Dialogic Inc. Reports Second Quarter 2014 Financial Results

PARSIPPANY, NJ - Dialogic Inc. (OTCQB:DLGC), the Network Fuel® company, today announced second quarter results for the period ending June 30, 2014.

GAAP Results

Total Revenue for the second quarter of 2014 was $31.5 million compared to $28.4 million in the first quarter of 2014 and $31.1 million in the second quarter of 2013. For the second quarter of 2014, there was an increase in total revenue of $1.6 million that was attributable to a revision of the application of our revenue recognition practice as a result of establishing a track record of successful installations related to our ControlSwitch products, whereby revenue is recognized based upon delivery rather than customer acceptance. Gross Margin for the second quarter of 2014 was 61.8% compared to 62.4% in the first quarter of 2014 and 57.6% in the second quarter of 2013. Operating Expense for the second quarter of 2014 was $18.1 million compared to $19.9 million in the first quarter of 2014 and $23.2 million in the second quarter of 2013. Net Loss for the second quarter of 2014 was $2.3 million, or $0.14 per share compared to $5.2 million, or $0.32 per share, in the first quarter of 2014 and $5.7 million, or $0.36 per share, in the second quarter of 2013. Cash on hand for the second quarter of 2014 was $6.5 million compared to $4.1 million in the first quarter of 2014 and $8.4 million in the second quarter of 2013.

Non-GAAP Results

Total Revenue for the second quarter of 2014 was $31.5 million compared to $28.4 million in the first quarter of 2014 and $31.3 million in the second quarter of 2013. For the second quarter of 2014, there was an increase in total revenue of $1.6 million that was attributable to a revision of the application of our revenue recognition practice as a result of establishing a track record of successful installations related to our ControlSwitch products, whereby revenue is recognized based upon delivery rather than customer acceptance. Gross Margin for the second quarter of 2014 was 65.2% compared to 66.2% in the first quarter of 2014 and 61.8% in the second quarter of 2013. Operating Expense for the second quarter of 2014 was $16.2 million compared to $18.5 million in the first quarter of 2014 and $20.6 million in the second quarter of 2013. Adjusted EBITDA for the second quarter of 2014 was $4.3 million compared to $0.3 million in the first quarter of 2014 and ($1.2) million in the second quarter of 2013.

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 March 31, 2014, 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

Dialogic Inc.

Consolidated Statements of Operations (GAAP)

(In thousands, except per share data)

Dialogic Inc.

Consolidated Balance Sheets

(In thousands, except share and per share data)

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


Andrew.Goldberg@dialogic.com 

Source: Dialogic Inc