LOD, Israel, May 5, 2009 (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 first quarter of 2009 ended March 31, 2009.
Revenues for the first quarter of 2009 were $29.3 million compared to $43.7 million for the quarter ended March 31, 2008. Net loss in accordance with U.S. generally accepted accounting principles (GAAP) was $3.1 million, or ($0.07) per share, for the first quarter of 2009 compared to a GAAP net loss of $416,000, or ($0.01) per share, for the corresponding first quarter of 2008.
Non-GAAP net loss was $1.6 million, or ($0.04) per share, for the first quarter of 2009 compared to non-GAAP net income of $3.1 million, or $0.07 per diluted share, for the first quarter of 2008.
Non-GAAP net income excludes (i) stock-based compensation expenses, (ii) amortization expenses related to the Nuera, Netrake and CTI Squared acquisitions and (iii) an adjustment to expenses related to the Company's Senior Convertible Notes due to implementation of FASB Staff Position APB 14-1. This new accounting requirement results in the recognition of higher interest expense by the Company, and a related reduction in income tax expense, due to amortization of the discount that results from separating the liability and equity components of the Senior Convertible Notes in accordance with this Staff Position. 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.
"Our revenues decreased in the first quarter of 2009 as a result of the downturn in the global economy and the challenging environment. While we are disappointed with our results, we are encouraged with the increased level of customer activity in the quarter and our strong operating expense control while continuing to invest in our next generation products," stated Shabtai Adlersberg, Chairman of the Board, President and CEO of AudioCodes.
"Based on early second quarter inputs, we anticipate improving market conditions and forecast better financial performance in the coming quarter," concluded Mr. Adlersberg.
In January 2009, Nortel, AudioCodes' largest customer in 2008, announced that it would seek creditor protection for the company and some of its subsidiaries. As of March 31, 2009, a total of $1.7 million of sales to the Nortel Group was recorded as unpaid deferred revenues, of which less than $100,000 were recorded in the first quarter of 2009.
Cash and cash equivalents, short-term marketable securities, and short-term and long-term bank deposits were $113.5 million as of March 31, 2009, compared to $115.1 million as of December 31, 2008 and $137.6 million as of March 31, 2008. The year-over-year decline was primarily attributable to the repurchase of our Senior Convertible Notes and the repurchase of our ordinary shares, offset in part by cash provided by our operating activities and additional borrowings.
The Company adopted FASB Staff Position APB 14-1 ("FSP") effective for financial statements issued for periods starting January 1, 2009. The FSP requires the Company to separately account for the liability and equity components of its Senior Convertible Notes in a manner that reflects the Company's nonconvertible debt borrowing rate. The FSP requires a retrospective application for all periods presented and comparative figures have been adjusted accordingly. As a result of applying the provisions of the FSP, the Company recorded additional non-cash interest expense, net of taxes, of $550,000 and $873,000 during the first quarter of 2009 and 2008, respectively.
Conference Call & Web cast Information
AudioCodes will conduct a conference call at 9:00 A.M., Eastern Daylight Time on Wednesday, May 6, 2009 to discuss the company's first quarter operational 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 leader focused on VoIP communications, applications and networking elements, and its products are deployed globally in Broadband, Mobile, Cable, and Enterprise networks. The company provides a range of innovative, cost-effective products including Media Gateways, Multi-Service Business Gateways, Residential Gateways, IP Phones, Media Servers, Session Border Controllers (SBC), Security Gateways and Value Added Applications. AudioCodes underlying technology, VoIPerfectHD(tm), relies primarily 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 emerging Voice networks. 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, AudioCoded, Ardito, CTI2, CTI(2), CTI Squared, HD VoIP, InTouch, IPmedia, Mediant, MediaPack, NetCoder, Netrake, Nuera, Open Solutions Network, OSN, Stretto, TrunkPack, VoicePacketizer, VoIPerfect, VoIPerfectHD, What's Inside Matters, 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.
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------------------------------------
U.S. dollars in thousands
March 31, Dec. 31,
2009 2008
-------- --------
(Unaudited) (Unaudited)
-------- --------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 30,551 $ 36,779
Short-term bank deposits 66,508 61,870
Short-term marketable securities and accrued
interest 16,397 16,481
Trade receivables, net 21,324 29,564
Other receivables and prepaid expenses 5,204 3,373
Deferred tax assets 972 972
Inventories 22,112 20,623
-------- --------
Total current assets 163,068 169,662
-------- --------
LONG-TERM INVESTMENTS:
Investments in companies 1,305 1,245
Deferred tax assets 1,255 1,255
Severance pay funds 9,657 10,297
-------- --------
Total long-term investments 12,217 12,797
-------- --------
PROPERTY AND EQUIPMENT, NET 6,379 6,844
-------- --------
GOODWILL, INTANGIBLE ASSETS, DEFERRED
CHARGES AND OTHER, NET (1) 40,430 41,001
-------- --------
Total assets $222,094 $230,304
======== ========
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term bank loans $ 6,000 $ 6,000
Trade payables 12,262 11,661
Other payables and accrued expenses 19,255 24,189
Deferred tax liability (1) 506 705
Senior convertible notes (1) 71,552 70,786
-------- --------
Total current liabilities 109,575 113,341
-------- --------
ACCRUED SEVERANCE PAY 11,396 12,174
-------- --------
LONG-TERM BANK LOANS 20,250 21,750
-------- --------
Total equity (1) 80,873 83,039
-------- --------
Total liabilities and equity $222,094 $230,304
======== ========
(1) December 31, 2008 amounts adjusted due to implementation of FSP
APB 14-1.
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------------------------------------
In thousands, except per share data
Three months ended
March 31,
------------------
2009 2008
-------- --------
(Unaudited)
------------------
Revenues $ 29,297 $ 43,739
Cost of revenues 12,908 19,124
-------- --------
Gross profit 16,389 24,615
Operating expenses:
Research and development, net 8,211 10,236
Selling and marketing 8,614 11,560
General and administrative 2,053 2,500
-------- --------
Total operating expenses 18,878 24,296
-------- --------
Operating income (loss) (2,489) 319
Financial expenses, net (1) 714 648
Equity in losses of affiliated companies 40 280
-------- --------
Loss before taxes on income (3,243) (609)
Income taxes (1) 147 193
-------- --------
Net loss $ (3,096) $ (416)
======== ========
Net loss attributable to the noncontrolling
interest (179) --
-------- --------
Net loss attributable to AudioCodes $ (2,917) $ (416)
======== ========
Basic net loss per share $ (0.07) $ (0.01)
======== ========
Diluted net loss per share $ (0.07) $ (0.01)
======== ========
Weighted average number of shares used in
computing basic net loss per share (in
thousands) 40,182 43,010
======== ========
Weighted average number of shares used in
computing diluted net loss per share (in
thousands) 40,182 43,010
======== ========
(1) Amounts for three months ended March 31, 2008 adjusted due to
implementation of FSP APB 14-1.
AUDIOCODES LTD. AND ITS SUBSIDIARIES
NON-GAAP PROFORMA STATEMENTS OF OPERATIONS
-------------------------------------------------------------------
In thousands, except per share data
Three months ended
March 31,
------------------
2009 2008
-------- --------
(Unaudited)
------------------
Revenues $ 29,297 $ 43,739
Cost of revenues (1) (2) 12,558 18,449
-------- --------
Gross profit 16,739 25,290
Operating expenses:
Research and development, net (1) 8,038 9,519
Selling and marketing (1) (2) 8,266 10,572
General and administrative (1) 1,987 2,257
-------- --------
Total operating expenses 18,291 22,348
-------- --------
Operating income (loss) (1,552) 2,942
Financial income, net (3) 35 558
Equity in losses of affiliated companies 40 280
-------- --------
Income (loss) before taxes on income (1,557) 3,220
Income taxes (3) 52 140
-------- --------
Non-GAAP net income (loss) $ (1,609) $ 3,080
======== ========
Net loss attributable to the
noncontrolling interest (179) --
-------- --------
Net income (loss) attributable to
AudioCodes $ (1,430) $ 3,080
======== ========
Non-GAAP diluted net income (loss) per
share $ (0.04) $ 0.07
======== ========
Weighted average number of shares used
in computing non-GAAP diluted net
income (loss) per share 40,182 43,511
======== ========
(1) Excluding stock-based compensation expenses related to options
granted to employees and others.
(2) Excluding amortization of intangible assets related to the
acquisitions of Nuera, Netrake and CTI Squared.
(3) Excluding adjustments to interest expense with respect to Senior
Convertible Notes, and related income tax expense, due to
implementation of FSP APB 14-1.
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
Three months ended
March 31,
------------------
2009 2008
-------- --------
(Unaudited)
------------------
GAAP net loss $ (3,096) $ (416)
======== ========
GAAP net loss per share $ (0.07) $ (0.01)
======== ========
Cost of revenues:
Stock-based compensation (1) 36 140
Amortization expenses (2) 314 535
-------- --------
350 675
Research and development, net:
Stock-based compensation (1) 173 717
Selling and marketing:
Stock-based compensation (1) 260 727
Amortization expenses (2) 88 261
-------- --------
348 988
General and administrative:
Stock-based compensation (1) 66 243
-------- --------
Financial expenses:
FSP APB 14-1 adjustment (3) 749 1,206
-------- --------
Income Taxes:
FSP APB 14-1 adjustment (3) (199) (333)
-------- --------
Non- GAAP net income (loss) $ (1,609) $ 3,080
======== ========
Non-GAAP diluted net income (loss) per share $ (0.04) $ 0.07
======== ========
(1) Stock-based compensation expenses related to options granted to
employees and others.
(2) Amortization of intangible assets related to the acquisitions of
Nuera, Netrake and CTI Squared.
(3) Adjustments to interest expense with respect to Senior Convertible
Notes, and related income tax expense, due to implementation of FSP
APB 14-1.
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 CONSOLIDATED STATEMENT OF CASH FLOWS
-------------------------------------------------------------------
U.S. dollars in thousands
Three months ended
March 31,
------------------
2009 2008
-------- --------
(Unaudited)
------------------
Cash flows from operating activities:
-------------------------------------
Net loss (1) $ (3,096) $ (416)
Adjustments required to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 1,361 1,916
Amortization of marketable securities
premiums and accretion of discounts, net (5) (9)
Equity in losses of affiliated companies 40 280
Increase (decrease) in accrued severance
pay, net (138) 149
Stock-based compensation expenses 535 1,827
Amortization of senior convertible notes
discount and deferred charges (1) 780 1,257
Increase in accrued interest on marketable
securities, bank deposits and structured
notes (235) (262)
Decrease in trade receivables, net 8,240 1,391
Increase in other receivables and prepaid
expenses (1,663) (648)
Increase in inventories (1,489) (2,174)
Increase in trade payables 601 684
Decrease in deferred tax liability (1) (199) (333)
Increase (decrease) in other payables and
accrued expenses (4,706) 176
-------- --------
Net cash provided by operating activities 26 3,838
-------- --------
Cash flows from investing activities:
------------------------------------
Investment in short-term bank deposits (15,813) --
Proceeds from sale and maturity of marketable
securities -- 11,000
Proceeds from bank deposits 11,499 8,036
Additional payment for the acquisition of
CTI Squared Ltd -- (5,000)
Investments in companies (100) (585)
Purchase of property and equipment (340) (916)
-------- --------
Net cash provided by (used in) investing
activities (4,754) 12,535
-------- --------
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Cont.)
-------------------------------------------------------------------
U.S. dollars in thousands
Three months ended
March 31,
------------------
2009 2008
-------- --------
(Unaudited)
------------------
Cash flows from financing activities:
-------------------------------------
Repurchase of shares -- (4,222)
Repayment of loan from bank (1,500) --
Proceeds from issuance of shares upon exercise
of options and employee stock purchase plan -- 1,219
-------- --------
Net cash used in financing activities (1,500) (3,003)
-------- --------
Increase (decrease) in cash and cash equivalents (6,228) 13,370
Cash and cash equivalents at the beginning of
the period 36,779 75,063
-------- --------
Cash and cash equivalents at the end of the
period $ 30,551 $ 88,433
======== ========
(1) Amounts for three months ended December 31, 2008 adjusted due to
implementation of FSP APB 14-1.