Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Dialogic Inc. | c649-20131114x8k.htm |
Dialogic Inc. Reports Third Quarter 2013 Financial Results
MILPITAS, Calif.--(BUSINESS WIRE) -- Dialogic Inc. (OTCQB: DLGC), the Network Fuel® company, today announced third quarter results for the period ending September 30, 2013.
GAAP Results
Total Revenue for the third quarter of 2013 was $30.2 million compared to $31.1 million in the second quarter of 2013 and $44.1 million in the third quarter of 2012. Gross Margin for the third quarter of 2013 was 63.8% compared to 57.6% in the second quarter of 2013 and 62.0% in the third quarter of 2012. Operating Expense for the third quarter of 2013 was $17.5 million compared to $23.2 million in the second quarter of 2013 and $26.4 million in the third quarter of 2012. Net Income (Loss) for the third quarter of 2013 was ($0.9) million, or ($0.05) per share compared to ($5.7) million, or ($0.36) per share, in the second quarter of 2013 and $0.8 million, or $0.08 per share, in the third quarter of 2012. Cash on hand for the third quarter of 2013 was $4.5 million compared to $8.4 million in the second quarter of 2013 and $2.7 million in the third quarter of 2012.
Non-GAAP Results
Total Revenue for the third quarter of 2013 was $30.3 million compared to $31.3 million in the second quarter of 2013 and $44.2 million in the third quarter of 2012. Gross Margin for the third quarter of 2013 was 67.8% compared to 61.8% in the second quarter of 2013 and 65.3% in the third quarter of 2012. Operating Expense for the third quarter of 2013 was $18.3 million compared to $20.6 million in the second quarter of 2013 and $23.9 million in the third quarter of 2012. Adjusted EBITDA for the third quarter of 2013 was $2.3 million compared to ($1.2) million in the second quarter of 2013 and $5.0 million in the third quarter of 2012.
About Dialogic:
Dialogic (OTCQB:DLGC), the Network Fuel® company, inspires the world's leading service providers and application developers to elevate the performance of media-rich communications across the most advanced networks. We boost the reliability of any-to-any network connections, supercharge the impact of applications and amplify the capacity of congested networks. Forty-eight of the world's top 50 mobile operators and nearly 3,000 application developers rely on Dialogic to redefine the possible and exceed user expectations.
For more information on Dialogic and the communications solutions energized by our technology, visit www.dialogic.com and www.dialogic.com/en/showcase. Also, visit our social media newsroom for the latest news, videos and blog posts.
This press release may contain forward-looking statements regarding future events that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results. These forward-looking statements involve risks and uncertainties, as well as assumptions that if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include but are not limited to our ability to continue to achieve operational, organizational and financial savings through initiatives already in process or which may be put in process, generate positive cash flow and support continued revenue growth, the potential market for and market acceptance of our products, industry and competitive market conditions, gross margin expansion, creating new revenue opportunities, reducing operating expenses and other risks and uncertainties described more fully in our documents filed with or furnished to the SEC. More information about these and other risks that may impact Dialogic's business is set forth
in the "Risk Factors" section in our Quarterly Report on Form 10-Q for the three months ended June 30, 2013, as filed with the SEC. These filings are available on a website maintained by the SEC http://www.sec.gov/. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements.
Dialogic and Network Fuel are registered trademarks of Dialogic Inc. or a subsidiary. (DLGC-IR)
GAAP Financial Tables
Use of Non-GAAP Financial Measures
Some of the measures in this press release are non-GAAP financial measures within the meaning of the SEC Regulation G. Dialogic believes that presenting non-GAAP Adjusted EBITDA is useful to investors, because it reflects the operating performance of Dialogic. Dialogic management uses these non-GAAP measures as important indicators of the company's past performance and in planning and forecasting performance in future periods. Dialogic considers EBITDA, as adjusted, an important measure of its ability to generate cash flows to fund operating activities, service debt, fund capital expenditures and fund other corporate investing and financing activities. EBITDA, as adjusted, eliminates the non-cash effect of tangible asset depreciation and amortization of intangible assets and stock-based compensation, as well as certain nonrecurring items. EBITDA should be considered in addition to, rather than as a substitute for, pre-tax income, net income and cash flows from operating activities. The non-GAAP financial information Dialogic presents may not be comparable to similarly-titled financial measures used by other companies, and investors should not consider non-GAAP financial measures in isolation from, or in substitution for, financial information presented in compliance with GAAP. You are encouraged to review the reconciliation of GAAP financial measures to non-GAAP financial measures included elsewhere in this press release.
In respect of the foregoing, Dialogic provides the following supplemental information to provide additional context for the use and consideration of the non-GAAP financial measures used elsewhere in this press release:
"EBITDA" is defined as earnings before interest, income taxes, depreciation and amortization. "Adjusted EBITDA" is defined as EBITDA, plus adjustments for nonrecurring items or other adjustments. Adjusted EBITDA includes EBITDA but excludes restructuring and integration costs, product rationalization, non-cash stock compensation expense, purchase accounting adjustments, SEC inquiry expenses and other non-recurring transactions such as revenue reversals and bad debt charges, as well as other income (expense) items which include the change in the fair value of warrants and foreign exchange gain (loss). Dialogic considers Adjusted EBITDA as a key metric in evaluating its financial performance.
Non-GAAP Financial Tables
Investor Relations:
Dialogic Inc.
Andrew Goldberg, 973-967-6425
Senior Vice President, Marketing & Strategy
Source: Dialogic Inc.
|
Dialogic Inc. |
|||||||||||
|
Unaudited Consolidated Statements of Operations (GAAP) |
|||||||||||
|
(In thousands, except per share data) |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
||||
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Products |
$ |
20,841 |
|
$ |
33,837 |
|
$ |
68,325 |
|
$ |
93,279 |
|
Services |
|
9,366 |
|
|
10,251 |
|
|
26,752 |
|
|
29,808 |
|
Total revenue |
|
30,207 |
|
|
44,088 |
|
|
95,077 |
|
|
123,087 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Products |
|
6,944 |
|
|
11,654 |
|
|
25,389 |
|
|
38,329 |
|
Services |
|
3,986 |
|
|
5,118 |
|
|
12,930 |
|
|
15,267 |
|
Total cost of revenue |
|
10,930 |
|
|
16,772 |
|
|
38,319 |
|
|
53,596 |
|
Gross profit |
|
19,277 |
|
|
27,316 |
|
|
56,758 |
|
|
69,491 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development, net |
|
5,881 |
|
|
9,266 |
|
|
20,997 |
|
|
33,459 |
|
Sales and marketing |
|
7,615 |
|
|
9,261 |
|
|
25,219 |
|
|
31,935 |
|
General and administrative |
|
6,280 |
|
|
7,375 |
|
|
21,869 |
|
|
23,766 |
|
Restructuring charges, net |
|
(2,323) |
|
|
457 |
|
|
(1,997) |
|
|
4,760 |
|
Total operating expenses |
|
17,453 |
|
|
26,359 |
|
|
66,088 |
|
|
93,920 |
|
Income (loss) from operations |
|
1,824 |
|
|
957 |
|
|
(9,330) |
|
|
(24,429) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other income, net |
|
109 |
|
|
242 |
|
|
56 |
|
|
95 |
|
Interest expense |
|
(2,620) |
|
|
(1,792) |
|
|
(7,519) |
|
|
(8,836) |
|
Change in fair value of warrants |
|
118 |
|
|
1,750 |
|
|
1,391 |
|
|
2,154 |
|
Foreign exchange loss, net |
|
(8) |
|
|
(278) |
|
|
(919) |
|
|
(1,047) |
|
Total other expense, net |
|
(2,401) |
|
|
(78) |
|
|
(6,991) |
|
|
(7,634) |
|
(Loss) income before provision for income taxes |
|
(577) |
|
|
879 |
|
|
(16,321) |
|
|
(32,063) |
|
Income tax provision |
|
274 |
|
|
56 |
|
|
577 |
|
|
304 |
|
Net (loss) income |
$ |
(851) |
|
$ |
823 |
|
$ |
(16,898) |
|
$ |
(32,367) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per share - basic and diluted |
$ |
(0.05) |
|
$ |
0.08 |
|
$ |
(1.11) |
|
$ |
(4.24) |
|
Weighted average shares of common stock |
|
16,046 |
|
|
10,229 |
|
|
15,227 |
|
|
7,634 |
|
Dialogic Inc. |
|||||
|
Consolidated Balance Sheets |
|||||
|
(In thousands, except share and per share data) |
|||||
|
|
September 30, |
|
December 31, |
||
|
|
2013 |
|
2012 |
||
|
|
(unaudited) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
4,511 |
|
$ |
6,501 |
|
Restricted cash |
|
1,180 |
|
|
900 |
|
Accounts receivable, net of allowance of $2,142 and $1,217, respectively |
|
22,304 |
|
|
32,422 |
|
Inventory |
|
6,396 |
|
|
8,874 |
|
Other current assets |
|
6,855 |
|
|
8,993 |
|
Total current assets |
|
41,246 |
|
|
57,690 |
|
Property and equipment, net |
|
4,587 |
|
|
5,978 |
|
Intangible assets, net |
|
20,656 |
|
|
25,089 |
|
Goodwill |
|
31,223 |
|
|
31,223 |
|
Other assets |
|
2,036 |
|
|
2,147 |
|
Total assets |
$ |
99,748 |
|
$ |
122,127 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
$ |
10,349 |
|
$ |
16,994 |
|
Accrued liabilities |
|
13,352 |
|
|
21,270 |
|
Deferred revenue, current portion |
|
13,989 |
|
|
12,742 |
|
Bank indebtedness |
|
12,475 |
|
|
11,717 |
|
Income taxes payable |
|
756 |
|
|
1,007 |
|
|
|
- |
|
|
- |
|
Total current liabilities |
|
50,921 |
|
|
63,730 |
|
Long-term debt, related parties, net of discount |
|
73,074 |
|
|
66,536 |
|
Warrants |
|
594 |
|
|
1,985 |
|
Other long-term liabilities |
|
5,707 |
|
|
8,978 |
|
Total liabilities |
|
130,296 |
|
|
141,229 |
|
Commitments and contingencies |
|
|
|
|
|
|
Preferred stock, $0.001 par value: |
|
|
|
|
|
|
Authorized - 10,000,000 shares; Issued and outstanding - 1 share |
|
- |
|
|
- |
|
Stockholders' deficit: |
|
|
|
|
|
|
Common stock, $0.001 par value: |
|
|
|
|
|
|
Authorized - 200,000,000 shares; Issued and outstanding 16,179,809 and 14,415,652 shares, respectively |
|
16 |
|
|
14 |
|
Additional paid-in capital |
|
262,893 |
|
|
257,658 |
|
Accumulated other comprehensive loss |
|
(22,208) |
|
|
(22,423) |
|
Accumulated deficit |
|
(271,249) |
|
|
(254,351) |
|
Total stockholders' deficit |
|
(30,548) |
|
|
(19,102) |
|
Total liabilities and stockholders' deficit |
$ |
99,748 |
|
$ |
122,127 |
|
Dialogic Inc. |
|||||||||||||||||||
|
Reconciliation of Condensed Consolidated Statement of Operations to Adjusted EBITDA Results |
|||||||||||||||||||
|
Three Months Ended September 30, 2013 |
|||||||||||||||||||
|
(in thousands, except per share data) |
|||||||||||||||||||
|
(unaudited) |
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
Depreciation and Amortization |
|
Restructuring and Integration Costs |
|
Product Rationalization |
|
Stock-based Compensation Expense |
|
Purchase Accounting Adjustments |
|
SEC Inquiry |
|
Other Adjustments |
|
Adjusted EBITDA |
||
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products |
$ |
20,841 |
|
- |
|
- |
|
- |
|
- |
|
35 |
|
- |
|
- |
|
$ |
20,876 |
|
Services |
|
9,366 |
|
- |
|
- |
|
- |
|
- |
|
58 |
|
- |
|
- |
|
|
9,424 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products |
|
6,944 |
|
(1,166) |
|
- |
|
- |
|
(20) |
|
- |
|
- |
|
- |
|
|
5,758 |
|
Services |
|
3,986 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
3,986 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development, net |
|
5,881 |
|
(207) |
|
- |
|
- |
|
(25) |
|
- |
|
- |
|
- |
|
|
5,649 |
|
Sales and marketing |
|
7,615 |
|
(372) |
|
- |
|
- |
|
(61) |
|
- |
|
- |
|
- |
|
|
7,182 |
|
General and administrative |
|
6,280 |
|
(512) |
|
(24) |
|
- |
|
(362) |
|
- |
|
66 |
|
7 |
|
|
5,455 |
|
Restructuring charges, net |
|
(2,323) |
|
- |
|
2,323 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other expense, net |
|
(2,401) |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
2,401 |
|
|
- |
|
Income tax provision |
|
274 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(274) |
|
|
- |
|
Net (loss) income |
$ |
(851) |
|
2,257 |
|
(2,299) |
|
- |
|
468 |
|
93 |
|
(66) |
|
2,668 |
|
$ |
2,270 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per share - |
$ |
(0.05) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.14 |
|
Weighted average shares of |
|
16,046 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,046 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dialogic Inc. |
|||||||||||||||||||
|
Reconciliation of Condensed Consolidated Statement of Operations to Adjusted EBITDA Results |
|||||||||||||||||||
|
Three Months Ended September 30, 2012 |
|||||||||||||||||||
|
(in thousands, except per share data) |
|||||||||||||||||||
|
(unaudited) |
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
Depreciation and Amortization |
|
Restructuring and Integration Costs |
|
Product Rationalization |
|
Stock-based Compensation Expense |
|
Purchase Accounting Adjustments |
|
SEC Inquiry |
|
Other Adjustments |
|
Non-GAAP |
||
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products |
$ |
33,837 |
|
- |
|
- |
|
- |
|
- |
|
165 |
|
- |
|
- |
|
$ |
34,002 |
|
Services |
|
10,251 |
|
- |
|
- |
|
- |
|
- |
|
(77) |
|
- |
|
- |
|
|
10,174 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products |
|
11,654 |
|
(1,226) |
|
- |
|
(516) |
|
(86) |
|
371 |
|
- |
|
- |
|
|
10,197 |
|
Services |
|
5,118 |
|
|
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
5,118 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development, net |
|
9,266 |
|
(324) |
|
4 |
|
- |
|
(146) |
|
73 |
|
- |
|
- |
|
|
8,872 |
|
Sales and marketing |
|
9,261 |
|
(471) |
|
19 |
|
- |
|
(175) |
|
6 |
|
- |
|
- |
|
|
8,641 |
|
General and administrative |
|
7,375 |
|
(269) |
|
(486) |
|
- |
|
(238) |
|
69 |
|
(64) |
|
- |
|
|
6,387 |
|
Restructuring charges, net |
|
457 |
|
- |
|
(457) |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other expense, net |
|
(78) |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
78 |
|
|
- |
|
Income tax provision |
|
56 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(56) |
|
|
- |
|
Net income |
$ |
823 |
|
2,290 |
|
920 |
|
516 |
|
645 |
|
(431) |
|
64 |
|
134 |
|
$ |
4,961 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per share - |
$ |
0.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.49 |
|
Weighted average shares of |
|
10,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dialogic Inc. |
|||||||||||||||||||
|
Reconciliation of Condensed Consolidated Statement of Operations to Adjusted EBITDA Results |
|||||||||||||||||||
|
Three Months Ended June 30, 2013 |
|||||||||||||||||||
|
(in thousands, except per share data) |
|||||||||||||||||||
|
(unaudited) |
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
Depreciation and Amortization |
|
Restructuring and Integration Costs |
|
Product Rationalization |
|
Stock-based Compensation Expense |
|
Purchase Accounting Adjustments |
|
SEC Inquiry |
|
Other Adjustments |
|
Non-GAAP |
||
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products |
$ |
22,751 |
|
- |
|
- |
|
- |
|
- |
|
92 |
|
- |
|
- |
|
$ |
22,843 |
|
Services |
|
8,324 |
|
- |
|
- |
|
- |
|
- |
|
131 |
|
- |
|
- |
|
|
8,455 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products |
|
8,868 |
|
(1,167) |
|
- |
|
- |
|
(40) |
|
- |
|
- |
|
- |
|
|
7,661 |
|
Services |
|
4,303 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
4,303 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development, net |
|
7,083 |
|
(265) |
|
- |
|
- |
|
(53) |
|
- |
|
- |
|
- |
|
|
6,765 |
|
Sales and marketing |
|
8,356 |
|
(373) |
|
- |
|
- |
|
(120) |
|
- |
|
- |
|
- |
|
|
7,863 |
|
General and administrative |
|
7,629 |
|
(484) |
|
(558) |
|
- |
|
(448) |
|
- |
|
28 |
|
(216) |
|
|
5,951 |
|
Restructuring charges, net |
|
114 |
|
- |
|
(114) |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other expense, net |
|
(616) |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
616 |
|
|
- |
|
Income tax benefit |
|
(207) |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
207 |
|
|
- |
|
Net loss |
$ |
(5,687) |
|
2,289 |
|
672 |
|
- |
|
661 |
|
223 |
|
(28) |
|
625 |
|
$ |
(1,245) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per share - |
$ |
(0.36) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(0.08) |
|
Weighted average shares of |
|
15,907 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,907 |