Allot Communications Reports non-GAAP Revenues of $21.5 Million for Second Quarter of 2013

  Allot Communications Reports non-GAAP Revenues of $21.5 Million for Second
                               Quarter of 2013

PR Newswire

HOD HASHARON, Israel, Aug. 6, 2013

HOD HASHARON, Israel, Aug.6, 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 second quarter 2013 results, with non-GAAP
revenues reaching $21.5 million ($21.2 million on a GAAP basis).

Second quarter highlights:

  oNon-GAAP revenues were $21.5 million ($21.2 million on a GAAP basis).
  oNon-GAAP gross margin was 76% (73% on a GAAP basis).
  oAll-time high, record booking, leading to book-to-bill significantly above
    1. Booking's level was more than 20% higher than the second quarter of
    2012.
  oWon a multi-million USD contract with an APAC Tier 1 fixed-line operator
    in a competitive deal against other pure play DPI vendors.
  oA $5 million deal with an EMEA Tier 1 fixed-line operator, has been
    delivered however, revenue recognition has been delayed to the second half
    of 2013.

Financial results:

On a non-GAAP basis, total revenues for the second quarter of 2013 reached
$21.5 million, compared with $26.4 million of revenue reported for the second
quarter of 2012 and $24.2 million of revenue reported for the first quarter of
2013. On a non-GAAP basis, net loss for the second quarter of 2013 was $0.9
million, or ($0.03) per basic and diluted share. This compares with non-GAAP
net profit of $5.0 million, or $0.16 per basic share, and $0.15 per diluted
share, in the second quarter of 2012 and non-GAAP net profit of $0.6 million,
or $0.02 per basic and diluted share, in the first quarter of 2013.

Total GAAP revenues for the second quarter of 2013 reached $21.2 million
compared to $26.4 million of revenue reported for the second quarter of 2012
and $24.1 million of revenue reported for the first quarter of 2013. On a GAAP
basis, the net loss for the second quarter of 2013 was $3.9 million, or a net
loss of ($0.12) per basic and diluted share. This compares with net profit of
$2.7 million, or $0.08 per basic and diluted share, in the second quarter of
2012, and a net loss of $1.8 million, or a net loss of $0.06 per basic and
diluted share, in the first quarter of 2013.

Key quarterly achievements:

  oDuring the quarter, large orders were received from 13 service providers,
    3 of which were new customers
  o6 of the large orders came from mobile-service providers, two of which
    were new customers
  oSecured orders from three of the world's top ten telecommunication
    operators to assist in their LTE network rollouts
  oWon a $2 million new account with a Tier 1 EMEA mobile operator, for the
    delivery of service gateway and video caching combination
  oVAS accounted for 26% of total bookings.
  oA multi million dollars, follow-on order with a Tier 1, U.S. mobile
    operator, announced early second quarter exceeded $10 million.

As of June 30, 2013, cash, cash equivalents, short-term deposits and
marketable securities totaled $134.7 million with no debt.

"Our second quarter revenue came in 11% below first quarter's level,"
commented Rami Hadar, Allot Communications' President and Chief Executive
Officer. "The sequential revenues' decline was mostly the result of
unfulfilled revenue recognition terms of a $5 million deal with an EMEA Tier 1
operator. We expect this deal to materialize during the second half of the
year. We are encouraged by the surge in demand for our DPI solution, as well
as for our VAS, as demonstrated by the all-time, record booking level achieved
during the quarter. In the second quarter we made good progress with our Tier
1 mobile U.S. operator, increasing the announced follow-on order to more than
$10 million. We expect that the booking results of the last two quarters will
set a good foundation to resumed growth in the following quarters." 

Conference Call & Webcast

The Allot management team will host a conference call to discuss second
quarter 2013 earnings results today at 8:30 a.m. ET, 3:30 p.m. Israel time.

To access the conference call, please dial one of the following numbers: US:
+1 212 444 0896, UK: +44(0)20 3427 1911, Israel: +972-3-721 9510, participant
code 2638006.

A replay of the conference call will be available from 12:01 a.m. ET on August
6^th, 2013 for 30 days. To access the replay, please dial: US: + 1 347 366
9565, UK: + 44 (0)20 3427 0598, access code: 2638006.

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 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.

Safe Harbor Statement

Information provided in this press release may contain statements relating to
current expectations, estimates, forecasts and projections about future events
that are "forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. These forward-looking statements generally
relate to the Company's plans, objectives and expectations for future
operations. These forward-looking statements are based upon management's
current estimates and projections of future results or trends. Actual results
may differ materially from those projected as a result of certain risks and
uncertainties. These factors include, but are not limited to: our ability to
increase the breadth and functionality of the Service Gateway platform through
additional partnerships, changes in general economic and business conditions;
the Company's inability to develop and introduce new technologies, products
and applications; loss of market; 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. 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             Six Months Ended
                     June 30,                       June 30,
                     2013           2012            2013           2012
                     (Unaudited)                    (Unaudited)
Revenues             $        $         $        $     
                     21,212         26,405          45,326          50,622
Cost of revenues     5,753          7,755           12,493         14,656
Gross profit       $        $         $        $     
                     15,459         18,650          32,833          35,966
Operating expenses:
Research and
development costs,   6,898          5,332           13,800         9,342
net
Sales and marketing  9,896          8,126           19,723         15,881
General and          2,666          2,659           5,304          5,433
administrative
Total operating      19,460         16,117          38,827         30,656
expenses
Operating profit     $         $         $         $     
(loss)               (4,001)       2,533           (5,994)        5,310
Financial and other  168            187             355            649
income, net
Profit (loss) before $         $         $         $     
income tax expenses  (3,833)       2,720           (5,639)        5,959
Tax expenses         32             21              73             24
Net profit (loss)    $         $         $         $     
                     (3,865)       2,699           (5,712)        5,935
Basic net profit    $        $         $        $     
(loss) per share     (0.12)        0.08            (0.18)        0.19
Diluted net profit  $        $         $        $     
(loss) per share     (0.12)        0.08            (0.18)        0.18
Weighted average
number of shares
used in computing
basicnet
earnings per share   32,630,280     31,873,752      32,596,317     31,548,294
Weighted average
number of shares
used in computing
diluted net
earnings per share   32,630,280     33,356,308      32,596,317     33,169,640



TABLE - 2
ALLOT COMMUNICATIONS LTD.
AND ITS SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAPCONSOLIDATEDSTATEMENTSOFOPERATIONS
(U.S. dollars in thousands, except per share data)
                           Three Months Ended         Six Months Ended
                           June 30,                   June 30,
                           2013          2012         2013         2012
                           (Unaudited)                (Unaudited)
GAAP net profit (loss) as $         $       $        $     
reported                  (3,865)       2,699      (5,712)       5,935
Non-GAAP adjustments
Fair value adjustment for
acquired deferred revenues 276           -            313          -
write down (Revenues)
Expenses recorded for
stock-based compensation
     Cost of revenues      115           52           201          97
     Research and
     development costs,    412           240          823          428
     net
     Sales and marketing   874           446          1,620        763
     General and           649           288          1,235        454
     administrative
Expenses related to M&A
activities and compliance
with regulatory matters
(*)
     General and           21            666          33           1,711
     administrative
     Research and
     development costs,    22            250          28           250
     net
     Sales and marketing   12            93           12           93
Intangible assets
amortization
     Cost of revenues      503           262          1,006        293
     S&M                   57            -            115          -
Total adjustments          $        $       $       $     
                            2,941        2,297       5,386        4,089
Non-GAAP net profit       $        $       $       $     
(loss)                     (924)       4,996       (326)      10,024
Non- GAAP basic net profit $        $       $       $     
(loss) per share           (0.03)        0.16     (0.01)        0.32
Non- GAAP diluted net      $        $       $       $     
profit (loss) per share     (0.03)        0.15     (0.01)        0.30
Weighted average number of
shares
used in computing basic
net
earnings per share         32,630,280    31,873,752   32,596,317   31,548,294
Weighted average number of
shares
used in computing diluted
net
earnings per share         32,630,280    33,662,390   32,596,317   33,401,374
(*) Mostly legal, finance and compensation expenses related to the acquisition



TABLE - 3
ALLOT COMMUNICATIONS LTD.
AND ITS SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAPCONSOLIDATEDREVENUES
(U.S. dollars in thousands, except share and per share data)
                                      Three Months Ended    Six Months Ended
                                      June 30,              June 30,
                                      2013        2012      2013      2012
                                      (Unaudited)           (Unaudited)
GAAP Revenues                         $  21,212  $ 26,405  $ 45,326  $ 50,622
Fair value adjustment for acquired    276         -         313       -
deferred revenues write down
Non-GAAP Revenues                     $  21,488  $ 26,405  $ 45,639  $ 50,622



TABLE - 4
ALLOT COMMUNICATIONS LTD.
AND ITS SUBSIDIARIES
CONSOLIDATEDBALANCESHEETS
(U.S. dollars in thousands)
                                      June 30,             December 31,
                                      2013                 2012
                                      (Unaudited)          (Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents             $     92,453    $      50,026
Short term deposits                   2,000                78,042
Marketable securities and restricted  40,296               14,988
cash
Trade receivables, net                22,719               20,236
Other receivables and prepaid         8,461                6,815
expenses
Inventories                           10,744               9,963
Total current assets                  $    176,673     $     180,070
LONG-TERM ASSETS:
Severance pay fund                    232                  213
Deferred Taxes                        1,525                1,525
Other assets                         252                  239
Total long-term assets                $      2,009   $       1,977
PROPERTY AND EQUIPMENT, NET           6,276                6,609
GOODWILL AND INTANGIBLE ASSETS, NET   32,014               33,136
Total assets                          $     216,972    $     221,792
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables                        5,030                4,809
Deferred revenues                     10,490               13,829
Other payables and accrued expenses   14,823               13,947
Liability related to settlement of    15,886               15,886
OCS grants
Total current liabilities             $      46,229   $      48,471
LONG-TERM LIABILITIES:
Deferred revenues                     3,226                3,945
Accrued severance pay                 271                  254
Total long-term liabilities           $       3,497  $       4,199
SHAREHOLDERS' EQUITY                  167,246              169,122
Total liabilities and shareholders'   $     216,972    $     221,792
equity



TABLE - 5
ALLOT COMMUNICATIONS LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
                            Three Months Ended         Six Months Ended
                            June 30,                   June 30,
                            2013        2012           2013        2012
                            (Unaudited)                (Unaudited)
Cash flows from operating
activities:
Net income (Loss)           $       $         $       $     
                            (3,865)    2,699          (5,712)    5,935
Adjustments to reconcile
net income (loss) to net
cash provided (used) by
operating activities:
Depreciation                867         718            1,747       1,363
Stock-based compensation
related to options granted  2,050       1,026          3,879       1,742
to employees
Amortization of intangible  560         262            1,122       293
assets
Capital loss               14          -              14          4
Decrease (Increase) in      (26)        13             (2)         7
accrued severance pay, net
Decrease (Increase) in      16          2              (13)        1
other assets
Decrease in accrued
interest andamortization   46          11             57          48
of premium on marketable
securities
Increase (Decrease) in      2,868       (1,112)        (2,483)     (5,499)
trade receivables
Decrease (Increase) in
other receivables and       (1,625)     1,402          (1,669)     1,626
prepaid expenses
Decrease (Increase) in      (1,101)     472            (781)       321
inventories
Increase (Decrease) in      1,602       (763)          221         2,492
trade payables
Increase (Decrease) in
employees and payroll       (538)       113            (1,260)     378
accruals
Decrease in deferred        (1,070)     (2,847)        (4,058)     (1,636)
revenues
Increase in other payables  963         2,794          2,136       2,117
and accrued expenses
Net cash provided by (used  $      $         $       $     
in) operating activities     761       4,790         (6,802)    9,192
Cash flows from investing
activities:
Decrease (Increase) in      (3)         65             1           21
restricted deposit
Redemption of short-term    15,000      -              76,042      -
deposits
Investment in short-term    -           (65,000)       -           (47,000)
deposit
Purchase of property and    (572)       (766)          (1,428)     (1,469)
equipment
Investment in marketable    (13,704)    (1,000)        (29,366)    (1,251)
securities
Proceeds from redemption or
sale of marketable          1,432       750            3,711       1,200
securities
Acquisitions                -           (10,399)       -           (10,399)
Loan to purchased           -           (1,000)        -           (1,000)
Subsidiary
Net cash provided by (used  $      $          $       $    
in) investing activities    2,153       (77,350)      48,960      (59,898)
Cash flows from financing
activities:
Exercise of employee stock  105         1,741          269         4,107
options
Net cash provided by        $      $        $      $     
financing activities         105       1,741           269        4,107
Increase (decrease) in cash 3,019       (70,819)       42,427      (46,599)
and cash equivalents
Cash and cash equivalents
at the beginning of the     89,434      140,902        50,026      116,682
period
Cash and cash equivalents   $       $         $       $     
at the end of the period    92,453     70,083        92,453      70,083



SOURCE Allot Communications Ltd.

Website: http://www.allot.com
 
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