AudioCodes Reports Second Quarter 2019 Results

LOD, Israel, July 23, 2019 /PRNewswire/ --

Second Quarter Highlights

• Quarterly revenues increased by 13.8% year-over-year to $49.5 million;
• Quarterly service revenues increased by 23.5% year-over-year to $16.7 million;
• Quarterly UC-SIP revenues increased more than 20% year-over-year;
• Quarterly GAAP gross margin percentage was 63.3%; quarterly Non-GAAP gross margin percentage was 63.5%;
• Quarterly GAAP operating margin percentage was 11.9%; quarterly Non-GAAP operating margin percentage was 14.1%;
• Quarterly cash flow from operating activities was $8.4 million;
• Quarterly GAAP net income was $4.8 million, or $0.16 per diluted share;
• Quarterly Non-GAAP net income was $6.8 million, or $0.22 per diluted share; 
• AudioCodes repurchased 473,235 of its ordinary shares during the quarter at an aggregate cost of $7.05 million.

Details

AudioCodes (NASDAQ: AUDC), a leading vendor of advanced voice networking and media processing solutions for the digital workplace, today announced financial results for the second quarter ended June 30, 2019.

Revenues for the second quarter of 2019 were $49.5 million compared to $46.6 million for the first quarter of 2019 and $43.5 million for the second quarter of 2018.

Net income was $4.8 million, or $0.16 per diluted share, for the second quarter of 2019 compared to $2.4 million, or $0.08 per diluted share, for the second quarter of 2018.

On a Non-GAAP basis, net income was $6.8 million, or $0.22 per diluted share, for the second quarter of 2019 compared to $4.1 million, or $0.14 per diluted share, for the second quarter of 2018.

Non-GAAP net income excludes: (i) share-based compensation expenses; (ii) amortization expenses related to intangible assets; (iii) expenses or income related to revaluation of an earn-out liability in connection with the acquisition of Active Communications Europe; (iv) financial income or expenses related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies and (v) non-cash deferred tax expenses. A reconciliation of net income 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 was $8.4 million for the second quarter of 2019. Cash and cash equivalents, long- and short-term bank deposits and short-term marketable securities were $69.1 million as of June 30, 2019 compared to $65.4 million as of December 31, 2018. The increase in cash and cash equivalents, long- and short-term bank deposits and short-term marketable securities was the result of cash from operating activities offset, in part, by the use of cash for the continued repurchasing of the Company's ordinary shares pursuant to its share repurchase program and the payment of a cash dividend in the first quarter of 2019.

"We are pleased to report record financial results for the second quarter of 2019," said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes. "We continue to enjoy strong growth in the UC and UCaaS markets and a faster pace of migration of service providers to All-IP. Coupling these growth trends with strong execution across our business lines we continue to expand our business while demonstrating improved financial and operational efficiency. By surpassing our financial plan for the first half of 2019, we are confident in our ability to outperform our initial plan for the year and deliver higher revenues and profitability than previously announced."

"We continue to increase our investments in the Microsoft Teams space as this collaboration solution continues to gain traction in the market. We are confident in our ability to grow our business in this area in 2019 and beyond. At the same time, we continue to foster new partnerships with more leading players in the UCaaS and Contact Center markets, and make progress in our efforts and investments in the voice.ai area. We continue to prudently invest in our future offerings and remain focused on maximizing the return on investments for our shareholders," concluded Mr. Adlersberg.

Share Buy Back Program

As of June 30, 2019, AudioCodes had acquired an aggregate of 18.1 million of its ordinary shares since August 2014 for an aggregate consideration of $102.1 million. During the quarter ended June 30, 2019, AudioCodes acquired 473,235 of its ordinary shares under its share repurchase program for a total consideration of $7.05 million.

In January 2019, AudioCodes received court approval in Israel to purchase up to an aggregate of $12 million ("Permitted Amount") of additional ordinary shares pursuant to its share repurchase program. The court approval also permitted AudioCodes to declare a dividend of any part of the Permitted Amount during the approved validity period. This court approval expired on July 1, 2019.

On May 28, 2019, the Board of Directors of AudioCodes approved the submission of a new application to the Israeli court, requesting approval of an additional repurchase program for $12 million of ordinary shares following the expiration of the existing program. The application also requests the court to permit AudioCodes to declare a dividend of any part of this amount. The new application was submitted to the court and a decision is expected during August 2019.

Conference Call & Web Cast Information

AudioCodes will conduct a conference call at 8:30 A.M., Eastern Time today to discuss the Company's first quarter of 2019 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

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AudioCodes invites you to join our online community and follow us on: AudioCodes Voice Blog, LinkedIn, Twitter, Facebook, and YouTube.

About AudioCodes

AudioCodes Ltd. (NASDAQ: AUDC) (TASE: AUDC) is a leading vendor of advanced voice networking and media processing solutions for the digital workplace. AudioCodes enables enterprises and service providers to build and operate all-IP voice networks for unified communications, contact centers, and hosted business services. AudioCodes offers a broad range of innovative products, solutions and services that are used by large multi-national enterprises and leading tier-1 operators around the world.

For more information on AudioCodes, visit http://www.audiocodes.com.

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.

©2019 AudioCodes Ltd. All rights reserved. AudioCodes, AC, HD VoIP, HD VoIP Sounds Better, IPmedia, Mediant, MediaPack, What's Inside Matters, OSN, SmartTAP, User Management Pack, 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.

Summary financial data follows

(1)  Share-based compensation expenses related to options and restricted share units granted to employees and others.

(2)  Amortization of intangible assets related to the acquisitions of Mailvision and Active Communications Europe assets.

(3)  Expenses or income related to revaluation of an earn-out liability in connection with the acquisition of Active Communications Europe.

(4)  Financial income or expenses related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies.

(5)  Non-cash deferred tax expenses.

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.

SOURCE AudioCodes Ltd.