3Ware 2004 Annual Report Download - page 44

Impact of Adoption of Accounting Standard
The following table presents the impact of SFAS 142 on the net loss and the net loss per share as if SFAS
142 had been in effect for all periods presented in the consolidated statements of operations (in thousands, except
per share amounts):
Fiscal Years Ended March 31,
2004 2003 2002
Net loss—as reported ................................. $(104,877) $(745,541) $(3,605,690)
Adjustments:
Cumulative effect of accounting change ............... — 102,229 —
Amortization of goodwill .......................... — — 230,250
Amortization of assembled workforce previously
classified as purchased intangible assets ............. — — 4,193
Income tax effect ................................. — — (1,698)
Total adjustments ............................ — 102,229 232,745
Net loss—as adjusted ................................. $(104,877) $(643,312) $(3,372,945)
Basic and diluted net loss per share—as reported ............ $ (0.34) $ (2.47) $ (12.08)
Basic and diluted net loss per share—as adjusted ............ $ (0.34) $ (2.14) $ (11.30)
Financial Condition and Liquidity
As of March 31, 2004, our principal source of liquidity consisted of $861.0 million in cash, cash equivalents
and short-term investments. Working capital as of March 31, 2004 was $841.5 million. At the end of fiscal 2004,
we had contractual obligations not included on our balance sheet totaling $70.1 million, primarily related to
facilities leases, engineering design software tool licenses and inventory purchase commitments.
For fiscal 2004, we used $42.5 million of cash to fund our operations compared to using $47.7 million in
fiscal 2003 and using $35.7 million in fiscal 2002. Although we had a net loss of $104.9 million in fiscal 2004,
$79.8 million consisted of non-cash charges such as $20.4 million of depreciation, amortization of purchased
intangibles of $10.1 million and stock based compensation of $21.2 million. The remaining change in operating
cash flows for fiscal 2004 primarily reflects increases in accounts receivable, as a result of higher net revenues, a
decrease in accrued interest income and prepaid software licenses as a result of lower investment balances and
lower quantities of software licenses. Net cash used for operations in fiscal 2003 primarily reflects our operating
results before noncash charges, as well as decreases in accounts receivable, as a result of lower revenues,
decreased inventory resulting from lower expectations of demand and excess inventory charges, decreased
accounts payable, as a result of reduced overall spending and reduced deferred tax liabilities.
We generated $195.7 million of cash from investing activities during fiscal 2004, compared to using $145.2
million and generating $323.0 million in fiscal 2003 and 2002, respectively. The outflow of cash in fiscal 2004
primarily represents net cash paid for acquisitions, which was offset by proceeds from the sale of real estate and
sale and maturities of investments.
Capital expenditures totaled $13.4 million, $4.9 million and $31.3 million for the years ended March 31,
2004, 2003 and 2002, respectively. The capital expenditures in fiscal 2004, 2003 and 2002 primarily consisted of
purchases of engineering hardware and design software.
We generated $25.5 million of cash in fiscal 2004 from financing activities compared to generating $7.8
million and using $9.9 million in fiscal 2003 and 2002, respectively. The major financing source of cash in fiscal
2004 and 2003 was from the sale of common stock through the exercise of employee stock options and purchases
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