LOD, Israel, Nov. 3, 2009 (GLOBE NEWSWIRE) -- AudioCodes Ltd. (Nasdaq:AUDC), a leading provider of Voice over IP (VoIP) technologies and Voice Network products, today announced financial results for the third quarter of 2009, ended September 30, 2009.
Revenues for the third quarter ended September 30, 2009 were $32.1 million compared to $30.4 million for the second quarter of 2009 and $46.6 million for the quarter ended September 30, 2008. Net income in accordance with U.S. generally accepted accounting principles (GAAP) was $139,000, or $0.01 per share, for the third quarter of 2009 compared to a GAAP net loss of $891,000, or ($0.02) per share, for the second quarter of 2009, and GAAP net income of $2.3 million, or $0.06 per share, for the corresponding third quarter of 2008.
Non-GAAP net income was $1.6 million, or $0.04 per diluted share, for the third quarter of 2009 compared to non-GAAP net income of $614,000, or $0.02 per diluted share, for the second quarter of 2009, and non-GAAP net income of $4.8 million, or $0.11 per diluted share, for the third quarter of 2008.
Non-GAAP net income excludes (i) stock-based compensation expenses, (ii) amortization expenses related to the Nuera, Netrake and CTI Squared acquisitions and (iii) an adjustment to expenses related to the Company's Senior Convertible Notes due to implementation of FASB Staff Position APB 14-1. A reconciliation between net income 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.
During the third quarter of 2009, AudioCodes generated $5.6 million from operating activities compared to $3.5 million in the second quarter of 2009 and $193,000 in the third quarter of 2008.
"We are pleased to report improved third quarter performance highlighted by sequential improvements in top line revenue, bottom line profitability, positive cash flow from operating activities and growing backlog. Our continued success in improving key financial metrics underlines our return to a consistent pattern of growth in our business," stated Shabtai Adlersberg, Chairman of the Board, President and CEO of AudioCodes. "Throughout the third quarter and into the beginning of the fourth quarter of 2009, we have witnessed a healthy VoIP market and increased partner and customer activities in both the enterprise and service provider markets. Capitalizing on our continued investments throughout the economic downturn, AudioCodes enters the final quarter of 2009, and looks ahead to 2010, with a robust pipeline of new product launches and initiatives," concluded Mr. Adlersberg.
Cash and cash equivalents, short-term and long-term bank deposits and short-term marketable securities were $116.4 million as of September 30, 2009, compared to $114.9 million as of June 30, 2009 and $158.7 million as of September 30, 2008. The year-over-year decline was primarily attributable to the repurchase of some of the Company's Senior Convertible Notes in the fourth quarter of 2008, offset, in part, by cash provided by operating activities.
Pursuant to the terms of the Indenture governing the Company's Senior Convertible Notes (the "Notes"), the Company is required to offer to repurchase the remaining $73.5 million in principal amount of the Notes in November 2009. As a result, on October 8, 2009, the Company notified holders of the Notes (CUSIP Nos. 050732AB2 and 050732AA4) that they have an option, pursuant to the terms of the Notes, to require the Company to purchase, promptly after November 9, 2009, all or a portion of such holders' Notes at a cash price equal to 100% of the aggregate principal amount of the Notes, together with any accrued and unpaid interest up to but not including November 9, 2009. The Company maintains funds on hand allocated for the repurchase of any or all of the outstanding Notes, as well as adequate working capital to support the Company's operations and capital expenditures.
Conference Call & Web cast Information
AudioCodes will conduct a conference call at 9:00 A.M., Eastern Time on Wednesday, November 4, 2009 to discuss the Company's third quarter operational 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 leader focused on VoIP communications, applications and networking elements, and its products are deployed globally in Broadband, Mobile, Cable, and Enterprise networks. The Company provides a range of innovative, cost-effective products including Media Gateways, Multi-Service Business Gateways, Residential Gateways, IP Phones, Media Servers, Session Border Controllers (SBC), Security Gateways and Value Added Applications. AudioCodes underlying technology, VoIPerfectHD(TM), relies primarily 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 emerging Voice networks. 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; the bankruptcy filing in January 2009 of AudioCodes' largest customer in 2008, shifts in supply and demand; market acceptance of new products and continuing products' demand; 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 integration of acquired companies' products and operations into AudioCodes' business; the obligation to offer to repurchase the outstanding senior convertible notes in November 2009 and other factors detailed in AudioCodes' filings with the Securities and Exchange Commission. AudioCodes assumes no obligation to update the information in this release.
AudioCodes, AC, AudioCoded, Ardito, CTI2, CTI(2), CTI Squared, HD VoIP, InTouch, IPmedia, Mediant, MediaPack, NetCoder, Netrake, Nuera, Open Solutions Network, OSN, Stretto, TrunkPack, VoicePacketizer, VoIPerfect, VoIPerfectHD, What's Inside Matters, 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.
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
------------------------------------------------------------------
U.S. dollars in thousands
Sept. 30, Dec. 31,
2009 2008
-------- --------
(Unaudited) (Audited)
-------- --------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 70,444 $ 36,779
Short-term bank deposits 38,731 61,870
Short-term marketable securities and
accrued interest 7,232 16,481
Trade receivables, net 22,623 29,564
Other receivables and prepaid expenses 6,107 3,373
Deferred tax assets 972 972
Inventories 16,430 20,623
-------- --------
Total current assets 162,539 169,662
-------- --------
LONG-TERM INVESTMENTS:
Investments in companies 1,515 1,245
Deferred tax assets 1,255 1,255
Severance pay funds 12,002 10,297
-------- --------
Total long-term investments 14,772 12,797
-------- --------
PROPERTY AND EQUIPMENT, NET 5,299 6,844
-------- --------
GOODWILL, INTANGIBLE ASSETS, DEFERRED
CHARGES AND OTHER, NET (1) 39,537 41,001
-------- --------
Total assets $222,147 $230,304
======== ========
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term bank loans $ 6,000 $ 6,000
Trade payables 7,581 11,661
Other payables and accrued expenses 22,333 24,189
Deferred tax liability (1) 266 735
Senior convertible notes (1) 73,130 70,670
-------- --------
Total current liabilities 109,310 113,255
-------- --------
ACCRUED SEVERANCE PAY 13,172 12,174
-------- --------
LONG-TERM BANK LOANS 17,250 21,750
-------- --------
Total equity (1) 82,415 83,125
-------- --------
Total liabilities and equity $222,147 $230,304
======== ========
(1) December 31, 2008 amounts adjusted due to implementation of FSP
APB 14-1.
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
--------------------------------------------------------------------
In thousands, except per share data
Nine months ended Three months ended
September 30, September 30,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
(Unaudited) (Unaudited)
------------------ ------------------
Revenues $ 91,736 $135,992 $ 32,082 $ 46,602
Cost of revenues 40,927 59,655 14,362 20,535
-------- -------- -------- --------
Gross profit 50,809 76,337 17,720 26,067
Operating expenses:
Research and
development, net 22,697 29,135 7,245 9,155
Selling and marketing 24,089 34,459 7,749 11,116
General and administrative 5,857 7,047 1,931 2,226
-------- -------- -------- --------
Total operating expenses 52,643 70,641 16,925 22,497
-------- -------- -------- --------
Operating income (loss) (1,834) 5,696 795 3,570
Financial expenses, net (1) (2,349) (2,689) (751) (1,047)
-------- -------- -------- --------
Income (loss) before
taxes on income (4,183) 3,007 44 2,523
Taxes benefit, net (1) (403) (581) (112) (166)
Equity in losses of
affiliated companies 68 1,061 17 428
-------- -------- -------- --------
Net income (loss) $ (3,848) $ 2,527 $ 139 $ 2,261
======== ======== ======== ========
Net loss attributable to
the noncontrolling interest 553 -- 191 --
-------- -------- -------- --------
Net income (loss)
attributable to AudioCodes $ (3,295) $ 2,527 $ 330 $ 2,261
======== ======== ======== ========
Basic net earnings (loss)
per share $ (0.08) $ 0.06 $ 0.01 $ 0.06
======== ======== ======== ========
Diluted net earnings (loss)
per share $ (0.08) $ 0.06 $ 0.01 $ 0.06
======== ======== ======== ========
Weighted average number of
shares used in computing
basic net earnings per
share (in thousands)
40,189 41,540 40,204 40,200
======== ======== ======== ========
Weighted average number of
shares used in computing
diluted net earnings per
share (in thousands)
40,189 41,967 40,309 40,517
======== ======== ======== ========
(1) Amounts for three and nine months ended September 30, 2008
adjusted due to implementation of FSP APB 14-1.
AUDIOCODES LTD. AND ITS SUBSIDIARIES
NON-GAAP PROFORMA STATEMENTS OF OPERATIONS
--------------------------------------------------------------------
In thousands, except per share data
Nine months ended Three months ended
September 30, September 30,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
(Unaudited) (Unaudited)
------------------ ------------------
Revenues $ 91,736 $135,992 $ 32,082 $ 46,602
Cost of revenues (1) (2) 39,897 57,778 14,028 19,955
-------- -------- -------- --------
Gross profit 51,839 78,214 18,054 26,647
Operating expenses:
Research and development,
net (1) 22,230 27,825 7,111 8,942
Selling and
marketing (1) (2) 23,113 31,945 7,448 10,414
General and
administrative (1) 5,696 6,563 1,892 2,140
-------- -------- -------- --------
Total operating expenses 51,039 66,333 16,451 21,496
-------- -------- -------- --------
Operating income 800 11,881 1,603 5,151
Financial income, net (3) 65 1,162 76 267
-------- -------- -------- --------
Income before taxes
on income 865 13,043 1,679 5,418
Income taxes, net (3) 236 480 106 196
Equity in losses of
affiliated companies 68 1,061 17 428
-------- -------- -------- --------
Non-GAAP net income $ 561 $ 11,502 $ 1,556 $ 4,794
======== ======== ======== ========
Non-GAAP diluted net
earnings per share $ 0.01 $ 0.27 $ 0.04 $ 0.11
======== ======== ======== ========
Weighted average number of
shares used in computing
non-GAAP diluted net
earnings per share
(in thousands)
40,248 44,195 40,331 47,198
======== ======== ======== ========
(1) Excluding stock-based compensation expenses related to options
granted to employees and others.
(2) Excluding amortization of intangible assets related to the
acquisitions of Nuera, Netrake and CTI Squared.
(3) Excluding adjustments to interest expense with respect to Senior
Convertible Notes, and related income tax expense, due to
implementation of FSP APB 14-1.
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 as well.
AUDIOCODES LTD. AND ITS SUBSIDIARIES
RECONCILIATION BETWEEN GAAP NET INCOME AND NON-GAAP NET INCOME
--------------------------------------------------------------------
In thousands, except per share data
Nine months ended Three months ended
September 30, September 30,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
(Unaudited) (Unaudited)
------------------ ------------------
GAAP Net income (loss) $ (3,848) $ 2,527 $ 139 $ 2,261
======== ======== ======== ========
GAAP Diluted earnings
(loss) per share
$ (0.08) $ 0.06 $ 0.01 $ 0.06
======== ======== ======== ========
Cost of revenues:
Stock-based
compensation (1) 94 278 24 50
Amortization expenses (2) 936 1,599 310 530
-------- -------- -------- --------
1,030 1,877 334 580
Research and
development, net:
Stock-based
compensation (1) 467 1,310 134 213
Selling and marketing:
Stock-based
compensation (1) 725 1,731 226 441
Amortization expenses (2) 251 783 75 261
-------- -------- -------- --------
976 2,514 301 702
General and administrative:
Stock-based
compensation (1) 161 484 39 86
Financial expenses:
FSP APB 14-1
adjustment (3) 2,414 3,851 827 1,314
Income Taxes:
FSP APB 14-1
adjustment (3) (639) (1,061) (218) (362)
-------- -------- -------- --------
Non-GAAP Net income $ 561 $ 11,502 $ 1,556 $ 4,794
======== ======== ======== ========
Non-GAAP Diluted
earnings per share
$ 0.01 $ 0.27 $ 0.04 $ 0.11
======== ======== ======== ========
(1) Stock-based compensation expenses related to options granted to
employees and others.
(2) Amortization of intangible assets related to the acquisitions
of Nuera, Netrake and CTI Squared.
(3) Adjustments to interest expense with respect to Senior
Convertible Notes, and related income tax expense, due to
implementation of FSP APB 14-1.
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 as well 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,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
(Unaudited) (Unaudited)
------------------ ------------------
Cash flows from
operating activities:
----------------------------
Net income (loss) (1) $ (3,848) $ 5,317 $ 139 $ 3,213
Adjustments required to
reconcile net income to
net cash provided by
operating activities:
Depreciation and
amortization 3,825 5,676 1,178 1,821
Net loss from sale of
marketable securities -- -- -- --
Amortization of
marketable securities
premiums and accretion
of discounts, net 152 23 68 39
Equity in losses of
affiliated companies 56 1,061 5 428
Decrease (increase)
in accrued severance
pay, net (707) (57) (292) 62
Stock-based compensation
expenses 1,447 3,803 423 790
Amortization of senior
convertible notes
discount and deferred
charges 2,509 153 861 51
Decrease (increase) in
accrued interest on
marketable securities,
bank deposits and
structured notes 2,024 (794) 2,473 (787)
Decrease (increase) in
trade receivables, net 6,938 (10,227) (1,636) (6,123)
Decrease (increase) in
other receivables and
prepaid expenses (1,304) (1,280) (1,138) (982)
Decrease (increase) in
inventories 4,193 (1,332) 2,894 (73)
Increase (decrease) in
trade payables (4,080) 1,659 (3,245) (1,621)
Increase (decrease) in
other payables and
accrued expenses (1,628) 4,000 3,962 3,375
Decrease in deferred
tax liabilities (1) (468) -- (49) --
-------- -------- -------- --------
Net cash provided by
operating activities 9,109 8,002 5,643 193
-------- -------- -------- --------
Cash flows from investing
activities:
----------------------------
Proceeds from sale and
maturity of marketable
securities 9,000 17,000 8,000 4,000
Proceeds from sale of
bank deposits 70,530 34,639 48,825 16,545
Investments in companies (326) (2,370) (77) (1,054)
Payment for acquisition
of CTI Squared -- (5,000) -- --
Purchase of property
and equipment (863) (2,893) (94) (726)
Investment in short-term
deposit (49,318) (92,109) (15,300) (22,005)
Investment in marketable
securities -- (16,795) -- (16,795)
Investment in long-term
deposit -- (255) -- --
-------- -------- -------- --------
Net cash provided (used) by
(in) investing activities 29,023 (67,783) 41,354 (20,035)
-------- -------- -------- --------
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Cont.)
--------------------------------------------------------------------
U.S. dollars in thousands
Nine months ended Three months ended
September 30, September 30,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
(Unaudited) (Unaudited)
------------------ ------------------
Cash flows from financing
activities:
----------------------------
Repurchase of shares -- (13,747) -- (2,339)
Increase in current
maturities of long-term
bank loans -- 6,000 -- 3,000
Long-term bank loans
received -- 24,000 -- 12,000
Repayment of loan from bank (4,500) (750) (1,500) (750)
Proceeds from issuance
of shares upon exercise
of options and employee
stock purchase plan 33 1,547 33 247
-------- -------- -------- --------
Net cash provided (used) by
(in) financing activities (4,467) 17,050 (1,467) 12,158
-------- -------- -------- --------
Increase (decrease) in cash
and cash equivalents 33,665 (42,731) 45,530 (7,684)
Cash and cash equivalents
at the beginning of
the period 36,779 75,063 24,914 40,016
-------- -------- -------- --------
Cash and cash equivalents at
the end of the period $ 70,444 $ 32,332 $ 70,444 $ 32,332
======== ======== ======== ========
(1) Amounts for nine and three months ended September 30, 2008
adjusted due to implementation of FSP APB 14-1.