Allot Announces First Quarter 2019 Financial Results
HOD HASHARON, Israel, May 14, 2019 /PRNewswire/ -- Allot Ltd. (NASDAQ: ALLT) (TASE: ALLT), a global provider of leading innovative network intelligence and security solutions for service providers worldwide, today announced its first quarter 2019 financial results.
First Quarter 2019 - Financial Highlights
-- Revenues were $25.3 million, up 17% year-over-year;
-- GAAP gross margin improved to 71.2% up from 68.1% in Q1 2018; Non-GAAP
gross margin improved to 72.4% up from 69.6% in Q1 2018;
-- GAAP operating loss narrowed to $3.3 million compared to $3.5 million in
Q1 2018; Non-GAAP operating loss narrowed to $1.8 million compared to
$2.3 million in Q1 2018;
Financial Outlook
-- Management maintains its 2019 expectations of revenues between $106-110
million, representing continued double-digit year-over-year growth;
-- Continue to expect full year 2019 book to bill ratio at above 1;
-- Management goal to sign security OPEX deals with an aggregate MAR
(Maximum Annual Revenue) of $100M during 2019, remains unchanged.
Management Comment
Erez Antebi, President & CEO of Allot, commented: "We are pleased with the continued strong year-over-year growth in revenue as well as the improvement in profitability parameters in the quarter, and we are on target with our longer-term goals. Our momentum in the quarter remained positive and includes the win of a contract to provide a full suite of solutions comprising of network-based traffic management and network security solutions to Rakuten Mobile in Japan. Our pipeline of potential security OPEX deals remains strong and we are actively working to close further deals. We look forward to continued and sustainable growth in 2019 and beyond."
Q1 2019 Financial Results Summary
Total revenues for the quarter were $25.3 million, up 17% compared to $21.7 million in the first quarter of 2018.
Gross profit on a GAAP basis for the quarter was $18.0 million (gross margin of 71.2%), a 22% improvement compared with $14.8 million (gross margin of 68.1%) in the first quarter of 2018.
Gross profit on a non-GAAP basis for the quarter of was $18.3 million (gross margin of 72.4%), a 21% improvement compared with $15.1 million (gross margin of 69.6%) in the first quarter of 2018.
Operating loss on a GAAP basis for the quarter was $3.3 million, an improvement compared with an operating loss of $3.5 million, in the first quarter of 2018.
Non-GAAP operating loss for the quarter of 2019 was $1.8 million, an improvement compared with a non-GAAP operating loss of $2.3 million in the first quarter of 2018.
Net loss on a GAAP basis for the quarter was $3.3 million, or $0.1 per basic and diluted share, an improvement compared with a net loss of $3.7 million, or $0.11 per basic and diluted share, in the first quarter of 2018.
Non-GAAP net loss for the quarter was $1.9 million, or $0.05 per basic and diluted share, an improvement compared with a non-GAAP net loss of $2.4 million, or $0.07 per basic and diluted share, in the first quarter of 2018.
Cash and investments as of March 31, 2019 totaled $101.5 million, compared to $103.9 million as of December 31, 2018.
Conference Call & Webcast:
The Allot management team will host a conference call to discuss first quarter 2019 earnings results today, May 14, 2019 at 8:30 am ET, 3:30 pm Israel time. To access the conference call, please dial one of the following numbers:
US: 1-888-668- 9141, UK: 0-800-917- 5108, Israel: +972-3-918-0609
A live webcast and, following the end of the call, an archive of the conference call, will be accessible on the Allot website at: http://investors.allot.com/index.cfm
About Allot
Allot Ltd. (NASDAQ: ALLT, TASE: ALLT) is a provider of leading innovative network intelligence and security solutions for service providers worldwide, enhancing value to their customers. Our solutions are deployed globally for network and application analytics, traffic control and shaping, network-based security services, and more. Allot's multi-service platforms are deployed by over 500 mobile, fixed and cloud service providers and over 1000 enterprises. Our industry leading network-based security as a service solution has achieved over 50% penetration with some service providers and is already used by over 21 million subscribers in Europe. Allot. See. Control. Secure.
For more information, visit www.allot.com
GAAP to Non-GAAP Reconciliation:
Non-GAAP net income is defined as GAAP net income after excluding stock-based compensation expenses, amortization of acquisition-related intangible assets, deferred tax asset adjustment, exchange rate differences related to revaluation of assets and liabilities denominated in non-dollar currencies 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 is 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 fourth 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 LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
Three Months Ended
March 31,
2019 2018
(Unaudited)
(Unaudited)
Revenues $25,342 $21,732
Cost of revenues 7,293 6,924
Gross profit 18,049 14,808
Operating expenses:
Research and
development costs,
net 7,174 5,793
Sales and marketing 11,477 10,033
General and
administrative 2,705 2,466
Total operating
expenses 21,356 18,292
Operating loss (3,307) (3,484)
Financial and other
income, net 532 230
Loss before income
tax expenses (2,775) (3,254)
Tax expenses 558 432
Net Loss (3,333) (3,686)
Basic net loss per
share $(0.10) $(0.11)
Diluted net loss
per share $(0.10) $(0.11)
Weighted average number of shares used in
computing basic net
loss per share 33,983,863 33,555,980
Weighted average number of shares used in
computing diluted
net loss per share 33,983,863 33,555,980
TABLE - 2
ALLOT LTD.
AND ITS SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except per share data)
Three Months Ended
March 31,
2019 2018
(Unaudited)
GAAP cost of revenues $7,293 $6,924
Share-based compensation (1) (60) (80)
Amortization of intangible assets (2) (232) (232)
Non-GAAP cost of revenues $7,001 $6,612
GAAP gross profit $18,049 $14,808
Gross profit adjustments 292 312
Non-GAAP gross profit $18,341 $15,120
GAAP operating expenses $21,356 $18,292
Share-based compensation (1) (685) (624)
Amortization of intangible assets (2) (188) (175)
Expenses related to M&A activities (3) (295) (38)
Non-GAAP operating expenses $20,188 $17,455
GAAP financial and other income $532 $230
Exchange rate differences* (2) 150
Non-GAAP Financial and other income $530 $380
GAAP taxes on income $558 $432
Tax expenses in respect of net deferred tax asset recorded (16) (19)
Non-GAAP taxes on income $542 $413
GAAP Net Loss $(3,333) $(3,686)
Share-based compensation (1) 745 704
Amortization of intangible assets (2) 420 407
Expenses related to M&A activities (3) 295 38
Exchange rate differences (2) 150
Tax expenses in respect of net deferred tax asset recorded 16 19
Non-GAAP Net Loss $(1,859) $(2,368)
GAAP Loss per share (diluted) $(0.10) $(0.11)
Share-based compensation 0.02 0.02
Amortization of intangible assets 0.02 0.01
Expenses related to M&A activities 0.01 0.00
Exchange rate differences (0.00) 0.01
Tax expense in respect of net deferred tax asset recorded 0.00 0.00
Non-GAAP Net loss per share (diluted) $(0.05) $(0.07)
Weighted average number of shares used in
computing GAAP diluted net loss per share 33,983,863 33,555,980
Weighted average number of shares used in
computing non-GAAP diluted net loss per share 33,983,863 33,555,980
* Financial income or expenses related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies.
TABLE - 2 cont.
ALLOT COMMUNICATIONS LTD.
AND ITS SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except per share data)
Three Months Ended
March 31,
2019 2018
(Unaudited)
(1) Share-based compensation:
Cost of revenues $60 $80
Research and development costs, net 169 155
Sales and marketing 283 222
General and administrative 233 247
$745 $704
(2) Amortization of intangible assets
Cost of revenues $232 $232
Sales and marketing 188 175
$420 $407
(3) Expenses related to M&A activities
General and administrative
$ - $38
Research and development costs, net 295
$295 $38
TABLE - 3
ALLOT LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
March 31, December 31,
2019 2018
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $17,430 $16,336
Short term deposits 18,557 22,543
Restricted deposit 548 465
Marketable securities 64,713 64,290
Trade receivables, net 28,686 26,093
Other receivables and prepaid
expenses 5,449 3,647
Inventories 13,255 11,345
Total current assets 148,638 144,719
LONG-TERM ASSETS:
Restricted deposit 257 257
Severance pay fund 341 345
Operating lease right-of-use
assets 7,137
Deferred taxes 314 281
Other assets 533 600
Total long-term assets 8,582 1,483
PROPERTY AND EQUIPMENT, NET 6,362 6,249
GOODWILL AND INTANGIBLE ASSETS, NET 36,223 37,393
Total assets $199,805 $189,844
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES:
Trade payables $10,370 $7,813
Deferred revenues 13,299 13,855
Short-term operating lease
liabilities 2,460
Other payables and accrued expenses 23,805 21,052
Total current liabilities 49,934 42,720
LONG-TERM LIABILITIES:
Deferred revenues 4,211 4,247
Long-term operating lease
liabilities 4,471
Accrued severance pay 737 806
Other long term liabilities 5,763 6,168
Total long-term liabilities 15,182 11,221
SHAREHOLDERS' EQUITY 134,689 135,903
Total liabilities and shareholders'
equity $199,805 $189,844
TABLE - 4
ALLOT LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
Three Months Ended
March 31,
2019 2018
(Unaudited) (Unaudited)
Cash flows from operating activities:
---
Net Loss $(3,333) $(3,686)
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation 616 498
Stock-based compensation related to options granted to employees 745 704
Amortization of intangible assets 420 407
Capital loss 3
Decrease (Increase) in accrued severance pay, net (65) 33
Decrease in other assets 67 788
Decrease in accrued interest and amortization of premium on marketable securities 77 246
Changes in operating leases, net (206)
Decrease (Increase) in trade receivables (2,593) 746
Increase in other receivables and prepaid expenses (1,147) (1,879)
Increase in inventories (1,910) (277)
Decrease (Increase) in long-term deferred taxes, net (33) 19
Increase in trade payables 2,557 602
Increase (Decrease) in employees and payroll accruals 1,023 (499)
Increase (Decrease) in deferred revenues (592) 731
Increase in other payables and accrued expenses 1,893 486
Net cash used in operating activities (2,481) (1,078)
Cash flows from investing activities:
---
Decrease (Increase) in restricted deposit (83) 200
Redemption of short-term deposits 3,986 14,100
Purchase of property and equipment (729) (694)
Investment in marketable securities (11,584) (7,061)
Proceeds from redemption or sale of marketable securities 11,379 4,991
Acquisitions (3,048)
Net cash provided by investing activities 2,969 8,488
Cash flows from financing activities:
---
Exercise of employee stock options 606 83
Net cash provided by financing activities 606 83
Increase in cash and cash equivalents 1,094 7,493
Cash and cash equivalents at the beginning of the period 16,336 15,342
Cash and cash equivalents at the end of the period $17,430 $22,835
Investor Relations
Contact: Public Relations Contact:
GK Investor Relations Jodi Joseph Asiag
Ehud Helft/Gavriel
Frohwein Director of Corporate Communications
+1 646 688 3559
jasiag@allot.com
allot@gkir.com
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SOURCE Allot Ltd.
