LOD, Israel, Feb. 4, 2008 (PRIME NEWSWIRE) -- AudioCodes (Nasdaq:AUDC), a leading provider of Voice over Packet (VoP) technologies and Voice Network products, today announced financial results for the fourth quarter and fiscal year ended December 31, 2007.
Revenues for the fourth quarter ended December 31, 2007 were a record $42.8 million compared to $40.4 million for the quarter ended September 30, 2007 and $42.6 million for the quarter ended December 31, 2006. Fourth quarter revenues grew 6.0% sequentially and increased 0.5% compared to the fourth quarter of 2006. GAAP net income was $1.3 million, or $0.03 per diluted share, for the fourth quarter of 2007 compared to $225,000, or $0.01 per diluted share, for the third quarter of 2007 and $671,000, or $0.02 per diluted share, for the corresponding period last year.
Revenues for the year ended December 31, 2007 were a record $158.2 million compared to $147.4 million in 2006, a year-over-year increase of $10.9 million, or 7.4%. The Company reported a net loss of $1.8 million, or $0.04 per diluted share, for 2007 compared to net income of $6.9 million, or $0.16 per diluted share, for 2006.
Non-GAAP net income was $3.7 million, or $0.08 per diluted share, in the fourth quarter of 2007 compared to non-GAAP net income of $2.8 million, or $0.06 per diluted share, in the third quarter of 2007 and $3.6 million, or $0.08 per diluted share, in the fourth quarter of 2006. Non-GAAP net income in 2007 was $8.3 million, or $0.19 per diluted share, compared to non-GAAP net income of $16.6 million, or $0.37 per diluted share for 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 flow from operating activities was $9.0 million in the fourth quarter of 2007, and totaled $12.4 million in 2007, compared to $6.6 million in 2006.
Cash and cash equivalents, short-term and long-term marketable securities, short-term and long-term bank deposits and structured notes were $143.0 million as of December 31, 2007 compared to $134.2 million as of September 30, 2007, and $133.6 million as of December 31, 2006. The year-over-year net increase was primarily attributable to positive cash flow from operations and financing activities.
"AudioCodes is pleased to report record quarterly and annual revenues and a third consecutive quarter of sequential top line growth driven primarily by the strength of our networking business," stated Shabtai Adlersberg, Chairman of the Board, President and CEO of AudioCodes. "With our networking business growing over 30% year over year for the third straight year, and surpassing $100 million in 2007, we remain confident in the continued expansion of our networking business in coming years. Leading the growth were sales of CPE devices and mid-density Media Gateways, both of which grew above 40% in 2007. In addition to growing revenues, we were successful in maintaining better control over operational expenses which allowed us to finish 2007 with efficiency gains that returned non-GAAP operating income margins back to 8% in the fourth quarter and contributed to $9.0 million of cash flow from operations in the last three months of 2007. Based on new customers and OEM design wins in 2007, the continued evolution of VoIP into the telecom mainstream, consolidation in our industry, increased investments in our sales and customer support worldwide and further investments in our technology and products, we believe we are well positioned for continued growth in 2008," concluded Mr. Adlersberg.
Conference Call & Webcast Information
AudioCodes will conduct a conference call on Tuesday, February 5, 2008 to discuss the fourth quarter and year end 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 AudioCodes corporate Website at www.audiocodes.com.
About AudioCodes
AudioCodes Ltd. (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 -- 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 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.
Summary financial data follows
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
---------------------------------------------------------------------
U.S. dollars in thousands
Dec. 31, Dec. 31,
2007 2006
--------- ---------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 75,063 $ 25,171
Short-term bank deposits and structured
notes 18,065 28,658
Short-term marketable securities and
accrued interest 17,244 29,422
Trade receivables, net 25,604 30,501
Other receivables and prepaid expenses 6,592 3,309
Inventories 18,736 16,093
--------- ---------
Total current assets 161,304 133,154
--------- ---------
LONG-TERM INVESTMENTS:
Long-term bank deposits and structured
notes 32,670 30,435
Long-term marketable securities -- 19,942
Investments in companies 1,343 3,999
Deferred tax assets 2,058 3,742
Severance pay funds 9,799 7,231
--------- ---------
Total long-term investments 45,870 65,349
--------- ---------
PROPERTY AND EQUIPMENT, NET 7,094 7,847
--------- ---------
INTANGIBLE ASSETS, DEFERRED CHARGES AND
OTHER, NET 19,007 21,853
--------- ---------
GOODWILL 119,855 108,853
--------- ---------
Total assets $ 353,130 $ 337,056
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $ 8,849 $ 7,522
Other payables and accrued expenses 28,780 28,139
--------- ---------
Total current liabilities 37,629 35,661
--------- ---------
DEFERRED TAX LIABILITIES 6,606 7,780
--------- ---------
ACCRUED SEVERANCE PAY 11,168 7,915
--------- ---------
SENIOR CONVERTIBLE NOTES 121,198 121,015
--------- ---------
Total shareholders' equity 176,529 164,685
--------- ---------
Total liabilities and shareholders' equity $ 353,130 $ 337,056
========= =========
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
----------------------------------------------------------
U.S. dollars in thousands, except share and per share data
Year ended Three months ended
December 31, December 31,
-------------------- --------------------
2007 2006 2007 2006
--------- --------- --------- ---------
(Unaudited)
--------------------
Revenues $ 158,235 $ 147,353 $ 42,840 $ 42,613
Cost of revenues 69,185 61,242 18,673 18,124
--------- --------- --------- ---------
Gross profit 89,050 86,111 24,167 24,489
Operating expenses:
Research and
development, net 40,706 35,416 10,086 10,701
Selling and marketing 42,900 37,664 10,818 11,218
General and
administrative 9,637 8,766 2,437 2,530
--------- --------- --------- ---------
Total operating expenses 93,243 81,846 23,341 24,449
--------- --------- --------- ---------
Operating income (loss) (4,193) 4,265 826 40
Financial income, net 2,670 3,817 784 754
Equity in losses of
affiliated companies 1,097 916 346 244
--------- --------- --------- ---------
Income (loss) before
taxes on income (2,620) 7,166 1,264 550
Taxes (tax benefit) on
income (loss), net (772) 289 (75) (121)
--------- --------- --------- ---------
Net income (loss) $ (1,848) $ 6,877 $ 1,339 $ 671
========= ========= ========= =========
Basic net earnings
(loss) per share $ (0.04) $ 0.16 $ 0.03 $ 0.02
========= ========= ========= =========
Diluted net earnings
(loss) per share $ (0.04) $ 0.16 $ 0.03 $ 0.02
========= ========= --------- ---------
Weighted average number
of shares used in
computing basic net
earnings (loss) per
share (in thousands) 42,699 41,717 43,080 42,079
========= ========= ========= =========
Weighted average number
of shares used in
computing diluted net
earnings (loss) per
share (in thousands) 42,699 43,689 43,938 42,846
========= ========= ========= =========
AUDIOCODES LTD. AND ITS SUBSIDIARIES
NON-GAAP PROFORMA STATEMENTS OF OPERATIONS
----------------------------------------------------------
U.S. dollars in thousands, except share and per share data
Year ended Three months ended
December 31, December 31,
--------------------- ---------------------
2007 2006 2007 2006
--------- --------- --------- ---------
(Unaudited) (Unaudited)
--------------------- ---------------------
Revenues $ 158,235 $ 147,353 $ 42,840 $ 42,613
Cost of revenues
*) **) 66,079 59,381 17,960 17,277
--------- --------- --------- ---------
Gross profit 92,156 87,972 24,880 25,336
Operating expenses:
Research and
development, net *) 37,695 32,363 9,456 9,873
Selling and marketing
*) **) 38,380 33,514 9,779 9,827
General and
administrative *) 8,770 7,360 2,209 2,215
--------- --------- --------- ---------
Total operating
expenses 84,845 73,237 21,444 21,915
--------- --------- --------- ---------
Operating income 7,311 14,735 3,436 3,421
Financial income, net 2,670 3,817 784 754
Equity in losses of
affiliated companies 1,097 916 346 244
--------- --------- --------- ---------
Income before taxes on
income 8,884 17,636 3,874 3,931
Taxes on income, net 561 994 224 293
--------- --------- --------- ---------
Non-GAAP net income $ 8,323 $ 16,642 $ 3,650 $ 3,638
========= ========= ========= =========
Non-GAAP diluted net
earnings per share $ 0.19 $ 0.37 $ 0.08 $ 0.08
========= ========= ========= =========
Weighted average
number of shares used
in computing non-GAAP
diluted net earnings
per share (in
thousands) 43,740 50,605 43,955 50,466
========= ========= ========= =========
*) 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
Year ended Three months ended
December 31, December 31,
------------------- -------------------
2007 2006 2007 2006
-------- -------- -------- --------
(Unaudited) (Unaudited)
------------------- -------------------
GAAP Net income (loss) $ (1,848) $ 6,877 $ 1,339 $ 671
======== ======== ======== ========
GAAP Diluted net earnings
(loss) per share
$ (0.04) $ 0.16 $ 0.03 $ 0.02
======== ======== ======== ========
Cost of revenues:
Stock-based
compensation (*) 613 620 131 200
Amortization
expenses(**) 2,493 1,241 582 647
-------- -------- -------- --------
3,106 1,861 713 847
Research and development,
net:
Stock-based
compensation (*) 3,011 3,053 630 828
Selling and marketing:
Stock-based
compensation (*) 3,476 3,628 778 1,124
Amortization
expenses(**) 1,044 522 261 267
-------- -------- -------- --------
4,520 4,150 1,039 1,391
General and
administrative:
Stock-based
compensation (*) 867 1,406 228 315
Income tax effect(**) (1,333) (705) (299) (414)
-------- -------- -------- --------
Non-GAAP Net income $ 8,323 $ 16,642 $ 3,650 $ 3,638
======== ======== ======== ========
Non-GAAP Diluted net
earnings per share
$ 0.19 $ 0.37 $ 0.08 $ 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
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
--------------------------------------------------------------------
U.S. dollars in thousands
Year ended Three months ended
December 31, December 31,
-------------------- --------------------
2007 2006 2007 2006
-------- -------- -------- --------
(Unaudited)
--------------------
Cash flows from
operating activities:
----------------------
Net income (loss) $ (1,848) $ 6,877 $ 1,339 $ 671
Adjustments required
to reconcile net
income to net cash
provided by
operating
activities:
Depreciation and
amortization 7,789 5,543 1,867 1,916
Net loss from sale
of marketable
securities -- 15 -- --
Amortization of
marketable
securities premiums
and accretion of
discounts, net 39 225 (11) 52
Equity in losses of
affiliated
companies 1,097 916 346 244
Increase (decrease)
in accrued
severance pay, net 356 203 152 (30)
Stock-based
compensation
expenses 7,967 8,707 1,767 2,467
Amortization of
senior convertible
notes discount and
deferred charges 203 199 52 50
Increase in accrued
interest on
marketable
securities, bank
deposits and
structured notes (519) (130) (92) (476)
Decrease (increase)
in deferred tax
assets 1,684 (298) 2,020 (255)
Decrease (increase)
in trade
receivables, net 5,014 (9,751) 3,987 (4,440)
Decrease (increase)
in other
receivables and
prepaid expenses (1,504) 1,457 (867) 1,796
Increase in
inventories (2,643) (1,954) (970) (265)
Increase (decrease)
in trade payables 1,263 (2,671) 2,085 (1,591)
Increase (decrease)
in other payables
and accrued
expenses (5,181) (2,005) (2,413) 732
Decrease in deferred
tax liabilities (1,331) (703) (298) (414)
-------- -------- -------- --------
Net cash provided by
operating activities 12,386 6,630 8,964 457
-------- -------- -------- --------
Cash flows from
investing activities:
----------------------
Investment in short-
term bank deposits (18,065) -- (18,065) --
Investment in long-
term bank deposits (11,000) (20,000) -- --
Proceeds from sale
and maturity of
marketable
securities 31,600 9,979 9,000 5,000
Proceeds from bank
deposits 28,700 51,300 -- --
Investments in
companies (1,003) (3,453) -- (1,802)
Payment for
acquisition of
Nuera*) -- (82,520) -- --
Payment for
acquisition of
Netrake*) -- (13,836) -- --
Payment for
acquisition of CTI
Squared*) (4,897) -- -- --
Purchase of property
and equipment (2,629) (3,067) (574) (1,352)
Proceeds from sale of
property and
equipment -- -- -- --
Proceed from
structured notes
called by the bank 10,000 -- 10,000 --
-------- -------- -------- --------
Net cash provided by
(used in) investing
activities 32,706 (61,597) 361 1,846
-------- -------- -------- --------
Cash flows from
financing activities:
----------------------
Proceeds from issuance
of shares upon exercise
of options and employee
stock purchase plan 4,800 9,181 158 216
-------- -------- -------- --------
Net cash provided by
financing activities 4,800 9,181 158 216
-------- -------- -------- --------
Increase (decrease) in
cash and cash
equivalents 49,892 (45,786) 9,483 2,519
Cash and cash
equivalents at the
beginning of the
period 25,171 70,957 65,580 22,652
-------- -------- -------- --------
Cash and cash
equivalents
at the end of the
period $ 75,063 $ 25,171 $ 75,063 $ 25,171
======== ======== ======== ========
*) Excluding cash and cash equivalents