Altair (Nasdaq: ALTR), a global technology company that provides
software and cloud solutions in the areas of product development,
high performance computing (HPC) and data analytics, today released
its financial results for the second quarter ended June 30, 2020.
“We are very pleased with our second quarter
performance, which exceeded our expectations. I am proud to lead an
organization which has remained so dedicated and intensely focused
on developing great software and helping customers succeed despite
the personal hardships brought on by COVID-19,” said James Scapa,
Founder, Chairman and Chief Executive Officer of Altair.
“Our software product revenue increased to 83% of
total revenue, which drove a 400 basis point year over year
improvement in gross margins, while our recurring license rate rose
to an all-time high of 93%,” said Howard Morof, Chief Financial
Officer of Altair. “Moreover, the proactive steps we took to
control costs in light of COVID-19 had an immediate positive impact
on our operating expenses. Our ongoing digital transformation
efforts continue, and as we implement robust processes, we believe
the positive impact of these significant investments will drive
measurable benefits for the business and support our long-term
goals.”
Second Quarter 2020 Financial
Highlights
- Software product revenue was $81.8 million compared to $84.4
million for the second quarter of 2019.
- Total revenue was $98.6 million compared to $106.8 million for
the second quarter of 2019.
- Net loss was $10.2 million compared to net loss of $3.1 million
for the second quarter of 2019. Diluted net loss per share was
$0.14 based on 73.0 million diluted weighted average common shares
outstanding, compared to diluted net loss per share of $0.04 for
the second quarter of 2019, based on 71.4 million diluted weighted
average common shares outstanding.
- Adjusted EBITDA was $5.7 million, compared to $5.2 million for
the second quarter of 2019.
- Non-GAAP net loss was $1.7 million, compared to non-GAAP net
income of $3.2 million for the second quarter of 2019. Non-GAAP
diluted net loss per share was $0.02 based on 80.7 million non-GAAP
diluted common shares outstanding, compared to non-GAAP diluted net
income per share of $0.04 for the second quarter of 2019, based on
77.7 million non-GAAP diluted common shares outstanding.
- Free cash flow was $4.5 million for both the second quarters of
2020 and 2019.
Business Outlook
Based on information available as of today, Altair
is issuing guidance for the third quarter and full year
2020.
(in millions) |
Third Quarter 2020 |
|
Full Year 2020 |
|
Software Product Revenue |
|
$ |
80.0 |
|
to |
$ |
82.0 |
|
|
$ |
368.0 |
|
to |
$ |
380.0 |
|
Total Revenue |
|
$ |
96.0 |
|
|
$ |
100.0 |
|
|
$ |
443.0 |
|
|
$ |
455.0 |
|
Net Loss |
|
$ |
(20.3 |
) |
|
$ |
(18.3 |
) |
|
$ |
(36.0 |
) |
|
$ |
(31.0 |
) |
Non-GAAP Net (Loss) Income |
|
$ |
(9.0 |
) |
|
$ |
(7.0 |
) |
|
$ |
2.2 |
|
|
$ |
7.2 |
|
Adjusted EBITDA |
|
$ |
(2.0 |
) |
|
$ |
0.0 |
|
|
$ |
33.0 |
|
|
$ |
38.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conference Call Information
What: |
Altair’s
Second Quarter 2020 Financial Results Conference Call |
When: |
Friday, August 7, 2020 |
Time: |
8:30 a.m. ET |
Live Call: |
(866) 754-5204, Domestic |
|
(636) 812-6621, International |
Replay: |
(855) 859-2056, Conference ID 5072406, Domestic |
|
(404) 537-3406, Conference ID 5072406, International |
Webcast: |
http://investor.altair.com (live & replay) |
***
Non-GAAP Financial Measures This
press release contains the following non-GAAP financial measures:
Adjusted EBITDA, Non-GAAP Net Income (Loss), Non-GAAP Net Income
(Loss) Per Share and Free Cash Flow.
Altair believes that these non-GAAP measures of
financial results provide useful information to management and
investors regarding certain financial and business trends relating
to its financial condition and results of operations. The Company’s
management uses these non-GAAP measures to compare the Company’s
performance to that of prior periods for trend analysis, for
purposes of determining executive and senior management incentive
compensation and for budgeting and planning purposes. The Company
also believes that the use of these non-GAAP financial measures
provides an additional tool for investors to use in evaluating
ongoing operating results and trends and in comparing the Company’s
financial measures with other software companies, many of which
present similar non-GAAP financial measures to investors.
Adjusted EBITDA represents net income adjusted for
income tax expense, interest expense, interest income and other,
depreciation and amortization, stock-based compensation expense,
restructuring charges, asset impairment charges and other special
items as identified by management and described elsewhere in this
press release.
Non-GAAP net income excludes stock-based
compensation, amortization of intangible assets related to
acquisitions, and special items as identified by management and
described elsewhere in this press release.
Non-GAAP diluted common shares includes total
outstanding shares plus outstanding equity awards under the
Company’s equity award plans.
Free cash flow consists of cash flow from
operations less capital expenditures.
Company management does not consider these non-GAAP
measures in isolation or as an alternative to financial measures
determined in accordance with GAAP. The principal limitation of
these non-GAAP financial measures is that they exclude significant
expenses and income that are required by GAAP to be recorded in the
Company’s financial statements. In addition, they are subject to
inherent limitations as they reflect the exercise of judgment by
management about which expenses and income are excluded or included
in determining these non-GAAP financial measures. Altair urges
investors to review the reconciliation of its non-GAAP financial
measures to the comparable GAAP financial measures, which it
includes in press releases announcing quarterly financial results,
including this press release, and not to rely on any single
financial measure to evaluate the Company’s business.
Reconciliation tables of the most comparable GAAP
financial measures to the non-GAAP financial measures used in this
press release are included with the financial tables at the end of
this release.
About Altair Altair is a global
technology company that provides software and cloud solutions in
the areas of product development, high performance computing (HPC)
and data analytics. Altair enables organizations across broad
industry segments to compete more effectively in a connected world
while creating a more sustainable future. To learn more, please
visit www.altair.com.
Cautionary Language Concerning
Forward-Looking Statements
This press release contains “forward-looking
statements” within the meaning of the “safe harbor” provisions of
the Private Securities Litigation Reform Act of 1995, including but
not limited to, our guidance for the third quarter and full year
2020, our statements regarding COVID-19, our statements regarding
our digital transformation efforts, and our reconciliations of
projected non-GAAP financial measures. These forward-looking
statements are made as of the date of this release and are based on
current expectations, estimates, forecasts and projections as well
as the beliefs and assumptions of management. Words such as
“expect,” “anticipate,” “should,” “believe,” “hope,” “target,”
“project,” “goals,” “estimate,” “potential,” “predict,” “may,”
“will,” “might,” “could,” “intend,” variations of these terms or
the negative of these terms and similar expressions are intended to
identify these forward-looking statements. Forward-looking
statements are subject to a number of risks and uncertainties, many
of which involve factors or circumstances that are beyond Altair’s
control. Altair’s actual results could differ materially from those
stated or implied in our forward-looking statements due to a number
of factors, including but not limited to, the risks detailed in
Altair’s quarterly and annual reports filed with the Securities and
Exchange Commission as well as other documents that may be filed by
the Company from time to time with the Securities and Exchange
Commission. Past performance is not necessarily indicative of
future results. The forward-looking statements included in this
press release represent Altair’s views as of the date of this press
release. The Company anticipates that subsequent events and
developments will cause its views to change. Altair undertakes no
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. These forward-looking statements should not be relied
upon as representing Altair’s views as of any date subsequent to
the date of this press release.
Media RelationsAltairDave
Simon248-614-2400 ext. 332ir@altair.com
Investor RelationsThe Blueshirt
GroupMonica Gould212-871-3927Lindsay
Savarese212-331-8417ir@altair.com
ALTAIR ENGINERING INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS
|
|
June 30, 2020 |
|
|
December 31, 2019 |
|
(In thousands) |
|
(Unaudited) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
250,540 |
|
|
$ |
223,117 |
|
Accounts receivable, net |
|
|
79,185 |
|
|
|
104,984 |
|
Income tax receivable |
|
|
5,760 |
|
|
|
7,264 |
|
Prepaid expenses and other current assets |
|
|
16,469 |
|
|
|
17,092 |
|
Total current assets |
|
|
351,954 |
|
|
|
352,457 |
|
Property and equipment, net |
|
|
34,456 |
|
|
|
36,297 |
|
Operating lease right of use assets |
|
|
32,598 |
|
|
|
28,134 |
|
Goodwill |
|
|
233,486 |
|
|
|
233,683 |
|
Other intangible assets, net |
|
|
58,177 |
|
|
|
67,075 |
|
Deferred tax assets |
|
|
5,661 |
|
|
|
5,791 |
|
Other long-term assets |
|
|
20,514 |
|
|
|
19,708 |
|
TOTAL ASSETS |
|
$ |
736,846 |
|
|
$ |
743,145 |
|
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’
EQUITY |
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
Current portion of long-term debt |
|
$ |
456 |
|
|
$ |
430 |
|
Accounts payable |
|
|
4,780 |
|
|
|
8,585 |
|
Accrued compensation and benefits |
|
|
30,997 |
|
|
|
30,676 |
|
Current portion of operating lease liabilities |
|
|
9,369 |
|
|
|
9,141 |
|
Other accrued expenses and current liabilities |
|
|
27,411 |
|
|
|
28,603 |
|
Deferred revenue |
|
|
73,061 |
|
|
|
75,431 |
|
Total current liabilities |
|
|
146,074 |
|
|
|
152,866 |
|
Long-term debt, net of current portion |
|
|
183,409 |
|
|
|
178,238 |
|
Operating lease liabilities, net of current portion |
|
|
24,352 |
|
|
|
20,174 |
|
Deferred revenue, non-current |
|
|
7,287 |
|
|
|
8,136 |
|
Other long-term liabilities |
|
|
19,990 |
|
|
|
26,672 |
|
TOTAL LIABILITIES |
|
|
381,112 |
|
|
|
386,086 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
MEZZANINE EQUITY |
|
|
784 |
|
|
|
2,352 |
|
STOCKHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
Preferred stock ($0.0001 par value), authorized 45,000 shares, none
issued and outstanding |
|
|
— |
|
|
|
— |
|
Common stock ($0.0001 par value) |
|
|
|
|
|
|
|
|
Class A common stock, authorized 513,797 shares, issued and
outstanding 42,108 and 41,271 shares as of June 30, 2020 and
December 31, 2019, respectively |
|
|
4 |
|
|
|
4 |
|
Class B common stock, authorized 41,203 shares, issued and
outstanding 30,971 and 31,131 shares as of June 30, 2020 and
December 31, 2019, respectively |
|
|
3 |
|
|
|
3 |
|
Additional paid-in capital |
|
|
456,307 |
|
|
|
446,633 |
|
Accumulated deficit |
|
|
(86,986 |
) |
|
|
(82,405 |
) |
Accumulated other comprehensive loss |
|
|
(14,378 |
) |
|
|
(9,528 |
) |
TOTAL STOCKHOLDERS’ EQUITY |
|
|
354,950 |
|
|
|
354,707 |
|
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY |
|
$ |
736,846 |
|
|
$ |
743,145 |
|
|
|
|
|
|
|
|
|
|
ALTAIR ENGINEERING INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
(in thousands, except per share data) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License |
|
$ |
51,018 |
|
|
$ |
56,653 |
|
|
$ |
128,561 |
|
|
$ |
133,274 |
|
Maintenance and other services |
|
|
30,815 |
|
|
|
27,755 |
|
|
|
61,715 |
|
|
|
54,425 |
|
Total software |
|
|
81,833 |
|
|
|
84,408 |
|
|
|
190,276 |
|
|
|
187,699 |
|
Software related services |
|
|
5,444 |
|
|
|
7,907 |
|
|
|
12,378 |
|
|
|
17,679 |
|
Total software and related services |
|
|
87,277 |
|
|
|
92,315 |
|
|
|
202,654 |
|
|
|
205,378 |
|
Client engineering services |
|
|
9,640 |
|
|
|
12,412 |
|
|
|
23,518 |
|
|
|
24,462 |
|
Other |
|
|
1,644 |
|
|
|
2,046 |
|
|
|
3,852 |
|
|
|
4,792 |
|
Total revenue |
|
|
98,561 |
|
|
|
106,773 |
|
|
|
230,024 |
|
|
|
234,632 |
|
Cost of revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License |
|
|
2,851 |
|
|
|
2,954 |
|
|
|
8,374 |
|
|
|
8,775 |
|
Maintenance and other services |
|
|
8,502 |
|
|
|
9,430 |
|
|
|
18,957 |
|
|
|
17,961 |
|
Total software * |
|
|
11,353 |
|
|
|
12,384 |
|
|
|
27,331 |
|
|
|
26,736 |
|
Software related services |
|
|
4,656 |
|
|
|
6,612 |
|
|
|
10,145 |
|
|
|
13,130 |
|
Total software and related services |
|
|
16,009 |
|
|
|
18,996 |
|
|
|
37,476 |
|
|
|
39,866 |
|
Client engineering services |
|
|
7,789 |
|
|
|
10,033 |
|
|
|
19,107 |
|
|
|
19,833 |
|
Other |
|
|
1,283 |
|
|
|
1,994 |
|
|
|
2,995 |
|
|
|
4,209 |
|
Total cost of revenue |
|
|
25,081 |
|
|
|
31,023 |
|
|
|
59,578 |
|
|
|
63,908 |
|
Gross profit |
|
|
73,480 |
|
|
|
75,750 |
|
|
|
170,446 |
|
|
|
170,724 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development * |
|
|
28,970 |
|
|
|
29,829 |
|
|
|
60,437 |
|
|
|
57,345 |
|
Sales and marketing * |
|
|
25,806 |
|
|
|
26,221 |
|
|
|
53,905 |
|
|
|
52,672 |
|
General and administrative * |
|
|
20,248 |
|
|
|
19,851 |
|
|
|
42,594 |
|
|
|
40,180 |
|
Amortization of intangible assets |
|
|
3,692 |
|
|
|
3,600 |
|
|
|
7,532 |
|
|
|
7,128 |
|
Other operating income, net |
|
|
(944 |
) |
|
|
(549 |
) |
|
|
(1,835 |
) |
|
|
(1,166 |
) |
Total operating expenses |
|
|
77,772 |
|
|
|
78,952 |
|
|
|
162,633 |
|
|
|
156,159 |
|
Operating (loss) income |
|
|
(4,292 |
) |
|
|
(3,202 |
) |
|
|
7,813 |
|
|
|
14,565 |
|
Interest expense |
|
|
2,843 |
|
|
|
590 |
|
|
|
5,656 |
|
|
|
860 |
|
Other expense (income), net |
|
|
320 |
|
|
|
(505 |
) |
|
|
(1,070 |
) |
|
|
(115 |
) |
(Loss) income before income taxes |
|
|
(7,455 |
) |
|
|
(3,287 |
) |
|
|
3,227 |
|
|
|
13,820 |
|
Income tax expense (benefit) |
|
|
2,768 |
|
|
|
(167 |
) |
|
|
7,420 |
|
|
|
3,921 |
|
Net (loss) income |
|
$ |
(10,223 |
) |
|
$ |
(3,120 |
) |
|
$ |
(4,193 |
) |
|
$ |
9,899 |
|
(Loss) income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per share attributable to common
stockholders, basic |
|
$ |
(0.14 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.06 |
) |
|
$ |
0.14 |
|
Net (loss) income per share attributable to common
stockholders, diluted |
|
$ |
(0.14 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.06 |
) |
|
$ |
0.13 |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in computing net
(loss) income per share, basic |
|
|
72,999 |
|
|
|
71,373 |
|
|
|
72,811 |
|
|
|
71,081 |
|
Weighted average number of shares used in computing net
(loss) income per share, diluted |
|
|
72,999 |
|
|
|
71,373 |
|
|
|
72,811 |
|
|
|
77,017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Amounts include stock-based compensation
expense as follows (in thousands):
|
|
(Unaudited) |
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Cost of revenue – software |
|
$ |
552 |
|
|
$ |
279 |
|
|
$ |
918 |
|
|
$ |
343 |
|
Research and development |
|
|
1,830 |
|
|
|
579 |
|
|
|
3,258 |
|
|
|
937 |
|
Sales and marketing |
|
|
1,273 |
|
|
|
475 |
|
|
|
2,000 |
|
|
|
937 |
|
General and administrative |
|
|
879 |
|
|
|
747 |
|
|
|
1,529 |
|
|
|
1,075 |
|
Total stock-based compensation expense |
|
$ |
4,534 |
|
|
$ |
2,080 |
|
|
$ |
7,705 |
|
|
$ |
3,292 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALTAIR ENGINEERING INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
FLOW(Unaudited)
|
|
Six Months Ended June 30, |
|
(In thousands) |
|
2020 |
|
|
2019 |
|
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(4,193 |
) |
|
$ |
9,899 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
11,293 |
|
|
|
10,468 |
|
Provision for credit loss |
|
|
589 |
|
|
|
134 |
|
Amortization of debt discount and issuance costs |
|
|
5,342 |
|
|
|
459 |
|
Stock-based compensation expense |
|
|
7,705 |
|
|
|
3,292 |
|
Deferred income taxes |
|
|
(5,961 |
) |
|
|
(703 |
) |
Other, net |
|
|
3 |
|
|
|
(17 |
) |
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
23,264 |
|
|
|
10,406 |
|
Prepaid expenses and other current assets |
|
|
1,817 |
|
|
|
(4,952 |
) |
Other long-term assets |
|
|
(960 |
) |
|
|
(2,300 |
) |
Accounts payable |
|
|
(3,841 |
) |
|
|
(2,187 |
) |
Accrued compensation and benefits |
|
|
497 |
|
|
|
(2,455 |
) |
Other accrued expenses and current liabilities |
|
|
131 |
|
|
|
1,887 |
|
Operating lease right-of-use assets and liabilities, net |
|
|
30 |
|
|
|
197 |
|
Deferred revenue |
|
|
(2,315 |
) |
|
|
7,740 |
|
Net cash provided by operating activities |
|
|
33,401 |
|
|
|
31,868 |
|
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(2,530 |
) |
|
|
(6,667 |
) |
Payments for acquisition of businesses, net of cash acquired |
|
|
(2,270 |
) |
|
|
(709 |
) |
Payments for acquisition of developed technology |
|
|
(433 |
) |
|
|
(344 |
) |
Other investing activities, net |
|
|
142 |
|
|
|
16 |
|
Net cash used in investing activities |
|
|
(5,091 |
) |
|
|
(7,704 |
) |
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from the exercise of stock options |
|
|
477 |
|
|
|
1,270 |
|
Proceeds from issuance of convertible senior notes, net of
underwriters' discount and commissions |
|
|
— |
|
|
|
223,101 |
|
Payments on revolving commitment |
|
|
— |
|
|
|
(127,941 |
) |
Borrowings under revolving commitment |
|
|
— |
|
|
|
96,991 |
|
Payments for issuance costs of convertible senior notes |
|
|
— |
|
|
|
(1,018 |
) |
Other financing activities |
|
|
(210 |
) |
|
|
(259 |
) |
Net cash provided by financing activities |
|
|
267 |
|
|
|
192,144 |
|
Effect of exchange rate changes on cash, cash equivalents and
restricted cash |
|
|
(1,148 |
) |
|
|
187 |
|
Net increase in cash, cash equivalents and restricted cash |
|
|
27,429 |
|
|
|
216,495 |
|
Cash, cash equivalents and restricted cash at beginning of
year |
|
|
223,497 |
|
|
|
35,685 |
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
250,926 |
|
|
$ |
252,180 |
|
Supplemental disclosure of cash flow: |
|
|
|
|
|
|
|
|
Interest paid |
|
$ |
306 |
|
|
$ |
362 |
|
Income taxes paid |
|
$ |
9,491 |
|
|
$ |
4,054 |
|
Supplemental disclosure of non-cash investing and financing
activities: |
|
|
|
|
|
|
|
|
Finance leases |
|
$ |
100 |
|
|
$ |
566 |
|
Property and equipment in accounts payable, other current
liabilities and other liabilities |
|
$ |
343 |
|
|
$ |
417 |
|
Convertible senior notes issuance costs in accounts payable |
|
|
— |
|
|
$ |
216 |
|
|
|
|
|
|
|
|
|
|
Financial Results
The following table provides a reconciliation of
Non-GAAP net (loss) income and Non-GAAP net (loss) income per share
- diluted to net (loss) income and net (loss) income per share –
diluted, the most comparable GAAP financial measures:
|
|
(Unaudited) |
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
(in thousands, except per share amounts) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net (loss) income |
|
$ |
(10,223 |
) |
|
$ |
(3,120 |
) |
|
$ |
(4,193 |
) |
|
$ |
9,899 |
|
Stock-based compensation expense |
|
|
4,534 |
|
|
|
2,080 |
|
|
|
7,705 |
|
|
|
3,292 |
|
Amortization of intangible assets |
|
|
3,692 |
|
|
|
3,600 |
|
|
|
7,532 |
|
|
|
7,128 |
|
Special adjustments (1) |
|
|
578 |
|
|
|
776 |
|
|
|
578 |
|
|
|
1,004 |
|
Income tax effect of non-GAAP adjustments |
|
|
(280 |
) |
|
|
(175 |
) |
|
|
(662 |
) |
|
|
(415 |
) |
Non-GAAP net (loss) income |
|
$ |
(1,699 |
) |
|
$ |
3,161 |
|
|
$ |
10,960 |
|
|
$ |
20,908 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per share - diluted |
|
$ |
(0.14 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.06 |
) |
|
$ |
0.13 |
|
Non-GAAP net (loss) income per share - diluted |
|
$ |
(0.02 |
) |
|
$ |
0.04 |
|
|
$ |
0.14 |
|
|
$ |
0.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted shares outstanding: |
|
|
72,999 |
|
|
|
71,373 |
|
|
|
72,811 |
|
|
|
77,017 |
|
Non-GAAP diluted shares outstanding: |
|
|
80,700 |
|
|
|
77,700 |
|
|
|
80,700 |
|
|
|
77,700 |
|
(1) Includes $0.6 million of severance expense for
the three and six months ended June 30, 2020. Includes $0.8 million
and $1.0 million of impairment charges for royalty contracts for
the three and six months ended June 30, 2019, respectively.
The following table provides a reconciliation of
Adjusted EBITDA to net (loss) income, the most comparable GAAP
financial measure:
|
|
(Unaudited) |
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
(in thousands) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net (loss) income |
|
$ |
(10,223 |
) |
|
$ |
(3,120 |
) |
|
$ |
(4,193 |
) |
|
$ |
9,899 |
|
Income tax expense (benefit) |
|
|
2,768 |
|
|
|
(167 |
) |
|
|
7,420 |
|
|
|
3,921 |
|
Stock-based compensation expense |
|
|
4,534 |
|
|
|
2,080 |
|
|
|
7,705 |
|
|
|
3,292 |
|
Interest expense |
|
|
2,843 |
|
|
|
590 |
|
|
|
5,656 |
|
|
|
860 |
|
Interest income and other (1) |
|
|
194 |
|
|
|
508 |
|
|
|
(460 |
) |
|
|
709 |
|
Depreciation and amortization |
|
|
5,633 |
|
|
|
5,274 |
|
|
|
11,293 |
|
|
|
10,468 |
|
Adjusted EBITDA |
|
$ |
5,749 |
|
|
$ |
5,165 |
|
|
$ |
27,421 |
|
|
$ |
29,149 |
|
(1) Includes $0.6 million of severance expense for
the three and six months ended June 30, 2020. Includes $0.8 million
and $1.0 million of impairment charges for royalty contracts for
the three and six months ended June 30, 2019,
respectively.
The following table provides a reconciliation of
Free Cash Flow to net cash provided by operating activities, the
most comparable GAAP financial measure:
|
|
(Unaudited) |
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
(in thousands) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net cash provided by operating activities |
|
$ |
5,365 |
|
|
$ |
6,553 |
|
|
$ |
33,401 |
|
|
$ |
31,868 |
|
Capital expenditures |
|
|
(886 |
) |
|
|
(2,084 |
) |
|
|
(2,530 |
) |
|
|
(6,667 |
) |
Free cash flow |
|
$ |
4,479 |
|
|
$ |
4,469 |
|
|
$ |
30,871 |
|
|
$ |
25,201 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Outlook
The following table provides a reconciliation of
projected Non-GAAP net (loss) income to projected net loss, the
most comparable GAAP financial measure:
|
|
(Unaudited) |
|
|
|
Three Months EndingSeptember 30,
2020 |
|
|
Year EndingDecember 31, 2020 |
|
(in thousands) |
|
Low |
|
|
High |
|
|
Low |
|
|
High |
|
Net loss |
|
$ |
(20,300 |
) |
|
$ |
(18,300 |
) |
|
$ |
(36,000 |
) |
|
$ |
(31,000 |
) |
Stock-based compensation expense |
|
|
7,900 |
|
|
|
7,900 |
|
|
|
24,000 |
|
|
|
24,000 |
|
Amortization of intangible assets |
|
|
3,800 |
|
|
|
3,800 |
|
|
|
15,000 |
|
|
|
15,000 |
|
Special adjustments |
|
|
— |
|
|
|
— |
|
|
|
600 |
|
|
|
600 |
|
Income tax effect of non-GAAP adjustments |
|
|
(400 |
) |
|
|
(400 |
) |
|
|
(1,400 |
) |
|
|
(1,400 |
) |
Non-GAAP net (loss) income |
|
$ |
(9,000 |
) |
|
$ |
(7,000 |
) |
|
$ |
2,200 |
|
|
$ |
7,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table provides a reconciliation of
projected Adjusted EBITDA to projected net loss, the most
comparable GAAP financial measure:
|
|
(Unaudited) |
|
|
|
Three Months EndingSeptember 30,
2020 |
|
|
Year EndingDecember 31, 2020 |
|
(in thousands) |
|
Low |
|
|
High |
|
|
Low |
|
|
High |
|
Net loss |
|
$ |
(20,300 |
) |
|
$ |
(18,300 |
) |
|
$ |
(36,000 |
) |
|
$ |
(31,000 |
) |
Income tax expense |
|
|
2,100 |
|
|
|
2,100 |
|
|
|
12,000 |
|
|
|
12,000 |
|
Stock-based compensation expense |
|
|
7,900 |
|
|
|
7,900 |
|
|
|
24,000 |
|
|
|
24,000 |
|
Interest expense |
|
|
2,900 |
|
|
|
2,900 |
|
|
|
11,400 |
|
|
|
11,400 |
|
Depreciation and amortization |
|
|
5,700 |
|
|
|
5,700 |
|
|
|
22,700 |
|
|
|
22,700 |
|
Interest income and other special adjustments |
|
|
(300 |
) |
|
|
(300 |
) |
|
|
(1,100 |
) |
|
|
(1,100 |
) |
Adjusted EBITDA |
|
$ |
(2,000 |
) |
|
$ |
— |
|
|
$ |
33,000 |
|
|
$ |
38,000 |
|
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