LOD, Israel, Nov. 25, 2019 /PRNewswire/ --
AudioCodes (NASDAQ: AUDC), a leading
vendor of advanced voice networking and media processing solutions
for the digital workplace, today announced that it has entered into
a royalty buyout agreement ("Agreement") with the Israel National
Authority for Technology and Innovation ("IIA").
AudioCodes Ltd. and its subsidiary, AudioCodes Development Ltd.
("AudioCodes"), participated in royalty-bearing research and
development programs and had received grants from the IIA, under
which AudioCodes paid royalties at the rate of 1.3%-5% on sales of
products developed with funds provided by the IIA.
AudioCodes' contingent net royalty liability to the IIA at the
time of the Agreement was approximately $49
million ("Debt") including interest to the date of the
Agreement with different annual interest rates ranging up to
5%.
As part of the Agreement, AudioCodes agreed to pay approximately
$32.2 million to the IIA (to settle
the $49 million Debt in full) over 3
years starting 2019, in 3 annual installments. This expense will be
included in the cost of revenues reported for the fourth quarter of
2019.
Upon making this payment, AudioCodes will eliminate all future
royalty obligations related to its anticipated revenues and save
the associated future interest payments in future years related to
the Debt. In 2018, annual royalty expenses to the IIA were
approximately $3 million. The
elimination of future royalty payments following the Agreement,
will have a positive impact on the reported gross margin starting
in the first quarter of 2020.
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, 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
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
Brett
Maas, Managing Partner Hayden IR
Tel: +1-646-536-7331
Brett@haydenir.com
View original
content:http://www.prnewswire.com/news-releases/audiocodes-announces-royalty-buyout-agreement-with-the-israel-national-authority-for-technology-and-innovation-300964582.html
SOURCE AudioCodes