AudioCodes Posts Net Loss for Q1 2012, Cites Quick Drop Off Legacy Business

By Rory Lidstone

TMCnet Contributing Writer

 

Provider of Voice over IP (VoIP) and Voice Network products, AudioCodes recently announced its financial results for the first quarter of the year. Revenues were $32.3 million compared to $37.2 million for the fourth quarter of 2011, and $41 million for the first quarter of last year.

In accordance with U.S. generally accepted accounting principles (GAAP), AudioCodes (News - Alert) experienced a net loss of $1.6 million.

Non-GAAP net loss for the first quarter of 2012 was $827,000, compared to a non-GAAP net income of $1.5 million for the fourth quarter of 2011, and a non-GAAP net income of $4.1 million for the first quarter of 2011.

Non-GAAP net income and loss calculations exclude stock-based compensation expenses and amortization expenses related to intangible assets.

Part of the reason AudioCodes posted a net loss for the past quarter is because it bought up approximately 692,000 of its Ordinary Shares during the first quarter of 2012, as dictated by a program authorized by the company's board of directors in October of 2011.

The aggregate cost of these shares was approximately $2.5 million, while as of March 31, 2012, approximately 1.9 million shares were repurchased since October when the program was first implemented.

Furthermore, in the first quarter of 2012, net cash of $623,000 was provided by operating activities as compared to net cash of $4.1 million from operating activities in the fourth quarter of 2011, and net cash of $371,000 used in operating activities in the first quarter of 2011.

'AudioCodes' first quarter revenues were below our original forecast and reflected a faster than anticipated decline in our legacy business, a trend we believe will become less significant in the second half of 2012," explained Shabtai Adlersberg (News - Alert), Chairman, President and CEO at AudioCodes. "These lower revenues reflect weakness in sales in North America including, among others, a decline in legacy OEM business and lower than anticipated government and technology sales."

AudioCodes is a designer and developer of advanced VoIP and converged VoIP and data networking products aimed at service providers and enterprises. The company ranked third place in terms of market share of the Enterprise Session Border Controller market in 2011 according to Infonetics Research.

"Aside from these headwinds, we saw continued solid demand for our core networking business line which represents about 80 percent of our overall business," added Adlersberg. "Favorable product mix contributed to strong gross margin performance during the quarter. Strength in AudioCodes' cash flow from operations for the first quarter was also favorable, strengthening the balance sheet and allowing us to continue to execute on our active share repurchase program."