Dialogic Inc. Reports Fourth Quarter And Full Year 2012 Financial Results

GAAP Financial Tables

Dialogic Inc.
Consolidated Statements of Operations (GAAP)
(In thousands, except per share data)
				Three Months Ended December 31,								Twelve Months Ended December 31,
					2012				2011				2012				2011
Revenue:
Products				$	28,980			$	38,660			$	121,229			$	157,088
Services					8,932				11,352				38,740				40,996
Total revenue					37,912				50,012				159,969				198,084
Cost of revenue:
Products					10,483				15,753				48,521				60,990
Services					4,445				5,207				19,712				21,422
Total cost of revenue					14,928				20,960				68,233				82,412
Gross profit					22,984				29,052				91,736				115,672
Operating expenses:
Research and development, net					9,326				12,300				42,785				54,562
Sales and marketing					9,521				12,464				41,456				54,293
General and administrative					7,414				8,369				31,180				35,921
Restructuring charges					2,270				793				7,030				7,214
Total operating expenses					28,531				33,926				122,451				151,990
Loss from operations					(5,547	)			(4,874	)			(30,715	)			(36,318	)
Other income (expense):
Interest and other income (expense), net					85				76				180				73
Interest expense					(1,894	)			(4,789	)			(10,730	)			(18,016	)
Change in fair value of warrants					2,932				-				5,086				-
Foreign exchange loss, net					(331	)			118				(1,378	)			(266	)
Total other income (expense), net					792				(4,595	)			(6,842	)			(18,209	)
Loss before provision (benefit) for income taxes					(4,755	)			(9,469	)			(37,557	)			(54,527	)
Income tax (benefit) provision					(91	)			(306	)			213				282
Net loss				$	(4,664	)		$	(9,163	)		$	(37,770	)		$	(54,809	)
Net loss per share - basic and diluted				$	(0.32	)		$	(1.46	)		$	(4.04	)		$	(8.75	)
Weighted average shares of common stock used in
calculation of net loss per share - basic and diluted					14,409				6,289				9,341				6,265

Dialogic Inc.
Consolidated Balance Sheets
(In thousands, except share and per share data)
				December 31,
					2012				2011
ASSETS
Current assets:
Cash and cash equivalents				$	6,501			$	10,353
Restricted cash					900				1,497
Accounts receivable, net of allowance of $1,217 and $3,622, respectively					34,248				47,460
Inventory					8,306				20,127
Prepaid expenses					4,639				3,580
Other current assets					4,354				5,577
Total current assets					58,948				88,594
Property and equipment, net					5,978				7,947
Intangible assets, net					25,089				33,267
Goodwill					31,223				31,223
Other assets					2,147				2,311
Total assets				$	123,385			$	163,342
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable				$	16,994			$	21,569
Accrued liabilities					21,270				22,449
Deferred revenue, current portion					12,742				14,872
Bank indebtedness					11,717				12,509
Income taxes payable					1,007				1,665
Interest payable, related parties					-				3,452
Total current liabilities					63,730				76,516
Long-term debt, related parties, net of discount					66,536				94,675
Warrants					1,985				-
Other long-term liabilities					8,978				7,587
Total liabilities					141,229				178,778
Commitments and contingencies
Preferred stock, $0.001 par value:
Authorized - 10,000,000 shares; Issued and outstanding - 1 share					-				-
Stockholders' deficit:
Common stock, $0.001 par value:
Authorized - 200,000,000 shares; Issued and outstanding 14,415,652 and 6,295,230 shares, respectively					14				6
Additional paid-in capital					257,658				222,087
Accumulated other comprehensive loss					(22,423	)			(22,206	)
Accumulated deficit					(253,093	)			(215,323	)
Total stockholders' deficit					(17,844	)			(15,436	)
Total liabilities and stockholders' deficit				$	123,385			$	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.

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