Allot Communications Reports non-GAAP Revenues of $21.5 Million for Second Quarter of 2013

HOD HASHARON, Israel, Aug. 6, 2013 /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 second quarter 2013 results, with non-GAAP revenues reaching $21.5 million ($21.2 million on a GAAP basis).

Second quarter highlights:

  • Non-GAAP revenues were $21.5 million ($21.2 million on a GAAP basis).
  • Non-GAAP gross margin was 76% (73% on a GAAP basis).
  • All-time high, record booking, leading to book-to-bill significantly above 1. Booking's level was more than 20% higher than the second quarter of 2012.
  • Won a multi-million USD contract with an APAC Tier 1 fixed-line operator in a competitive deal against other pure play DPI vendors.
  • A $5 million deal with an EMEA Tier 1 fixed-line operator, has been delivered however, revenue recognition has been delayed to the second half of 2013.

Financial results:

On a non-GAAP basis, total revenues for the second quarter of 2013 reached $21.5 million, compared with $26.4 million of revenue reported for the second quarter of 2012 and $24.2 million of revenue reported for the first quarter of 2013.  On a non-GAAP basis, net loss for the second quarter of 2013 was $0.9 million, or ($0.03) per basic and diluted share. This compares with non-GAAP net profit of $5.0 million, or $0.16 per basic share, and $0.15 per diluted share, in the second quarter of 2012 and 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 second quarter of 2013 reached $21.2 million compared to $26.4 million of revenue reported for the second quarter of 2012 and $24.1 million of revenue reported for the first quarter of 2013. On a GAAP basis, the net loss for the second quarter of 2013 was $3.9 million, or a net loss of ($0.12) per basic and diluted share. This compares with net profit of $2.7 million, or $0.08 per basic and diluted share, in the second quarter of 2012, and a net loss of $1.8 million, or a net loss of $0.06 per basic and diluted share, in the first quarter of 2013.

Key quarterly achievements:

  • During the quarter, large orders were received from 13 service providers, 3 of which were new customers
  • 6 of the large orders came from mobile-service providers, two of which were new customers
  • Secured orders from three of the world's top ten telecommunication operators to assist in their LTE network rollouts
  • Won a $2 million new account with a Tier 1 EMEA mobile operator, for the delivery of service gateway and video caching combination
  • VAS accounted for 26% of total bookings.
  • A multi million dollars, follow-on order with a Tier 1, U.S. mobile operator, announced early second quarter exceeded $10 million.

As of June 30, 2013, cash, cash equivalents, short-term deposits and marketable securities totaled $134.7 million with no debt.

"Our second quarter revenue came in 11% below first quarter's level," commented Rami Hadar, Allot Communications' President and Chief Executive Officer. "The sequential revenues' decline was mostly the result of unfulfilled revenue recognition terms of a $5 million deal with an EMEA Tier 1 operator. We expect this deal to materialize during the second half of the year. We are encouraged by the surge in demand for our DPI solution, as well as for our VAS, as demonstrated by the all-time, record booking level achieved during the quarter. In the second quarter we made good progress with our Tier 1 mobile U.S. operator, increasing the announced follow-on order to more than $10 million. We expect that the booking results of the last two quarters will set a good foundation to resumed growth in the following quarters."  

Conference Call & Webcast

The Allot management team will host a conference call to discuss second quarter 2013 earnings results today at 8:30 a.m. ET, 3:30 p.m. Israel time.

To access the conference call, please dial one of the following numbers: US: +1 212 444 0896, UK: +44(0)20 3427 1911, Israel: +972-3-721 9510, participant code 2638006.

A replay of the conference call will be available from 12:01 a.m. ET on August 6th, 2013 for 30 days. To access the replay, please dial: US: + 1 347 366 9565, UK: + 44 (0)20 3427 0598, access code: 2638006.

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: ALLT) is a leading provider of intelligent data traffic optimization and monetization solutions for fixed and mobile broadband operators and large enterprises. Allot's scalable, carrier-grade solutions provide the visibility, topology awareness, security, application control and subscriber management that are vital to managing fixed and mobile data, enhancing user experience, containing operating costs, and enabling service providers to generate revenues from their broadband networks. 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. For more information, please visit http://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

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: our ability to increase the breadth and functionality of the Service Gateway platform through additional partnerships, 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.

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



Six Months Ended


June 30,



June 30,


2013


2012



2013


2012


(Unaudited)



(Unaudited)










Revenues

$             21,212


$             26,405



$             45,326


$             50,622

Cost of revenues

5,753


7,755



12,493


14,656

Gross profit  

$             15,459


$             18,650



$             32,833


$             35,966










Operating expenses:









Research and development costs, net

6,898


5,332



13,800


9,342

Sales and marketing

9,896


8,126



19,723


15,881

General and administrative

2,666


2,659



5,304


5,433

Total operating expenses

19,460


16,117



38,827


30,656

Operating profit (loss)

$            (4,001)


$             2,533



$            (5,994)


$             5,310

Financial and other income, net

168


187



355


649

Profit (loss) before income tax expenses

$            (3,833)


$             2,720



$            (5,639)


$             5,959










Tax expenses

32


21



73


24

Net profit (loss)

$            (3,865)


$             2,699



$            (5,712)


$             5,935










 Basic net profit (loss) per share

$              (0.12)


$             0.08



$              (0.18)


$            0.19



















 Diluted net profit (loss) per share

$              (0.12)


$             0.08



$              (0.18)


$            0.18










Weighted average number of shares









used in computing basic net









earnings per share

32,630,280


31,873,752



32,596,317


31,548,294










Weighted average number of shares









used in computing diluted net









earnings per share

32,630,280


33,356,308



32,596,317


33,169,640










 

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


Six Months Ended



June 30,


June 30,



2013


2012


2013


2012



(Unaudited)


(Unaudited)










 GAAP net profit (loss) as reported 

$          (3,865)


$             2,699


$          (5,712)


$               5,935










Non-GAAP adjustments








Fair value adjustment for acquired deferred revenues write down (Revenues)

276


-


313


-

Expenses recorded for stock-based compensation









Cost of revenues

115


52


201


97


Research and development costs, net

412


240


823


428


Sales and marketing

874


446


1,620


763


General and administrative

649


288


1,235


454

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









General and administrative 

21


666


33


1,711


Research and development costs, net

22


250


28


250


Sales and marketing

12


93


12


93

Intangible assets amortization 









Cost of revenues

503


262


1,006


293


S&M

57


-


115


-

Total adjustments

$             2,941


$             2,297


$             5,386


$               4,089










 Non-GAAP net profit (loss) 

$              (924)


$             4,996


$              (326)


$             10,024










Non- GAAP basic net profit (loss)  per share

$             (0.03)


$                0.16


$             (0.01)


$                 0.32










Non- GAAP diluted net profit (loss) per share

$             (0.03)


$                0.15


$             (0.01)


$                 0.30



















Weighted average number of shares








used in computing basic net








earnings per share

32,630,280


31,873,752


32,596,317


31,548,294










Weighted average number of shares








used in computing diluted net








earnings per share

32,630,280


33,662,390


32,596,317


33,401,374



















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










 

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


June 30,


June 30,


2013


2012


2013


2012


(Unaudited)


(Unaudited)









GAAP Revenues

$   21,212


$ 26,405


$ 45,326


$ 50,622









Fair value adjustment for acquired deferred revenues write down

276


-


313


-









Non-GAAP Revenues

$   21,488


$ 26,405


$ 45,639


$ 50,622









 

TABLE  - 4

ALLOT COMMUNICATIONS LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands)













June 30,


December 31,



2013


2012



(Unaudited)


(Audited)




ASSETS





CURRENT ASSETS:





Cash and cash equivalents


$          92,453


$           50,026

Short term deposits


2,000


78,042

Marketable securities and restricted cash


40,296


14,988

Trade receivables, net


22,719


20,236

Other receivables and prepaid expenses


8,461


6,815

Inventories


10,744


9,963

Total current assets


$        176,673


$         180,070






LONG-TERM ASSETS:





Severance pay fund


232


213

Deferred Taxes


1,525


1,525

Other assets 


252


239

Total long-term assets


$            2,009


$             1,977






PROPERTY AND EQUIPMENT, NET


6,276


6,609

GOODWILL AND INTANGIBLE ASSETS, NET


32,014


33,136






Total assets


$         216,972


$         221,792






LIABILITIES AND SHAREHOLDERS' EQUITY





CURRENT LIABILITIES:





Trade payables


5,030


4,809

Deferred revenues


10,490


13,829

Other payables and accrued expenses


14,823


13,947

Liability related to settlement of OCS grants


15,886


15,886

Total current liabilities


$           46,229


$           48,471






LONG-TERM LIABILITIES:





Deferred revenues


3,226


3,945

Accrued severance pay


271


254

Total long-term liabilities


$             3,497


$             4,199






SHAREHOLDERS' EQUITY


167,246


169,122






Total liabilities and shareholders' equity


$         216,972


$         221,792






 

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,


2013

2012


2013

2012


(Unaudited)


(Unaudited)







Cash flows from operating activities:












Net income (Loss)

$          (3,865)

$           2,699


$          (5,712)

$           5,935

Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:






Depreciation

867

718


1,747

1,363

Stock-based compensation related to options granted to employees

2,050

1,026


3,879

1,742

Amortization of intangible assets

560

262


1,122

293

Capital loss 

14

-


14

4

Decrease (Increase) in accrued severance pay, net

(26)

13


(2)

7

Decrease (Increase) in other assets

16

2


(13)

1

Decrease in accrued interest and amortization of premium on marketable securities 

46

11


57

48

Increase (Decrease) in trade receivables

2,868

(1,112)


(2,483)

(5,499)

Decrease (Increase) in other receivables and prepaid expenses

(1,625)

1,402


(1,669)

1,626

Decrease (Increase) in inventories

(1,101)

472


(781)

321

Increase (Decrease) in trade payables

1,602

(763)


221

2,492

Increase (Decrease) in employees and payroll accruals

(538)

113


(1,260)

378

Decrease in deferred revenues

(1,070)

(2,847)


(4,058)

(1,636)

Increase in other payables and accrued expenses

963

2,794


2,136

2,117







Net cash provided by (used in) operating activities

$             761

$            4,790


$          (6,802)

$            9,192







Cash flows from investing activities:












Decrease (Increase) in restricted deposit

(3)

65


1

21

Redemption of short-term deposits 

15,000

-


76,042

-

Investment in short-term deposit

-

(65,000)


-

(47,000)

Purchase of property and equipment

(572)

(766)


(1,428)

(1,469)

Investment in marketable securities

(13,704)

(1,000)


(29,366)

(1,251)

Proceeds from redemption or sale of marketable securities

1,432

750


3,711

1,200

Acquisitions

-

(10,399)


-

(10,399)

Loan to purchased Subsidiary

-

(1,000)


-

(1,000)







Net cash provided by (used in) investing activities

$           2,153

$          (77,350)


$         48,960

$          (59,898)







Cash flows from financing activities:












Exercise of employee stock options 

105

1,741


269

4,107







Net cash provided by financing activities

$             105

$             1,741


$             269

$             4,107













Increase (decrease) in cash and cash equivalents

3,019

(70,819)


42,427

(46,599)

Cash and cash equivalents at the beginning of the period

89,434

140,902


50,026

116,682







Cash and cash equivalents at the end of the period

$          92,453

$            70,083


$         92,453

$           70,083







 

SOURCE Allot Communications Ltd.



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