LOD, Israel, Oct. 27, 2020 /PRNewswire/ --
Third Quarter Highlights
- Quarterly revenues increased by 10% year-over-year to
$56.6 million;
- Quarterly service revenues increased by 19.9% year-over-year to
$19.6 million; and
- Quarterly UC-SIP revenues increased by about 20%
year-over-year.
- GAAP results:
- Quarterly GAAP gross margin percentage
was 67.1%;
- Quarterly GAAP operating margin
percentage was 19.8%; and
- Quarterly GAAP net income was
$7.0 million, or $0.20 per diluted share.
- Non-GAAP results:
- Quarterly Non-GAAP gross margin
percentage was 67.4%;
- Quarterly Non-GAAP operating margin
percentage was 23.7%; and
- Quarterly Non-GAAP net income was
$13.3 million, or $0.38 per diluted share.
- Net cash provided by operating activities was $10.9 million for the quarter.
- AudioCodes declared a cash dividend of 14 cents per share. The dividend, in the
aggregate amount of $4.6 million, was
paid on September 1, 2020.
Details
AudioCodes (NASDAQ: AUDC), a leading vendor of advanced
communications software, products and productivity solutions for
the digital workplace, today announced financial results for the
third quarter ended September 30,
2020.
Revenues for the third quarter of 2020 were $56.6 million compared to $53.5 million for the second quarter of 2020 and
$51.4 million for the third quarter
of 2019.
Net income was $7.0 million, or $0.20 per diluted share, for the
third quarter of 2020, compared to $4.4
million, or $0.14 per diluted
share, for the third quarter of 2019.
On a Non-GAAP basis, net income was $13.3
million, or $0.38 per diluted
share, for the third quarter of 2020 compared to $7.4 million, or $0.24 per diluted share, for the third quarter of
2019.
Non-GAAP net income excludes: (i) share-based compensation
expenses; (ii) amortization expenses related to intangible assets;
(iii) expenses or income related to revaluation of an earn-out
liability in connection with the acquisition of Active
Communications Europe; (iv) financial income or expenses related to
exchange rate differences in connection with revaluation of assets
and liabilities in non-dollar denominated currencies and (v)
non-cash deferred tax expenses. A reconciliation of net income 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 was $10.9 million for the third quarter of 2020. Cash
and cash equivalents, long- and short-term bank deposits and long-
and short-term marketable securities were $176.4 million as of September 30, 2020 compared to $71.9 million as of December 31, 2019. The increase in cash and cash
equivalents, long- and short-term bank deposits and long- and
short-term marketable securities was the result of the receipt of
the net proceeds of the Company's public offering in June 2020, as well as due to cash provided by
operating activities offset, in part, by the payment of cash
dividends during 2020.
"We are pleased to report record financial results for the third
quarter of 2020," said Shabtai
Adlersberg, President and Chief Executive Officer of
AudioCodes. "With work-from-home (WFH) becoming the new normal in
today's world, we see Collaboration taking center stage in enabling
the agenda and implementation plans of many organizations in order
to enhance their productivity and competitiveness in the markets
they serve. This trend has driven the accelerated transition to a
digital workplace by many enterprises, and presents us with an
opportunity to take part in this accelerated digital transformation
trend and increased reliance on digital collaboration tools."
Mr. Adlersberg continued, "As a result, we experienced strong
demand and business momentum across the key segments we serve such
as the UCaaS and Contact Center markets. Coupling this favorable
business momentum with our continued improved efficiency and
productivity, we improved our financial performance year-over-year
to record levels. Underscoring our financial success were
improved gross margin and operating margin, increase of net income
above 75% compared to the year-ago-quarter, and strong cash flow
from operations.
"We continued to experience increased demand and activity
related to the Microsoft Teams collaboration solution. As in
previous quarters, we continued to make progress in our Voice.ai
business, including with our Meeting Insights which targets
meetings recap applications, the Voice.ai Gateway, which
facilitates voice interaction with virtual agents, and in our Voca
business where we saw increased demand for conversational AI.
Looking forward, we expect that Collaboration and WFH will continue
to drive success in our business and remain a mainstream industry
trend for coming years. We plan to continue our investment in
future solutions and product offerings in the UCaaS market and
focus on the return on investment to our shareholders," concluded
Mr. Adlersberg.
Cash Dividend
On August 5, 2020, the Company
declared a cash dividend of $0.14 per
share. The dividend, in the aggregate amount of $4.6 million, was paid on September 1, 2020 to all of the Company's
shareholders of record on August 17,
2020.
Conference Call & Web Cast Information
AudioCodes will conduct a conference call at 8:30 A.M., Eastern Time today to discuss the
Company's third quarter of 2020 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
Follow AudioCodes' social media channels:
AudioCodes invites you to join our online community and follow
us on: AudioCodes Voice Blog, LinkedIn, Twitter, Facebook,
and YouTube.
About AudioCodes
AudioCodes Ltd. (NASDAQ, TASE: AUDC) is a leading vendor of
advanced communications software, products and productivity
solutions for the digital workplace. AudioCodes enables enterprises
and service providers to build and operate all-IP voice networks
for unified communications, contact centers, and hosted business
services. AudioCodes offers a broad range of innovative
products, solutions and services that are used by large
multi-national enterprises and leading tier-1 operators around the
world.
For more information on AudioCodes, visit
http://www.audiocodes.com.
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;
possible adverse impact of the COVID-19 pandemic on our business
and results of operations; 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.
©2020 AudioCodes Ltd. All rights reserved. AudioCodes, AC, HD
VoIP, HD VoIP Sounds Better, IPmedia, Mediant, MediaPack, What's
Inside Matters, OSN, SmartTAP, User Management Pack, VMAS,
VoIPerfect, VoIPerfectHD, Your Gateway To VoIP, 3GX, VocaNom,
AudioCodes One Voice, AudioCodes Meeting Insights, AudioCodes Room
Experience and CloudBond 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,
|
|
2020
|
|
2019
|
|
(Unaudited)
|
|
(Audited)
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$ 58,635
|
|
$ 64,773
|
Restricted
cash
|
5,000
|
|
5,000
|
Short-term and
restricted bank deposits
|
84,742
|
|
1,416
|
Short-term marketable
securities and accrued interest
|
247
|
|
-
|
Trade receivables,
net
|
31,154
|
|
27,501
|
Other receivables and
prepaid expenses
|
8,742
|
|
5,626
|
Inventories
|
30,322
|
|
28,275
|
Total current
assets
|
218,842
|
|
132,591
|
|
|
|
|
LONG-TERM
ASSETS:
|
|
|
|
Long-term and
restricted bank deposits
|
$ 469
|
|
$ 694
|
Long-term marketable
securities and accrued interest
|
27,281
|
|
-
|
Deferred tax
assets
|
12,787
|
|
20,466
|
Operating lease
right-of-use assets
|
25,901
|
|
29,688
|
Severance pay
funds
|
19,370
|
|
19,370
|
Total long-term
assets
|
85,808
|
|
70,218
|
|
|
|
|
PROPERTY AND
EQUIPMENT, NET
|
4,622
|
|
4,392
|
|
|
|
|
GOODWILL, INTANGIBLE
ASSETS AND OTHER, NET
|
36,874
|
|
37,123
|
|
|
|
|
Total
assets
|
$ 346,146
|
|
$ 244,324
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Current maturities of
long-term bank loans
|
$ 1,525
|
|
$ 2,473
|
Trade
payables
|
6,594
|
|
6,628
|
Other payables and
accrued expenses
|
25,436
|
|
24,692
|
IIA settlement
liability
|
10,885
|
|
10,750
|
Deferred
revenues
|
36,175
|
|
33,538
|
Short-term operating
lease liabilities
|
8,535
|
|
8,579
|
Total current
liabilities
|
89,150
|
|
86,660
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
Accrued severance
pay
|
$ 20,736
|
|
$ 20,313
|
Long-term bank
loans
|
300
|
|
1,200
|
IIA settlement
liability
|
10,885
|
|
10,749
|
Deferred revenues and
other liabilities
|
11,050
|
|
9,831
|
Long-term operating
lease liabilities
|
17,568
|
|
23,097
|
Total long-term
liabilities
|
60,539
|
|
65,190
|
|
|
|
|
Total shareholders'
equity
|
196,457
|
|
92,474
|
Total liabilities and
shareholders' equity
|
$ 346,146
|
|
$ 244,324
|
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,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(Unaudited)
|
|
(Unaudited)
|
Revenues:
|
|
|
|
|
|
|
|
Products
|
$ 107,688
|
|
$ 100,375
|
|
$ 36,987
|
|
$ 35,079
|
Services
|
54,420
|
|
47,115
|
|
19,577
|
|
16,333
|
Total Revenues
|
162,108
|
|
147,490
|
|
56,564
|
|
51,412
|
Cost of
revenues:
|
|
|
|
|
|
|
|
Products
|
42,313
|
|
43,682
|
|
14,520
|
|
15,532
|
Services
|
11,839
|
|
10,914
|
|
4,065
|
|
3,529
|
Total Cost of
revenues
|
54,152
|
|
54,596
|
|
18,585
|
|
19,061
|
Gross
profit
|
107,956
|
|
92,894
|
|
37,979
|
|
32,351
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development, net
|
33,544
|
|
30,258
|
|
10,738
|
|
10,599
|
Selling and
marketing
|
38,107
|
|
37,885
|
|
12,521
|
|
12,665
|
General and
administrative
|
10,073
|
|
8,354
|
|
3,495
|
|
3,091
|
Total operating
expenses
|
81,724
|
|
76,497
|
|
26,754
|
|
26,355
|
Operating
income
|
26,232
|
|
16,397
|
|
11,225
|
|
5,996
|
Financial income
(expenses), net
|
958
|
|
(1,992)
|
|
504
|
|
(913)
|
Income before taxes
on income
|
27,190
|
|
14,405
|
|
11,729
|
|
5,083
|
Taxes on income,
net
|
(8,323)
|
|
(2,195)
|
|
(4,765)
|
|
(716)
|
Net income
|
$ 18,867
|
|
$ 12,210
|
|
$ 6,964
|
|
$ 4,367
|
Basic net earnings
per share
|
$ 0.61
|
|
$ 0.42
|
|
$ 0.21
|
|
$ 0.15
|
Diluted net earnings
per share
|
$ 0.58
|
|
$ 0.40
|
|
$ 0.20
|
|
$ 0.14
|
Weighted average
number of shares used in
computing basic net earnings per share (in
thousands)
|
30,951
|
|
29,195
|
|
32,673
|
|
29,157
|
Weighted average
number of shares used in
computing diluted net earnings per share (in
thousands)
|
32,484
|
|
30,705
|
|
34,198
|
|
30,642
|
AUDIOCODES LTD.
AND ITS SUBSIDIARIES
|
RECONCILIATION OF
GAAP NET INCOME TO NON-GAAP NET INCOME
|
U.S. dollars in
thousands, except per share data
|
|
|
Nine months
ended
|
|
Three months
ended
|
|
September
30,
|
|
September
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
GAAP net
income
|
$ 18,867
|
|
$ 12,210
|
|
$ 6,964
|
|
$ 4,367
|
GAAP net earnings per
share
|
$ 0.58
|
|
$ 0.40
|
|
$ 0.20
|
|
$ 0.14
|
Cost of
revenues:
|
|
|
|
|
|
|
|
Share-based
compensation (1)
|
157
|
|
121
|
|
58
|
|
55
|
Amortization expenses
(2)
|
204
|
|
204
|
|
68
|
|
68
|
|
361
|
|
325
|
|
126
|
|
123
|
Research and
development, net:
|
|
|
|
|
|
|
|
Share-based
compensation (1)
|
764
|
|
648
|
|
274
|
|
226
|
Selling and
marketing:
|
|
|
|
|
|
|
|
Share-based
compensation (1)
|
2,668
|
|
1,360
|
|
1,045
|
|
606
|
Amortization expenses
(2)
|
45
|
|
45
|
|
15
|
|
15
|
|
2,713
|
|
1,405
|
|
1,060
|
|
621
|
General and
administrative:
|
|
|
|
|
|
|
|
Share-based
compensation (1)
|
1,984
|
|
1,204
|
|
720
|
|
465
|
Revaluation of
earn-out liability (3)
|
-
|
|
(23)
|
|
-
|
|
-
|
|
1,984
|
|
1,181
|
|
720
|
|
465
|
Financial
expenses:
|
|
|
|
|
|
|
|
Exchange rate
differences (4)
|
(871)
|
|
2,330
|
|
(418)
|
|
1,072
|
|
|
|
|
|
|
|
|
Income
taxes:
|
|
|
|
|
|
|
|
Deferred tax expense
(5)
|
7,678
|
|
1,632
|
|
4,524
|
|
544
|
Non-GAAP net
income
|
$ 31,496
|
|
$ 19,731
|
|
$ 13,250
|
|
$ 7,418
|
Non-GAAP diluted net
earnings per share
|
$ 0.96
|
|
$ 0.63
|
|
$ 0.38
|
|
$ 0.24
|
(1) Share-based compensation expenses related to options
and restricted share units granted to employees and others.
(2) Amortization of intangible assets related to the
acquisitions of Active Communications Europe assets.
(3) Expenses or income related to revaluation of an earn-out
liability in connection with the acquisition of Active
Communications Europe.
(4) Financial income or expenses related to exchange rate
differences in connection with revaluation of assets and
liabilities in non-dollar denominated currencies.
(5) 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,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
(Unaudited)
|
|
(Unaudited)
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$ 18,867
|
|
$ 12,210
|
|
$ 6,964
|
|
$ 4,367
|
Adjustments required
to reconcile net income to net
cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
1,681
|
|
1,522
|
|
562
|
|
542
|
Amortization of
marketable securities premiums and
accretion of discounts,
net
|
|
38
|
|
79
|
|
38
|
|
-
|
Increase (decrease)
in accrued severance pay, net
|
|
423
|
|
124
|
|
(201)
|
|
239
|
Share-based
compensation expenses
|
|
5,573
|
|
3,333
|
|
2,097
|
|
1,352
|
Decrease in deferred
tax assets, net
|
|
7,637
|
|
1,481
|
|
4,510
|
|
528
|
Increase (decrease)
in accrued interest and exchange
rate effect of loans, marketable
securities and bank
deposits
|
|
(19)
|
|
120
|
|
(20)
|
|
(39)
|
Decrease in operating
lease right-of-use assets
|
|
5,720
|
|
5,901
|
|
1,822
|
|
1,838
|
Decrease in operating
lease liabilities
|
|
(7,506)
|
|
(5,516)
|
|
(3,322)
|
|
(2,803)
|
Changes in IIA
settlement liability, net
|
|
271
|
|
-
|
|
210
|
|
-
|
Decrease (increase)
in trade receivables, net
|
|
(3,653)
|
|
(2,006)
|
|
(1,010)
|
|
617
|
Decrease (increase)
in other receivables and prepaid
expenses
|
|
(1,749)
|
|
482
|
|
(1,732)
|
|
279
|
Increase in
inventories
|
|
(2,454)
|
|
(7,677)
|
|
(1,046)
|
|
(421)
|
Increase (decrease)
in trade payables
|
|
(34)
|
|
1,631
|
|
1,983
|
|
(2,036)
|
Increase (decrease)
in other payables and accrued
expenses
|
|
(304)
|
|
1,424
|
|
673))
|
|
(641)
|
Increase in deferred
revenues
|
|
3,898
|
|
7,648
|
|
692
|
|
217
|
Net cash provided by
operating activities
|
|
28,389
|
|
20,756
|
|
10,874
|
|
4,039
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Investment in
short-term deposits
|
|
(84,000)
|
|
-
|
|
(84,000)
|
|
-
|
Proceeds from
short-term deposits
|
|
674
|
|
10,962
|
|
223
|
|
4,991
|
Proceeds from
long-term deposits
|
|
225
|
|
900
|
|
75
|
|
300
|
Proceeds from
redemption of marketable securities
|
|
-
|
|
19,385
|
|
-
|
|
-
|
Purchase of
marketable securities
|
|
(27,664)
|
|
(10,006)
|
|
(27,664)
|
|
(10,006)
|
Purchase of property
and equipment
|
|
(1,112)
|
|
(1,676)
|
|
(471)
|
|
(315)
|
Net cash provided by
(used in) investing activities
|
|
(111,877)
|
|
19,565
|
|
(111,837)
|
|
(5,030)
|
|
|
|
|
|
|
|
|
|
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,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
(Unaudited)
|
|
(Unaudited)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Purchase of treasury
shares
|
|
-
|
|
(8,002)
|
|
-
|
|
-
|
Repayment of bank
loans
|
|
(1,865)
|
|
(1,853)
|
|
(627)
|
|
(616)
|
Cash dividends paid
to shareholders
|
|
(7,587)
|
|
(6,720)
|
|
(3,721)
|
|
(3,502)
|
Payment related to
the acquisition of ACS
|
|
-
|
|
(410)
|
|
-
|
|
-
|
Proceeds from
issuance of shares, net
|
|
85,426
|
|
-
|
|
(228)
|
|
-
|
Proceeds from
issuance of shares upon exercise of
options and warrants
|
|
1,376
|
|
2,233
|
|
325
|
|
771
|
Net cash provided by
(used in) financing activities
|
|
77,350
|
|
(14,752)
|
|
(4,251)
|
|
(3,347)
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash, cash equivalents, and
restricted cash
|
|
(6,138)
|
|
25,569
|
|
(105,214)
|
|
(4,338)
|
Cash, cash
equivalents and restricted cash at beginning
of period
|
|
69,773
|
|
31,503
|
|
168,849
|
|
61,410
|
Cash, cash
equivalents and restricted cash at end of
period
|
|
$ 63,635
|
|
$ 57,072
|
|
$ 63,635
|
|
$ 57,072
|
Logo -
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Company
Contacts
|
|
IR Agency
Contact
|
Niran
Baruch,
VP Finance &
Chief Financial 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
|
Brett Maas,
Managing Director Hayden IR Tel:
+1-646-536-7331 brett@haydenir.com
|
View original
content:http://www.prnewswire.com/news-releases/audiocodes-reports-third-quarter-2020-results-301160266.html
SOURCE AudioCodes