0001564590-21-041685.txt : 20210805 0001564590-21-041685.hdr.sgml : 20210805 20210805165321 ACCESSION NUMBER: 0001564590-21-041685 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 78 CONFORMED PERIOD OF REPORT: 20210630 FILED AS OF DATE: 20210805 DATE AS OF CHANGE: 20210805 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: 211149172 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_20210630.htm 10-Q altr-10q_20210630.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 June 30, 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 July 19, 2021, there were 46,570,452 shares of the registrant’s Class A common stock outstanding and 28,956,197 shares of the registrant’s Class B common stock outstanding.

 

  

 

 


 

ALTAIR ENGINEERING INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 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

 

20

 

 

 

 

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

36

 

 

 

 

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

36

 

 

 

 

 

 

 

 

PART II.

OTHER INFORMATION

 

 

 

 

 

 

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

37

 

 

 

 

 

 

 

 

 

Item 1A.

 

Risk Factors

 

37

 

 

 

 

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

37

 

 

 

 

 

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

 

37

 

 

 

 

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

 

37

 

 

 

 

 

 

 

 

 

Item 5.

 

Other Information

 

37

 

 

 

 

 

 

 

 

 

Item 6.

 

Exhibits

 

38

 

 

 

 

 

 

 

 

SIGNATURES

 

 

 

 

 

39

 

 

 

 


 

 

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

 

ALTAIR ENGINEERING INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

 

 

June 30, 2021

 

 

December 31, 2020

 

(In thousands)

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

260,098

 

 

$

241,221

 

Accounts receivable, net

 

 

91,570

 

 

 

117,878

 

Income tax receivable

 

 

7,949

 

 

 

6,736

 

Prepaid expenses and other current assets

 

 

23,030

 

 

 

21,100

 

Total current assets

 

 

382,647

 

 

 

386,935

 

Property and equipment, net

 

 

39,610

 

 

 

36,332

 

Operating lease right of use assets

 

 

33,395

 

 

 

33,526

 

Goodwill

 

 

262,963

 

 

 

264,481

 

Other intangible assets, net

 

 

66,637

 

 

 

76,114

 

Deferred tax assets

 

 

8,265

 

 

 

7,125

 

Other long-term assets

 

 

26,699

 

 

 

25,389

 

TOTAL ASSETS

 

$

820,216

 

 

$

829,902

 

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Current portion of long-term debt

 

$

 

 

$

29,962

 

Accounts payable

 

 

6,515

 

 

 

8,594

 

Accrued compensation and benefits

 

 

35,846

 

 

 

34,772

 

Current portion of operating lease liabilities

 

 

10,770

 

 

 

10,331

 

Other accrued expenses and current liabilities

 

 

27,810

 

 

 

31,404

 

Deferred revenue

 

 

81,343

 

 

 

85,691

 

Convertible senior notes, net

 

 

193,926

 

 

 

 

Total current liabilities

 

 

356,210

 

 

 

200,754

 

Convertible senior notes, net

 

 

 

 

 

188,300

 

Operating lease liabilities, net of current portion

 

 

23,785

 

 

 

24,323

 

Deferred revenue, non-current

 

 

7,236

 

 

 

9,388

 

Other long-term liabilities

 

 

32,856

 

 

 

27,767

 

TOTAL LIABILITIES

 

 

420,087

 

 

 

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 46,392

   and 44,216 shares as of June 30, 2021, and December 31, 2020, respectively

 

 

4

 

 

 

4

 

Class B common stock, authorized 41,203 shares, issued and outstanding 29,091

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

 

 

3

 

 

 

3

 

Additional paid-in capital

 

 

495,824

 

 

 

474,669

 

Accumulated deficit

 

 

(92,581

)

 

 

(93,293

)

Accumulated other comprehensive loss

 

 

(3,905

)

 

 

(2,797

)

TOTAL STOCKHOLDERS’ EQUITY

 

 

399,345

 

 

 

378,586

 

TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY

 

$

820,216

 

 

$

829,902

 

 

See accompanying notes to consolidated financial statements.

 

 

 

3


 

 

 

ALTAIR ENGINEERING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

(in thousands, except per share data)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

License

 

$

66,632

 

 

$

51,018

 

 

$

163,027

 

 

$

128,561

 

Maintenance and other services

 

 

32,926

 

 

 

30,815

 

 

 

66,072

 

 

 

61,715

 

Total software

 

 

99,558

 

 

 

81,833

 

 

 

229,099

 

 

 

190,276

 

Software related services

 

 

7,481

 

 

 

5,444

 

 

 

15,579

 

 

 

12,378

 

Total software and related services

 

 

107,039

 

 

 

87,277

 

 

 

244,678

 

 

 

202,654

 

Client engineering services

 

 

10,268

 

 

 

9,640

 

 

 

20,945

 

 

 

23,518

 

Other

 

 

2,605

 

 

 

1,644

 

 

 

4,452

 

 

 

3,852

 

Total revenue

 

 

119,912

 

 

 

98,561

 

 

 

270,075

 

 

 

230,024

 

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

License

 

 

3,617

 

 

 

2,851

 

 

 

9,012

 

 

 

8,374

 

Maintenance and other services

 

 

12,043

 

 

 

8,502

 

 

 

23,598

 

 

 

18,957

 

Total software

 

 

15,660

 

 

 

11,353

 

 

 

32,610

 

 

 

27,331

 

Software related services

 

 

5,731

 

 

 

4,656

 

 

 

11,853

 

 

 

10,145

 

Total software and related services

 

 

21,391

 

 

 

16,009

 

 

 

44,463

 

 

 

37,476

 

Client engineering services

 

 

8,293

 

 

 

7,789

 

 

 

17,181

 

 

 

19,107

 

Other

 

 

2,262

 

 

 

1,283

 

 

 

3,724

 

 

 

2,995

 

Total cost of revenue

 

 

31,946

 

 

 

25,081

 

 

 

65,368

 

 

 

59,578

 

Gross profit

 

 

87,966

 

 

 

73,480

 

 

 

204,707

 

 

 

170,446

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

38,757

 

 

 

28,970

 

 

 

77,033

 

 

 

60,437

 

Sales and marketing

 

 

31,909

 

 

 

25,806

 

 

 

63,979

 

 

 

53,905

 

General and administrative

 

 

21,861

 

 

 

20,248

 

 

 

45,787

 

 

 

42,594

 

Amortization of intangible assets

 

 

4,615

 

 

 

3,692

 

 

 

9,492

 

 

 

7,532

 

Other operating income, net

 

 

(585

)

 

 

(944

)

 

 

(1,202

)

 

 

(1,835

)

Total operating expenses

 

 

96,557

 

 

 

77,772

 

 

 

195,089

 

 

 

162,633

 

Operating (loss) income

 

 

(8,591

)

 

 

(4,292

)

 

 

9,618

 

 

 

7,813

 

Interest expense

 

 

2,988

 

 

 

2,843

 

 

 

5,961

 

 

 

5,656

 

Other expense (income), net

 

 

708

 

 

 

320

 

 

 

1,543

 

 

 

(1,070

)

(Loss) income before income taxes

 

 

(12,287

)

 

 

(7,455

)

 

 

2,114

 

 

 

3,227

 

Income tax expense

 

 

1,361

 

 

 

2,768

 

 

 

1,402

 

 

 

7,420

 

Net (loss) income

 

$

(13,648

)

 

$

(10,223

)

 

$

712

 

 

$

(4,193

)

(Loss) income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per share attributable to common

  stockholders, basic

 

$

(0.18

)

 

$

(0.14

)

 

$

0.01

 

 

$

(0.06

)

Net (loss) imcome per share attributable to common

  stockholders, diluted

 

$

(0.18

)

 

$

(0.14

)

 

$

0.01

 

 

$

(0.06

)

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares used in computing

  net (loss) income per share, basic

 

 

75,263

 

 

 

72,999

 

 

 

74,959

 

 

 

72,811

 

Weighted average number of shares used in computing

  net (loss) income per share, diluted

 

 

75,263

 

 

 

72,999

 

 

 

79,851

 

 

 

72,811

 

 

See accompanying notes to consolidated financial statements.

 

 

4


 

 

ALTAIR ENGINEERING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

(in thousands)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net (loss) income

 

$

(13,648

)

 

$

(10,223

)

 

$

712

 

 

$

(4,193

)

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

   all periods)

 

 

2,640

 

 

 

2,560

 

 

 

(1,335

)

 

 

(5,018

)

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

   $0 and $0, respectively)

 

 

84

 

 

 

31

 

 

 

227

 

 

 

168

 

Total other comprehensive income (loss)

 

 

2,724

 

 

 

2,591

 

 

 

(1,108

)

 

 

(4,850

)

Comprehensive loss

 

$

(10,924

)

 

$

(7,632

)

 

$

(396

)

 

$

(9,043

)

 

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 as of 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 as of March 31, 2021

 

 

45,494

 

 

 

4

 

 

 

29,601

 

 

 

3

 

 

 

484,584

 

 

 

(78,933

)

 

 

(6,629

)

 

 

399,029

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(13,648

)

 

 

 

 

 

(13,648

)

Exercise of stock options

 

 

334

 

 

 

 

 

 

 

 

 

 

 

 

614

 

 

 

 

 

 

 

 

 

614

 

Vesting of restricted stock

 

 

54