Allot Communications Announces Second Quarter 2017 Financial Results
HOD HASHARON, Israel, Aug. 1, 2017 /PRNewswire/ -- Allot Communications Ltd. (NASDAQ: ALLT; TASE: ALLT), a leading global provider of security and monetization solutions that enable service providers and enterprises to protect and personalize the digital experience, today announced its second quarter 2017 financial results.
Q2 2017 Highlights
-- GAAP revenues were $19.5M, up from $18.4M in Q1 2017; -- GAAP operating loss was $3.8M, down from $4.9M in Q1 2017; -- Book-to-bill above one for the second consecutive quarter.
Management Comment
Erez Antebi, President & CEO of Allot Communications, commented, "The past quarter was the second consecutive quarter with book-to-bill ratio above one. We are also seeing a steady, consistent increase in the number of consumers who are enjoying the benefits of our network security solutions. Internally, we are aligning the organization to fit the new strategy and generate growth. I strongly believe we are on the right path to materialize on the market opportunities we identified as growth engines, and we continue to demonstrate the value of our solutions and commitment to customer success."
Q2 2017 Financial results
On a GAAP basis, total revenues for the second quarter of 2017 were $19.5 million, compared to $18.4 million reported for the first quarter of 2017. Net loss for the second quarter of 2017 was $4.0 million, or $0.12 per basic and diluted share. This compares with a net loss of $5.1 million, or $0.15 per basic and diluted share, in the first quarter of 2017.
On a non-GAAP basis, total revenues for the second quarter of 2017 were $19.5 million compared to $18.5 million reported for the first quarter of 2017. Net loss for the second quarter of 2017 was $2.3 million, or $0.07 per basic and diluted share. This compares with a net loss of $3.6 million, or $0.11 per basic and diluted share, in the first quarter of 2017.
Cash and investments as of June 30, 2017 totaled $111.3 million. The Company recorded a positive operating cash flow of $0.9 million during the quarter.
2017 Outlook
Management reiterates its previously issued guidance and expects 2017 revenues in the range of $80 - $84 million. Revenues for the second half of 2017 are expected to be better than for the first half and the book to bill ratio for the year is expected to be above 1.
Conference Call & Webcast:
The Allot management team will host a conference call to discuss second quarter 2017 earnings results today, August 1, 2017 at 8:30 AM ET, 3:30 p.m. Israel time. To access the conference call, please dial one of the following numbers:
US: +1-888-668-9141, UK: +44(0) 800-917-5108, Israel: +972-3-918-0609.
A recording of the conference call will be available from 12:00PM ET on August 1, 2017 for 30 days. To access the recording, please dial: +1-866-276-1485; UK: +44(0) 800-917-1246; Intl: +972-3-925-5928
A live webcast of the conference call can be accessed on the Allot Communications website at: http://www.allot.com.
The webcast will also be archived on the website following the conference call.
About Allot Communications
Allot Communications (NASDAQ: ALLT, TASE: ALLT) is a leading provider of security and monetization solutions that enables service providers and enterprises to protect and personalize the digital experience. Allot's flexible and highly scalable service delivery framework leverages the intelligence in data networks, enabling service providers to get closer to their customers, safeguard network assets and users, and accelerate time-to-revenue for value-added services. We employ innovative technology, proven know-how and a collaborative approach to provide the right solution for every network environment. Allot solutions are currently deployed at 5 of the top 10 global mobile operators and in thousands of CSP and enterprise networks worldwide. For more information, please visit www.allot.com.
GAAP to Non-GAAP Reconciliation:
The difference between GAAP and non-GAAP revenues is related to the acquisitions made by the Company and represents revenues adjusted for the impact of the fair value adjustment to acquired deferred revenue related to purchase accounting. Non-GAAP net income is defined as GAAP net income after including deferred revenues related to the fair value adjustment resulting from purchase accounting and excluding stock-based compensation expenses, amortization of acquisition-related intangible assets, deferred tax asset adjustment, restructuring expenses and other acquisition-related expenses.
These non-GAAP measures should be considered in addition to, and not as a substitute for, comparable GAAP measures. The non-GAAP results and a full reconciliation between GAAP and non-GAAP results are provided in the accompanying Table 2. The Company provides these non-GAAP financial measures because it believes they present a better measure of the Company's core business and management uses the non-GAAP measures internally to evaluate the Company's ongoing performance. Accordingly, the Company believes they are useful to investors in enhancing an understanding of the Company's operating performance.
Safe Harbor Statement
This release contains forward-looking statements, which express the current beliefs and expectations of Company management. Such statements involve a number of known and unknown risks and uncertainties that could cause our future results, performance or achievements to differ significantly from the results, performance or achievements set forth in such forward-looking statements. Important factors that could cause or contribute to such differences include risks relating to: our ability to compete successfully with other companies offering competing technologies; the loss of one or more significant customers; consolidation of, and strategic alliances by, our competitors, government regulation; the timing of completion of key project milestones which impact the timing of our revenue recognition; lower demand for key value-added services; our ability to keep pace with advances in technology and to add new features and value-added services; managing lengthy sales cycles; operational risks associated with large projects; our dependence on third party channel partners for a material portion of our revenues; court approval of the Company's proposed share buy-back program; and other factors discussed under the heading "Risk Factors" in the Company's annual report on Form 20-F filed with the Securities and Exchange Commission. Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
TABLE - 1 ALLOT COMMUNICATIONS LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. dollars in thousands, except share and per share data) Three Months Ended Six Months Ended June 30, June 30, -------- -------- 2017 2016 2017 2016 ---- ---- ---- ---- (Unaudited) (Unaudited) ---------- ---------- Revenues $19,502 $22,958 $37,937 $45,896 Cost of revenues 6,662 6,524 12,980 13,667 ----- ----- ------ ------ Gross profit 12,840 16,434 24,957 32,229 ------ ------ ------ ------ Operating expenses: Research and development costs, net 5,364 5,957 10,897 12,818 Sales and marketing 8,747 8,846 17,727 19,117 General and administrative 2,519 2,570 5,060 5,267 ----- ----- ----- ----- Total operating expenses 16,630 17,373 33,684 37,202 Operating loss (3,790) (939) (8,727) (4,973) Financial and other income , net 112 211 474 327 --- --- --- --- Loss before income tax benefit (3,678) (728) (8,253) (4,646) Tax expenses 352 499 854 870 --- --- --- --- Net loss (4,030) (1,227) (9,107) (5,516) ====== ====== ====== ====== Basic net loss per share $(0.12) $(0.04) $(0.27) $(0.17) ====== ====== ====== ====== Diluted net loss per share $(0.12) $(0.04) $(0.27) $(0.17) ====== ====== ====== ====== Weighted average number of shares used in computing basic net earnings per share 33,200,982 33,234,040 33,146,715 33,357,014 ========== ========== ========== ========== Weighted average number of shares used in computing diluted net earnings per share 33,200,982 33,234,040 33,146,715 33,357,014 ========== ========== ========== ==========
TABLE - 2 ALLOT COMMUNICATIONS LTD. AND ITS SUBSIDIARIES RECONCILATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. dollars in thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, -------- -------- 2017 2016 2017 2016 ---- ---- ---- ---- (Unaudited) (Unaudited) ---------- ---------- GAAP Revenues $19,502 $22,958 $37,937 $45,896 Fair value adjustment for acquired deferred revenues write down 13 36 37 101 Non-GAAP Revenues $19,515 $22,994 $37,974 $45,997 ------- ------- ------- ------- GAAP cost of revenues $6,662 $6,524 $12,980 $13,667 Share-based compensation (1) (96) (104) (192) (173) Amortization of intangible assets (2) (242) (233) (474) (481) Non-GAAP cost of revenues $6,324 $6,187 $12,314 $13,013 ------ ------ ------- ------- GAAP gross profit $12,840 $16,434 $24,957 $32,229 Gross profit adjustments 351 373 703 755 Non-GAAP gross profit $13,191 $16,807 $25,660 $32,984 ------- ------- ------- ------- GAAP operating expenses $16,630 $17,373 $33,684 $37,202 Share-based compensation (1) (870) (1,220) (1,618) (2,806) Amortization of intangible assets (2) (135) (132) (269) (270) Expenses related to M&A activities (3) - - (89) - Non-GAAP operating expenses $15,625 $16,021 $31,708 $34,126 ------- ------- ------- ------- GAAP financial and other income $112 $211 $474 $327 Expenses related to M&A activities (3) 306 (135) 379 143 Non-GAAP Financial and other income $418 $76 $853 $470 ---- --- ---- ---- GAAP taxes on income $352 $499 $854 $870 Tax benefit (in respect of net deferred tax asset recorded) (64) (69) (130) (131) Non-GAAP taxes on income $288 $430 $724 $739 ==== ==== ==== ==== GAAP Net Loss $(4,030) $(1,227) $(9,107) $(5,516) Share-based compensation (1) 966 1,324 1,810 2,979 Amortization of intangible assets (2) 377 365 743 751 Expenses related to M&A activities (3) 306 (135) 468 143 Fair value adjustment for acquired deferred revenues write down 13 36 37 101 Tax benefit (in respect of net deferred tax asset recorded) 64 69 130 131 Non-GAAP Net income (Loss) $(2,304) $432 $(5,919) $(1,411) ======= ==== ======= ======= GAAP Loss per share (diluted) $(0.12) $(0.04) $(0.27) $(0.17) Share-based compensation 0.03 0.04 0.05 0.09 Amortization of intangible assets 0.01 0.01 0.02 0.02 Expenses related to M&A activities 0.01 (0.00) 0.01 0.01 Fair value adjustment for acquired deferred revenues write down 0.00 0.00 0.00 0.00 Tax benefit (in respect of net deferred tax asset recorded) 0.00 0.00 0.01 0.01 Non-GAAP Net income (Loss) per share (diluted) $(0.07) $0.01 $(0.18) $(0.04) ====== ===== ====== ====== Weighted average number of shares used in computing GAAP diluted net earnings per share 33,200,982 33,234,040 33,146,715 33,357,014 ========== ========== ========== ========== Weighted average number of shares used in computing non-GAAP diluted net earnings per share 33,200,982 33,736,414 33,146,715 33,357,014 ========== ========== ========== ==========
TABLE - 2 cont. ALLOT COMMUNICATIONS LTD. AND ITS SUBSIDIARIES RECONCILATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. dollars in thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, -------- -------- 2017 2016 2017 2016 ---- ---- ---- ---- (Unaudited) (Unaudited) ---------- ---------- (1) Share-based compensation: Cost of revenues $96 $104 $192 $173 Research and development costs, net 217 280 446 706 Sales and marketing 246 467 487 1,089 General and administrative 407 473 685 1,011 $966 $1,324 $1,810 $2,979 ---- ------ ------ ------ (2) Amortization of intangible assets Cost of revenues $242 $233 $474 $481 Sales and marketing 135 132 269 270 $377 $365 $743 $751 ---- ---- ---- ---- (3) Expenses related to M&A activities General and administrative $ - $ - $89 $ - Finanacial expenses 306 (135) 379 143 $306 $(135) $468 $143 ---- ----- ---- ----
TABLE - 3 ALLOT COMMUNICATIONS LTD. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (U.S. dollars in thousands) June 30, December 31, 2017 2016 ---- ---- (Unaudited) (Audited) ---------- -------- ASSETS CURRENT ASSETS: Cash and cash equivalents $23,460 $23,326 Short term deposits 24,543 29,821 Marketable securities 63,252 60,507 Trade receivables, net 24,367 24,158 Other receivables and prepaid expenses 3,926 3,879 Inventories 10,084 7,235 Total current assets 149,632 148,926 ======= ======= LONG-TERM ASSETS: Severance pay fund 287 252 Deferred taxes 133 267 Other assets 570 1,136 Total long-term assets 990 1,655 --- ----- PROPERTY AND EQUIPMENT, NET 5,076 4,387 ----- ----- GOODWILL AND INTANGIBLE ASSETS, NET 35,229 35,972 ------ ------ Total assets $190,927 $190,940 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Trade payables $9,411 $3,275 Deferred revenues 10,679 11,133 Other payables and accrued expenses 11,482 10,538 ------ ------ Total current liabilities 31,572 24,946 ====== ====== LONG-TERM LIABILITIES: Deferred revenues 3,090 3,597 Accrued severance pay 711 592 Other long term liabilities 4,857 4,502 Total long-term liabilities 8,658 8,691 ----- ----- SHAREHOLDERS' EQUITY 150,697 157,303 ------- ------- Total liabilities and shareholders' equity $190,927 $190,940 ======== ========
TABLE - 4 ALLOT COMMUNICATIONS LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in thousands) Three Months Ended Six Months Ended June 30, June 30, -------- -------- 2017 2016 2017 2016 ---- ---- ---- ---- (Unaudited) (Unaudited) (Unaudited) (Unaudited) Cash flows from operating activities: ------------------------------------- Net Loss $(4,030) $(1,227) $(9,107) $(5,516) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 535 596 1,065 1,195 Stock-based compensation related to options granted to employees 966 1,324 1,809 2,979 Amortization of intangible assets 376 365 743 751 Capital loss 3 21 7 20 Decrease in accrued severance pay, net 56 9 84 27 Decrease in other assets 258 483 566 374 Decease in accrued interest and amortization of premium on marketable securities 376 402 502 740 Decrease (Increase) in trade receivables (1,469) 261 (209) 542 Decrease (Increase) in other receivables and prepaid expenses 1,028 (92) 406 242 Increase in inventories (2,087) (513) (2,849) (139) Decrease in long-term deferred taxes, net 67 61 134 123 Increase (Decrease) in trade payables 4,287 (3,060) 6,136 (2,905) Increase (Decrease) in employees and payroll accruals 340 (12) 616 (597) Increase (Decrease) in deferred revenues (108) 1,163 (961) (64) Increase (Decrease) in other payables and accrued expenses 269 (1,004) 760 (404) Net cash provided by (used in) operating activities 867 (1,223) (298) (2,632) --- ------ ---- ------ Cash flows from investing activities: ------------------------------------- Redemption of (Investment in) short-term deposits 4,805 (267) 5,278 9,733 Purchase of property and equipment (949) (409) (1,760) (736) Investment in marketable securities (8,950) (8,200) (15,538) (16,980) Proceeds from redemption or sale of marketable securities 7,662 7,690 12,411 18,590 Net cash provided by (used in) investing activities 2,568 (1,186) 391 10,607 ----- ------ --- ------ Cash flows from financing activities: ------------------------------------- Exercise of employee stock options 17 15 41 26 Purchase of treasury stocks - (2,279) - (3,326) Net cash provided by (used in) financing activities 17 (2,264) 41 (3,300) --- ------ --- ------ Increase (Decrease) in cash and cash equivalents 3,452 (4,673) 134 4,675 Cash and cash equivalents at the beginning of the period 20,008 24,818 23,326 15,470 Cash and cash equivalents at the end of the period $23,460 $20,145 $23,460 $20,145 ======= ======= ======= =======
Investor Relations Contact: GK Investor Relations Ehud Helft/Gavriel Frohwein +1 646 688 3559 allot@gkir.com Public Relations Contact: Sigalit Orr Director Corporate Communications International dialing +972-54-268-1500 sorr@allot.com
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SOURCE Allot Communications Ltd.