Allot Communications Reports Non-GAAP Revenues of $24.1 Million for the Third Quarter of 2013

HOD HASHARON, Israel, Oct. 29, 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 third quarter 2013 results, with non-GAAP revenues reaching $24.1 million ($24.0 million on a GAAP basis).

Third Quarter Highlights:

  • Non-GAAP revenues were $24.1 million ($24.0 million on a GAAP basis).
  • Non-GAAP gross margin was 77% (73% on a GAAP basis).
  • Non-GAAP operating margin was 4% (9% loss on a GAAP basis).
  • Book-to-bill above one.
  • Retired $16 million of OCS liability.

Financial Results:

On a non-GAAP basis, total revenues for the third quarter of 2013 reached $24.1 million, compared with $28.0 million of revenue reported for the third quarter of 2012 and $21.5 million of revenue reported for the second quarter of 2013.  On a non-GAAP basis, net profit for the third quarter of 2013 was $1.1 million, or $0.03 per basic and diluted share. This compares with non-GAAP net profit of $5.1 million, or $0.16 per basic share, and $0.15 per diluted share, in the third quarter of 2012 and non-GAAP net loss of $0.9 million, or $0.03 per basic and diluted share, in the second quarter of 2013.

Total GAAP revenues for the third quarter of 2013 reached $24.0 million compared to $27.8 million of revenue reported for the third quarter of 2012 and $21.2 million of revenue reported for the second quarter of 2013. On a GAAP basis, the net loss for the third quarter of 2013 was $1.9 million, or a net loss of $0.06 per basic and diluted share. This compares with net profit of $2.4 million, or $0.07 per basic and diluted share, in the third quarter of 2012, and a net loss of $3.9 million, or a net loss of $0.12 per basic and diluted share, in the second quarter of 2013.

Key Quarterly Achievements:

  • During the quarter, large orders were received from 14 service providers, two of which are new customers.
  • Four of the large orders came from mobile-service providers, eight were from fixed-line service providers and two from enterprises.
  • Received a $12 million expansion order from a tier-1 fixed line operator in APAC.
  • Received a multimillion dollar order from major U.S.-based cloud provider to monitor and guarantee SLAs for Cloud-based services.

As of September 30, 2013, cash, cash equivalents, short-term deposits and marketable securities totaled $115 million with no debt.

"The booking environment remained strong during the third quarter and book-to-bill was once again above one, despite the weakness often associated with third quarter seasonality. The business momentum strength is equally felt both in our PCC as well as our VAS activities," said Rami Hadar, Allot Communications' President and Chief Executive Officer. "Today we announced that we have won a $12 million project with a tier 1, fixed line operator from APAC. This deal includes a bundle of our Allot Sigma Service Gateway, our Allot ServiceProtector, VAS security offering and intelligent steering. We view this deal as another successful testament to our service gateway and VAS vision."

Conference Call & Webcast

The Allot management team will host a conference call to discuss third quarter 2013 earnings results today at 8:30 a.m. ET, 2:30 p.m. Israel time.

To access the conference call, please dial one of the following numbers: US: +1646 254 3360, UK: +44(0)20 3427 1902, Israel: +9723763 0147, participant code 7266032.

A replay of the conference call will be available from 12:00 AM ET on October 29, 2013 through November 27, 2013 at 6:59 PM ET time. To access the replay, please dial: US:  +1 347 366 9565; UK: +44 (0) 20 3427 0598, access code: 7266032.

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 2 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.

Forward Looking 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



Nine Months Ended


September 30,



September 30,


2013


2012



2013


2012


(Unaudited)



(Unaudited)










Revenues

$             23,949


$             27,768



$             69,274


$             78,390

Cost of revenues

6,568


8,464



19,061


23,119

Gross profit  

17,381


19,304



50,213


55,271










Operating expenses:









Research and development costs, net

6,599


6,069



20,399


15,411

Sales and marketing

9,982


8,539



29,704


24,420

General and administrative

2,942


2,671



8,246


8,104

Total operating expenses

19,523


17,279



58,349


47,935

Operating profit (loss)

(2,142)


2,025



(8,136)


7,336

Financial and other income, net

229


382



584


1,030

Profit (loss) before income tax benefit

(1,913)


2,407



(7,552)


8,366










Tax expenses

17


19



90


43

Net profit (loss)

(1,930)


2,388



(7,642)


8,323










 Basic net profit (loss) per share

$              (0.06)


$                0.07



$              (0.23)


$                0.26



















Diluted net profit (loss) per share

$              (0.06)


$                0.07



$              (0.23)


$                0.25










Weighted average number of shares









used in computing basic net









earnings per share

32,710,885


32,260,061



32,634,926


31,787,646










Weighted average number of shares









used in computing diluted net









earnings per share

32,710,885


33,471,098



32,634,926


33,086,932










 

 


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


Nine Months Ended



September 30,


September 30,



2013


2012


2013


2012



(Unaudited)


(Unaudited)










 GAAP net profit (loss) as reported 

$            (1,930)


$             2,388


$            (7,642)


$             8,323










Non-GAAP adjustments

















Fair value adjustment for acquired deferred revenues write down

147


258


460


258

Expenses recorded for stock-based compensation









Cost of revenues

88


57


289


154


Research and development costs, net

428


329


1,251


757


Sales and marketing

796


588


2,415


1,351


General and administrative

705


342


1,940


796

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









General and administrative (G&A)

3


354


36


2,065


Research and development costs, net

-


93


28


343


Sales and marketing

-


55


12


148

Intangible assets amortization 









Cost of revenues

587


641


1,593


934


S&M

58


17


173


17

Expense related to settlement of OCS grants (Cost of revenues)

250


-


250


-










Total adjustments

3,062


2,734


8,447


6,823










 Non-GAAP net profit  

$               1,132


$             5,122


$                 805


$             15,146










Non- GAAP basic  net profit  per share

$                 0.03


$               0.16


$                0.02


$                0.48










Non- GAAP diluted net profit per share

$                 0.03


$               0.15


$                0.02


$                0.45



















Weighted average number of shares








used in computing basic net








earnings per share

32,710,885


32,260,061


32,634,926


31,787,646










Weighted average number of shares








used in computing diluted net








earnings per share

33,579,948


33,848,560


33,453,921


33,347,232



















(*) 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


Nine Months Ended




September 30,


September 30,




2013


2012


2013


2012




(Unaudited)


(Unaudited)












GAAP Revenues


$   23,949


$   27,768


$   69,274


$   78,390












Fair value adjustment for acquired deferred revenues write down


$        147


$         258


$         460


$         258












Non-GAAP Revenues


$   24,096


$   28,026


$   69,734


$   78,648






















 

 



TABLE  - 4



ALLOT COMMUNICATIONS LTD.



AND ITS SUBSIDIARIES



CONSOLIDATED  BALANCE  SHEETS



(U.S. dollars in thousands)















September 30,


December 31,




2013


2012




(Unaudited)


(Audited)






ASSETS






CURRENT ASSETS:






Cash and cash equivalents


$              51,861


$              50,026


Short term deposits


23,600


78,042


Marketable securities and restricted cash


39,617


14,987


Trade receivables, net


23,480


20,236


Other receivables and prepaid expenses


8,913


6,815


Inventories


12,069


9,963


Total current assets


159,540


180,069








LONG-TERM ASSETS:






Severance pay fund


248


213


Deferred Taxes


1,525


1,525


Other assets 


225


239


Total long-term assets


1,998


1,977








PROPERTY AND EQUIPMENT, NET


5,989


6,609


GOODWILL AND INTANGIBLE ASSETS, NET


31,369


33,136








Total assets


$            198,896


$            221,791








LIABILITIES AND SHAREHOLDERS' EQUITY






CURRENT LIABILITIES:






Trade payables


$                4,517


$                4,809


Deferred revenues


10,448


13,829


Other payables and accrued expenses


13,656


13,947


Liability related to settlement of OCS grants


-


15,886


Total current liabilities


28,621


48,471








LONG-TERM LIABILITIES:






Deferred revenues


2,678


3,945


Accrued severance pay


285


254


Total long-term liabilities


2,963


4,199








SHAREHOLDERS' EQUITY


167,312


169,121








Total liabilities and shareholders' equity


$             198,896


$             221,791














 

 


TABLE  - 5


ALLOT COMMUNICATIONS LTD.


AND ITS SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS 


(U.S. dollars in thousands)








Three Months Ended


Nine Months Ended


September 30,

September 30,


2013

2012


2013

2012


(Unaudited)


(Unaudited)







Cash flows from operating activities:












Net income (Loss)

$            (1,930)

$             2,388


$            (7,642)

$             8,323

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






Depreciation

837

890


2,584

2,253

Stock-based compensation related to options granted to employees

2,017

1,316


5,896

3,058

Amortization of intangible assets

645

658


1,767

951

Capital loss 

4

10


18

14

Decrease (Increase) in accrued severance pay, net

(2)

(1)


(4)

6

Decrease in other assets

27

55


14

56

Decease in accrued interest and  amortization of premium on marketable securities 

151

96


208

144

Increase in trade receivables

(761)

(4,143)


(3,244)

(9,642)

Decrease (Increase) in other receivables and prepaid expenses

(971)

(65)


(2,640)

1,561

Decrease (Increase) in inventories

(1,325)

1,816


(2,106)

2,137

Decrease in trade payables

(263)

(1,125)


(42)

1,367

Increase (Decrease) in employees and payroll accruals

(144)

1,789


(1,404)

2,167

Decrease in deferred revenues

(590)

(2,659)


(4,648)

(4,295)

Increase (Decrease) in other payables and accrued expenses

(1,135)

(875)


1,001

1,242

Payment of a Liability related to the settlement of OCS grants

(16,024)

-


(16,024)

-







Net cash provided by (used in) operating activities

(19,464)

150


(26,266)

9,342







Cash flows from investing activities:












Decrease (Increase) in restricted deposit

145

(147)


146

(126)

Redemption of short-term deposits 

-

-


76,042

-

Investment in short-term deposit

(21,600)

(23,000)


(21,600)

(70,000)

Purchase of property and equipment

(552)

(1,528)


(1,980)

(2,997)

Investment in marketable securities

(525)

(6,443)


(29,891)

(7,694)

Proceeds from redemption or sale of marketable securities

1,100

800


4,811

2,000

Acquisitions

-

(13,493)


-

(23,892)

Loan to purchased Subsidiary

-

-


-

(1,000)







Net cash provided by (used in) investing activities

(21,432)

(43,811)


27,528

(103,709)







Cash flows from financing activities:












Exercise of employee stock options 

304

1,198


573

5,305

Redemption of bank loan

-

(1,952)


-

(1,952)







Net cash provided by (used in) financing activities

304

(754)


573

3,353













Increase (Decrease) in cash and cash equivalents

(40,592)

(44,415)


1,835

(91,014)

Cash and cash equivalents at the beginning of the period

92,453

70,083


50,026

116,682







Cash and cash equivalents at the end of the period

$            51,861

$            25,668


$            51,861

$            25,668













 

SOURCE Allot Communications Ltd.



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