Allot Communications Announces Second Quarter 2015 Financial Results

Aug 04, 2015, 02:30 ET from Allot

HOD HASHARON, Israel, Aug. 4, 2015 /PRNewswire/ -- Allot Communications Ltd. (NASDAQ, TASE: ALLT), a leading global provider of intelligent broadband solutions that empowers communication service providers to optimize and monetize their networks, enterprises to enhance productivity and consumers to improve their digital lifestyle, today announced its second quarter 2015 results. 

Q2 2015 – Financial Highlights:

  • Non-GAAP Revenues were $21.6 million, down 23% year over year
  • Non-GAAP Gross Margin reached 74%
  • Non-GAAP Operating loss was 14%
  • Book-to-bill was above one
  • The Company recorded negative Operating Cash Flow of $2.3 million
  • Net Cash and cash equivalents as of June 30, 2015 totaled $120.6 million

Financial results:

On a GAAP basis, total revenues for the second quarter of 2015 were $21.6 million compared to $29.5 million of revenue reported for the first quarter of 2015 and $28.2 million of revenue reported for the second quarter of 2014.  Net loss for the second quarter of 2015 was $6.0 million, or $0.18 per basic and diluted share. This compares with a net loss of zero, or $0.00 per basic and diluted share, in the first quarter of 2015 and a net loss of $0.6 million, or $0.02 per basic and diluted share, in the second quarter of 2014.

On a non-GAAP basis, total revenues for the second quarter of 2015 were $21.6 million, compared with $29.5 million of revenue reported for the first quarter of 2015 and $28.2 million of revenue reported for the second quarter of 2014.  On a non-GAAP basis, net loss for the second quarter of 2015 was $3.0 million, or $0.09 per basic and diluted share. This compares with non-GAAP net income of $2.9 million, or $0.09 per basic and diluted share, in the first quarter of 2015 and non-GAAP net income of $1.9 million, or $0.06 per basic and diluted share, in the second quarter of 2014.

Q2 2015 - Key Achievements:

  • During Q2 2015, 21 large orders were received, 9 of which were from new customers
  • 15 of the large orders came from mobile-service providers and 5 were from fixed-line service providers
  • In addition, 1 large order was received for private and public cloud deployments
  • During the second quarter Allot received 6 $1 million + deals, compared to 0 in the previous quarter and 5 in the second quarter 2014
  • Allot WebSafe Personal is powering Vodafone Germany's newly launched secure net offering
  • Achieving 3 strategic wins totaling $8 million from new tier-1 mobile operators

"During the second quarter, despite a slower business environment, we achieved 3 wins of new tier 1 mobile service providers which we expect to turn into revenues during the second half of 2015 and the first half of 2016. We continue to make additional progress with our security offering including wins in North America with tier 1 accounts," said Andrei Elefant, President & CEO of Allot Communications. "During the second quarter of 2015 our booking has recovered significantly compared to the level of the first quarter and we undertook a number of efficiency measures to realign our OPEX without compromising our future growth."  

2015 Outlook

The Company reiterates its previously provided guidance and expects non-GAAP total revenues to be in the range of $100 million to $105 million for full year 2015.

Share Repurchase Program

Allot further announced separately that the Company's board of directors has authorized a share repurchase program of up to $15 million. The program is subject to certain court approvals in Israel, which Allot expects to obtain during the third or fourth quarter of 2015.

Conference Call & Webcast:

The Allot management team will host a conference call to discuss second quarter 2015 earnings results today at 8:30 AM ET, 3:30 p.m. Israel time. To access the conference call, please dial one of the following numbers: US: +1212 444 0896, UK: +44(0)2033645721, Israel: +97237630147, participant code 1553650.

A replay of the conference call will be available from 12:00 AM ET on August 5 2015 for 30 days. To access the replay, please dial: US: +1 347 366 9565; UK: +44(0)2034270598, access code:  1553650. A live webcast of the conference call can be accessed on the Allot Communications website at www.allot.com. The webcast also will be archived on the website following the conference call.

About Allot Communications

Allot Communications Ltd. (NASDAQ, TASE: ALLT) empowers service providers to monetize and optimize their networks, enterprises to enhance productivity and consumers to enjoy an always-on digital lifestyle. Allot's advanced DPI-based broadband solutions identify and leverage network intelligence to analyze, protect, improve and enrich mobile, fixed and cloud service delivery and user experience. Allot's unique blend of innovative technology, proven know-how and collaborative approach to industry standards and partnerships enables network operators worldwide to elevate their role in the digital lifestyle ecosystem and to open the door to a wealth of new business opportunities. For more information, please visit www.allot.com.

GAAP to Non-GAAP Reconciliation:

The difference between GAAP and non-GAAP revenues is related to the acquisitions made by the Company and represents revenues adjusted for the impact of the fair value adjustment to acquired deferred revenue related to purchase accounting. Non-GAAP net income is defined as GAAP net income after including deferred revenues related to the fair value adjustment resulting from purchase accounting and excluding stock-based compensation expenses, amortization of acquisition-related intangible assets, inventory write-off expenses, regulatory matter expenses, acquisition-related expenses, restructuring costs and compensation expenses related to the acquisitions.

These non-GAAP measures should be considered in addition to, and not as a substitute for, comparable GAAP measures. The non-GAAP results and a full reconciliation between GAAP and non-GAAP results are provided in the accompanying Table 2. The Company provides these non-GAAP financial measures because it believes they present a better measure of the Company's core business and management uses the non-GAAP measures internally to evaluate the Company's ongoing performance. Accordingly, the Company believes they are useful to investors in enhancing an understanding of the Company's operating performance.

Safe Harbor Statement

This release contains forward-looking statements, which express the current beliefs and expectations of Company management. Such statements involve a number of known and unknown risks and uncertainties that could cause our future results, performance or achievements to differ significantly from the results, performance or achievements set forth in such forward-looking statements. Important factors that could cause or contribute to such differences include risks relating to: our ability to compete successfully with other companies offering competing technologies; the loss of one or more significant customers; consolidation of, and strategic alliances by, our competitors, government regulation; the timing of completion of key project milestones which impact the timing of our revenue recognition; lower demand for key value-added services; our ability to keep pace with advances in technology and to add new features and value-added services; managing lengthy sales cycles; operational risks associated with large projects; our dependence on third party channel partners for a material portion of our revenues; court approval of the Company's proposed share buy-back program; and other factors discussed under the heading "Risk Factors" in the Company's annual report on Form 20-F filed with the Securities and Exchange Commission. Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Relations Contact:

Rami Rozen
AVP Corporate Development
International access code +972-52-569-4441
rrozen@allot.com

Public Relations Contact:

Sigalit Orr
Director Corporate Communications
International access code +972-54-268-1500
sorr@allot.com

 


TABLE  - 1


ALLOT COMMUNICATIONS LTD.


AND ITS SUBSIDIARIES


CONSOLIDATED STATEMENTS OF OPERATIONS


(U.S. dollars in thousands, except share and per share data)











Three Months Ended



Six Months Ended


June 30,



June 30,


2015


2014



2015


2014


(Unaudited)



(Unaudited)










Revenues

$      21,592


$      28,166



$     51,124


$     56,450


6,432


8,056



14,200


16,252

Gross profit  

15,160


20,110



36,924


40,198










Operating expenses:









Research and development costs, net

6,691


7,188



13,500


14,409

Sales and marketing

10,836


10,637



22,644


21,133

General and administrative

3,375


2,931



6,626


5,818

Total operating expenses

20,902


20,756



42,770


41,360

Operating Loss

(5,742)


(646)



(5,846)


(1,162)

Financial and other income (loss), net

(111)


87



94


236

Loss before income tax benefit

(5,853)


(559)



(5,752)


(926)










Tax expenses

171


61



307


82

Net Loss

(6,024)


(620)



(6,059)


(1,008)










 Basic net loss per share

$         (0.18)


$        (0.02)



$        (0.18)


$        (0.03)



















 Diluted net loss per share

$         (0.18)


$        (0.02)



$        (0.18)


$        (0.03)










Weighted average number of shares









used in computing basic  net









earnings per share

33,457,887


33,111,197



33,408,174


33,025,671










Weighted average number of shares









used in computing diluted net









earnings per share

33,457,887


33,111,197



33,408,174


33,025,671










 


 



TABLE  - 2



ALLOT COMMUNICATIONS LTD.



AND ITS SUBSIDIARIES



RECONCILIATION OF GAAP TO NON-GAAP  CONSOLIDATED  STATEMENTS  OF  OPERATIONS



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






Three Months Ended


Three Months Ended




June 30, 2015


June 30, 2014




(Unaudited)


(Unaudited)




$

% of Revenues


$

% of Revenues


















 GAAP Operating Loss 

$   (5,742)

-27%


$         (646)

-2%


 Share-based compensation (1) 

1,925



1,987



 Amortization of intangible assets (2) 

786



465



 Expenses related to M&A activities (3) 

-



25



 Fair value adjustment for acquired deferred revenues write down 

11



11



 Non-GAAP Operating income (Loss)

$   (3,020)

-14%


$        1,842

7%










 GAAP Net Loss 

$   (6,024)

-28%


$         (620)

-2%


 Share-based compensation (1) 

1,925



1,987



 Amortization of intangible assets (2) 

786



465



 Expenses related to M&A activities (3) 

264



25



 Fair value adjustment for acquired deferred revenues write down 

11



11



 Non-GAAP Net income (Loss)

$   (3,038)

-14%


$        1,868

7%










 GAAP Loss per share (diluted) 

$     (0.18)



$        (0.02)



 Share-based compensation 

0.06



0.06



 Amortization of intangible assets 

0.02



0.02



 Expenses related to M&A activities 

0.01



0.00



 Fair value adjustment for acquired deferred revenues write down 

0.00



0.00



 Non-GAAP Net income (Loss) per share (diluted) 

$     (0.09)



$         0.06











(1) Share-based compensation:








Cost of revenues

$         83



$            90




Research and development costs, net

425



487




Sales and marketing

739



811




General and administrative

678



599





$     1,925



$        1,987











 (2) Amortization of intangible assets 








Cost of revenues

$       627



$          400




Sales and marketing

159



65





$       786



$          465











 (3) Expenses related to M&A activities 








General and administrative 

$         -



$            25




Research and development costs, net

-



-




Sales and marketing

-



-




Financial expenses

264



-





$       264



$            25











 




TABLE  - 2 cont.



ALLOT COMMUNICATIONS LTD.



AND ITS SUBSIDIARIES



RECONCILIATION OF GAAP TO NON-GAAP  CONSOLIDATED  STATEMENTS  OF  OPERATIONS



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






Six Months Ended


Six Months Ended



June 30, 2015


June 30, 2014



(Unaudited)


(Unaudited)



$

% of Revenues


$

% of Revenues















 GAAP Operating Loss 

$   (5,846)

-11%


$      (1,162)

-2%

 Share-based compensation (1) 

3,792



3,979


 Amortization of intangible assets (2) 

1,297



930


 Expenses related to M&A activities (3) 

577



33


 Fair value adjustment for acquired deferred revenues write down 

22



23


 Non-GAAP Operating income (Loss) 

$      (158)

0%


$        3,803

7%








 GAAP Net Loss 

$   (6,059)

-12%


$      (1,008)

-2%

 Share-based compensation (1) 

3,792



3,979


 Amortization of intangible assets (2) 

1,297



930


 Expenses related to M&A activities (3) 

841



33


 Fair value adjustment for acquired deferred revenues write down 

22



23


 Non-GAAP Net income (Loss)

$      (107)

0%


$        3,957

7%








 GAAP Loss per share (diluted) 

$     (0.18)



$        (0.03)


 Share-based compensation 

0.11



0.12


 Amortization of intangible assets 

0.04



0.03


 Expenses related to M&A activities 

0.03



0.00


 Fair value adjustment for acquired deferred revenues write down 

0.00



0.00


 Non-GAAP Net income (Loss) per share (diluted) 

$     (0.00)



$         0.12









(1) Share-based compensation:







Cost of revenues

$       165



$          178



Research and development costs, net

845



956



Sales and marketing

1,491



1,632



General and administrative

1,291



1,213




$     3,792



$        3,979









 (2) Amortization of intangible assets 







Cost of revenues

$     1,081



$          799



Sales and marketing

216



131




$     1,297



$          930









 (3) Expenses related to M&A activities 







General and administrative 

$       351



$            33



Research and development costs, net

45



-



Sales and marketing

181



-



Financial expenses

264



-




$       841



$            33









 



TABLE  - 3


ALLOT COMMUNICATIONS LTD.


AND ITS SUBSIDIARIES


RECONCILIATION OF GAAP TO NON-GAAP  CONSOLIDATED  REVENUES


(U.S. dollars in thousands, except share and per share data)











Three Months Ended


Six Months Ended



March 31,


June 30,



2015


2014


2015


2014



(Unaudited)


(Unaudited)











GAAP Revenues

$   21,592


$ 28,166


$   51,124


$   56,450











Fair value adjustment for acquired deferred revenues write down

11


11


$           22


$           23











Non-GAAP Revenues

$   21,603


$ 28,177


$   51,146


$   56,473


 




TABLE  - 4



ALLOT COMMUNICATIONS LTD.



AND ITS SUBSIDIARIES



CONSOLIDATED  BALANCE  SHEETS



(U.S. dollars in thousands)















June 30,


December 31,




2015


2014




(Unaudited)


(Audited)






ASSETS






CURRENT ASSETS:






Cash and cash equivalents


$            39,218


$           19,180


Short term deposits


21,000


59,000


Marketable securities and restricted cash


60,423


54,271


Trade receivables, net


24,929


23,759


Other receivables and prepaid expenses


5,640


5,383


Inventories


7,454


10,109


Total current assets


158,664


171,702








LONG-TERM ASSETS:






Severance pay fund


282


262


Deferred taxes


1,856


1,716


Other assets 


3,542


4,948


Total long-term assets


5,680


6,926








PROPERTY AND EQUIPMENT, NET


5,610


5,957


GOODWILL AND INTANGIBLE ASSETS, NET


45,210


28,363








Total assets


$          215,164


$        212,948








LIABILITIES AND SHAREHOLDERS' EQUITY






CURRENT LIABILITIES:






Trade payables


$               5,594


$             6,300


Deferred revenues


12,144


12,704


Other payables and accrued expenses


13,361


14,524


Total current liabilities


31,099


33,528








LONG-TERM LIABILITIES:






Deferred revenues


5,256


4,158


Accrued severance pay


355


282


Other long term liabilities


4,080


0


Total long-term liabilities


9,691


4,440








SHAREHOLDERS' EQUITY


174,374


174,980








Total liabilities and shareholders' equity


$          215,164


$        212,948








 



TABLE  - 5


ALLOT COMMUNICATIONS LTD.


AND ITS SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS 


(U.S. dollars in thousands)








Three Months Ended


Six Months Ended


June 30,


June 30,


2015

2014


2015

2014


(Unaudited)


(Unaudited)







Cash flows from operating activities:












Net Loss

$                (6,024)

$                (620)


$            (6,059)

$            (1,008)

Adjustments to reconcile net income  to net cash provided by  operating activities:






Depreciation

634

762


1,397

1,562

Stock-based compensation related to options granted to employees

1,923

1,987


3,772

3,979

Amortization of intangible assets

785

465


1,234

930

Capital loss 

11

-


15

-

Decrease (Increase) in accrued severance pay, net

41

(7)


53

(3)

Decrease (Increase) in other assets

(188)

12


(366)

(70)

Decrease  in accrued interest and  amortization of premium on marketable securities 

173

37


473

245

Decrease in trade receivables

(2,300)

(2,372)


(2,125)

(6,878)

Decrease (Increase) in other receivables and prepaid expenses

1,378

301


(1,313)

199

Decrease (Increase) in inventories

(23)

(403)


1,765

(79)

Increase (Decrease) in long-term deferred taxes, net

(236)

56


(140)

56

Increase in trade payables

1,661

2,606


1,237

4,302

Increase (Decrease) in employees and payroll accruals

260

(57)


(149)

1,005

Increase (Decrease) in deferred revenues

283

(732)


383

364

Increase (Decrease) in other payables and accrued expenses

(727)

(629)


(435)

247







Net cash provided (used) by operating activities

(2,349)

1,406


(258)

4,851







Cash flows from investing activities:












Redemption of short-term deposits 

25,500

22,000


38,000

29,500

Purchase of property and equipment

(418)

(697)


(1,084)

(1,613)

Investment in marketable securities

(11,548)

(18,081)


(18,275)

(18,981)

Proceeds from redemption or sale of marketable securities

6,079

3,363


11,607

4,264

Acquisitions

-

-


(10,052)

-

Loan provided to third party, net

-

170


-

(2,393)







Net cash provided by investing activities

19,613

6,755


20,196

10,777







Cash flows from financing activities:












Exercise of employee stock options 

24

632


100

1,388







Net cash provided by financing activities

24

632


100

1,388













Increase in cash and cash equivalents

17,288

8,793


20,038

17,016

Cash and cash equivalents at the beginning of the period

21,930

51,036


19,180

42,813







Cash and cash equivalents at the end of the period

$                39,218

$             59,829


$            39,218

$            59,829







 

 

 

SOURCE Allot



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