Dialogic Inc. Reports Third Quarter 2012 Financial Results
Dialogic Inc. Reports Third Quarter 2012 Financial Results
Organizational, Operational and Financial initiatives driving positive impact
MILPITAS, Calif.--(BUSINESS WIRE)-- Dialogic Inc. (NAS: DLGC) , a leading provider of products and technologies that enable operators to provide an enhanced mobile experience, today announced third quarter financial results for the period ending September 30, 2012.
On a GAAP basis, Dialogic achieved the following financial results for the third quarter of 2012 as compared to the third quarter of 2011 and the second quarter of 2012.
- Total revenue for the third quarter of 2012 was $42.4 million, compared to $47.4 million in the third quarter of 2011 and $38.6 million in the second quarter of 2012.
- Gross margin for the third quarter of 2012 was 61.8%, compared to 59.8% in the third quarter of 2011 and 45.9% in the second quarter of 2012.
- Operating expense for the third quarter of 2012 was $26.4 million, compared to $37.3 million in the third quarter of 2011 and $35.5 million in the second quarter of 2012.
- Net loss for the third quarter of 2012 was ($0.3) million, or ($0.03) per share, compared to losses of ($13.1) million, or ($2.09) per share, in the third quarter of 2011 and ($18.0) million, or ($2.85) per share, in the second quarter of 2012. Earnings per share results were calculated on a post-split basis, taking into effect the company's 5 for 1 reverse stock split, effected on September 14, 2012, retroactively applied for compared periods.
As reflected below in the Reconciliation of Condensed Consolidated Statements of Operations to Adjusted EBITDA Results, on a non-GAAP basis, Dialogic achieved the following financial results for the third quarter of 2012, as compared to the third quarter of 2011 and to the second quarter of 2012.
- Total revenue for the third quarter of 2012 was $42.5 million, compared to $48.0 million in the third quarter of 2011 and $39.3 million in the second quarter of 2012.
- Gross margin for the third quarter of 2012 was 65.3%, compared to 65.3% in the third quarter of 2011 and 65.1% in the second quarter of 2012.
- Operating expense for the third quarter of 2012 was $23.9 million, compared to $30.3 million in the third quarter of 2011 and $27.5 million in the second quarter of 2012.
- Adjusted EBITDA for the third quarter of 2012 was $3.8 million, compared to $1.0 million in the third quarter of 2011 and ($2.0) million in the second quarter of 2012.
"Dialogic is pleased to report that the organizational, operational and financial initiatives that have been implemented over the past four quarters are starting to yield better results across key dimensions of our business," said Kevin Cook, President and CEO. "We are encouraged that our Next-Gen portfolio achieved double digit sequential revenue growth. In addition, we recorded the lowest quarterly non-GAAP operating expenses and the highest adjusted EBITDA for 2012."
"Our customers continue to reinforce that we are uniquely enabling the integration and delivery of complex video, voice and data services across legacy and Next-Gen IMS/LTE networks," added Cook. "Throughout the quarter, we demonstrated success in turning up new Next-Gen networks with our ControlSwitch system, enhancing existing networks with our BorderNet session border controllers and expanding the capacity of severely constrained networks with our Session Bandwidth Optimization portfolio. The company's ability to address the breadth of customer opportunities served us well."
Conference Call Information
Dialogic will hold its third quarter earnings conference call at approximately 4:30 p.m. Eastern Standard Time on Tuesday, November 13, 2012. Dialogic will offer a live webcast of the conference call on its website at www.dialogic.com, which will also include forward-looking information. For parties in the United States, call 1-800-860-2442 to access the conference call. International parties can access the call at 412-858-4600. A replay of the webcast will be accessible from the "Investor Relations" section of the Dialogic website. A telephonic replay of the conference call will also be available one hour after the call and will run for 30 days. To hear the telephonic replay, parties in the United States should call 1-877-344-7529 and enter passcode 10021152#. International parties should call +1-412-317-0088 and enter passcode 10021152#. In addition, Dialogic's press release will be distributed via Business Wire and posted on the Dialogic website prior to the conference call.
Dialogic (NAS: DLGC) is a leading provider of products and technologies that enable operators to provide an enhanced mobile experience. Whether our products are used in mobile value-added service solutions or to transform, connect and optimize communications services, Dialogic understands that mobile experience matters. Our technology touches over two billion mobile subscribers a day and our network solutions carry more than 15 billion minutes of traffic per month.
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 June 30, 2012, 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 is a registered trademark and BorderNet and ControlSwitch are trademarks of Dialogic Inc. or a subsidiary. All other company and product names may be trademarks of the respective companies with which they are associated. (DLGC-IR)
GAAP Financial Tables
|Condensed Consolidated Statements of Operations (GAAP)|
|(in thousands, except per share data)|
|Three Months Ended September 30,||Nine Months Ended September 30,|
|Cost of revenue:|
|Total cost of revenue||16,188||19,058||53,305||61,452|
|Research and development, net||9,266||13,540||33,459||42,262|
|Sales and marketing||9,261||12,664||31,935||41,829|
|General and administrative||7,375||9,391||23,766||27,553|
|Total operating expenses||26,359||37,269||93,920||118,064|
|Loss from operations||(156||)||(8,906||)||(25,168||)||(31,444||)|
|Other income (expense):|
|Interest and other income (expense), net||242||(3||)||95||(3||)|
|Change in fair value of warrants||1,750||-||2,154||-|
|Foreign exchange loss, net||(278||)||(51||)||(1,047||)||(384||)|
|Total other expense, net||(78||)||(4,749||)||(7,634||)||(13,614||)|
|Loss before provision (benefit) for income taxes||(234||)||(13,655||)||(32,802||)||(45,058||)|
|Income tax provision (benefit)||56||(557||)||304||588|
|Net loss per share - basic and diluted||$||(0.03||)||$||(2.09||)||$||(4.34||)||$||(7.30||)|
Weighted average shares of common stock used in calculation of net loss per share - basic and diluted
|Unaudited Condensed Consolidated Balance Sheets|
|(in thousands, except share and per share data)|
|September 30, 2012||December 31, 2011|
|Cash and cash equivalents||$||2,661||$||10,353|
|Accounts receivable, net of allowance of $3,797 and $3,622, respectively||39,393||47,460|
|Other current assets||7,845||9,157|
|Total current assets||60,640||88,594|
|Property and equipment, net||6,479||7,947|
|Intangible assets, net||26,675||33,267|
|LIABILITIES AND STOCKHOLDERS' DEFICIT|
|Deferred revenue, current portion||13,503||14,872|
|Income taxes payable||920||1,665|
|Interest payable, related parties||50||3,452|
|Total current liabilities||62,894||76,516|
|Long-term debt, related parties, net of discount||64,233||94,675|
|Other long-term liabilities||8,649||7,587|
|Commitments and contingencies|
|Preferred stock, $0.001 par value:|
|Authorized - 10,000,000 shares; Issued and outstanding - 1 share||-||-|
|Common stock, $0.001 par value:|
|Authorized - 200,000,000 shares; Issued and outstanding 14,401,747 and 6,295,230 shares, respectively||14||6|
|Additional paid-in capital||257,049||222,087|
|Accumulated other comprehensive loss||(22,630||)||(22,206||)|
|Total stockholders' deficit||(13,996||)||(15,436||)|
|Total liabilities and stockholders' deficit||$||126,697||$||163,342|
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 expenses. 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 and also restructuring and integration costs, product rationalization, non-cash stock compensation expense, purchase accounting adjustments, SEC inquiry expenses and other income (expense) items, which includes 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
|Reconciliation of Condensed Consolidated Statement of Operations to Adjusted EBITDA Results|
|Three Months Ended September 30, 2012|
|(in thousands, except per share data)|
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