<PAGE>
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.
<PAGE>
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
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
LIGHTBRIDGE, INC. AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
----------------- -----------------
<S> <C> <C>
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
================= =================
</TABLE>
See notes to unaudited condensed consolidated financial statements
3
<PAGE>
LIGHTBRIDGE, INC. AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENTS
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
1997 1996
------------- -------------
<S> <C> <C>
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
=============
</TABLE>
See notes to unaudited condensed consolidated financial statements
4
<PAGE>
LIGHTBRIDGE, INC. AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
1997 1996
--------------- -----------
<S> <C> <C>
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
=============== ===========
</TABLE>
See notes to unaudited condensed consolidated financial statements
5
<PAGE>
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:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------
1997 1996
------------- -------------
<S> <C> <C>
Basic................... $0.12 $0.00
Diluted................. 0.11 0.00
</TABLE>
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
<PAGE>
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
<PAGE>
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.
<TABLE>
<CAPTION>
Results of Operations Data:
Three Months Ended
March 31,
------------------
1997 1996
-------- --------
<S> <C> <C>
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%
======== ========
</TABLE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
Exhibit 11
Computation of Earnings (Loss) per Common Share
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------
<S> <C> <C>
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
=========== ===========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 24,883,262
<SECURITIES> 2,069,323
<RECEIVABLES> 8,308,334
<ALLOWANCES> (118,992)
<INVENTORY> 0
<CURRENT-ASSETS> 36,588,332
<PP&E> 10,434,585
<DEPRECIATION> 5,891,618
<TOTAL-ASSETS> 42,829,595
<CURRENT-LIABILITIES> 5,547,918
<BONDS> 0
0
0
<COMMON> 154,364
<OTHER-SE> 35,229,967
<TOTAL-LIABILITY-AND-EQUITY> 42,829,595
<SALES> 8,822,838
<TOTAL-REVENUES> 8,822,838
<CGS> 4,168,670
<TOTAL-COSTS> 3,732,962
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 107,855
<INCOME-PRETAX> 1,123,887
<INCOME-TAX> (643,939)
<INCOME-CONTINUING> 1,767,826
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,767826
<EPS-PRIMARY> 0.11
<EPS-DILUTED> 0.11
</TABLE>
