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