Allot Communications Reports Non-GAAP 17.2% Revenue Growth for First Quarter of 2014 Non-GAAP Revenues reach $28.3 million, compared with $24.2 million in first quarter of 2013

HOD HASHARON, Israel, April 30, 2014 /PRNewswire/ -- 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 its first quarter 2014 results, with non-GAAP revenues reaching $28.3 million.

Other First Quarter Highlights:

  • Non-GAAP revenues grew 17.2% year on year and 3.5% sequentially.
  • Non-GAAP gross margin was 73% (71% on a GAAP basis).
  • Non-GAAP operating margin was 7% (2% operating loss on a GAAP basis).
  • Book-to-bill above one.
  • Generated $3.4 million of operating cash flow. Net cash as of March 31st 2014 totals $122.2 million.

Financial Results:

On a non-GAAP basis, total revenues for the first quarter of 2014 reached $28.3 million, compared with $24.1 million of revenue reported for the first quarter of 2013 and $27.3 million of revenue reported for the fourth quarter of 2013.  On a non-GAAP basis, net profit for the first quarter of 2014 was $2.1 million, or $0.06 per basic and diluted share. This compares with non-GAAP net profit of $3.2 million, or $0.10 per basic and $0.09 per diluted share, in the fourth quarter of 2013 and a non-GAAP net profit of $0.6 million, or $0.02 per basic and diluted share, in the first quarter of 2013.

Total GAAP revenues for the first quarter of 2014 reached $28.3 million compared to $24.1 million of revenue reported for the first quarter of 2013 and $27.3 million of revenue reported for the fourth quarter of 2013. On a GAAP basis, the net loss for the first quarter of 2014 was $0.4 million, or of $0.01 per basic and diluted share. This compares with a net profit of $1.2 million, or $0.04 per basic and diluted share, in the fourth quarter of 2013 and a net loss of $1.8 million, or $0.06 per basic and diluted share, in the first quarter of 2013.

Key Quarterly Achievements:

  • During the quarter, large orders were received from 25 service providers, five of which are new customers.
  • 14 of the large orders came from mobile-service providers and 11 were from fixed-line service providers.
  • Introduced the new Allot Service Gateway Tera platform which has already received $9 million orders from four different mobile and fixed line operators worldwide.
  • Won a new video optimization contract from an Asian Tier-1 mobile operator.
  • Received its first $1 million, ClearSee Big-Data Analytics Solution, purchase order from a Tier-1 mobile and fixed operator.

"During the first quarter 2014 we continued to execute well on all fronts and produced a strong inflow of large orders, as well as expanded our customer base, an achievement, which we believe, should be beneficial for Allot in the mid as well as the long-term horizon. We reached a record revenues level for a first quarter and book to bill was above one for a fifth time in a row," said Rami Hadar, Allot Communications' President and CEO. "Our well-diversified, differentiated VAS offering is one of the key catalysts for the demand that we experience from service providers and we look forward to continuing to address the needs of our Tier-1 customers with our innovative service generating VAS suite."

Conference Call & Webcast

The Allot management team will host a conference call to discuss first quarter 2014 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: +1646 254 3368, UK: +44(0)203 4271933, Israel: +97237217906, participant code 9702862.

A replay of the conference call will be available from 12:00 AM ET on April 30, 2014 for 30 days. To access the replay, please dial: US: +1 347 366 9565; UK: +44 (0)20 3427 0598, access code: 9702862. 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) is a leading global provider of intelligent broadband solutions that put mobile, fixed and enterprise networks at the center of the digital lifestyle and work style. Allot's DPI-based solutions identify and leverage the business intelligence in data networks, empowering operators to analyze, protect, improve and enrich the digital lifestyle services they deliver. Allot's unique blend of innovative technology, proven know-how, collaborative approach to industry standards and partnerships enables service providers 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 discrepancy between GAAP and non-GAAP revenues is related to the acquisitions made by the Company during the year and represents revenues adjusted for the impact of the fair value adjustment to acquired deferred revenue related to purchase accounting. Non-GAAP net profit is defined as GAAP net profit 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, regulatory matters, acquisition-related expenses 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 may contain 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 expressed or implied by 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; 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; 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

 

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




March 31,




2014


2013




(Unaudited)









Revenues

$      28,284


$      24,114



Cost of revenues

8,195


6,740



Gross profit  

20,089


17,374









Operating expenses:






Research and development costs, net

7,221


6,902



Sales and marketing

10,497


9,827



General and administrative

2,887


2,638



Total operating expenses

20,605


19,367



Operating loss

(516)


(1,993)



Financial and other income, net

149


187



Loss before income tax expenses

(367)


(1,806)









Tax expenses

21


41



Net loss

(388)


(1,847)









 Basic net loss per share

$         (0.01)


$        (0.06)















 Diluted net loss per share

$         (0.01)


$        (0.06)









Weighted average number of shares






used in computing basic  net






earnings per share

32,939,195


32,561,977









Weighted average number of shares






used in computing diluted net






earnings per share

32,939,195


32,561,977









 

TABLE  - 2

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




March 31,




2014


2013




(Unaudited)








 GAAP net loss as reported 

$          (388)


$         (1,847)







Non-GAAP adjustments





Fair value adjustment for acquired deferred revenues write down

12


37


Expenses recorded for stock-based compensation






Cost of revenues

88


86



Research and development costs, net

469


411



Sales and marketing

821


746



General and administrative

614


586


Expenses related to M&A activities and compliance with regulatory matters (*)






General and administrative 

8


12



Research and development costs, net

-


6


Intangible assets amortization 






Cost of revenues

399


504



Sales and marketing

66


58







Total adjustments

2,477


2,446







 Non-GAAP net profit  

$        2,089


$               599








Non- GAAP basic net profit per share

$           0.06


$              0.02








Non- GAAP diluted net profit per share

$           0.06


$              0.02














Weighted average number of shares





used in computing basic net





earnings per share

32,939,195


32,561,977








Weighted average number of shares





used in computing diluted net





earnings per share

33,895,273


33,506,441














(*) Mostly legal, finance and compensation expenses related to the acquisition


 


TABLE  - 3

ALLOT COMMUNICATIONS LTD.

AND ITS SUBSIDIARIES

RECONCILATION OF GAAP TO NON-GAAP CONSOLIDATED REVENUES

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







Three Months Ended



March 31,



2014


2013



(Unaudited)







GAAP Revenues

$   28,284


$ 24,114







Fair value adjustment for acquired deferred revenues write down

12


37







Non-GAAP Revenues

$   28,296


$ 24,151







 

TABLE  - 4


ALLOT COMMUNICATIONS LTD.


AND ITS SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS


(U.S. dollars in thousands)
















March 31,


December 31,




2014


2013




(Unaudited)


(Audited)






ASSETS






CURRENT ASSETS:






Cash and cash equivalents


$            51,036


$           42,813


Short term deposits


30,500


38,000


Marketable securities and restricted cash


40,639


40,798


Trade receivables, net


21,414


16,908


Other receivables and prepaid expenses


8,906


8,218


Inventories


13,474


13,798


Total current assets


165,969


160,535








LONG-TERM ASSETS:






Severance pay fund


260


254


Deferred taxes


1,602


1,602


Other assets 


2,726


771


Total long-term assets


4,588


2,627








PROPERTY AND EQUIPMENT, NET


5,990


5,874


GOODWILL AND INTANGIBLE ASSETS, NET


29,756


30,221








Total assets


$          206,303


$        199,257








LIABILITIES AND SHAREHOLDERS' EQUITY






CURRENT LIABILITIES:






Trade payables


$               4,887


$             3,191


Deferred revenues


13,527


12,504


Other payables and accrued expenses


12,851


10,906


Total current liabilities


31,265


26,601








LONG-TERM LIABILITIES:






Deferred revenues


2,520


2,447


Accrued severance pay


292


282


Total long-term liabilities


2,812


2,729








SHAREHOLDERS' EQUITY


172,226


169,927








Total liabilities and shareholders' equity


$          206,303


$        199,257








 

TABLE  - 5


ALLOT COMMUNICATIONS LTD.


AND ITS SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS 


(U.S. dollars in thousands)







Three Months Ended



March 31,



2014

2013



(Unaudited)






Cash flows from operating activities:








Net Loss

$                   (388)

$             (1,847)


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




Depreciation

800

880


Stock-based compensation related to options granted to employees

1,992

1,829


Amortization of intangible assets

465

562


Decrease in accrued severance pay, net

4

24


Increase in other assets

(82)

(29)


Decease in accrued interest and  amortization of premium on marketable securities 

208

11


Increase in trade receivables

(4,506)

(5,351)


Increase in other receivables and prepaid expenses

(102)

(44)


Decrease in inventories

324

320


Increase (decrease) in trade payables

1,696

(1,381)


Increase (decrease) in employees and payroll accruals

1,062

(722)


Increase (decrease) in deferred revenues

1,096

(2,988)


Increase in other payables and accrued expenses

876

1,173






Net cash provided by (used in) operating activities

3,445

(7,563)






Cash flows from investing activities:








Decrease in restricted deposit

-

4


Redemption of short-term deposits 

7,500

61,042


Purchase of property and equipment

(916)

(856)


Investment in marketable securities

(900)

(15,662)


Proceeds from redemption or sale of marketable securities

901

2,279


Loan provided to third party, net

(2,563)

-






Net cash provided by investing activities

4,022

46,807






Cash flows from financing activities:








Exercise of employee stock options 

756

164






Net cash provided by financing activities

756

164










Increase in cash and cash equivalents

8,223

39,408


Cash and cash equivalents at the beginning of the period

42,813

50,026






Cash and cash equivalents at the end of the period

$                51,036

$             89,434










 

SOURCE Allot Communications Ltd.



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