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AudioCodes Reports Fourth Quarter and Full Year 2013 Results

January 28, 2014 --

LOD, Israel, Jan. 29, 2014 (GLOBE NEWSWIRE) -- 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, 2013.



Fourth Quarter Highlights:




  • Revenues totaled $36.3 million, a 10.5% increase over the year ago quarter


  • Quarterly networking revenues increased 16.7% year-over-year and 7.1% over previous quarter


  • Non-GAAP net income was $1.9 million, or $0.05 per diluted share


  • Net cash provided by operating activities was $5.6 million


  • As of December 31, 2013, the amount of un-earned revenues that are expected to be recognized in the future were 45% higher than as of December 31, 2012


  • Strong momentum in revenues from SBC, Services and Microsoft Lync related activities



Revenues for the fourth quarter of 2013 were $36.3 million, compared to $35.0 million for the third quarter of 2013 and $32.8 million for the fourth quarter of 2012. Revenues were $137.2 million in 2013 compared to $127.5 million in 2012.


Net income in accordance with U.S. generally accepted accounting principles (GAAP) was $2.8 million, or $0.07 per diluted share, for the fourth quarter of 2013, compared to GAAP net income of $935,000, or $0.02 per diluted share, for the third quarter of 2013, and GAAP net income of $524,000, or $0.01 per diluted share, for the fourth quarter of 2012.




The Company reported GAAP net income of $4.2 million, or $0.11 per diluted share, in 2013 compared to a GAAP net loss of $4.2 million, or ($0.11) per diluted share, in 2012.



Non-GAAP net income for the fourth quarter of 2013 was $1.9 million, or $0.05 per diluted share, compared to $1.8 million, or $0.04 per diluted share, for the third quarter of 2013, and $1.1 million, or $0.03 per diluted share, for the fourth quarter of 2012.



The Company reported non-GAAP net income of $5.3 million, or $0.14 per diluted share, in 2013 compared to a non-GAAP net loss of $1.5 million, or ($0.04) per diluted share, in 2012.



Non-GAAP net income (loss) excludes: (i) stock-based compensation expenses; (ii) amortization expenses related to intangible assets; and (iii) non-cash deferred tax benefit. A reconciliation of net income (loss) 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.



Net cash provided by operating activities for the fourth quarter of 2013 totaled $5.6 million. Cash and cash equivalents, bank deposits and marketable securities were $62.2 million as of December 31, 2013 compared to $58.0 million as of September 30, 2013 and $58.5 million as of December 31, 2012.



"We are pleased to report our sixth consecutive quarter of improved financial performance and solid growth for the full year 2013," said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes. "AudioCodes fourth quarter 2013 performance was underlined by strong sequential growth of sales in the Microsoft Lync voice segment and growth in sales of session border controller products. We also achieved better than anticipated increase in our services revenues in 2013. This business momentum drove better fourth quarter operating margin and cash flow contribution from operations. Investments made with our global partners over the past few years continue to contribute to our sustained growth and leadership in the voice networking business. These investments, coupled with increased focus on software products, solutions and services, are expected to provide further strength and support to our expected success in coming years."



"As we look ahead to 2014, AudioCodes stands well positioned to extend its leadership in wide-area voice networking solutions and services for the fast growing segments of unified communications, business services and contact centers. AudioCodes end-to-end One Voice connectivity and networking solutions for Microsoft Lync, hosted PBX services and emerging cloud-based voice solutions have proved to provide high value to our enterprise and service provider customer base globally. Our deep knowledge and rich voice technologies portfolio for connectivity, security, quality of service, routing and mobility, among other features, is key to our success in recent years and is expected to enable our success in next coming years. We believe that these capabilities are a clear competitive advantage within one of the most attractive segments of the communications sector," concluded Mr. Adlersberg.



Conference Call & Web Cast Information



AudioCodes will conduct a conference call at 9:00 A.M., Eastern Time today to discuss the Company's fourth quarter and full year 2013 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 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 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™, 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.



©2014 AudioCodes Ltd. All rights reserved. AudioCodes, AC, HD VoIP, HD VoIP Sounds Better, IPmedia, Mediant, MediaPack, OSN, SmartTAP, VMAS, VoIPerfect, VoIPerfectHD, 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. 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,

 

2013

2012

 

Unaudited

Audited

ASSETS

 

 

 

 

 

CURRENT ASSETS:

 

 

Cash and cash equivalents 

$30,763

$15,219

Short-term and restricted bank deposits

9,101

10,330

Short-term marketable securities and accrued interest

15,706

7,966

Trade receivables, net

26,431

24,198

Other receivables and prepaid expenses 

6,184

7,274

Inventories 

13,811

16,797

 

 

 

Total current assets

101,996

81,784

 

 

 

LONG-TERM ASSETS:

 

 

Long-term and restricted bank deposits

$6,628

$9,251

Long-term marketable securities

--

15,762

Investments in an affiliated company

--

1,084

Deferred tax assets 

4,855

3,565

Severance pay funds 

19,549

15,772

 

 

 

Total long-term assets

31,032

45,434

 

 

 

PROPERTY AND EQUIPMENT, NET

3,191

3,619

 

 

 

GOODWILL, INTANGIBLE ASSETS AND OTHER, NET

38,001

34,952

 

 

 

Total assets

$174,220

$165,789

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

CURRENT LIABILITIES:

 

 

Current maturities of long-term bank loans 

$4,686

$8,436

Trade payables

7,215

6,817

Other payables and accrued expenses

17,874

15,062

Deferred revenues

6,940

4,871

 

 

 

Total current liabilities

36,715

35,186

 

 

 

LONG-TERM LIABILITIES:

 

 

Accrued severance pay

$19,845

$16,284

Long-term bank loans

9,791

14,477

Senior convertible notes

353

353

Deferred revenues and other liabilities 

2,707

1,192

 

 

 

Total long-term liabilities

32,696

32,306

 

 

 

Total equity

104,809

98,297

 

 

 

Total liabilities and equity

$174,220

$165,789























































































































































































































































































































 

 

 

 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands, except per share data

 

 

 

 

 

 Year ended 

Three months ended

 

 December 31, 

 December 31, 

 

2013

2012

2013

2012

 

(Unaudited)

(Audited)

(Unaudited)

Revenues:

 

 

 

 

Products

$111,750

$103,651

$29,004

$26,070

Services

25,482

23,839

7,248

6,736

 

 

 

 

 

Total Revenues

137,232

127,490

36,252

32,806

 

 

 

 

 

Cost of revenues:

 

 

 

 

Products

51,996

48,371

13,586

12,613

Services

6,568

5,923

1,869

1,487

 

 

 

 

 

Total Cost of revenues 

58,564

54,294

15,455

14,100

 

 

 

 

 

Gross profit 

78,668

73,196

20,797

18,706

 

 

 

 

 

Operating expenses:

 

 

 

 

Research and development, net

28,194

28,677

7,200

6,231

Selling and marketing

39,279

40,040

10,288

9,721

General and administrative

8,456

8,214

2,048

1,733

 

 

 

 

 

Total operating expenses

75,929

76,931

19,536

17,685

 

 

 

 

 

Operating income (loss)

2,739

(3,735)

1,261

1,021

Financial income (expenses), net

96

453

(55)

87

 

 

 

 

 

Income (loss) before taxes on income

2,835

(3,282)

1,206

1,108

Income tax benefit (expense), net

1,404

(541)

1,565

(257)

Equity in losses of an affiliated company, net

(21)

(354)

-- 

(327)

 

 

 

 

 

Net income (loss)

$4,218

$(4,177)

$2,771

$524

 

 

 

 

 

Basic net earnings (loss) per share 

$0.11

$(0.11)

$0.07

$0.01

 

 

 

 

 

Diluted net earnings (loss) per share 

$0.11

$(0.11)

$0.07

$0.01

 

 

 

 

 

Weighted average number of shares used in computing basic net earnings (loss) per share (in thousands)

38,241

39,125

38,602

37,931

 

 

 

 

 

Weighted average number of shares used in computing diluted net earnings (loss) per share (in thousands)

39,097

39,125

39,825

38,169




















































































































































































































































































































 

 

 

 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

 

 

 

 

NON-GAAP PROFORMA STATEMENTS OF OPERATIONS

U.S. dollars in thousands, except per share data

 

 

 

 

 

 Year ended 

Three months ended

 

 December 31, 

 December 31, 

 

2013

2012

2013

2012

 

(Unaudited)

(Unaudited)

Revenues:

 

 

 

 

Products

$111,750

$103,651

$29,004

$26,070

Services

25,482

23,839

7,248

6,736

 

 

 

 

 

Total Revenues

137,232

127,490

36,252

32,806

 

 

 

 

 

Cost of revenues:

 

 

 

 

Products

51,247

47,544

13,365

12,402

Services

6,398

5,865

1,814

1,487

 

 

 

 

 

Total Cost of revenues (1) (2)

57,645

53,409

15,179

13,889

 

 

 

 

 

Gross profit 

79,587

74,081

21,073

18,917

 

 

 

 

 

Operating expenses:

 

 

 

 

Research and development, net (1)

27,786

28,247

7,076

6,103

Selling and marketing (1) (2)

38,317

39,299

10,009

9,592

General and administrative (1) 

7,850

7,613

1,866

1,587

 

 

 

 

 

Total operating expenses

73,953

75,159

18,951

17,282

 

 

 

 

 

Operating income (loss)

5,634

(1,078)

2,122

1,635

Financial income (expenses), net

96

453

(55)

87

 

 

 

 

 

Income (loss) before taxes on income

5,730

(625)

2,067

1,722

Income tax expenses, net (3)

(368)

(541)

(207)

(257)

Equity in losses of an affiliated company, net

(21)

(354)

--

(327)

 

 

 

 

 

Net income (loss)

$5,341

$(1,520)

$1,860

$1,138

 

 

 

 

 

Diluted net earnings (loss) per share 

$0.14

$(0.04)

$0.05

$0.03

 

 

 

 

 

Weighted average number of shares used in computing basic net earnings (loss) per share (in thousands)

39,439

39,125

40,201

38,375

 

 

 

 

 

(1)   Excluding 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 Nuera, Netrake, CTI Squared and Mailvision assets.

(3)   Excluding non-cash deferred tax 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

 

 

 

 

RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)

U.S. dollars in thousands, except per share data

 

 

 

 

 

 Year ended 

Three months ended

 

 December 31, 

 December 31, 

 

2013

2012

2013

2012

 

(Unaudited)

(Unaudited)

GAAP net income (loss)

$4,218

$(4,177)

$2,771

$524

 

 

 

 

 

GAAP net earnings (loss) per share

$0.11

$(0.11)

$0.07

$0.01

 

 

 

 

 

Cost of revenues:

 

 

 

 

Stock-based compensation (1)

62

61

28

5

Amortization expenses (2)

857

824

248

206

 

919

885

276

211

Research and development, net:

 

 

 

 

Stock-based compensation (1)

408

430

124

128

 

 

 

 

 

Selling and marketing:

 

 

 

 

Stock-based compensation (1)

625

437

188

53

Amortization expenses (2)

337

304

91

76

 

962

741

279

129

General and administrative:

 

 

 

 

Stock-based compensation (1)

606

601

182

146

 

 

 

 

 

Income taxes: 

 

 

 

 

Deferred tax (3)

(1,772)

--

(1,772)

--

 

 

 

 

 

Non-GAAP net income (loss)

$5,341

$(1,520)

$1,860

$1,138

Non-GAAP Diluted net earnings (loss) per share

$0.14

$(0.04)

$0.05

$0.03

 

 

 

 

 

(1)  Stock-based compensation expenses related to options and restricted stock units granted to employees and others.

(2)  Amortization of intangible assets related to the acquisitions of Nuera, Netrake, CTI Squared and Mailvision assets.

(3)  Non-cash deferred tax 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, 

 

2013

2012

2013

2012

 

(Unaudited)

(Audited)

(Unaudited)

Cash flows from operating activities:

 

 

 

 

Net income (loss)

$4,218

$(4,177)

$2,771

$524

Adjustments required to reconcile net income or loss to net cash provided by or used in operating activities:

 

 

 

Depreciation and amortization

3,047

2,883

814

747

Amortization of marketable securities premiums and accretion of discounts, net 

349

436

81

109

Equity in losses of an affiliated company, net

21

350

 -- 

336

Increase (decrease) in accrued severance pay, net

(495)

(184)

(709)

125

Stock-based compensation expenses

1,701

1,529

522

332

Increase (decrease) in accrued interest on marketable securities, bank deposits and structured notes

73

4

(42)

(1)

Increase in long-term deferred tax assets, net

(1,290)

(965)

(1,187)

(965)

Decrease (increase) in trade receivables, net

(2,254)

6,725

1,639

2,520

Decrease (increase) in other receivables and prepaid expenses

(462)

1,106

2,201

3,514

Decrease (increase) in inventories

2,986

3,618

(418)

1,935

Increase (decrease) in trade payables

403

(5,545)

(1,399)

153

Increase (decrease) in deferred revenues

3,138

270

(5)

171

Increase (decrease) in other payables and accrued expenses

2,493

(3,054)

1,300

(1,265)

 

 

 

 

 

Net cash provided by operating activities

13,928

2,996

5,568

8,235

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Decrease in short-term deposits, net

1,229

3,678

500

377

Investment in affiliated company

(1,211)

(183)

--

(111)

Investments in long-term deposits

--

(131)

--

--

Proceeds from redemption of long-term bank deposits

2,623

 

851

--

Proceeds from redemption of marketable securities upon maturity

7,600

--

3,600

850

Purchase of property and equipment 

(1,426)

(2,006)

(363)

(162)

Net cash provided by investing activities

8,815

1,358

4,588

954















































































































































 

 

 

 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)

U.S. dollars in thousands

 

 

 

 

 

 Year ended 

Three months ended

 

 December 31, 

 December 31, 

 

2013

2012

2013

2012

 

(Unaudited)

(Audited)

(Unaudited)

Cash flows from financing activities:

 

 

 

 

Purchase of treasury stock

 -- 

(6,917)

 -- 

(618)

Repayment of long-term bank loans 

(8,436)

(10,242)

(1,366)

(2,866)

Consideration related to payment of acquisition of NSC

(515)

(336)

--

--

 

 

 

 

 

Proceeds from issuance of shares upon exercise of options and warrants

1,752

103

376

68

 

 

 

 

 

Net cash used in financing activities

(7,199)

(17,392)

(990)

(3,416)

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

15,544

(13,038)

9,166

5,773

Cash and cash equivalents at the beginning of the period

15,219

28,257

21,597

9,446

 

 

 

 

 

Cash and cash equivalents at the end of the period

$30,763

$15,219

$30,763

$15,219

CONTACT: Company Contacts
Guy Avidan,
VP Finance & CFO
AudioCodes
Tel: +972-3-976-4000
guy.avidan@audiocodes.com

Shirley Nakar,
Director, Investor Relations
AudioCodes
Tel: +972-3-976-4000
shirley@audiocodes.com

IR Agency Contact
Erik Knettel,
Grayling
Tel: +1-646-284-9415
erik.knettel@grayling.com

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