AUDIOCODES LTD. (ISRAEL) LOD, Israel, Jan. 31, 2017 /PRNewswire/ --
Fourth Quarter and Full Year 2016 Highlights:
-- Quarterly revenues were $37.8 million, 5.9% over last year's comparable
quarter; full 2016 year revenues totaled $145.6 million compared to
$139.8 million in 2015;
-- Quarterly service revenues were $11.4 million, 14.6% over last year's
comparable quarter; full 2016 year service revenues totaled $43.3
million compared to $37.8 million in 2015;
-- Revenues related to UC-SIP business increased more than 20% compared to
the fourth quarter of 2015;
-- Quarterly GAAP gross margin was 60.9%, Quarterly Non-GAAP gross margin
was 61.5%;
-- Quarterly GAAP operating margin was 9.5%, Quarterly Non-GAAP operating
margin was 7.7%;
-- Quarterly GAAP net income was $14.8 million, or $0.44 per diluted share,
Quarterly Non-GAAP net income was $2.6 million, or $0.08 per diluted
share;
-- Full 2016 year GAAP net income was $16.2 million, or $0.45 per diluted
share, full 2016 year Non-GAAP net income was $9.4 million, or $0.26 per
diluted share;
-- Cash flow from operating activities was $6.7 million for the quarter and
$18.3 million for the full 2016 year;
-- AudioCodes repurchased 1,261,555 of its ordinary shares at an aggregate
cost of $7.7 million during the fourth quarter of 2016.
Details:
AudioCodes (Nasdaq: AUDC), a leading provider of converged voice solutions that enable enterprises and service providers to transition to all-IP voice networks, today announced financial results for the fourth quarter and full year periods ended December 31, 2016.
Revenues for the fourth quarter of 2016 were $37.8 million, compared to $37.2 million for the third quarter of 2016 and $35.6 million for the fourth quarter of 2015. Revenues were $145.6 million in 2016 compared to $139.8 million in 2015.
During the fourth quarter of 2016, the Company made sales to Avaya of $645,000 which remained unpaid. On January 19, 2017, Avaya Inc. announced that it had filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code. As a result, the revenues related to these sales were recorded by the Company as unpaid deferred revenues and were not included in revenues reported for the fourth quarter. These unpaid revenues were also not included in trade receivables in the Company's balance sheet as of December 31, 2016.
Net income was $14.8 million, or $0.44 per diluted share, for the fourth quarter of 2016 compared to $2.8 million, or $0.07 per diluted share, for the fourth quarter of 2015. Net income in 2016 was $16.2 million or $0.45 per diluted share, compared to $366,000, or $0.01 per diluted share, in 2015.
Net income per diluted share included $0.34 in the fourth quarter of 2016 and $0.32 in the full 2016 year as a result of the tax benefit described below.
On a Non-GAAP basis, quarterly net income was $2.6 million, or $0.08 per diluted share, compared to $2.8 million, or $0.07 per diluted share, in the fourth quarter last year. Non-GAAP net income in 2016 was $9.4 million, or $0.26 per diluted share, compared to $5.9 million, or $0.14 per diluted share, in 2015.
Non-GAAP net income (loss) excludes: (i) stock-based compensation expenses; (ii) amortization expenses related to intangible assets; (iii) expenses related to deferred payments and income due to revaluation of an Earn-Out liability, each in connection with the acquisition of Active Communications Europe and (iv) non-cash deferred tax benefit or expenses. A reconciliation of net income 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.
During the fourth quarter of 2016, the Company fully utilized the remaining amount of the deferred tax asset recorded in 2013. Based on its earnings history and expected future operating results, the Company recorded another deferred tax asset in the amount of $11.6 million as of December 31, 2016. This deferred tax asset represents the approximate amount of the Company's net operating losses and temporary tax differences that the Company estimates it will utilize over the next few years. GAAP net income for the fourth quarter and full 2016 year reflect the effect of the tax benefit associated with the creation of this deferred tax asset. Non-GAAP net income excludes this non-cash deferred tax benefit.
Net cash provided by operating activities was $6.7 million for the fourth quarter of 2016 and $18.3 million for 2016. Cash and cash equivalents, long- and short-term bank deposits and long- and short-term marketable securities were $69.5 million as of December 31, 2016 compared to $80.4 million as of December 31, 2015. The decrease in cash and cash equivalents, long- and short-term bank deposits and long- and short-term marketable securities was the result of the use of cash for the continued repurchasing of the Company's ordinary shares pursuant to its share repurchase program.
"We are pleased to report strong financial results for the fourth quarter and the full 2016 year," said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes. "In 2016, we continued to execute on our strategic goal of growing the UC-SIP business. We are pleased to report that we grew UC-SIP revenues to more than $55 million in 2016, an increase of more than 20% compared to 2015. We are confident in our ability to continue this growth and are planning to reach $100 million in annual revenues from this business within the next three years. Additionally, the global trend to move to All-IP between now and 2025 has increased demand for gateways. In line with this trend, our gateway revenues increased in the second half of 2016 compared to the first half of the year. We are encouraged by the momentum of these two business lines which now comprise above 90% of our quarterly revenues."
"We are focused on growing and positioning AudioCodes to become the leader in the Enterprise Voice market, applying our superior voice platform in the areas of unified communications (UC), contact centers (CC) and SIP trunking (SIPT). We achieved growth of our business with leading application partners such as Microsoft, Genesys and Broadsoft. We have emerged a most successful and valued vendor of CPE gear to our partners and customers, and were able to increase our penetration of the Service Providers market. In addition, we made important steps in evolving our business to the Cloud era with growing deployments of Cloud products and solutions in the areas of virtualized SBC and Skype for Business online. Finally, as we are confident in the long-term strength of our business, we continued to buy back shares in the fourth quarter of 2016 with the aim of increasing value to our shareholders," concluded Mr. Adlersberg.
Share Buy Back Program
During the quarter ended December 31, 2016, AudioCodes acquired 1,261,555 of its ordinary shares under its share repurchase program for a total consideration of approximately $7.7 million. As of December 31, 2016, AudioCodes had acquired an aggregate of 12.0 million of its ordinary shares since August 2014 for an aggregate consideration of approximately $54.2 million.
Conference Call & Web Cast Information
AudioCodes will conduct a conference call at 8:00 A.M., Eastern Time today to discuss the Company's fourth quarter and full year of 2016 operating performance, financial results and outlook. Interested parties may participate in the conference call by dialing one the following numbers:
United States Participants: +1 (877) 407-0778
International Participants: +1 (201) 689-8565
The conference call will also be simultaneously webcast. Investors are invited to listen to the call live via webcast at the AudioCodes investor website at http://www.audiocodes.com/investors-lobby.
Follow AudioCodes' social media channels:
AudioCodes invites you to join our online community and follow us on: AudioCodes Voice Blog, LinkedIn, Twitter, Facebook, and YouTube.
To download AudioCodes' investor relations app, which offers access to its SEC filings, press releases, videos, audiocasts and more, please visit Apple's App Store for the iPhone and iPad or Google Play for Android mobile devices.
About AudioCodes
AudioCodes Ltd. (NASDAQ, TASE: 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, Value Added Applications and Professional Services. 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.
©2017 AudioCodes Ltd. All rights reserved. AudioCodes, AC, HD VoIP, HD VoIP Sounds Better, IPmedia, Mediant, MediaPack, What's Inside Matters, OSN, SmartTAP, User Management Pack, VMAS, VoIPerfect, VoIPerfectHD, Your Gateway To VoIP, 3GX, VocaNom, AudioCodes One Voice and CloudBond 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
December 31, December 31,
2016 2015
---- ----
(Unaudited) (Audited)
---------- --------
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents $24,344 $18,908
Short-term and
restricted bank
deposits 3,401 5,661
Short-term marketable
securities and accrued
interest 6,778 2,480
Trade receivables, net 25,448 25,622
Other receivables and
prepaid expenses 3,377 4,405
Inventories 16,333 16,778
------ ------
Total current assets 79,681 73,854
------ ------
LONG-TERM ASSETS:
Long-term and
restricted bank
deposits $5,407 $3,034
Long-term marketable
securities 29,540 50,294
Deferred tax assets 11,607 2,216
Severance pay funds 17,820 16,086
------ ------
Total long-term assets 64,374 71,630
------ ------
PROPERTY AND EQUIPMENT,
NET 3,867 4,090
----- -----
GOODWILL, INTANGIBLE
ASSETS AND OTHER, NET 39,054 40,246
Total assets $186,976 $189,820
======== ========
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of
long-term bank loans $3,451 $5,338
Trade payables 7,710 7,304
Other payables and
accrued expenses 18,618 17,951
Deferred revenues 14,951 12,885
------ ------
Total current
liabilities 44,730 43,478
------ ------
LONG-TERM LIABILITIES:
Accrued severance pay $18,941 $16,377
Long-term bank loans 8,493 6,032
Deferred revenues and
other liabilities 6,153 6,480
----- -----
Total long-term
liabilities 33,587 28,889
------ ------
Total equity 108,659 117,453
------- -------
Total liabilities and
equity $186,976 $189,820
======== ========
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,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
(Unaudited) (Audited) (Unaudited)
---------- -------- ----------
Revenues:
Products $102,279 $101,990 $26,359 $25,704
Services 43,292 37,769 11,401 9,945
------ ------ ------ -----
Total Revenues 145,571 139,759 37,760 35,649
-------------- ------- ------- ------ ------
Cost of revenues:
Products 46,935 47,227 12,039 11,879
Services 10,295 9,744 2,717 2,470
------ ----- ----- -----
Total Cost of revenues 57,230 56,971 14,756 14,349
---------------------- ------ ------ ------ ------
Gross profit 88,341 82,788 23,004 21,300
------ ------ ------ ------
Operating expenses:
Research and development, net 29,139 27,996 7,682 6,664
Selling and marketing 45,084 43,360 11,369 10,260
General and administrative 6,364 8,726 366 1,913
----- ----- --- -----
Total operating expenses 80,587 80,082 19,417 18,837
------ ------ ------ ------
Operating income 7,754 2,706 3,587 2,463
Financial income (expenses), net (160) 442 (127) (158)
---- --- ---- ----
Income before taxes on income 7,594 3,148 3,460 2,305
Taxes on income, net 8,644 (2,782) 11,308 491
----- ------ ------ ---
Net income $16,238 $366 $14,768 $2,796
======= ==== ======= ======
Basic net earnings per share $0.46 $0.01 $0.45 $0.07
===== ===== ===== =====
Diluted net earnings per share $0.45 $0.01 $0.44 $0.07
===== ===== ===== =====
Weighted average number of shares used in computing basic
net earnings per share (in thousands) 35,174 40,178 32,956 38,443
====== ====== ====== ======
Weighted average number of shares used in computing diluted
net earnings per share (in thousands) 35,779 40,565 33,859 38,771
====== ====== ====== ======
AUDIOCODES LTD. AND ITS SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME
--------------------------------------------------------
U.S. dollars in thousands, except per share data
Year ended Three months ended
December 31, December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
(Unaudited) (Audited) (Unaudited)
---------- -------- ----------
GAAP net income $16,238 $366 $14,768 $2,796
======= ==== ======= ======
GAAP net earnings per share $0.45 $0.01 $0.44 $0.07
===== ===== ===== =====
Cost of revenues:
Stock-based compensation (1) 118 101 31 27
Amortization expenses (2) 1,052 992 174 248
1,170 1,093 205 275
Research and development, net:
Stock-based compensation (1) 459 429 113 76
Deferred payments expenses (3) 752 - 188 -
--- --- --- ---
1,211 429 301 76
Selling and marketing:
Stock-based compensation (1) 1,101 1,061 264 242
Amortization expenses (2) 120 193 30 15
--- --- --- ---
1,221 1,254 294 257
General and administrative:
Stock-based compensation (1) 736 782 182 103
Revaluation of Earn-out liability (4) (1,674) - (1,674) -
------ --- ------ ---
(938) 782 (1,492) 103
Income taxes:
Deferred tax (5) (9,475) 1,977 (11,468) (669)
------ ----- ------- ----
Non-GAAP net income $9,427 $5,901 $2,608 $2,838
====== ====== ====== ======
Non-GAAP diluted net earnings per share $0.26 $0.14 $0.08 $0.07
===== ===== ===== =====
(1) 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 Netrake, Mailvision and Active Communications Europe assets.
(3) Excluding expenses related to deferred payments in connection with the acquisition of Active Communications Europe.
(4) Revaluation of Earn-out liability in connection with the acquisition of Active Communications Europe.
(5) Non-cash deferred tax expenses (benefit).
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,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
(Unaudited) (Audited) (Unaudited)
----------
Cash flows from operating activities:
-------------------------------------
Net income $16,238 $366 $14,768 $2,796
Adjustments required to reconcile net income or loss to net cash provided by or used in operating
activities:
Depreciation and amortization 2,892 2,963 630 613
Amortization of marketable securities premiums and accretion of discounts, net 973 1,107 296 256
Increase in accrued severance pay, net 830 218 247 (59)
Stock-based compensation expenses 2,414 2,373 590 448
Decrease (increase) in long-term deferred tax assets, net (9,391) 1,975 (11,446) (671)
Decrease (increase) in accrued interest and exchange rate effect of loans, marketable securities and
bank deposits 114 55 (73) 113
Decrease in trade receivables, net 174 5,575 385 598
Decrease in other receivables and prepaid expenses 732 1,777 1,390 1,277
Decrease (increase) in inventories 445 (2,013) (666) (481)
Increase (decrease) in trade payables 406 (2,987) 93 (183)
Increase (decrease) in other payables and accrued expenses (680) 2,395 (2,318) 2,297
Increase in deferred revenues 3,195 3,758 2,795 702
Net cash provided by operating activities 18,342 17,562 6,691 7,706
------ ------ ----- -----
Cash flows from investing activities:
-------------------------------------
Proceeds from sale of marketable securities 12,429 2,557 - -
Decrease (increase) in short-term deposits, net 2,260 1,969 531 (105)
Decrease (increase) in long-term bank deposits (2,367) 1,032 (2,844) (1,994)
Proceeds from redemption of marketable securities 3,215 2,711 2,315 -
Purchase of property and equipment (1,477) (1,976) (288) (299)
Net cash paid in acquisition of subsidiary - (1,960) - (1,960)
--- ------ --- ------
Net cash provided by (used in) investing activities 14,060 4,333 (286) (4,358)
------ ----- ---- ------
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,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
(Unaudited) (Audited) (Unaudited)
---------- -------- ----------
Cash flows from financing activities:
-------------------------------------
Purchase of treasury stock (29,392) (19,523) (7,666) (4,532)
Repayment of long-term bank loans (5,353) (4,685) (1,078) (1,366)
Proceeds from bank loans 6,000 6,264 6,000 6,264
Consideration related to payment of acquisition of Mailvision (233) (233) - -
Proceeds from issuance of shares upon exercise of options and warrants 2,012 393 1,451 57
----- --- ----- ---
Net cash provided by (used in) financing activities (26,966) (17,784) (1,293) 423
------- ------- ------ ---
Increase in cash and cash equivalents 5,436 4,111 5,112 3,771
Cash and cash equivalents at the beginning of the period 18,908 14,797 19,232 15,137
------ ------ ------ ------
Cash and cash equivalents at the end of the period $24,344 $18,908 $24,344 $18,908
======= ======= ======= =======
Company Contacts IR Agency Contact
Niran Baruch, Shirley Nakar, Philip Carlson
Chief Financial Officer Director, Investor Relations KCSA Strategic
AudioCodes AudioCodes Communications
Tel: +972-3-976-4000 Tel: +972-3-976-4000 Tel: +1-212-896-1233
Niran.baruch@audiocodes.com shirley@audiocodes.com audc@kcsa.com
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SOURCE AudioCodes
