LOD, Israel, July 27, 2011 (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 second quarter of 2011, ended June 30, 2011.
Revenues for the second quarter of 2011 were $41.5 million compared to $41.0 million for the first quarter of 2011 and $36.5 million for the second quarter of 2010.
Net income in accordance with U.S. generally accepted accounting principles (GAAP) was $4.0 million, or $0.09 per diluted share, for the second quarter of 2011 compared to $3.0 million, or $0.07 per diluted share, for the first quarter of 2011, and $2.1 million, or $0.05 per diluted share, for the second quarter of 2010.
Non-GAAP net income for the second quarter of 2011 was $4.9 million, or $0.12 per diluted share, compared to $4.1 million, or $0.10 per diluted share, for the first quarter of 2011, and $2.8 million, or $0.07 per diluted share, for the second quarter of 2010.
Non-GAAP net income excludes (i) stock-based compensation expenses and (ii) amortization expenses related to intangible assets. 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.
Cash and cash equivalents, short-term deposits and short-term and long-term marketable securities were $56.5 million as of June 30, 2011, compared to $62.0 million as of March 31, 2011 and $54.5 million as of June 30, 2010.
"AudioCodes' improved financial performance continued a trend that reflects the strength of our enterprise and carrier VoIP business," stated Shabtai Adlersberg, Chairman of the Board, President and CEO of AudioCodes. "Growth has been driven primarily by the rising demand in the access, broadband, contact centers and unified communications markets. Our second quarter results are highlighted by year-over-year growth of above 30% in our networking business, as well as sequential growth of 9% over the previous quarter, and by improved profitability. Strong gross margin performance continued to be driven by a favorable sales mix, introduction of new software products, and a higher contribution from AudioCodes services operations. Investments in partnering with global industry players and value added resellers, combined with an increase in our global sales force coverage, are yielding improvements that are expected to favorably impact us as we proceed through the second half of 2011."
"With over a hundred million legacy telephony lines estimated to transition to VoIP over the next three years and a rising need for unified communications, our innovative, interoperable and diverse portfolio of solutions is well positioned to assist AudioCodes' global customers across the evolving landscape for IP infrastructure. A key component of this strategy revolves around our partnership with Microsoft and their Microsoft Lync offerings, including enhanced media gateways, survivable branch appliances, enterprise session border controllers, SIP phones, mobile clients and software based recording appliances. Increasingly, we are being selected by leading Microsoft Voice Specialized Partners (VSPs) to provide significantly broader offerings for Lync solutions focused on connectivity, mobility and recording applications," 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 second quarter 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 & 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 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; and other factors detailed in AudioCodes' filings with the Securities and Exchange Commission. AudioCodes assumes no obligation to update the information in this release.
©2011 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. Lync is a trademark of Microsoft Corporation. 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 | ||
| June 30, | December 31, | |
| 2011 | 2010 | |
| (Unaudited) | (Audited) | |
| ASSETS | ||
| CURRENT ASSETS: | ||
| Cash and cash equivalents | $ 19,292 | $ 50,311 |
| Short-term bank deposits | 12,816 | 13,825 |
| Short-term marketable securities and accrued interest | 341 | -- |
| Trade receivables, net | 33,125 | 25,881 |
| Other receivables and prepaid expenses | 6,535 | 3,646 |
| Deferred tax assets | 2,287 | 2,287 |
| Inventories | 18,771 | 18,043 |
| Total current assets | 93,167 | 113,993 |
| LONG-TERM INVESTMENTS: | ||
| Long-term marketable securities and accrued interest | 24,043 | -- |
| Investments in companies | 1,065 | 1,317 |
| Deferred tax assets | 2,261 | 2,261 |
| Severance pay funds | 16,513 | 15,039 |
| Total long-term investments | 43,882 | 18,617 |
| PROPERTY AND EQUIPMENT, NET | 3,492 | 3,703 |
| GOODWILL, INTANGIBLE ASSETS, DEFERRED CHARGES AND OTHER, NET | 36,644 | 37,405 |
| Total assets | $ 177,185 | $ 173,718 |
| LIABILITIES AND EQUITY | ||
| CURRENT LIABILITIES: | ||
| Current maturities of long-term bank loans | $ 6,000 | $ 6,000 |
| Trade payables | 12,223 | 13,519 |
| Other payables and accrued expenses | 18,527 | 24,168 |
| Deferred revenues | 4,986 | 3,769 |
| Total current liabilities | 41,736 | 47,456 |
| LONG-TERM LIABILITIES: | ||
| Accrued severance pay | $ 17,250 | $ 15,821 |
| Long-term bank loans | 6,750 | 9,750 |
| Senior convertible notes | 353 | 353 |
| Deferred revenue and other payables | 1,137 | 1,158 |
| Total Long-Term liabilities |
25,490 |
27,082 |
| Total equity | 109,959 | 99,180 |
| Total liabilities and equity | $ 177,185 | $ 173,718 |
| AUDIOCODES LTD. AND ITS SUBSIDIARIES | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| U.S. dollars in thousands, except per share data | ||||
| Six months ended | Three months ended | |||
| June 30, | June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| (Unaudited) | (Unaudited) | |||
| Revenues | $ 82,555 | $ 71,282 | $ 41,511 | $ 36,478 |
| Cost of revenues | 34,034 | 31,831 | 17,012 | 16,260 |
| Gross profit | 48,521 | 39,451 | 24,499 | 20,218 |
| Operating expenses: | ||||
| Research and development, net | 15,970 | 15,086 | 7,436 | 7,730 |
| Selling and marketing | 21,328 | 16,212 | 11,107 | 8,148 |
| General and administrative | 4,446 | 4,031 | 2,314 | 2,063 |
| Total operating expenses | 41,744 | 35,329 | 20,857 | 17,941 |
| Operating income | 6,777 | 4,122 | 3,642 | 2,277 |
| Financial income (expenses), net | 643 | (201) | 427 | (122) |
| Income before taxes on income | 7,420 | 3,921 | 4,069 | 2,155 |
| Taxes on income, net | (147) | (134) | (82) | (68) |
| Equity in profit (losses) of an affiliated companies | (252) | -- | 5 | (4) |
| Net income | $ 7,021 | $ 3,787 | $ 3,992 | $ 2,083 |
| Net loss attributable to non-controlling Interest | -- | 111 | -- | 20 |
| Net income attributable to AudioCodes | $ 7,021 | $ 3,898 | $ 3,992 | $ 2,103 |
| Basic net earnings per share | $ 0.17 | $ 0.10 | $ 0.10 | $ 0.05 |
| Diluted net earnings per share | $ 0.17 | $ 0.10 | $ 0.09 | $ 0.05 |
| Weighted average number of shares used in computing basic net earnings per share (in thousands) | 41,471 | 40,369 | 41,610 | 40,437 |
| Weighted average number of shares used in computing diluted net earnings per share (in thousands) | 42,306 | 40,772 | 42,328 | 40,813 |
| AUDIOCODES LTD. AND ITS SUBSIDIARIES | ||||
| NON-GAAP PROFORMA STATEMENTS OF OPERATIONS | ||||
| U.S. dollars in thousands, except per share data | ||||
| Six months ended | Three months ended | |||
| June 30, | June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| (Unaudited) | (Unaudited) | |||
| Revenues | $ 82,555 | $ 71,282 | $ 41,511 | $ 36,478 |
| Cost of revenues (1) (2) | 33,361 | 31,175 | 16,675 | 15,932 |
| Gross profit | 49,194 | 40,107 | 24,836 | 20,546 |
| Operating expenses: | ||||
| Research and development, net (1) | 15,689 | 14,886 | 7,282 | 7,634 |
| Selling and marketing (1) (2) | 20,590 | 15,756 | 10,807 | 7,920 |
| General and administrative (1) | 4,066 | 3,825 | 2,148 | 1,960 |
| Total operating expenses | 40,345 | 34,467 | 20,237 | 17,514 |
| Operating income | 8,849 | 5,640 | 4,599 | 3,032 |
| Financial income (expenses), net | 643 | (201) | 427 | (122) |
| Income before taxes on income | 9,492 | 5,439 | 5,026 | 2,910 |
| Taxes on income, net | (147) | (134) | (82) | (68) |
| Equity in profit (losses) of an affiliated companies | (252) | -- | 5 | (4) |
| Net income | $ 9,093 | $ 5,305 | $ 4,949 | $ 2,838 |
| Net loss attributable to non-controlling Interest | -- | 111 | -- | 20 |
| Net income attributable to AudioCodes | $ 9,093 | $ 5,416 | $ 4,949 | $ 2,858 |
| Diluted net earnings per share | $ 0.21 | $ 0.13 | $ 0.12 | $ 0.07 |
| Weighted average number of shares used in computing diluted net earnings per share (in thousands) | 42,624 | 41,008 | 42,636 | 41,036 |
|
(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. | ||||
| 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 | ||||
| Six months ended | Three months ended | |||
| June 30, | June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| (Unaudited) | (Unaudited) | |||
| GAAP net income | $ 7,021 | $ 3,787 | $ 3,992 | $ 2,083 |
| GAAP net income per share | $ 0.17 | $ 0.10 | $ 0.09 | $ 0.05 |
| Cost of revenues: | ||||
| Stock-based compensation (1) | 64 | 39 | 37 | 19 |
| Amortization expenses (2) | 609 | 617 | 300 | 309 |
| 673 | 656 | 337 | 328 | |
| Research and development, net: | ||||
| Stock-based compensation (1) | 281 | 200 | 154 | 96 |
| Selling and marketing: | ||||
| Stock-based compensation (1) | 586 | 305 | 224 | 152 |
| Amortization expenses (2) | 152 | 151 | 76 | 76 |
| 738 | 456 | 300 | 228 | |
| General and administrative: | ||||
| Stock-based compensation (1) | 380 | 206 | 166 | 103 |
| Non-GAAP net income | $ 9,093 | $ 5,305 | $ 4,949 | $ 2,838 |
| Non-GAAP Diluted net income per share | $ 0.21 | $ 0.13 | $ 0.12 | $ 0.07 |
| (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. |
||||
| 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 | ||||
| Six months ended | Three months ended | |||
| June 30, | June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| ( Unaudited) | ( Unaudited) | ( Unaudited) | ( Unaudited) | |
| Cash flows from operating activities: | ||||
| Net income | $ 7,021 | $ 3,787 | $ 3,992 | $ 2,083 |
| Adjustments required to reconcile net income to net cash provided by operating activities: | ||||
| Depreciation and amortization | 1,801 | 2,024 | 879 | 991 |
| Amortization of marketable securities premiums and accretion of discounts, net | 196 | -- | 109 | -- |
| Equity in losses (profit) of affiliated companies and interest on loans to affiliated company | 252 | (20) | (5) | (7) |
| Decrease in accrued severance pay, net | (45) | (264) | (144) | (521) |
| Stock-based compensation expenses | 1,907 | 750 | 581 | 370 |
| Increase in accrued interest on marketable securities, bank deposits and structured notes | (178) | -- | -- | -- |
| Increase in trade receivables, net | (7,244) | (6,314) | (5,437) | (3,650) |
| Decrease (increase) in other receivables and prepaid expenses | (2,828) | (1,446) | 215 | 145 |
| Increase in inventories | (728) | (1,550) | (1,083) | (579) |
| Increase (decrease) in trade payables | (1,296) | 5,501 | (846) | 656 |
| Increase (decrease) in deferred revenues | 1,481 | 2,377 | (1,901) | 1,144 |
| Increase (decrease) in other payables and accrued expenses | (5,231) | 23 | (225) | 978 |
| Net cash provided by (used in) operating activities | (4,892) | 4,868 | (3,865) | 1,610 |
| Cash flows from investing activities: | ||||
| Purchase of marketable securities | (24,402) | -- | -- | -- |
| Short-term deposits, net | 1,009 | 386 | (14) | 2,708 |
| Purchase of property and equipment | (829) | (633) | (304) | (304) |
| Net cash used in investing activities | (24,222) | (247) | (318) | 2,404 |
| AUDIOCODES LTD. AND ITS SUBSIDIARIES | ||||
| CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Continued) | ||||
| U.S. dollars in thousands | ||||
| Six months ended | Three months ended | |||
| June 30, | June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| ( Unaudited) | ( Unaudited) | ( Unaudited) | ( Unaudited) | |
| Cash flows from financing activities: | ||||
| Repayment of loan from bank | (3,000) | (3,000) | (1,500) | (1,500) |
| Payment of acquisition of NSC | (278) | (74) | -- | (74) |
|
Proceeds from issuance of shares upon exercise of options, warrants and employee stock purchase plan |
1,373 | 513 | 272 | 128 |
| Net cash used in financing activities | (1,905) | (2,561) | (1,228) | (1,446) |
| Increase (decrease) in cash and cash equivalents | (31,019) | 2,060 | (5,411) | 2,568 |
| Cash and cash equivalents at the beginning of the period | 50,311 | 38,969 | 24,703 | 38,461 |
| Cash and cash equivalents at the end of the period | $ 19,292 | $ 41,029 | $ 19,292 | $ 41,029 |