UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Amendment No. 1)
(Mark One)
þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2005
or
o 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: 000-51299
TALEO CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware
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52-2190418 |
(State or other jurisdiction of
Incorporation or organization)
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(I.R.S. Employer Identification No.) |
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575 Market Street, Eighth Floor |
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San Francisco, California
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94105 |
(Address of principal executive offices)
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(Zip code) |
(415) 538-9068
(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 (the “Act”) 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
o No þ
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule
12b-2 of the Act).
Yes
o No þ
At July 31, 2005, the number of shares outstanding of the registrant’s Class A common stock
was 95,636 shares and the number of shares outstanding of the registrant’s Class B common stock was
4,038,287 shares.
PART I — FINANCIAL INFORMATION |
ITEM 4. CONTROLS AND PROCEDURES
(A) Evaluation of disclosure controls and procedures. The Company’s management evaluated,
with the participation of the Chief Executive Officer and Chief Financial Officer, the
effectiveness of the Company’s disclosure controls and procedures, as such term is defined under
Rule 13a-15(f) of the Securities and Exchange Act of 1934, as of the end of the period covered by
this Quarterly Report on Form 10-Q. Based on this evaluation, the Chief Executive Officer and Chief
Financial Officer have concluded that because of the material weakness in internal control over
financial reporting described below, our disclosure controls and procedures were ineffective as of
June 30, 2005 to ensure that information we are required to disclose in reports that we file or
submit under the Securities Exchange Act of 1934 (i) is recorded, processed, summarized and
reported within the time periods specified in Securities and Exchange Commission rules and forms
and (ii) is accumulated and communicated to Taleo’s management, including our Chief Executive
Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding
required disclosure.
(B) Changes in internal control over financial reporting. In connection with the audit of
the consolidated financial statements for the year ended December 31, 2004, both the Company and
its independent registered accounting firm identified that the Company’s internal controls relating
to post-closing and audit adjustments was a material weakness. Specifically, a significant number
of post-closing and audit adjustments were required to be made to the consolidated financial
statements prior to the issuance of such statements. These adjustments included purchase price
adjustments related to the acquisition of White Amber, Inc., correcting entries associated with the
amortization of debt, recording of accruals and accounts payable, and adjustments of year-end
general ledger balances to supporting detail.
The Company is in the process of reviewing and redesigning its internal controls over
financial reporting related to closing procedures and processes. Specifically, the Company has
undertaken the following actions:
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Hired personnel with more experience in financial reporting and accounting process
than the incumbent group, including appointing a new Chief Financial Officer with
public company operating and reporting experience; |
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Purchased a new system for accounting for revenue and deferred revenue; |
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Improved detective controls with greater financial analysis around budget variances; |
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Begun to implement and document policies around closing processes; and, |
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Begun investigation of new accounting systems to address system oriented
deficiencies in the system of internal controls. |
In addition, the Company’s Chief Financial Officer will review and approve the Company’s
consolidating trial balance and closing adjustment prior to the preparation of financial
statements. These changes in our internal control over financial reporting have materially
affected, or are reasonably likely to materially affect, our internal controls over financial
reporting.
We believe these steps, when completed and fully implemented, will constitute all of the
material steps required to address our material weakness. We expect to continue to enhance our
internal controls over financial reporting by adding resources in key functional areas and to take
steps to bring our documentation, segregation of duties, systems security and transactional control
procedures to a level required under the new Auditing Standard No. 2 issued by the Public Company
Accounting Oversight Board. We have discussed and disclosed these matters to the audit committee of
our board of directors and to our external auditors and will continue to do so. We currently expect
to complete these remedial steps by the second quarter of 2006. We believe the costs associated
with these remedial measures will not be material, other than for the purchases of new accounting
systems, which could cost up to $1 million.