Altair (Nasdaq: ALTR), a global technology company providing
software and cloud solutions in the areas of simulation, data
analytics, and high-performance computing, today released its
financial results for the third quarter ended September 30, 2020.
“We are very pleased with our third quarter performance, which
exceeded our expectations,” said James Scapa, Founder, Chairman and
Chief Executive Officer of Altair. “During the quarter new customer
activity remained relatively strong and software renewals continued
to come in as expected with several significant expansions,
including in the automobile and aerospace sectors. We expanded our
capabilities in high performance computing and material modeling
with tuck-in acquisitions and the introduction of new internally
developed solutions. Our organization continues to do a great job
of developing and delivering valuable technology despite macro
uncertainties.”
“Software product revenue increased 13% from the third quarter
of 2019 to 83% of total revenue, which drove a year over year
improvement in gross margins of over 400 basis points, while our
recurring license rate rose to 92%,” said Howard Morof, Chief
Financial Officer of Altair. “The proactive steps we took to
control costs when combined with those impacted by COVID-19, had a
positive impact on our operating expenses and profitability.”
Third Quarter
2020 Financial Highlights
- Software product
revenue was $87.8 million compared to $77.8 million for the third
quarter of 2019.
- Total revenue was
$106.5 million compared to $100.4 million for the third quarter of
2019.
- Net loss was $8.5
million compared to net loss of $15.9 million for the third quarter
of 2019. Diluted net loss per share was $0.12 based on 73.3 million
diluted weighted average common shares outstanding, compared to
diluted net loss per share of $0.22 for the third quarter of 2019,
based on 71.8 million diluted weighted average common shares
outstanding.
- Adjusted EBITDA was
$8.2 million, compared to $(2.3) million for the third quarter of
2019.
- Non-GAAP net income
was $0.4 million, compared to non-GAAP net loss of $9.8 million for
the third quarter of 2019. Non-GAAP diluted net income per share
was $0.00 based on 80.7 million non-GAAP diluted common shares
outstanding, compared to non-GAAP diluted net loss per share of
$0.13 for the third quarter of 2019, based on 77.8 million non-GAAP
diluted common shares outstanding.
- Free cash flow was
$(7.5) million, compared to $(3.3) million for the third quarter of
2019.
Business Outlook
Based on information available as of today, Altair is issuing
guidance for the fourth quarter and full year 2020.
(in millions) |
Fourth Quarter 2020 |
|
Full Year 2020 |
|
Software Product Revenue |
|
$ |
95.0 |
|
to |
$ |
99.0 |
|
|
$ |
373.0 |
|
to |
$ |
377.0 |
|
Total Revenue |
|
$ |
112.0 |
|
|
$ |
117.0 |
|
|
$ |
448.0 |
|
|
$ |
453.0 |
|
Net Loss |
|
$ |
(13.3 |
) |
|
$ |
(11.3 |
) |
|
$ |
(26.6 |
) |
|
$ |
(24.6 |
) |
Non-GAAP Net (Loss) Income |
|
$ |
(2.1 |
) |
|
$ |
(0.1 |
) |
|
$ |
8.6 |
|
|
$ |
10.6 |
|
Adjusted EBITDA |
|
$ |
5.0 |
|
|
$ |
7.0 |
|
|
$ |
40.0 |
|
|
$ |
42.0 |
|
Conference Call Information
What: |
Altair’s Third
Quarter 2020 Financial Results Conference Call |
When: |
Friday, November 6, 2020 |
Time: |
8:30 a.m. ET |
Live Call: |
(866) 754-5204, Domestic(636) 812-6621, International
|
Replay: |
(855) 859-2056, Conference ID 1464885, Domestic(404) 537-3406,
Conference ID 1464885, 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 (loss) 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 AltairAltair is a global technology
company that provides software and cloud solutions in the areas of
simulation, data analytics, and high-performance computing. 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 fourth 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
Gould212-871-3927ir@altair.com
Lindsay Savarese212-331-8417ir@altair.com
ALTAIR ENGINERING INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS
|
September 30, 2020 |
|
December 31, 2019 |
(In
thousands) |
(Unaudited) |
|
|
|
ASSETS |
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
Cash and cash equivalents |
$ |
245,364 |
|
$ |
223,117 |
Accounts receivable, net |
|
88,514 |
|
|
104,984 |
Income tax receivable |
|
7,091 |
|
|
7,264 |
Prepaid expenses and other current assets |
|
18,834 |
|
|
17,092 |
Total current assets |
|
359,803 |
|
|
352,457 |
Property and equipment, net |
|
34,401 |
|
|
36,297 |
Operating lease right of use
assets |
|
33,302 |
|
|
28,134 |
Goodwill |
|
270,651 |
|
|
233,683 |
Other intangible assets, net |
|
56,741 |
|
|
67,075 |
Deferred tax assets |
|
5,631 |
|
|
5,791 |
Other long-term assets |
|
19,174 |
|
|
19,708 |
TOTAL ASSETS |
$ |
779,703 |
|
$ |
743,145 |
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’
EQUITY |
CURRENT LIABILITIES: |
|
|
|
|
|
Current portion of long-term debt |
$ |
430 |
|
$ |
430 |
Accounts payable |
|
5,413 |
|
|
8,585 |
Accrued compensation and benefits |
|
33,932 |
|
|
30,676 |
Current portion of operating lease liabilities |
|
10,062 |
|
|
9,141 |
Other accrued expenses and current liabilities |
|
25,606 |
|
|
28,603 |
Deferred revenue |
|
74,045 |
|
|
75,431 |
Total current liabilities |
|
149,488 |
|
|
152,866 |
Long-term debt, net of current
portion |
|
215,945 |
|
|
178,238 |
Operating lease liabilities, net
of current portion |
|
24,395 |
|
|
20,174 |
Deferred revenue,
non-current |
|
8,513 |
|
|
8,136 |
Other long-term liabilities |
|
21,123 |
|
|
26,672 |
TOTAL LIABILITIES |
|
419,464 |
|
|
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 42,870 and 41,271 shares as of September 30, 2020 and
December 31, 2019, respectively |
|
4 |
|
|
4 |
Class B common stock, authorized 41,203 shares, issued and
outstanding 30,591 and 31,131 shares as of September 30, 2020 and
December 31, 2019, respectively |
|
3 |
|
|
3 |
Additional paid-in capital |
|
464,803 |
|
|
446,633 |
Accumulated deficit |
|
(95,491 |
|
|
(82,405 |
Accumulated other comprehensive loss |
|
(9,864 |
|
|
(9,528 |
TOTAL STOCKHOLDERS’ EQUITY |
|
359,455 |
|
|
354,707 |
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY |
$ |
779,703 |
|
$ |
743,145 |
ALTAIR ENGINEERING INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited)
|
Three Months
EndedSeptember 30, |
|
|
Nine Months
EndedSeptember 30, |
|
(in thousands, except
per share data) |
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License |
$ |
55,023 |
|
|
$ |
46,853 |
|
|
$ |
183,584 |
|
|
$ |
180,127 |
|
Maintenance and other services |
|
32,787 |
|
|
|
30,963 |
|
|
|
94,502 |
|
|
|
85,388 |
|
Total software |
|
87,810 |
|
|
|
77,816 |
|
|
|
278,086 |
|
|
|
265,515 |
|
Software related services |
|
6,170 |
|
|
|
7,956 |
|
|
|
18,548 |
|
|
|
25,635 |
|
Total software and related services |
|
93,980 |
|
|
|
85,772 |
|
|
|
296,634 |
|
|
|
291,150 |
|
Client engineering services |
|
10,868 |
|
|
|
12,803 |
|
|
|
34,386 |
|
|
|
37,265 |
|
Other |
|
1,608 |
|
|
|
1,831 |
|
|
|
5,460 |
|
|
|
6,623 |
|
Total revenue |
|
106,456 |
|
|
|
100,406 |
|
|
|
336,480 |
|
|
|
335,038 |
|
Cost of revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License |
|
4,477 |
|
|
|
4,371 |
|
|
|
12,851 |
|
|
|
13,146 |
|
Maintenance and other services |
|
9,626 |
|
|
|
9,548 |
|
|
|
28,583 |
|
|
|
27,509 |
|
Total software * |
|
14,103 |
|
|
|
13,919 |
|
|
|
41,434 |
|
|
|
40,655 |
|
Software related services |
|
4,996 |
|
|
|
6,013 |
|
|
|
15,141 |
|
|
|
19,143 |
|
Total software and related services |
|
19,099 |
|
|
|
19,932 |
|
|
|
56,575 |
|
|
|
59,798 |
|
Client engineering services |
|
8,510 |
|
|
|
10,160 |
|
|
|
27,617 |
|
|
|
29,993 |
|
Other |
|
1,427 |
|
|
|
1,649 |
|
|
|
4,422 |
|
|
|
5,858 |
|
Total cost of revenue |
|
29,036 |
|
|
|
31,741 |
|
|
|
88,614 |
|
|
|
95,649 |
|
Gross profit |
|
77,420 |
|
|
|
68,665 |
|
|
|
247,866 |
|
|
|
239,389 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development * |
|
30,678 |
|
|
|
29,667 |
|
|
|
91,115 |
|
|
|
87,012 |
|
Sales and marketing * |
|
26,998 |
|
|
|
25,790 |
|
|
|
80,903 |
|
|
|
78,462 |
|
General and administrative * |
|
20,905 |
|
|
|
20,706 |
|
|
|
63,499 |
|
|
|
60,886 |
|
Amortization of intangible assets |
|
3,858 |
|
|
|
3,545 |
|
|
|
11,390 |
|
|
|
10,673 |
|
Other operating income, net |
|
(1,596 |
) |
|
|
(536 |
) |
|
|
(3,431 |
) |
|
|
(1,702 |
) |
Total operating expenses |
|
80,843 |
|
|
|
79,172 |
|
|
|
243,476 |
|
|
|
235,331 |
|
Operating (loss) income |
|
(3,423 |
) |
|
|
(10,507 |
) |
|
|
4,390 |
|
|
|
4,058 |
|
Interest expense |
|
2,934 |
|
|
|
2,726 |
|
|
|
8,590 |
|
|
|
3,586 |
|
Other income net |
|
(782 |
) |
|
|
(588 |
) |
|
|
(1,852 |
) |
|
|
(703 |
) |
(Loss) income before income taxes |
|
(5,575 |
) |
|
|
(12,645 |
) |
|
|
(2,348 |
) |
|
|
1,175 |
|
Income tax expense |
|
2,930 |
|
|
|
3,294 |
|
|
|
10,350 |
|
|
|
7,215 |
|
Net loss |
$ |
(8,505 |
) |
|
$ |
(15,939 |
) |
|
$ |
(12,698 |
) |
|
$ |
(6,040 |
) |
Loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share attributable to common stockholders, basic and
diluted |
$ |
(0.12 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.08 |
) |
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in computing net loss per
share, basic and diluted |
|
73,311 |
|
|
|
71,770 |
|
|
|
72,979 |
|
|
|
71,313 |
|
* |
Amounts include stock-based compensation expense as follows (in
thousands): |
|
(Unaudited) |
|
Three Months
EndedSeptember 30, |
|
Nine Months
EndedSeptember 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Cost of revenue – software |
$ |
684 |
|
$ |
384 |
|
$ |
1,602 |
|
$ |
727 |
Research and development |
|
2,428 |
|
|
674 |
|
|
5,686 |
|
|
1,611 |
Sales and marketing |
|
1,949 |
|
|
625 |
|
|
3,949 |
|
|
1,562 |
General and
administrative |
|
1,173 |
|
|
609 |
|
|
2,702 |
|
|
1,684 |
Total stock-based compensation expense |
$ |
6,234 |
|
$ |
2,292 |
|
$ |
13,939 |
|
$ |
5,584 |
ALTAIR ENGINEERING INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
FLOW(Unaudited)
|
Nine Months Ended September 30, |
|
(In
thousands) |
2020 |
|
|
2019 |
|
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
Net loss |
$ |
(12,698 |
) |
|
$ |
(6,040 |
) |
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
16,916 |
|
|
|
15,836 |
|
Provision for credit loss |
|
930 |
|
|
|
472 |
|
Amortization of debt discount and issuance costs |
|
8,067 |
|
|
|
3,044 |
|
Stock-based compensation expense |
|
13,939 |
|
|
|
5,584 |
|
Deferred income taxes |
|
(5,441 |
) |
|
|
(741 |
) |
Other, net |
|
13 |
|
|
|
(16 |
) |
Changes in assets and liabilities: |
|
|
|
|
|
|
|
Accounts receivable |
|
16,213 |
|
|
|
10,185 |
|
Prepaid expenses and other current assets |
|
(1,055 |
) |
|
|
(8,718 |
) |
Other long-term assets |
|
867 |
|
|
|
(1,443 |
) |
Accounts payable |
|
(3,321 |
) |
|
|
(420 |
) |
Accrued compensation and benefits |
|
1,274 |
|
|
|
(2,111 |
) |
Other accrued expenses and current liabilities |
|
(5,847 |
) |
|
|
2,110 |
|
Operating lease right-of-use assets and liabilities, net |
|
(26 |
) |
|
|
188 |
|
Deferred revenue |
|
(2,452 |
) |
|
|
12,075 |
|
Net cash provided by operating activities |
|
27,379 |
|
|
|
30,005 |
|
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
Payments for acquisition of businesses, net of cash acquired |
|
(32,279 |
) |
|
|
(709 |
) |
Capital expenditures |
|
(4,006 |
) |
|
|
(8,120 |
) |
Payments for acquisition of developed technology |
|
(433 |
) |
|
|
(473 |
) |
Other investing activities, net |
|
152 |
|
|
|
16 |
|
Net cash used in investing activities |
|
(36,566 |
) |
|
|
(9,286 |
) |
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
Borrowings under revolving commitment |
|
30,000 |
|
|
|
96,991 |
|
Proceeds from the exercise of stock options |
|
1,094 |
|
|
|
1,441 |
|
Proceeds from issuance of convertible senior notes, net of
underwriters' discount and commissions |
|
— |
|
|
|
223,101 |
|
Payments on revolving commitment |
|
— |
|
|
|
(127,941 |
) |
Payments for issuance costs of convertible senior notes |
|
— |
|
|
|
(1,233 |
) |
Other financing activities |
|
(401 |
) |
|
|
(399 |
) |
Net cash provided by financing activities |
|
30,693 |
|
|
|
191,960 |
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash |
|
676 |
|
|
|
(1,065 |
) |
Net increase in cash, cash
equivalents and restricted cash |
|
22,182 |
|
|
|
211,614 |
|
Cash, cash equivalents and
restricted cash at beginning of year |
|
223,497 |
|
|
|
35,685 |
|
Cash, cash equivalents and
restricted cash at end of period |
$ |
245,679 |
|
|
$ |
247,299 |
|
Supplemental disclosure of
cash flow: |
|
|
|
|
|
|
|
Interest paid |
$ |
320 |
|
|
$ |
385 |
|
Income taxes paid |
$ |
12,142 |
|
|
$ |
7,163 |
|
Supplemental disclosure of
non-cash investing and financing activities: |
|
|
|
|
|
|
|
Issuance of common stock in connection with acquisitions |
$ |
1,638 |
|
|
$ |
— |
|
Finance leases |
$ |
117 |
|
|
$ |
588 |
|
Property and equipment in accounts payable, other current
liabilities and other liabilities |
$ |
208 |
|
|
$ |
1,827 |
|
Financial Results
The following table provides a reconciliation of Non-GAAP net
income (loss) and Non-GAAP net income (loss) per share – diluted,
to net loss and net loss per share – diluted, the most comparable
GAAP financial measures:
|
(Unaudited) |
|
|
Three Months
EndedSeptember 30, |
|
|
Nine Months
EndedSeptember 30, |
|
(in thousands, except
per share amounts) |
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net loss |
$ |
(8,505 |
) |
|
$ |
(15,939 |
) |
|
$ |
(12,698 |
) |
|
$ |
(6,040 |
) |
Stock-based compensation
expense |
|
6,234 |
|
|
|
2,292 |
|
|
|
13,939 |
|
|
|
5,584 |
|
Amortization of intangible
assets |
|
3,858 |
|
|
|
3,545 |
|
|
|
11,390 |
|
|
|
10,673 |
|
Special adjustments (1) |
|
(950 |
) |
|
|
1,027 |
|
|
|
(372 |
) |
|
|
2,031 |
|
Income tax effect of non-GAAP
adjustments |
|
(267 |
) |
|
|
(688 |
) |
|
|
(929 |
) |
|
|
(1,103 |
) |
Non-GAAP net income (loss) |
$ |
370 |
|
|
$ |
(9,763 |
) |
|
$ |
11,330 |
|
|
$ |
11,145 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share -
diluted |
$ |
(0.12 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.08 |
) |
Non-GAAP net income (loss) per
share - diluted |
$ |
— |
|
|
$ |
(0.13 |
) |
|
$ |
0.14 |
|
|
$ |
0.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted shares
outstanding: |
|
73,311 |
|
|
|
71,770 |
|
|
|
72,979 |
|
|
|
71,313 |
|
Non-GAAP diluted shares
outstanding: |
|
80,700 |
|
|
|
77,800 |
|
|
|
80,700 |
|
|
|
77,800 |
|
(1) |
Included in 2020 are a) $1.0 million of proceeds from settlements
related to a historical acquisition for both the three and nine
months ended September 30, 2020, and b) $0.6 million of severance
expense for the nine months ended September 30, 2020. Included in
2019 are a) nonrecurring severance expenses of $0.4 million and
nonrecurring acquisition related costs of $0.6 million for both the
three and nine months ended September 30, 2019, and b) impairment
charges for royalty contracts of $1.0 million for the nine months
ended September 30, 2019. |
The following table provides a reconciliation of Adjusted EBITDA
to net loss, the most comparable GAAP financial measure:
|
(Unaudited) |
|
|
Three Months
EndedSeptember 30, |
|
|
Nine Months
EndedSeptember 30, |
|
(in
thousands) |
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net loss |
$ |
(8,505 |
) |
|
$ |
(15,939 |
) |
|
$ |
(12,698 |
) |
|
$ |
(6,040 |
) |
Income tax expense |
|
2,930 |
|
|
|
3,294 |
|
|
|
10,350 |
|
|
|
7,215 |
|
Stock-based compensation
expense |
|
6,234 |
|
|
|
2,292 |
|
|
|
13,939 |
|
|
|
5,584 |
|
Interest expense |
|
2,934 |
|
|
|
2,726 |
|
|
|
8,590 |
|
|
|
3,586 |
|
Interest income and other
(1) |
|
(1,041 |
) |
|
|
(76 |
) |
|
|
(1,501 |
) |
|
|
633 |
|
Depreciation and
amortization |
|
5,623 |
|
|
|
5,368 |
|
|
|
16,916 |
|
|
|
15,836 |
|
Adjusted EBITDA |
$ |
8,175 |
|
|
$ |
(2,335 |
) |
|
$ |
35,596 |
|
|
$ |
26,814 |
|
(1) |
Included in 2020 are a) $1.0 million of proceeds from settlements
related to a historical acquisition for both the three and nine
months ended September 30, 2020, and b) $0.6 million of severance
expense for the nine months ended September 30, 2020. Included in
2019 are a) nonrecurring severance expenses of $0.4 million and
nonrecurring acquisition related costs of $0.6 million for both the
three and nine months ended September 30, 2019, and b) impairment
charges for royalty contracts of $1.0 million for the nine months
ended September 30, 2019. |
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
EndedSeptember 30, |
|
|
Nine Months
EndedSeptember 30, |
|
(in
thousands) |
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net cash (used in) provided by operating activities |
$ |
(6,022 |
) |
|
$ |
(1,863 |
) |
|
$ |
27,379 |
|
|
$ |
30,005 |
|
Capital expenditures |
|
(1,476 |
) |
|
|
(1,453 |
) |
|
|
(4,006 |
) |
|
|
(8,120 |
) |
Free cash flow |
$ |
(7,498 |
) |
|
$ |
(3,316 |
) |
|
$ |
23,373 |
|
|
$ |
21,885 |
|
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 EndingDecember 31,
2020 |
|
|
Year EndingDecember 31, 2020 |
|
(in
thousands) |
Low |
|
|
High |
|
|
Low |
|
|
High |
|
Net loss |
$ |
(13,300 |
) |
|
$ |
(11,300 |
) |
|
$ |
(26,600 |
) |
|
$ |
(24,600 |
) |
Stock-based compensation
expense |
|
7,200 |
|
|
|
7,200 |
|
|
|
21,100 |
|
|
|
21,100 |
|
Amortization of intangible
assets |
|
4,400 |
|
|
|
4,400 |
|
|
|
15,800 |
|
|
|
15,800 |
|
Special adjustments |
|
— |
|
|
|
— |
|
|
|
(400 |
) |
|
|
(400 |
) |
Income tax effect of non-GAAP
adjustments |
|
(400 |
) |
|
|
(400 |
) |
|
|
(1,300 |
) |
|
|
(1,300 |
) |
Non-GAAP net (loss) income |
$ |
(2,100 |
) |
|
$ |
(100 |
) |
|
$ |
8,600 |
|
|
$ |
10,600 |
|
The following table provides a reconciliation of projected
Adjusted EBITDA to projected net loss, the most comparable GAAP
financial measure:
|
(Unaudited) |
|
|
Three Months EndingDecember 31,
2020 |
|
|
Year EndingDecember 31, 2020 |
|
(in
thousands) |
Low |
|
|
High |
|
|
Low |
|
|
High |
|
Net loss |
$ |
(13,300 |
) |
|
$ |
(11,300 |
) |
|
$ |
(26,600 |
) |
|
$ |
(24,600 |
) |
Income tax expense |
|
2,200 |
|
|
|
2,200 |
|
|
|
12,500 |
|
|
|
12,500 |
|
Stock-based compensation
expense |
|
7,200 |
|
|
|
7,200 |
|
|
|
21,100 |
|
|
|
21,100 |
|
Interest expense |
|
2,900 |
|
|
|
2,900 |
|
|
|
11,500 |
|
|
|
11,500 |
|
Depreciation and
amortization |
|
6,100 |
|
|
|
6,100 |
|
|
|
23,100 |
|
|
|
23,100 |
|
Interest income and other
non-recurring adjustments |
|
(100 |
) |
|
|
(100 |
) |
|
|
(1,600 |
) |
|
|
(1,600 |
) |
Adjusted EBITDA |
$ |
5,000 |
|
|
$ |
7,000 |
|
|
$ |
40,000 |
|
|
$ |
42,000 |
|
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