Record Fourth Quarter and Full Year 2020 Software Product and Total Revenue, Exceeding Expectations
TROY, Mich., Feb. 25, 2021 (GLOBE NEWSWIRE) -- 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.
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 Call |
| When: |
Friday, February 26, 2021 |
| Time: |
8:30 a.m. ET |
| Live Call: |
(866) 754-5204, Domestic
(636) 812-6621, International
|
| Replay: |
(855) 859-2056, Conference ID 3056322, Domestic
(404) 537-3406, Conference ID 3056322, 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, 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.
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
ir@altair.com
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
* 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 |
|
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 |
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
3,840 |
|
|
|
3,692 |
|
|
|
3,858 |
|
|
|
4,986 |
|
| Non-cash interest expense |
|
2,648 |
|
|
|
2,689 |
|
|
|
2,725 |
|
|
|
2,762 |
|
| Special adjustments and other |
|
— |
|
|
|
578 |
|
|
|
(950 |
) |
|
|
— |
|
| Impact of non-GAAP tax rate |
|
(637 |
) |
|
|
1,718 |
|
|
|
1,294 |
|
|
|
(2,900 |
) |
| Non-GAAP net income |
$ |
15,052 |
|
|
$ |
2,988 |
|
|
$ |
4,656 |
|
|
$ |
14,462 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table provides a reconciliation of projected Adjusted EBITDA 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 |
) |
| Income tax expense |
|
4,300 |
|
|
|
4,400 |
|
|
|
15,200 |
|
|
|
15,500 |
|
| Stock-based compensation expense |
|
11,900 |
|
|
|
11,900 |
|
|
|
44,500 |
|
|
|
44,500 |
|
| Interest expense |
|
2,900 |
|
|
|
2,900 |
|
|
|
12,000 |
|
|
|
12,000 |
|
| Depreciation and amortization |
|
6,300 |
|
|
|
6,300 |
|
|
|
25,400 |
|
|
|
25,400 |
|
| Special adjustments, interest income and other |
|
4,000 |
|
|
|
5,000 |
|
|
|
4,900 |
|
|
|
6,900 |
|
| Adjusted EBITDA |
$ |
24,000 |
|
|
$ |
26,000 |
|
|
$ |
58,000 |
|
|
$ |
66,000 |
|
