LOD, Israel, July 24, 2018 /PRNewswire/ --
Second Quarter Highlights
- Quarterly revenues increased by 12.3% year-over-year to
$43.5 million;
- Quarterly service revenues increased by 14.2% year-over-year to
$13.5 million;
- Revenues related to UC-SIP business increased more than 30%
compared to the second quarter of 2017;
- Quarterly GAAP gross margin was 62.3%; quarterly Non-GAAP gross
margin was 62.8%;
- Quarterly GAAP operating margin was 7.6%; quarterly Non-GAAP
operating margin was 10.2%;
- Quarterly cash flow from operating activities was $2.2 million;
- Quarterly GAAP net income was $2.4
million, or $0.08 per diluted
share; quarterly Non-GAAP net income was $4.1 million, or $0.14 per diluted share;
- AudioCodes repurchased 452,000 of its ordinary shares during
the quarter at an aggregate cost of $3.3
million.
Details
AudioCodes (NASDAQ, TASE: 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, 2018.
Revenues for the second quarter of 2018 were $43.5 million compared to $42.4 million for the first quarter of 2018 and
$38.7 million for the second quarter
of 2017.
Net income was $2.4 million, or
$0.08 per diluted share, for the
second 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 $4.1
million, or $0.14 per diluted
share, for the second quarter of 2018 compared to $2.5 million, or $0.08 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 $2.2 million for the second quarter of 2018. Cash
and cash equivalents, long- and short-term bank deposits and long-
and short-term marketable securities were $58.1 million as of June
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 for the continued
repurchasing of the Company's ordinary shares pursuant to its share
repurchase program offset, in part, by cash from operating
activities.
"We are pleased to report strong financial results for the
second quarter of 2018," said Shabtai
Adlersberg, President and Chief Executive Officer of
AudioCodes.
"Continuing the strong trend of previous quarters, our
Enterprise Voice business continued to evolve as we enhanced our
leadership position in the UC and the contact center market
segments. Revenues in the first half of 2018 grew 12.9% compared to
the first half of 2017. We now project revenue growth of about 10%
for the full 2018 year, compared to growth of 7.7% in 2017 and 4.2%
in 2016. At the core of this growth is the UC-SIP business which
performed well across all business lines and achieved growth of
over 30% from the year ago quarter. On the financial front, we
achieved substantial improvement in our operating margins which
reached 10% in the second quarter of 2018. Taking into account our
investment in the new initiative of Voice.AI, which we expect to
amount to more than $3 million this
year, we now project operating margins of approximately 12% in 2018
for the mainstream networking business, now comprising about 99% of
the Company revenues. Cash flow from operations in the first half
2018 continued to be strong, following similar performance in the
past three years. We remain confident for the second half of 2018
and beyond as we continue to enjoy good business momentum in
winning enterprise voice deployments and service provider network
transformation projects. We also experienced continued evolution of
new opportunities in our Voice.AI business," concluded Mr.
Adlersberg.
Appointment of Lior Aldema as director
The Board of Directors has appointed Lior Aldema as a director
of the Company. Mr Aldema is the Company's Chief Business Officer
and has been with the Company since 1998. Mr Aldema will fill a
vacancy as a Class I director and will therefore stand for
re-election at the Annual General Meeting in 2019.
"I am delighted that Lior will be joining our Board of
Directors," said Shabtai Adlersberg,
President and CEO, founder and director of AudioCodes. "Lior and I
have been working closely for many years, and his contributions to
the Company are significant. Lior's unique and deep understanding
of AudioCodes' products and markets will benefit the Board and the
Company. I wish him success in his new role."
Dividend
The Company's Board of Directors has decided to declare an
annual cash dividend of 20 cents per
share payable on August 20, 2018 to
shareholders of record on August 6,
2018. The Company is issuing a separate press release that
contains additional information with respect to the dividend.
Share Buy Back Program
As of June 30, 2018, AudioCodes
had acquired an aggregate of 17.2 million of its ordinary shares
since August 2014 for an aggregate
consideration of $90.3 million.
During the quarter ended June 30,
2018, AudioCodes acquired 452,000 of its ordinary shares
under its share repurchase program for a total consideration of
approximately $3.3 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 of any
part of the Permitted Amount during the approved validity period.
As of June 30, 2018, $19.5 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 second 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
|
|
June 30,
2018
|
|
December 31,
2017
|
|
(Unaudited)
|
|
(Audited)
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$ 22,038
|
|
$ 24,235
|
Short-term and
restricted bank deposits
|
6,639
|
|
2,739
|
Short-term marketable
securities and accrued interest
|
25,709
|
|
7,087
|
Trade receivables,
net
|
24,954
|
|
22,059
|
Other receivables and
prepaid expenses
|
5,943
|
|
4,693
|
Inventories
|
18,649
|
|
16,563
|
Total current
assets
|
103,932
|
|
77,376
|
|
|
|
|
LONG-TERM
ASSETS:
|
|
|
|
Long-term and
restricted bank deposits
|
3,700
|
|
4,207
|
Long-term marketable
securities
|
-
|
|
20,475
|
Deferred tax
assets
|
5,517
|
|
6,685
|
Severance pay
funds
|
18,867
|
|
20,138
|
Total long-term
assets
|
28,084
|
|
51,505
|
|
|
|
|
PROPERTY AND
EQUIPMENT, NET
|
3,734
|
|
3,835
|
|
|
|
|
GOODWILL, INTANGIBLE
ASSETS AND OTHER, NET
|
37,834
|
|
38,222
|
|
|
|
|
Total
assets
|
$ 173,584
|
|
$ 170,938
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Current maturities of
long-term bank loans
|
$ 2,500
|
|
$ 2,519
|
Trade
payables
|
6,097
|
|
5,639
|
Other payables and
accrued expenses
|
21,821
|
|
20,786
|
Deferred
revenues
|
21,780
|
|
16,417
|
Total current
liabilities
|
52,198
|
|
45,361
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
Accrued severance
pay
|
19,818
|
|
21,228
|
Long-term bank
loans
|
4,949
|
|
6,237
|
Deferred revenues and
other liabilities
|
6,757
|
|
5,731
|
Total long-term
liabilities
|
31,524
|
|
33,196
|
|
|
|
|
Total shareholders'
equity
|
89,862
|
|
92,381
|
Total liabilities and
shareholders' equity
|
$ 173,584
|
|
$ 170,938
|
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,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(Unaudited)
|
|
(Unaudited)
|
Revenues:
|
|
|
|
|
|
|
|
Products
|
$ 58,775
|
|
$ 52,928
|
|
$ 30,012
|
|
$ 26,920
|
Services
|
27,152
|
|
23,185
|
|
13,490
|
|
11,816
|
Total
Revenues
|
$ 85,927
|
|
$ 76,113
|
|
$ 43,502
|
|
$ 38,736
|
Cost of
revenues:
|
|
|
|
|
|
|
|
Products
|
25,014
|
|
23,332
|
|
13,119
|
|
12,173
|
Services
|
6,658
|
|
5,667
|
|
3,287
|
|
2,765
|
Total Cost of
revenues
|
31,672
|
|
28,999
|
|
16,406
|
|
14,938
|
Gross
profit
|
54,255
|
|
47,114
|
|
27,096
|
|
23,798
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development, net
|
17,343
|
|
14,536
|
|
8,710
|
|
7,382
|
Selling and
marketing
|
25,357
|
|
24,398
|
|
12,369
|
|
12,363
|
General and
administrative
|
5,311
|
|
4,361
|
|
2,730
|
|
2,200
|
Total operating
expenses
|
48,011
|
|
43,295
|
|
23,809
|
|
21,945
|
Operating
income
|
6,244
|
|
3,819
|
|
3,287
|
|
1,853
|
Financial income
(expenses), net
|
223
|
|
(103)
|
|
(20)
|
|
(34)
|
Income before taxes
on income
|
6,467
|
|
3,716
|
|
3,267
|
|
1,819
|
Income tax expense,
net
|
(1,639)
|
|
(1,407)
|
|
(873)
|
|
(805)
|
Net income
|
$ 4,828
|
|
$ 2,309
|
|
$ 2,394
|
|
$ 1,014
|
Basic earnings per
share
|
$ 0.17
|
|
$ 0.07
|
|
$ 0.08
|
|
$ 0.03
|
Diluted earnings per
share
|
$ 0.16
|
|
$ 0.07
|
|
$ 0.08
|
|
$ 0.03
|
Weighted average
number of shares used in
computing basic earnings per share (in thousands)
|
28,884
|
|
31,791
|
|
28,609
|
|
31,596
|
Weighted average
number of shares used in
computing diluted earnings per share (in thousands)
|
30,041
|
|
32,822
|
|
29,733
|
|
32,608
|
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,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(Unaudited)
|
|
(Unaudited)
|
GAAP net
income
|
$ 4,828
|
|
$ 2,309
|
|
$ 2,394
|
|
$ 1,014
|
GAAP earnings per
share
|
$ 0.16
|
|
$ 0.07
|
|
$ 0.08
|
|
$ 0.03
|
Cost of
revenues:
|
|
|
|
|
|
|
|
Share-based
compensation (1)
|
87
|
|
42
|
|
48
|
|
17
|
Amortization expenses
(2)
|
348
|
|
348
|
|
174
|
|
174
|
|
435
|
|
390
|
|
222
|
|
191
|
Research and
development, net:
|
|
|
|
|
|
|
|
Share-based
compensation (1)
|
264
|
|
181
|
|
151
|
|
86
|
Deferred payments
expenses (3)
|
-
|
|
74
|
|
-
|
|
63
|
|
264
|
|
255
|
|
151
|
|
149
|
Selling and
marketing:
|
|
|
|
|
|
|
|
Share-based
compensation (1)
|
554
|
|
540
|
|
280
|
|
277
|
Amortization expenses
(2)
|
30
|
|
60
|
|
15
|
|
30
|
|
584
|
|
600
|
|
295
|
|
307
|
General and
administrative:
|
|
|
|
|
|
|
|
Share-based
compensation (1)
|
540
|
|
346
|
|
271
|
|
191
|
Revaluation of
earn-out liability (4)
|
200
|
|
-
|
|
200
|
|
-
|
|
740
|
|
346
|
|
471
|
|
191
|
Income
taxes:
|
|
|
|
|
|
|
|
Deferred tax
(5)
|
1,168
|
|
1,064
|
|
584
|
|
634
|
Non-GAAP net
income
|
$ 8,019
|
|
$ 4,964
|
|
$ 4,117
|
|
$ 2,486
|
Non-GAAP diluted
earnings per share
|
$ 0.26
|
|
$ 0.15
|
|
$ 0.14
|
|
$ 0.08
|
(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
|
|
Six months
ended
|
|
Three months
ended
|
|
June
30,
|
|
June
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(Unaudited)
|
|
(Unaudited)
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
|
$ 4,828
|
|
$ 2,309
|
|
$ 2,394
|
|
$ 1,014
|
Adjustments required
to reconcile net income to net cash
provided by operating activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
1,105
|
|
1,260
|
|
565
|
|
605
|
Amortization of
marketable securities premiums and
accretion of discounts, net
|
188
|
|
329
|
|
85
|
|
168
|
Decrease in accrued
severance pay, net
|
(139)
|
|
(52)
|
|
(186)
|
|
(248)
|
Share-based
compensation expenses
|
1,445
|
|
1,109
|
|
750
|
|
571
|
Decrease (increase)
in accrued interest and exchange
rate effect of loans, marketable securities and bank
deposits
|
(15)
|
|
215
|
|
(30)
|
|
218
|
Decrease in long-
term deferred tax assets
|
1,126
|
|
1,022
|
|
563
|
|
613
|
Increase in trade
receivables, net
|
(2,895)
|
|
(109)
|
|
(3,284)
|
|
(1,165)
|
Decrease (increase)
in other receivables and prepaid expenses
|
(1,070)
|
|
(4,181)
|
|
664
|
|
(729)
|
Decrease (increase)
in inventories
|
(2,086)
|
|
390
|
|
(1,115)
|
|
497
|
Increase (decrease)
in trade payables
|
458
|
|
(2,701)
|
|
296
|
|
(137)
|
Increase in other
payables and accrued expenses
|
881
|
|
1,657
|
|
1,962
|
|
1,711
|
Increase (decrease)
in deferred revenues
|
6,656
|
|
1,969
|
|
(468)
|
|
(761)
|
Net cash provided by
operating activities
|
10,482
|
|
3,217
|
|
2,196
|
|
2,357
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Investment in
short-term deposits, net
|
(399)
|
|
-
|
|
(399)
|
|
-
|
Proceeds from
redemption of marketable securities
|
1,577
|
|
850
|
|
850
|
|
850
|
Purchase of property
and equipment
|
(616)
|
|
(646)
|
|
(336)
|
|
(183)
|
Net cash provided by
investing activities
|
562
|
|
204
|
|
115
|
|
667
|
|
|
|
|
|
|
|
|
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,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(Unaudited)
|
|
(Unaudited)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Purchase of treasury
shares
|
(10,511)
|
|
(10,182)
|
|
(3,287)
|
|
(2,850)
|
Repayment of bank
loans
|
(1,262)
|
|
(1,925)
|
|
(626)
|
|
(940)
|
Payment related to
the acquisition of ACS
|
(151)
|
|
-
|
|
-
|
|
-
|
Proceeds from
issuance of shares upon
exercise of options and warrants
|
1,677
|
|
1,533
|
|
231
|
|
247
|
Net cash used in
financing activities
|
(10,247)
|
|
(10,574)
|
|
(3,682)
|
|
(3,543)
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash, cash
equivalents, and restricted cash
|
797
|
|
(7,153)
|
|
(1,371)
|
|
(519)
|
Cash, cash
equivalents and restricted
cash at beginning of period
|
31,181
|
|
33,152
|
|
33,349
|
|
26,518
|
Cash, cash
equivalents and restricted
cash at end of period
|
$ 31,978
|
|
$ 25,999
|
|
$ 31,978
|
|
$ 25,999
|
Company Contacts
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
IR Agency Contact
Philip Carlson
KCSA Strategic
Communications
Tel: 1-212-896-1233
audc@kcsa.com
View original
content:http://www.prnewswire.com/news-releases/audiocodes-reports-second-quarter-2018-results-300685357.html
SOURCE AudioCodes Ltd.