altr-8k_20210225.htm
false 0001701732 0001701732 2021-02-25 2021-02-25

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________

 

FORM 8-K

 _____________________

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): February 25, 2021

 

 Altair Engineering Inc.

(Exact name of registrant as specified in its charter)

 

 

 

 

 

Delaware

 

001-38263

 

38-2591828

(State or other jurisdiction of incorporation)

 

(Commission File Number)

 

(IRS Employer Identification No.)

 

 

 

 

1820 E. Big Beaver Road, Troy, Michigan

 

48083

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: (248) 614-2400

 

Not Applicable

(Former name or former address, if changed since last report)

__________________

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol

Name of each exchange on which registered

Class A Common Stock $0.0001 par value per share

ALTR

The NASDAQ Stock Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 


 

Item 2.02. Results of Operations and Financial Condition.

 

On February 25, 2021, Altair Engineering Inc. issued a press release disclosing its financial information and operating metrics for its fourth quarter and year ended December 31, 2020. A copy of the press release is being furnished as Exhibit 99.1 to this Report on Form 8-K.

 

The information in this Report on Form 8-K and Exhibit 99.1 attached hereto is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

 

Item 9.01.    Financial Statements and Exhibits.

 

Exhibit 99.1

 

Press Release issued by Altair Engineering Inc. dated February 25, 2021, furnished hereto.

Exhibit 104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 



 

SIGNATURE

 

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.

 

 

 

 

 

 

ALTAIR ENGINEERING INC.

 

 

 

Date: February 25, 2021

By:

/s/ Howard N. Morof

 

 

Howard N. Morof

 

 

Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

altr-ex991_6.htm

Exhibit 99.1

Altair Announces Fourth Quarter 2020 Financial Results

Record Fourth Quarter and Full Year 2020 Software Product and Total Revenue, Exceeding Expectations

 

TROY, Mich. – February 25, 2021 – Altair (Nasdaq: ALTR), a global technology company providing software and cloud solutions in the areas of simulation, high-performance computing, data analytics and artificial intelligence today released its financial results for the fourth quarter and full year ended December 31, 2020.

“Altair had an excellent fourth quarter and full year 2020,” said James Scapa, Founder, Chairman and Chief Executive Officer of Altair. “In a year of business disruptions and personal challenges, Altair brought to market broad and deep additions and enhancements to our product portfolio while delivering solid financial performance. I am proud of our global team, and excited about 2021 as we will continue delivering industry-leading technology and expertise aligned with our vision for the convergence of simulation, high-performance computing, and artificial intelligence.”

“Software product revenue increased over 12% from the fourth quarter of 2019 to 85% of total revenue, which drove year over year improvement in gross margin of over 500 basis points for the quarter, while our recurring software license rate rose to 92% for the year,” said Howard Morof, Chief Financial Officer of Altair. “The top line performance coupled with continued discipline managing operating expenses had a very positive impact on our profitability in the quarter.” 

Fourth Quarter 2020 Financial Highlights

 

Software product revenue was $113.6 million compared to $101.2 million for the fourth quarter of 2019.

 

Total revenue was $133.4 million compared to $123.9 million for the fourth quarter of 2019.

 

Net income was $2.2 million compared to net loss of $(1.5) million for the fourth quarter of 2019. Diluted net income per share was $0.03 based on 78.5 million diluted weighted average common shares outstanding, compared to diluted net loss per share of $(0.02) for the fourth quarter of 2019, based on 72.2 million diluted weighted average common shares outstanding.

 

Adjusted EBITDA was $21.7 million, compared to $12.7 million for the fourth quarter of 2019.  

 

Non-GAAP net income was $14.1 million, compared to Non-GAAP net income of $5.3 million for the fourth quarter of 2019. Non-GAAP diluted net income per share was $0.17 based on 83.0 million non-GAAP diluted common shares outstanding, compared to Non-GAAP diluted net income per share of $0.07 for the fourth quarter of 2019, based on 78.0 million non-GAAP diluted common shares outstanding.

 

Free cash flow was $3.4 million, compared to $(0.2) million for the fourth quarter of 2019.

Full Year 2020 Financial Highlights

 

Software product revenue was $391.7 million compared to $366.7 million for the full year of 2019.

 

Total revenue was $469.9 million compared to $458.9 million for the full year of 2019.

 

Net loss was $(10.5) million compared to net loss of $(7.5) million for the full year of 2019. Diluted net loss per share was $(0.14) based on 73.2 million diluted weighted average common shares outstanding, compared to diluted net loss per share of $(0.11) for the full year of 2019, based on 71.5 million diluted weighted average common shares outstanding.

 

Adjusted EBITDA was $57.3 million, compared to $39.5 million for the full year of 2019.  

 

Non-GAAP net income was $25.5 million, compared to Non-GAAP net income of $16.4 million for the full year of 2019. Non-GAAP diluted net income per share was $0.31 based on 83.0 million non-GAAP diluted common shares outstanding, compared to Non-GAAP diluted net income per share of $0.21 for the full year of 2019, based on 78.0 million non-GAAP diluted common shares outstanding.

 

Free cash flow was $26.8 million, compared to $21.7 million for the full year of 2019.



Exhibit 99.1

Business Outlook

Based on information available as of today, Altair is issuing guidance for the first quarter and full year 2021.  

 

 

 

 

(in millions)

 

First Quarter 2021

 

 

Full Year 2021

 

Software Product Revenue

 

$

118.0

 

to

$

120.0

 

 

$

423.0

 

to

$

431.0

 

Total Revenue

 

$

138.0

 

 

$

140.0

 

 

$

502.0

 

 

$

510.0

 

Net Loss

 

$

(5.4

)

 

$

(4.5

)

 

$

(44.0

)

 

$

(38.3

)

Non-GAAP Net Income

 

$

16.3

 

 

$

17.8

 

 

$

36.9

 

 

$

42.8

 

Adjusted EBITDA

 

$

24.0

 

 

$

26.0

 

 

$

58.0

 

 

$

66.0

 

Conference Call Information

What: Altair’s Fourth Quarter and Full Year 2020 Financial Results Conference CallWhen:Friday, February 26, 2021
Time:8:30 a.m. ETLive Call:(866) 754-5204, Domestic(636) 812-6621, International
Replay:(855) 859-2056, Conference ID 3056322, Domestic(404) 537-3406, Conference ID 3056322, InternationalWebcast: 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, Non-GAAP Net Income 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 – as defined through 2020 results 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 net income – as defined starting with 2021 guidance and going forward excludes stock-based compensation, amortization of intangible assets related to acquisitions, non-cash interest expense, impact of non-GAAP tax rate to income tax expense, which approximates our tax rate excluding discrete items and other specific events that can fluctuate form period to period, and special items as identified by management and described elsewhere in this press release.


Exhibit 99.1

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 simulation, high-performance computing, data analytics and artificial intelligence. 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 first quarter and full year 2021, our statements regarding our expectation for 2021, 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 Relations

Altair

Dave Simon

248-614-2400 ext. 332

ir@altair.com

 

Investor Relations

The Blueshirt Group

Monica Gould

212-871-3927

ir@altair.com

 

Lindsay Savarese

212-331-8417


Exhibit 99.1

ir@altair.com



Exhibit 99.1

ALTAIR ENGINERING INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

 

December 31,

 

(in thousands)

 

2020

 

 

2019

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

241,221

 

 

$

223,117

 

Accounts receivable, net

 

 

117,878

 

 

 

104,984

 

Income tax receivable

 

 

6,736

 

 

 

7,264

 

Prepaid expenses and other current assets

 

 

21,100

 

 

 

17,092

 

Total current assets

 

 

386,935

 

 

 

352,457

 

Property and equipment, net

 

 

36,332

 

 

 

36,297

 

Operating lease right of use assets

 

 

33,526

 

 

 

28,134

 

Goodwill

 

 

264,481

 

 

 

233,683

 

Other intangible assets, net

 

 

76,114

 

 

 

67,075

 

Deferred tax assets

 

 

7,125

 

 

 

5,791

 

Other long-term assets

 

 

25,389

 

 

 

19,708

 

TOTAL ASSETS

 

$

829,902

 

 

$

743,145

 

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

Current portion of long-term debt

 

$

30,384

 

 

$

430

 

Accounts payable

 

 

8,594

 

 

 

8,585

 

Accrued compensation and benefits

 

 

34,772

 

 

 

30,676

 

Current portion of operating lease liabilities

 

 

10,331

 

 

 

9,141

 

Other accrued expenses and current liabilities

 

 

30,982

 

 

 

28,603

 

Deferred revenue

 

 

85,691

 

 

 

75,431

 

Total current liabilities

 

 

200,754

 

 

 

152,866

 

Long-term debt, net of current portion

 

 

188,653

 

 

 

178,238

 

Operating lease liabilities, net of current portion

 

 

24,323

 

 

 

20,174

 

Deferred revenue, non-current

 

 

9,388

 

 

 

8,136

 

Other long-term liabilities

 

 

27,414

 

 

 

26,672

 

TOTAL LIABILITIES

 

 

450,532

 

 

 

386,086

 

Commitments and contingencies

 

 

 

 

 

 

 

 

MEZZANINE EQUITY

 

 

784

 

 

 

2,352

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Preferred stock ($0.0001 par value), authorized 45,000 shares, none issued or outstanding

 

 

 

 

 

 

Common stock ($0.0001 par value)

 

 

 

 

 

 

 

 

Class A common stock, authorized 513,797 shares, issued and outstanding 44,216

   and 41,271 shares as of December 31, 2020 and 2019, respectively

 

 

4

 

 

 

4

 

Class B common stock, authorized 41,203 shares, issued and outstanding 30,111

   and 31,131 shares as of December 31, 2020 and 2019, respectively

 

 

3

 

 

 

3

 

Additional paid-in capital

 

 

474,669

 

 

 

446,633

 

Accumulated deficit

 

 

(93,293

)

 

 

(82,405

)

Accumulated other comprehensive loss

 

 

(2,797

)

 

 

(9,528

)

TOTAL STOCKHOLDERS’ EQUITY

 

 

378,586

 

 

 

354,707

 

TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY

 

$

829,902

 

 

$

743,145

 

 



Exhibit 99.1

ALTAIR ENGINEERING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

For the Three Months Ended December 31,

 

 

For the Year Ended December 31,

 

(in thousands, except per share data)

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

License

 

$

76,381

 

 

$

64,194

 

 

$

259,965

 

 

$

244,321

 

Maintenance and other services

 

 

37,244

 

 

 

36,993

 

 

 

131,746

 

 

 

122,381

 

Total software

 

 

113,625

 

 

 

101,187

 

 

 

391,711

 

 

 

366,702

 

Software related services

 

 

7,906

 

 

 

8,941

 

 

 

26,454

 

 

 

34,576

 

Total software and related services

 

 

121,531

 

 

 

110,128

 

 

 

418,165

 

 

 

401,278

 

Client engineering services

 

 

9,934

 

 

 

11,722

 

 

 

44,320

 

 

 

48,987

 

Other

 

 

1,976

 

 

 

2,027

 

 

 

7,436

 

 

 

8,650

 

Total revenue

 

 

133,441

 

 

 

123,877

 

 

 

469,921

 

 

 

458,915

 

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

License

 

 

6,786

 

 

 

8,139

 

 

 

19,637

 

 

 

21,285

 

Maintenance and other services

 

 

10,105

 

 

 

10,892

 

 

 

38,688

 

 

 

38,401

 

Total software *

 

 

16,891

 

 

 

19,031

 

 

 

58,325

 

 

 

59,686

 

Software related services

 

 

6,102

 

 

 

6,497

 

 

 

21,243

 

 

 

25,640

 

Total software and related services

 

 

22,993

 

 

 

25,528

 

 

 

79,568

 

 

 

85,326

 

Client engineering services

 

 

8,067

 

 

 

9,882

 

 

 

35,684

 

 

 

39,875

 

Other

 

 

1,631

 

 

 

1,540

 

 

 

6,053

 

 

 

7,398

 

Total cost of revenue

 

 

32,691

 

 

 

36,950

 

 

 

121,305

 

 

 

132,599

 

Gross profit

 

 

100,750

 

 

 

86,927

 

 

 

348,616

 

 

 

326,316

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development *

 

 

34,966

 

 

 

30,498

 

 

 

126,081

 

 

 

117,510

 

Sales and marketing *

 

 

30,537

 

 

 

27,589

 

 

 

111,440

 

 

 

106,051

 

General and administrative *

 

 

22,933

 

 

 

21,292

 

 

 

86,432

 

 

 

82,178

 

Amortization of intangible assets

 

 

4,986

 

 

 

3,769

 

 

 

16,376

 

 

 

14,442

 

Other operating loss (income), net

 

 

5

 

 

 

(370

)

 

 

(3,426

)

 

 

(2,072

)

Total operating expenses

 

 

93,427

 

 

 

82,778

 

 

 

336,903

 

 

 

318,109

 

Operating income

 

 

7,323

 

 

 

4,149

 

 

 

11,713

 

 

 

8,207

 

Interest expense

 

 

3,008

 

 

 

2,785

 

 

 

11,598

 

 

 

6,371

 

Other income, net

 

 

(65

)

 

 

(849

)

 

 

(1,917

)

 

 

(1,552

)

Income before income taxes

 

 

4,380

 

 

 

2,213

 

 

 

2,032

 

 

 

3,388

 

Income tax expense

 

 

2,182

 

 

 

3,715

 

 

 

12,532

 

 

 

10,930

 

Net income (loss)

 

$

2,198

 

 

$

(1,502

)

 

$

(10,500

)

 

$

(7,542

)

Income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share attributable to common

  stockholders, basic

 

$

0.03

 

 

$

(0.02

)

 

$

(0.14

)

 

$

(0.11

)

Net income (loss) per share attributable to common

  stockholders, diluted

 

$

0.03

 

 

$

(0.02

)

 

$

(0.14

)

 

$

(0.11

)

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares used in computing

  net income (loss) per share, basic

 

 

74,020

 

 

 

72,227

 

 

 

73,241

 

 

 

71,544

 

Weighted average number of shares used in computing

  net income (loss) per share, diluted

 

 

78,484

 

 

 

72,227

 

 

 

73,241

 

 

 

71,544

 

 

 

 

 

 

 

 

 

 

 


Exhibit 99.1

*Amounts include stock-based compensation expense as follows (in thousands):

 

 

 

(Unaudited)

 

 

 

Three Months Ended

December 31,

 

 

Twelve Months Ended

December 31,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Cost of revenue-software

 

$

871

 

 

$

342

 

 

$

2,473

 

 

$

1,069

 

Research and development

 

 

2,686

 

 

 

1,306

 

 

 

8,372

 

 

 

2,917

 

Sales and marketing

 

 

2,474

 

 

 

688

 

 

 

6,423

 

 

 

2,250

 

General and administrative

 

 

1,385

 

 

 

608

 

 

 

4,087

 

 

 

2,292

 

Total stock-based compensation expense

 

$

7,416

 

 

$

2,944

 

 

$

21,355

 

 

$

8,528

 



Exhibit 99.1

ALTAIR ENGINEERING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)

 

 

 

Year Ended December 31,

(in thousands)

 

2020

 

 

2019

 

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

 

Net loss

 

$

(10,500

)

 

$

(7,542

)

 

Adjustments to reconcile net loss to net cash provided by

   operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

23,806

 

 

 

21,522

 

 

Provision for credit loss

 

 

1,259

 

 

 

671

 

 

Amortization of debt discount and issuance costs

 

 

10,829

 

 

 

5,663

 

 

Stock-based compensation expense

 

 

21,355

 

 

 

8,528

 

 

Deferred income taxes

 

 

(10,350

)

 

 

(950

)

 

Other, net

 

 

118

 

 

 

6

 

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(11,032

)

 

 

(7,901

)

 

Prepaid expenses and other current assets

 

 

(2,131

)

 

 

(2,396

)

 

Other long-term assets

 

 

(4,527

)

 

 

(2,591

)

 

Accounts payable

 

 

(1,839

)

 

 

(426

)

 

Accrued compensation and benefits

 

 

1,985

 

 

 

(1,232

)

 

Other accrued expenses and current liabilities

 

 

5,771

 

 

 

513

 

 

Operating lease right of use assets and liabilities, net

 

 

(142

)

 

 

102

 

 

Deferred revenue

 

 

8,280

 

 

 

17,426

 

 

Net cash provided by operating activities

 

 

32,882

 

 

 

31,393

 

 

INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

 

Payments for acquisition of businesses, net of cash acquired

 

 

(41,028

)

 

 

(25,720

)

 

Capital expenditures

 

 

(6,093

)

 

 

(9,660

)

 

Payments for acquisition of developed technology

 

 

(2,133

)

 

 

(473

)

 

Other investing activities, net

 

 

162

 

 

 

14

 

 

Net cash used in investing activities

 

 

(49,092

)

 

 

(35,839

)

 

FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

Borrowings under revolving commitment

 

 

30,000

 

 

 

96,992

 

 

Proceeds from the exercise of stock options

 

 

1,710

 

 

 

1,510

 

 

Proceeds from issuance of convertible senior notes,

   net of underwriters' discounts and commissions

 

 

 

 

 

223,101

 

 

Payments on revolving commitment

 

 

 

 

 

(127,941

)

 

Payments for issuance costs of convertible senior notes

 

 

 

 

 

(1,233

)

 

Other financing activities

 

 

(460

)

 

 

(513

)

 

Net cash provided by financing activities

 

 

31,250

 

 

 

191,916

 

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

3,010

 

 

 

342

 

 

Net increase in cash, cash equivalents and restricted cash

 

 

18,050

 

 

 

187,812

 

 

Cash, cash equivalents and restricted cash at beginning of year

 

 

223,497

 

 

 

35,685

 

 

Cash, cash equivalents and restricted cash at end of period

 

$

241,547

 

 

$

223,497

 

 

Supplemental disclosures of cash flow:

 

 

 

 

 

 

 

 

 

Interest paid

 

$

731

 

 

$

664

 

 

Income taxes paid

 

$

12,666

 

 

$

7,686

 

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

 

Issuance of common stock in connection with acquisitions

 

$

3,504

 

 

$

7,637

 

 

Promissory notes issued and deferred payment obligations

   for acquisitions

 

$

1,266

 

 

$

497

 

 

Finance leases

 

$

118

 

 

$

632

 

 

Property and equipment in accounts payable and other current liabilities

 

$

1,671

 

 

$

259

 

 

 



Exhibit 99.1

Financial Results

 

The following table provides a reconciliation of Non-GAAP net income and Non-GAAP net income per share – diluted, to net income (loss) and net income (loss) per share – diluted, the most comparable GAAP financial measures:

 

 

 

(Unaudited)

 

 

 

Three Months Ended

December 31,

 

 

Twelve Months Ended

December 31,

 

(in thousands, except per share amounts)

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net income (loss)

 

$

2,198

 

 

$

(1,502

)

 

$

(10,500

)

 

$

(7,542

)

Stock-based compensation expense

 

 

7,416

 

 

 

2,944

 

 

 

21,355

 

 

 

8,528

 

Amortization of intangible assets

 

 

4,986

 

 

 

3,769

 

 

 

16,376

 

 

 

14,442

 

Special adjustments (1)

 

 

 

 

 

7

 

 

 

(372

)

 

 

2,038

 

Income tax effect of non-GAAP adjustments

 

 

(451

)

 

 

34

 

 

 

(1,380

)

 

 

(1,069

)

Non-GAAP net income

 

$

14,149

 

 

$

5,252

 

 

$

25,479

 

 

$

16,397

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share - diluted

 

$

0.03

 

 

$

(0.02

)

 

$

(0.14

)

 

$

(0.11

)

Non-GAAP net income per share - diluted

 

$

0.17

 

 

$

0.07

 

 

$

0.31

 

 

$

0.21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP diluted shares outstanding:

 

 

78,484

 

 

 

72,227

 

 

 

73,241

 

 

 

71,544

 

Non-GAAP diluted shares outstanding:

 

 

83,000

 

 

 

78,000

 

 

 

83,000

 

 

 

78,000

 

(1)

The twelve months ended December 31, 2020, includes $1.0 million of proceeds from settlements related to a historical acquisition and $0.6 million of severance expense. The twelve months ended December 31, 2019, includes $1.0 million of impairment charges for royalty contracts, $0.6 million of acquisition related costs and $0.4 million of severance expense.

 

The following table provides a reconciliation of Adjusted EBITDA to net income (loss), the most comparable GAAP financial measure:

 

 

 

(Unaudited)

 

 

 

Three Months Ended

December 31,

 

 

Twelve Months Ended

December 31,

 

(in thousands)

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net income (loss)

 

$

2,198

 

 

$

(1,502

)

 

$

(10,500

)

 

$

(7,542

)

Income tax expense

 

 

2,182

 

 

 

3,715

 

 

 

12,532

 

 

 

10,930

 

Stock-based compensation expense

 

 

7,416

 

 

 

2,944

 

 

 

21,355

 

 

 

8,528

 

Interest expense

 

 

3,008

 

 

 

2,785

 

 

 

11,598

 

 

 

6,371

 

Depreciation and amortization

 

 

6,890

 

 

 

5,686

 

 

 

23,806

 

 

 

21,522

 

Special adjustments, interest income and other (1)

 

 

(2

)

 

 

(893

)

 

 

(1,503

)

 

 

(260

)

Adjusted EBITDA

 

$

21,692

 

 

$

12,735

 

 

$

57,288

 

 

$

39,549

 

(1)

The twelve months ended December 31, 2020, includes $1.0 million of proceeds from settlements related to a historical acquisition and $0.6 million of severance expense. The twelve months ended December 31, 2019, includes $1.0 million of impairment charges for royalty contracts, $0.6 million of acquisition related costs and $0.4 million of severance expense.

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

December 31,

 

 

Twelve Months Ended

December 31,

 

(in thousands)

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net cash provided by operating activities

 

 

5,503

 

 

 

1,388

 

 

 

32,882

 

 

 

31,393

 

Capital expenditures

 

 

(2,087

)

 

 

(1,540

)

 

 

(6,093

)

 

 

(9,660

)

Free Cash Flow

 

$

3,416

 

 

$

(152

)

 

$

26,789

 

 

$

21,733

 

 



Exhibit 99.1

Business Outlook

Starting with the 2021 guidance presented in this press release (including the reconciliations provided below) and going forward, our definition of Non-GAAP net income now excludes non-cash interest expense and assumes a non-GAAP income tax rate, which approximates our tax rate excluding discrete items and other specific events that can fluctuate from period to period. There are no other changes from our prior definition. We’ve made these changes to reflect how management reviews results of the business and to be more consistent with our peers.

The following table provides a reconciliation of projected Non-GAAP net income to projected net loss, the most comparable GAAP financial measure:

 

 

 

(Unaudited)

 

 

 

Three Months Ending

March 31, 2021

 

 

Year Ending

December 31, 2021

 

(in thousands)

 

Low

 

 

High

 

 

Low

 

 

High

 

Net loss

 

$

(5,400

)

 

$

(4,500

)

 

$

(44,000

)

 

$

(38,300

)

Stock-based compensation expense

 

 

11,900

 

 

 

11,900

 

 

 

44,500

 

 

 

44,500

 

Amortization of intangible assets

 

 

4,400

 

 

 

4,400

 

 

 

17,800

 

 

 

17,800

 

Non-cash interest expense

 

 

2,800

 

 

 

2,800

 

 

 

11,400

 

 

 

11,400

 

Special adjustments and other

 

 

4,000

 

 

 

5,000

 

 

 

5,000

 

 

 

7,000

 

Impact of non-GAAP tax rate

 

 

(1,400

)

 

 

(1,800

)

 

 

2,200

 

 

 

400

 

Non-GAAP net income

 

$

16,300

 

 

$

17,800

 

 

$

36,900

 

 

$

42,800

 

 

For comparability purposes, the following table provides a reconciliation of the Quarterly Non-GAAP net income results for 2020 to GAAP net income (loss) for 2020, reflecting the 2021 definition:

 

 

 

(Unaudited)

 

 

 

Three Months Ended

 

(in thousands)

 

March 31,

2020

 

 

June 30,

2020

 

 

Sept 30,

2020

 

 

December 31,

2020

 

Net income (loss)

 

$

6,030

 

 

$

(10,223

)

 

$

(8,505

)

 

$

2,198

 

Stock-based compensation expense

 

 

3,171

 

 

 

4,534

 

 

 

6,234

 

 

 

7,416

 

Amortization of intangible assets