AudioCodes Reports Fourth Quarter and Full Year 2015 Results

Jan 26, 2016, 02:30 ET from AudioCodes

LOD, Israel, Jan. 26, 2016 /PRNewswire/ --

Fourth Quarter and Full Year 2015 Highlights:

  • Quarterly revenues increased by 4.2% over the previous quarter to $35.6 million; full year 2015 revenues totaled $139.8 million;
  • Quarterly service revenues increased by 3.4% over the previous quarter to $9.9 million; full year 2015 service revenues totaled $37.8 million.
  • Quarterly Non-GAAP gross margin was a record 60.5%; Full Year 2015 Non-GAAP gross margin totaled 60.0%;
  • Quarterly Non-GAAP operating margin grew to a record 8.9%;
  • Quarterly Non-GAAP net income was $2.8 million, or $0.07 per diluted share; full year 2015 Non-GAAP net income was $5.9 million, or $0.14 per diluted share;
  • Cash flow from operating activities was $7.7 million for the quarter and $17.6 million for the full year 2015;
  • AudioCodes repurchased 1.1 million shares of its ordinary shares at an aggregate cost of $4.5 million during the quarter;

Details:

AudioCodes (NASDAQ: AUDC), a leading provider of converged voice solutions that enable enterprises and service providers to transition to all-IP voice networks, today announced financial results for the fourth quarter and full year periods ended December 31, 2015.

Revenues for the fourth quarter of 2015 were $35.6 million, compared to $34.2 million for the third quarter of 2015 and $39.1 million for the fourth quarter of 2014. Revenues were $139.8 million in 2015 compared to $151.6 million in 2014.

Net income was $2.8 million, or $0.07 per diluted share, for the fourth quarter of 2015, compared to $946,000, or $0.02 per diluted share, for the fourth quarter of 2014. Full year 2015 net income was $366,000, or $0.01 per diluted share, compared to a net loss of $(86,000), or $(0.00) per diluted share, in 2014.

On a Non-GAAP basis, quarterly net income was $2.8 million, or $0.07 per diluted share, compared to $2.5 million, or $0.06 per diluted share, in the fourth quarter last year.  Full year Non-GAAP net income was $5.9 million, or $0.14 per diluted share, compared to $6.8 million, or $0.16 per diluted share, in 2014.

Non-GAAP net income (loss) excludes: (i) stock-based compensation expenses; (ii) amortization expenses related to intangible assets; and (iii) non-cash deferred tax benefit or expenses. A reconciliation of net income (loss) on a GAAP basis to a non-GAAP basis is provided in the tables that accompany the condensed consolidated financial statements contained in this press release.

Net cash provided by operating activities for the fourth quarter of 2015 totaled $7.7 million and $17.6 million for the full year 2015. Cash and cash equivalents, bank deposits and marketable securities were $80.4 million as of December 31, 2015 compared to $85.7 million as of December 31, 2014. The decrease in cash and cash equivalents, bank deposits and marketable securities for the full year 2015, was the result of the use of cash for the continued repurchasing of the Company's ordinary shares pursuant to its share repurchase program and the acquisition of Active Communications Europe.

"We are pleased to report strong financial results for the fourth quarter and solid progress in our key business lines for the full year 2015," said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes. "AudioCodes' 2015 performance was underlined by successful execution of our strategic plan to focus on the growing needs of enterprises and service providers to realign their operations towards unified communications (UC) and the transition to an ALL-IP network. In the fourth quarter of 2015 we enjoyed strong business momentum related to the Microsoft Skype for Business (SfB) solution and in our session border controller (SBC) activities, which provided sequential revenue growth of more than 20%. Enjoying a record gross margin of 60.5% in our sales, and good control of operating expenses, we also achieved record performance in operating margin which increased to 8.9% of revenues and strong positive cash flow."

"We continued to invest in our UC and SIP-related (UC-SIP) activities and announced an agreement to acquire Active Communications Europe to further strengthen our ability to provide advanced software solutions for the emerging Microsoft SfB online application. We intend to further invest in the transition to a world of All-IP networks and solidify our leading position in connecting businesses to the emerging Cloud-Centric world. Investments made in these areas over the past few years continue to contribute to our sustained growth and leadership in the enterprise voice business. These investments, coupled with increased focus on software products, solutions and services, are expected to provide further strength and support to our success in coming years," concluded Mr. Adlersberg.

Share Buy Back Program

During the quarter ended December 31, 2015, AudioCodes acquired 1.1 million shares under the existing share repurchase program for a total consideration of approximately $4.5 million. As of December 31, 2015 and since beginning the repurchase of its shares in August 2014, AudioCodes had acquired an aggregate of 5.8 million shares for an aggregate consideration of approximately $24.8 million.

In January 2016, AudioCodes received court approval in Israel to purchase up to an aggregate of $15 million of additional ordinary shares pursuant to this program. The current court approval for share repurchases will expire on May 19, 2016.

Acquisition of Active Communications Europe

On December 31, 2015 (the "Closing Date"), AudioCodes entered into a definitive agreement to acquire Active Communications Europe, a provider of communications solutions that increase the effectiveness of departments, individuals and organizations. Active Communications Europe is a Microsoft Silver Partner specializing in Unified Communications.

The consideration for this transaction consists of payment of $3 million in cash to the stockholders of Active Communications Europe, plus an earn-out arrangement. The fair value of the earn-out was estimated at $2.1 million and was recorded as a liability in AudioCodes financial statements as of the Closing Date. The Company allocated the acquired assets and liabilities assumed based on a preliminary Purchase Price Allocation ("PPA") performed by an independent financial advisor.  Following the transaction, Active Communications Europe became a wholly owned subsidiary of AudioCodes.

Conference Call & Web Cast Information

AudioCodes will conduct a conference call at 8:00 A.M., Eastern Time today to discuss the Company's fourth quarter and full year 2015 operating performance, financial results and outlook. Interested parties may participate in the conference call by dialing one the following numbers:

United States Participants: +1-(877)407-0778

International Participants: +1-(201)689-8565

The conference call will also be simultaneously webcast. Investors are invited to listen to the call live via webcast at the AudioCodes investor website at http://www.audiocodes.com/investors-lobby.

About AudioCodes

AudioCodes Ltd. (NASDAQ, TASE: AUDC) designs, develops and sells advanced Voice-over-IP (VoIP) and converged VoIP and Data networking products and applications to Service Providers and Enterprises. AudioCodes is a VoIP technology market leader, focused on converged VoIP and data communications, and its products are deployed globally in Broadband, Mobile, Enterprise networks and Cable. The Company provides a range of innovative, cost-effective products including Media Gateways, Multi-Service Business Routers, Session Border Controllers (SBC), Residential Gateways, IP Phones, Media Servers, Value Added Applications and Professional Services. AudioCodes' underlying technology, VoIPerfectHD™, relies on AudioCodes' leadership in DSP, voice coding and voice processing technologies. AudioCodes' High Definition (HD) VoIP technologies and products provide enhanced intelligibility and a better end user communication experience in Voice communications. For more information on AudioCodes, visit http://www.audiocodes.com.

To download AudioCodes investor relations app, which offers access to its SEC filings, press releases, videos, audiocasts and more, please visit Apple's App Store for the iPhone and iPad or Google Play for Android mobile devices.

Statements concerning AudioCodes' business outlook or future economic performance; product introductions and plans and objectives related thereto; and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters, are "forward-looking statements'' as that term is defined under U.S. Federal securities laws. Forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from those stated in such statements. These risks, uncertainties and factors include, but are not limited to: the effect of global economic conditions in general and conditions in AudioCodes' industry and target markets in particular; shifts in supply and demand; market acceptance of new products and the demand for existing products; the impact of competitive products and pricing on AudioCodes' and its customers' products and markets; timely product and technology development, upgrades and the ability to manage changes in market conditions as needed; possible need for additional financing; the ability to satisfy covenants in the Company's loan agreements; possible disruptions from acquisitions; the ability of AudioCodes to successfully integrate the products and operations of acquired companies into AudioCodes' business; and other factors detailed in AudioCodes' filings with the U.S. Securities and Exchange Commission. AudioCodes assumes no obligation to update the information in this release.

©2016 AudioCodes Ltd. All rights reserved. AudioCodes, AC, HD VoIP, HD VoIP Sounds Better, IPmedia, Mediant, MediaPack, What's Inside Matters, OSN, SmartTAP, VMAS, VoIPerfect, VoIPerfectHD, Your Gateway To VoIP, 3GX, VocaNom, AudioCodes One Voice and CloudBond are trademarks or registered trademarks of AudioCodes Limited. All other products or trademarks are property of their respective owners. Product specifications are subject to change without notice.


AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands



December 31,


December 31,


2015


2014


(Unaudited)


(Audited)

ASSETS








CURRENT ASSETS:




Cash and cash equivalents

$ 18,908


$ 14,797

Short-term and restricted bank deposits

5,661


7,630

Short-term marketable securities and accrued interest

2,480


543

Trade receivables, net

25,622


31,056

Other receivables and prepaid expenses

4,405


6,244

Inventories

16,778


14,736

Total current assets

73,854


75,006





LONG-TERM ASSETS:




Long-term and restricted bank deposits

$ 3,034


$ 4,066

Long-term marketable securities

50,294


58,684

Deferred tax assets

1,659


4,192

Severance pay funds

16,086


17,835

Total long-term assets

71,073


84,777





PROPERTY AND EQUIPMENT, NET

4,090


3,856





GOODWILL, INTANGIBLE ASSETS AND OTHER, NET

40,246


36,745





Total assets

$ 189,263


$ 200,384





LIABILITIES AND EQUITY








CURRENT LIABILITIES:




Current maturities of long-term bank loans

$ 5,338


$ 4,686

Trade payables

7,304


10,111

Other payables and accrued expenses

20,060


15,758

Deferred revenues

12,885


10,233

Total current liabilities

45,587


40,788





LONG-TERM LIABILITIES:




Accrued severance pay

$ 16,377


$ 17,908

Long-term bank loans

6,032


5,105

Deferred revenues and other liabilities

3,814


2,862

Total  long-term liabilities

26,223


25,875





Total equity

117,453


133,721

Total liabilities and equity

$ 189,263


$ 200,384

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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


Year ended


Three months ended


December 31,


December 31,


2015


2014


2015


2014


(Unaudited)


(Audited)


(Unaudited)

Revenues:








Products

$ 101,990


$ 118,561


$ 25,704


$ 30,012

Services

37,769


33,018


9,945


9,105

Total Revenues

139,759


151,579


35,649


39,117

Cost of revenues:








Products

47,227


54,349


11,879


13,582

Services

9,744


8,243


2,470


2,370

Total Cost of revenues

56,971


62,592


14,349


15,952

Gross profit

82,788


88,987


21,300


23,165

Operating expenses:








Research and development, net

27,996


32,275


6,664


7,938

Selling and marketing

43,360


45,534


10,260


11,278

General and administrative

8,726


7,677


1,913


1,986

Total operating expenses

80,082


85,486


18,837


21,202

Operating income

2,706


3,501


2,463


1,963

Financial income (expenses), net

442


(196)


(158)


(28)

Income before taxes on income

3,148


3,305


2,305


1,935

Income tax benefit (expense), net

(2,782)


(3,391)


491


(989)

Net income (loss)

$ 366


$ (86)


$ 2,796


$ 946

Basic net earnings (loss) per share

$ 0.01


$ (0.00)


$ 0.07


$ 0.02

Diluted net earnings (loss) per share

$ 0.01


$ (0.00)


$ 0.07


$ 0.02

Weighted average number of shares used in computing basic net earnings (loss) per share (in thousands)

40,178


42,286


38,443


42,738

Weighted average number of shares used in
  computing diluted net earnings (loss) per share
  (in thousands)

40,565


42,286


38,771


43,205

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

NON-GAAP PROFORMA STATEMENTS OF OPERATIONS

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



Year ended


Three months ended


December 31,


December 31,


2015


2014


2015


2014


(Unaudited)


(Audited)


(Unaudited)

Revenues:








Products

$ 101,990


$ 118,561


$ 25,704


$ 30,012

Services

37,769


33,018


9,945


9,105

Total Revenues

139,759


151,579


35,649


39,117

Cost of revenues:








Products

46,422


53,503


11,675


13,379

Services

9,456


8,008


2,399


2,309

Total Cost of revenues (1) (2)

55,878


61,511


14,074


15,688

Gross profit

83,881


90,068


21,575


23,429

Operating expenses:








Research and development, net (1)

27,567


31,690


6,588


7,816

Selling and marketing (1) (2)

42,106


44,065


10,003


10,911

General and administrative (1)

7,944


6,910


1,810


1,818

Total operating expenses

77,617


82,665


18,401


20,545

Operating income

6,264


7,403


3,174


2,884

Financial income (expenses), net

442


(196)


(158)


(28)

Income before taxes on income

6,706


7,207


3,016


2,856

Taxes on income, net (3)

(805)


(453)


(178)


(314)

Net income

$ 5,901


$ 6,754


$ 2,838


$ 2,542

Diluted net earnings per share

$ 0.14


$ 0.16


$ 0.07


$ 0.06

Weighted average number of shares used in computing diluted net earnings per share (in thousands)

40,809


43,568


39,035


43,524


(1)

Excluding stock-based compensation expenses related to options and restricted stock units granted to employees and others.

(2)

Excluding amortization of intangible assets related to the acquisitions of Nuera, Netrake, and Mailvision assets.

(3)

Excluding non-cash deferred tax expenses (benefits).



Note: Non-GAAP measures should be considered in addition to, and not as a substitute for, the results prepared in accordance with GAAP. The Company believes that non-GAAP information is useful because it can enhance the understanding of its ongoing economic performance and therefore uses internally this non-GAAP information to evaluate and manage its operations. The Company has chosen to provide this information to investors to enable them to perform comparisons of operating results in a manner similar to how the Company analyzes its operating results and because many comparable companies report this type of information.

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME

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



 Year ended


Three months ended


 December 31,


 December 31,


2015


2014


2015


2014


(Unaudited)


(Audited)


(Unaudited)

GAAP net income (loss)

$ 366


$ (86)


$ 2,796


$ 946

GAAP net earnings (loss) per share

$ 0.01


$ (0.00)


$ 0.07


$ 0.02

Cost of revenues:








Stock-based compensation (1)

101


89


27


16

Amortization expenses (2)

992


992


248


248


1,093


1,081


275


264

Research and development, net:








Stock-based compensation (1)

429


585


76


122

Selling and marketing:








Stock-based compensation (1)

1,061


1,105


242


276

Amortization expenses (2)

193


364


15


91


1,254


1,469


257


367

General and administrative:








Stock-based compensation (1)

782


767


103


168









Income taxes:








Deferred tax (3)

1,977


2,938


(669)


675

Non-GAAP net income

$ 5,901


$ 6,754


$ 2,838


$ 2,542

Non-GAAP diluted net earnings per share

$ 0.14


$ 0.16


$ 0.07


$ 0.06









(1)

Stock-based compensation expenses related to options and restricted stock units granted to employees and others.

(2)

Amortization of intangible assets related to the acquisitions of Nuera, Netrake, and Mailvision assets.

(3)

Non-cash deferred tax expenses (benefits).



Note: Non-GAAP measures should be considered in addition to, and not as a substitute for, the results prepared in accordance with GAAP. The Company believes that non-GAAP information is useful because it can enhance the understanding of its ongoing economic performance and therefore uses internally this non-GAAP information to evaluate and manage its operations. The Company has chosen to provide this information to investors to enable them to perform comparisons of operating results in a manner similar to how the Company analyzes its operating results and because many comparable companies report this type of information.

 

 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

U.S. dollars in thousands




 Year ended


Three months ended



 December 31,


 December 31,



2015


2014


2015


2014



(Unaudited)


(Audited)


 (Unaudited)

Cash flows from operating activities:









Net income (loss)


$ 366


$ (86)


$ 2,796


$ 946

Adjustments required to reconcile net income or loss to net cash provided by operating activities:









Depreciation and amortization


2,963


3,230


613


800

Amortization of marketable securities premiums and accretion of discounts, net


1,107


820


256


312

Increase (decrease) in accrued severance pay, net


218


(223)


(59)


(108)

Stock-based compensation expenses


2,373


2,546


448


582

Decrease (increase) in long- term deferred tax assets


1,975


2,940


(671)


676

Decrease in accrued interest on loans, marketable securities, convertible notes and bank deposits


55


152


113


141

Decrease (increase) in trade receivables, net


5,575


(4,625)


598


(955)

Decrease (increase)  in other receivables and prepaid expenses


1,777


(2,249)


1,277


1926

Decrease (increase) in inventories


(2,013)


(925)


(481)


319

Increase (decrease) in trade payables


(2,987)


2,896


(183)


(434)

Increase (decrease) in deferred revenues


3,758


3,595


702


(447)

Increase (decrease) in other payables and accrued expenses


2,395


(2,114)


2,297


(1,391)

Net cash provided by operating activities


17,562


5,957


7,706


2,367

Cash flows from investing activities:









Purchase of marketable securities


-


(60,286)


-


-

Proceeds from sale of marketable securities


2,557


-


-


-

Decrease in short-term deposits, net


1,969


1,471


(105)


571

Decrease (increase) in long-term bank deposits


1,032


2,685


(1,994)


851

Proceeds from redemption of marketable securities


2,711


15,390


-


-

Purchase of property and equipment


(1,976)


(2,539)


(299)


(1,089)

Purchase of intangible asset


-


(100)


-


(100)

Net cash paid in acquisition of subsidiary


(1,960)


-


(1,960)


-

Net cash provided by (used in) investing activities


4,333


(43,379)


(4,358)


233










 

 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

U.S. dollars in thousands




 Year ended


Three months ended



 December 31,


 December 31,



2015


2014


2015


2014



 (Unaudited)


(Audited)


 (Unaudited)

Cash flows from financing activities:









Purchase of treasury stock


(19,523)


(5,267)


(4,532)


(2,534)

Repayment of senior convertible notes


-


(338)


-


(53)

Repayment of long-term bank loans


(4,685)


(4,686)


(1,366)


(1,367)

Proceeds from bank loans


6,264


-


6,264


-

Consideration related to payment of
acquisition of Mailvision


(233)


(233)


-


-

Proceeds from issuance of shares upon
exercise of options and warrants


393


2,236


57


85

Proceeds from issuance of shares, net


-


29,744


-


-

Net cash provided by (used in) financing
activities


(17,784)


21,456


423


(3,869)










Increase (decrease) in cash and cash
  equivalents


4,111


(15,966)


3,771


(1,269)

Cash and cash equivalents at the beginning of
  the period


14,797


30,763


15,137


16,066

Cash and cash equivalents at the end of the
  period


$ 18,908


$ 14,797


$ 18,908


$ 14,797











 

Company Contacts

Niran Baruch

VP Finance & Chief Accounting Officer

AudioCodes

Tel: +972-3-976-4000

niran.baruch@audiocodes.com

 

Shirley Nakar

Director, Investor Relations

AudioCodes

Tel: +972-3-976-4000

shirley@audiocodes.com

 

IR Agency Contact

Philip Carlson/Collin Dennis

KCSA Strategic Communications

Tel: +1-212-896-1233

audc@kcsa.com

 

SOURCE AudioCodes



RELATED LINKS

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