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 email@example.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
Allot Communications Reports non-GAAP Revenues of $21.5 Million for Second Quarter of 2013
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