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AudioCodes Reports First Quarter 2013 Results



AudioCodes Reports First Quarter 2013 Results

Year-Over-Year Profitability Improvement Driven by Operational Efficiency and
Growing Sales in Unified Communications and Enterprise SBC

LOD, Israel, April 29, 2013 (GLOBE NEWSWIRE) -- AudioCodes (Nasdaq:AUDC), a
leading provider of Voice over IP (VoIP) technologies, products and services,
today announced financial results for the first quarter ended March 31, 2013.

Revenues for the first quarter of 2013 were $32.3 million, compared to $32.8
million for the fourth quarter of 2012, and $32.3 million for the first
quarter of 2012.

Net income in accordance with U.S. generally accepted accounting principles
(GAAP) was, $71,000, or $0.002 per diluted share, for the first quarter of
2013, compared to GAAP net income of $524,000, or $0.01 per diluted share, for
the fourth quarter of 2012, and a GAAP net loss of $1.6 million, or ($0.04)
per diluted share, for the first quarter of 2012.

Non-GAAP net income for the first quarter of 2013 was $691,000, or $0.02 per
diluted share, compared to non-GAAP net income of $1.1 million, or $0.03 per
diluted share, for the fourth quarter of 2012, and a non-GAAP net loss of
$827,000, or ($0.02) per diluted share, for the first quarter of 2012.

Non-GAAP net income (loss) excludes: (i) stock-based compensation expenses;
and (ii) amortization expenses related to intangible assets. 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 operations for the first quarter of 2013 totaled $2.7
million. Cash and cash equivalents, bank deposits and marketable securities
were $57.5 million as of March 31, 2013, compared to $58.5 million as of
December 31, 2012 and $70.3 million as of March 31, 2012. AudioCodes used
approximately $2.5 million in cash during the first quarter of 2013 for the
repayment of loans.

In April 2013, AudioCodes entered into an asset purchase agreement with its
affiliated company, MailVision. MailVision is an Israeli company which
develops, markets and licenses VoIP solutions for mobile, PC, web and tablet
devices for telecom operators and service providers. As of December 31, 2012,
AudioCodes owned 26.4% of the outstanding share capital of MailVision, or
24.1% of the share capital of the company on a diluted basis. The closing of
the transaction is subject to customary conditions and is expected to occur
during May 2013.

Pursuant to this agreement, AudioCodes has agreed to acquire certain of
MailVision's assets for the following consideration: (i) $233,000 to be
payable 12 months following the closing date; and (ii) additional earn out
payments will be paid to MailVision subject to the achievement of a certain
level of net revenues from the sale of MailVision's products. Payment can be
made, at AudioCodes' discretion, in either cash or ordinary shares. As
additional consideration for the transaction, on closing, AudioCodes' agreed
to waive repayment of any outstanding loans made by the company to MailVision
and to assume specified liabilities of MailVision in the aggregate amount of
approximately $1.3 million.

"We are pleased to report financial results in line with our plan for the
year. Our performance in the first quarter of 2013 is underlined by good
progress in our key strategic initiatives and improved operational
performance," said Shabtai Adlersberg, President and Chief Executive Officer
of AudioCodes. "Continuing the trend from the previous quarter, our networking
business grew primarily in the areas of Unified Communication and enterprise
SBC applications, both representing strategic directions for us. We saw a
growing pipeline of opportunities developing for us in the Microsoft Lync
marketplace, the SIP trunking business communication services market, and in
enterprise VoIP networking. Growth trends in these market segments provide
further support for our expected success in coming years."

"Our proposed acquisition of MailVision assets will allow AudioCodes to extend
our innovative development efforts in the area of mobile SIP real-time
communication solutions for enterprise and service providers. We believe this
investment in the over-the-top market positions AudioCodes in one of the most
attractive growth segments of the communications market, and will assist us in
maintaining our position as one of the leaders in the unified communications
and real-time media communications solutions market," 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 first quarter 2013 operating performance, financial
results and outlook. 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 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 and Value Added
Applications. AudioCodes' underlying technology, VoIPerfectHD(TM), 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 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.

©2013 AudioCodes Ltd. All rights reserved. AudioCodes, AC, HD VoIP, HD VoIP
Sounds Better, IPmedia, Mediant, MediaPack, OSN, SmartTAP, VMAS, VoIPerfect,
VoIPerfectHD, 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
 
                                                      March 31,  December 31,
                                                      2013       2012
                                                      Unaudited  Audited
ASSETS                                                            
                                                                  
CURRENT ASSETS:                                                   
Cash and cash equivalents                             $ 15,133   $ 15,219
Short-term and restricted bank deposits               9,924      10,330
Short-term marketable securities and accrued interest 19,510     7,966
Trade receivables, net                                 25,133     24,413
Other receivables and prepaid expenses                8,247      7,274
Inventories                                           15,531     16,797
Total current assets                                  93,478     81,999
                                                                  
LONG-TERM INVESTMENTS:                                            
Long-term and restricted bank deposits                $ 8,790    $ 9,251
Long-term marketable securities                       4,104      15,762
Investments in an affiliated company                  1,678      1,084
Deferred tax assets                                   3,565      3,565
Severance pay funds                                   16,447     15,772
Total long-term assets                                34,584     45,434
                                                                  
PROPERTY AND EQUIPMENT, NET                           3,391      3,619
                                                                  
GOODWILL AND INTANGIBLE ASSETS, NET                   34,676     34,952
                                                                  
Total assets                                          $ 166,129  $ 166,004
                                                                  
LIABILITIES AND EQUITY                                            
                                                                  
CURRENT LIABILITIES:                                              
Current maturities of long-term bank loans            $ 6,936    $ 8,436
Trade payables                                        5,291      6,817
Other payables and accrued expenses                   15,505     15,062
Deferred revenues                                     6,297      5,086
Total current liabilities                             34,029     35,401
                                                                  
LONG-TERM LIABILITIES:                                            
Accrued severance pay                                 $ 17,225   $ 16,284
Long-term bank loans                                  13,500     14,477
Senior convertible notes                              353        353
Deferred revenues and other liabilities               1,848      1,192
Total long-term liabilities                           32,926     32,306
                                                                  
Total equity                                          99,174     98,297
Total liabilities and equity                           $ 166,129  $ 166,004

 
 
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except per share data
 
                                                            Three months ended
                                                            March 31,
                                                            2013     2012
                                                            (Unaudited)
Revenues:                                                             
Products                                                    26,171   26,818
Services                                                    6,097    5,495
                                                                      
Total Revenues                                              $ 32,268 $32,313
                                                                      
Cost of revenues:                                                     
Products                                                    11,794   11,971
Services                                                    1,538    1,481
                                                                      
Total Cost of revenues                                      13,332   13,452
                                                                      
Gross profit                                                18,936   18,861
                                                                      
Operating expenses:                                                   
Research and development, net                               7,310    8,118
Selling and marketing                                       9,214    10,496
General and administrative                                  2,039    1,959
                                                                      
Total operating expenses                                    18,563   20,573
                                                                      
Operating income (loss)                                     373      (1,712)
Financial income (expenses), net                            (203)    228
                                                                      
Income (loss) before taxes on income                        170      (1,484)
Taxes on income, net                                        (78)     (84)
Equity in profit (losses) of an affiliated companies        (21)     10
                                                                      
Net income (loss)                                           $ 71     $ (1,558)
                                                                      
Basic net earnings (loss) per share                         $ 0.00   $ (0.04)
                                                                      
Diluted net earnings (loss) per share                       $ 0.00   $ (0.04)
Weighted average number of shares used in computing basic    38,009   
net earnings (loss) per share (in thousands)                         40,270
Weighted average number of shares used in computing diluted  38,577   40,270
net earnings (loss) per share (in thousands)

 
 
AUDIOCODES LTD. AND ITS SUBSIDIARIES
NON-GAAP PROFORMA STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except per share data
 
                                           Three months ended
                                           March 31,
                                           2013              2012
                                           (Unaudited)                        
Revenues:                                                     
Products                                   26,171            26,818
Services                                   6,097             5,495
                                                              
Total Revenues                             $ 32,268          $32,313
Cost of revenues:                                             
Products                                   11,624            11,781
Services                                   1,499             1,442
                                                              
Total Cost of revenues (1) (2)             13,123            13,223
                                                              
Gross profit                               19,145            19,090
                                                              
Operating expenses:                                           
Research and development, net (1)          7,217             7,982
Selling and marketing (1) (2)              9,033             10,298
General and administrative (1)             1,902             1,791
                                                              
Total operating expenses                   18,152            20,071
                                                              
Operating income (loss)                    993               (981)
Financial income (expenses), net           (203)             228
                                                              
Income (loss) before taxes on income       790               (753)
Taxes on income, net                       (78)              (84)
Equity in profit (losses) of an affiliated (21)              10
companies
                                                              
Net income (loss)                          $ 691             $ (827)
                                                              
Diluted net earnings (loss) per share      $ 0.02            $ (0.02)
                                                              
Weighted average number of shares used in
computing diluted net earnings (loss) per   38,896            40,270
share (in thousands)
 
(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 CTI Squared.
 
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 (LOSS)
U.S. dollars in thousands, except per share data
 
                                          Three months ended
                                          March 31,
                                          2013             2012
                                          (Unaudited)
GAAP net income (loss)                    $ 71             $ (1,558)
                                                            
GAAP net earnings (loss) per share        $ 0.00           $ (0.04)
                                                            
Cost of revenues:                                           
Stock-based compensation (1)              9                23
Amortization expenses (2)                 200              206
                                          209              229
Research and development, net:                              
Stock-based compensation (1)              93               136
                                                            
Selling and marketing:                                      
Stock-based compensation (1)              105              122
Amortization expenses (2)                 76               76
                                          181              198
General and administrative:                                 
Stock-based compensation (1)              137              168
                                                            
Non-GAAP net income (loss)                $ 691            $ (827)
Non-GAAP Diluted net earnings (loss) per  $ 0.02           $ (0.02)
share
 
(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 CTI Squared.
 
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
 
                                                           Three months ended
                                                           March 31,
                                                           2013     2012
                                                           ( Unaudited)
Cash flows from operating activities:                                
Net income (loss)                                           $ 71     $ (1,558)
Adjustments required to reconcile net income to net cash             
provided by operating activities:
Depreciation and amortization                               782     706
Amortization of marketable securities premiums and         107      108
accretion of discounts, net
Equity in profit (losses) of affiliated company and         21      (10)
interest on loans to affiliated company
Increase (decrease) in accrued severance pay, net          266      (105)
Stock-based compensation expenses                          344      449
Decrease in accrued interest on marketable securities,     7         3 
bank deposits and structured notes
Decrease (increase) in trade receivables, net              (720)    4,348
Increase in other receivables and prepaid expenses         (640)     
                                                                    (1,433)
Decrease in inventories                                    1,266    428
Decrease in trade payables                                  (1,526) (5,267)
Increase in deferred revenues                              1,867    2,273
Increase in other payables and accrued expenses            838       681
                                                                     
Net cash provided by operating activities                   2,683   623
                                                                     
Cash flows from investing activities:                                
Short-term deposits, net                                   406      1,807
Net loans provided to affiliated company                   (615)    --
Proceeds from long-term bank deposits                      461      600
Purchase of property and equipment                          (278)    (651)
Net cash provided by (used in) investing activities        (26)     1,756

 
 
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
U.S. dollars in thousands
 
                                                            Three months ended
                                                            March 31,
                                                            2013      2012
                                                            ( Unaudited)
Cash flows from financing activities:                                  
Purchase of treasury stock                                  --        (2,513)
Repayment of long-term bank loans                            (2,477)  (2,355)
Payment for acquisition of NSC non-controlling interest     (395)     (336)
Proceeds from issuance of shares upon exercise of options,  129       35
warrants and employee stock purchase plan
                                                                       
Net cash used in financing activities                        (2,743)  (5,169)
                                                                       
Decrease in cash and cash equivalents                       (86)       (2,790)
Cash and cash equivalents at the beginning of the period     15,219    28,257
                                                                       
Cash and cash equivalents at the end of the period           $ 15,133 $ 25,467

CONTACT: Company Contacts
         Guy Avidan,
         VP Finance & CFO
         AudioCodes
         Tel: +972-3-976-4000
         guy.avidan@audiocodes.com
        
         Shirley Nakar,
         Director, Investor Relations
         AudioCodes
         Tel: +972-3-976-4000
         shirley@audiocodes.com
        
         IR Agency Contact
         Erik Knettel,
         Grayling
         Tel: +1-646-284-9415
         erik.knettel@grayling.com
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