Altair Engineering Inc. [ALTR] Filings

10-Q 1 altr-10q_20210930.htm 10-Q altr-10q_20210930.htm

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 September 30, 2021

☐	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 October 18, 2021, there were 50,789,524 shares of the registrant’s Class A common stock outstanding and 28,056,813 shares of the registrant’s Class B common stock outstanding.

ALTAIR ENGINEERING INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 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		21

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk		37

	Item 4.	Controls and Procedures		38

PART II.	OTHER INFORMATION

	Item 1.	Legal Proceedings		39

	Item 1A.	Risk Factors		39

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		39

	Item 3.	Defaults Upon Senior Securities		39

	Item 4.	Mine Safety Disclosures		39

	Item 5.	Other Information		39

	Item 6.	Exhibits		40

SIGNATURES				41

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

ALTAIR ENGINEERING INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	September 30, 2021			December 31, 2020
(In thousands)	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	455,858		$	241,221
Accounts receivable, net		88,701			117,878
Income tax receivable		8,929			6,736
Prepaid expenses and other current assets		26,017			21,100
Total current assets		579,505			386,935
Property and equipment, net		38,711			36,332
Operating lease right of use assets		30,916			33,526
Goodwill		268,888			264,481
Other intangible assets, net		61,540			76,114
Deferred tax assets		8,221			7,125
Other long-term assets		26,702			25,389
TOTAL ASSETS	$	1,014,483		$	829,902
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$	—		$	29,962
Accounts payable		4,900			8,594
Accrued compensation and benefits		35,999			34,772
Current portion of operating lease liabilities		10,342			10,331
Other accrued expenses and current liabilities		24,721			31,404
Deferred revenue		75,138			85,691
Convertible senior notes, net		196,796			—
Total current liabilities		347,896			200,754
Convertible senior notes, net		—			188,300
Operating lease liabilities, net of current portion		21,610			24,323
Deferred revenue, non-current		9,290			9,388
Other long-term liabilities		32,641			27,767
TOTAL LIABILITIES		411,437			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 50,558 and 44,216 shares as of September 30, 2021, and December 31, 2020, respectively		5			4
Class B common stock, authorized 41,203 shares, issued and outstanding 28,206 and 30,111 shares as of September 30, 2021, and December 31, 2020, respectively		3			3
Additional paid-in capital		711,082			474,669
Accumulated deficit		(100,690	)		(93,293	)
Accumulated other comprehensive loss		(8,138	)		(2,797	)
TOTAL STOCKHOLDERS’ EQUITY		602,262			378,586
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY	$	1,014,483		$	829,902

See accompanying notes to consolidated financial statements.

ALTAIR ENGINEERING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands, except per share data)	2021			2020			2021			2020
Revenue
License	$	67,603		$	55,023		$	230,630		$	183,584
Maintenance and other services		34,686			32,787			100,758			94,502
Total software		102,289			87,810			331,388			278,086
Software related services		7,650			6,170			23,229			18,548
Total software and related services		109,939			93,980			354,617			296,634
Client engineering services		10,060			10,868			31,005			34,386
Other		1,308			1,608			5,760			5,460
Total revenue		121,307			106,456			391,382			336,480
Cost of revenue
License		4,694			4,477			13,706			12,851
Maintenance and other services		11,770			9,626			35,368			28,583
Total software		16,464			14,103			49,074			41,434
Software related services		5,707			4,996			17,560			15,141
Total software and related services		22,171			19,099			66,634			56,575
Client engineering services		7,982			8,510			25,163			27,617
Other		1,348			1,427			5,072			4,422
Total cost of revenue		31,501			29,036			96,869			88,614
Gross profit		89,806			77,420			294,513			247,866
Operating expenses:
Research and development		35,839			30,678			112,872			91,115
Sales and marketing		30,589			26,998			94,568			80,903
General and administrative		22,196			20,905			67,983			63,499
Amortization of intangible assets		4,432			3,858			13,924			11,390
Other operating income, net		(1,324	)		(1,596	)		(2,526	)		(3,431	)
Total operating expenses		91,732			80,843			286,821			243,476
Operating (loss) income		(1,926	)		(3,423	)		7,692			4,390
Interest expense		3,037			2,934			8,998			8,590
Other expense (income), net		124			(782	)		1,667			(1,852	)
Loss before income taxes		(5,087	)		(5,575	)		(2,973	)		(2,348	)
Income tax expense		3,022			2,930			4,424			10,350
Net loss	$	(8,109	)	$	(8,505	)	$	(7,397	)	$	(12,698	)
Loss per share:
Net loss per share attributable to common stockholders, basic	$	(0.11	)	$	(0.12	)	$	(0.10	)	$	(0.17	)
Net loss per share attributable to common stockholders, diluted	$	(0.11	)	$	(0.12	)	$	(0.10	)	$	(0.17	)
Weighted average shares outstanding:
Weighted average number of shares used in computing net loss per share, basic		75,750			73,311			75,226			72,979
Weighted average number of shares used in computing net loss per share, diluted		75,750			73,311			75,226			72,979

See accompanying notes to consolidated financial statements.

ALTAIR ENGINEERING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2021			2020			2021			2020
Net loss	$	(8,109	)	$	(8,505	)	$	(7,397	)	$	(12,698	)
Other comprehensive income (loss), net of tax:
Foreign currency translation (net of tax effect of $0 for all periods)		(4,350	)		4,572			(5,685	)		(446	)
Retirement related benefit plans (net of tax effect of $0 for all periods)		117			(58	)		344			110
Total other comprehensive income (loss)		(4,233	)		4,514			(5,341	)		(336	)
Comprehensive loss	$	(12,342	)	$	(3,991	)	$	(12,738	)	$	(13,034	)

See accompanying notes to consolidated financial statements.

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	)		—

Altair Engineering Inc. [ALTR] Filings
10-Q	[2021-11-04]
10-Q	[2021-08-05]
10-Q	[2021-05-06]
10-K	[2021-02-26]
10-Q	[2020-11-05]
10-Q	[2020-08-06]
10-Q	[2020-05-07]
10-K	[2020-03-02]
10-Q	[2019-11-07]
10-Q	[2019-08-08]
10-Q	[2019-05-09]
10-K	[2019-03-01]
10-Q	[2018-11-08]
10-Q	[2018-08-09]
S-1	[2018-06-04]
10-Q	[2018-05-14]
10-K	[2018-03-21]
10-Q	[2017-12-01]
S-1	[2017-09-29]