LOD, Israel, July 23, 2019 /PRNewswire/ --
Second Quarter Highlights
- Quarterly revenues increased by 13.8% year-over-year to
$49.5 million;
- Quarterly service revenues increased by 23.5% year-over-year to
$16.7 million;
- Quarterly UC-SIP revenues increased more than 20%
year-over-year;
- Quarterly GAAP gross margin percentage was 63.3%; quarterly
Non-GAAP gross margin percentage was 63.5%;
- Quarterly GAAP operating margin percentage was 11.9%; quarterly
Non-GAAP operating margin percentage was 14.1%;
- Quarterly cash flow from operating activities was $8.4 million;
- Quarterly GAAP net income was $4.8
million, or $0.16 per diluted
share;
- Quarterly Non-GAAP net income was $6.8
million, or $0.22 per diluted
share;
- AudioCodes repurchased 473,235 of its ordinary shares during
the quarter at an aggregate cost of $7.05
million.
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 second quarter
ended June 30, 2019.
Revenues for the second quarter of 2019 were $49.5 million compared to $46.6 million for the first quarter of 2019 and
$43.5 million for the second quarter
of 2018.
Net income was $4.8 million, or
$0.16 per diluted share, for the
second quarter of 2019 compared to $2.4
million, or $0.08 per diluted
share, for the second quarter of 2018.
On a Non-GAAP basis, net income was $6.8
million, or $0.22 per diluted
share, for the second quarter of 2019 compared to $4.1 million, or $0.14 per diluted share, for the second quarter
of 2018.
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 $8.4 million for the second quarter of 2019. Cash
and cash equivalents, long- and short-term bank deposits and
short-term marketable securities were $69.1
million as of June 30, 2019
compared to $65.4 million as of
December 31, 2018. The increase in
cash and cash equivalents, long- and short-term bank deposits and
short-term marketable securities was the result of cash from
operating activities offset, in part, by the use of cash for the
continued repurchasing of the Company's ordinary shares pursuant to
its share repurchase program and the payment of a cash dividend in
the first quarter of 2019.
"We are pleased to report record financial results for the
second quarter of 2019," said Shabtai
Adlersberg, President and Chief Executive Officer of
AudioCodes. "We continue to enjoy strong growth in the UC and UCaaS
markets and a faster pace of migration of service providers to
All-IP. Coupling these growth trends with strong execution across
our business lines we continue to expand our business while
demonstrating improved financial and operational efficiency. By
surpassing our financial plan for the first half of 2019, we are
confident in our ability to outperform our initial plan for the
year and deliver higher revenues and profitability than previously
announced."
"We continue to increase our investments in the Microsoft Teams
space as this collaboration solution continues to gain traction in
the market. We are confident in our ability to grow our business in
this area in 2019 and beyond. At the same time, we continue to
foster new partnerships with more leading players in the UCaaS and
Contact Center markets, and make progress in our efforts and
investments in the voice.ai area. We continue to prudently invest
in our future offerings and remain focused on maximizing the return
on investments for our shareholders," concluded Mr. Adlersberg.
Share Buy Back Program
As of June 30, 2019, AudioCodes
had acquired an aggregate of 18.1 million of its ordinary shares
since August 2014 for an aggregate
consideration of $102.1 million.
During the quarter ended June 30,
2019, AudioCodes acquired 473,235 of its ordinary shares
under its share repurchase program for a total consideration of
$7.05 million.
In January 2019, AudioCodes
received court approval in Israel
to purchase up to an aggregate of $12
million ("Permitted Amount") of additional ordinary shares
pursuant to its share repurchase program. The court approval also
permitted AudioCodes to declare a dividend of any part of the
Permitted Amount during the approved validity period. This court
approval expired on July 1, 2019.
On May 28, 2019, the Board of
Directors of AudioCodes approved the submission of a new
application to the Israeli court, requesting approval of an
additional repurchase program for $12
million of ordinary shares following the expiration of the
existing program. The application also requests the court to permit
AudioCodes to declare a dividend of any part of this amount. The
new application was submitted to the court and a decision is
expected during August 2019.
Conference Call & Web Cast Information
AudioCodes will conduct a conference call at 8:30 A.M., Eastern Time today to discuss the
Company's first quarter of 2019 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: AUDC) (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.
©2019 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
|
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
2019
|
|
2018
|
|
(Unaudited)
|
|
(Audited)
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$ 39,400
|
|
$ 31,503
|
Short-term and
restricted bank deposits
|
7,385
|
|
12,381
|
Short-term marketable
securities and accrued interest
|
21,035
|
|
19,602
|
Trade receivables,
net
|
24,716
|
|
22,279
|
Other receivables and
prepaid expenses
|
5,687
|
|
5,885
|
Inventories
|
29,832
|
|
22,620
|
Total current
assets
|
128,055
|
|
114,270
|
|
|
|
|
LONG-TERM
ASSETS:
|
|
|
|
Long-term and
restricted bank deposits
|
$ 1,294
|
|
$ 1,894
|
Deferred tax
assets
|
3,263
|
|
4,350
|
Operating lease
right-of-use assets
|
32,253
|
|
-
|
Severance pay
funds
|
18,393
|
|
17,518
|
Total long-term
assets
|
55,203
|
|
23,762
|
|
|
|
|
PROPERTY AND
EQUIPMENT, NET
|
4,522
|
|
3,865
|
|
|
|
|
GOODWILL, INTANGIBLE
ASSETS AND OTHER, NET
|
37,299
|
|
37,475
|
|
|
|
|
Total
assets
|
$ 225,079
|
|
$ 179,372
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Current maturities of
long-term bank loans
|
$ 2,483
|
|
$ 2,487
|
Trade
payables
|
9,855
|
|
6,188
|
Other payables and
accrued expenses
|
23,766
|
|
22,541
|
Deferred
revenues
|
29,542
|
|
23,727
|
Short-term operating
lease liabilities
|
8,513
|
|
-
|
Total current
liabilities
|
74,159
|
|
54,943
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
Accrued severance
pay
|
$ 19,488
|
|
$ 18,728
|
Long-term bank
loans
|
2,442
|
|
3,687
|
Deferred revenues and
other liabilities
|
8,948
|
|
7,466
|
Long-term operating
lease liabilities
|
25,090
|
|
-
|
Total long-term
liabilities
|
55,968
|
|
29,881
|
|
|
|
|
Total shareholders'
equity
|
94,952
|
|
94,548
|
Total liabilities and
shareholders' equity
|
$ 225,079
|
|
$ 179,372
|
AUDIOCODES LTD.
AND ITS SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
U.S. dollars in
thousands, except share and per share
data
|
|
|
|
|
|
Six months
ended
|
|
Three months
ended
|
|
June
30,
|
|
June
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(Unaudited)
|
|
(Unaudited)
|
Revenues:
|
|
|
|
|
|
|
|
Products
|
$ 65,296
|
|
$ 58,775
|
|
$ 32,843
|
|
$ 30,012
|
Services
|
30,782
|
|
27,152
|
|
16,656
|
|
13,490
|
Total Revenues
|
96,078
|
|
85,927
|
|
49,499
|
|
43,502
|
Cost of
revenues:
|
|
|
|
|
|
|
|
Products
|
28,150
|
|
25,014
|
|
14,372
|
|
13,119
|
Services
|
7,385
|
|
6,658
|
|
3,813
|
|
3,287
|
Total Cost of
revenues
|
35,535
|
|
31,672
|
|
18,185
|
|
16,406
|
Gross
profit
|
60,543
|
|
54,255
|
|
31,314
|
|
27,096
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development, net
|
19,659
|
|
17,343
|
|
10,179
|
|
8,710
|
Selling and
marketing
|
25,220
|
|
25,357
|
|
12,659
|
|
12,369
|
General and
administrative
|
5,263
|
|
5,311
|
|
2,592
|
|
2,730
|
Total operating
expenses
|
50,142
|
|
48,011
|
|
25,430
|
|
23,809
|
Operating
income
|
10,401
|
|
6,244
|
|
5,884
|
|
3,287
|
Financial income
(expenses), net
|
(1,079)
|
|
223
|
|
(280)
|
|
(20)
|
Income before taxes
on income
|
9,322
|
|
6,467
|
|
5,604
|
|
3,267
|
Taxes on income,
net
|
(1,479)
|
|
(1,639)
|
|
(810)
|
|
(873)
|
Net income
|
$ 7,843
|
|
$ 4,828
|
|
$ 4,794
|
|
$ 2,394
|
Basic net earnings
per share
|
$ 0.27
|
|
$ 0.17
|
|
$ 0.16
|
|
$ 0.08
|
Diluted net earnings
per share
|
$ 0.26
|
|
$ 0.16
|
|
$ 0.16
|
|
$ 0.08
|
Weighted average
number of shares used in computing basic net earnings per share (in
thousands)
|
29,214
|
|
28,884
|
|
29,214
|
|
28,609
|
Weighted average
number of shares used in computing diluted net earnings per share
(in thousands)
|
30,737
|
|
30,041
|
|
30,744
|
|
29,733
|
AUDIOCODES LTD.
AND ITS SUBSIDIARIES
|
RECONCILIATION OF
GAAP NET INCOME TO NON-GAAP NET INCOME
|
U.S. dollars in
thousands, except per share data
|
|
|
|
|
|
|
|
|
|
Six months
ended
|
|
Three months
ended
|
|
June
30,
|
|
June
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(Unaudited)
|
|
(Unaudited)
|
GAAP net
income
|
$ 7,843
|
|
$ 4,828
|
|
$ 4,794
|
|
$ 2,394
|
GAAP net earnings per
share
|
$ 0.26
|
|
$ 0.16
|
|
$ 0.16
|
|
$ 0.08
|
Cost of
revenues:
|
|
|
|
|
|
|
|
Share-based
compensation (1)
|
66
|
|
87
|
|
30
|
|
48
|
Amortization expenses
(2)
|
136
|
|
348
|
|
68
|
|
174
|
|
202
|
|
435
|
|
98
|
|
222
|
Research and
development, net:
|
|
|
|
|
|
|
|
Share-based
compensation (1)
|
422
|
|
264
|
|
210
|
|
151
|
Selling and
marketing:
|
|
|
|
|
|
|
|
Share-based
compensation (1)
|
754
|
|
554
|
|
421
|
|
280
|
Amortization expenses
(2)
|
30
|
|
30
|
|
15
|
|
15
|
|
784
|
|
584
|
|
436
|
|
295
|
General and
administrative:
|
|
|
|
|
|
|
|
Share-based
compensation (1)
|
739
|
|
540
|
|
373
|
|
271
|
Revaluation of
earn-out liability (3)
|
(23)
|
|
200
|
|
-
|
|
200
|
|
716
|
|
740
|
|
373
|
|
471
|
Financial
expenses:
|
|
|
|
|
|
|
|
Exchange rate
differences (4)
|
1,258
|
|
-
|
|
358
|
|
-
|
|
|
|
|
|
|
|
|
Income
taxes:
|
|
|
|
|
|
|
|
Deferred tax
(5)
|
1,088
|
|
1,168
|
|
544
|
|
584
|
Non-GAAP net
income
|
$ 12,313
|
|
$ 8,019
|
|
$ 6,813
|
|
$ 4,117
|
Non-GAAP diluted net
earnings per share
|
$ 0.40
|
|
$ 0.26
|
|
$ 0.22
|
|
$ 0.14
|
|
|
|
|
|
|
|
|
|
(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 Mailvision and 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 STATEMENTS OF CASH FLOWS
|
U.S. dollars in
thousands
|
|
|
|
|
|
|
|
Six months
ended
|
|
Three months
ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
(Unaudited)
|
|
(Unaudited)
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$ 7,843
|
|
$ 4,828
|
|
$ 4,794
|
|
$ 2,394
|
Adjustments required
to reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
980
|
|
1,105
|
|
506
|
|
565
|
Amortization of
marketable securities premiums and accretion of discounts,
net
|
|
79
|
|
188
|
|
23
|
|
85
|
Increase in accrued
severance pay, net
|
|
(115)
|
|
(139)
|
|
(276)
|
|
(186)
|
Share-based
compensation expenses
|
|
1,981
|
|
1,445
|
|
1,034
|
|
750
|
Decrease in deferred
tax assets, net
|
|
953
|
|
1,126
|
|
528
|
|
563
|
Decrease (increase)
in accrued interest and exchange rate effect of loans, marketable
securities and bank deposits
|
|
159
|
|
(15)
|
|
170
|
|
(30)
|
Changes in operating
leases, net
|
|
1,350
|
|
-
|
|
1,783
|
|
-
|
Decrease (increase)
in trade receivables, net
|
|
(2,623)
|
|
(2,895)
|
|
2,237
|
|
(3,284)
|
Decrease (increase)
in other receivables and prepaid expenses
|
|
203
|
|
(1,070)
|
|
457
|
|
664
|
Increase in
inventories
|
|
(7,256)
|
|
(2,086)
|
|
(4,357)
|
|
(1,115)
|
Increase in trade
payables
|
|
3,667
|
|
458
|
|
3,040
|
|
296
|
Increase (decrease)
in other payables and accrued expenses
|
|
2,065
|
|
881
|
|
(2,401)
|
|
1,962
|
Increase (decrease)
in deferred revenues
|
|
7,431
|
|
6,656
|
|
884
|
|
(468)
|
Net cash provided by
operating activities
|
|
16,717
|
|
10,482
|
|
8,422
|
|
2,196
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Investment in
short-term deposits
|
|
-
|
|
(399)
|
|
-
|
|
(399)
|
Proceeds from
short-term deposits
|
|
5,971
|
|
-
|
|
-
|
|
-
|
Proceeds from
long-term deposits
|
|
600
|
|
-
|
|
300
|
|
-
|
Proceeds from
redemption of marketable securities
|
|
19,385
|
|
1,577
|
|
12,094
|
|
850
|
Purchase of
marketable securities
|
|
(21,035)
|
|
-
|
|
(21,035)
|
|
-
|
Purchase of property
and equipment
|
|
(1,361)
|
|
(616)
|
|
(245)
|
|
(336)
|
Net cash provided by
(used in) investing activities
|
|
3,560
|
|
562
|
|
(8,886)
|
|
115
|
|
|
|
|
|
|
|
|
|
AUDIOCODES LTD.
AND ITS SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
U.S. dollars in
thousands
|
|
|
|
|
|
|
|
Six months
ended
|
|
Three months
ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
(Unaudited)
|
|
(Unaudited)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Purchase of treasury
shares
|
|
(8,002)
|
|
(10,511)
|
|
(7,051)
|
|
(3,287)
|
Repayment of bank
loans
|
|
(1,237)
|
|
(1,262)
|
|
(619)
|
|
(626)
|
Cash dividends paid
to shareholders
|
|
(3,218)
|
|
-
|
|
-
|
|
-
|
Payment related to
the acquisition of ACS
|
|
(410)
|
|
(151)
|
|
-
|
|
-
|
Proceeds from
issuance of shares upon exercise of options and warrants
|
|
1,462
|
|
1,677
|
|
348
|
|
231
|
Net cash used in
financing activities
|
|
(11,405)
|
|
(10,247)
|
|
(7,322)
|
|
(3,682)
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash, cash equivalents, and restricted
cash
|
|
8,872
|
|
797
|
|
(7,786)
|
|
(1,371)
|
Cash, cash
equivalents and restricted cash at beginning of period
|
|
31,503
|
|
31,181
|
|
48,161
|
|
33,349
|
Cash, cash
equivalents and restricted cash at end of period
|
|
$ 40,375
|
|
$ 31,978
|
|
$ 40,375
|
|
$ 31,978
|
Company
Contacts
|
|
IR Agency
Contact
|
Niran
Baruch,
|
Shirley
Nakar,
|
Rob Fink,
|
VP Finance &
Chief Financial Officer
|
Director, Investor
Relations
|
Hayden IR
|
AudioCodes
|
AudioCodes
|
Tel:
+1-646-415-8972
|
Tel:
+972-3-976-4000
|
Tel:
+972-3-976-4000
|
audc@haydenir.com
|
Niran.baruch@audiocodes.com
|
shirley@audiocodes.com
|
|
View original
content:http://www.prnewswire.com/news-releases/audiocodes-reports-second-quarter-2019-results-300889219.html
SOURCE AudioCodes Ltd.