Dialogic Inc.

CIK:0001366649|SEC Filings

Consolidated Statements Of Operations And Comprehensive Loss (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Revenue:
Products	$ 21,805	$ 20,841	$ 62,574	$ 68,325
Services	8,827	9,366	27,946	26,752
Total revenue	30,632	30,207	90,520	95,077
Cost of revenue:
Products	7,283	6,944	21,121	25,389
Services	3,848	3,986	12,729	12,930
Total cost of revenue	11,131	10,930	33,850	38,319
Gross profit	19,501	19,277	56,670	56,758
Operating expenses:
Research and development, net	4,664	5,881	15,343	20,997
Sales and marketing	6,941	7,615	21,705	25,219
General and administrative	5,862	6,280	18,331	21,869
Restructuring charges, net	(690)	(2,323)	(613)	(1,997)
Total operating expenses	16,777	17,453	54,766	66,088
Income (loss) from operations	2,724	1,824	1,904	(9,330)
Other income (expense):
Interest income and other (expense) income, net	(91)	109	(166)	56
Interest expense	(2,850)	(2,620)	(8,352)	(7,519)
Change in fair value of warrants	521	118	(531)	1,391
Foreign exchange loss, net	(425)	(8)	(383)	(919)
Total other expense, net	(2,845)	(2,401)	(9,432)	(6,991)
Loss before provision for income taxes	(121)	(577)	(7,528)	(16,321)
Income tax provision	240	274	424	577
Net loss	(361)	(851)	(7,952)	(16,898)
Net loss per share - basic and diluted	$ (0.02)	$ (0.05)	$ (0.49)	$ (1.11)
Weighted average shares of common stock used in calculation of net loss per share - basic and diluted	16,257	16,046	16,241	15,227
Comprehensive loss:
Net loss	(361)	(851)	(7,952)	(16,898)
Foreign currency translation adjustment	249	29	4	215
Total comprehensive loss	$ (112)	$ (822)	$ (7,948)	$ (16,683)

Condensed Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash flows from operating activities:
Net loss	$ (7,952)	$ (16,898)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	5,687	6,891
Stock-based compensation	884	1,766
Amortization of debt issuance costs and debt discount	1,560	1,196
Fair value adjustment to warrants	531	(1,391)
Loss on disposal of fixed assets	42	13
Payment-in-kind interest expense on debt	6,263	5,622
Bad debt expense, net	(2)	1,643
Gain on settlement of office lease obligation		(4,184)
Deferred income taxes	(2)	94
Other non-cash charges, net	(16)	215
Net changes in operating assets and liabilities
Accounts receivable	1,588	8,475
Inventory	962	2,399
Other current assets	2,856	2,136
Accounts payable and accrued liabilities	(8,726)	(11,529)
Deferred revenue	747	1,247
Income taxes payable	66	(251)
Other long-term liabilities	(558)	(1,682)
Net cash provided by (used in) operating activities	3,930	(4,238)
Cash flows from investing activities:
Restricted cash	605	(280)
Purchases of property and equipment	(572)	(826)
Net cash provided by (used in) investing activities	33	(1,106)
Cash flows from financing activities:
(Payments on) proceeds from bank indebtedness, net	(3,851)	154
Payments on capital lease obligations	(27)
Proceeds from debt, net of original issue discount		3,200
Net cash (used in) provided by financing activities	(3,878)	3,354
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents	85	(1,990)
Cash and cash equivalents at beginning of period	4,508	6,501
Cash and cash equivalents at end of period	4,593	4,511
Cash paid for:
Interest	451	522
Income taxes	152	449
Non-cash investing and financing activities:
Acquisition of property and equipment through capital lease	214
Landlord-financed leasehold improvements	1,477
Issuance of common stock in connection with debt modification		3,461
Debt issuance costs incurred as additional term loan debt		$ 250

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9 Months Ended

Sep. 30, 2014

Select Balance Sheet Information [Abstract]

Summary Of Components Of Inventory


		September 30,		December 31,
		2014		2013
Raw materials and components	$	1,743	$	2,332
Work in process		312		457
Finished products		2,782		3,010
Total inventory	$	4,837	$	5,799

Summary Of Property And Equipment, Net


		September 30,		December 31,
		2014		2013

Computer equipment and software	$	40,802	$	40,502
Furniture and fixtures		3,500		3,352
Machinery and equipment		13,210		13,076
Leasehold improvements		6,665		4,593
		64,177		61,523
Less: accumulated depreciation		(59,600)		(57,748)
Total property and equipment, net	$	4,577	$	3,775

Schedule of Goodwill


		September 30, 2014
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Indefinite-lived intangibles:
Trade names	$	1,100	$	—	$	1,100
Finite-lived intangibles:
Technology		55,949		(53,121)		2,828
Customer relationships		38,312		(35,746)		2,566
Software licenses		3,489		(3,489)		—
Patents		1,137		(1,137)		—
	$	99,987	$	(93,493)	$	6,494


		December 31, 2013
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Indefinite-lived intangibles:
Trade names	$	1,100	$	—	$	1,100
Finite-lived intangibles:
Technology		55,949		(50,144)		5,805
Customer relationships		38,312		(34,974)		3,338
Software licenses		3,489		(3,489)		—
Patents		1,137		(1,093)		44
	$	99,987	$	(89,700)	$	10,287

Summary Of Accrued Liabilities


		September 30,		December 31,
		2014		2013

Accrued compensation and benefits	$	4,763	$	5,756
Accrued restructuring expenses		757		4,445
Accrued royalty expenses		1,160		1,540
Accrued commissions		415		1,230
Accrued professional fees		942		1,603
Other accrued expenses		3,796		3,234
Total accrued liabilities	$	11,833	$	17,808