×

AudioCodes Reports Third Quarter 2013 Results

LOD, Israel, Oct. 30, 2013 (GLOBE NEWSWIRE) -- AudioCodes (Nasdaq:AUDC), a leading provider of converged voice solutions that enable enterprises and service providers to transition to all-IP voice networks, today announced financial results for the third quarter ended September 30, 2013.

Third Quarter Highlights:

  • Revenues totaled $35.0 million, an 11.7% increase over the year ago quarter
  • 13.4% increase in revenues from the networking business over the year ago quarter
  • GAAP net income was $935,000 or $0.02 per diluted share
  • Non-GAAP net income was $1.8 million or $0.04 per diluted share
  • Net cash provided by operating activities was $1.6 million

Revenues for the third quarter of 2013 were $35.0 million, compared to $33.7 million for the second quarter of 2013 and $31.4 million for the third quarter of 2012.

Net income in accordance with U.S. generally accepted accounting principles (GAAP) was $935,000, or $0.02 per diluted share, for the third quarter of 2013, compared to GAAP net income of $441,000, or $0.01 per diluted share, for the second quarter of 2013, and a GAAP net loss of $1.1 million, or ($0.03) per diluted share, for the third quarter of 2012.

Non-GAAP net income for the third quarter of 2013 was $1.8 million, or $0.04 per diluted share, compared to non-GAAP net income of $1.0 million, or $0.03 per diluted share, for the second quarter of 2013, and a non-GAAP net loss of $419,000, or ($0.01) per diluted share, for the third quarter of 2012.

Non-GAAP net income (loss) excludes: (i) stock-based compensation expenses; and (ii) amortization expenses related to intangible assets. A reconciliation of net income (loss) 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 for the third quarter of 2013 totaled $1.6 million. Cash and cash equivalents, bank deposits and marketable securities were $58.0 million as of September 30, 2013 compared to $57.5 million as of June 30, 2013 and $54.1 million as of September 30, 2012.

"We are very pleased to report another quarter of growing revenues and earnings, our fifth consecutive quarter of growth and expansion in our markets for unified communications and business services," said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes. "This series of successful quarters illustrates our ability to deliver consistent growth and success that we expect will continue in future years."

Mr. Adlersberg continued, "In the third quarter of 2013, we made important strides with our One Voice strategic initiative to become a leader in full service, end-to-end voice solutions in our industry. Our 'One Voice for Lync' program announced in early 2013 has proven to be effective and successful, and has contributed to our performance in the third quarter. Early in the fourth quarter we have made further progress in the One Voice Initiative by announcing a second program, AudioCodes One Voice for Hosted Services, a program which targets the fast developing market for Hosted PBX Services and SIP Trunking for service providers' business services market.

Overall, innovation remains the foundation of our growth strategy. Our recent demonstration of the world's first WebRTC HD call between an internet browser and an IP phone is expected to accelerate the adoption of browser-based real-time voice and video communications. Our ability to tap these opportunities among global carrier and enterprise customers is strengthened by our robust network of international partners which is further enhancing our ability to grow."

Conference Call & Web Cast Information

AudioCodes will conduct a conference call at 9:00 A.M., Eastern Time today to discuss the Company's third quarter 2013 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) 407-8031

International Participants: +1 (201) 689-8031

The conference call will also 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 Routers, 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 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.

©2013 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 SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
September 30, December 31,
2013 2012
Unaudited Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 21,598 $ 15,219
Short-term and restricted bank deposits 9,601 10,330
Short-term marketable securities and accrued interest 19,345 7,966
Trade receivables, net 28,070 24,198
Other receivables and prepaid expenses 9,137 7,274
Inventories 13,393 16,797
Total current assets 101,144 81,784
LONG-TERM ASSETS:
Long-term and restricted bank deposits $ 7,479 $ 9,251
Long-term marketable securities -- 15,762
Investments in an affiliated company -- 1,084
Deferred tax assets 3,668 3,565
Severance pay funds 17,765 15,772
Total long-term assets 28,912 45,434
PROPERTY AND EQUIPMENT, NET 3,303 3,619
GOODWILL, INTANGIBLE ASSETS AND OTHER, NET 38,340 34,952
Total assets $ 171,699 $ 165,789
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term bank loans $ 4,686 $ 8,436
Trade payables 8,614 6,817
Other payables and accrued expenses 16,580 15,062
Deferred revenues 7,257 4,871
Total current liabilities 37,137 35,186
LONG-TERM LIABILITIES:
Accrued severance pay $ 18,770 $ 16,284
Long-term bank loans 11,157 14,477
Senior convertible notes 353 353
Deferred revenues and other liabilities 2,389 1,192
Total long-term liabilities 32,669 32,306
Total equity 101,893 98,297
Total liabilities and equity $ 171,699 $ 165,789
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except per share data
Nine months ended Three months ended
September 30, September 30,
2013 2012 2013 2012
(Unaudited) (Unaudited)
Revenues:
Products $ 82,746 $ 77,581 $ 29,034 $ 25,638
Services 18,234 17,103 5,991 5,725
Total Revenues 100,980 94,684 35,025 31,363
Cost of revenues:
Products 38,410 35,758 13,704 12,065
Services 4,699 4,436 1,595 1,486
Total Cost of revenues 43,109 40,194 15,299 13,551
Gross profit 57,871 54,490 19,726 17,812
Operating expenses:
Research and development, net 20,994 22,446 6,714 7,201
Selling and marketing 28,991 30,319 10,035 9,567
General and administrative 6,408 6,481 2,292 2,278
Total operating expenses 56,393 59,246 19,041 19,046
Operating income (loss) 1,478 (4,756) 685 (1,234)
Financial income, net 151 366 273 231
Income (loss) before taxes on income 1,629 (4,390) 958 (1,003)
Income tax expenses, net (161) (284) (23) (101)
Equity in losses of an affiliated company, net (21) (27) -- (4)
Net income (loss) $ 1,447 $ (4,701) $ 935 $ (1,108)
Basic net earnings (loss) per share $ 0.04 $ (0.12) $ 0.02 $ (0.03)
Diluted net earnings (loss) per share $ 0.04 $ (0.12) $ 0.02 $ (0.03)
Weighted average number of shares used in computing basic net earnings (loss) per share (in thousands) 38,121 39,523 38,294 38,673
Weighted average number of shares used in computing diluted net earnings (loss) per share (in thousands) 38,854 39,523 39,332 38,673
AUDIOCODES LTD. AND ITS SUBSIDIARIES
NON-GAAP PROFORMA STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except per share data
Nine months ended Three months ended
September 30, September 30,
2013 2012 2013 2012
(Unaudited) (Unaudited)
Revenues:
Products $ 82,746 $ 77,581 $ 29,034 $ 25,638
Services 18,234 17,103 5,991 5,725
Total Revenues 100,980 94,684 35,025 31,363
Cost of revenues:
Products 37,882 35,142 13,470 11,882
Services 4,584 4,378 1,547 1,445
Total Cost of revenues (1) (2) 42,466 39,520 15,017 13,327
Gross profit 58,514 55,164 20,008 18,036
Operating expenses:
Research and development, net (1) 20,710 22,144 6,616 7,110
Selling and marketing (1) (2) 28,308 29,707 9,742 9,342
General and administrative (1) 5,984 6,026 2,142 2,129
Total operating expenses 55,002 57,877 18,500 18,581
Operating income (loss) 3,512 (2,713) 1,508 (545)
Financial income, net 151 366 273 231
Income (loss) before taxes on income 3,663 (2,347) 1,781 (314)
Income tax expenses, net (161) (284) (23) (101)
Equity in losses of an affiliated company, net (21) (27) -- (4)
Net income (loss) $ 3,481 $ (2,658) $ 1,758 $ (419)
Diluted net earnings (loss) per share $ 0.09 $ (0.07) $ 0.04 $ (0.01)
Weighted average number of shares used in computing basic net earnings (loss) per share (in thousands) 39,185 39,523 39,712 38,673
(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, CTI Squared and Mailvision assets.
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
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)
U.S. dollars in thousands, except per share data
Nine months ended Three months ended
September 30, September 30,
2013 2012 2013 2012
(Unaudited) (Unaudited)
GAAP net income (loss) $ 1,447 $ (4,701) $ 935 $ (1,108)
GAAP net earnings (loss) per share $ 0.04 $ (0.12) $ 0.02 $ (0.03)
Cost of revenues:
Stock-based compensation (1) 34 56 15 18
Amortization expenses (2) 609 618 267 206
643 674 282 224
Research and development, net:
Stock-based compensation (1) 284 302 98 91
Selling and marketing:
Stock-based compensation (1) 437 384 199 149
Amortization expenses (2) 246 228 94 76
683 612 293 225
General and administrative:
Stock-based compensation (1) 424 455 150 149
Non-GAAP net income (loss) $ 3,481 $ (2,658) $ 1,758 $ (419)
Non-GAAP Diluted net earnings (loss) per share $ 0.09 $ (0.07) $ 0.04 $ (0.01)
(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, CTI Squared and Mailvision assets.
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
Nine months ended Three months ended
September 30, September 30,
2013 2012 2013 2012
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Cash flows from operating activities:
Net income (loss) $ 1,447 $ (4,701) $ 935 $ (1,108)
Adjustments required to reconcile net income or loss to net cash provided by or used in operating activities:
Depreciation and amortization 2,233 2,136 854 735
Amortization of marketable securities premiums and accretion of discounts, net 268 327 76 110
Equity in losses of an affiliated company, net 21 14 -- (9)
Increase (decrease) in accrued severance pay, net 214 (309) 100 (89)
Stock-based compensation expenses 1,179 1,197 462 407
Increase in accrued interest on marketable securities, bank deposits and structured notes 115 5 63 --
Increase in long- term deferred tax assets (103) -- (103) --
Decrease (increase) in trade receivables, net (3,893) 4,205 (1,664) 195
Increase in other receivables and prepaid expenses (2,663) (2,408) (1,927) (895)
Decrease in inventories 3,404 1,683 73 838
Increase (decrease) in trade payables 1,802 (5,698) 2,337 (462)
Increase (decrease) in deferred revenues 3,143 99 (57) (844)
Increase (decrease) in other payables and accrued expenses 1,193 (1,789) 467 (123)
Net cash provided by (used in) operating activities 8,360 (5,239) 1,616 (1,245)
Cash flows from investing activities:
Decrease (increase) in short-term deposits, net 729 730 998 (959)
Investment in affiliated company (1,211) (72) -- (22)
Proceeds from redemption of long-term bank deposits 1,772 1,590 460 600
Proceeds from redemption of marketable securities upon maturity 4,000 -- -- --
Purchase of property and equipment (1,063) (1,844) (390) (674)
Net cash provided by (used in) investing activities 4,227 404 1,068 (1,055)
Nine months ended Three months ended
September 30, September 30,
2013 2012 2013 2012
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Cash flows from financing activities:
Purchase of treasury stock -- (6,299) -- (2,050)
Repayment of long-term bank loans (7,070) (7,376) (1,727) (2,477)
Consideration related to payment of acquisition of NSC (515) (336) -- --
Proceeds from issuance of shares upon exercise of options and warrants 1,377 35 1,167 --
Net cash used in financing activities (6,208) (13,976) (560) (4,527)
Increase (decrease) in cash and cash equivalents 6,379 (18,811) 2,124 (6,827)
Cash and cash equivalents at the beginning of the period 15,219 28,257 19,474 16,273
Cash and cash equivalents at the end of the period $ 21,598 $ 9,446 $ 21,598 $ 9,446

CONTACT: Company Contacts Guy Avidan, VP Finance & CFO AudioCodes Tel: +972-3-976-4000 guy.avidan@audiocodes.com Shirley Nakar, Director, Investor Relations AudioCodes Tel: +972-3-976-4000 shirley@audiocodes.com IR Agency Contact Erik Knettel, Grayling Tel: +1-646-284-9415 erik.knettel@grayling.comSource:AudioCodes Ltd.