LOD, Israel, Jan. 26, 2011 (GLOBE NEWSWIRE) -- AudioCodes Ltd. (Nasdaq:AUDC), a leading provider of Voice over IP (VoIP) technologies and Voice Network products, today announced financial results for the fourth quarter and full year 2010, ended December 31, 2010.
Revenues for the fourth quarter of 2010 were $40.5 million compared to $38.3 million for the third quarter of 2010 and $34.2 million for the fourth quarter of 2009. Revenues were $150.0 million in 2010 compared to $125.9 million in 2009.
Net income in accordance with U.S. generally accepted accounting principles (GAAP) was $5.4 million, or $0.13 per diluted share, for the fourth quarter of 2010 compared to GAAP net income of $2.9 million, or $0.07 per diluted share, for the third quarter of 2010, and GAAP net income of $1.2 million, or $0.03 per diluted share, for the fourth quarter of 2009. During 2010, the Company recorded a non-cash tax benefit of $2.3 million, equivalent to $0.06 per diluted share, due to deferred tax.
The Company reported GAAP net income of $12.0 million, or $0.30 per diluted share, in 2010 compared to a GAAP net loss of $3.3 million, or ($0.07) per share, in 2009.
Non-GAAP net income for the fourth quarter of 2010 was $4.5 million, or $0.11 per diluted share, compared to non-GAAP net income of $3.6 million, or $0.09 per diluted share, for the third quarter of 2010, and non-GAAP net income of $2.5 million, or $0.06 per diluted share, for the fourth quarter of 2009.
Non-GAAP net income excludes (i) stock-based compensation expenses, (ii) amortization expenses related to intangible assets, (iii) for the 2009 period, an adjustment to expenses related to the Company's Senior Convertible Notes due to application of FASB Staff Position APB 14-1, and (iv) a non-cash deferred tax income. Almost all of the Company's Senior Convertible Notes were repurchased in November 2009. A reconciliation between net income on a GAAP basis and non-GAAP net income is provided in the tables that accompany the condensed consolidated financial statements contained in this press release.
During the fourth quarter of 2010, AudioCodes generated $5.7 million in cash from operating activities compared to $5.8 million in the third quarter of 2010 and $11.9 million in the fourth quarter of 2009. The Company generated $16.4 million in cash from operations in 2010 compared to $21.0 million in 2009.
Cash and cash equivalents and short-term deposits were $64.1 million as of December 31, 2010, compared to $58.6 million as of September 30, 2010 and $52.9 million as of December 31, 2009.
"I am pleased to announce strong results for the fourth quarter and full year 2010," stated Shabtai Adlersberg, Chairman of the Board, President and CEO of AudioCodes. "This is the seventh consecutive quarter of improved performance and momentum gain in our networking business. Year-over-year, revenues grew 19% and proforma net income grew more than 330%. Coupling these results with the ability to achieve a better-than-expected gross margin, continued positive cash flow, and our stated objective of 10% proforma operating margin, further underscores our improved performance. In 2010, we gained market share in the VoIP media gateway market, introduced our new enterprise session border controller product line for the SIP Trunking market, strengthened our partnerships with leading players in the telecom, applications and over-the-top (OTT) market, made first steps into the new mobile VoIP market, and grew sales coverage worldwide. SIP connectivity, mobility and security are increasingly becoming main trends in the VoIP market, and we believe that our continued investments in these areas will further drive market share gain and growth in 2011 and beyond," concluded Mr. Adlersberg.
Conference Call & Web Cast Information
AudioCodes will conduct a conference call at 9:00 A.M., Eastern Time today to discuss the Company's fourth quarter and full year 2010 operational and financial results. The conference call will be simultaneously Web cast. Investors are invited to listen to the call live via Web cast at the AudioCodes corporate website at www.audiocodes.com
About AudioCodes
AudioCodes Ltd. (Nasdaq: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 & data communications and its products are deployed globally in Broadband, Mobile, Cable, and Enterprise networks. The company provides a range of innovative, cost-effective products including Media Gateways, Multi-Service Business Gateways, Session Border Controllers (SBC), Residential Gateways, IP Phones, Media Servers and Value Added Applications. 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
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 continuing products' demand; 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 disruptions from acquisitions; the integration of acquired companies' products and operations into AudioCodes' business; and other factors detailed in AudioCodes' filings with the Securities and Exchange Commission. AudioCodes assumes no obligation to update the information in this release.
©2011 AudioCodes Ltd. All rights reserved. AudioCodes, AC, AudioCoded, Ardito, CTI2, CTI², CTI Squared, HD VoIP, HD VoIP Sounds Better, InTouch, IPmedia, Mediant, MediaPack, NetCoder, Netrake, Nuera, Open Solutions Network, OSN, Stretto, TrunkPack, VMAS, VoicePacketizer, VoIPerfect, VoIPerfectHD, What's Inside Matters, Your Gateway To VoIP and 3GX 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
| AUDIOCODES LTD. AND ITS SUBSIDIARIES | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| U.S. dollars in thousands | ||
|
December 31, 2010 |
December 31, 2009 |
|
| (Unaudited) | (Audited) | |
| ASSETS | ||
| CURRENT ASSETS: | ||
| Cash and cash equivalents | $ 50,311 | $ 38,969 |
| Short-term deposits | 13,825 | 13,902 |
| Trade receivables, net | 25,881 | 18,522 |
| Other receivables and prepaid expenses | 3,646 | 2,754 |
| Deferred tax assets | 2,287 | 1,053 |
| Inventories | 18,043 | 13,516 |
| Total current assets | 113,993 | 88,716 |
| LONG-TERM INVESTMENTS: | ||
| Investments in companies | 1,317 | 1,510 |
| Deferred tax assets | 2,261 | 1,174 |
| Severance pay funds | 15,039 | 12,235 |
| Total long-term investments | 18,617 | 14,919 |
| PROPERTY AND EQUIPMENT, NET | 3,703 | 4,956 |
|
GOODWILL, INTANGIBLE ASSETS, DEFERRED CHARGES AND OTHER, NET |
37,405 |
38,942 |
| Total assets | $ 173,718 | $ 147,533 |
| LIABILITIES AND EQUITY | ||
| CURRENT LIABILITIES: | ||
| Current maturities of long-term bank loans | $ 6,000 | $ 6,000 |
| Trade payables | 13,519 | 8,609 |
| Other payables and accrued expenses | 27,937 | 19,550 |
| Total current liabilities | 47,456 | 34,159 |
| LONG-TERM LIABILITIES: | ||
| Accrued severance pay | $ 15,821 | $ 13,336 |
| Long-term bank loans | 9,750 | 15,750 |
| Senior convertible notes | 353 | 403 |
| Other payables | 1,158 | -- |
| Total long term liabilities | 27,082 | 29,489 |
| Total equity | 99,180 | 83,885 |
| Total liabilities and equity | $ 173,718 | $ 147,533 |
| AUDIOCODES LTD. AND ITS SUBSIDIARIES | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| In thousands, except per share data | ||||
|
Year ended December 31, |
Three months ended December 31, |
|||
| 2010 | 2009 | 2010 | 2009 | |
| (Unaudited) | (Audited) | (Unaudited) | ||
| Revenues | $ 150,040 | $ 125,894 | $ 40,464 | $ 34,158 |
| Cost of revenues | 66,138 | 56,194 | 17,227 | 15,267 |
| Gross profit | 83,902 | 69,700 | 23,237 | 18,891 |
| Operating expenses: | ||||
| Research and development, net | 30,189 | 29,952 | 7,839 | 7,255 |
| Selling and marketing | 35,024 | 32,111 | 9,998 | 8,022 |
| General and administrative | 8,252 | 7,821 | 2,115 | 1,964 |
| Total operating expenses | 73,465 | 69,884 | 19,952 | 17,241 |
| Operating income (loss) | 10,437 | (184) | 3,285 | 1,650 |
| Financial income (expenses), net | (94) | (2,744) | 191 | (395) |
| Income (loss) before taxes on income | 10,343 | (2,928) | 3,476 | 1,255 |
| Income tax expense (income), net | (1,885) | 290 | (2,110) | 54 |
| Equity in losses of affiliated companies | 213 | 76 | 230 | 8 |
| Net income (loss) | $ 12,015 | $ (3,294) | $ 5,356 | $ 1,193 |
| Net loss attributable to the noncontrolling interest | 111 | 472 | -- | 98 |
|
Net income (loss) attributable to AudioCodes |
$ 12,126 |
$ (2,822) |
$ 5,356 |
$ 1,291 |
| Basic net earnings (loss) per share | $ 0.30 | $ (0.07) | $ 0.13 | $ 0.03 |
| Diluted net earnings (loss) per share | $ 0.30 | $ (0.07) | $ 0.13 | $ 0.03 |
| Weighted average number of shares used in computing basic net earnings per share |
40,560 |
40,208 |
40,951 |
40,262 |
| Weighted average number of shares used in computing diluted net earnings per share |
40,961 |
40,208 |
41,556 |
40,397 |
| AUDIOCODES LTD. AND ITS SUBSIDIARIES | ||||
| NON-GAAP PROFORMA STATEMENTS OF OPERATIONS | ||||
| In thousands, except per share data | ||||
|
Year ended December 31, |
Three months ended December 31, |
|||
| 2010 | 2009 | 2010 | 2009 | |
| (Unaudited) | (Unaudited) | |||
| Revenues | $ 150,040 | $ 125,894 | $ 40,464 | $ 34,158 |
| Cost of revenues (1) (2) | 64,840 | 54,833 | 16,903 | 14,936 |
| Gross profit | 85,200 | 71,061 | 23,561 | 19,222 |
| Operating expenses: | ||||
| Research and development, net (1) | 29,796 | 29,310 | 7,723 | 7,080 |
| Selling and marketing (1) (2) | 33,540 | 30,872 | 9,155 | 7,759 |
| General and administrative (1) | 7,799 | 7,502 | 1,967 | 1,806 |
| Total operating expenses | 71,135 | 67,684 | 18,845 | 16,645 |
| Operating income | 14,065 | 3,377 | 4,716 | 2,577 |
| Financial income (expenses), net (3) | (94) | 32 | 191 | (33) |
| Income before taxes on income | 13,971 | 3,409 | 4,907 | 2,544 |
| Income tax expense, net (4) | 436 | 290 | 211 | 54 |
| Equity in losses of affiliated companies | 213 | 76 | 230 | 8 |
| Non-GAAP net income | $ 13,322 | $ 3,043 | $ 4,466 | $ 2,482 |
| Net loss attributable to the noncontrolling interest | 111 | 472 | -- | 98 |
|
Net income attributable to AudioCodes |
$ 13,433 |
$ 3,515 |
$ 4,466 |
$ 2,580 |
|
Non-GAAP diluted net earnings per share |
$ 0.33 |
$ 0.09 |
$ 0.11 |
$ 0.06 |
| Weighted average number of shares used in computing non-GAAP diluted net earnings per share |
40,975 |
40,338 |
41,875 |
40,607 |
| (1) Excluding stock-based compensation expenses related to options granted to employees and others. | ||||
| (2) Excluding amortization of intangible assets related to the acquisitions of Nuera, Netrake and CTI Squared. | ||||
| (3) Excluding adjustments to interest expense with respect to Senior Convertible Notes, due to implementation of FSP APB 14-1 (2009). | ||||
| (4) Excluding non-cash deferred tax benefit. | ||||
| 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 as well. | ||||
| AUDIOCODES LTD. AND ITS SUBSIDIARIES | ||||
| RECONCILIATION BETWEEN GAAP NET INCOME AND NON-GAAP NET INCOME | ||||
| In thousands, except per share data | ||||
| Year ended | Three months ended | |||
| December 31, | December 31, | |||
| 2010 | 2009 | 2010 | 2009 | |
| (Unaudited) | (Unaudited) | |||
| GAAP Net income (loss) | $ 12,015 | $ (3,294) | $ 5,356 | $ 1,193 |
| GAAP Diluted earnings (loss) per share |
$ 0.30 |
$ (0.07) |
$ 0.13 |
$ 0.03 |
| Cost of revenues: | ||||
| Stock-based compensation (1) | 62 | 117 | 14 | 23 |
| Amortization expenses (2) | 1,236 | 1,244 | 310 | 308 |
| 1,298 | 1,361 | 324 | 331 | |
| Research and development, net: | ||||
| Stock-based compensation (1) | 393 | 642 | 116 | 175 |
| Selling and marketing: | ||||
| Stock-based compensation (1) | 1,180 | 913 | 766 | 188 |
| Amortization expenses (2) | 304 | 326 | 77 | 75 |
| 1,484 | 1,239 | 843 | 263 | |
| General and administrative: | ||||
| Stock-based compensation (1) | 453 | 319 | 148 | 158 |
| Financial expenses: | ||||
| FSP APB 14-1 adjustment (3) | -- | 2,776 | -- | 362 |
|
Income taxes: |
||||
| Deferred tax income (4) | (2,321) | -- | (2,321) | -- |
|
Non-GAAP Net income |
$ 13,322 |
$ 3,043 |
$ 4,466 |
$ 2,482 |
| Non-GAAP Diluted earnings per share |
$ 0.33 |
$ 0.09 |
$ 0.11 |
$ 0.06 |
| (1) Stock-based compensation expenses related to options granted to employees and others. | ||||
| (2) Amortization of intangible assets related to the acquisitions of Nuera, Netrake and CTI Squared. | ||||
| (3) Adjustments to interest expense with respect to Senior Convertible Notes, due to implementation of FSP APB 14-1. | ||||
| (4) Non-cash deferred tax benefit. | ||||
| 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 December 31, |
Three months ended December 31, |
|||
| 2010 | 2009 | 2010 | 2009 | |
| (Unaudited) | (Audited) | (Unaudited) | ||
| Cash flows from operating activities: | ||||
| Net income (loss) | $ 12,015 | $ (3,294) | $ 5,356 | $ 1,193 |
| Adjustments required to reconcile net income to net cash provided by operating activities: | ||||
| Depreciation and amortization | 4,359 | 4,969 | 958 | 1,144 |
| Amortization of marketable securities premiums and accretion of discounts, net | -- | 252 | -- | 100 |
| Equity in losses of affiliated companies | 193 | 76 | 230 | 20 |
| Decrease (increase) in accrued severance pay, net | (319) | (776) | 39 | (69) |
| Stock-based compensation expenses | 1,370 | 1,991 | 326 | 544 |
| Amortization of senior convertible notes discount and deferred charges and gain from redemption | -- | 2,930 | -- | 421 |
| Decrease in accrued interest on marketable securities, bank deposits and structured notes | -- | 2,312 | -- | 288 |
| Increase in deferred tax assets | (2,321) | -- | (2,321) | -- |
| Decrease (increase) in trade receivables, net | (7,359) | 11,042 | (677) | 4,104 |
| Decrease (increase) in other receivables and prepaid expenses | (168) | 908 | 1,165 | 2,212 |
| Decrease (increase) in inventories | (4,527) | 7,107 | (2,097) | 2,914 |
| Increase (decrease) in trade payables | 4,910 | (3,052) | 921 | 1,028 |
| Increase (decrease) in other payables and accrued expenses |
8,249 |
(3,491) |
1,791 |
(2,034) |
| Net cash provided by operating activities | 16,402 | 20,974 | 5,691 | 11,865 |
| Cash flows from investing activities: | ||||
|
Proceeds from sale and maturity of marketable securities |
-- | 16,000 | -- | 7,000 |
| Proceeds from sale of deposits | 57,956 | 95,203 | 14,314 | 24,673 |
| Investments in companies | -- | (341) | -- | (15) |
| Purchase of property and equipment | (1,569) | (1,271) | (284) | (408) |
| Investment in short-term deposit | (57,879) | (49,318) | (13,825) | -- |
| Net cash provided by (used in) investing activities | (1,492) | 60,273 | 205 | 31,250 |
| AUDIOCODES LTD. AND ITS SUBSIDIARIES | ||||
| CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Cont.) | ||||
| U.S. dollars in thousands | ||||
|
Year ended December 31, |
Three months ended December 31, |
|||
| 2010 | 2009 | 2010 | 2009 | |
| (Unaudited) | (Audited) | (Unaudited) | ||
| Cash flows from financing activities: | ||||
| Payment for the acquisition of NSC | (74) | -- | -- | -- |
| Repurchase of convertible notes, net of costs | (50) | (73,147) | -- | (73,147) |
| Repayment of loan from bank | (6,000) | (6,000) | (1,500) | (1,500) |
| Proceeds from issuance of shares upon exercise of options and employee stock purchase plan | 2,556 | 90 | 1,649 | 57 |
| Net cash provided by (used in) financing activities | (3,568) | (79,057) | 149 | (74,590) |
| Increase (decrease) in cash and cash equivalents | 11,342 | 2,190 | 6,045 | (31,475) |
| Cash and cash equivalents at the beginning of the period | 38,969 | 36,779 | 44,266 | 70,444 |
| Cash and cash equivalents at the end of the period | $ 50,311 | $ 38,969 | $ 50,311 | $ 38,969 |