LOD, Israel, July 30, 2013 (GLOBE NEWSWIRE) -- AudioCodes (Nasdaq:AUDC), a leading provider of Voice over IP (VoIP) technologies, products and services, today announced financial results for the second quarter ended June 30, 2013.
Second Quarter Highlights:
- Revenues for the quarter were $33.7 million, 4.4% increase over the previous quarter
- 8% sequential increase in our networking business
- Non-GAAP gross margin was 57.5% (57.0% on a GAAP basis)
- Non-GAAP net margin was 3% (1% net margin on a GAAP basis)
- Net cash provided by operating activities were 4.1 million and net cash at the end of the quarter increased to 39.6 million
Revenues for the second quarter of 2013 were $33.7 million, compared to $32.3 million for the first quarter of 2013 and $31.0 million for the second quarter of 2012.
Net income in accordance with U.S. generally accepted accounting principles (GAAP) was $441,000, or $0.01 per diluted share, for the second quarter of 2013, compared to GAAP net income of $71,000, or $0.002 per diluted share, for the first quarter of 2013, and a GAAP net loss of $2.0 million, or ($0.05) per diluted share, for the second quarter of 2012.
Non-GAAP net income for the second quarter of 2013 was $1.0 million, or $0.03 per diluted share, compared to non-GAAP net income of $691,000, or $0.02 per diluted share, for the first quarter of 2013, and a non-GAAP net loss of $1.4 million, or ($0.04) per diluted share, for the second 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 second quarter of 2013 totaled $4.1 million, compared to net cash used in operating activities of $4.6 million for the second quarter of 2012. Cash and cash equivalents, bank deposits and marketable securities were $57.5 million as of both June 30, 2013 and March 31, 2013, compared to $60.7 million as of June 30, 2012.
In May 2013, AudioCodes completed the previously announced asset purchase agreement with its affiliated company, MailVision. MailVision is an Israeli company which develops markets and licenses VoIP solutions for mobile, PC, web and tablet devices for telecom operators and service providers.
"We are pleased to report another quarter of growing revenues and improved financial performance. This is our fourth consecutive quarter of growth since July 2012 when we realigned operations in order to position our business for growth," said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes. "In the second quarter of 2013 we experienced good momentum and success in our networking business which grew 8% over the previous quarter and 14% year-over-year. Our networking business now comprises approximately 86% of our total revenues. We are aligned with leading software and networking industry leaders through numerous partnerships. Accordingly, we are confident in our ability to sustain similar growth rates in our business as we move forward. Supporting this longer term potential is the solid multi-year growth in markets where we play a leading role, such as Unified Communications, Hosted Telephony, SIP Trunking and Contact Centers. In addition, the increased pace of transition from voice into cloud and hosted telephony applications opens opportunities for us in new two strategic directions."
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 2013 operating performance, financial results and outlook. 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 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(TM), 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 | ||
| June 30, | December 31, | |
| 2013 | 2012 | |
| Unaudited | Audited | |
| ASSETS | ||
| CURRENT ASSETS: | ||
| Cash and cash equivalents | $ 19,474 | $ 15,219 |
| Short-term and restricted bank deposits | 10,599 | 10,330 |
| Short-term marketable securities and accrued interest | 19,484 | 7,966 |
| Trade receivables, net | 26,406 | 24,198 |
| Other receivables and prepaid expenses | 7,660 | 7,274 |
| Inventories | 13,466 | 16,797 |
| Total current assets | 97,089 | 81,784 |
| LONG-TERM ASSETS:: | ||
| Long-term and restricted bank deposits | $ 7,939 | $ 9,251 |
| Long-term marketable securities | -- | 15,762 |
| Investments in an affiliated company | -- | 1,084 |
| Deferred income tax assets | 3,565 | 3,565 |
| Severance pay funds | 17,214 | 15,772 |
| Total long-term assets | 28,718 | 45,434 |
| PROPERTY AND EQUIPMENT, NET | 3,409 | 3,619 |
| GOODWILL AND INTANGIBLE ASSETS, NET | 38,698 | 34,952 |
| Total assets | $ 167,914 | $ 165,789 |
| LIABILITIES AND EQUITY | ||
| CURRENT LIABILITIES: | ||
| Current maturities of long-term bank loans | $ 4,836 | $ 8,436 |
| Trade payables | 6,277 | 6,817 |
| Other payables and accrued expenses | 16,121 | 15,062 |
| Deferred revenues | 7,386 | 4,871 |
| Total current liabilities | 34,620 | 35,186 |
| LONG-TERM LIABILITIES: | ||
| Accrued severance pay | $ 18,119 | $ 16,284 |
| Long-term bank loans, net of current maturities | 12,734 | 14,477 |
| Senior convertible notes | 353 | 353 |
| Deferred revenues and other liabilities | 2,309 | 1,192 |
| Total long-term liabilities | 33,515 | 32,306 |
| Total equity | 99,779 | 98,297 |
| Total liabilities and equity | $ 167,914 | $ 165,789 |
| 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, | |||
| 2013 | 2012 | 2013 | 2012 | |
| (Unaudited) | (Unaudited) | |||
| Revenues: | ||||
| Products | $ 53,712 | $ 51,943 | $ 27,541 | $ 25,125 |
| Services | 12,243 | 11,378 | 6,146 | 5,883 |
| Total Revenues | 65,955 | 63,321 | 33,687 | 31,008 |
| Cost of revenues: | ||||
| Products | 24,706 | 23,693 | 12,912 | 11,722 |
| Services | 3,104 | 2,950 | 1,566 | 1,469 |
| Total Cost of revenues | 27,810 | 26,643 | 14,478 | 13,191 |
| Gross profit | 38,145 | 36,678 | 19,209 | 17,817 |
| Operating expenses: | ||||
| Research and development, net | 14,280 | 15,245 | 6,970 | 7,127 |
| Selling and marketing | 18,956 | 20,752 | 9,742 | 10,256 |
| General and administrative | 4,116 | 4,203 | 2,077 | 2,244 |
| Total operating expenses | 37,352 | 40,200 | 18,789 | 19,627 |
| Operating income (loss) | 793 | (3,522) | 420 | (1,810) |
| Financial income (expenses), net | (122) | 135 | 81 | (93) |
| Income (loss) before taxes on income | 671 | (3,387) | 501 | (1,903) |
| Taxes on income, net | (138) | (183) | (60) | (99) |
| Equity in losses of an affiliated company, net | (21) | (23) | -- | (33) |
| Net income (loss) | $ 512 | $ (3,593) | $ 441 | $ (2,035) |
| Basic net earnings (loss) per share | $ 0.01 | $ (0.09) | $ 0.01 | $ (0.05) |
| Diluted net earnings (loss) per share | $ 0.01 | $ (0.09) | $ 0.01 | $ (0.05) |
| Weighted average number of shares used in computing basic net earnings (loss) per share (in thousands) | 38,035 | 39,948 | 38,060 | 39,627 |
| Weighted average number of shares used in computing diluted net earnings (loss) per share (in thousands) | 38,615 | 39,948 | 38,653 | 39,627 |
| 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, | |||
| 2013 | 2012 | 2013 | 2012 | |
| (Unaudited) | (Unaudited) | |||
| Revenues: | ||||
| Products | $ 53,712 | $ 51,943 | $ 27,541 | $ 25,125 |
| Services | 12,243 | 11,378 | 6,146 | 5,883 |
| Total Revenues | 65,955 | 63,321 | 33,687 | 31,008 |
| Cost of revenues: | ||||
| Products | 24,412 | 23,260 | 12,788 | 11,479 |
| Services | 3,037 | 2,933 | 1,538 | 1,491 |
| Total Cost of revenues (1) (2) | 27,449 | 26,193 | 14,326 | 12,970 |
| Gross profit | 38,506 | 37,128 | 19,361 | 18,038 |
| Operating expenses: | ||||
| Research and development, net (1) | 14,094 | 15,034 | 6,877 | 7,052 |
| Selling and marketing (1) (2) | 18,566 | 20,365 | 9,533 | 10,067 |
| General and administrative (1) | 3,842 | 3,897 | 1,940 | 2,106 |
| Total operating expenses | 36,502 | 39,296 | 18,350 | 19,225 |
| Operating income (loss) | 2,004 | (2,168) | 1,011 | (1,187) |
| Financial income (expenses), net | (122) | 135 | 81 | (93) |
| Income (loss) before taxes on income | 1,882 | (2,033) | 1,092 | (1,280) |
| Taxes on income, net | (138) | (183) | (60) | (99) |
| Equity in losses of an affiliated company, net | (21) | (23) | -- | (33) |
| Net income (loss) | $ 1,723 | $ (2,239) | $ 1,032 | $ (1,412) |
| Diluted net earnings (loss) per share | $ 0.04 | $ (0.06) | $ 0.03 | $ (0.04) |
| Weighted average number of shares used in computing basic net earnings (loss) per share (in thousands) | 38,922 | 39,948 |
38,949 |
39,627 |
| (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 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 | ||||
| Six months ended | Three months ended | |||
| June 30, | June 30, | |||
| 2013 | 2012 | 2013 | 2012 | |
| (Unaudited) | (Unaudited) | |||
| GAAP net income (loss) | $ 512 | $ (3,593) | $ 441 | $ (2,035) |
| GAAP net earnings (loss) per share | $ 0.01 | $ (0.09) | $ 0.01 | $ 0.05 |
| Cost of revenues: | ||||
| Stock-based compensation (1) | 19 | 38 | 10 | 15 |
| Amortization expenses (2) | 342 | 412 | 142 | 206 |
| 361 | 450 | 152 | 221 | |
| Research and development, net: | ||||
| Stock-based compensation (1) | 186 | 211 | 93 | 75 |
| Selling and marketing: | ||||
| Stock-based compensation (1) | 238 | 235 | 133 | 113 |
| Amortization expenses (2) | 152 | 152 | 76 | 76 |
| 390 | 387 | 209 | 189 | |
| General and administrative: | ||||
| Stock-based compensation (1) | 274 | 306 | 137 | 138 |
| Non-GAAP net income (loss) | $ 1,723 | $ (2,239) | $ 1,032 | $ (1,412) |
| Non-GAAP Diluted net earnings (loss) per share | $ 0.04 | $ (0.06) | $ 0.03 | $ (0.04) |
| (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 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. | ||||
| Six months ended | Three months ended | |||
| June 30, | June 30, | |||
| 2013 | 2012 | 2013 | 2012 | |
| ( Unaudited) | ( Unaudited) | ( Unaudited) | ( Unaudited) | |
| Cash flows from operating activities: | ||||
| Net income (loss) | $ 512 | $ (3,593) | $ 441 | $ (2,035) |
| Adjustments required to reconcile net income or loss to net cash provided by or used in operating activities: | ||||
| Depreciation and amortization | 1,379 | 1,401 | 597 | 695 |
| Amortization of marketable securities premiums and accretion of discounts, net | 192 | 217 | 85 | 109 |
| Equity in losses of an affiliated company, net | 21 | 23 | -- | 33 |
| Increase (decrease) in accrued severance pay, net | 114 | (220) | (152) | (115) |
| Stock-based compensation expenses | 717 | 790 | 373 | 341 |
| Increase in accrued interest on marketable securities, bank deposits and structured notes | 52 | 5 | 45 | 2 |
| Decrease (increase) in trade receivables, net | (2,229) | 4,010 | (1,524) | (471) |
| Increase in other receivables and prepaid expenses | (736) | (1,513) | (96) | (80) |
| Decrease in inventories | 3,331 | 845 | 2,065 | 417 |
| Increase (decrease) in trade payables | (535) | (5,236) | 991 | 31 |
| Increase (decrease) in deferred revenues | 3,200 | 943 | 1,348 | (1,197) |
| Increase (decrease) in other payables and accrued expenses | 726 | (1,666) | (112) | (2,347) |
| Net cash provided by (used in) operating activities | 6,744 | (3,994) | 4,061 | (4,617) |
| Cash flows from investing activities: | ||||
| Short-term deposits, net | (269) | 1,689 | (675) | (118) |
| Investment in affiliated company | (1,211) | (50) | (596) | (50) |
| Proceeds from redemption of long-term bank deposits | 1,312 | 990 | 851 | 390 |
| Proceeds from redemption of marketable securities upon maturity | 4,000 | -- | 4,000 | -- |
| Purchase of property and equipment | (673) | (1,170) | (395) | (519) |
| Net cash provided by (used in) investing activities | 3,159 | 1,459 | 3,185 | (297) |
| 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, | |||
| 2013 | 2012 | 2013 | 2012 | |
| ( Unaudited) | ( Unaudited) | ( Unaudited) | ( Unaudited) | |
| Cash flows from financing activities: | ||||
| Purchase of treasury stock | -- | (4,249) | -- | (1,736) |
| Repayment of long-term bank loans | (5,343) | (4,899) | (2,866) | (2,544) |
| Payment of acquisition of NSC | (515) | (336) | (120) | -- |
| Proceeds from issuance of shares upon exercise of options, warrants and employee stock purchase plan | 210 | 35 | 81 | -- |
| Net cash used in financing activities | (5,648) | (9,449) | (2,905) | (4,280) |
| Increase (decrease) in cash and cash equivalents | 4,255 | (11,984) | 4,341 | (9,194) |
| Cash and cash equivalents at the beginning of the period | 15,219 | 28,257 | 15,133 | 25,467 |
| Cash and cash equivalents at the end of the period | $ 19,474 | $ 16,273 | $ 19,474 | $ 16,273 |