AudioCodes Reports First Quarter 2019 Results

Date : 04/30/2019 @ 7:30AM
Source : PR Newswire (US)
Stock : Audiocodes Ltd. - Ordinary Shares (AUDC)
Quote : 15.9  0.16 (1.02%) @ 5:17PM

AudioCodes Reports First Quarter 2019 Results

Audiocodes Ltd. - Ordinary Shares (NASDAQ:AUDC)
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LOD, Israel, April 30, 2019 /PRNewswire/ --

First Quarter Highlights

  • Quarterly revenues increased by 9.8% year-over-year to $46.6 million
  • Quarterly service revenues increased by 3.4% year-over-year to $14.1 million;
  • Quarterly UC-SIP booking increased approximately 15% year-over-year;
  • Quarterly GAAP gross margin percentage was 62.8%; quarterly Non-GAAP gross margin percentage was 63.0%;
  • Quarterly GAAP operating margin percentage was 9.7%; quarterly Non-GAAP operating margin percentage was 11.9%;
  • Cash flow from operating activities was $8.3 million;
  • Quarterly GAAP net income was $3.0 million, or $0.10 per diluted share;
  • Quarterly Non-GAAP net income was $5.5 million, or $0.18 per diluted share; 
  • AudioCodes repurchased 86,613 of its ordinary shares during the quarter at an aggregate cost of $951,000.
  • AudioCodes declared a semiannual cash dividend of 11 cents per share. The dividend, in the aggregate amount of $3.2 million, was paid on February 19, 2019.

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 first quarter ended March 31, 2019.

Revenues for the first quarter of 2019 were $46.6 million compared to $45.8 million for the fourth quarter of 2018 and $42.4 million for the first quarter of 2018.

Net income was $3.0 million, or $0.10 per diluted share, for the first quarter of 2019, compared to $2.4 million, or $0.08 per diluted share, for the first quarter of 2018.

On a Non-GAAP basis, net income was $5.5 million, or $0.18 per diluted share, for the first quarter of 2019 compared to $3.9 million, or $0.13 per diluted share, for the first 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 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 $8.3 million for the first quarter of 2019. Cash and cash equivalents, long- and short-term bank deposits and long- and short-term marketable securities were $68.4 million as of March 31, 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 long- and short-term marketable securities was the result of cash provided by operating activities offset, in part, by the use of cash in 2019 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 solid financial results for the first quarter of 2019," said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes. "The strong underlying growth in the unified communications and UCaaS markets and the continuing transformation to all IP are favorably impacting our financial results. We continued to execute on our 2019 revenue plan and grew approximately 10% year-over-year while continuing to generate increased earnings and a strong cash flow from operations."

"New enterprise voice networking deployments and service provider network transformation projects continue to drive our top line growth. Our investments in adapting our One Voice solution to Cloud, and more specifically to the Microsoft Teams collaboration solution started to bear fruits in the first quarter of 2019 and we saw encouraging new project starts in this space. At the same time, we continue to invest in our emerging voice.ai business and we are seeing encouraging initial results. We continue to prudently invest in our future offerings and remain focused on maximizing the return on these investments for our shareholders," concluded Mr. Adlersberg.

Share Buy Back Program

As of March 31, 2019, AudioCodes had acquired an aggregate of 17.64 million of its ordinary shares since August 2014 for an aggregate consideration of $95 million. During the quarter ended March 31, 2019, AudioCodes acquired 86,613 of its ordinary shares under its share repurchase program for a total consideration of $951,000.

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. As of March 31, 2019, $7.8 million remained available to the Company under this court approval for repurchasing shares or declaring dividends.

Cash Dividend

On January 28, 2019, the Company declared a cash dividend of $0.11 per share. The dividend, in the aggregate amount of $3.2 million, was paid on February 19, 2019 to all of the Company's shareholders of record on February 7, 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, 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



March 31,


December 31,


2019


2018


(Unaudited)


(Audited)

ASSETS








CURRENT ASSETS:




Cash and cash equivalents

$ 47,186


$ 31,503

Short-term and restricted bank deposits

7,385


12,381

Short-term marketable securities and accrued interest

12,271


19,602

Trade receivables, net

27,081


22,279

Other receivables and prepaid expenses

6,237


5,885

Inventories

25,528


22,620

Total current assets

125,688


114,270





LONG-TERM ASSETS:




Long-term and restricted bank deposits

$ 1,594


$ 1,894

Deferred tax assets

3,807


4,350

Operating lease right-of-use assets

31,582


-

Severance pay funds

18,017


17,518

Total long-term assets

55,000


23,762





PROPERTY AND EQUIPMENT, NET

4,604


3,865





GOODWILL, INTANGIBLE ASSETS AND OTHER, NET

37,387


37,475





Total assets

$ 222,679


$ 179,372





LIABILITIES AND SHAREHOLDERS' EQUITY








CURRENT LIABILITIES:




Current maturities of long-term bank loans

$ 2,474


$ 2,487

Trade payables

6,815


6,188

Other payables and accrued expenses

26,295


22,541

Deferred revenues

29,134


23,727

Short-term operating lease liabilities

8,196


-

Total current liabilities

72,914


54,943





LONG-TERM LIABILITIES:




Accrued severance pay

$ 19,388


$ 18,728

Long-term bank loans

3,055


3,687

Deferred revenues and other liabilities

8,488


7,466

Long-term operating lease liabilities

22,953


-

Total long-term liabilities

53,884


29,881





Total shareholders' equity

95,881


94,548

Total liabilities and shareholders' equity

$ 222,679


$ 179,372

 

 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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




Three months ended



March 31,



2019


2018



(Unaudited)

Revenues:





Products


$ 32,453


$ 28,763

Services


14,126


13,662

Total Revenues


46,579


42,425

Cost of revenues:





Products


13,778


11,895

Services


3,572


3,371

Total Cost of revenues


17,350


15,266

Gross profit


29,229


27,159

Operating expenses:





Research and development, net


9,480


8,633

Selling and marketing


12,561


12,988

General and administrative


2,671


2,581

Total operating expenses


24,712


24,202

Operating income


4,517


2,957

Financial income (expenses), net


(799)


243

Income before taxes on income


3,718


3,200

Taxes on income, net


(669)


(766)

Net income


$ 3,049


$ 2,434

Basic net earnings per share


$ 0.10


$ 0.08

Diluted net earnings per share


$ 0.10


$ 0.08

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


29,213


29,159

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


30,729


30,349

 


 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME

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




Three months ended



March 31,



2019


2018



(Unaudited)

GAAP net income


$ 3,049


$ 2,434

GAAP net earnings per share


$ 0.10


$ 0.08

Cost of revenues:





Share-based compensation (1)


36


39

Amortization expenses (2)


68


174



104


213

Research and development, net:





Share-based compensation (1)


212


113

Selling and marketing:





Share-based compensation (1)


333


274

Amortization expenses (2)


15


15



348


289

General and administrative:





Share-based compensation (1)


366


269

Revaluation of earn-out liability (3)


(23)


-



343


269

Financial expenses:





Exchange rate differences (4)


900


-






Income taxes:





Deferred tax (5)


544


584

Non-GAAP net income


$ 5,500


$ 3,902

Non-GAAP diluted net earnings per share


$ 0.18


$ 0.13









(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 benefit or 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 STATEMENT OF CASH FLOWS

U.S. dollars in thousands




Three months ended



 March 31,



2019


2018



 (Unaudited)

Cash flows from operating activities:





Net income


$ 3,049


$ 2,434

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





Depreciation and amortization


474


540

Amortization of marketable securities premiums and accretion of discounts, net


56


103

Increase in accrued severance pay, net


161


47

Share-based compensation expenses


947


695

Decrease in deferred tax assets, net


425


563

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


(11)


15

Changes in operating leases, net


(433)


-

Decrease (increase) in trade receivables, net


(4,860)


389

Increase in other receivables and prepaid expenses


(254)


(1,734)

Increase in inventories


(2,899)


(971)

Increase in trade payables


627


162

Increase (decrease) in other payables and accrued expenses


4,466


(1,081)

Increase in deferred revenues


6,547


7,124

Net cash provided by operating activities


8,295


8,286

Cash flows from investing activities:





Proceeds from short-term deposits


5,971


-

Proceeds from long-term deposits


300


-

Proceeds from redemption of marketable securities


7,291


727

Purchase of property and equipment


(1,116)


(280)

Net cash provided by investing activities


12,446


447













 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

U.S. dollars in thousands




Three months ended



 March 31,



2019


2018



 (Unaudited)

Cash flows from financing activities:





Purchase of treasury shares


(951)


(7,224)

Repayment of bank loans


(618)


(636)

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


1,114


1,446

Net cash used in financing activities


(4,083)


(6,565)






Net increase in cash, cash equivalents, and restricted cash


16,658


2,168

Cash, cash equivalents and restricted cash at beginning of period


31,503


31,181

Cash, cash equivalents and restricted cash at end of period


$ 48,161


$ 33,349

                                                                                                                       

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


 

Cision View original content:http://www.prnewswire.com/news-releases/audiocodes-reports-first-quarter-2019-results-300840419.html

SOURCE AudioCodes

Copyright 2019 PR Newswire

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