AudioCodes Reports Fourth Quarter and Full Year 2018 Results

Date : 01/28/2019 @ 7:30AM
Source : PR Newswire (US)
Stock : Audiocodes Ltd. - Ordinary Shares (AUDC)
Quote : 16.0  0.15 (0.95%) @ 1:00AM

AudioCodes Reports Fourth Quarter and Full Year 2018 Results

Audiocodes Ltd. - Ordinary Shares (NASDAQ:AUDC)
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LOD, Israel, Jan. 28, 2019 /PRNewswire/ --

Fourth Quarter and Full Year 2018 Highlights

  • Quarterly revenues increased by 10.5% year-over-year to $45.8 million
    full 2018 year revenues increased by 12.4% to $176.2 million;
  • Quarterly service revenues increased by 13.0% year-over-year to $15.1 million;
    full 2018 year service revenues increased by 14.4% to $56.3 million;
  • Quarterly UC-SIP revenues increased more than 30% year-over-year;
  • Quarterly GAAP gross margin percentage was 62.6%; quarterly Non-GAAP gross margin percentage was 63.0%;
  • Quarterly GAAP operating margin percentage was 11.2%; quarterly Non-GAAP operating margin percentage was 13.7%;
  • Cash flow from operating activities was $11.6 million for the quarter and $25.6 million for the full year;
  • Quarterly GAAP net income was $4.5 million, or $0.15 per diluted share;
    Quarterly Non-GAAP net income was $6.3 million, or $0.20 per diluted share;
  • Full 2018 year GAAP net income was $13.5 million, or $0.45 per diluted share;
    full 2018 year Non-GAAP net income was $20.0 million, or $0.65 per diluted share;
  • AudioCodes repurchased 250,000 of its ordinary shares during the quarter at an aggregate cost of $2.8 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 fourth quarter and full year periods ended December 31, 2018.

Revenues for the fourth quarter of 2018 were $45.8 million, compared to $44.5 million for the third quarter of 2018 and $41.4 million for the fourth quarter of 2017. Revenues were $176.2 million in 2018 compared to $156.7 million in 2017.

Net income was $4.5 million, or $0.15 per diluted share, for the fourth quarter of 2018, compared to $672,000, or $0.02 per diluted share, for the fourth quarter of 2017. Net income in 2018 was $13.5 million, or $0.45 per diluted share, compared to $4.0 million, or $0.13 per diluted share, in 2017.

On a Non-GAAP basis, net income was $6.3 million, or $0.20 per diluted share, for the fourth quarter of 2018 compared to $3.8 million, or $0.12 per diluted share, in the fourth quarter last year. Non-GAAP net income in 2018 was $20.0 million, or $0.65 per diluted share, compared to $12.2 million, or $0.37 per diluted share, in 2017.

Non-GAAP net income excludes: (i) share-based compensation expenses; (ii) amortization expenses related to intangible assets; (iii) expenses related to deferred payments and income 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 $11.6 million for the fourth quarter of 2018 and $25.6 million for 2018. Cash and cash equivalents, long- and short-term bank deposits and long- and short-term marketable securities were $65.4 million as of December 31, 2018 compared to $58.7 million as of December 31, 2017. The increase in cash and cash equivalents, long- and short-term bank deposits and long- and short-term marketable securities was the result of cash provided by operating activities offset, in part, by the use of cash in 2018 for the continued repurchasing of the Company's ordinary shares pursuant to its share repurchase program and for the payment of a cash dividend.

"We are pleased to report record financial results for the fourth quarter and full year 2018," said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes.

"2018 was a very strong year for us, our most successful year ever, and a very important milestone in our mission of building a strong and successful voice networking business for years to come. Growing our top line revenue by 12.4% year-over-year, improving non-GAAP annual operating income to 11.7% from 8.2% in the prior year, and growing non-GAAP annual net income by 64.9% compared to 2017, all demonstrate the strength of our Company's performance.  A key factor driving this significant growth is the strength in our UC-SIP business which increased more than 30% year-over-year. Our success in growing our UC-SIP business is intertwined with the continued trend of digital transformation and transition towards a digital workplace. Our continued investment in building a solid foundation for the Company is echoed in a strong industry position and successful execution in the markets we serve.

"In 2018, we continued to lead the Enterprise Voice segment with voice connectivity solutions, and continued to invest in the recently announced voice.ai business unit, an investment which is already bearing fruit. Looking forward, and based on current business momentum, we are confident in our ability to continue to expand our business in 2019 and beyond. We plan to continue our investment in future offerings, and focus on the return on investment to our shareholders."

Share Buy Back Program

As of December 31, 2018, AudioCodes had acquired an aggregate of 17.6 million of its ordinary shares since August 2014 for an aggregate consideration of $94.1 million. During the quarter ended December 31, 2018, AudioCodes acquired 250,000 of its ordinary shares under its share repurchase program for a total consideration of $2.8 million. During 2018, AudioCodes acquired 1.8 million of its ordinary shares for a total consideration of $14.3 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 permits AudioCodes to declare a dividend of any part of the Permitted Amount during the approved validity period. The current court approval will expire on July 1, 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 fourth quarter and full year of 2018 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.

©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



December 31,


December 31,


2018


2017


(Unaudited)


(Audited)

ASSETS








CURRENT ASSETS:




Cash and cash equivalents

$ 31,503


$ 24,235

Short-term and restricted bank deposits

11,181


2,739

Short-term marketable securities and accrued interest

19,602


7,087

Trade receivables, net

19,080


22,059

Other receivables and prepaid expenses

5,203


4,693

Inventories

23,302


16,563

Total current assets

109,871


77,376





LONG-TERM ASSETS:




Long-term and restricted bank deposits

$ 3,094


$ 4,207

Long-term marketable securities

-


20,475

Deferred tax assets

4,350


6,685

Severance pay funds

17,518


20,138

Total long-term assets

24,962


51,505





PROPERTY AND EQUIPMENT, NET

3,865


3,835





GOODWILL, INTANGIBLE ASSETS AND OTHER, NET

37,475


38,222





Total assets

$ 176,173


$ 170,938





LIABILITIES AND SHAREHOLDERS' EQUITY








CURRENT LIABILITIES:




Current maturities of long-term bank loans

$ 2,487


$ 2,519

Trade payables

6,188


5,639

Other payables and accrued expenses

20,269


20,786

Deferred revenues

22,800


16,417

Total current liabilities

51,744


45,361





LONG-TERM LIABILITIES:




Accrued severance pay

$ 18,728


$ 21,228

Long-term bank loans

3,687


6,237

Deferred revenues and other liabilities

7,466


5,731

Total long-term liabilities

29,881


33,196





Total shareholders' equity

94,548


92,381

Total liabilities and shareholders' equity

$ 176,173


$ 170,938

 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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



Year ended


Three months ended


December 31,


December 31,


2018


2017


2018


2017


(Unaudited)


(Audited)


(Unaudited)

Revenues:








Products

$ 119,887


$ 107,482


$ 30,650


$ 28,032

Services

56,336


49,257


15,127


13,386

Total Revenues

176,223


156,739


45,777


41,418

Cost of revenues:








Products

51,878


47,445


13,450


12,204

Services

13,739


11,449


3,668


3,090

Total Cost of revenues

65,617


58,894


17,118


15,294

Gross profit

110,606


97,845


28,659


26,124

Operating expenses:








Research and development, net

34,661


30,348


9,035


8,126

Selling and marketing

49,335


48,954


11,958


12,405

General and administrative

10,251


8,893


2,538


2,356

Total operating expenses

94,247


88,195


23,531


22,887

Operating income

16,359


9,650


5,128


3,237

Financial income (expenses), net

228


(10)


42


(4)

Income before taxes on income

16,587


9,640


5,170


3,233

Taxes on income, net

(3,094)


(5,610)


(640)


(2,561)

Net income

$ 13,493


$ 4,030


$ 4,530


$ 672

Basic net earnings per share

$ 0.47


$ 0.13


$ 0.16


$ 0.02

Diluted net earnings per share

$ 0.45


$ 0.13


$ 0.15


$ 0.02

Weighted average number of shares used in
computing basic net earnings per share
(in thousands)

28,928


31,104


29,147


29,915

Weighted average number of shares used in
computing diluted net earnings per share
(in thousands)

30,220


32,168


30,525


31,071

 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME

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



Year ended


Three months ended


December 31,


December 31,


2018


2017


2018


2017


(Unaudited)


 (Audited)


(Unaudited)

GAAP net income

$ 13,493


$ 4,030


$ 4,530


$ 672

GAAP net earnings per share

$ 0.45


$ 0.13


$ 0.15


$ 0.02

Cost of revenues:








Share-based compensation (1)

186


84


48


25

Amortization expenses (2)

667


696


145


174


853


780


193


199

Research and development, net:








Share-based compensation (1)

651


383


206


105

Deferred payments expenses (3)

-


198


-


62


651


581


206


167

Selling and marketing:








Share-based compensation (1)

1,238


1,024


377


245

Amortization expenses (2)

60


116


15


26


1,298


1,140


392


271

General and administrative:








Share-based compensation (1)

1,212


816


358


251

Revaluation of earn-out liability (4)

200


(118)


-


(118)


1,412


698


358


133

Income taxes:








Deferred tax (5)

2,334


4,922


582


2,362

Non-GAAP net income

$ 20,041


$ 12,151


$ 6,261


$ 3,804

Non-GAAP diluted net earnings per share

$ 0.65


$ 0.37


$ 0.20


$ 0.12









(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 (benefit).

 

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




Year ended


Three months ended



December 31,


December 31,



2018


2017


2018


2017



(Unaudited)


(Audited)


(Unaudited)

Cash flows from operating activities:









Net income


$ 13,493


$ 4,030


$ 4,530


$ 672

Adjustments required to reconcile net income to
net cash provided by operating activities:









Depreciation and amortization


2,309


2,438


643


579

Amortization of marketable securities premiums
and accretion of discounts, net


353


570


82


95

Increase (decrease) in accrued severance pay, net


120


(31)


77


(263)

Share-based compensation expenses


3,287


2,307


989


626

Decrease in long-term deferred tax assets, net


2,251


4,838


562


2,341

Decrease (increase) in accrued interest and
exchange rate effect of loans, marketable
securities and bank deposits


(32)


403


47


152

Decrease in trade receivables, net


2,979


3,389


7,374


2,538

Decrease (increase) in other receivables and
prepaid expenses


(330)


(1,316)


2,803


473

Increase in inventories


(6,991)


(230)


(1,491)


(132)

Increase (decrease) in trade payables


549


(2,071)


(439)


244

Increase (decrease) in other payables and
accrued expenses


(835)


1,798


(3,596)


204

Increase in deferred revenues


8,427


1,640


35


831

Net cash provided by operating activities


25,580


17,765


11,616


8,360

Cash flows from investing activities:









Investment in short-term deposits


(8,436)


-


(4,936)


-

Proceeds from short-term deposits


-


662


-


166

Proceeds from long-term deposits


1,107


1,200


300


300

Proceeds from redemption of marketable securities


7,577


8,116


6,000


2,766

Purchase of property and equipment


(1,340)


(1,574)


(362)


(533)

Net cash provided by (used in) investing activities


(1,092)


8,404


1,002


2,699




























 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands




Year ended


Three months ended



December 31,


December 31,



2018


2017


2018


2017



(Unaudited)


(Audited)


(Unaudited)

Cash flows from financing activities:









Purchase of treasury share


(14,321)


(25,563)


(2,752)


(9,015)

Repayment of long-term bank loans


(2,508)


(3,504)


(621)


(626)

Cash dividends paid to shareholders


(5,761)


-


-


-

Payment related to the acquisition of ACS


(151)


-


-


-

Proceeds from issuance of shares upon exercise of options and warrants


5,521


2,789


938


777

Net cash used in financing activities


(17,220)


(26,278)


(2,435)


(8,864)










Increase (decrease) in cash and cash equivalents


7,268


(109)


10,183


2,195

Cash and cash equivalents at the beginning of the period


24,235


$ 24,344


21,320


$ 22,040

Cash and cash equivalents at the end of the period


$ 31,503


$ 24,235


$ 31,503


$ 24,235

                                                                       

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 

 

 

 

 

Cision View original content:http://www.prnewswire.com/news-releases/audiocodes-reports-fourth-quarter-and-full-year-2018-results-300784888.html

SOURCE AudioCodes

Copyright 2019 PR Newswire

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