AUDC AudioCodes Ltd

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

Report of Foreign Private Issuer

 

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

 

For the Month of July 2015

 

Commission file number 0-30070

 

AUDIOCODES LTD.

(Translation of registrant’s name into English)

 

1 Hayarden Street • Airport City, Lod 7019900 • ISRAEL

(Address of principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F    x

Form 40-F   ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

 

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

 

 

 

On July 28, 2015, AudioCodes Ltd. (the “Registrant”) issued a press release announcing financial results for the second quarter of 2015 and other matters. A copy of this press release is attached hereto as Exhibit 1.

 

The following document is attached hereto and incorporated by reference herein:

 

Exhibit 1.          Press release, dated July 28, 2015, announcing financial results for the second quarter of 2015 and other matters.

 

The information set forth in (a) the first, second and fifth paragraphs following the list captioned “Second Quarter Highlights,” the first paragraph following the caption “Share Buy Back Program” of, and (b) the condensed consolidated balance sheets, condensed consolidated statements of operations and condensed consolidated statement of cash flows contained in, the press release attached as Exhibit 1 to this Report on Form 6-K are hereby incorporated by reference into (i) the Registrant’s Registration Statement on Form S-8, File No. 333-11894; (ii) the Registrant’s Registration Statement on Form S-8, File No. 333-13268; (iii) the Registrant’s Registration Statement on Form S-8, File No. 333-105473; (iv) the Registrant’s Registration Statement on Form S-8, File No. 333-144825; (v) the Registrant’s Registration Statement on Form S-8, File No. 333-160330; (vi) the Registrant’s Registration Statement on Form S-8, File No. 333-170676; (vii) the Registrant’s Registration Statement on Form S-8, File No. 333-190437; and (viii) the Registrant’s Registration Statement on Form F-3, File No. 333-193209.

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	AUDIOCODES LTD.
	(Registrant)

 

	By:	/s/ NIRAN BARUCH
		Niran Baruch
		Vice President Finance and
		Chief Accounting Officer

 

Dated: July 28, 2015

 

 

EXHIBIT INDEX

 

Exhibit No.		Description
1		Press release, dated July 28, 2015, announcing financial results for the second quarter of 2015 and other matters.

 

 

 

Exhibit 1

 

 

 

Company Contacts				IR Agency Contact
Niran Baruch, VP Finance & Chief Accounting Officer AudioCodes Tel: +972-3-976-4000 Niran.baruch@audiocodes.com		Shirley Nakar, Director, Investor Relations AudioCodes Tel: +972-3-976-4000 shirley@audiocodes.com		Philip Carlson/Collin Dennis KCSA Strategic Communications Tel: +1-212-896-1233 audc@kcsa.com

 

AudioCodes Reports Second Quarter 2015 Results

 

Lod, Israel – July 28, 2015 - AudioCodes (NasdaqGS: AUDC), a leading provider of converged voice solutions, which enables enterprises and service providers to transition to all-IP voice networks, today announced financial results for the second quarter ended June 30, 2015.

 

Second Quarter Highlights:

 

·

Quarterly revenues decreased 13.7% year-over-year to $32.4 million;

 

·

Service revenues increased 13.7% year-over-year to $9.3 million from $8.2 million;

 

·

Quarterly Non-GAAP gross margin was 59.9%, compared to 60.0% in the prior year period;

 

·

Quarterly Non-GAAP operating expenses decreased 4.2% year-over-year to $20.2 million;

 

·

Quarterly cash flow from operating activities remained positive at $3.4 million;

 

·

Quarterly Non-GAAP net loss was $537,000, or ($0.01) per diluted share, compared to net income of $1.6 million, or $0.04 per diluted share, in the prior year period;

 

·

AudioCodes repurchased 1,449,000 of its ordinary shares at an aggregate cost of $6.1 million during the quarter.

 

Revenues for the second quarter of 2015 were $32.4 million, compared to $37.6 million for the second quarter of 2014.

 

Net loss was $1.9 million, or ($0.05) per diluted share, for the second quarter of 2015, compared to a net loss of $46,000, or ($0.00) per diluted share, for the second quarter of 2014.

 

 

 

 

On a Non-GAAP basis, the Company reported a quarterly net loss of $537,000, or ($0.01) per diluted share, compared to net income of $1.6 million, or $0.04 per diluted share, in the second 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 second quarter of 2015 totaled $3.4 million. Cash and cash equivalents, bank deposits and marketable securities were $78.6 million as of June 30, 2015 compared to $91.8 million as of June 30, 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.

 

"We are disappointed with the financial results for the second quarter of 2015, more so in view of our growing business activity and the progress made in the second quarter in the unified communications and the business services market segments. As pre-announced on June 9th, AudioCodes’ second quarter results reflect weakness in our business in Central and Latin America and certain markets in Europe. In addition, we experienced larger than expected weakness in the contact center market, and lower gateway revenues in the areas of low and mid capacity and legacy residential gateways," said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes. “On a more positive note, we saw encouraging developments in our Microsoft Lync business and in our service provider activity, reflected in increased success in sales of CPE products into the hosted PBX market and projects related to the All-IP transformation trend. In order to compensate for the decline in revenues, we have initiated a cost reduction plan. The plan is expected to generate an estimated annualized savings of 5% to 10% of the Company’s operating expenses and be implemented over the next six to twelve months. We expect the initial steps already taken to reduce our operating expenses by approximately 5% below the level of expenses in the first quarter as early as the fourth quarter of this year. In addition, we have started a full review of our business line activities in order to support our plan to return to profitability and growth in the second half of 2015 and beyond,” Mr. Adlersberg added.

 

 

 

 

“Our Skype for Business One Voice Solution, and the One Box 365 solution continue to gain market traction. We see great potential, and saw good progress with our service provider activity, mainly as a result of targeting our efforts towards the global trend of migrating public telephony and voice services into All-IP networks. In this space, we made progress towards winning two large multi-year projects with leading tier-1 service providers. Additionally, we continued to focus our efforts on developing and selling more complete end-to-end solutions and software products to end customers, which we believe will support further growth in coming years. As we continue to adapt and align our offering towards industry trends such as NFV and SDN, as well as the migration to hybrid and pure Cloud environments, we are confident in our ability to weather challenging market conditions and drive growth and success in the future,” 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 $15.0 million of its Ordinary Shares and in May 2015 the court approved an additional $15.0 million in share repurchases. During the quarter ended June 30, 2015, AudioCodes acquired 1,449,000 shares under this program for a total consideration of approximately $6.1 million. As of June 30, 2015, AudioCodes had acquired an aggregate of 3,537,000 shares under this program for an aggregate consideration of approximately $16.6 million.

 

2015 Full Year Outlook update

 

AudioCodes is updating its full year guidance. 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 $137 million to $143 million compared with the prior forecast of a range of $158 million to $162 million. We are now forecasting non-GAAP net income per diluted share to be in the range of $0.09 to $0.12 compared with the prior forecast of $0.24 to $0.28.

 

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 second 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 investor website at http://www.audiocodes.com/investors-lobby.

 

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, What’s Inside Matters, OSN, SmartTAP, VMAS, VoIPerfect, VoIPerfectHD, Your Gateway To VoIP, 3GX, VocaNom 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

 

		June 30,				December 31,
		2015				2014
		(Unaudited)				(Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	15,307			$	14,797
Short-term and restricted bank deposits			4,361				7,630
Short-term marketable securities and accrued interest			4,100				543
Trade receivables, net			28,059				31,056
Other receivables and prepaid expenses			8,279				9,564
Inventories			15,132				14,736
Total current assets			75,238				78,326
LONG-TERM ASSETS:
Long-term and restricted bank deposits			2,733				4,066
Long-term marketable securities			52,107				58,684
Deferred tax assets			-				872
Severance pay funds			18,579				17,835
Total long-term assets			73,419				81,457
PROPERTY AND EQUIPMENT, NET			4,226				3,856
GOODWILL, INTANGIBLE ASSETS AND OTHER, NET			36,080				36,745
Total assets		$	188,963			$	200,384
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term bank loans		$	4,686			$	4,686
Trade payables			6,442				10,111
Other payables and accrued expenses			16,401				15,758
Deferred revenues			12,166				10,233
Total current liabilities			39,695				40,788
LONG-TERM LIABILITIES:
Accrued severance pay			18,731				17,908
Long-term bank loans			2,763				5,105
Deferred revenues and other liabilities			3,896				2,862
Total  long-term liabilities			25,390				25,875
Total equity			123,878				133,721
Total liabilities and equity		$	188,963			$	200,384

 

 

 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

 

		Six months ended								Three months ended
		June 30,								June 30,
		2015				2014				2015				2014
		(Unaudited)								(Unaudited)
Revenues:
Products		$	51,673			$	57,917			$	23,089			$	29,369
Services			18,212				15,600				9,316				8,197
Total Revenues			69,885				73,517				32,405				37,566
Cost of revenues:
Products			23,821				26,193				10,678				13,276
Services			4,823				3,961				2,577				2,036
Total Cost of revenues			28,644				30,154				13,255				15,312
Gross profit			41,241				43,363				19,150				22,254
Operating expenses:
Research and development, net			14,676				16,228				7,097				8,416
Selling and marketing			22,637				22,895				11,340				11,669
General and administrative			4,655				3,716				2,493				1,802
Total operating expenses			41,968				42,839				20,930				21,887
Operating income (loss)			(727	)			524				(1,780	)			367
Financial income, net			606				102				541				15
Income (loss) before taxes on income			(121	)			626				(1,239	)			382
Taxes on income, net			(2,179	)			(950	)			(683	)			(428	)
Net loss		$	(2,300	)		$	(324	)		$	(1,922	)		$	(46	)
Basic net loss per share		$	(0.06	)		$	(0.01	)		$	(0.05	)		$	(0.00	)
Diluted net loss per share		$	(0.06	)		$	(0.01	)		$	(0.05	)		$	(0.00	)
Weighted average number of shares used in computing basic net loss per share (in thousands)			41,391				41,600				40,813				43,230
Weighted average number of shares used in computing diluted net earnings loss per share (in thousands)			41,391				41,600				40,813				43,230

 

 

 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

NON-GAAP PROFORMA STATEMENTS OF OPERATIONS

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

 

		Six months ended								Three months ended
		June 30,								June 30,
		2015				2014				2015				2014
		(Unaudited)								(Unaudited)
Revenues:
Products		$	51,673			$	57,917			$	23,089			$	29,369
Services			18,212				15,600				9,316				8,197
Total Revenues			69,885				73,517				32,405				37,566
Cost of revenues:
Products			23,422				25,762				10,484				13,063
Services			4,677				3,845				2,497				1,976
Total Cost of revenues (1) (2)			28,099				29,607				12,981				15,039
Gross profit			41,786				43,910				19,424				22,527
Operating expenses:
Research and development, net (1)			14,438				15,922				6,980				8,253
Selling and marketing (1) (2)			21,906				22,167				10,992				11,278
General and administrative (1)			4,203				3,303				2,266				1,595
Total operating expenses			40,547				41,392				20,238				21,126
Operating income (loss)			1,239				2,518				(814	)			1,401
Financial income, net			606				102				541				15
Income (loss) before taxes on income			1,845				2,620				(273	)			1,416
Taxes on income, net (3)			(432	)			11				(264	)			153
Net income (loss)		$	1,413			$	2,631			$	(537	)		$	1,569
Diluted net earnings (loss) per share		$	0.03			$	0.06			$	(0.01	)		$	0.04
Weighted average number of shares used in computing basic net earnings (loss) per share (in thousands)			42,172				43,175				41,453				44,616

 

 

(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 (LOSS)

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

 

		Six months ended								Three months ended
		June 30,								June 30,
		2015				2014				2015				2014
		(Unaudited)								(Unaudited)
GAAP net loss		$	(2,300	)		$	(324	)		$	(1,922	)		$	(46	)
GAAP net loss per share		$	(0.06	)		$	(0.01	)		$	(0.05	)		$	(0.00	)
Cost of revenues:
Stock-based compensation (1)			49				51				26				25
Amortization expenses (2)			496				496				248				248
			545				547				274				273
Research and development, net:
Stock-based compensation (1)			238				306				117				163
Selling and marketing:
Stock-based compensation (1)			568				546				276				300
Amortization expenses (2)			163				182				72				91
			731				728				348				391
General and administrative:
Stock-based compensation (1)			452				413				227				207
Income taxes:
Deferred tax (3)			1,328				961				419				581
Non-GAAP net income (loss)		$	994			$	2,631			$	(537	)		$	1,569
Non-GAAP diluted net earnings (loss) per share		$	0.03			$	0.06			$	(0.01	)		$	0.04

 

(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

 

		Six months ended								Three months ended
		June 30,								June 30,
		2015				2014				2015				2014
		( Unaudited)								( Unaudited)
Cash flows from operating activities:
Net loss		$	(2,300	)		$	(324	)		$	(1,922	)		$	(46	)
Adjustments required to reconcile net income or loss to net cash provided by or used in operating activities:
Depreciation and amortization			1,627				1,629				803				773
Amortization of marketable securities premiums and accretion of discounts, net			552				195				239				156
Increase (decrease) in accrued severance pay, net			79				(186	)			(82	)			26
Stock-based compensation expenses			1,307				1,316				646				695
Decrease in long-term deferred tax assets, net			872				967				253				496
Amortization of senior convertible notes discount and deferred charges			-				(15	)			-				-
Decrease (increase) in accrued interest on marketable securities, bank deposits and structured notes			29				174				177				(4	)
Decrease (increase) in trade receivables, net			2,997				(4,363	)			2,853				(3,751	)
Decrease (increase)  in other receivables and prepaid expenses			2,810				(2,370	)			2,519				(231	)
Increase in inventories			(396	)			(234	)			(528	)			(277	)
Increase (decrease) in trade payables			(3,669	)			546				(1,145	)			(1,515	)
Increase (decrease) in deferred revenues			3,212				3,273				(1,010	)			17
Increase in other payables and accrued expenses			950				953				554				3,275
Net cash provided by (used in) operating activities			8,070				1,561				3,357				(386	)
Cash flows from investing activities:
Purchase of marketable securities			-				(60,170	)			-				(60,170	)
Decrease (increase) in short-term deposits, net			3,269				1,000				(7	)			-
Proceeds from redemption of long-term bank deposits			1,365				1,381				850				851
Proceeds from redemption of marketable securities upon maturity			2,711				15,390				2,711				4,000
Purchase of property and equipment			(1,332	)			(719	)			(490	)			(308	)
Net cash provided by (used in) investing activities			6,013				(43,118	)			3,064				(55,627	)

 

 

 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

U.S. dollars in thousands

 

		Six months ended								Three months ended
		June 30,								June 30,
		2015				2014				2015				2014
		( Unaudited)								( Unaudited)
Cash flows from financing activities:
Purchase of treasury stock			(11,329	)			-				(6,080	)			-
Repayment of senior convertible notes			-				(285	)			-				-
Repayment of long-term bank loans			(2,342	)			(2,343	)			(1,366	)			(1,367	)
Consideration related to payment of acquisition of Mailvision			(233	)			(233	)			(233	)			(233	)
Proceeds from issuance of shares upon exercise of options and warrants			331				2,112				59				388
Proceeds from issuance of shares, net			-				29,744				-				-
Payment of issuance costs			-				-				-				(111	)
Net cash provided by (used in) financing activities			(13,573	)			28,995				(7,620	)			(1,323	)
Increase (decrease) in cash and cash equivalents			510				(12,562	)			(1,199	)			(57,336	)
Cash and cash equivalents at the beginning of the period			14,797				30,763				16,506				75,537
Cash and cash equivalents at the end of the period		$	15,307			$	18,201			$	15,307			$	18,201