Dialogic Inc. Reports Fourth Quarter And Full Year 2011 Financial Results

Dialogic Inc. (NASDAQ:DLGC), a leading provider of communications technologies that power advanced networks, today announced fourth quarter and full year financial results for the period ending December 31, 2011.

Fourth Quarter Highlights

• Achieved the highest non-GAAP Gross Margins and EBITDA in the company’s history
• Increased Cash on hand to $10.4 million from $9.0 million
• Continued momentum in Next-Gen products, most notably with design wins in bandwidth optimization for mobile backhaul to support 3G and 4G networks worldwide

“As we review our financial results for the fourth quarter of 2011 over the third quarter of 2011, we are pleased to report that we increased Total Revenue and Gross Margin while significantly reducing Operating Expense, all of which resulted in $4.4 million of Adjusted EBITDA and added to our cash position at the end of the year,” said Nick Jensen, Dialogic Chairman and Chief Executive Officer.

Financial Results

On a GAAP basis, Dialogic achieved the following financial results for the fourth quarter of 2011 as compared to the third quarter of 2011 and full year 2011 as compared to full year 2010:

• Total Revenue for the fourth quarter of 2011 was $50.0 million, an increase of 5.5% compared to $47.4 million in the third quarter of 2011. Total revenue in 2011 was $198.1 million, an increase of 10.8% compared to $178.8M in 2010.
• Gross Margin for the fourth quarter of 2011 was 61.1%, an increase of 130 bps compared to 59.8% in the third quarter of 2011. Gross Margin in 2011 was 59.2% compared to 59.1% in 2010.
• Operating Expense for the fourth quarter of 2011 was $33.9 million, a decrease of 9.0% compared to $37.3M in the third quarter of 2011. Operating Expense in 2011 was $151.9 million, an increase of 12.7% compared to $134.9 million in 2010.
• Net Loss attributable to shareholders for the fourth quarter of 2011 was $9.2 million, or $0.29 per share compared to $13.1 million, or $0.42 per share, in the third quarter of 2011, a decrease of 30.0% quarter over quarter. Net Loss attributable to shareholders for 2011 was $54.8 million, or $1.75 per share, compared to $49.7 million for 2010, or $3.67 per share, an increase of 10.1% year over year.
• Cash on hand for the fourth quarter of 2011 was $10.4 million, an increase of 15.6% compared to $9.0 million in the third quarter of 2011.

As reflected below in the Reconciliation of Condensed Consolidated Statement of Operations Loss to Adjusted EBITDA results, on a non-GAAP basis, Dialogic achieved the following financial results for the fourth quarter of 2011 as compared to the third quarter of 2011:

• Total Revenue for the fourth quarter of 2011 was $50.4 million, an increase of 5.0% compared to $48.0 million for the third quarter of 2011.
• Gross Margin for the fourth quarter of 2011 was the highest in company history at 65.8%, an increase of 50 basis points compared to 65.3% for the third quarter of 2011.
• Operating Expense for the fourth quarter of 2011 was $28.8 million, a decrease of 5.0% compared to $30.3 million for the third quarter of 2011.
• Adjusted EBITDA for the fourth quarter of 2011 was the highest in company history at $4.4 million, an increase of 340% compared to $1.0 million for the third quarter of 2011.

“Since early 2011, we have been actively focused on reducing costs and have decreased annualized operating expenses by approximately $25 million between the first and fourth quarter of 2011,” said John Hanson, Dialogic Chief Financial Officer. “We continue to evaluate and pursue cost management opportunities by sharpening our focus on outsourcing, strategic sourcing and other key measures that could yield an additional annualized cost savings of $18 - $20 million by the end of the fourth quarter of 2012.”

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