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 November 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 November 3, 2015, AudioCodes Ltd. (the “Registrant”) issued a press release announcing financial results for the third 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 November 3, 2015, announcing financial results for the third quarter of 2015 and other matters.

 

The information set forth in (a) the second, third and sixth paragraphs following the list captioned “Third Quarter Highlights,” the first and second paragraphs 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: November 3, 2015

 

 

EXHIBIT INDEX

 

Exhibit No.		Description
1		Press release, dated November 3, 2015, announcing financial results for the third 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 Third Quarter 2015 Results

 

Lod, Israel - November 3, 2015 -

 

Third Quarter Highlights:

 

·

Quarterly revenues increased 5.6% over the previous quarter and decreased 12.1% year-over-year to $34.2 million;

·

Quarterly service revenues increased 15.6% year-over-year to $9.6 million;

·

Quarterly Non-GAAP gross margin was 60.0%;

·

Quarterly Non-GAAP operating expenses decreased by 9.9% year-over-year to $18.7 million;

·

Quarterly cash flow from operating activities was $1.8 million;

·

Quarterly Non-GAAP net income was $1.7 million, or $0.04 per diluted share, compared to Non-GAAP net income of $1.6 million, or $0.04 per diluted share, in the prior year period;

·

AudioCodes repurchased 1.1 million shares of its ordinary shares at an aggregate cost of $3.7 million during the quarter.

 

Details:

 

AudioCodes (Nasdaq: AUDC), 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 third quarter ended September 30, 2015.

 

Revenues for the third quarter of 2015 were $34.2 million, compared to $32.4 million for the second quarter of 2015 and $38.9 million for the third quarter of 2014.

 

 

 

Net loss was $130,000, or ($0.00) per diluted share, for the third quarter of 2015, compared to a net loss of $708,000, or ($0.02) per diluted share, for the third quarter of 2014.

 

On a Non-GAAP basis, the Company reported a quarterly net income of $1.7 million, or $0.04 per diluted share, compared to net income of $1.6 million, or $0.04 per diluted share, in the third quarter of 2014.

 

Non-GAAP net income 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 third quarter of 2015 totaled $1.8 million. Cash and cash equivalents, bank deposits and marketable securities were $75.3 million as of September 30, 2015 compared to $89.3 million as of September 30, 2014. The decrease in cash and cash equivalents, bank deposits and marketable securities was the result of the use of cash for the continued repurchasing of the Company’s ordinary shares pursuant to its share repurchase program.

 

“We are pleased to report a return to growth in revenues and improved sequential financial performance for the third quarter of 2015,” said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes. “Third quarter revenues demonstrate strong performance across our networking business which grew 10.3% over the previous quarter. Driven by healthy demand in the unified communications market and the business communications services market, we saw increased traction in our sales and continued to solidify our position as a leading Voice Networking solutions and services vendor. Backed by the strong trend of network transformation into all-IP networks, our continued investment in the Microsoft Skype for Business ecosystem and our session border controller (SBC) activities provided more than 15% sequential growth in each of these market segments. As in previous quarters, we experienced growing collaboration with our industry partners, which we believe will support further growth in coming years.”

 

“As we remain focused on improving bottom line results, we made solid progress with our cost reduction plan announced in July 2015. Third quarter financial results reflect this reduction in operating expenses, an area we intend to continue to focus on in 2016 and beyond,” concluded Mr. Adlersberg.

 

 

Share Buy Back Program

 

During the quarter ended September 30, 2015, AudioCodes acquired 1.1 million shares under the existing share repurchase program for a total consideration of approximately $3.7 million. As of September 30, 2015 and since beginning the repurchase of its shares in August 2014, AudioCodes had acquired an aggregate of 4.7 million shares for an aggregate consideration of approximately $20.3 million.

 

 

 

In August 2014, the Board of Directors of AudioCodes approved a program to repurchase up to $3 million of its ordinary shares. In addition, AudioCodes received court approvals in Israel in November 2014 and May 2015 to purchase up to an aggregate of $30 million of additional ordinary shares pursuant to this program. The current court approval for share repurchases will expire at the end of December 2015. At that time the authority to repurchase any unutilized portions of the prior approval will expire. On November 2, 2015 the Board of Directors has approved filing a new application with the court requesting approval for a new repurchase program for a total consideration of up to $10 million in share repurchases for a period of 6 months from the date of receipt of court approval.

 

Conference Call & Web Cast Information

 

AudioCodes will conduct a conference call at 8:00 A.M., Eastern Time today to discuss the Company’s third 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. (Nasdaq, 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 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, AudioCodes One Voice and AudioCodes 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

 

		September 30,				December 31,
		2015				2014
		(Unaudited)				(Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	15,137			$	14,797
Short-term and restricted bank deposits			5,556				7,630
Short-term marketable securities and accrued interest			1,540				543
Trade receivables, net			26,079				31,056
Other receivables and prepaid expenses			7,179				9,564
Inventories			16,268				14,736
Total current assets			71,759				78,326
LONG-TERM ASSETS:
Long-term and restricted bank deposits		$	1,075				4,066
Long-term marketable securities			51,973				58,684
Deferred tax assets			-				872
Severance pay funds			16,239				17,835
Total long-term assets			69,287				81,457
PROPERTY AND EQUIPMENT, NET			4,116				3,856
GOODWILL, INTANGIBLE ASSETS AND OTHER, NET			35,812				36,745
Total assets		$	180,974			$	200,384
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term bank loans		$	4,686			$	4,686
Trade payables			7,307				10,111
Other payables and accrued expenses			15,571				15,758
Deferred revenues			12,124				10,233
Total current liabilities			39,688				40,788
LONG-TERM LIABILITIES:
Accrued severance pay		$	16,589				17,908
Long-term bank loans			1,786				5,105
Deferred revenues and other liabilities			3,786				2,862
Total  long-term liabilities			22,161				25,875
Total equity			119,125				133,721
Total liabilities and equity		$	180,974			$	200,384

 

 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

 

		Nine months ended								Three months ended
		September 30,								September 30,
		2015				2014				2015				2014
		(Unaudited)								(Unaudited)
Revenues:
Products		$	76,286			$	88,549			$	24,613			$	30,632
Services			27,824				23,913				9,612				8,313
Total Revenues			104,110				112,462				34,225				38,945
Cost of revenues:
Products			35,348				40,767				11,527				14,574
Services			7,274				5,873				2,451				1,912
Total Cost of revenues			42,622				46,640				13,978				16,486
Gross profit			61,488				65,822				20,247				22,459
Operating expenses:
Research and development, net			21,332				24,337				6,656				8,109
Selling and marketing			33,100				34,256				10,463				11,361
General and administrative			6,813				5,691				2,158				1,975
Total operating expenses			61,245				64,284				19,277				21,445
Operating income			243				1,538				970				1,014
Financial income (expenses), net			600				(168	)			(6	)			(270	)
Income before taxes on income			843				1,370				964				744
Taxes on income, net			(3,273	)			(2,402	)			(1,094	)			(1,452	)
Net loss		$	(2,430	)		$	(1,032	)		$	(130	)		$	(708	)
Basic net loss per share		$	(0.06	)		$	(0.02	)		$	(0.00	)		$	(0.02	)
Diluted net loss per share		$	(0.06	)		$	(0.02	)		$	(0.00	)		$	(0.02	)
Weighted average number of shares used in computing basic and diluted net loss per share (in thousands)			40,757				42,135				39,489				43,206

 

 

 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

NON-GAAP PROFORMA STATEMENTS OF OPERATIONS

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

 

		Nine months ended								Three months ended
		September 30,								September 30,
		2015				2014				2015				2014
		(Unaudited)								(Unaudited)
Revenues:
Products		$	76,286			$	88,549			$	24,613			$	30,632
Services			27,824				23,913				9,612				8,313
Total Revenues			104,110				112,462				34,225				38,945
Cost of revenues:
Products			34,747				40,124				11,325				14,362
Services			7,057				5,699				2,380				1,854
Total Cost of revenues (1) (2)			41,804				45,823				13,705				16,216
Gross profit			62,306				66,639				20,520				22,729
Operating expenses:
Research and development, net (1)			20,979				23,874				6,541				7,952
Selling and marketing (1) (2)			32,103				33,154				10,197				10,987
General and administrative (1)			6,134				5,092				1,931				1,789
Total operating expenses			59,216				62,120				18,669				20,728
Operating income			3,090				4,519				1,851				2,001
Financial income (expenses), net			600				(168	)			(6	)			(270	)
Income before taxes on income			3,690				4,351				1,845				1,731
Taxes on income, net (3)			(627	)			(139	)			(195	)			(150	)
Net income		$	3,063			$	4,212			$	1,650			$	1,581
Diluted net earnings per share		$	0.07			$	0.10			$	0.04			$	0.04
Weighted average number of shares used in computing basic net earnings per share (in thousands)			41,400				43,583				39,855				44,400

 

(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

 

		Nine months ended								Three months ended
		September 30,								September 30,
		2015				2014				2015				2014
		(Unaudited)								(Unaudited)
GAAP net loss		$	(2,430	)		$	(1,032	)		$	(130	)		$	(708	)
GAAP net loss per share		$	(0.06	)		$	(0.02	)		$	(0.00	)		$	(0.02	)
Cost of revenues:
Stock-based compensation (1)			74				73				25				22
Amortization expenses (2)			744				744				248				248
			818				817				273				270
Research and development, net:
Stock-based compensation (1)			353				463				115				157
Selling and marketing:
Stock-based compensation (1)			819				829				251				283
Amortization expenses (2)			178				273				15				91
			997				1,102				266				374
General and administrative:
Stock-based compensation (1)			679				599				227				186
Income taxes:
Deferred tax (3)			2,646				2,263				899				1,302
Non-GAAP net income		$	3,063			$	4,212			$	1,650			$	1,581
Non-GAAP diluted net earnings per share		$	0.07			$	0.10			$	0.04			$	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

 

		Nine months ended								Three months ended
		September 30,								September 30,
		2015				2014				2015				2014
		(Unaudited)								(Unaudited)
Cash flows from operating activities:
Net loss		$	(2,430	)		$	(1,032	)		$	(130	)		$	(708	)
Adjustments required to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization			2,350				2,430				723				801
Amortization of marketable securities premiums and accretion of discounts, net			851				508				299				313
Increase (decrease) in accrued severance pay, net			277				(115	)			198				71
Stock-based compensation expenses			1,925				1,964				618				648
Decrease in long- term deferred tax assets			872				1,450				-				483
Amortization of senior convertible notes discount and deferred charges			-				(15	)			-				-
Decrease (increase) in accrued interest on marketable securities, bank deposits and structured notes			(58	)			26				(87	)			(148	)
Decrease (increase) in trade receivables, net			4,977				(3,670	)			1,980				693
Decrease (increase)  in other receivables and prepaid expenses			2,274				(3,361	)			(536	)			(991	)
Increase in inventories			(1,532	)			(1,244	)			(1,136	)			(1,010	)
Increase (decrease) in trade payables			(2,804	)			3,330				865				2,784
Increase (decrease) in deferred revenues			3,056				4,042				(156	)			769
Increase (decrease) in other payables and accrued expenses			98				(723	)			(852	)			(1,676	)
Net cash provided by operating activities			9,856				3,590				1,786				2,029
Cash flows from investing activities:
Purchase of marketable securities			-				(60,286	)			-				(116	)
Proceeds from sale of marketable securities			2,557				-				2,557				-
Decrease (increase) in short-term deposits, net			3,274				900				5				(100	)
Proceeds from redemption of long-term bank deposits			1,826				1,834				461				453
Proceeds from redemption of marketable securities upon maturity			2,711				15,390				-				-
Purchase of property and equipment			(1,677	)			(1,450	)			(345	)			(731	)
Net cash provided by (used in) investing activities			8,691				(43,612	)			2,678				(494	)

 

 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

U.S. dollars in thousands

 

		Nine months ended								Three months ended
		September 30,								September 30,
		2015				2014				2015				2014
		(Unaudited)								(Unaudited)
Cash flows from financing activities:
Purchase of treasury stock			(14,991	)			(2,733	)			(3,662	)			(2,733	)
Repayment of senior convertible notes			-				(285	)			-				-
Repayment of long-term bank loans			(3,319	)			(3,319	)			(977	)			(976	)
Consideration related to payment of acquisition of Mailvision			(233	)			(233	)			-				-
Proceeds from issuance of shares upon exercise of options and warrants			336				2,151				5				39
Proceeds from issuance of shares, net			-				29,744				-				-
Net cash provided by (used in) financing activities			(18,207	)			25,325				(4,634	)			(3,670	)
Increase (decrease) in cash and cash equivalents			340				(14,697	)			(170	)			(2,135	)
Cash and cash equivalents at the beginning of the period			14,797				30,763				15,307				18,201
Cash and cash equivalents at the end of the period		$	15,137			$	16,066			$	15,137			$	16,066