Allot Communications Reports 36% Increase in Revenues to $13.6 Million for the Second Quarter of 2010
EPS Increases to $0.03 on Non-GAAP Basis
BOSTON, Massachusetts, August 10, 2010 /PRNewswire-FirstCall/ --
Key highlights:
- Second quarter revenues reached $13.6 million, a 36% increase over the
second quarter of 2009
- Second quarter non-GAAP net income of $786,000; non-GAAP EPS grows to
$0.03 from $0.01 in the first quarter 2010
- Cash and cash equivalents totaled $55.4 million; entire ARS portfolio
sold during the quarter for $12.25 million
- Allot receives $4.5 million order from a global Tier 1 fixed line
operator during the quarter
Allot Communications Ltd. (NASDAQ: ALLT), a leading supplier of service optimization and revenue generation solutions for fixed and mobile broadband service providers worldwide, today announced that sales, as well as profitability on a non-GAAP basis, continued to increase for the second quarter of 2010.
Total revenues for the second quarter of 2010 reached $13.6 million, a 36% increase from the $10 million of revenues reported for the second quarter of 2009, and a 9% increase from the $12.5 million of revenues reported for the first quarter of 2010. On a GAAP basis, net loss for the second quarter of 2010 was $7.4 million, or $0.33 per share (basic and diluted), primarily as a result of the sale of the Company's ARS portfolio as described below. This compares with a net loss of $1.0 million, or $0.05 per share (basic and diluted), in the second quarter of 2009, and a net loss of $446 thousand, or $0.02 per share (basic and diluted), in the first quarter of 2010.
On a non-GAAP basis, excluding the impact of share-based compensation, amortization of certain intangibles and the loss derived from sale of its ARS portfolio during the quarter, non-GAAP net income for the second quarter of 2010 totaled $786,000 or $0.03 per share (basic and diluted), compared with a non-GAAP net loss of $359,000, or $0.02 loss per share (basic and diluted), for the second quarter of 2009 and non-GAAP income of $177,000, or $0.01 per share (basic and diluted), for the first quarter of 2010. These non-GAAP measures should be considered in addition to, and not as a substitute for, comparable GAAP measures. A full reconciliation between GAAP and non-GAAP results is provided in the accompanying Tables 2 and 3. The Company provides these non-GAAP financial measures because it believes that 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 that they are useful to investors in enhancing an understanding of the Company's operating performance.
"Allot continues its strong revenue growth while increasing non-GAAP profitability," commented Rami Hadar, Allot Communications' President and Chief Executive Officer. "We are seeing continued demand for our Service Gateway platform, which offers service providers the ability to save on operating expenses while enabling them to offer advanced, revenue-generating services to subscribers. We believe that our growing funnel of opportunities, coupled with our increasing success with Tier 1 service providers, primarily in the mobile market, positions Allot for continued growth going forward."
Recently, the Company achieved the following significant goals:
- Announced a $4.5 million order from a Tier 1 fixed line
operator;
- During the quarter, concluded 9 large deals with service
providers, of which 4 represented new customers and 5 represented
expansion deals; and
- Of these deals, 4 were with mobile operators.
As of June 30, 2010, cash and cash equivalents totaled $55.4 million. During the quarter, the Company sold off its entire ARS portfolio for total price of $12.25 million, which payment was received and recorded during the quarter. As a result, the Company recorded a net loss of $7.7 million, of which $1.9 million represented the difference between valuation of the portfolio on March 31, 2010 and the actual sale price, and a net amount of $5.8 million that was recorded in the shareholders' equity section as an unrealized loss and was reclassified to the statement of operations. The $5.8 million represents substantial component of other cumulative loss of previously recognized impairments that were reclassified in 2009 to the shareholders' equity following the adoption in April 2009 of the new FASB's updated guidance for investment in marketable securities.
Conference Call & Webcast
The Allot management team will host a conference call to discuss its second quarter 2010 earnings results on Tuesday, August 10, 2010, at 8:30 AM EDT, 3:30 PM Israel time. The quarterly results will be published prior to the conference call.
To access the conference call, please dial one of the following numbers: US: +1-212-444-0412, UK: +44(0)20-7806-1951, Israel: +972-3721-9509, participant code 1845729.
A replay of the conference call will be available from 12:01 am EDT on August 11, 2010 through September 12, 2010 at 11:59 pm EDT. To access the replay, please dial: US: +1-347-366-9565, UK: +44(0)20-7111-1244, access code: 1845729.
A live webcast of the conference call can be accessed on the Allot Communications website at http://www.allot.com. The webcast will also be archived on the website following the conference call.
About Allot Communications
Allot Communications Ltd. (NASDAQ: ALLT) is a leading provider of intelligent IP service optimization solutions for fixed and mobile broadband operators and large enterprises. Allot's rich portfolio of solutions leverages dynamic actionable recognition technology (DART) to transform broadband pipes into smart networks that can rapidly and efficiently deploy value added Internet services. Allot's scalable, carrier-grade solutions provide the visibility, topology awareness, security, application control and subscriber management that are vital to managing Internet service delivery, enhancing user experience, containing operating costs, and maximizing revenue in broadband networks. For more information, please visit http://www.allot.com.
Safe Harbor Statement
Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to the Company's plans, objectives and expectations for future operations. These forward-looking statements are based upon management's current estimates and projections of future results or trends. Actual results may differ materially from those projected as a result of certain risks and uncertainties. These factors include, but are not limited to: Allot's ability to sustain growth going forward based on the Company's anticipated funnel of opportunities, coupled with its increasing success with Tier 1 service providers, primarily in the mobile market, and changes in general economic and business conditions; the Company's inability to develop and introduce new technologies, products and applications; loss of market; 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. 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.
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,
2010 2009 2010 2009
(Unaudited) (Unaudited)
Revenues $ 13,626 $ 10,009 $ 26,097 $ 19,378
Cost of revenues 3,915 2,784 7,270 5,310
Gross profit 9,711 7,225 18,827 14,068
Operating expenses:
Research and development
costs, net 2,728 2,100 5,316 4,507
Sales and marketing 5,413 4,853 10,664 9,257
General and administrative 1,305 1,466 2,637 2,859
Total Operating expenses 9,446 8,419 18,617 16,623
Operating Income (Loss) 265 (1,194) 210 (2,555)
Financial and other
income (expenses), net (7,555) 312 (7,977) (1,212)
Loss before income
tax expenses (7,290) (882) (7,767) (3,767)
Income tax expenses 127 112 96 116
Net Loss (7,417) (994) (7,863) (3,883)
Basic and diluted net
loss per share $ (0.33) $ (0.05) $ (0.35) $ (0.18)
Weighted average number
of shares used in
computing basic and
diluted net
loss per share 22,711,470 22,070,416 22,572,070 22,069,909
ALLOT COMMUNICATIONS LTD.
AND ITS SUBSIDIARIES
RECONCILATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2010 2009 2010 2009
(Unaudited) (Unaudited)
GAAP net loss as reported $ (7,417) $ (994) $ (7,863) $ (3,883)
Non-GAAP adjustments
Expenses recorded for
stock-based compensation
Cost of revenues 22 28 51 53
Research and
development costs,
net 93 89 186 178
Sales and marketing 212 197 442 306
General and administrative 143 292 376 579
Core technology
amortization- cost
of revenues 30 30 60 58
Total adjustments to
operating income (loss) 500 635 1,115 1,174
Impairment of auction
rate securities
Financial and other
expenses, net 7,703 - 7,711 1,575
Total adjustments 8,203 635 8,826 2,749
Non-GAAP net earnings (Loss) $ 786 $ (359) $ 963 $ (1,134)
Non- GAAP basic net
(Loss) per share $ 0.03 $ (0.02) $ 0.04 $ (0.05)
Non- GAAP diluted net
(Loss) per share $ 0.03 $ (0.02) $ 0.04 $ (0.05)
Weighted average number
of shares used in
computing basic net
earnings per share 22,711,470 22,070,416 22,572,070 22,069,909
Weighted average number
of shares used in
computing diluted net
earnings per share 24,266,272 22,070,416 23,960,442 22,069,909
ALLOT COMMUNICATIONS LTD.
AND ITS SUBSIDIARIES
NON-GAAP 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,
2010 2009 2010 2009
(Unaudited) (Unaudited)
Revenues $ 13,626 $ 10,009 $ 26,097 $ 19,378
Cost of revenues 3,863 2,726 7,159 5,199
Gross profit 9,763 7,283 18,938 14,179
Operating expenses:
Research and development
costs, net 2,635 2,011 5,130 4,329
Sales and marketing 5,201 4,657 10,222 8,951
General and administrative 1,162 1,174 2,261 2,280
Total Operating expenses 8,998 7,842 17,613 15,560
Operating Income (Loss) 765 (559) 1,325 (1,381)
Financial and other income
(expenses), net 148 312 (266) 363
Loss (income) before income
tax expenses 913 (247) 1,059 (1,018)
Income tax expenses 127 112 96 116
Net Income (Loss) 786 (359) 963 (1,134)
Basic and diluted net
loss per share $ 0.03 $ (0.02) $ 0.04 $ (0.05)
Weighted average number
of shares
used in computing basic net
earnings per share 22,711,470 22,070,416 22,572,070 22,069,909
Weighted average number
of shares used in computing
diluted net earnings
(loss) per share 24,266,272 22,070,416 23,960,442 22,069,909
ALLOT COMMUNICATIONS LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
June 30, December 31,
2010 2009
(Unudited) (Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 49,391 $ 36,470
Short term deposits and restricted cash 5,968 2,324
Trade receivables, net 7,096 7,842
Other receivables and prepaid expenses 2,428 3,618
Inventories 7,531 5,046
Total current assets 72,414 55,300
LONG-TERM ASSETS:
Marketable securities - 14,490
Severance pay fund 264 3,410
Other assets 424 430
Total long-term assets 688 18,330
PROPERTY AND EQUIPMENT, NET 5,793 5,674
GOODWILL AND INTANGIBLE ASSETS, NET 3,577 3,639
Total assets $ 82,472 $ 82,943
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $ 4,654 $ 3,142
Deferred revenues 7,136 5,467
Other payables and accrued expenses 8,024 8,512
Total current liabilities 19,814 17,121
LONG-TERM LIABILITIES:
Deferred revenues 3,465 2,046
Accrued severance pay 153 3,364
Total long-term liabilities 3,618 5,410
SHAREHOLDERS' EQUITY 59,040 60,412
Total liabilities and shareholders' equity $ 82,472 $ 82,943
Investor Relations Contact:
Jay Kalish
Executive Director Investor Relations
International access code +972-54-221-1365
[email protected]
SOURCE Allot Communications Ltd.
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