TROY, Mich., Feb. 27, 2020 (GLOBE NEWSWIRE) — Altair (Nasdaq:ALTR), a global technology company providing solutions in product development, high-performance computing and data analytics, today released its financial results for the fourth quarter ended December 31, 2019.
“We continue to execute on our vision of transforming product design and customer decision making by leveraging simulation, data analytics and high-performance computing,” said James Scapa, Founder, Chairman and Chief Executive Officer of Altair. “Our core simulation and optimization technologies performed well during the quarter and we remain highly encouraged by strong demand for our SimSolid product, which continues to have one of the fastest new product ramps in our history. As we enter 2020, we continue to see macro headwinds in our automotive end market and given the potential impact of the Coronavirus on our customers we anticipate a more modest start to the year. However, we remain confident that our diversification across multiple verticals and products positions the company well to achieve above market growth over the long-term.”“Software product revenue exceeded our expectations in the fourth quarter and our year over year growth rate accelerated sequentially to 27%,” said Howard Morof, Chief Financial Officer of Altair.Fourth Quarter 2019 Financial HighlightsSoftware product revenue was $101.2 million, an increase of 27% from $79.9 million for the fourth quarter of 2018.Non-GAAP software product revenue was $103.4 million, an increase of 29% from $79.9 million for the fourth quarter of 2018. Total revenue was $123.9 million, an increase of 20% from $103.0 million for the fourth quarter of 2018.Non-GAAP total revenue was $126.1 million, an increase of 22% from $103.0 million for the fourth quarter of 2018. Net loss was $(1.5) million, compared to net loss of $(9.0) million for the fourth quarter of 2018. Diluted net loss per share was $(0.02) based on 72.2 million diluted weighted average common shares outstanding, compared to diluted net loss per share of $(0.13) for the fourth quarter of 2018, based on 70.5 million diluted weighted average common shares outstanding.Adjusted EBITDA was $12.7 million, compared to $12.9 million for the fourth quarter of 2018. Modified Adjusted EBITDA was $15.0 million, compared to $12.9 million for the fourth quarter of 2018. Non-GAAP net income was $6.9 million, compared to non-GAAP net income of $5.6 million for the fourth quarter of 2018. Non-GAAP diluted net income per share was $0.09 based on 78.0 million non-GAAP diluted common shares outstanding, compared to non-GAAP diluted net income per share of $0.07 for the fourth quarter of 2018, based on 77.7 million non-GAAP diluted common shares outstanding.Free cash flow was $(0.2) million, compared to $(5.5) million for the fourth quarter of 2018.Full Year 2019 Financial HighlightsSoftware product revenue was $366.7 million, an increase of 20% from $304.4 million for the full year 2018.Non-GAAP software product revenue was $375.7 million, an increase of 23% from $304.4 million for the full year 2018.Total revenue was $458.9 million, an increase of 16% from $396.4 million for the full year 2018.Non-GAAP total revenue was $467.9 million, an increase of 18% from $396.4 million for the full year 2018.Net loss was $(7.5) million, compared to net income of $15.5 million for the full year 2018. Diluted net loss per share was $(0.11) based on 71.5 million diluted weighted average common shares outstanding, compared to diluted net income per share of $0.21 for the full year 2018, based on 74.9 million diluted weighted average common shares outstanding.Adjusted EBITDA was $39.5 million, compared to $50.2 million for the full year 2018.Modified Adjusted EBITDA was $48.5 million, compared to $50.2 million for the full year 2018. Non-GAAP net income was $24.8 million, compared to non-GAAP net income of $32.8 million for the full year 2018. Non-GAAP diluted net income per share was $0.32 based on 78.0 million non-GAAP diluted common shares outstanding, compared to non-GAAP diluted net income per share of $0.42 for the full year 2018, based on 77.7 million non-GAAP diluted common shares outstanding.Free cash flow was $21.7 million, compared to $29.6 million for the full year 2018.Business Outlook
Based on information available as of today, Altair is issuing guidance for the first quarter and full year 2020. (All figures in millions)Conference Call Information
Non-GAAP Financial Measures
This press release contains the following non-GAAP financial measures: Non-GAAP Software Product Revenue, Non-GAAP Total Revenue, Adjusted EBITDA, Modified 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.Non-GAAP software product revenue and Non-GAAP total revenue include revenue not recognized under GAAP due to acquisition accounting adjustments associated with the accounting for deferred revenue in significant business combinations.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.Modified Adjusted EBITDA represents Adjusted EBITDA adjusted for revenue not recognized under GAAP due to acquisition accounting adjustments associated with the accounting for deferred revenue in significant business combinations.Non-GAAP net income excludes stock-based compensation, amortization of intangible assets related to acquisitions, revenue not recognized under GAAP due to acquisition accounting 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 Altair 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 design and 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 StatementsThis 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 2020, statements regarding other future periods, anticipated trends and long-term growth, 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 forward-looking statements due to a number of factors, including but not limited to, 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
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ir@altair.comInvestor Relations
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ALTAIR ENGINEERING INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
ALTAIR ENGINEERING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)* Amounts include stock-based compensation expense as follows (in thousands):
ALTAIR ENGINEERING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)Financial ResultsThe following table provides a reconciliation of Non-GAAP net income and Non-GAAP net income per share – diluted to net (loss) income and net (loss) income per share – diluted, the most comparable GAAP financial measures:(1) Represents revenue not recognized under GAAP due to acquisition accounting adjustments associated with the accounting for deferred revenue in significant business combinations.
(2) Includes a) nonrecurring severance expenses of $0.4 million and nonrecurring acquisition related costs of $0.6 million, for the twelve months ended December 31, 2019, and b) an impairment charge for royalty contracts resulting in $1.0 million of expenses for the twelve ended December 31, 2019.
Includes a) nonrecurring costs from the acquisition of Datawatch of $10.4 million for the three and twelve months ended December 31, 2018, b) a gain on the sale of a building of $4.4 million for the twelve months ended December 31, 2018, b) an impairment charge for royalty contracts and trade names resulting in $0.2 million and $2.8 million for the three and twelve months ended December 31, 2018, respectively and c) a non-recurring adjustment for a change in estimated legal expenses resulting in $2.0 million of income for the twelve months ended December 31, 2018.The following table provides a reconciliation of Adjusted EBITDA and Modified Adjusted EBITDA to net (loss) income, the most comparable GAAP financial measure:(1) Includes a) nonrecurring severance expenses of $0.4 million and nonrecurring acquisition related costs of $0.6 million, for the twelve months ended December 31, 2019, and b) impairment charges for royalty contracts resulting in $1.0 million of expense for the twelve months ended December 31, 2019.
Includes a) nonrecurring costs from the acquisition of Datawatch of $10.4 million for the three and twelve months ended December 31, 2018, b) a gain on the sale of a building of $4.4 million for the twelve months ended December 31, 2018, b) impairment charges for royalty contracts and trade names resulting in $0.2 million and $2.8 million of expense for the three and twelve months ended December 31, 2018, respectively, and c) a non-recurring adjustment for a change in estimated legal expenses resulting in $2.0 million of income for the twelve months ended December 31, 2018.
(2) Represents revenue not recognized under GAAP due to acquisition accounting adjustments associated with the accounting for deferred revenue in significant business combinations.The following table provides a reconciliation of Non-GAAP total revenue to total revenue, the most comparable GAAP financial measure:(1) Adjustment for revenue not recognized under GAAP due to acquisition accounting adjustments associated with the accounting for deferred revenue in significant business combinations.The following table provides a reconciliation of Non-GAAP total software product revenue to total software product revenue, the most comparable GAAP financial measure:(1) Adjustment for revenue not recognized under GAAP due to acquisition accounting adjustments associated with the accounting for deferred revenue in significant business combinations.The following table provides a recompilation of Free Cash Flow to net cash provided by operating activities, the most comparable GAAP financial measure:Effective January 1, 2018, we adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASC 606). The following table sets forth selected quarterly information under ASC 606 for 2018:Disaggregation of revenueThe Company disaggregates its software revenue by type of performance obligation and timing of revenue recognition as follows (in thousands):Business Outlook
The following table provides a reconciliation of projected Non-GAAP net income to projected net income (loss), the most comparable GAAP financial measure:The following table provides a reconciliation of projected Adjusted EBITDA to projected net income (loss), the most comparable GAAP financial measure:
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