LOD, Israel, Aug. 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 second quarter of 2009, ended June 30, 2009.
Revenues for the second quarter ended June 30, 2009 were $30.4 million compared to $29.3 million for the first quarter of 2009 and $45.7 million for the quarter ended June 30, 2008. Net loss in accordance with U.S. generally accepted accounting principles (GAAP) was $891,000, or ($0.02) per share, for the second quarter of 2009 compared to GAAP net loss of $3.1 million or ($0.07) per share, for the first quarter of 2009 and GAAP net income of $720,000, or $0.02 per share, for the corresponding second quarter of 2008.
Non-GAAP net income was $614,000, or $0.02 per diluted share, for the second quarter of 2009 compared to non-GAAP net loss of $1.6 million, or ($0.04) per share, for the first quarter of 2009, and non-GAAP net income of $3.6 million, or $0.09 per diluted share, for the second 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. 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.
During the second quarter of 2009, AudioCodes generated $3.5 million from operating activities compared to $26,000 in the first quarter of 2009 and $4.0 million in the second quarter of 2008.
Cash and cash equivalents, short-term and long-term bank deposits and short-term marketable securities were $114.9 million as of June 30, 2009, compared to $113.5 million as of March 31, 2009 and $147.3 million as of June 30, 2008. The year-over-year decline was primarily attributable to the repurchase of some of the Company's Senior Convertible Notes in the fourth quarter of 2008 and the repurchase of our ordinary shares, offset, in part, by cash provided by operating activities and additional borrowings. The Company is required to offer to repurchase the remaining $73.5 million in principal amount of the Senior Convertible Notes in November 2009.
"We are pleased to report improved financials and return to non-GAAP profitability in the second quarter 2009 after a single quarter of loss. In the second quarter of 2009, AudioCodes delivered growth in top line revenues and strong operating cash flow. The improved financial performance was backed by signs of stabilization, increased demand in our markets and strength in our networking business. In addition, we achieved good control of quarterly non-GAAP operating expenses, which were 27.5% lower than the comparable quarter in 2008. With robust VoIP and telecom market demand and our continued success in acquiring more customers and projects, we are confident in our ability to continue our growth in coming years," stated Shabtai Adlersberg, Chairman of the Board, President and CEO of AudioCodes.
"Overall, we are pleased to see early signs of improved market conditions as well as new key product launches, such as our HD VoIP offering, which is resonating well with our customers and partners. Our continued investment in next generation products and technologies throughout this economic cycle, combined with our streamlined operating structure, is expected to allow AudioCodes to exit the current economic downturn in a position of competitive strength," concluded Mr. Adlersberg.
Conference Call & Web cast Information
AudioCodes will conduct a conference call at 9:00 A.M., Eastern Daylight Time on Thursday, August 6, 2009 to discuss the company's second 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, 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; the bankruptcy filing in January 2009 of AudioCodes' largest customer in 2008, 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; the obligation to offer to repurchase the outstanding senior convertible notes in November 2009 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.
Summary financial data follows.
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
---------------------------------------------------------------------
U.S. dollars in thousands
June 30, December 31,
2009 2008
----------- -----------
(Unaudited) (Unaudited)
----------- -----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 24,914 $ 36,779
Short-term bank deposits 74,602 61,870
Short-term marketable securities
and accrued interest 15,427 16,481
Trade receivables, net 20,990 29,564
Other receivables and prepaid expenses 4,922 3,373
Deferred tax assets 972 972
Inventories 19,324 20,623
----------- -----------
Total current assets 161,151 169,662
----------- -----------
LONG-TERM INVESTMENTS:
Investments in companies 1,443 1,245
Deferred tax assets 1,255 1,255
Severance pay funds 10,926 10,297
----------- -----------
Total long-term investments 13,624 12,797
----------- -----------
PROPERTY AND EQUIPMENT, NET 6,001 6,844
----------- -----------
GOODWILL, INTANGIBLE ASSETS, DEFERRED
CHARGES AND OTHER, NET (1) 39,935 41,001
----------- -----------
Total assets $ 220,711 $ 230,304
=========== ===========
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term bank loans $ 6,000 $ 6,000
Trade payables 10,826 11,661
Other payables and accrued expenses 18,371 24,189
Deferred tax liability (1) 315 735
Senior convertible notes (1) 72,288 70,670
----------- -----------
Total current liabilities 107,800 113,255
----------- -----------
ACCRUED SEVERANCE PAY 12,388 12,174
----------- -----------
LONG-TERM BANK LOANS 18,750 21,750
----------- -----------
Total equity (1) 81,773 83,125
----------- -----------
Total liabilities and equity $ 220,711 $ 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
Six months ended Three months
ended June 30, ended June 30,
---------------- ----------------
2009 2008 2009 2008
------- ------- ------- -------
(Unaudited) (Unaudited)
---------------- ----------------
Revenues $59,654 $89,390 $30,357 $45,651
Cost of revenues 26,565 39,120 13,657 19,996
------- ------- ------- -------
Gross profit 33,089 50,270 16,700 25,655
Operating expenses:
Research and development, net 15,452 19,980 7,241 9,744
Selling and marketing 16,340 23,343 7,726 11,783
General and administrative 3,926 4,821 1,873 2,321
------- ------- ------- -------
Total operating expenses 35,718 48,144 16,840 23,848
------- ------- ------- -------
Operating income (loss) (2,629) 2,126 (140) 1,807
Financial expenses, net (1) 1,598 1,642 884 943
------- ------- ------- -------
Income (loss) before taxes on
income (4,227) 484 (1,024) 864
Tax benefit, net (1) (291) (415) (144) (209)
Equity in losses of affiliated
companies 51 633 11 353
------- ------- ------- -------
Net income (loss) $(3,987) $ 266 $ (891) $ 720
======= ======= ======= =======
Basic net earnings (loss) per
share $ (0.09) $ 0.01 $ (0.02) $ 0.02
======= ======= ======= =======
Diluted net earnings (loss) per
share $ (0.09) $ 0.01 $ (0.02) $ 0.02
======= ======= ======= =======
Weighted average number of shares
used in computing basic net
earnings per share (in thousands) 40,182 42,210 40,182 41,410
======= ======= ======= =======
Weighted average number of shares
used in computing diluted net
earnings per share (in thousands) 40,182 42,694 40,182 41,873
======= ======= ======= =======
(1) Amounts for three and six months ended June 30, 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
Six months Three months
ended June 30, ended June 30,
---------------- ----------------
2009 2008 2009 2008
------- ------- ------- -------
(Unaudited) (Unaudited)
---------------- ----------------
Revenues $59,654 $89,390 $30,357 $45,651
Cost of revenues (1) (2) 25,869 37,823 13,311 19,374
------- ------- ------- -------
Gross profit 33,785 51,567 17,046 26,277
Operating expenses:
Research and development, net (1) 15,119 18,883 7,081 9,364
Selling and marketing (1) (2) 15,665 21,531 7,399 10,959
General and administrative (1) 3,804 4,423 1,817 2,166
------- ------- ------- -------
Total operating expenses 34,588 44,837 16,297 22,489
------- ------- ------- -------
Operating income (loss) (803) 6,730 749 3,788
Financial expenses (income),
net (3) 11 (895) 46 (337)
------- ------- ------- -------
Income (loss) before taxes on
income (814) 7,625 703 4,125
Income taxes, net (3) 130 284 78 144
Equity in losses of affiliated
companies 51 633 11 353
------- ------- ------- -------
Non-GAAP net income (loss) $ (995) $ 6,708 $ 614 $ 3,628
------- ------- ------- -------
Non-GAAP diluted net earnings
(loss) per share $ (0.02) $ 0.16 $ 0.02 $ 0.09
------- ------- ------- -------
Weighted average number of shares
used in computing non-GAAP diluted
net earnings per share
(in thousands) 40,182 42,694 40,206 41,887
======= ======= ======= =======
(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
Six months Three months
ended June 30, ended June 30,
---------------- ----------------
2009 2008 2009 2008
------- ------- ------- -------
(Unaudited) (Unaudited)
---------------- ----------------
GAAP Net income (loss) $(3,987) $ 266 $ (891) $ 720
======= ======= ======= =======
GAAP Diluted earnings (loss) per
share $ (0.09) $ 0.01 $ (0.02) $ 0.02
======= ======= ======= =======
Cost of revenues:
Stock-based compensation (1) 70 228 34 88
Amortization expenses(2) 626 1,069 312 534
------- ------- ------- -------
696 1,297 346 622
Research and development, net:
Stock-based compensation (1) 333 1,097 160 380
Selling and marketing:
Stock-based compensation (1) 499 1,290 239 563
Amortization expenses(2) 176 522 88 261
------- ------- ------- -------
675 1,812 327 824
General and administrative:
Stock-based compensation (1) 122 398 56 155
Financial expenses:
FSP APB 14-1 adjustment (3) 1,587 2,537 838 1,280
Income Taxes:
FSP APB 14-1 adjustment (3) (421) (699) (222) (353)
------- ------- ------- -------
Non-GAAP net income (loss) $ (995) $ 6,708 $ 614 $ 3,628
======= ======= ======= =======
Non-GAAP Diluted earnings (loss)
per share $ (0.02) $ 0.16 $ 0.02 $ 0.09
======= ======= ======= =======
(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
Six months Three months
ended June 30, ended June 30,
---------------- ----------------
2009 2008 2009 2008
------- ------- ------- -------
(Unaudited) (Unaudited)
---------------- ----------------
Cash flows from operating
activities:
-------------------------
Net income (loss) (1) $(3,987) $ 266 $ (891) $ 720
Adjustments required to reconcile
net income to net cash provided
by operating activities:
Depreciation and amortization 2,647 3,855 1,286 1,939
Net loss from sale of marketable
securities -- -- -- --
Amortization of marketable
securities premiums and
accretion of discounts, net 84 (16) 89 (7)
Equity in losses of affiliated
companies 51 633 11 353
Decrease in accrued severance
pay, net (415) (119) (277) (268)
Stock-based compensation expenses 1,024 3,013 489 1,186
Amortization of senior
convertible notes discount and
deferred charges 1,648 2,639 868 1,331
Decrease (increase) in accrued
interest on marketable
securities, bank deposits and
structured notes (449) (99) (214) 163
Decrease (increase) in trade
receivables, net 8,574 (4,104) 334 (5,495)
Decrease (increase) in other
receivables and prepaid expenses (166) (206) 1,497 442
Decrease (increase) in
inventories 1,299 (1,259) 2,788 915
Increase (decrease) in trade
payables (835) 3,280 (1,436) 2,596
Increase (decrease) in other
payables and accrued expenses (5,590) 625 (884) 449
Decrease in deferred tax
liabilities (1) (419) (699) (220) (353)
------- ------- ------- -------
Net cash provided by operating
activities 3,466 7,809 3,440 3,971
------- ------- ------- -------
Cash flows from investing
activities:
-------------------------
Proceeds from sale and maturity of
marketable securities 1,000 13,000 1,000 2,000
Proceeds from sale of bank
deposits 21,705 18,094 10,206 10,029
Investments in companies (249) (1,316) (149) (731)
Payment for acquisition of CTI
Squared*) -- (5,000) -- -
Purchase of property and equipment (769) (2,167) (429) (1,251)
Investment in short-term deposit (34,018) (70,104) (18,205) (70,075)
Investment in long-term deposit -- (255) -- (255)
------- ------- ------- -------
Net cash provided used in
investing activities (12,331) (47,748) (7,577) (60,283)
------- ------- ------- -------
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Cont.)
---------------------------------------------------------------------
U.S. dollars in thousands
Six months Three months
ended June 30, ended June 30,
---------------- ----------------
2009 2008 2009 2008
------- ------- ------- -------
(Unaudited) (Unaudited)
---------------- ----------------
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
Repayment of loan from bank (3,000) (1,500)
Proceeds from issuance of shares
upon exercise of options and
employee stock purchase plan -- 1,300 -- 81
------- ------- ------- -------
Net cash provided by financing
activities (3,000) 4,892 (1,500) 7,895
------- ------- ------- -------
Decrease in cash and cash
equivalents (11,865) (35,047) (5,637) (48,417)
Cash and cash equivalents at the
beginning of the period 36,779 75,063 30,551 88,433
------- ------- ------- -------
Cash and cash equivalents at the
end of the period $24,914 $40,016 $24,914 $40,016
======= ======= ======= =======
(1) Amounts for six and three months ended June 30, 2008 adjusted due
to implementation of FSP APB 14-1.