LOD, Israel, Oct. 23, 2018
/PRNewswire/ --
Third Quarter Highlights
- Quarterly revenues increased by 13.5% year-over-year to
$44.5 million;
- Quarterly service revenues increased by 10.8% year-over-year to
$14.1 million;
- Revenues related to UC-SIP business increased more than 30%
compared to the third quarter of 2017;
- Quarterly GAAP gross margin was 62.2%; quarterly Non-GAAP gross
margin was 62.7%;
- Quarterly GAAP operating margin was 11.2%; quarterly Non-GAAP
operating margin was 13.5%;
- Quarterly cash flow from operating activities was $3.5 million;
- Quarterly GAAP net income was $4.1
million, or $0.14 per diluted
share; quarterly Non-GAAP net income was $5.8 million, or $0.19 per diluted share;
- AudioCodes repurchased approximately 133,000 of its ordinary
shares during the quarter at an aggregate cost of $1.1 million.
- AudioCodes declared an annual cash dividend of 20 cents per share. The dividend, in the
aggregate amount of $5.8 million, was
paid on August 20, 2018.
Details
AudioCodes (NASDAQ: AUDC), a leading vendor of advanced voice
networking and media processing solutions for the digital
workplace, today announced financial results for the third quarter
ended September 30, 2018.
Revenues for the third quarter of 2018 were $44.5 million compared to $43.5 million for the second quarter of 2018 and
$39.2 million for the third quarter
of 2017.
Net income was $4.1 million, or
$0.14 per diluted share, for the
third quarter of 2018 compared to $1.0
million, or $0.03 per diluted
share, for the comparable period last year.
On a Non-GAAP basis, net income was $5.8
million, or $0.19 per diluted
share, for the third quarter of 2018 compared to $3.4 million, or $0.10 per diluted share, for the comparable
period last year.
Non-GAAP net income excludes: (i) share-based compensation
expenses; (ii) amortization expenses related to intangible assets;
(iii) expenses related to deferred payments and expenses due to
revaluation of an earn-out liability, each in connection with the
acquisition of Active Communications Europe; and (iv) non-cash
deferred tax benefit or 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 $3.5 million for the third quarter of 2018. Cash
and cash equivalents, long- and short-term bank deposits and long-
and short-term marketable securities were $56.7 million as of September 30, 2018 compared to $58.7 million as of December 31, 2017. The decrease in cash and cash
equivalents, long- and short-term bank deposits and long- and
short-term marketable securities was the result of the use of cash
to pay a dividend to shareholders in the aggregate amount of
$5.8 million and for the continued
repurchasing of the Company's ordinary shares offset, in part, by
cash provided by operating activities.
"We are pleased to report record financial results for the third
quarter of 2018," said Shabtai
Adlersberg, President and Chief Executive Officer of
AudioCodes.
"In the third quarter we continued to execute on our strategic
plan to grow our leadership in the Enterprise and Service Providers
telephony and Voice business. Supporting our strategy for secular
multi-year growth are the strong trends of moving to a digital
workplace in the enterprise and the transitioning to all-IP
networks in the service providers market. This has resulted in
13.5% growth in revenue and strong net income compared to the year
ago quarter. Key to this strong performance was our UC-SIP business
which grew over 30% compared to the third quarter of 2017. This is
now the third quarter in a row in 2018 with above 30% growth in our
UC-SIP business over the respective quarters in 2017. We now
predict annual revenue growth of above 11.5% for the full year 2018
compared to 7.7% growth in revenue in 2017. We also forecast that
non-GAAP net income in 2018 will grow more than 50% compared to
2017, on the heels of close to 30% growth in net income in 2017.
Steady evolution in the underlying market segments we serve coupled
with our strong execution and leadership should support continued
business momentum in coming quarters".
"On the financial front, we have demonstrated good control of
operating expenses resulting in record financial performance.
Non-GAAP operating margin for the third quarter of 2018 was 13.5%
compared to 8.8% in the third quarter of 2017. EBITDA was
$6.4 million compared to $3.8 million in the third quarter of 2017.
Non-GAAP net income reached $5.8
million compared to non-GAAP net income of $3.8 million in the third quarter of 2017. Net
cash provided by operations was $3.5
million and has reached $14.0
million for the nine months ended September 30, 2018. As such, we remain confident
in improved performance in the coming quarters as we enjoy
continued good business momentum," concluded Mr. Adlersberg.
Dividend
On July 24, 2018, the Company
declared an annual cash dividend of 20
cents per share. The dividend, in the aggregate amount of
$5.8 million, was paid on
August 20, 2018 to all of the
Company's shareholders of record on August
6, 2018.
Share Buy Back Program
During the quarter ended September 30,
2018, AudioCodes acquired approximately 133,000 of its
ordinary shares under its share repurchase program for a total
consideration of $1.1 million. As of
September 30, 2018, AudioCodes had
acquired an aggregate of 17.3 million of its ordinary shares since
August 2014 for an aggregate
consideration of $91.3 million.
In June 2018, AudioCodes received
court approval in Israel to
purchase up to an additional $20
million ("Permitted Amount") of its ordinary shares. The
court approval also permits AudioCodes to declare a dividend out of
any part of the Permitted Amount during the approved validity
period. As of September 30, 2018,
$12.7 million remained available to
the Company under this court approval. The current court approval
will expire on December 14, 2018.
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
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 voice networking and media processing 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; 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.
©2018 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 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,
|
|
2018
|
|
2017
|
|
(Unaudited)
|
|
(Audited)
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$ 21,320
|
|
$ 24,235
|
Short-term and
restricted bank deposits
|
6,245
|
|
2,739
|
Short-term marketable
securities and accrued interest
|
25,710
|
|
7,087
|
Trade receivables,
net
|
26,454
|
|
22,059
|
Other receivables and
prepaid expenses
|
8,244
|
|
4,693
|
Inventories
|
21,900
|
|
16,563
|
Total current
assets
|
109,873
|
|
77,376
|
|
|
|
|
LONG-TERM
ASSETS:
|
|
|
|
Long-term and
restricted bank deposits
|
3,394
|
|
4,207
|
Long-term marketable
securities
|
-
|
|
20,475
|
Deferred tax
assets
|
4,933
|
|
6,685
|
Severance pay
funds
|
18,654
|
|
20,138
|
Total long-term
assets
|
26,981
|
|
51,505
|
|
|
|
|
PROPERTY AND
EQUIPMENT, NET
|
3,892
|
|
3,835
|
|
|
|
|
GOODWILL, INTANGIBLE
ASSETS AND OTHER, NET
|
37,640
|
|
38,222
|
|
|
|
|
Total
assets
|
$ 178,386
|
|
$ 170,938
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Current maturities of
long-term bank loans
|
$ 2,497
|
|
$ 2,519
|
Trade
payables
|
6,627
|
|
5,639
|
Other payables and
accrued expenses
|
23,621
|
|
20,786
|
Deferred
revenues
|
22,995
|
|
16,417
|
Total current
liabilities
|
55,740
|
|
45,361
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
Accrued severance
pay
|
19,787
|
|
21,228
|
Long-term bank
loans
|
4,322
|
|
6,237
|
Deferred revenues and
other liabilities
|
7,257
|
|
5,731
|
Total long-term
liabilities
|
31,366
|
|
33,196
|
|
|
|
|
Total shareholders'
equity
|
91,280
|
|
92,381
|
Total liabilities and
shareholders' equity
|
$ 178,386
|
|
$ 170,938
|
AUDIOCODES LTD.
AND ITS SUBSIDIARIES
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
U.S. dollars in
thousands, except share and per share data
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months
ended
|
|
Three months
ended
|
|
September
30,
|
|
September
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(Unaudited)
|
|
(Unaudited)
|
Revenues:
|
|
|
|
|
|
|
|
Products
|
$ 89,237
|
|
$ 79,450
|
|
$ 30,462
|
|
$ 26,522
|
Services
|
41,209
|
|
35,871
|
|
14,057
|
|
12,686
|
Total
Revenues
|
130,446
|
|
115,321
|
|
44,519
|
|
39,208
|
Cost of
revenues:
|
|
|
|
|
|
|
|
Products
|
38,428
|
|
35,241
|
|
13,414
|
|
11,909
|
Services
|
10,071
|
|
8,359
|
|
3,413
|
|
2,692
|
Total Cost of
revenues
|
48,499
|
|
43,600
|
|
16,827
|
|
14,601
|
Gross
profit
|
81,947
|
|
71,721
|
|
27,692
|
|
24,607
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development, net
|
25,626
|
|
22,222
|
|
8,283
|
|
7,686
|
Selling and
marketing
|
37,377
|
|
36,549
|
|
12,020
|
|
12,151
|
General and
administrative
|
7,713
|
|
6,537
|
|
2,402
|
|
2,176
|
Total operating
expenses
|
70,716
|
|
65,308
|
|
22,705
|
|
22,013
|
Operating
income
|
11,231
|
|
6,413
|
|
4,987
|
|
2,594
|
Financial income
(expenses), net
|
186
|
|
(6)
|
|
(37)
|
|
97
|
Income before taxes
on income
|
11,417
|
|
6,407
|
|
4,950
|
|
2,691
|
Taxes on income,
net
|
(2,454)
|
|
(3,049)
|
|
(815)
|
|
(1,642)
|
Net income
|
$ 8,963
|
|
$ 3,358
|
|
$ 4,135
|
|
$ 1,049
|
Basic earnings per
share
|
$ 0.31
|
|
$ 0.11
|
|
$ 0.14
|
|
$ 0.03
|
Diluted earnings per
share
|
$ 0.30
|
|
$ 0.10
|
|
$ 0.14
|
|
$ 0.03
|
Weighted average
number of shares
used in computing basic earnings per share (in
thousands)
|
28,855
|
|
31,500
|
|
28,797
|
|
30,918
|
Weighted average
number of shares
used in computing diluted earnings per share (in
thousands)
|
30,118
|
|
32,534
|
|
30,272
|
|
31,959
|
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,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(Unaudited)
|
|
(Unaudited)
|
GAAP net
income
|
$ 8,963
|
|
$ 3,358
|
|
$ 4,135
|
|
$ 1,049
|
GAAP earnings per
share
|
$ 0.30
|
|
$ 0.10
|
|
$ 0.14
|
|
$ 0.03
|
Cost of
revenues:
|
|
|
|
|
|
|
|
Share-based
compensation (1)
|
138
|
|
59
|
|
51
|
|
17
|
Amortization expenses
(2)
|
522
|
|
522
|
|
174
|
|
174
|
|
660
|
|
581
|
|
225
|
|
191
|
Research and
development, net:
|
|
|
|
|
|
|
|
Share-based
compensation (1)
|
445
|
|
278
|
|
181
|
|
97
|
Deferred payments
expenses (3)
|
-
|
|
136
|
|
-
|
|
63
|
|
445
|
|
414
|
|
181
|
|
160
|
Selling and
marketing:
|
|
|
|
|
|
|
|
Share-based
compensation (1)
|
861
|
|
779
|
|
307
|
|
239
|
Amortization expenses
(2)
|
45
|
|
90
|
|
15
|
|
30
|
|
906
|
|
869
|
|
322
|
|
269
|
General and
administrative:
|
|
|
|
|
|
|
|
Share-based
compensation (1)
|
854
|
|
565
|
|
314
|
|
219
|
Revaluation of
earn-out liability (4)
|
200
|
|
-
|
|
-
|
|
-
|
|
1,054
|
|
565
|
|
314
|
|
219
|
Income
taxes:
|
|
|
|
|
|
|
|
Deferred tax
(5)
|
1,752
|
|
2,560
|
|
584
|
|
1,496
|
Non-GAAP net
income
|
$ 13,780
|
|
$ 8,347
|
|
$ 5,761
|
|
$ 3,384
|
Non-GAAP diluted
earnings per share
|
$ 0.45
|
|
$ 0.25
|
|
$ 0.19
|
|
$ 0.10
|
|
|
|
|
|
|
|
|
|
(1) Share-based compensation
expenses related to options and restricted share units granted to
employees and others.
(2) Excluding amortization of
intangible assets related to the acquisitions of Mailvision and
Active Communications Europe assets.
(3) Excluding expenses related to
deferred payments in connection with the acquisition of Active
Communications Europe.
(4) Revaluation of earn-out
liability in connection with the acquisition of Active
Communications Europe.
(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 STATEMENTS OF CASH FLOWS
|
U.S. dollars in
thousands
|
|
|
|
|
|
|
|
|
|
|
|
Nine months
ended
|
|
Three months
ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
(Unaudited)
|
|
(Unaudited)
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$ 8,963
|
|
$ 3,358
|
|
$ 4,135
|
|
$ 1,049
|
Adjustments required
to reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
1,666
|
|
1,859
|
|
561
|
|
599
|
Amortization of
marketable securities premiums and accretion of discounts,
net
|
|
271
|
|
475
|
|
83
|
|
146
|
Increase in accrued
severance pay, net
|
|
43
|
|
232
|
|
182
|
|
284
|
Share-based
compensation expenses
|
|
2,298
|
|
1,681
|
|
853
|
|
572
|
Decrease (increase)
in accrued interest and exchange rate effect of loans, marketable
securities and bank deposits
|
|
(79)
|
|
251
|
|
(64)
|
|
36
|
Decrease in long-
term deferred tax assets
|
|
1,689
|
|
2,497
|
|
563
|
|
1,475
|
Decrease (increase)
in trade receivables, net
|
|
(4,395)
|
|
851
|
|
(1,500)
|
|
960
|
Decrease (increase)
in other receivables and prepaid expenses
|
|
(3,133)
|
|
(1,789)
|
|
(2,063)
|
|
2,398
|
Increase in
inventories
|
|
(5,500)
|
|
(98)
|
|
(3,414)
|
|
(488)
|
Increase (decrease)
in trade payables
|
|
988
|
|
(2,315)
|
|
530
|
|
386
|
Increase (decrease)
in other payables and accrued expenses
|
|
2,761
|
|
1,594
|
|
1,880
|
|
(63)
|
Increase (decrease)
in deferred revenues
|
|
8,392
|
|
809
|
|
1,736
|
|
(1,160)
|
Net cash provided by
operating activities
|
|
13,964
|
|
9,405
|
|
3,482
|
|
6,194
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Proceeds from
short-term deposits, net
|
|
-
|
|
496
|
|
400
|
|
161
|
Investment in
short-term deposits, net
|
|
(3,500)
|
|
-
|
|
-
|
|
-
|
Proceeds from
long-term bank deposits
|
|
807
|
|
900
|
|
300
|
|
300
|
Proceeds from
redemption of marketable securities
|
|
1,577
|
|
5,350
|
|
-
|
|
4,500
|
Purchase of property
and equipment
|
|
(978)
|
|
(1,041)
|
|
(362)
|
|
(395)
|
Net cash provided by
(used in) investing activities
|
|
(2,094)
|
|
5,705
|
|
338
|
|
4,566
|
|
|
|
|
|
|
|
|
|
AUDIOCODES LTD.
AND ITS SUBSIDIARIES
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
U.S. dollars in
thousands
|
|
|
|
|
|
|
|
|
|
|
|
Nine months
ended
|
|
Three months
ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
(Unaudited)
|
|
(Unaudited)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Purchase of treasury
shares
|
|
(11,569)
|
|
(16,548)
|
|
(1,058)
|
|
(6,366)
|
Repayment of bank
loans
|
|
(1,887)
|
|
(2,878)
|
|
(625)
|
|
(953)
|
Cash dividends paid
to shareholders
|
|
(5,761)
|
|
-
|
|
(5,761)
|
|
-
|
Payment related to
the acquisition of ACS
|
|
(151)
|
|
-
|
|
-
|
|
-
|
Proceeds from
issuance of shares upon exercise of options and warrants
|
|
4,583
|
|
2,012
|
|
2,906
|
|
479
|
Net cash used in
financing activities
|
|
(14,785)
|
|
(17,414)
|
|
(4,538)
|
|
(6,840)
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash, cash equivalents, and restricted
cash
|
|
(2,915)
|
|
(2,304)
|
|
(718)
|
|
3,920
|
Cash, cash
equivalents and restricted cash at beginning of period
|
|
24,235
|
|
24,344
|
|
22,038
|
|
18,120
|
Cash, cash
equivalents and restricted cash at end of period
|
|
$ 21,320
|
|
$ 22,040
|
|
$ 21,320
|
|
$ 22,040
|
Company
Contacts
|
|
IR Agency Contact
|
Niran
Baruch,
|
Shirley
Nakar,
|
Philip Carlson
|
VP Finance &
Chief Financial Officer
|
Director,
Investor Relations
|
KCSA
Strategic
|
AudioCodes
|
AudioCodes
|
Communications
|
Tel:
+972-3-976-4000
|
Tel:
+972-3-976-4000
|
Tel: +1-212-896-1233
|
Niran.baruch@audiocodes.com
|
shirley@audiocodes.com
|
audc@kcsa.com
|
View original
content:http://www.prnewswire.com/news-releases/audiocodes-reports-third-quarter-2018-results-300735818.html
SOURCE AudioCodes Ltd.