Quarterly Report (10-q)
05 May 2023 - 06:26AM
Edgar (US Regulatory)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
10-Q
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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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For the quarterly period ended
March 31,
2023
OR
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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For the transition period from
to
Commission File Number:
001-38263
ALTAIR ENGINEERING INC.
(Exact name of registrant as specified in its charter)
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Delaware
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38-2591828
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(State or other jurisdiction of incorporation or
organization)
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(I.R.S. Employer Identification No.)
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1820 East Big Beaver Road,
Troy,
Michigan
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48083
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(Address of principal executive offices)
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(Zip Code)
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(248)
614-2400
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the
Act:
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Class A Common Stock $0.0001 par value per share
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ALTR
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The NASDAQ Global Select Market
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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.
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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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 17, 2023, there were
53,414,224
shares of the registrant’s Class A common stock outstanding
and
27,294,574
shares of the registrant’s Class B common stock
outstanding.
ALTAIR ENGINEERING INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTER ENDED March 31, 2023
INDEX
PART I – FINANCIAL
INFORMATION
Item 1. Financial
Statements
ALTAIR ENGINEERING INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
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March 31, 2023
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December 31, 2022
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(In thousands)
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(Unaudited)
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ASSETS
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CURRENT ASSETS:
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Cash and cash equivalents
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$
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378,377
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$
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316,146
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Accounts receivable, net
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130,636
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170,279
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Income tax receivable
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11,226
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11,259
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Prepaid expenses and other current assets
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28,363
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29,142
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Total current assets
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548,602
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526,826
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Property and equipment, net
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38,260
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37,517
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Operating lease right of use assets
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33,297
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33,601
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Goodwill
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451,170
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449,048
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Other intangible assets, net
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101,586
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107,609
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Deferred tax assets
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9,675
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9,727
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Other long-term assets
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43,582
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40,410
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TOTAL ASSETS
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$
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1,226,172
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$
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1,204,738
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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CURRENT LIABILITIES:
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Accounts payable
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$
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6,014
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$
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10,434
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Accrued compensation and benefits
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30,341
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42,456
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Current portion of operating lease liabilities
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9,939
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10,396
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Other accrued expenses and current liabilities
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58,673
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56,371
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Deferred revenue
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114,423
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113,081
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2024 Convertible senior notes, net
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81,004
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—
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Total current liabilities
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300,394
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232,738
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2027 Convertible senior notes, net
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225,039
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305,604
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Operating lease liabilities, net of current portion
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23,989
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24,065
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Deferred revenue, non-current
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27,520
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31,379
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Other long-term liabilities
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42,325
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41,216
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TOTAL LIABILITIES
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619,267
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635,002
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Commitments and contingencies
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STOCKHOLDERS’ EQUITY:
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Preferred stock ($0.0001 par
value), authorized
45,000 shares,
none issued
and outstanding
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—
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—
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Common stock ($0.0001 par
value)
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Class A common stock, authorized
513,797 shares,
issued and outstanding
53,153
and
52,277 shares
as of March 31, 2023, and December 31, 2022,
respectively
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5
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5
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Class B common stock, authorized
41,203 shares,
issued and outstanding
27,505
and
27,745 shares
as of March 31, 2023, and December 31, 2022
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3
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3
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Additional paid-in capital
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753,184
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721,307
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Accumulated deficit
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(123,536
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)
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(121,577
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)
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Accumulated other comprehensive loss
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(22,751
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)
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(30,002
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)
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TOTAL STOCKHOLDERS’ EQUITY
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606,905
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569,736
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
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$
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1,226,172
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$
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1,204,738
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See accompanying notes to consolidated financial
statements.
3
ALTAIR ENGINEERING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS
OF OPERATIONS
(Unaudited)
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Three Months Ended
March 31,
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(in thousands, except per share data)
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2023
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2022
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Revenue
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License
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$
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112,409
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$
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106,169
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Maintenance and other services
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37,234
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34,728
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Total software
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149,643
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140,897
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Software related services
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7,100
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9,061
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Total software and related services
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156,743
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149,958
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Client engineering services
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7,776
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8,012
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Other
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1,515
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1,811
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Total revenue
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|
|
166,034
|
|
|
|
159,781
|
|
|
Cost of revenue
|
|
|
|
|
|
|
|
License
|
|
|
4,824
|
|
|
|
4,687
|
|
|
Maintenance and other services
|
|
|
14,426
|
|
|
|
12,719
|
|
|
Total software
|
|
|
19,250
|
|
|
|
17,406
|
|
|
Software related services
|
|
|
5,616
|
|
|
|
6,035
|
|
|
Total software and related services
|
|
|
24,866
|
|
|
|
23,441
|
|
|
Client engineering services
|
|
|
6,624
|
|
|
|
6,641
|
|
|
Other
|
|
|
1,245
|
|
|
|
1,521
|
|
|
Total cost of revenue
|
|
|
32,735
|
|
|
|
31,603
|
|
|
Gross profit
|
|
|
133,299
|
|
|
|
128,178
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
Research and development
|
|
|
53,251
|
|
|
|
47,079
|
|
|
Sales and marketing
|
|
|
43,492
|
|
|
|
37,840
|
|
|
General and administrative
|
|
|
17,951
|
|
|
|
17,426
|
|
|
Amortization of intangible assets
|
|
|
7,814
|
|
|
|
5,903
|
|
|
Other operating expense (income), net
|
|
|
5,605
|
|
|
|
(781
|
)
|
|
Total operating expenses
|
|
|
128,113
|
|
|
|
107,467
|
|
|
Operating income
|
|
|
5,186
|
|
|
|
20,711
|
|
|
Interest expense
|
|
|
1,526
|
|
|
|
585
|
|
|
Other (income) expense, net
|
|
|
(3,613
|
)
|
|
|
2,068
|
|
|
Income before income taxes
|
|
|
7,273
|
|
|
|
18,058
|
|
|
Income tax expense
|
|
|
9,232
|
|
|
|
6,530
|
|
|
Net (loss) income
|
|
$
|
(1,959
|
)
|
|
$
|
11,528
|
|
|
(Loss) income per share:
|
|
|
|
|
|
|
|
Net (loss) income per share attributable to common
stockholders, basic
|
|
$
|
(0.02
|
)
|
|
$
|
0.15
|
|
|
Net (loss) income per share attributable to common
stockholders, diluted
|
|
$
|
(0.02
|
)
|
|
$
|
0.13
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
Weighted average number of shares used in computing
net (loss) income per share, basic
|
|
|
80,191
|
|
|
|
79,462
|
|
|
Weighted average number of shares used in computing
net (loss) income per share, diluted
|
|
|
80,191
|
|
|
|
87,261
|
|
See accompanying notes to consolidated financial
statements.
4
ALTAIR ENGINEERING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
(in thousands)
|
|
2023
|
|
|
2022
|
|
|
Net (loss) income
|
|
$
|
(1,959
|
)
|
|
$
|
11,528
|
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
Foreign currency translation (net of tax effect of
$0 for
all periods)
|
|
|
7,232
|
|
|
|
(4,163
|
)
|
|
Retirement related benefit plans (net of tax effect of
$0 for
all periods)
|
|
|
19
|
|
|
|
105
|
|
|
Total other comprehensive income (loss)
|
|
|
7,251
|
|
|
|
(4,058
|
)
|
|
Comprehensive income
|
|
$
|
5,292
|
|
|
$
|
7,470
|
|
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 December 31, 2022
|
|
|
52,277
|
|
|
$
|
5
|
|
|
|
27,745
|
|
|
$
|
3
|
|
|
$
|
721,307
|
|
|
$
|
(121,577
|
)
|
|
$
|
(30,002
|
)
|
|
$
|
569,736
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,959
|
)
|
|
|
—
|
|
|
|
(1,959
|
)
|
|
Issuance of common stock for acquisitions
|
|
|
34
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Repurchase and retirement of common stock
|
|
|
(91
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(4,256
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(4,256
|
)
|
|
Issuance of common stock for employee stock
purchase program
|
|
|
92
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,648
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,648
|
|
|
Exercise of stock options
|
|
|
265
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10,324
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10,324
|
|
|
Vesting of restricted stock
|
|
|
336
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Conversion of Class B to Class A
common stock
|
|
|
240
|
|
|
|
—
|
|
|
|
(240
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Stock-based compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
22,161
|
|
|
|
—
|
|
|
|
—
|
|
|
|
22,161
|
|
|
Foreign currency translation, net of tax
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7,232
|
|
|
|
7,232
|
|
|
Retirement related benefit plans, net of tax
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19
|
|
|
|
19
|
|
|
Balance as of March 31, 2023
|
|
|
53,153
|
|
|
$
|
5
|
|
|
|
27,505
|
|
|
$
|
3
|
|
|
$
|
753,184
|
|
|
$
|
(123,536
|
)
|
|
$
|
(22,751
|
)
|
|
$
|
606,905
|
|
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 as of December 31, 2021
|
|
|
51,524
|
|
|
$
|
5
|
|
|
|
27,745
|
|
|
$
|
3
|
|
|
$
|
724,226
|
|
|
$
|
(102,087
|
)
|
|
$
|
(8,950
|
)
|
|
$
|
613,197
|
|
|
Cumulative effect of an accounting change
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(50,009
|
)
|
|
|
23,939
|
|
|
|
—
|
|
|
|
(26,070
|
)
|
|
Net income
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
11,528
|
|
|
|
—
|
|
|
|
11,528
|
|
|
Issuance of common stock for employee stock
purchase program
|
|
|
77
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,187
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,187
|
|
|
Exercise of stock options
|
|
|
86
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
238
|
|
|
|
—
|
|
|
|
—
|
|
|
|
238
|
|
|
Vesting of restricted stock
|
|
|
324
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Stock-based compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19,403
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19,403
|
|
|
Foreign currency translation, net of tax
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(4,163
|
)
|
|
|
(4,163
|
)
|
|
Retirement related benefit plans, net of tax
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
105
|
|
|
|
105
|
|
|
Balance as of March 31, 2022
|
|
|
52,011
|
|
|
$
|
5
|
|
|
|
27,745
|
|
|
$
|
3
|
|
|
$
|
698,045
|
|
|
$
|
(66,620
|
)
|
|
$
|
(13,008
|
)
|
|
$
|
618,425
|
|
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)
|
|
2023
|
|
|
2022
|
|
|
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(1,959
|
)
|
|
$
|
11,528
|
|
|
Adjustments to reconcile net (loss) income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
9,750
|
|
|
|
7,686
|
|
|
Stock-based compensation expense
|
|
|
22,161
|
|
|
|
18,614
|
|
|
Loss on mark-to-market adjustment of contingent
consideration
|
|
|
7,006
|
|
|
|
—
|
|
|
Other, net
|
|
|
640
|
|
|
|
506
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
39,872
|
|
|
|
21,735
|
|
|
Prepaid expenses and other current assets
|
|
|
1,981
|
|
|
|
(138
|
)
|
|
Other long-term assets
|
|
|
(1,944
|
)
|
|
|
2,139
|
|
|
Accounts payable
|
|
|
(5,362
|
)
|
|
|
(302
|
)
|
|
Accrued compensation and benefits
|
|
|
(12,283
|
)
|
|
|
(6,896
|
)
|
|
Other accrued expenses and current liabilities
|
|
|
2,015
|
|
|
|
(61,759
|
)
|
|
Deferred revenue
|
|
|
(2,678
|
)
|
|
|
12,673
|
|
|
Net cash provided by operating activities
|
|
|
59,199
|
|
|
|
5,786
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(1,727
|
)
|
|
|
(2,190
|
)
|
|
Payments for acquisition of businesses, net of cash
acquired
|
|
|
—
|
|
|
|
(12,971
|
)
|
|
Other investing activities, net
|
|
|
(1,405
|
)
|
|
|
(343
|
)
|
|
Net cash used in investing activities
|
|
|