Allot Announces Second Quarter 2019 Financial Results
HOD HASHARON, Israel, Aug. 6, 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 second quarter 2019 financial results.
Second Quarter 2019 - Financial Highlights
-- Revenue growth to $26.6 million, up 15% year-over-year;
-- GAAP gross profit up 12% year-over-year to $18.3 million; non-GAAP gross
profit up 12% to $18.5 million;
-- GAAP operating loss of $1.5 million; non-GAAP operating loss of $2.1
million.
Financial Outlook
-- Management continues to maintain its 2019 expectations of yearly
revenues between $106-110 million, representing continued double-digit
year-over-year growth;
-- Management continue to expect full year 2019 book to bill ratio at above
1.
Management Comment
Erez Antebi, President & CEO of Allot, commented: "We are pleased with our ongoing year-over-year growth in revenue and we remain on target with our strategy and longer-term goals. Our pipeline remains strong and we are actively working to close further deals in the coming months, both in the Visibility and Control, as well as in the Security areas. We look forward to continued and sustainable growth for the remainder of this year and beyond."
Second Quarter 2019 Financial Results Summary
Total revenues for the quarter were $26.6 million, an increase of 15% compared to $23.0 million in the second quarter of 2018.
Gross profit on a GAAP basis for the quarter was $18.3 million (gross margin of 68.7%), a 12% improvement compared with $16.3 million (gross margin of 70.8%) in the second quarter of 2018.
Gross profit on a non-GAAP basis for the quarter of was $18.5 million (gross margin of 69.8%), a 12% improvement compared with $16.6 million (gross margin of 72.2%) in the second quarter of 2018.
Operating loss on a GAAP basis for the quarter was $1.5 million, compared with an operating loss of $2.8 million, in the second quarter of 2018.
Non-GAAP operating loss for the quarter was $2.1 million, compared with a non-GAAP operating loss of $1.3 million in the second quarter of 2018.
Net loss on a GAAP basis for the quarter was $1.5 million, or $0.04 per basic and diluted share, compared with a net loss of $2.4 million, or $0.07 per basic and diluted share, in the second quarter of 2018.
Non-GAAP net loss for the quarter was $2.1 million, or $0.06 per basic share, compared with a non-GAAP net loss of $1.2 million, or $0.04 per basic share, in the second quarter of 2018.
Cash and investments as of June 30, 2019 totaled $101.6 million, compared to $101.5 million as of March 31, 2019.
Conference Call & Webcast:
The Allot management team will host a conference call to discuss second quarter 2019 earnings results today, August 6, 2019 at 8:30 am ET, 3:30 pm Israel time. To access the conference call, please dial one of the following numbers:
US: 1-888-407-2553, UK: 0-800-917-5108, Israel: +972-3-918-0610
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 Six Months Ended
June 30,
June 30,
---
2019 2018 2019 2018
---
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Revenues $26,554 $23,003 $51,896 $44,735
Cost of revenues 8,301 6,712 15,594 13,636
---
Gross profit 18,253 16,291 36,302 31,099
---
Operating expenses:
Research and development costs, net 7,633 6,298 14,807 12,091
Sales and marketing 11,209 10,182 22,686 20,215
General and administrative 923 2,579 3,628 5,045
---
Total operating expenses 19,765 19,059 41,121 37,351
Operating loss (1,512) (2,768) (4,819) (6,252)
Financial and other income, net 571 806 1,103 1,036
---
Loss before income tax expenses (941) (1,962) (3,716) (5,216)
Tax expenses 592 455 1,150 887
---
Net Loss (1,533) (2,417) (4,866) (6,103)
===
Basic net loss per share $(0.04) $(0.07) $(0.14) $(0.18)
Diluted net loss per share $(0.04) $(0.07) $(0.14) $(0.18)
Weighted average number of shares used in
computing basic net loss per share 34,213,724 33,655,940 34,099,428 33,606,236
===
Weighted average number of shares used in
computing diluted net loss per share 34,213,724 33,655,940 34,099,428 33,606,236
===
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 Six Months Ended
June 30,
June 30,
2019 2018 2019 2018
(Unaudited) (Unaudited)
GAAP cost of revenues $8,301 $6,712 $15,594 $13,636
Share-based compensation (1) (61) (90) (121) (170)
Amortization of intangible assets (2) (232) (232) (464) (465)
Non-GAAP cost of revenues $8,008 $6,390 $15,009 $13,001
---
GAAP gross profit $18,253 $16,291 $36,302 $31,099
Gross profit adjustments 293 322 585 635
Non-GAAP gross profit $18,546 $16,613 $36,887 $31,734
---
GAAP operating expenses $19,765 $19,059 $41,121 $37,351
Share-based compensation (1) (782) (630) (1,467) (1,254)
Amortization of intangible assets (2) (189) (175) (377) (350)
Income (Expenses) related to M&A activities (3) 1,832 (151) 1,537 (189)
Changes in tax related items (4) - (170) (170)
Non-GAAP operating expenses $20,626 $17,933 $40,814 $35,388
---
GAAP financial and other income $571 $806 $1,103 $1,036
Exchange rate differences* (31) (292) (33) (142)
Non-GAAP Financial and other income $540 $514 $1,070 $894
---
GAAP taxes on income $592 $455 $1,150 $887
Tax expenses in respect of net deferred tax asset recorded (17) (19) (33) (38)
Non-GAAP taxes on income $575 $436 $1,117 $849
===
GAAP Net Loss $(1,533) $(2,417) $(4,866) $(6,103)
Share-based compensation (1) 843 720 1,588 1,424
Amortization of intangible assets (2) 421 407 841 815
Expenses related to M&A activities (3) (1,832) (141) (1,537) 47
Changes in tax related items (4) - 170 170
Exchange rate differences (31) (33) -
Tax expenses in respect of net deferred tax asset recorded 17 19 33 38
Non-GAAP Net Loss $(2,115) $(1,242) $(3,974) $(3,609)
===
GAAP Loss per share (diluted) $(0.04) $(0.07) $(0.14) $(0.18)
Share-based compensation 0.02 0.02 0.05 0.04
Amortization of intangible assets 0.02 0.01 0.02 0.02
Expenses related to M&A activities (0.06) (0.01) (0.05) 0.00
Changes in taxes and headcount related items - 0.01 0.01
Exchange rate differences (0.00) (0.00) -
Tax expense in respect of net deferred tax asset recorded 0.00 0.00 0.00 -
Non-GAAP Net loss per share (diluted) $(0.06) $(0.04) $(0.12) $(0.11)
===
Weighted average number of shares used in
computing GAAP diluted net loss per share 34,213,724 33,655,940 34,099,428 33,606,236
Weighted average number of shares used in
computing non-GAAP diluted net loss per share 34,213,724 33,655,940 34,099,428 33,606,236
* 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 Six Months Ended
June 30, June 30,
2019 2018 2019 2018
(Unaudited) (Unaudited)
(1) Share-based compensation:
Cost of revenues $61 $90 $121 $170
Research and development costs, net 214 171 383 326
Sales and marketing 327 215 610 437
General and administrative 241 244 474 491
$843 $720 $1,588 $1,424
(2) Amortization of intangible assets
Cost of revenues $232 $232 $464 $465
Sales and marketing 189 175 377 350
$421 $407 $841 $815
(3) Expenses related to M&A activities
General and administrative $(1,947)
$ - $(1,947) $38
Research and development costs, net 115 151 410 151
Financial income (292) (142)
$(1,832) $(141) $(1,537) $47
(4) Changes in tax related items
Sales and marketing 100 100
General and administrative 70 70
$ - $170
$ - $170
TABLE - 3
ALLOT LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
June 30,
December 31,
2019 2018
(Unaudited)
(Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $17,517 $16,336
Short term deposits 17,624 22,543
Restricted deposit 506 465
Marketable securities 65,681 64,290
Trade receivables, net 21,863 26,093
Other receivables and prepaid expenses 4,552 3,647
Inventories 10,687 11,345
Total current assets 138,430 144,719
LONG-TERM ASSETS:
Restricted deposit 257 257
Severance pay fund 357 345
Operating lease right-of-use assets 6,129
Deferred taxes 463 281
Other assets 877 600
Total long-term assets 8,083 1,483
PROPERTY AND EQUIPMENT, NET 7,385 6,249
GOODWILL AND INTANGIBLE ASSETS, NET 35,802 37,393
Total assets $189,700 $189,844
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES:
Trade payables $6,601 $7,813
Deferred revenues 15,271 13,855
Short-term operating lease liabilities 2,480
Other payables and accrued expenses 21,473 21,052
Total current liabilities 45,825 42,720
LONG-TERM LIABILITIES:
Deferred revenues 4,154 4,247
Long-term operating lease liabilities 4,031
Accrued severance pay 768 806
Other long term liabilities 590 6,168
Total long-term liabilities 9,543 11,221
SHAREHOLDERS' EQUITY 134,332 135,903
Total liabilities and shareholders' equity $189,700 $189,844
TABLE - 4
ALLOT LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
---
2019 2018 2019 2018
---
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Cash flows from operating activities:
---
Net Loss $(1,533) $(2,417) $(4,866) $(6,103)
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation 617 555 1,233 1,053
Stock-based compensation related to options granted to employees 843 720 1,588 1,424
Amortization of intangible assets 421 407 841 815
Capital loss 36 39
Decrease (Increase) in accrued severance pay, net 15 (7) (50) 26
Decrease (Increase) in other assets (344) (395) (277) 393
Decrease in accrued interest and amortization of premium on marketable securities 164 169 241 415
Changes in operating leases, net 588 382 -
Decrease (Increase) in trade receivables 6,823 (2,635) 4,230 (1,889)
Decrease (Increase) in other receivables and prepaid expenses 773 1,597 (374) (282)
Decrease (Increase) in inventories 1,676 164 (234) (113)
Decrease (Increase) in long-term deferred taxes, net (149) 19 (182) 38
Increase (Decrease) in trade payables (3,769) (113) (1,212) 489
Increase (Decrease) in employees and payroll accruals 517 214 1,540 (285)
Increase in deferred revenues 1,915 943 1,323 1,674
Increase (Decrease) in other payables, accrued expenses and other long term liabilities (7,923) 2,920 (6,030) 3,405
---
Net cash provided by (used in) operating activities 634 2,177 (1,847) 1,099
---
Cash flows from investing activities:
---
Decrease (Increase) in restricted deposit 42 (352) (41) (152)
Redemption of (investment in) short-term deposits 933 (4,000) 4,919 10,100
Purchase of property and equipment (748) (874) (1,477) (1,568)
Investment in marketable securities (13,020) (10,896) (24,604) (17,957)
Proceeds from redemption or sale of marketable securities 12,190 11,422 23,569 16,413
Acquisitions (3,048)
Net cash provided by (used in) investing activities (603) (4,700) 2,366 3,788
---
Cash flows from financing activities:
---
Exercise of employee stock options 56 59 662 142
---
Net cash provided by financing activities 56 59 662 142
---
Increase (Decrease) in cash and cash equivalents 87 (2,464) 1,181 5,029
Cash and cash equivalents at the beginning of the period 17,430 22,835 16,336 15,342
---
Cash and cash equivalents at the end of the period $17,517 $20,371 $17,517 $20,371
Investor Relations Contact:
Public Relations Contact:
GK Investor Relations
Seth Greenberg Director of Corporate Communications
sgreenberg@allot.com
Ehud Helft/Gavriel Frohwein
+1 646 688 3559
allot@gkir.com
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SOURCE Allot Ltd.
