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AudioCodes Reports Fourth Quarter and Full Year 2011 Results(GlobeNewswire Via Acquire Media NewsEdge) LOD, Israel, Feb. 1, 2012 (GLOBE NEWSWIRE) -- AudioCodes (Nasdaq:AUDC), a leading provider of Voice over IP (VoIP) technologies and Voice Network products, today announced financial results for the fourth quarter and year ended December 31, 2011. Revenues for the fourth quarter of 2011 were $37.2 million compared to $36.0 million for the third quarter of 2011 and $40.5 million for the fourth quarter of 2010. Revenues were $155.8 million in 2011 compared to $150.0 million in 2010. AudioCodes has established a new financial reporting product line, Managed and Technical Services, effective with the Company's results for the fourth quarter of 2011. Revenues associated with the new Managed and Technical Services product line grew to 15% of total revenues in the fourth quarter of 2011. Net income in accordance with U.S. generally accepted accounting principles (GAAP) was $670,000, or $0.02 per diluted share, for the fourth quarter of 2011 compared to a net loss of $527,000, or ($0.01) per diluted share, for the third quarter of 2011, and net income of $5.4 million, or $0.13 per diluted share, for the fourth quarter of 2010. The Company reported GAAP net income of $7.2 million, or $0.17 per diluted share, in 2011 compared to GAAP net income of $12.0 million, or $0.30 per diluted share, in 2010. During the three months and year ended December 31, 2010, the Company recorded a non-cash tax benefit of $2.3 million, equivalent to $0.06 per diluted share, due to deferred tax. Non-GAAP net income for the fourth quarter of 2011 was $1.5 million, or $0.04 per diluted share, compared to $274,000, or $0.01 per diluted share, for the third quarter of 2011, and $4.5 million, or $0.11 per diluted share, for the fourth quarter of 2010. The Company reported non-GAAP net income of $10.8 million, or $0.26 per diluted share, in 2011 compared to non-GAAP net income of $13.3 million, or $0.33 per diluted share, in 2010. Non-GAAP net income excludes (i) stock-based compensation expenses, (ii) amortization expenses related to intangible assets and (iii) for the three months and year ended December 31, 2010, the non-cash tax benefit. A reconciliation between net income (loss) on a GAAP basis and non-GAAP net income is provided in the tables that accompany the condensed consolidated financial statements contained in this press release. In October 2011, AudioCodes' Board of Directors authorized a program to repurchase up to 4.0 million of the Company's Ordinary Shares, NIS 0.01 nominal (par) value, which is approximately 10% of the Company's outstanding shares. As of December 31, 2011, approximately 1.2 million shares have been repurchased at an aggregate cost of $4.0 million. During the fourth quarter of 2011, AudioCodes generated $4.1 million in cash from operating activities compared to cash used in operations of $405,000 in the third quarter of 2011 and cash generated from operating activities of $5.7 million in the fourth quarter of 2010. Cash and cash equivalents, bank deposits and marketable securities were $75.6 million as of December 31, 2011, compared to $72.8 million as of September 30, 2011 and $64.1 million as of December 31, 2010. The year-over-year net increase in cash balances included new bank loans made to the Company during the second half of 2011 in the amount of $23.8 million. "AudioCodes fourth quarter 2011 performance was highlighted by a return to sequential growth in all key financial metrics including revenues, earnings and cash flow from operations, and continued strength in our core networking business which grew over 20% in 2011 compared to 2010," commented Shabtai Adlersberg, Chairman, President and Chief Executive Officer of AudioCodes. "In the fourth quarter of 2011 we experienced increased demand in our markets and growing activities and projects with our customers and partners in the areas of unified communications, IP and TDM connectivity for business services and mobility, all of which present additional opportunities for AudioCodes to continue our growth and increase our market share." "In the past two years, we have invested in growing our managed and technical services, which accounted for 15% of our total revenues in the fourth quarter of 2011. Growing over 25% annually in the past two years, we believe that our services practice will continue to grow at a similar rate in coming years and expect it to be an influential growth engine for AudioCodes. Based on our confidence in the near and long-term growth prospects for AudioCodes' business, as well as the strength of our balance sheet, the Company's Board of Directors approved a stock repurchase program during the fourth quarter as part of our ongoing commitment to enhancing shareholder value," concluded Mr. Adlersberg. Conference Call & Web Cast Information AudioCodes will conduct a conference call at 9:00 A.M., Eastern Time today to discuss the Company's fourth quarter and full year 2011 operating and financial results. The conference call will be simultaneously Web cast. Investors are invited to listen to the call live via Web cast at the AudioCodes corporate website at www.audiocodes.com About AudioCodes AudioCodes Ltd. (Nasdaq:AUDC) designs, develops and sells advanced Voice over IP (VoIP) and converged VoIP and Data networking products and applications to Service Providers and Enterprises. AudioCodes is a VoIP technology market leader focused on converged VoIP and data communications and its products are deployed globally in Broadband, Mobile, Enterprise networks and Cable. The Company provides a range of innovative, cost-effective products including Media Gateways, Multi-Service Business Gateways, Session Border Controllers (SBC), Residential Gateways, IP Phones, Media Servers and Value Added Applications. AudioCodes' underlying technology, VoIPerfectHD™, relies on AudioCodes' leadership in DSP, voice coding and voice processing technologies. AudioCodes' High Definition (HD) VoIP technologies and products provide enhanced intelligibility and a better end user communication experience in Voice communications. 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 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. ©2012 AudioCodes Ltd. All rights reserved. AudioCodes, AC, HD VoIP, HD VoIP Sounds Better, IPmedia, Mediant, MediaPack, OSN, SmartTAP, VMAS, VoIPerfect, VoIPerfectHD, Your Gateway To VoIP and 3GX 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 SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands December 31,December 31, 20112010 (Unaudited)(Audited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 26,352 $ 50,311 Short-term bank deposits 15,971 13,825 Trade receivables, net 30,923 (*) 26,321 Other receivables and prepaid expenses 4,764 (*) 4,896 Deferred tax assets 2,600 2,287 Inventories 20,415 (*) 16,279 Total current assets 101,025 113,919 LONG-TERM INVESTMENTS: Long-term bank deposits 9,120 -- Long-term marketable securities 23,823 -- Investments in affiliated company 1,251 1,317 Deferred tax assets 2,600 2,261 Severance pay funds 15,410 15,039 Total long-term investments 52,204 18,617 PROPERTY AND EQUIPMENT, NET 3,368 3,703 GOODWILL, INTANGIBLE ASSETS, DEFERRED CHARGES AND OTHER, NET 36,080 37,405 Total assets $ 192,677 $ 173,644 LIABILITIES AND EQUITY CURRENT LIABILITIES: Current maturities of long-term bank loans and short-term loans $ 10,243 $ 6,000 Trade payables 12,362 13,519 Other payables and accrued expenses 18,102 24,168 Deferred revenue 5,235 (*) 3,695 Total current liabilities 45,942 47,382 LONG-TERM LIABILITIES: Accrued severance pay $ 16,106 $ 15,821 Long-term bank loans 22,912 9,750 Senior convertible notes 353 353 Deferred revenue and other payables 1,345 1,158 Total long-term liabilities 40,716 27,082 Total equity 106,019 99,180 Total liabilities and equity $ 192,677 $ 173,644 (*) Reclassified AUDIOCODES LTD. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in thousands, except per share data Year ended December 31,Three months ended December 31, 2011201020112010 (Unaudited)(Audited)(Unaudited) Total revenues $155,827 $150,040 $37,223 $40,464 Total cost of revenues 64,157 66,138 15,220 17,227 Gross profit 91,670 83,902 22,003 23,237 Operating expenses: Research and development, net 32,150 30,189 8,241 7,839 Selling and marketing 43,260 35,024 10,775 9,998 General and administrative 9,028 8,252 2,174 2,115 Total operating expenses 84,438 73,465 21,190 19,952 Operating income 7,232 10,437 813 3,285 Financial income (expenses), net 423 (94) (93) 191 Income before taxes on income 7,655 10,343 720 3,476 Income tax expense (income), net 238 (1,885) 45 (2,110) Equity in losses of an affiliated company 253 213 5 230 Net income $7,164 $12,015 $670 $5,356 Net loss attributable to the noncontrolling interest -- 111 -- -- Net income attributable to AudioCodes $7,164 $12,126 $670 $5,356 Basic net earnings per share $0.17 $0.30 $0.02 $0.13 Diluted net earnings per share $0.17 $0.30 $0.02 $0.13 Weighted average number of shares used in computing basic net earnings per share 41,438 40,560 41,092 40,951 Weighted average number of shares used in computing diluted net earnings per share 41,935 40,961 41,411 41,556 AUDIOCODES LTD. AND ITS SUBSIDIARIES NON-GAAP PROFORMA STATEMENTS OF OPERATIONS U.S. dollars in thousands, except per share data Year ended December 31,Three months ended December 31, 2011201020112010 (Unaudited)(Unaudited) Total revenues $155,827 $150,040 $37,223 $40,464 Total cost of revenues (1) (2) 62,990 64,840 14,965 16,903 Gross profit 92,837 85,200 22,258 23,561 Operating expenses: Research and development, net (1) 31,624 29,796 8,120 7,723 Selling and marketing (1) (2) 41,985 33,540 10,512 9,155 General and administrative (1) 8,325 7,799 2,015 1,967 Total operating expenses 81,934 71,135 20,647 18,845 Operating income 10,903 14,065 1,611 4,716 Financial income (expenses), net 423 (94) (93) 191 Income before taxes on income 11,326 13,971 1,518 4,907 Income tax expense, net (3) 238 436 45 211 Equity in losses of an affiliated company 253 213 5 230 Non-GAAP net income $10,835 $13,322 $1,468 $4,466 Net loss attributable to the noncontrolling interest -- 111 -- -- Net income attributable to AudioCodes $10,835 $13,433 $1,468 $4,466 Non-GAAP diluted net earnings per share $0.26 $0.33 $0.04 $0.11 Weighted average number of shares used in computing non-GAAP diluted net earnings per share 42,369 40,975 41,710 41,875 (1) Excluding stock-based compensation expenses related to options and restricted stock units granted to employees and others. (2) Excluding amortization of intangible assets related to the acquisitions of Nuera, Netrake and CTI Squared. (3) Excluding non-cash deferred tax benefit in the three months and year ended December 31, 2010. 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 uses this non-GAAP information internally 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 as well. AUDIOCODES LTD. AND ITS SUBSIDIARIES RECONCILIATION BETWEEN GAAP NET INCOME AND NON-GAAP NET INCOME U.S. dollars in thousands, except per share data Year ended December 31,Three months ended December 31, 2011201020112010 (Unaudited)(Unaudited) GAAP Net income $7,164 $12,015 $670 $5,356 GAAP Diluted earnings per share $0.17 $0.30 $0.02 $0.13 Cost of revenues: Stock-based compensation (1) 130 62 33 14 Amortization expenses (2) 1,037 1,236 222 310 1,167 1,298 255 324 Research and development, net: Stock-based compensation (1) 526 393 121 116 Selling and marketing: Stock-based compensation (1) 963 1,180 179 766 Amortization expenses (2) 312 304 84 77 1,275 1,484 271 843 General and administrative: Stock-based compensation (1) 703 453 159 148 Income taxes: Deferred tax income (3) -- (2,321) -- (2,321) Non-GAAP Net income $10,835 $13,322 $1,468 $4,466 Non-GAAP Diluted earnings per share $0.26 $0.33 $0.04 $0.11 (1) Stock-based compensation expenses related to options and restricted stock units granted to employees and others. (2) Amortization of intangible assets related to the acquisitions of Nuera, Netrake and CTI Squared. (3) Non-cash deferred tax 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 uses this non-GAAP information internally 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 as well. AUDIOCODES LTD. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS U.S. dollars in thousands Year ended December 31,Three months ended December 31, 2011201020112010 (Unaudited)(Audited)(Unaudited) Cash flows from operating activities: Net income $7,164 $12,015 $670 $5,356 Adjustments required to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,264 4,359 741 958 Amortization of marketable securities premiums and accretion of discounts, net 416 -- 110 -- Equity in losses of an affiliated company and interest of loans to affiliated company 253 193 5 230 Decrease (increase) in accrued severance pay, net (86) (319) (36) 39 Stock-based compensation expenses 2,322 1,370 492 326 Increase in accrued interest on marketable securities, bank deposits and structured notes (182) -- (1) -- Increase in deferred tax assets (652) (2,321) (652) (2,321) Decrease (increase) in trade receivables, net (4,602) (*) (7,799) 924 (*) (982) Decrease (increase) in other receivables and prepaid expenses (345) (*) (218) 1,052 (*) 1,115 Increase in inventories (4,136) (*) (3,963) (1,959) (*) (1,937) Increase (decrease) in trade payables (1,157) 4,910 1,313 921 Increase (decrease) in deferred revenues 1,978 (*) 1,851 (67) (*) (789) Increase (decrease) in other payables and accrued expenses (5,464) 6,324 1,478 2,775 Net cash provided by (used in) operating activities (1,227) 16,402 4,070 5,691 Cash flows from investing activities: Purchase of marketable securities (24,402) -- -- -- Short-term deposit, net (2,146) 77 14,589 489 Investments in long-term deposits (9,120) -- (9,120) -- Investments in an affiliated company (211) -- (211) -- Purchase of property and equipment (1,579) (1,569) (316) (284) Net cash provided by (used in) investing activities (37,458) (1,492) 4,942 205 (*) Reclassified AUDIOCODES LTD. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Continued) U.S. dollars in thousands Year ended December 31,Three months ended December 31, 2011201020112010 (Unaudited)(Audited)(Unaudited) Cash flows from financing activities: Payment for the acquisition of NSC (278) (74) -- -- Repurchase of convertible notes, net of costs -- (50) -- -- Proceeds from loans 24,005 -- 5,255 -- Repayment of loan from bank (6,600) (6,000) (2,100) (1,500) Purchase of treasury stock (3,812) -- (3,812) -- Proceeds from issuance of shares upon exercise of options and employee stock purchase plan 1,411 2,556 28 1,649 Net cash provided by (used in) financing activities 14,726 (3,568) (629) 149 Increase (decrease) in cash and cash equivalents (23,959) 11,342 8,383 6,045 Cash and cash equivalents at the beginning of the period 50,311 38,969 17,969 44,266 Cash and cash equivalents at the end of the period $26,352 $50,311 $26,352 $50,311CONTACT: Company Contacts Guy Avidan, VP Finance & CFO AudioCodes Tel: +972-3-976-4000 [email protected] Shirley Nakar, Director, Investor Relations AudioCodes Tel: +972-3-976-4000 [email protected] IR Agency Contact Erik Knettel, Grayling Tel: +1-646-284-9415 [email protected] Source: AudioCodes Ltd. 2012 GlobeNewswire, Inc. |