LOD, Israel, Nov. 5, 2007 (PRIME NEWSWIRE) -- AudioCodes (Nasdaq:AUDC), a leading provider of Voice over Packet (VoP) technologies and Voice Network products, today announced financial results for the third quarter and nine months ended September 30, 2007.
Revenues for the third quarter were $40.4 million compared to $38.4 million for the quarter ended June 30, 2007 and $40.1 million for the quarter ended September 30, 2006. Third quarter revenues increased 5.1% compared to the second quarter of 2007 and increased 0.7% compared to the third quarter of 2006.
GAAP net income was $225,000, or $0.01 per diluted share, for the third quarter of 2007 compared to a net loss of $1.0 million, or $0.02 per diluted share, for the second quarter of 2007 and net income of $676,000, or $0.02 per diluted share, for the third quarter of 2006.
Non-GAAP net income was $2.8 million, or $0.06 per diluted share, in the third quarter of 2007 compared to non-GAAP net income of $1.4 million, or $0.03 per diluted share, in the second quarter of 2007 and $3.6 million, or $0.08 per diluted share, in the third quarter of 2006. Non-GAAP net income excludes (i) stock-based compensation expenses and (ii) amortization expenses related to the Nuera, Netrake and CTI Squared acquisitions. 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 release.
Cash and cash equivalents, short-term and long-term marketable securities, short-term and long-term bank deposits and structured notes were $134.2 million as of September 30, 2007 compared to $130.5 million as of June 30, 2007.
"We are pleased to report continued sequential growth of revenues and earnings for the third quarter of 2007," stated Shabtai Adlersberg, Chairman, President and CEO of AudioCodes. "This quarter's performance reflects sustained momentum and strength in our core networking business. We experienced success and growth in our sales of CPE products as well as in our mid-density media gateways and enjoyed increased recognition for the quality and value of our products and services. On the operations front, we were able to exhibit nice growth in our operating income compared to previous quarters this year, benefiting from higher revenues and the positive impact of our corporate wide cost reduction initiative of early 2007. With the VoIP market remaining one of the fastest growing segments of the telecom sector, our growing network of partners and customers and improved visibility in recent weeks, we believe in our ability to exhibit sustained growth in coming years."
"On the product and partner fronts, we highlight the recently announced launch of a new 'Basic Hybrid' Media Gateway product line that provides direct support for our relationship with Microsoft and its Open Communications Server 2007 and Exchange Server 2007 initiatives. We have also made progress and expanded our collaboration with key OEMs and application software partners in the enterprise space as well as with large system integrators and channels in North America and other countries," concluded Shabtai Adlersberg.
Conference Call & Webcast Information
AudioCodes will conduct a conference call on Tuesday, November 6, 2007 to discuss the third quarter 2007 financial results, which will be simultaneously Webcast at 9:00 A.M. Eastern Time. Investors are invited to listen to the call live via Webcast at the investor relations section of the AudioCodes corporate Website at www.audiocodes.com.
About AudioCodes
AudioCodes (Nasdaq:AUDC) provides innovative, reliable and cost-effective Voice over IP (VoIP) technology, Voice Network Products, and Value Added Applications to Service Providers, Enterprises, OEMs, Network Equipment Providers and System Integrators worldwide. AudioCodes provides a diverse range of flexible, comprehensive media gateway, and media processing enabling technologies based on VoIPerfect(tm) -- AudioCodes' underlying, best-of-breed, core media architecture. The company is a market leader in VoIP equipment, focused on VoIP Media Gateway, Media Server, Session Border Controllers (SBC), Security Gateways and Value Added Application network products. AudioCodes has deployed tens of millions of media gateway and media server channels globally over the past ten years and is a key player in the emerging best-of-breed, IMS based, VoIP market. The Company is a VoIP technology leader focused on quality and interoperability, with a proven track record in product and network interoperability with industry leaders in the Service Provider and Enterprise space. AudioCodes Voice Network Products feature media gateway and media server platforms for packet-based applications in the converged, wireline, wireless, broadband access, cable, enhanced voice services, video, and Enterprise IP Telephony markets. AudioCodes' headquarters are located in Israel with R&D in the U.S. Other AudioCodes' offices are located in Europe, India, the Far East, and Latin America. 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.
AudioCodes, AC, Ardito, AudioCoded, NetCoder, TrunkPack, VoicePacketizer, MediaPack, Stretto, Mediant, VoIPerfect and IPmedia, OSN, Open Solutions Network, What's Inside Matters, Your Gateway To VoIP, 3GX and Nuera, Netrake, InTouch, CTI(2) and CTI Squared 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
September 30, December 31,
2007 2006
------------- ------------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 65,580 $ 25,171
Short-term bank deposits and structured
notes -- 28,658
Short-term marketable securities and
accrued interest 25,237 29,422
Trade receivables, net 29,591 30,501
Other receivables and prepaid expenses 4,647 3,309
Inventories 17,766 16,093
------------- ------------
Total current assets 142,821 133,154
------------- ------------
LONG-TERM INVESTMENTS:
Long-term bank deposits and structured
notes 42,405 30,435
Long-term marketable securities 1,000 19,942
Investments in companies 2,690 3,999
Deferred tax assets 4,078 3,742
Severance pay funds 9,044 7,231
------------- ------------
Total long-term investments 59,217 65,349
------------- ------------
PROPERTY AND EQUIPMENT, NET 7,334 7,847
------------- ------------
INTANGIBLE ASSETS, DEFERRED CHARGES AND
OTHER, NET 20,067 21,853
------------- ------------
GOODWILL 119,855 108,853
------------- ------------
Total assets $349,294 $ 337,056
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $ 6,764 $ 7,522
Other payables and accrued expenses 31,195 28,139
------------- ------------
Total current liabilities 37,959 35,661
------------- ------------
DEFERRED TAX LIABILITIES 6,904 7,780
------------- ------------
ACCRUED SEVERANCE PAY 10,261 7,915
------------- ------------
SENIOR CONVERTIBLE NOTES 121,152 121,015
------------- ------------
Total shareholders' equity 173,018 164,685
------------- ------------
Total liabilities and shareholders' equity $ 349,294 $ 337,056
============= ============
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------------------------
U.S. dollars in thousands, except per share data
Nine months ended Three months ended
September 30, September 30,
----------------- -------------------
2007 2006 2007 2006
-------- -------- -------- --------
(Unaudited) (Unaudited)
------------------ ------------------
Revenues 115,395 $ 104,740 $ 40,408 $ 40,111
Cost of revenues 50,512 43,118 17,631 16,861
-------- -------- -------- --------
Gross profit 64,883 61,622 22,777 23,250
Operating expenses:
Research and development, net 30,620 24,715 10,239 10,171
Selling and marketing 32,082 26,446 10,332 10,266
General and administrative 7,200 6,236 2,474 2,538
-------- -------- -------- --------
Total operating expenses 69,902 57,397 23,045 22,975
-------- -------- -------- --------
Operating income (loss) (5,019) 4,225 (268) 275
Financial income, net 1,886 3,063 616 711
Equity in losses of affiliated
companies 751 672 218 286
-------- -------- -------- --------
Income (loss) before taxes on
income (3,884) 6,616 130 700
Taxes (tax benefit) on income
(loss), net (697) 410 (95) 24
-------- -------- -------- --------
Net income (loss) $(3,187) $ 6,206 $ 225 $ 676
======== ======== ======== ========
Basic net earnings (loss) per
share $(0.07) $0.15 $ 0.01 $ 0.02
======== ======== ======== ========
Diluted net earnings (loss)
per share $(0.07) $ 0.14 $ 0.01 $ 0.02
======== ======== ======== ========
Weighted average number of
shares used in computing basic
net earnings (loss) per share 42,572 41,596 42,885 41,985
======== ======== ======== ========
Weighted average number of
shares used in computing
diluted net earnings (loss)
per share 42,572 43,971 43,676 43,733
======== ======== ======== ========
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,
----------------- -------------------
2007 2006 2007 2006
-------- -------- -------- --------
(Unaudited) (Unaudited)
------------------ ------------------
Revenues 115,395 $ 104,740 $40,408 $ 40,111
Cost of revenues *) **) 48,119 42,104 16,948 16,099
-------- -------- -------- --------
Gross profit 67,276 62,636 23,460 24,012
Operating expenses:
Research and development,
net *) 28,239 22,490 9,444 9,312
Selling and marketing *) **) 28,601 23,687 9,238 9,101
General and administrative *) 6,561 5,145 2,191 2,122
-------- -------- -------- --------
Total operating expenses 63,401 51,322 20,873 20,535
-------- -------- -------- --------
Operating income 3,875 11,314 2,587 3,477
Financial income, net 1,886 3,063 616 711
Equity in losses of affiliated
companies
751 672 218 286
-------- -------- -------- --------
Income before taxes on income 5,010 13,705 2,985 3,902
Taxes on income, net 337 701 201 315
-------- -------- -------- --------
Non-GAAP net income $ 4,673 $ 13,004 $ 2,784 $ 3,587
======== ======== ======== ========
Non-GAAP diluted net earnings
per share $ 0.11 $ 0.29 $ 0.06 $ 0.08
======== ======== ======== ========
Weighted average number of
shares used in computing
non-GAAP diluted net earnings
per share 43,668 50,651 43,677 50,414
======== ======== ======== ========
*) Excluding stock-based compensation expenses related to options granted to employees and others as a result of the adoption of SFAR 123R as of January 1, 2006.
**) Excluding amortization of intangible assets related to the acquisitions of Nuera and Netrake during the third quarter of 2006 and to the acquisition of CTI Squared during the second quarter of 2007.
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,
----------------- -------------------
2007 2006 2007 2006
-------- -------- -------- --------
(Unaudited) (Unaudited)
------------------ ------------------
GAAP Net income (loss) $ (3,187) $ 6,206 $ 225 $ 676
======== ======= ======== =======
GAAP Diluted earnings (loss)
per share $ (0.07) $ 0.14 $ 0.01 $ 0.02
======== ======= ======== =======
Cost of revenues:
Stock-based compensation *) 482 420 151 168
Amortization expenses **) 1,911 594 532 594
-------- ------- -------- -------
2,393 1,014 683 762
Research and development, net:
Stock-based compensation *) 2,381 2,225 795 859
Selling and marketing:
Stock-based compensation *) 2,698 2,504 833 910
Amortization expenses **) 783 255 261 255
-------- ------- -------- -------
3,481 2,759 1,094 1,165
General and administrative:
Stock-based compensation *) 639 1,091 283 416
Income tax effect **) (1,034) (291) (296) (291)
-------- ------- -------- --------
Non- GAAP Net income $ 4,673 $13,004 $ 2,784 $ 3,587
======== ======= ======== ========
Non-GAAP Diluted earnings per
share $ 0.11 $ 0.29 $ 0.06 $ 0.08
======== ======= ======== ========
*) Stock-based compensation expenses related to options granted to employees and others as a result of the adoption of SFAR 123R as of January 1, 2006.
**) Amortization of intangible assets related to the acquisitions of Nuera and Netrake during the third quarter of 2006 and to the acquisition of CTI Squared during the second quarter of 2007.
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
CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
--------------------------------------------------------------------
U.S. dollars in thousands
Nine months ended Three months ended
September 30, September 30,
----------------- -------------------
2007 2006 2007 2006
-------- -------- -------- --------
(Unaudited) (Unaudited)
------------------ ------------------
Cash flows from operating
activities:
-------------------------
Net income (loss) $(3,187) $ 6,206 $ 225 $ 676
Adjustments required to
reconcile net income to net
cash provided by (used in)
operating activities:
Depreciation and
amortization 5,922 3,628 1,873 1,904
Net loss from sale of
marketable securities -- 15 -- --
Amortization of marketable
securities premiums and
accretion of discounts, net 50 173 (3) 51
Equity in losses of
affiliated companies 751 672 218 286
Increase (decrease) in
accrued severance pay, net 204 233 (23) 162
Stock-based compensation
expenses 6,200 6,240 2,062 2,353
Amortization of senior
convertible notes discount
and deferred charges 151 149 51 50
Decrease (increase) in
accrued interest on
marketable securities,
bank deposits and
structured notes (535) 345 (216) 597
Decrease (increase) in
deferred tax assets (336) (43) 11 166
Decrease (increase) in
trade receivables, net 1,027 (4,621) (4,099) (2,657)
Decrease (increase) in
other receivables
and prepaid expenses (526) (340) 107 565
Decrease (increase) in
inventories (1,673) (1,687) 2,056 126
Decrease in trade payables (822) (1,080) (1,254) (2,105)
Increase (decrease) in other
payables and accrued
expenses (2,768) (3,423) 2,045 (4,034)
Decrease in deferred tax
liabilities (1,033) (291) (299) (291)
-------- -------- -------- --------
Net cash provided by (used in)
operating activities 3,425 6,176 2,752 (2,151)
-------- -------- -------- --------
Cash flows from investing
activities:
-------------------------
Investment in short-term and
Long-term marketable
securities -- (20,000) -- (20,000)
Proceeds from sale and
maturity of marketable
securities 22,600 4,979 6,000 3,000
Proceeds from sale of bank
deposits 28,700 51,300 3,700 28,300
Investments in companies (1,006) (3,799) (468) (1,686)
Payment for acquisition of
Nuera*) -- (82,520) -- (82,520)
Payment for acquisition of
Netrake*) -- (10,019) -- (10,019)
Payment for acquisition of
CTI Squared*) (4,897) -- -- --
Purchase of property and
equipment (2,055) (1,720) (703) (724)
Investment in long-term
deposit (11,000) -- -- --
-------- -------- -------- --------
Net cash provided by (used in)
investing activities 32,342 (61,779) 8,529 (83,649)
-------- -------- -------- --------
Cash flows from financing
activities:
-------------------------
Repayment of loan from bank -- (1,666) -- (1,666)
Proceeds from issuance of
shares upon exercise of
options and employee stock
purchase plan 4,642 8,964 1,912 1,605
-------- -------- -------- --------
Net cash provided by (used in)
financing activities 4,642 7,298 1,912 (61)
-------- -------- -------- --------
Increase (decrease) in cash
and cash equivalents 40,409 (48,305) 13,193 (85,861)
Cash and cash equivalents at
the beginning of the period 25,171 70,957 52,387 108,513
-------- -------- -------- --------
Cash and cash equivalents at
the end of the period $ 65,580 $ 22,652 $ 65,580 $ 22,652
======== ======== ======== ========
*) Excluding cash and cash equivalents