Allot Announces Third Quarter 2019 Financial Results
HOD HASHARON, Israel, Nov. 5, 2019 /PRNewswire/ -- Allot Ltd. (NASDAQ: ALLT) (TASE: ALLT), a leading global provider of innovative network intelligence and security solutions for service providers and enterprises worldwide, today announced its third quarter 2019 financial results.
Third Quarter 2019 - Financial Highlights
-- Revenue growth to $27.6 million, up 14% year-over-year
-- Cash and investments increased by $13.3 million to $114.8 million
-- GAAP gross profit up 14% year-over-year to $19.2 million; non-GAAP gross
profit up 13% to $19.4 million
-- GAAP operating loss of $2.2 million; non-GAAP operating loss of $2.2
million
Financial Outlook
-- Management continues to maintain its expectations of full year 2019
revenues between $106-$110 million, representing continued double-digit
year-over-year growth
-- Management maintains its expectation that full year 2019 book to bill
ratio will be above 1
Management Comment
Erez Antebi, President & CEO of Allot, commented, "We are pleased with our continued ongoing year-over-year revenue growth and we remain on target with our strategy and longer-term goals. We have been successful in signing new significant deals in recent months. Our pipeline remains strong and we expect to enter next year with significant backlog that will enable Allot to accelerate revenue growth in 2020."
Third Quarter 2019 Financial Results Summary
Total revenue for the quarter was $27.6 million, an increase of 14% compared with $24.2 million in the third quarter of 2018.
Gross profit on a GAAP basis for the quarter was $19.2 million (gross margin of 69.4%), a 14% improvement compared with $16.8 million (gross margin of 69.4%) in the third quarter of 2018.
Gross profit on a non-GAAP basis for the quarter of was $19.4 million (gross margin of 70.2%), a 13% improvement compared with $17.1 million (gross margin of 70.7%) in the third quarter of 2018.
Operating loss on a GAAP basis for the quarter was $2.2 million, compared with an operating loss of $2.5 million, in the third quarter of 2018.
Non-GAAP operating loss for the quarter was $2.2 million, compared with a non-GAAP operating loss of $1.1 million in the third quarter of 2018.
Net loss on a GAAP basis for the quarter was $2.1 million, or $0.06 per basic and diluted share, compared with a net loss of $2.5 million, or $0.07 per basic and diluted share, in the third quarter of 2018.
Non-GAAP net loss for the quarter was $1.9 million, or $0.05 per basic share, compared with a non-GAAP net loss of $1.1 million, or $0.03 per basic share, in the third quarter of 2018.
Cash and investments as of September 30, 2019 totaled $114.8 million, compared with $101.6 million as of June 30, 2019.
Conference Call & Webcast:
The Allot management team will host a conference call to discuss third quarter 2019 earnings results today, November 5, 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: +972-3-918-0610
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 and enterprises 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 Nine Months Ended
September 30, September 30,
---
2019 2018 2019 2018
---
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Revenues $27,637 $24,217 $79,533 $68,952
Cost of revenues 8,456 7,417 24,050 21,053
---
Gross profit 19,181 16,800 55,483 47,899
---
Operating expenses:
Research and
development costs,
net 8,091 6,695 22,898 18,786
Sales and marketing 12,233 9,880 34,919 30,095
General and
administrative 1,096 2,755 4,724 7,800
---
Total operating
expenses 21,420 19,330 62,541 56,681
Operating loss (2,239) (2,530) (7,058) (8,782)
Financial and other
income, net 257 571 1,360 1,607
---
Loss before income
tax expenses (1,982) (1,959) (5,698) (7,175)
Tax expenses 129 536 1,279 1,424
---
Net Loss (2,111) (2,495) (6,977) (8,599)
===
Basic net loss per
share $(0.06) $(0.07) $(0.20) $(0.26)
Diluted net loss
per share $(0.06) $(0.07) $(0.20) $(0.26)
Weighted average number of shares used in
computing basic net
loss per share 34,348,200 33,761,279 34,183,272 33,658,485
===
Weighted average number of shares used in
computing diluted
net loss per share 34,348,200 33,761,279 34,183,272 33,658,485
===
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 Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
(Unaudited) (Unaudited)
GAAP cost of
revenues $8,456 $7,417 $24,050 $21,053
Share-based
compensation (1) (67) (86) (188) (256)
Amortization of
intangible assets
(2) (237) (232) (701) (697)
Changes in taxes and
headcount related
items (4) 75 75 -
Non-GAAP cost of
revenues $8,227 $7,099 $23,236 $20,100
---
GAAP gross profit $19,181 $16,800 $55,483 $47,899
Gross profit
adjustments 229 318 814 953
Non-GAAP gross
profit $19,410 $17,118 $56,297 $48,852
---
GAAP operating
expenses $21,420 $19,330 $62,541 $56,681
Share-based
compensation (1) (747) (658) (2,214) (1,912)
Amortization of
intangible assets
(2) (188) (175) (565) (525)
Income (Expenses)
related to M&A
activities (3) 1,198 (112) 2,735 (301)
Changes in taxes and
headcount related
items (4) (31) (210) (31) (380)
Non-GAAP operating
expenses $21,652 $18,175 $62,466 $53,563
---
GAAP financial and
other income $257 $571 $1,360 $1,607
Expenses related to
M&A activities (3) - (7) (149)
Exchange rate
differences* 235 202 -
Non-GAAP Financial
and other income $492 $564 $1,562 $1,458
---
GAAP taxes on income $129 $536 $1,279 $1,424
Tax expenses in
respect of net
deferred tax asset
recorded (16) 44 (49) 7
Non-GAAP taxes on
income $113 $580 $1,230 $1,431
===
GAAP Net Loss $(2,111) $(2,495) $(6,977) $(8,599)
Share-based
compensation (1) 814 744 2,402 2,168
Amortization of
intangible assets
(2) 425 407 1,266 1,222
Expenses related to
M&A activities (3) (1,198) 105 (2,735) 152
Changes in taxes and
headcount related
items (4) (44) 210 (44) 380
Exchange rate
differences 235 202 -
Tax expenses in
respect of net
deferred tax asset
recorded 16 (44) 49 (7)
Non-GAAP Net Loss $(1,863) $(1,073) $(5,837) $(4,684)
===
GAAP Loss per share
(diluted) $(0.06) $(0.07) $(0.20) $(0.26)
Share-based
compensation 0.02 0.02 0.07 0.07
Amortization of
intangible assets 0.01 0.01 0.03 0.04
Expenses related to
M&A activities (0.03) (0.08) 0.00
Changes in taxes and
headcount related
items (0.00) 0.01 (0.00) 0.01
Exchange rate
differences 0.01 0.01 -
Tax expense in
respect of net
deferred tax asset
recorded 0.00 (0.00) 0.00 -
Non-GAAP Net loss
per share (diluted) $(0.05) $(0.03) $(0.17) $(0.14)
===
Weighted average number of shares used in
computing GAAP
diluted net loss
per share 34,348,200 33,761,279 34,183,272 33,658,485
Weighted average number of shares used in
computing non-GAAP
diluted net loss
per share 34,348,200 33,761,279 34,183,272 33,658,485
* 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 Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
(Unaudited) (Unaudited)
(1) Share-based compensation:
Cost of revenues $67 $86 $188 $256
Research and development costs, net 234 178 617 504
Sales and marketing 297 264 907 701
General and administrative 216 216 690 707
$814 $744 $2,402 $2,168
(2) Amortization of intangible assets
Cost of revenues $237 $232 $701 $697
Sales and marketing 188 175 565 525
$425 $407 $1,266 $1,222
(3) Expenses related to M&A activities
General and administrative $(1,561) $31 $(3,508) $69
Research and development costs, net 363 81 773 232
Financial income (7) (149)
$(1,198) $105 $(2,735) $152
(4) Changes in taxes and headcount related items
Sales and marketing $16 $122 $16 $222
Cost of revenues (75) (75)
General and administrative 15 88 15 158
$(44) $210 $(44) $380
(*) Excluding share-based compensation related to the restructuring plan, which was already included under restructuring expenses.
TABLE - 3
ALLOT LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
September 30, December 31,
2019 2018
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents $20,809 $16,336
Restricted cash 10,656
Short term
deposits 8,557 22,543
Restricted
deposit 10,508 465
Marketable
securities 64,049 64,290
Trade
receivables, net 20,974 26,093
Other receivables
and prepaid
expenses 5,040 3,647
Inventories 9,243 11,345
Total current
assets 149,836 144,719
LONG-TERM
ASSETS:
Restricted
deposit 257 257
Severance pay
fund 369 345
Operating lease
right-of-use
assets 6,422
Deferred taxes 550 281
Other assets 766 600
Total long-term
assets 8,364 1,483
PROPERTY AND
EQUIPMENT, NET 7,976 6,249
GOODWILL AND
INTANGIBLE
ASSETS, NET 35,378 37,393
Total assets $201,554 $189,844
LIABILITIES AND
SHAREHOLDERS'
EQUITY
CURRENT
LIABILITIES:
Trade payables $7,287 $7,813
Deferred revenues 31,615 13,855
Short-term
operating lease
liabilities 2,748
Other payables
and accrued
expenses 16,848 21,052
Total current
liabilities 58,498 42,720
LONG-TERM
LIABILITIES:
Deferred revenues 4,247
Long-term
operating lease
liabilities 3,821 4,247
Accrued severance
pay 797
Other long term
liabilities 773 806
Total long-term
liabilities 9,638 6,168
SHAREHOLDERS'
EQUITY 133,418 135,903
Total liabilities
and
shareholders'
equity $201,554 $189,844
TABLE - 4
ALLOT LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
---
2019 2018 2019 2018
---
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Cash flows from operating activities:
---
Net Loss $(2,111) $(2,495) $(6,977) $(8,599)
Adjustments to reconcile net income to net cash used
in operating activities:
Depreciation 682 550 1,915 1,603
Stock-based
compensation
related to options
granted to
employees 814 744 2,402 2,168
Amortization of
intangible assets 425 407 1,266 1,222
Capital loss 39
Decrease (Increase)
in accrued
severance pay, net 17 8 (33) 34
Decrease (Increase)
in other assets 111 59 (166) 452
Decrease in accrued
interest and
amortization of
premium on
marketable
securities 95 197 336 612
Changes in
operating leases,
net (235) 147 -
Decrease (Increase)
in trade
receivables 889 (1,826) 5,119 (3,715)
Increase in other
receivables and
prepaid expenses (315) (1,003) (689) (1,285)
Decrease (Increase)
in inventories 1,483 (3,942) 1,249 (4,055)
Increase in long-
term deferred
taxes, net (87) (45) (269) (7)
Increase (Decrease)
in trade payables 686 5,826 (526) 6,315
Increase (Decrease)
in employees and
payroll accruals (953) 105 587 (180)
Increase in
deferred revenues 16,437 471 17,760 2,145
Increase (Decrease)
in other payables,
accrued expenses
and other long
term liabilities (3,474) 119 (9,504) 3,524
---
Net cash provided
by (used in)
operating
activities 14,464 (825) 12,617 273
---
Cash flows from investing activities:
---
Increase in
restricted deposit (10,002) (110) (10,043) (262)
Redemption of
(investment in)
short-term
deposits 9,067 (3,500) 13,986 6,600
Purchase of
property and
equipment (1,313) (491) (2,790) (2,058)
Investment in
marketable
securities (7,192) (7,236) (31,796) (25,193)
Proceeds from
redemption or sale
of marketable
securities 8,813 7,314 32,382 23,727
Acquisitions (3,048)
Net cash provided
by (used in)
investing
activities (627) (4,023) 1,739 (234)
---
Cash flows from financing activities:
---
Exercise of
employee stock
options 111 201 773 343
Net cash provided
by financing
activities 111 201 773 343
---
Increase (Decrease)
in cash and cash
equivalents and
restricted cash 13,948 (4,647) 15,129 382
Cash, cash
equivalents and
restricted cash at
the beginning of
the period 17,517 20,371 16,336 15,342
Cash, cash
equivalents and
restricted cash at
the end of the
period $31,465 $15,724 $31,465 $15,724
Investor Relations
Contact:
Public Relations Contact:
GK Investor Relations
Seth Greenberg
Ehuf Helft/Gavriel
Frohwein
Director of Corporate Communications
+1 646 688 3559
sgreenberg@allot.com
allot@gkir.com
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