2 million in the three month period ended September 30,
2003 from $0.9 million for the same period of the prior year, as the Xstreme
division continued to recognize deferred maintenance revenue and expand its VOD
customer base requiring additional installation, training, technical support,
and software and hardware maintenance services. The increase in VOD service
revenue was offset by a $0.5 million, or 11.4%, decrease in real-time service
revenue to $4.2 million for the three month period ended September 30, 2003 from
$4.7 million for the same period of the prior year. Real-time service revenue
continued to decline primarily due to the cancellation of maintenance contracts
as machines were removed from service and from customers purchasing our new
products that are less expensive to maintain.
Product Gross Margin. Product gross margin decreased $1.0 million, or
10.5%, to $8.5 million for the three months ended September 30, 2003 from $9.5
million for the same period of the prior year. The product gross margin as a
percentage of sales increased to 63.0% in the three month period ended September
30, 2003 from 57.6% in the three month period ended September 30, 2002. VOD
product gross margin increased to 60.0% in the three month period ended
September 30, 2003 from 57.9% in the same period of the prior year due to the
$1.3 million reversal from cost of sales of previously recognized warrant
expense in the three months ended September 30, 2003. The favorable impact from
the warrant expense reversal was partially offset by an increase in the revenue
reduction from the warrant accrual for Comcast of approximately $400,000 over
the prior year period due to an increase in the Black-Scholes value of the
warrants and increased sales to Comcast during the three months ended September
30, 2003. Real-time product gross margin increased to 69.1% in the three month
period ended September 30, 2003 from 56.6% for the same period of the prior year
due to a more favorable product mix, particularly related to higher margin
software sales in the current quarter, as compared to the same period of the
prior fiscal year.
Service Gross Margin. The gross margin on service sales increased to 45.2%
for the three month period ended September 30, 2003 from 41.7% for the same
period of the prior year. VOD service margins increased to 37.9% compared to
28.4% in the prior year period as the Xstreme division continues to build its
VOD customer base and revenue at a faster rate than the costs required to
support these services. Real-time service gross margin increased to 47.3% from
44.3% due primarily to reduced costs from the restructuring initiatives
implemented in the fourth quarter of fiscal 2003.
Sales and Marketing. Sales and marketing expenses increased as a
percentage of sales to 21.6% for the three months ended September 30, 2003 from
19.9% for the same period of the prior year. These expenses decreased $0.3
million, or 7.4%, to $4.1 million during the three month period ended September
30, 2003
-14-
from $4.4 million in the same period of the prior year. The Integrated Solutions
division's sales and marketing expenses remained relatively constant as compared
to the same period of the prior year. The Xstreme division's sales and marketing
expenses decreased $0.3 million primarily due to reduced salaries and wages as a
result of the realignment of resources in the fourth quarter of fiscal 2003, and
a decrease in trade show and other advertising expenses and commissions.
Research and Development. Research and development expenses increased as a
percentage of sales to 24.7% for the three months ended September 30, 2003 from
20.1% for the same period of the prior year. These expenses increased $0.2
million, or 5.0%, to $4.7 million during the three month period ended September
30, 2003 from $4.5 million during the same period of the prior year. The $0.2
million increase in research and development expense is due to an increase in
salaries and related costs as the Xstreme and Integrated Solutions divisions
added new development staff since the same period of the prior year and an
increase in depreciation expense in the Xstreme division, partially offset by a
decrease in consulting expenses in the Xstreme division as compared to the same
period of the prior year.
General and Administrative. General and administrative expenses increased
as a percentage of sales to 11.4% for the three months ended September 30, 2003
from 10.5% for the same period of the prior year. These expenses decreased $0.1
million, or 6.8%, to $2.2 million during the three months ended September 30,
2003 compared to $2.3 million in same period of the prior year due primarily to
a reduction in the bad debt reserve of $0.3 million, partially offset by an
increase in legal costs, accounting salaries and wages and consulting fees in
the three months ended September 30, 2003 as compared to the same period of the
prior year.
Recovery of Previously Recognized Impairment Loss. In the third and fourth
quarters of fiscal 2003, we recorded, in the aggregate, a net impairment charge
of $13.0 million due to an other-than-temporary decline in the market value of
our equity investment in Thirdspace, which included a $6.1 million charge for
the write off of two $3.0 million notes receivable and related accrued interest.
As a result of a partial liquidation of Thirdspace's remaining assets in the
quarter ended September 30, 2003, we received net proceeds of $1.1 million as a
partial recovery of the previously written off notes receivable. The income
recognized related to these proceeds is recorded in the line item "Recovery of
previously recognized impairment loss" in the Condensed Consolidated Statements
of Operations and the value of the investment and notes receivables remain at
zero on our September 30, 2003 Condensed Consolidated Balance Sheets. As of
September 30, 2003, uncertainty remained as to the amount and timing of receipt
of additional proceeds as a result of further liquidation of Thirdspace's
remaining assets.
Income Taxes. We recorded income tax expense for our domestic and foreign
subsidiaries of $0.4 million and $0.2 million during the three month periods
ended September 30, 2003 and 2002, respectively. This expense is based on a
pre-tax income of $1.0 million and $0.8 million in the three month periods ended
September 30, 2003 and 2002, respectively. For the three months ended September
30, 2003, this expense is primarily attributable to U.S. federal income tax that
is offset by net operating losses originating prior to our quasi-reorganization
in November 1991. For accounting purposes, the benefit from the utilization of
the pre quasi-reorganization net operating losses must be recognized directly in
equity rather than through the income statement. For the three months ended
September 30, 2002, this expense was primarily attributable to foreign
withholding taxes and income earned in foreign locations, which cannot be offset
by net operating loss carryforwards.
Net Income. We recorded net income of $0.6 million or $0.01 per basic and
diluted share for the three months ended September 30, 2003 and 2002.
-15-
LIQUIDITY AND CAPITAL RESOURCES
Our liquidity is dependent on many factors, including sales volume,
operating profit and the efficiency of asset use and turnover. Our future
liquidity will be affected by, among other things:
- The actual versus anticipated decline in sales of real-time
proprietary systems and service maintenance revenue;
- Revenues from real-time systems;
- Revenue growth from VOD systems and the pace at which cable companies
implement VOD technology;
- Ongoing cost control actions and expenses, including for example,
research and development and capital expenditures;
- The margins on the VOD and real-time businesses;
- The ability to raise additional capital, if necessary;
- The ability to obtain bank financing, if necessary;
- Timing of product shipments which occur primarily during the last
month of the quarter;
- The percentage of sales derived from outside the United States where
there are generally longer accounts receivable collection cycles;
- The number of countries in which we operate, which may require
maintenance of minimum cash levels in each country and, in certain
cases, may restrict the repatriation of cash, such as cash held on
deposit to secure office leases; and
- The success of the fourth generation VOD platform.
We used cash of $4.3 million from operating activities during the three
months ended September 30, 2003 compared to providing cash of $3.4 million
during the same period of the prior year. The decrease in cash from operations
was due to decreased collections of accounts receivable as compared to the same
period of the prior year.
We invested $1.2 million in property plant and equipment during the three
months ended September 30, 2003 compared to $1.5 million during the three months
ended September 30, 2002. Capital additions during the first three months of
fiscal 2004 related primarily to product development and testing equipment and
demonstration equipment for our Xstreme division.
At September 30, 2003, we had working capital of $30.9 million and had no
material commitments for capital expenditures. We believe that the existing
cash balances and funds generated by operations will be sufficient to meet the
anticipated working capital and capital expenditure requirements for the next 12
months.
Deferred revenues increased $0.5 million from $7.6 million at June 30, 2003
to $8.1 million at September 30, 2003, due primarily to the growing base of
cable customers with maintenance programs where the revenue is recognized
ratably over the maintenance period.
We maintain pension plans for certain employees and former employees in the
United Kingdom and Germany. The projected benefit obligation for the benefit
plans at June 30, 2003 and June 30, 2002 as determined in accordance with SFAS
No. 87, "Employers Accounting for Pensions", was $21.5 million and $17.0
million, respectively, and the value of the plans assets was $12.9 million and
$12.0 million, respectively. As a result, the plans were underfunded by $8.6
million at June 30, 2003 and by $5.0 million at June 30, 2002. The value of
plan assets was $12.9 million at September 30, 2003. It is likely that the
amount of our contribution to the plans will increase from the $394,000 of
contributions made in fiscal 2003. In addition, management expects the pension
cost to be recognized in the financial statements will increase from the
$747,000 recognized in fiscal 2003 to approximately $1,060,000 in fiscal 2004,
of which approximately $265,000 was recognized in the three months ended
September 30, 2003. The expense to be recognized in future periods could
increase further, depending upon the amount of the change in the fair market
value of the plan assets and the change in the projected benefit obligation.
The funding deficiency of $8.6 million at June 30, 2003 may increase
further or decrease in the future depending primarily upon the actual investment
performance of the pension assets as compared to the assumed rate of return on
plan assets and the amount of contributions to the plan by the Company. The
Company is currently in the process of completing its valuation to determine the
amount of contributions to the plan that the Company will be required to make
for the next 3 years. We also recorded a reduction to stockholders' equity as of
June 30, 2003 and 2002, amounting to $3.0 million and $1.6 million,
respectively, due to the decrease in the discount rate used to calculate the
accumulated benefit obligation and the less than anticipated investment returns.
-16-
CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS
Our only significant contractual obligations and commitments relate to
certain operating leases for sales, service and manufacturing facilities in the
United States, Europe and Asia.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements made or incorporated by reference in this report on Form
10-Q may constitute "forward-looking statements" within the meaning of the
federal securities laws. When used or incorporated by reference in this
prospectus, the words "believes," "expects," "estimates", "anticipates" and
similar expressions are intended to identify forward-looking statements.
Statements regarding future events and developments and our future performance,
as well as our expectations, beliefs, plans, estimates or projections relating
to the future, are forward-looking statements within the meaning of these laws.
All forward-looking statements are subject to certain risks and uncertainties
that could cause actual events to differ materially from those projected. The
risks and uncertainties which could affect our financial condition or results of
operations include, without limitation:
- availability of VOD content;
- delays or cancellations of customer orders;
- changes in product demand;
- economic conditions;
- various inventory risks due to changes in market conditions;
- uncertainties relating to the development and ownership of
intellectual property;
- uncertainties relating to our ability and the ability of other
companies to enforce their intellectual property rights;
- the pricing and availability of equipment, materials and inventories;
- the limited operating history of our VOD segment;
- the concentration of our customers;
- failure to effectively manage growth;
- delays in testing and introductions of new products;
- rapid technology changes;
- demand shifts from high-priced, proprietary real-time systems to
low-priced, open server systems;
- system errors or failures;
- reliance on a limited number of suppliers;
- uncertainties associated with international business activities,
including foreign regulations, trade controls, taxes, and currency
fluctuations;
- the highly competitive environment in which we operate and predatory
pricing pressures;
- failure to effectively service the installed base;
- the entry of new well-capitalized competitors into our markets;
- the valuation of equity investments and collectibility of notes
receivable;
- capital spending patterns by a limited customer base; and
- contract obligations that could impact revenue recognition.
Other important risk factors are discussed in our Annual Report on Form
10-K for the fiscal year ended June 30, 2003.
Our forward-looking statements are based on current expectations and speak
only as of the date of such statements. We undertake no obligation to publicly
update or revise any forward-looking statement, whether as a result of future
events, new information or otherwise.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
We are exposed to market risk from changes in interest rates and foreign
currency exchange rates. We are exposed to the impact of interest rate changes
on our short-term cash investments, which are backed
-17-
by U.S. government obligations, and other investments in respect of institutions
with the highest credit ratings, all of which have maturities of three months or
less. These short-term investments carry a degree of interest rate risk. We
believe that the impact of a 10% increase or decline in interest rates would not
be material to the financial statements.
We conduct business in the United States and around the world. The most
significant foreign currency transaction exposures relate to the United Kingdom,
those Western European countries that use the Euro as a common currency,
Australia, and Japan. We do not hedge against fluctuations in exchange rates
and believe that a hypothetical 10% upward or downward fluctuation in foreign
currency exchange rates relative to the United States dollar would not have a
material impact on future earnings, fair values, or cash flows.
ITEM 4. CONTROLS AND PROCEDURES
As required by Securities and Exchange Commission rules, we have evaluated
the effectiveness of the design and operation of our disclosure controls and
procedures as of September 30, 2003, the end of the quarter to which this report
relates. This evaluation was carried out under the supervision and with the
participation of our management, including our principal executive officer and
principal financial officer. Based on this evaluation, these officers have
concluded that the design and operation of our disclosure controls and
procedures are effective. There were no changes to our internal controls over
financial reporting during the period covered by this report that materially
affected, or are reasonably likely to materially affect, our internal controls
over financial reporting subsequent to the date of the their evaluation.
Disclosure controls and procedures are controls and other procedures that
are designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act of 1934, as amended, are
recorded, processed, summarized and reported, within the time periods specified
in the Securities and Exchange Commission's rules and forms. Disclosure
controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act are accumulated and
communicated to our management, including our principal executive officer and
principal financial officer, as appropriate, to allow timely decisions regarding
required disclosure.
-18-
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may be involved in litigation relating to claims
arising out of our ordinary course of business. We are not presently involved
in any material litigation, but have the following matters pending:
- SeaChange International, Inc. v. Putterman, et al, Arkansas Court of
---------------------------------------------------
Appeals, Case No. CA 01-1126. The suit was filed on June 14, 1999
alleging that we defamed SeaChange International, Inc. ("SeaChange").
On June 14, 2000, we counterclaimed against SeaChange alleging that
SeaChange defamed us. On January 4, 2001, the court granted our motion
to dismiss all claims against us. SeaChange subsequently and
successfully appealed and the matter is set for trial in January 2004.
- Eason v. Concurrent Computer Corp, et al., Superior Court of New
-----------------------------------------------
Jersey, Appellate Division, Docket No. A-003181-02T2. This suit arose
out of personal injury claim filed in 1994 wherein plaintiff alleged
that he was injured when a lamp post in our parking lot fell. The case
against us was dismissed in 1995, but in 2000 the plaintiff amended
the cause of action and refiled against us alleging spoliation of
evidence. The plaintiff obtained a default judgment for $119,800 in
December 2001 that was vacated in August 2002. Plaintiff subsequently
refiled and in February 2003 the court granted our motion to dismiss
all claims. Plaintiff has appealed, and the matter has been briefed. A
decision by the appellate court is expected this fiscal year.
We are involved in various other legal proceedings. We believe that any
liability which may arise as a result of these proceedings, including the
proceedings specifically discussed above, will not have a material adverse
effect on our financial condition.
-19-
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
3.1 - Restated Certificate of Incorporation of the Registrant
(incorporated by reference to the Registrant's Registration
Statement on Form S-2 (No. 33-62440)).
3.2 - Amended and Restated Bylaws of the Registrant Certificate
(incorporated by reference to the Registrants Quarterly report on
Form 10-Q for the quarter ended March 31, 2003).
3.3 - Certificate of Correction to Restated Certificate of
Incorporation of the Registrant (incorporated by reference to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
June 30, 2002).
3.4 - Amended Certificate of Designations of Series A Participating
Cumulative Preferred Stock (incorporated by reference to the Form
8-A/A, dated August 9, 2002).
3.5 - Amendment to Amended Certificate of Designations of Series A
Participating Cumulative Preferred Stock (incorporated by
reference to the Form 8-A/A, dated August 9, 2002).
4.1 - Form of Common Stock Certificate (incorporated by reference to
the Registrants Quarterly report on Form 10-Q for the quarter
ended March 31, 2003).
4.2 - Form of Rights Certificate (incorporated by reference to the
Registrant's Current Report on Form 8-K/A filed August 12, 2002).
4.3 - Amended and Restated Rights Agreement dated as of August 7,
2002 between the Registrant and American Stock Transfer & Trust
Company, as Rights Agent (incorporated by reference to the
Registrant's Current Report on Form 8-K/A filed on August 12,
2002).
10.1**- Form Indemnifications Agreement and Schedule of Directors who
have entered into such agreement.
11.1* - Statement Regarding Computation of Per Share Earnings.
31.1**- Certification of Chief Executive Officer, pursuant to Rule
13a-14 (a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2**- Certification of Chief Financial Officer, pursuant to Rule
13a-14 (a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1**- Certification of Chief Executive Officer, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32.2**- Certification of Chief Financial Officer, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
* Data required by Statement of Financial Accounting Standards No. 128,
"Earnings per Share," is provided in the Notes to the condensed
consolidated financial statements in this report.
** Filed herewith.
(b) Reports on Form 8-K.
The following reports on Form 8-K were filed during the period covered by
this report:
- Current Report on Form 8-K furnished on August 22, 2003, relating to
results of operations and financial condition as of and for the
quarter and year ended June 30, 2003.
- Current Report on Form 8-K furnished on August 28, 2003, relating to
required Regulation G Disclosures related to the conference call on
August 21, 2003.
- Current Report on Form 8-K filed on September 25, 2003, relating to
the resignation of Paul C. Meyer, president of Integrated Solutions
Division, effective October 10, 2003.
-20-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this quarterly report for the quarter ended September
30, 2003, to be signed on its behalf by the undersigned thereunto duly
authorized.
Date: November 14, 2003 CONCURRENT COMPUTER CORPORATION
By: /s/ Steven R. Norton
------------------------
Steven R. Norton
Executive Vice President, Chief Financial
Officer and Secretary
(Principal Financial and Accounting Officer,
Authorized Officer)
-21-
EXHIBIT INDEX
-------------
3.1 - Restated Certificate of Incorporation of the Registrant
(incorporated by reference to the Registrant's Registration
Statement on Form S-2 (No. 33-62440)).
3.2 - Amended and Restated Bylaws of the Registrant Certificate
(incorporated by reference to the Registrants Quarterly report on
Form 10-Q for the quarter ended March 31, 2003).
3.3 - Certificate of Correction to Restated Certificate of
Incorporation of the Registrant (incorporated by reference to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
June 30, 2002).
3.4 - Amended Certificate of Designations of Series A Participating
Cumulative Preferred Stock (incorporated by reference to the Form
8-A/A, dated August 9, 2002).
3.5 - Amendment to Amended Certificate of Designations of Series A
Participating Cumulative Preferred Stock (incorporated by
reference to the Form 8-A/A, dated August 9, 2002).
4.1 - Form of Common Stock Certificate (incorporated by reference to
the Registrants Quarterly report on Form 10-Q for the quarter
ended March 31, 2003).
4.2 - Form of Rights Certificate (incorporated by reference to the
Registrant's Current Report on Form 8-K/A filed August 12, 2002).
4.3 - Amended and Restated Rights Agreement dated as of August 7,
2002 between the Registrant and American Stock Transfer & Trust
Company, as Rights Agent (incorporated by reference to the
Registrant's Current Report on Form 8-K/A filed on August 12,
2002).
10.1**- Form Indemnifications Agreement and Schedule of Directors who
have entered into such agreement.
11.1* - Statement Regarding Computation of Per Share Earnings.
31.1**- Certification of Chief Executive Officer, pursuant to Rule
13a-14 (a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2**- Certification of Chief Financial Officer, pursuant to Rule
13a-14 (a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1**- Certification of Chief Executive Officer, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32.2**- Certification of Chief Financial Officer, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
* Data required by Statement of Financial Accounting Standards No. 128,
"Earnings per Share," is provided in the Notes to the condensed
consolidated financial statements in this report.
** Filed herewith.
-22-