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TMCNet:  AudioCodes Reports First Quarter 2018 Results

[April 24, 2018]

AudioCodes Reports First Quarter 2018 Results

LOD, Israel, April 24, 2018 /PRNewswire/ --

First Quarter Highlights

  • Quarterly revenues increased by 13.5% year-over-year to $42.4 million;
  • Quarterly service revenues increased by 20.2% year-over-year to $13.7 million;
  • Revenues related to UC-SIP business increased more than 30% compared to the first quarter of 2017;
  • Quarterly GAAP gross margin was 64.0%; quarterly Non-GAAP gross margin was 64.5%;
  • Quarterly GAAP operating margin was 7.0%; quarterly Non-GAAP operating margin was 9.1%;
  • Cash flow from operating activities was $8.3 million;
  • Quarterly GAAP net income was $2.4 million, or $0.08 per diluted share, Quarterly Non-GAAP net income was $3.9 million, or $0.13 per diluted share;
  • AudioCodes repurchased 1 million of its ordinary shares during the quarter at an aggregate cost of $7.2 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 first quarter ended March 31, 2018.

Revenues for the first quarter of 2018 were $42.4 million compared to $41.4 million for the fourth quarter of 2017 and $37.4 million for the first quarter of 2017.

Net income was $2.4 million, or $0.08 per diluted share, for the first quarter of 2018 compared to $1.3 million, or $0.04 per diluted share, for the comparable period last year.

On a Non-GAAP basis, net income was $3.9 million, or $0.13 per diluted share, for the first quarter of 2018 compared to $2.5 million, or $0.07 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 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 $8.3 million for the first quarter of 2018. Cash and cash equivalents, long- and short-term bank deposits and long- and short-term marketable securities were $60.1 million as of March 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 operating activities offset, in part, by the use of cash for the continued repurchasing of the Company's ordinary shares pursuant to its share repurchase program.

"We are pleased to report improved financial results for the first quarter 2018," said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes. "In the first quarter of 2018 we continued to strengthen our Enterprise Voice business and enhance our leadership position in this space. Continuing the strong trend of the fourth quarter of 2017, we achieved record financial results in our revenues, net income and gross margin. We also achieved higher operating margin for our Enterprise Voice operation. Our services business performed well in the quarter with revenues higher by 20% on a year over year basis. Looking forward, we expect to continue our growth in 2018, continue to generate strong cash flow from operating activities and invest in future offerings."

"The performance of our UC-SIP business was noteworthy, reaching a revenue level that's more than 50% of our total revenues. We continued to execute on our strategic plan, and grew sales of UC-SIP by more than 30% compared to the year ago quarter. Our performance continues to rely primarily on collaboration with our application and system integration partners worldwide, as well as on winning enterprise voice deployments and service provider network transformation projects. Additionally, we saw new opportunities developing in our Voice.AI business," concluded Mr. Adlersberg

Share Buy Back Program

As of March 31, 2018, AudioCodes had acquired an aggregate of 16.7 million of its ordinary shares since August 2014 for an aggregate consideration of $87 million. During the quarter ended March 31, 2018, AudioCodes acquired 1 million of its ordinary shares under its share repurchase program for a total consideration of approximately $7.2 million.

In November 2017, AudioCodes received court approval in Israel to purchase up to an aggregate of $20 million of additional ordinary shares pursuant to its share repurchase program. As of March 31, 2018, $9.5 million remained available to the Company for repurchasing shares under this court approval. The current court approval for share repurchases will expire on May 27, 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 first quarter and full year of 2017 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.

To download AudioCodes' investor relations app, which offers access to its SEC filings, press releases, videos, audiocasts and more, please visit Apple's App Store for the iPhone and iPad or Google Play for Android mobile devices.

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



March 31,


December 31,


2018


2017


(Unaudited)


(Audited)

ASSETS








CURRENT ASSETS:




Cash and cash equivalents

$ 21,701


$ 24,235

Short-term and restricted bank deposits

7,741


2,739

Short-term marketable securities and accrued interest

14,485


7,087

Trade receivables, net

21,670


22,059

Other receivables and prepaid expenses

6,665


4,693

Inventories

17,534


16,563

Total current assets

89,796


77,376





LONG-TERM ASSETS:




Long-term and restricted bank deposits

$ 3,907


$ 4,207

Long-term marketable securities

12,220


20,475

Deferred tax assets

6,101


6,685

Severance pay funds

19,718


20,138

Total long-term assets

41,946


51,505





PROPERTY AND EQUIPMENT, NET

3,769


3,835





GOODWILL, INTANGIBLE ASSETS AND OTHER, NET

38,028


38,222





Total assets

$ 173,539


$ 170,938





LIABILITIES AND EQUITY








CURRENT LIABILITIES:




Current maturities of long-term bank loans

$ 2,539


$ 2,519

Trade payables

5,801


5,639

Other payables and accrued expenses

19,779


20,786

Deferred revenues

22,081


16,417

Total current liabilities

50,200


45,361





LONG-TERM LIABILITIES:




Accrued severance pay

$ 20,855


$ 21,228

Long-term bank loans

5,643


6,237

Deferred revenues and other liabilities

6,945


5,731

Total long-term liabilities

33,443


33,196





Total equity

89,896


92,381

Total liabilities and equity

$ 173,539


$ 170,938

 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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




Three months ended



March 31,



2018


2017



(Unaudited)

Revenues:





Products


$ 28,763


$ 26,008

Services


13,662


11,369

Total Revenues


42,425


37,377

Cost of revenues:





Products


11,895


11,159

Services


3,371


2,902

Total Cost of revenues


15,266


14,061

Gross profit


27,159


23,316

Operating expenses:





Research and development, net


8,633


7,154

Selling and marketing


12,988


12,035

General and administrative


2,581


2,161

Total operating expenses


24,202


21,350

Operating income


2,957


1,966

Financial income (expenses), net


243


(69)

Income before taxes on income


3,200


1,897

Taxes on income, net


(766)


(602)

Net income


$ 2,434


$ 1,295

Basic net earnings per share


$ 0.08


$ 0.04

Diluted net earnings per share


$ 0.08


$ 0.04

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


29,159


31,986

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


30,349


33,037

 

 

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,



2018


2017



(Unaudited)

GAAP net income


$ 2,434


$ 1,295

GAAP net earnings per share


$ 0.08


$ 0.04

Cost of revenues:





Share-based compensation (1)


39


25

Amortization expenses (2)


174


174



213


199

Research and development, net:





Share-based compensation (1)


113


95

Deferred payments expenses (3)


-


11



113


106

Selling and marketing:





Share-based compensation (1)


274


263

Amortization expenses (2)


15


30



289


293

General and administrative:





Share-based compensation (1)


269


155






Income taxes:





Deferred tax (4)


584


430

Non-GAAP net income


$ 3,902


$ 2,478

Non-GAAP diluted net earnings per share


$ 0.13


$ 0.07


(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)      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 STATEMENT OF CASH FLOWS

U.S. dollars in thousands




Three months ended



 March 31,



2018


2017



 (Unaudited)

Cash flows from operating activities:





Net income


$ 2,434


$ 1,295

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





Depreciation and amortization


540


655

Amortization of marketable securities premiums and
accretion of discounts, net


103


161

Increase in accrued severance pay, net


47


196

Share-based compensation expenses


695


538

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


15


(3)

Decrease in long- term deferred tax assets


563


409

Decrease in trade receivables, net


389


1,056

Increase in other receivables and prepaid expenses


(1,734)


(3,452)

Increase in inventories


(971)


(107)

Increase (decrease) in trade payables


162


(2,564)

Decrease in other payables and accrued expenses


(1,081)


(54)

Increase in deferred revenues


7,124


2,730

Net cash provided by operating activities


8,286


860

Cash flows from investing activities:





Proceeds from redemption of marketable securities


727


-

Purchase of property and equipment


(280)


(463)






Net cash provided by (used in) investing activities


447


(463)











 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

U.S. dollars in thousands




Three months ended



 March 31,



2018


2017



 (Unaudited)

Cash flows from financing activities:





Purchase of treasury stock


(7,224)


(7,332)

Repayment of bank loans


(636)


(985)

Payment related to the acquisition of ACS


(151)


-

Proceeds from issuance of shares upon exercise of options and warrants


1,446


1,286

Net cash used in financing activities


(6,565)


(7,031)






Net increase (decrease) in cash, cash equivalents, and restricted cash


2,168


(6,634)

Cash, cash equivalents and restricted cash at beginning of period


31,181


33,152

Cash, cash equivalents and restricted cash at end of period


$ 33,349


$ 26,518

                                                                                                                       

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-first-quarter-2018-results-300635092.html

SOURCE AudioCodes


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