AudioCodes Reports Second Quarter 2017 Results
LOD, Israel, July 26, 2017 /PRNewswire/ --
Second Quarter Highlights:
-- Quarterly revenues increased by 8.0% year-over-year to $38.7 million;
-- Quarterly service revenues increased by 13.8% year-over-year to $11.8
million;
-- Quarterly UC-SIP revenues increased more than 15% year-over-year;
-- Quarterly GAAP gross margin was 61.4%, quarterly Non-GAAP gross margin
was 61.9%;
-- Quarterly GAAP operating margin was 4.8%, Quarterly Non-GAAP operating
margin was 6.9%;
-- Quarterly cash flow from operating activities was $2.4 million;
-- Quarterly GAAP net income was $1.0 million, or $0.03 per diluted share,
compared to $721,000, or 0.02 per diluted share, in the prior year
period;
-- Quarterly Non-GAAP net income was $2.5 million, or $0.08 per diluted
share, compared to $2.4 million, or $0.06 per diluted share, in the
prior year period; and
-- AudioCodes repurchased 438,000 of its ordinary shares during the quarter
at an aggregate cost of $2.9 million.
Details:
AudioCodes (Nasdaq: AUDC), a leading provider of voice networking solutions that enable enterprises and service providers to transition to all-IP voice networks, today announced financial results for the second quarter ended June 30, 2017.
Revenues for the second quarter of 2017 were $38.7 million, compared to $37.4 million for the first quarter of 2017 and $35.9 million for the second quarter of 2016.
Net income was $1.0 million, or $0.03 per diluted share, for the second quarter of 2017, compared to $721,000, or $0.02 per diluted share, for the second quarter of 2016.
On a Non-GAAP basis, the Company reported quarterly net income of $2.5 million, or $0.08 per diluted share, compared to $2.4 million, or $0.06 per diluted share, in the second quarter of 2016.
Non-GAAP net income excludes: (i) stock-based compensation expenses; (ii) amortization expenses related to intangible assets; (iii) expenses related to deferred payments in connection with the acquisition of Active Communications Europe and (iv) non-cash deferred tax benefit or expenses. A reconciliation of net income on a GAAP basis to a non-GAAP basis is provided in the tables that accompany the condensed consolidated financial statements contained in this press release.
Net cash provided by operating activities for the second quarter of 2017 totaled $2.4 million. Cash and cash equivalents, long- and short-term bank deposits and long- and short-term marketable securities were $61.2 million as of June 30, 2017, compared to $78.1 million as of June 30, 2016. The decrease in cash and cash equivalents, long and short-term bank deposits and long and short-term marketable securities was the result of the use of cash for the continued repurchasing of the Company's ordinary shares pursuant to its share repurchase programs.
"We are pleased to report solid financial results for the second quarter of 2017 as we continued to deliver steady growth, and further executed on our strategic plan to grow our UC-SIP business," said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes. "UC-SIP revenues increased in the first half of 2017 more than 15% compared to the same period in 2016. Strength in this area of the business is driven primarily by collaborating with our application and system integration partners worldwide and through winning enterprise voice deployments on a global basis."
"As expected, All-IP network transformation project activity maintained its momentum, contributing again to improved gateway revenues this quarter. We remain focused on strengthening our strategic partnerships with industry leaders in the Microsoft Skype for business, the UCaaS, contact centers and business services markets. As a reflection of our confidence in our business, in May, we obtained authorization to purchase up to an additional $15 million of our ordinary shares pursuant to our repurchase program," concluded Mr. Adlersberg.
Share Buy Back Program
During the quarter ended June 30, 2017, AudioCodes acquired 438,000 of its ordinary shares under its share repurchase program for a total consideration of approximately $2.9 million. As of June 30, 2017, AudioCodes had acquired an aggregate of 13.6 million of its ordinary shares since August 2014 for an aggregate consideration of approximately $64.4 million.
In May 2017, AudioCodes received court approval in Israel to purchase up to an aggregate of $15 million of additional ordinary shares pursuant to its share repurchase program. As of June 30, 2017, $12.1 million remained available to the Company for repurchasing shares under this court approval. The current court approval for share repurchases will expire on November 15, 2017.
Conference Call & Web Cast Information
AudioCodes will conduct a conference call at 8:00 A.M., Eastern Time today to discuss the Company's second quarter operating performance, financial results and outlook. Interested parties may participate in the conference call by dialing one the following numbers:
United States Participants: +1 (877) 407-0778
International Participants: +1 (201) 689-8565
The conference call will also be simultaneously webcast. Investors are invited to listen to the call live via webcast at the AudioCodes investor website at http://www.audiocodes.com/investors-lobby.
Follow AudioCodes' social media channels:
AudioCodes invites you to join our online community and follow us on: AudioCodes Voice Blog, LinkedIn, Twitter, Facebook, and YouTube.
To download AudioCodes' investor relations app, which offers access to its SEC filings, press releases, videos, audiocasts and more, please visit Apple's App Store for the iPhone and iPad or Google Play for Android mobile devices.
About AudioCodes
AudioCodes Ltd. (NASDAQ, TASE: AUDC) designs, develops and sells advanced Voice-over-IP (VoIP) and converged VoIP and Data networking products and applications to Service Providers and Enterprises. AudioCodes is a VoIP technology market leader, focused on converged VoIP and data communications, and its products are deployed globally in Broadband, Mobile, Enterprise networks and Cable. The Company provides a range of innovative, cost-effective products including Media Gateways, Multi-Service Business Routers, Session Border Controllers (SBC), Residential Gateways, IP Phones, Media Servers, Value Added Applications and Professional Services. AudioCodes' underlying technology, VoIPerfectHD(TM), relies on AudioCodes' leadership in DSP, voice coding and voice processing technologies. AudioCodes' High Definition (HD) VoIP technologies and products provide enhanced intelligibility and a better end user communication experience in Voice communications. For more information on AudioCodes, visit http://www.audiocodes.com.
Statements concerning AudioCodes' business outlook or future economic performance; product introductions and plans and objectives related thereto; and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters, are "forward-looking statements'' as that term is defined under U.S. Federal securities laws. Forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from those stated in such statements. These risks, uncertainties and factors include, but are not limited to: the effect of global economic conditions in general and conditions in AudioCodes' industry and target markets in particular; shifts in supply and demand; market acceptance of new products and the demand for existing products; the impact of competitive products and pricing on AudioCodes' and its customers' products and markets; timely product and technology development, upgrades and the ability to manage changes in market conditions as needed; possible need for additional financing; the ability to satisfy covenants in the Company's loan agreements; possible disruptions from acquisitions; the ability of AudioCodes to successfully integrate the products and operations of acquired companies into AudioCodes' business; and other factors detailed in AudioCodes' filings with the U.S. Securities and Exchange Commission. AudioCodes assumes no obligation to update the information in this release.
©2017 AudioCodes Ltd. All rights reserved. AudioCodes, AC, HD VoIP, HD VoIP Sounds Better, IPmedia, Mediant, MediaPack, What's Inside Matters, OSN, SmartTAP, User Management Pack, VMAS, VoIPerfect, VoIPerfectHD, Your Gateway To VoIP, 3GX, VocaNom, AudioCodes One Voice and CloudBond are trademarks or registered trademarks of AudioCodes Limited. All other products or trademarks are property of their respective owners. Product specifications are subject to change without notice.
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
U.S. dollars in thousands
June 30, December 31,
2017 2016
---- ----
(Unaudited) (Audited)
---------- --------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $18,120 $24,344
Short-term and
restricted bank deposits 3,066 3,401
Short-term marketable
securities and accrued
interest 7,590 6,778
Trade receivables, net 25,557 25,448
Other receivables and
prepaid expenses 7,983 3,377
Inventories 15,943 16,333
------ ------
Total current assets 78,259 79,681
------ ------
LONG-TERM ASSETS:
Long-term and restricted
bank deposits $4,813 $5,407
Long-term marketable
securities 27,636 29,540
Deferred tax assets 10,431 11,607
Severance pay funds 20,169 17,820
------ ------
Total long-term assets 63,049 64,374
------ ------
PROPERTY AND EQUIPMENT,
NET 3,671 3,867
----- -----
GOODWILL, INTANGIBLE
ASSETS AND OTHER, NET 38,636 39,054
Total assets $183,615 $186,976
======== ========
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of
long-term bank loans $2,806 $3,451
Trade payables 5,009 7,710
Other payables and
accrued expenses 20,531 18,618
Deferred revenues 17,131 14,951
------ ------
Total current liabilities 45,477 44,730
------ ------
LONG-TERM LIABILITIES:
Accrued severance pay $21,238 $18,941
Long-term bank loans 7,410 8,493
Deferred revenues and
other liabilities 5,503 6,153
----- -----
Total long-term
liabilities 34,151 33,587
------ ------
Total equity 103,987 108,659
------- -------
Total liabilities and
equity $183,615 $186,976
======== ========
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
U.S. dollars in thousands, except share and per share data
Six months ended Three months ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
(Unaudited) (Unaudited)
---------- ----------
Revenues:
Products $52,928 $50,016 $26,920 $25,482
Services 23,185 20,609 11,816 10,383
------ ------ ------ ------
Total Revenues $76,113 70,625 $38,736 35,865
-------------- ------- ------ ------- ------
Cost of revenues:
Products 23,332 22,854 12,173 11,574
Services 5,667 5,114 2,765 2,600
----- ----- ----- -----
Total Cost of revenues 28,999 27,968 14,938 14,174
---------------------- ------ ------ ------ ------
Gross profit 47,114 42,657 23,798 21,691
------ ------ ------ ------
Operating expenses:
Research and development, net 14,536 14,161 7,382 7,296
Selling and marketing 24,398 22,197 12,363 11,063
General and administrative 4,361 4,100 2,200 1,995
----- ----- ----- -----
Total operating expenses 43,295 40,458 21,945 20,354
------ ------ ------ ------
Operating income 3,819 2,199 1,853 1,337
Financial income (expenses), net (103) (26) (34) 96
---- --- --- ---
Income before taxes on income 3,716 2,173 1,819 1,433
Income tax expense, net (1,407) (1,674) (805) (712)
------ ------ ---- ----
Net income $2,309 $499 $1,014 $721
====== ==== ====== ====
Basic net earnings per share $0.07 $0.01 $0.03 $0.02
===== ===== ===== =====
Diluted net earnings per share $0.07 $0.01 $0.03 $0.02
===== ===== ===== =====
Weighted average number of shares used in 31,791 36,882 31,596 36,490
computing basic net earnings per share
(in thousands)
===
Weighted average number of shares used in 32,822 37,321 32,608 36,927
computing diluted net earnings per share
(in thousands)
===
AUDIOCODES LTD. AND ITS SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME
--------------------------------------------------------
U.S. dollars in thousands, except share and per share data
Six months ended Three months ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
(Unaudited) (Unaudited)
---------- ----------
GAAP net income $2,309 $499 $1,014 $721
====== ==== ====== ====
GAAP net earnings per share $0.07 $0.01 $0.03 $0.02
===== ===== ===== =====
Cost of revenues:
Stock-based compensation (1) 42 55 17 30
Amortization expenses (2) 348 632 174 316
390 687 191 346
Research and development, net:
Stock-based compensation (1) 181 228 86 117
Deferred payments expenses (3) 74 376 63 188
--- --- --- ---
255 604 149 305
Selling and marketing:
Stock-based compensation (1) 540 559 277 282
Amortization expenses (2) 60 60 30 30
--- --- --- ---
600 619 307 312
General and administrative:
Stock-based compensation (1) 346 360 191 183
Income taxes:
Deferred tax (4) 1,064 1,176 634 518
----- ----- --- ---
Non-GAAP net income $4,964 $3,945 $2,486 $2,385
====== ====== ====== ======
Non-GAAP diluted net earnings per share $0.15 $0.10 $0.08 $0.06
===== ===== ===== =====
(1) Stock-based compensation expenses related to options and restricted stock units granted to employees and others.
(2) Excluding amortization of intangible assets related to the acquisitions of Netrake, Mailvision and Active Communications Europe assets.
(3) Excluding expenses related to deferred payments in connection with the acquisition of Active Communications Europe.
(4) Non-cash deferred tax expenses.
Note: Non-GAAP measures should be considered in addition to, and not as a substitute for, the results prepared in accordance with GAAP. The Company believes that non-GAAP information is useful because it can enhance the understanding of its ongoing economic performance and therefore uses this non-GAAP information internally to evaluate and manage its operations. The Company has chosen to provide this information to investors to enable them to perform comparisons of operating results in a manner similar to how the Company analyzes its operating results and because many comparable companies report this type of information.
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
----------------------------------------------
U.S. dollars in thousands
Six months ended Three months ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
(Unaudited) (Unaudited)
---------- ----------
Cash flows from operating activities:
-------------------------------------
Net income $2,309 $499 $1,014 $721
Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 1,260 1,550 605 781
Amortization of marketable securities premiums and accretion of discounts, net 329 490 168 221
Increase (decrease) in accrued severance pay, net (52) 480 (248) 12
Stock-based compensation expenses 1,109 1,202 571 612
Decrease in accrued interest and exchange rate effect of loans, marketable securities and bank deposits 215 230 218 201
Decrease in long- term deferred tax assets 1,022 1,218 613 539
Decrease (increase) in trade receivables, net (109) 3,403 (1,165) 496
Decrease (increase) in other receivables and prepaid expenses (4,187) (59) (729) 2,570
Increase in inventories 390 1,753 497 1,855
Decrease in trade payables (2,701) (2,181) (137) (2,941)
Increase in other payables and accrued expenses 1,657 265 1,711 942
Increase (decrease) in deferred revenues 1,969 (633) (761) (508)
Net cash provided by operating activities 3,211 8,217 2,357 5,501
----- ----- ----- -----
Cash flows from investing activities:
-------------------------------------
Proceeds from sale of marketable securities - 12,429 - 12,429
Decrease (increase) in short-term deposits, net 335 (11,779) 621 (12,207)
Decrease in long-term bank deposits 600 327 300 150
Proceeds from redemption of marketable securities 850 900 850 -
Purchase of property and equipment (646) (822) (183) (361)
---- ---- ---- ----
Net cash provided by investing activities 1,139 1,055 1,588 11
----- ----- ----- ---
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
----------------------------------------------
U.S. dollars in thousands
Six months ended Three months ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
(Unaudited) (Unaudited)
---------- ----------
Cash flows from financing activities:
-------------------------------------
Purchase of treasury stock (10,182) (6,726) (2,850) (1,805)
Repayment of bank loans (1,925) (2,979) (940) (1,687)
Consideration related to payment for acquisition of Mailvision - (233) - (233)
Proceeds from issuance of shares upon exercise of options and warrants 1,533 219 247 96
----- --- --- ---
Net cash used in financing activities (10,574) (9,719) (3,543) (3,629)
------- ------ ------ ------
Increase (decrease) in cash and cash equivalents (6,224) (447) 402 1,883
Cash and cash equivalents at the beginning of the period 24,344 18,908 17,718 16,578
------ ------ ------ ------
Cash and cash equivalents at the end of the period $18,120 $18,461 $18,120 $18,461
======= ======= ======= =======
Company Contacts IR Agency Contact
Niran Baruch Shirley Nakar Philip Carlson
VP Finance & Chief Financial Officer Director, Investor Relations KCSA Strategic Communications
AudioCodes AudioCodes Tel: +1-212-896-1233
Tel: +972-3-976-4000 Tel: +972-3-976-4000 audc@kcsa.com
niran.baruch@audiocodes.com shirley@audiocodes.com
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SOURCE AudioCodes Ltd.
