0001564590-21-025062.txt : 20210506 0001564590-21-025062.hdr.sgml : 20210506 20210506163810 ACCESSION NUMBER: 0001564590-21-025062 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 86 CONFORMED PERIOD OF REPORT: 20210331 FILED AS OF DATE: 20210506 DATE AS OF CHANGE: 20210506 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Altair Engineering Inc. CENTRAL INDEX KEY: 0001701732 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 382591828 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-38263 FILM NUMBER: 21898495 BUSINESS ADDRESS: STREET 1: 1820 E. BIG BEAVER ROAD CITY: TROY STATE: MI ZIP: 48083 BUSINESS PHONE: 248-614-2400 MAIL ADDRESS: STREET 1: 1820 E. BIG BEAVER ROAD CITY: TROY STATE: MI ZIP: 48083 FORMER COMPANY: FORMER CONFORMED NAME: Altair Engineering Ing. DATE OF NAME CHANGE: 20170322 10-Q 1 altr-10q_20210331.htm 10-Q altr-10q_20210331.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021 

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                  to                 

Commission File Number: 001-38263

 

ALTAIR ENGINEERING INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

38-2591828

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

1820 East Big Beaver Road, Troy, Michigan

 

48083

(Address of principal executive offices)

 

(Zip Code)

(248) 614-2400

(Registrant’s telephone number, including area code)

 

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

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

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

On April 19, 2021, there were 45,711,025 shares of the registrant’s Class A common stock outstanding and 29,430,732 shares of the registrant’s Class B common stock outstanding.

 

  

 

 


 

ALTAIR ENGINEERING INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2021

INDEX

 

 

 

 

 

 

 

 

Page

 

 

 

 

 

 

 

 

PART I.

FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

 

 

 

Item 1.

 

Financial Statements – Unaudited

 

3

 

 

 

 

 

 

 

 

 

 

 

a)

 

Consolidated Balance Sheets

 

3

 

 

 

 

 

 

 

 

 

 

 

b)

 

Consolidated Statements of Operations

 

4

 

 

 

 

 

 

 

 

 

 

 

c)

 

Consolidated Statements of Comprehensive Income (Loss)

 

5

 

 

 

 

 

 

 

 

 

 

 

d)

 

Consolidated Statements of Changes in Stockholders’ Equity

 

6

 

 

 

 

 

 

 

 

 

 

 

e)

 

Consolidated Statements of Cash Flows

 

8

 

 

 

 

 

 

 

 

 

 

 

f)

 

Notes to Consolidated Financial Statements

 

9

 

 

 

 

 

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

19

 

 

 

 

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

30

 

 

 

 

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

31

 

 

 

 

 

 

 

 

PART II.

OTHER INFORMATION

 

 

 

 

 

 

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

32

 

 

 

 

 

 

 

 

 

Item 1A.

 

Risk Factors

 

32

 

 

 

 

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

32

 

 

 

 

 

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

 

32

 

 

 

 

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

 

32

 

 

 

 

 

 

 

 

 

Item 5.

 

Other Information

 

32

 

 

 

 

 

 

 

 

 

Item 6.

 

Exhibits

 

33

 

 

 

 

 

 

 

 

SIGNATURES

 

 

 

 

 

34

 

 

 

 


 

 

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

 

ALTAIR ENGINEERING INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

 

 

March 31, 2021

 

 

December 31, 2020

 

(In thousands)

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

243,364

 

 

$

241,221

 

Accounts receivable, net

 

 

107,112

 

 

 

117,878

 

Income tax receivable

 

 

5,985

 

 

 

6,736

 

Prepaid expenses and other current assets

 

 

22,295

 

 

 

21,100

 

Total current assets

 

 

378,756

 

 

 

386,935

 

Property and equipment, net

 

 

39,143

 

 

 

36,332

 

Operating lease right of use assets

 

 

33,568

 

 

 

33,526

 

Goodwill

 

 

262,090

 

 

 

264,481

 

Other intangible assets, net

 

 

70,912

 

 

 

76,114

 

Deferred tax assets

 

 

8,476

 

 

 

7,125

 

Other long-term assets

 

 

24,968

 

 

 

25,389

 

TOTAL ASSETS

 

$

817,913

 

 

$

829,902

 

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Current portion of long-term debt

 

$

394

 

 

$

30,384

 

Accounts payable

 

 

6,671

 

 

 

8,594

 

Accrued compensation and benefits

 

 

36,785

 

 

 

34,772

 

Current portion of operating lease liabilities

 

 

10,471

 

 

 

10,331

 

Other accrued expenses and current liabilities

 

 

32,238

 

 

 

30,982

 

Deferred revenue

 

 

81,737

 

 

 

85,691

 

Convertible senior notes, net

 

 

191,094

 

 

 

 

Total current liabilities

 

 

359,390

 

 

 

200,754

 

Long-term debt, net of current portion

 

 

258

 

 

 

353

 

Convertible senior notes, net

 

 

 

 

 

188,300

 

Operating lease liabilities, net of current portion

 

 

24,319

 

 

 

24,323

 

Deferred revenue, non-current

 

 

8,992

 

 

 

9,388

 

Other long-term liabilities

 

 

25,141

 

 

 

27,414

 

TOTAL LIABILITIES

 

 

418,100

 

 

 

450,532

 

Commitments and contingencies

 

 

 

 

 

 

 

 

MEZZANINE EQUITY

 

 

784

 

 

 

784

 

STOCKHOLDERS’ EQUITY:

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

Common stock ($0.0001 par value)

 

 

 

 

 

 

 

 

Class A common stock, authorized 513,797 shares, issued and outstanding 45,494

   and 44,216 shares as of March 31, 2021, and December 31, 2020, respectively

 

 

4

 

 

 

4

 

Class B common stock, authorized 41,203 shares, issued and outstanding 29,601

   and 30,111 shares as of March 31, 2021, and December 31, 2020, respectively

 

 

3

 

 

 

3

 

Additional paid-in capital

 

 

484,584

 

 

 

474,669

 

Accumulated deficit

 

 

(78,933

)

 

 

(93,293

)

Accumulated other comprehensive loss

 

 

(6,629

)

 

 

(2,797

)

TOTAL STOCKHOLDERS’ EQUITY

 

 

399,029

 

 

 

378,586

 

TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY

 

$

817,913

 

 

$

829,902

 

 

See accompanying notes to consolidated financial statements.

 

 

 

3


 

 

 

ALTAIR ENGINEERING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended

March 31,

 

(in thousands, except per share data)

 

2021

 

 

2020

 

Revenue

 

 

 

 

 

 

 

 

License

 

$

96,395

 

 

$

77,543

 

Maintenance and other services

 

 

33,146

 

 

 

30,900

 

Total software

 

 

129,541

 

 

 

108,443

 

Software related services

 

 

8,098

 

 

 

6,934

 

Total software and related services

 

 

137,639

 

 

 

115,377

 

Client engineering services

 

 

10,677

 

 

 

13,878

 

Other

 

 

1,847

 

 

 

2,208

 

Total revenue

 

 

150,163

 

 

 

131,463

 

Cost of revenue

 

 

 

 

 

 

 

 

License

 

 

5,395

 

 

 

5,523

 

Maintenance and other services

 

 

11,555

 

 

 

10,455

 

Total software

 

 

16,950

 

 

 

15,978

 

Software related services

 

 

6,122

 

 

 

5,489

 

Total software and related services

 

 

23,072

 

 

 

21,467

 

Client engineering services

 

 

8,888

 

 

 

11,318

 

Other

 

 

1,462

 

 

 

1,712

 

Total cost of revenue

 

 

33,422

 

 

 

34,497

 

Gross profit

 

 

116,741

 

 

 

96,966

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

 

38,276

 

 

 

31,467

 

Sales and marketing

 

 

32,070

 

 

 

28,099

 

General and administrative

 

 

23,926

 

 

 

22,346

 

Amortization of intangible assets

 

 

4,877

 

 

 

3,840

 

Other operating income, net

 

 

(617

)

 

 

(891

)

Total operating expenses

 

 

98,532

 

 

 

84,861

 

Operating income

 

 

18,209

 

 

 

12,105

 

Interest expense

 

 

2,973

 

 

 

2,813

 

Other expense (income), net

 

 

835

 

 

 

(1,390

)

Income before income taxes

 

 

14,401

 

 

 

10,682

 

Income tax expense

 

 

41

 

 

 

4,652

 

Net income

 

$

14,360

 

 

$

6,030

 

Income per share:

 

 

 

 

 

 

 

 

Net income per share attributable to common

  stockholders, basic

 

$

0.19

 

 

$

0.08

 

Net income per share attributable to common

  stockholders, diluted

 

$

0.18

 

 

$

0.08

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

Weighted average number of shares used in computing

  net income per share, basic

 

 

74,651

 

 

 

72,623

 

Weighted average number of shares used in computing

  net income per share, diluted

 

 

79,295

 

 

 

77,004

 

 

See accompanying notes to consolidated financial statements.

 

 

4


 

 

ALTAIR ENGINEERING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

 

 

 

Three Months Ended

March 31,

 

(in thousands)

 

2021

 

 

2020

 

Net income

 

$

14,360

 

 

$

6,030

 

Other comprehensive (loss) income, net of tax:

 

 

 

 

 

 

 

 

Foreign currency translation (net of tax effect of $0 for

   all periods)

 

 

(3,975

)

 

 

(7,578

)

Retirement related benefit plans (net of tax effect of $0 and $13,

   respectively)

 

 

143

 

 

 

137

 

Total other comprehensive loss

 

 

(3,832

)

 

 

(7,441

)

Comprehensive income (loss)

 

$

10,528

 

 

$

(1,411

)

 

See accompanying notes to consolidated financial statements.

 

 

 

5


 

 

ALTAIR ENGINEERING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

Common stock

 

 

Additional

 

 

 

 

 

 

other

 

 

Total

 

 

 

Class A

 

 

Class B

 

 

paid-in

 

 

Accumulated

 

 

comprehensive

 

 

stockholders’

 

(in thousands)

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

capital

 

 

deficit

 

 

loss

 

 

equity

 

Balance at January 1, 2021

 

 

44,216

 

 

$

4

 

 

 

30,111

 

 

$

3

 

 

$

474,669

 

 

$

(93,293

)

 

$

(2,797

)

 

$

378,586

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14,360

 

 

 

 

 

 

14,360

 

Exercise of stock options

 

 

490

 

 

 

 

 

 

 

 

 

 

 

 

271

 

 

 

 

 

 

 

 

 

271

 

Vesting of restricted stock

 

 

278

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conversion from Class B to Class A common stock

 

 

510

 

 

 

 

 

 

(510

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,644

 

 

 

 

 

 

 

 

 

9,644

 

Foreign currency translation, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,975

)

 

 

(3,975

)

Retirement related benefit plans, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

143

 

 

 

143

 

Balance at March 31, 2021

 

 

45,494

 

 

$

4

 

 

 

29,601

 

 

$

3

 

 

$

484,584

 

 

$

(78,933

)

 

$

(6,629

)

 

$

399,029

 

 

 

 

See accompanying notes to consolidated financial statements.


6


 

 

ALTAIR ENGINEERING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

Common stock

 

 

Additional

 

 

 

 

 

 

other

 

 

Total

 

 

 

Class A

 

 

Class B

 

 

paid-in

 

 

Accumulated

 

 

comprehensive

 

 

stockholders’

 

(in thousands)

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

capital

 

 

deficit

 

 

loss

 

 

equity

 

Balance at January 1, 2020

 

 

41,271

 

 

$

4

 

 

 

31,131

 

 

$

3

 

 

$

446,633

 

 

$

(82,405

)

 

$

(9,528

)

 

$

354,707

 

Cumulative effect of an accounting change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(388

)

 

 

 

 

 

(388

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,030

 

 

 

 

 

 

6,030

 

Exercise of stock options

 

 

285

 

 

 

 

 

 

 

 

 

 

 

 

194

 

 

 

 

 

 

 

 

 

194

 

Vesting of restricted stock

 

 

143

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conversion from Class B to Class A common stock

 

 

80

 

 

 

 

 

 

(80

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,043

 

 

 

 

 

 

 

 

 

3,043

 

Foreign currency translation, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,578

)

 

 

(7,578

)

Retirement related benefit plans, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

137

 

 

 

137

 

Balance at March 31, 2020

 

 

41,779

 

 

$

4

 

 

$

31,051

 

 

$

3

 

 

$

449,870

 

 

$

(76,763

)

 

$

(16,969

)

 

$

356,145

 

 

 

See accompanying notes to consolidated financial statements.

 

 

7


 

 

ALTAIR ENGINEERING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

Three Months Ended March 31,

 

(In thousands)

 

2021

 

 

2020

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net income

 

$

14,360

 

 

$

6,030

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

6,686

 

 

 

5,660

 

Provision for credit loss

 

 

89

 

 

 

338

 

Amortization of debt discount and issuance costs

 

 

2,800

 

 

 

2,653

 

Stock-based compensation expense