LOD, Israel, April 28, 2015 /PRNewswire/ -- AudioCodes (NasdaqGS: AUDC) Press Release

AudioCodes, a leading provider of converged voice solutions that enable enterprises and service providers to transition to all-IP voice networks, today announced financial results for the first quarter ended March 31, 2015.

First Quarter Highlights:

  • Quarterly revenues increased 4.3% year-over-year to $37.5 million
  • Quarterly networking product and service revenues increased 7.3% year-over-year to $33.1 million
  • Quarterly service revenues increased 20.2% year-over-year to $8.9 million from $7.4 million
  • Quarterly Non-GAAP gross margin improved to 59.7% from 59.5% in the prior year period
  • Quarterly Non-GAAP operating income increased to $2.1 million from $1.1 million in the prior year period
  • Quarterly Non-GAAP net income was $2.0 million, or $0.05 per diluted share, compared to $1.1 million, or $0.03 per diluted share, in the prior year period
  • Share repurchase program-Company acquired 1.04 million of its ordinary shares at a cost of $5.2 million during the quarter ended March 31, 2015.

Revenues for the first quarter of 2015 were $37.5 million compared to $36.0 million for the first quarter of 2014. Net loss for the quarter was $378,000, or ($0.01) per share, compared to a net loss of $278,000, or ($0.01) per share, for the first quarter of 2014.

On a Non-GAAP basis, quarterly net income was $2.0 million, or $0.05 per diluted share, compared to $1.1 million, or $0.03 per diluted share, in the first quarter last year.

Non-GAAP net income (loss) excludes: (i) stock-based compensation expenses; (ii) amortization expenses related to intangible assets; and (iii) non-cash deferred tax benefit or expenses. A reconciliation of net income (loss) 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 first quarter of 2015 totaled $4.7 million. Cash and cash equivalents, bank deposits and marketable securities were $84.1 million as of March 31, 2015 compared to $94.0 million as of March 31, 2014. The decrease in cash and cash equivalents, bank deposits and marketable securities was the result of the use of cash to repurchase the Company's ordinary shares pursuant to its share repurchase program.

"I am pleased to report continued strength in our Networking Business in the first quarter of 2015, our eleventh consecutive quarter of improved performance," said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes. "Our top line revenue was lower than expected due to lower sales in the EMEA region, mainly as a result of the weaker Euro/U.S. Dollar exchange rate. On a positive note and more importantly, sales of our networking line grew 7.3% over the year ago quarter. Our strategy and continued focus on the enterprise unified communications market proved beneficial. In addition, our comprehensive end-to-end voice solutions and services portfolio resulted in more customer wins and demand in the market served by our global application partners. This focus is expected to support our long-term success in the market. Working closely with our global partners over the past few years continued to contribute to our growth and leadership in the enterprise voice business," Mr. Adlersberg added.

"In the first quarter of 2015, we introduced a number of products and solutions that are intended to impact our long-term goals for business expansion. We introduced a Managed IP Phones solution that is designed to deliver unprecedented efficient, reliable and high quality voice network management experience for highly distributed enterprise voice networks. We have introduced new One Box 365 family appliances supporting larger enterprise deployments and demonstrated new Enterprise SBC integrated capabilities for WebRTC voice calls connectivity to Microsoft Lync," concluded Mr. Adlersberg.

Share Buy Back Program

In August, 2014, AudioCodes announced that its Board of Directors had approved a program to repurchase up to $3.0 million of its Ordinary Shares. In November, 2014, AudioCodes received court approval to repurchase up to an additional $15 million of its Ordinary Shares. During the three months ended March 31, 2015, AudioCodes acquired 1.04 million shares under this program for a total consideration of approximately $5.2 million. As of March 31, 2015, AudioCodes had acquired an aggregate of 2.09 million shares under this program for an aggregate consideration of approximately $10.5 million. In March 2015, the Company's Board of Directors approved the repurchase of up to an additional $15 million of the Company's Ordinary Shares subject to the receipt of court approval in Israel. An application for approval has been submitted to the Court.

New Chief Accounting Officer

The Company announced that it has appointed Niran Baruch as its new Chief Accounting Officer and Vice President of Finance, effective May 1st, 2015. Mr. Baruch joined AudioCodes in 2005 initially as Director of Finance and then as Vice President of Finance, responsible for the management of the finance department. Mr. Baruch has over 15 years of experience in Nasdaq traded public companies, and is a Certified Public Accountant (CPA) with a BA in Business Management and Accounting.

Ofer Segev, AudioCodes' Vice President of Finance and CFO, will be leaving AudioCodes at the end of the month to pursue new challenges. Shabtai Adlersberg, President, and Chief Executive Officer of AudioCodes, together with Niran Baruch, Vice President of Finance and Chief Accounting Officer, will assume executive management of AudioCodes' finance department.

"I have decided to change course and explore new personal challenges," said Ofer Segev, Vice President of Finance and CFO of AudioCodes.  "I enjoyed being part of AudioCodes, a company I have known for many years. I am confident that there will not be any issues in transition," he added.

"Ofer Segev is leaving us after approximately six months at the Company," said Shabtai Adlersberg. "We have the good fortune of possessing a strong and capable finance team and I am confident that a smooth transition will occur. AudioCodes' management and Board of Directors wish Ofer good luck in his future endeavors," Shabtai Adlersberg added.

2015 Full Year Outlook update

AudioCodes is updating its full year guidance, mainly to account for the recent change in the Euro/U.S. Dollar exchange rate. The Company's outlook is based on current indications for its business, which are subject to change.

We now expect revenues for 2015 to be in the range of $158 million to $162 million compared with the prior forecast of a range of $162 million to $167 million.  We are now forecasting non-GAAP net income per diluted share to be in the range of $0.24 to $0.28 compared with the prior forecast of $0.26 to $0.30.

AudioCodes management believes that Non-GAAP financial guidance provides the best comparative basis for investors to understand the Company's on-going operations and prospects for the future. Non-GAAP net income per diluted share should be evaluated in light of the Company's financial results prepared in accordance with U.S. GAAP. 

Conference Call & Web Cast Information

AudioCodes will conduct a conference call at 8:00 A.M., Eastern Time today to discuss the Company's first 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 corporate website at www.audiocodes.com.

About AudioCodes

AudioCodes Ltd. (NasdaqGS, 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™, 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.

To download the 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.

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.

©2015 AudioCodes Ltd. All rights reserved. AudioCodes, AC, HD VoIP, HD VoIP Sounds Better, IPmedia, Mediant, MediaPack, OSN, SmartTAP, VMAS, VoIPerfect, VoIPerfectHD, Your Gateway To VoIP, 3GX and One Box 365 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.

Summary financial data follows


AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands



March 31,


December 31,


2015


2014


(Unaudited)


(Audited)

ASSETS








CURRENT ASSETS:




Cash and cash equivalents

$ 16,506


$ 14,797

Short-term and restricted bank deposits

4,354


7,630

Short-term marketable securities and accrued interest

1,630


543

Trade receivables, net

30,912


31,056

Other receivables and prepaid expenses

8,842


9,564

Inventories

14,604


14,736

Total current assets

76,848


78,326





LONG-TERM ASSETS:




Long-term and restricted bank deposits

3,610


4,066

Long-term marketable securities

58,029


58,684

Deferred tax assets

253


872

Severance pay funds

17,559


17,835

Total long-term assets

79,451


81,457





PROPERTY AND EQUIPMENT, NET

4,218


3,856





GOODWILL, INTANGIBLE ASSETS AND OTHER, NET

36,401


36,745





Total assets

$ 196,918


$ 200,384





LIABILITIES AND EQUITY






CURRENT LIABILITIES:




Current maturities of long-term bank loans

$ 4,686


$ 4,686

Trade payables

7,587


10,111

Senior convertible notes

-


-

Other payables and accrued expenses

16,284


15,758

Deferred revenues

13,098


10,233

Total current liabilities

41,655


40,788





LONG-TERM LIABILITIES:




Accrued severance pay

17,793


17,908

Long-term bank loans

4,129


5,105

Deferred revenues and other liabilities

4,185


2,862

Total  long-term liabilities

26,107


25,875





Total equity

129,156


133,721

Total liabilities and equity

$ 196,918


$ 200,384

 

 


AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands, except per share data






Three months ended



March 31,



2015


2014



(Unaudited)

Revenues:





Products


28,584


28,549

Services


8,896


7,402






Total Revenues


$ 37,480


$ 35,951






Cost of revenues:





Products


13,143


12,917

Services


2,246


1,925






Total Cost of revenues


15,389


14,842






Gross profit


22,091


21,109






Operating expenses:





Research and development, net


7,579


7,812

Selling and marketing


11,297


11,226

General and administrative


2,162


1,914






Total operating expenses


21,038


20,952






Operating income


1,053


157

Financial income, net


65


87






Income before taxes on income


1,118


244

Taxes on income, net


1,496


522






Net loss


$ (378)


$ (278)






Basic net loss per share


$ (0.01)


$ (0.01)






Diluted net loss per share


$ (0.01)


$ (0.01)






Weighted average number of shares used in computing basic net loss per share (in thousands)


41,968


39,969






Weighted average number of shares used in computing diluted net loss per share (in thousands)


41,968


39,969

 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES
NON-GAAP PROFORMA STATEMENTS OF OPERATIONS

U.S. dollars in thousands, except per share data




Three months ended



March 31,



2015


2014



(Unaudited)

Revenues:





Products


28,584


28,549

Services


8,896


7,402






Total Revenues


$ 37,480


$ 35,951






Cost of revenues:





Products


12,938


12,699

Services


2,180


1,869






Total Cost of revenues (1) (2)


15,118


14,568






Gross profit


22,362


21,383






Operating expenses:





Research and development, net (1)


7,458


7,669

Selling and marketing (1) (2)


10,914


10,889

General and administrative (1)


1,937


1,708






Total operating expenses


20,309


20,266






Operating income


2,053


1,117

Financial income, net


65


87






Income before taxes on income


2,118


1,204

Taxes on income, net (3)


168


142






Net income


$ 1,950


$ 1,062






Diluted net income per share


$ 0.05


$ 0.03






Weighted average number of shares used in computing diluted net income per share (in thousands)


42,891


41,734

(1)       Excluding 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 Nuera, Netrake and Mailvision assets.

(3)       Excluding 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 internally this non-GAAP information 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
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET INCOME

U.S. dollars in thousands, except per share data






Three months ended



March 31,



2015


2014



(Unaudited)

GAAP net loss


$(378)


$(278)

GAAP net loss per share


$(0.01)


$(0.01)






Cost of revenues:





Stock-based compensation (1)


23


26

Amortization expenses (2)


248


248



271


274

Research and development, net:





Stock-based compensation (1)


121


143






Selling and marketing:





Stock-based compensation (1)


292


246

Amortization expenses (2)


91


91



383


337

General and administrative:





Stock-based compensation (1)


225


206






Income taxes:





Deferred tax (3)


1,328


380






Non-GAAP net income


$ 1,950


$ 1,062

Non-GAAP diluted net income per share


$ 0.05


$ 0.03



(1)      Stock-based compensation expenses related to options and restricted stock units granted to employees and others.

(2)      Amortization of intangible assets related to the acquisitions of Nuera, Netrake and Mailvision assets.

(3)      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 internally this non-GAAP information 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






Three months ended



March 31,



2015


2014



( Unaudited)

Cash flows from operating activities:





Net loss


$ (378)


$ (278)

Adjustments required to reconcile net income or losses to net cash provided by operating activities:





Depreciation and amortization


824


856

Amortization of marketable securities premiums and accretion of discounts, net


313


39

Increase (decrease) in accrued severance pay, net


161


(212)

Stock-based compensation expenses


661


621

Increase (decrease) in accrued interest on marketable securities, bank deposits and structured notes


(148)


163

Decrease in long-term deferred tax assets, net


619


471

Decrease (increase) in trade receivables, net


144


(612)

Decrease (increase) in other receivables and prepaid expenses


291


(2,139)

Decrease in inventories


132


43

Increase (decrease) in trade payables


(2,524)


2,061

Increase in deferred revenues


4,222


3,256

Increase (decrease)  in other payables and accrued
     expenses


396


(2,322)






Net cash provided by operating activities


4,713


1,947






Cash flows from investing activities:





Decrease in short-term deposits, net


3,276


1,000

Proceeds from redemption of long-term bank deposits


515


530

Purchase of property and equipment


(842)


(411)

Proceeds from redemption of marketable securities upon maturity


-


11,390

Net cash provided by investing activities


2,949


12,509











 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)

U.S. dollars in thousands








Three months ended




 March 31,




2015


2014




( Unaudited)

Cash flows from financing activities:






Purchase of treasury stock



(5,249)


-

Repayment of senior convertible notes



-


(285)

Repayment of long-term bank loans



(976)


(976)

Proceeds from issuance of shares upon exercise of options and warrants



272


1,724

Proceeds from issuance of shares, net



-


29,855







Net cash provided by (used in) financing activities



(5,953)


30,318







Increase in cash and cash equivalents



1,709


44,774

Cash and cash equivalents at the beginning of the period



14,797


30,763

Cash and cash equivalents at the end of the period



$ 16,506


$ 75,537

 

 

Company Contacts


IR Agency Contact

Ofer Segev,

Shirley Nakar,

Philip Carlson/Chris Harrison

VP Finance & CFO

Director, Investor Relations

KCSA Strategic

AudioCodes

AudioCodes

Communications

Tel: +972-3-976-4000

Tel: +972-3-976-4000

Tel: +1-212-896-1233

ofer.segev@audiocodes.com

shirley@audiocodes.com 

audc@kcsa.com

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/audiocodes-reports-first-quarter-2015-results-300073096.html

SOURCE AudioCodes

Copyright 2015 PR Newswire

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