SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT
Date of report: February 28, 2003
(Date of earliest event reported)
AKAMAI TECHNOLOGIES, INC.
Delaware | 0-27275 | 04-3432319 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
8 Cambridge Center, Cambridge, Massachusetts 02142
(Address of Principal Executive Offices) (Zip Code)
Registrants telephone number, including area code: (617) 444-3000
Item 5. Other Events. | ||||||||
Akamai Technologies, Inc. Condensed Consolidated Balance Sheet | ||||||||
Akamai Technologies, Inc. Condensed Consolidated Statements of Operations | ||||||||
SIGNATURES |
Item 5. Other Events.
On February 28, 2003, we settled a lawsuit filed against us in June 2001 by a former employee alleging breach of contract. Under the terms of the settlement, we agreed to make a $3.55 million payment, of which $1.75 million will be reimbursed by our insurance carriers. We have recorded the net amount of $1.8 million as general and administrative expenses, increased other current assets by $1.75 million and increased accrued expenses by $3.55 million as of December 31, 2002.
On January 28, 2003, we issued a press release that included our unaudited condensed consolidated statement of operations for the three and twelve months ended December 31, 2002 and unaudited condensed consolidated balance sheet as of December 31, 2002. On that date, we also held a telephone conference with the investing public to review those financial results during which we announced that we had positive earnings before income taxes, depreciation and amortization, or EBITDA. Subsequent to the date of the press release and the telephone conference, the parties participated in a mediation that resulted in the settlement. Accordingly, we recorded adjustments to our consolidated financial statements as of December 31, 2002. Furthermore, as a result of the adjustments above, our EBITDA was materially reduced by $1.8 million. EBITDA is, however, an unaudited financial metric that could be subject to additional adjustments over time. A revised reconciliation of net loss calculated in accordance with generally accepted accounting principles in the United States of America to normalized net loss and EBITDA, giving effect only to the adjustments related to settlement of this lawsuit, is available on our web site at www.akamai.com. We are not including the information contained on our web site as part of, or incorporating by reference into, this Current Report on Form 8-K.
Set forth below is a reconciliation from our consolidated financial statements included in our press release on January 28, 2003 to the adjusted consolidated financial statements.
2
Akamai Technologies, Inc.
Condensed Consolidated Balance Sheet
(dollar amounts in thousands)
(unaudited)
Per Press Release | Adjusted | |||||||||||||||||||
December 31, 2002 | Adjustment | December 31, 2002 | ||||||||||||||||||
Assets |
||||||||||||||||||||
Cash and cash equivalents |
$ | 111,262 | $ | | $ | 111,262 | ||||||||||||||
Restricted cash and marketable securities |
3,664 | 3,664 | ||||||||||||||||||
Accounts receivable, net |
17,574 | 17,574 | ||||||||||||||||||
Prepaid expenses and other current assets |
7,433 | 1,750 | 9,183 | |||||||||||||||||
Current assets: |
139,933 | 1,750 | 141,683 | |||||||||||||||||
Restricted cash |
10,244 | 10,244 | ||||||||||||||||||
Property and equipment, net |
63,159 | 63,159 | ||||||||||||||||||
Goodwill and other intangible assets, net |
7,410 | 7,410 | ||||||||||||||||||
Other assets |
7,367 | 7,367 | ||||||||||||||||||
Total assets |
$ | 228,113 | $ | 1,750 | $ | 229,863 | ||||||||||||||
Liabilities and stockholders (deficit) equity |
||||||||||||||||||||
Accounts payable and accrued expenses |
$ | 50,359 | $ | 3,550 | $ | 53,909 | ||||||||||||||
Other current liabilities |
27,455 | 27,455 | ||||||||||||||||||
Current liabilities: |
77,814 | 3,550 | 81,364 | |||||||||||||||||
Other liabilities |
16,589 | 16,589 | ||||||||||||||||||
Convertible notes |
300,000 | 300,000 | ||||||||||||||||||
Total liabilities |
394,403 | 3,550 | 397,953 | |||||||||||||||||
Stockholders (deficit) equity |
(166,290 | ) | (1,800 | ) | (168,090 | ) | ||||||||||||||
Total liabilities and stockholders (deficit) equity |
$ | 228,113 | $ | 1,750 | $ | 229,863 | ||||||||||||||
3
Akamai Technologies, Inc.
Condensed Consolidated Statements of Operations
(dollar amounts in thousands, except per share data)
(unaudited)
Three Months Ended | Year Ended | |||||||||||||||||||||||||
Per Press Release | Adjusted | Per Press Release | Adjusted | |||||||||||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||||||
2002 | Adjustment | 2002 | 2002 | Adjustment | 2002 | |||||||||||||||||||||
Revenue |
$ | 35,352 | $ | | $ | 35,352 | $ | 144,976 | $ | | $ | 144,976 | ||||||||||||||
Cost and operating expenses: |
||||||||||||||||||||||||||
Cost of revenue (before network-related depreciation) |
6,603 | 6,603 | 38,371 | 38,371 | ||||||||||||||||||||||
Research and development |
2,845 | 2,845 | 17,158 | 17,158 | ||||||||||||||||||||||
Sales and marketing |
11,760 | 11,760 | 53,068 | 53,068 | ||||||||||||||||||||||
General and administrative |
11,091 | 1,800 | 12,891 | 54,044 | 1,800 | 55,844 | ||||||||||||||||||||
Amortization of CNN advertising |
1,371 | 1,371 | 5,634 | 5,634 | ||||||||||||||||||||||
Amortization of goodwill and other intangible assets |
2,231 | 2,231 | 11,930 | 11,930 | ||||||||||||||||||||||
Depreciation |
17,141 | 17,141 | 78,488 | 78,488 | ||||||||||||||||||||||
Equity-related compensation |
5,562 | 5,562 | 21,195 | 21,195 | ||||||||||||||||||||||
Restructuring charge |
26,675 | 26,675 | 45,824 | 45,824 | ||||||||||||||||||||||
Total cost and operating expenses |
85,279 | 1,800 | 87,079 | 325,712 | 1,800 | 327,512 | ||||||||||||||||||||
Operating loss |
(49,927 | ) | (1,800 | ) | (51,727 | ) | (180,736 | ) | (1,800 | ) | (182,536 | ) | ||||||||||||||
Interest expense, net |
4,053 | 4,053 | 15,310 | 15,310 | ||||||||||||||||||||||
(Gain) loss on investments |
(299 | ) | (299 | ) | 6,099 | 6,099 | ||||||||||||||||||||
Loss before provision for income taxes |
(53,681 | ) | (1,800 | ) | (55,481 | ) | (202,145 | ) | (1,800 | ) | (203,945 | ) | ||||||||||||||
Provision for income taxes |
123 | 123 | 492 | 492 | ||||||||||||||||||||||
Net loss |
$ | (53,804 | ) | $ | (1,800 | ) | $ | (55,604 | ) | $ | (202,637 | ) | $ | (1,800 | ) | $ | (204,437 | ) | ||||||||
Basic and diluted net loss per share |
$ | (0.47 | ) | $ | (0.48 | ) | $ | (1.80 | ) | $ | (1.81 | ) | ||||||||||||||
Weighted average common shares outstanding |
114,866 | 114,866 | 112,766 | 112,766 |
4
SIGNATURES
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 hereunto duly authorized.
Dated: March 13, 2003 | AKAMAI TECHNOLOGIES, INC. | |
/s/ Kathryn Jorden Meyer | ||
|
||
Kathryn Jorden Meyer Vice President, General Counsel and Secretary |
5