LOD, Israel, July 29, 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 second quarter ended June 30, 2008.
Revenues for the second quarter ended June 30, 2008 were a record $45.7 million compared to $43.7 million for the quarter ended March 31, 2008 and $38.4 million for the quarter ended June 30, 2007. Second quarter revenues grew 4.4% compared to the quarter ended March 31, 2008 and increased 18.7% compared to the second quarter of 2007. Net income in accordance with U.S. generally accepted accounting principles (GAAP) was $1.6 million, or $0.04 per diluted share, for the second quarter of 2008 compared to $457,000 or $0.01 per diluted share, for the first quarter of 2008 and a net loss of $1.4 million, or ($0.03) per diluted share, for the corresponding period last year.
Non-GAAP net income was $3.6 million, or $0.09 per diluted share, in the second quarter of 2008 compared to $3.1 million, or $0.07 per diluted share, in the first quarter of 2008 and $1.4 million, or $0.03 per diluted share, in the second quarter of 2007. 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.
Net cash provided by operating activities was $4.0 million in the second quarter of 2008 compared to $2.7 million in the second quarter of 2007.
"We are very pleased to report yet another quarter of record revenues and growing profits, our fifth consecutive quarter of sequential growth," stated Shabtai Adlersberg, Chairman of the Board, President and CEO of AudioCodes. "In the second quarter of 2008 we enjoyed continued momentum in our networking business which grew 10% sequentially and over 25% year-over-year."
"This quarter we made an important step to diversify and grow our market reach and product offerings by introducing the Mediant(tm) 1000 Multi-Service Business Gateway (MSBG), our first converged voice and data services customer premises equipment (CPE) product. The Mediant 1000 MSBG integrates a VoIP media gateway with an enterprise level session border controller and data services such as switching, routing and security. The MSBG product provides us with access to a new market segment which is estimated by In-Stat, a market research firm, to be approximately $500 million in 2008 and predicted to grow 30% annually to above $1 billion by 2011," continued Mr. Adlersberg.
"With progress made this quarter in new product initiatives and improved budget and expense control, we believe we have set a strong foundation for further success in coming years," concluded Mr. Adlersberg.
AudioCodes repurchased approximately 1.8 million of its ordinary shares during the second quarter of 2008 at a cost of $7.2 million. In the first half of 2008, AudioCodes has repurchased a total of 2.8 million ordinary shares at a total cost of $11.4 million under the current stock repurchase program which authorized the Company to purchase up to 4,000,000 AudioCodes ordinary shares, or the equivalent of approximately 10% of the Company's outstanding share capital.
Cash and cash equivalents, short-term and long-term marketable securities, short-term and long-term bank deposits and structured notes were $147.3 million as of June 30, 2008 compared to $137.6 million as of March 31, 2008, and $130.5 million as of June 30, 2007. During the second quarter, AudioCodes borrowed $15.0 million from a bank.
Conference Call & Web cast Information
AudioCodes will conduct a conference call at 9:00 A.M., Eastern Daylight Time on Wednesday, July 30, 2008 to discuss the second quarter 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) 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 and R&D are located in Israel with an additional R&D facility 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 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
June 30, December 31,
2008 2007
----------- -----------
(Unaudited)
----------- -----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 40,016 $ 75,063
Short-term bank deposits 76,075 18,065
Short-term marketable securities and
accrued interest 4,073 17,244
Trade receivables, net 29,708 25,604
Other receivables and prepaid expenses 5,853 6,592
Inventories 19,995 18,736
----------- -----------
Total current assets 175,720 161,304
----------- -----------
LONG-TERM INVESTMENTS:
Long-term bank deposits 27,109 32,670
Investments in companies 2,026 1,343
Deferred tax assets 2,058 2,058
Severance pay funds 11,871 9,799
----------- -----------
Total long-term investments 43,064 45,870
----------- -----------
PROPERTY AND EQUIPMENT, NET 7,361 7,094
----------- -----------
INTANGIBLE ASSETS, DEFERRED CHARGES AND
OTHER, NET
17,043 19,007
----------- -----------
GOODWILL 111,212 111,212
----------- -----------
Total assets $ 354,400 $ 344,487
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term bank loans $ 3,000 $ --
Trade payables 12,129 8,849
Other payables and accrued expenses 24,405 28,780
Total current liabilities 39,534 37,629
----------- -----------
ACCRUED SEVERANCE PAY 13,121 11,168
----------- -----------
LONG-TERM BANK LOANS 12,000 --
----------- -----------
SENIOR CONVERTIBLE NOTES 121,291 121,198
----------- -----------
Total shareholders' equity 168,454 174,492
----------- -----------
Total liabilities and shareholders' equity $ 354,400 $ 344,487
=========== ===========
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
---------------------------------------------------------------------
In thousands, except share and per share data
Six months ended Three months ended
June 30, June 30,
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------
(Unaudited) (Unaudited)
------------------ ------------------
Revenues $ 89,390 $ 74,987 $ 45,651 $ 38,444
Cost of revenues 39,120 32,881 19,996 16,906
-------- -------- -------- --------
Gross profit 50,270 42,106 25,655 21,538
Operating expenses:
Research and development, net 19,980 20,381 9,744 10,345
Selling and marketing 23,343 21,750 11,783 10,910
General and administrative 4,821 4,726 2,321 2,171
-------- -------- -------- --------
Total operating expenses 48,144 46,857 23,848 23,426
-------- -------- -------- --------
Operating income (loss) 2,126 (4,751) 1,807 (1,888)
Financial income, net 895 1,270 337 766
-------- -------- -------- --------
Income (loss) before taxes on
income 3,021 (3,481) 2,144 (1,122)
Income taxes 284 842 144 80
Equity in losses of affiliated
companies 633 533 353 204
-------- -------- -------- --------
Net income (loss) $ 2,104 $ (4,856) $ 1,647 $ (1,406)
======== ======== ======== ========
Basic net earnings (loss) per
share $ 0.05 $ (0.11) $ 0.04 $ (0.03)
======== ======== ======== ========
Diluted net earnings (loss)
per share $ 0.05 $ (0.11) $ 0.04 $ (0.03)
======== ======== ======== ========
Weighted average number of
shares used in computing basic
net earnings per share
(in thousands) 42,210 42,416 41,410 42,519
======== ======== ======== ========
Weighted average number of
shares used in computing
diluted net earnings per share
(in thousands) 42,694 42,416 41,873 42,519
======== ======== ======== ========
AUDIOCODES LTD. AND ITS SUBSIDIARIES
NON-GAAP PROFORMA STATEMENTS OF OPERATIONS
---------------------------------------------------------------------
In thousands, except share and per share data
Six months ended Three months ended
June 30, June 30,
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------
(Unaudited) (Unaudited)
------------------ ------------------
Revenues $ 89,390 $ 74,987 $ 45,651 $ 38,444
Cost of revenues *) **) 37,823 31,171 19,374 16,025
-------- -------- -------- --------
Gross profit 51,567 43,816 26,277 22,419
Operating expenses:
Research and development,
net *) 18,883 18,795 9,364 9,594
Selling and marketing *) **) 21,531 19,363 10,959 9,764
General and administrative *) 4,423 4,370 2,166 2,160
-------- -------- -------- --------
Total operating expenses 44,837 42,528 22,489 21,518
-------- -------- -------- --------
Operating income 6,730 1,288 3,788 901
Financial income, net 895 1,270 337 766
-------- -------- -------- --------
Income before taxes on income 7,625 2,558 4,125 1,667
Income taxes, net **) 284 136 144 80
Equity in losses of affiliated
companies 633 533 353 204
-------- -------- -------- --------
Non-GAAP net income $ 6,708 $ 1,889 $ 3,628 $ 1,383
======== ======== ======== ========
Non-GAAP diluted net earnings
per share $ 0.16 $ 0.04 $ 0.09 $ 0.03
======== ======== ======== ========
Weighted average number of
shares used in computing
non-GAAP diluted net earnings
per share (in thousands) 42,694 43,664 41,887 43,481
======== ======== ======== ========
*) 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
Six months ended Three months ended
June 30, June 30,
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------
(Unaudited) (Unaudited)
------------------ ------------------
GAAP Net income (loss) $ 2,104 $ (4,856) $ 1,647 $ (1,406)
======== ======== ======== ========
GAAP Diluted earnings (loss)
per share $ 0.05 $ (0.11) $ 0.04 $ (0.03)
======== ======== ======== ========
Cost of revenues:
Stock-based compensation (*) 228 331 88 161
Amortization expenses(**) 1,069 1,379 534 720
-------- -------- -------- --------
1,297 1,710 622 881
Research and development, net:
Stock-based compensation (*) 1,097 1,586 380 751
Selling and marketing:
Stock-based compensation (*)
1,290 1,865 563 885
Amortization expenses(**)
522 522 261 261
-------- -------- -------- --------
1,812 2,387 824 1,146
General and administrative:
Stock-based compensation (*) 398 356 155 11
Income tax effect(**) -- 706 -- --
-------- -------- -------- --------
Non-GAAP Net income $ 6,708 $ 1,889 $ 3,628 $ 1,383
======== ======== ======== ========
Non-GAAP Diluted earnings per
share $ 0.16 $ 0.04 $ 0.09 $ 0.03
======== ======== ======== ========
*) 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
Six months ended Three months ended
June 30, June 30,
------------------- -------------------
2008 2007 2008 2007
-------- -------- -------- --------
(Unaudited) (Unaudited)
------------------- -------------------
Cash flows from operating
activities:
-------------------------
Net income (loss) $ 2,104 $ (4,856) $ 1,647 $ (1,406)
Adjustments required to
reconcile net income to
net cash provided by
operating activities:
Depreciation and
amortization 3,855 4,049 1,939 1,975
Net loss from sale of
marketable securities -- -- -- --
Amortization of marketable
securities premiums and
accretion of
discounts, net (16) 53 (7) 17
Equity in losses of
affiliated companies 633 533 353 204
Increase (decrease) in
accrued severance
pay, net (119) 227 (268) (21)
Stock-based compensation
expenses 3,013 4,138 1,186 1,808
Amortization of senior
convertible notes
discount and
deferred charges 102 100 51 50
Decrease (increase) in
accrued interest on
marketable securities,
bank deposits and
structured notes (99) (319) 163 (206)
Increase in deferred
tax assets -- (347) -- (210)
Decrease (increase) in
trade receivables, net (4,104) 5,126 (5,495) 1,980
Decrease (increase) in
other receivables and
prepaid expenses (206) (633) 442 272
Decrease (increase) in
inventories (1,259) (3,729) 915 (1,791)
Increase (decrease) in
trade payables 3,280 432 2,596 (1,011)
Increase (decrease) in
other payables and
accrued expenses 625 (4,811) 449 1,048
Increase in deferred
tax liabilities -- 706 -- --
Other -- 4 -- 3
-------- -------- -------- --------
Net cash provided by
operating activities 7,809 673 3,971 2,712
-------- -------- -------- --------
Cash flows from
investing activities:
-------------------------
Proceeds from sale and
maturity of marketable
securities 13,000 16,600 2,000 7,800
Proceeds from sale
of bank deposits 18,094 25,000 10,029 --
Investments in companies (1,316) (538) (731) (338)
Payment for acquisition
of CTI Squared*) (5,000) (4,897) -- (4,397)
Purchase of property
and equipment (2,167) (1,352) (1,251) (474)
Investment in
short-term deposit (70,104) -- (70,075) --
Investment in
long-term deposit (255) (11,000) (255) (11,000)
-------- -------- -------- --------
Net cash provided by
(used in) investing
activities (47,748) 23,813 (60,283) (8,409)
-------- -------- -------- --------
Cash flows from financing
activities:
-------------------------
Repurchase of shares (11,408) -- (7,186) --
Increase in current
maturities of long-term
bank loans 3,000 -- 3,000 --
Long-term bank loans
received 12,000 -- 12,000 --
Proceeds from issuance of
shares upon exercise of
options and employee stock
purchase plan 1,300 2,730 81 255
-------- -------- -------- --------
Net cash provided by
financing activities 4,892 2,730 7,895 255
-------- -------- -------- --------
Increase (decrease) in cash
and cash equivalents (35,047) 27,216 (48,417) (5,442)
Cash and cash equivalents at
the beginning of the period 75,063 25,171 88,433 57,829
-------- -------- -------- --------
Cash and cash equivalents
at the end of the period $ 40,016 $ 52,387 $ 40,016 $ 52,387
======== ======== ======== ========
*) Excluding cash and cash equivalents