AudioCodes Reports Fourth Quarter and Full Year 2013 Results

AudioCodes Reports Fourth Quarter and Full Year 2013 Results

Fourth Quarter Revenues Rise 10.5% Year-Over-Year to $36.3 Million

LOD, Israel, Jan. 29, 2014 (GLOBE NEWSWIRE) -- AudioCodes (Nasdaq:AUDC), a
leading provider of converged voice solutions that enable enterprises and
service providers to transition to all-IP voice networks, today announced
financial results for the fourth quarter and full year periods ended December
31, 2013.

Fourth Quarter Highlights:

  *Revenues totaled $36.3 million, a 10.5% increase over the year ago quarter
  *Quarterly networking revenues increased 16.7% year-over-year and 7.1% over
    previous quarter
  *Non-GAAP net income was $1.9 million, or $0.05 per diluted share
  *Net cash provided by operating activities was $5.6 million
  *As of December 31, 2013, the amount of un-earned revenues that are
    expected to be recognized in the future were 45% higher than as of
    December 31, 2012
  *Strong momentum in revenues from SBC, Services and Microsoft Lync related
    activities

Revenues for the fourth quarter of 2013 were $36.3 million, compared to $35.0
million for the third quarter of 2013 and $32.8 million for the fourth quarter
of 2012. Revenues were $137.2 million in 2013 compared to $127.5 million in
2012.

Net income in accordance with U.S. generally accepted accounting principles
(GAAP) was $2.8 million, or $0.07 per diluted share, for the fourth quarter of
2013, compared to GAAP net income of $935,000, or $0.02 per diluted share, for
the third quarter of 2013, and GAAP net income of $524,000, or $0.01 per
diluted share, for the fourth quarter of 2012.

The Company reported GAAP net income of $4.2 million, or $0.11 per diluted
share, in 2013 compared to a GAAP net loss of $4.2 million, or ($0.11) per
diluted share, in 2012.

Non-GAAP net income for the fourth quarter of 2013 was $1.9 million, or $0.05
per diluted share, compared to $1.8 million, or $0.04 per diluted share, for
the third quarter of 2013, and $1.1 million, or $0.03 per diluted share, for
the fourth quarter of 2012.

The Company reported non-GAAP net income of $5.3 million, or $0.14 per diluted
share, in 2013 compared to a non-GAAP net loss of $1.5 million, or ($0.04) per
diluted share, in 2012.

Non-GAAP net income (loss) excludes: (i) stock-based compensation expenses;
(ii) amortization expenses related to intangible assets; and (iii) non-cash
deferred tax benefit. 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 operating activities for the fourth quarter of 2013
totaled $5.6 million. Cash and cash equivalents, bank deposits and marketable
securities were $62.2 million as of December 31, 2013 compared to $58.0
million as of September 30, 2013 and $58.5 million as of December 31, 2012.

"We are pleased to report our sixth consecutive quarter of improved financial
performance and solid growth for the full year 2013," said Shabtai Adlersberg,
President and Chief Executive Officer of AudioCodes. "AudioCodes fourth
quarter 2013 performance was underlined by strong sequential growth of sales
in the Microsoft Lync voice segment and growth in sales of session border
controller products. We also achieved better than anticipated increase in our
services revenues in 2013. This business momentum drove better fourth quarter
operating margin and cash flow contribution from operations. Investments made
with our global partners over the past few years continue to contribute to our
sustained growth and leadership in the voice networking business. These
investments, coupled with increased focus on software products, solutions and
services, are expected to provide further strength and support to our expected
success in coming years."

"As we look ahead to 2014, AudioCodes stands well positioned to extend its
leadership in wide-area voice networking solutions and services for the fast
growing segments of unified communications, business services and contact
centers. AudioCodes end-to-end One Voice connectivity and networking solutions
for Microsoft Lync, hosted PBX services and emerging cloud-based voice
solutions have proved to provide high value to our enterprise and service
provider customer base globally. Our deep knowledge and rich voice
technologies portfolio for connectivity, security, quality of service, routing
and mobility, among other features, is key to our success in recent years and
is expected to enable our success in next coming years. We believe that these
capabilities are a clear competitive advantage within one of the most
attractive segments of the communications sector," 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 2013 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 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, Value Added
Applications and Professional Services. 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 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.

©2014 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                                        
                                                    December 31, December 31,
                                                    2013         2012
                                                    Unaudited    Audited
ASSETS                                                           
                                                                
CURRENT ASSETS:                                                  
Cash and cash equivalents                           $30,763      $15,219
Short-term and restricted bank deposits              9,101        10,330
Short-term marketable securities and accrued         15,706       7,966
interest
Trade receivables, net                               26,431       24,198
Other receivables and prepaid expenses              6,184        7,274
Inventories                                         13,811       16,797
                                                                
Total current assets                                 101,996      81,784
                                                                
LONG-TERM ASSETS:                                                
Long-term and restricted bank deposits               $6,628       $9,251
Long-term marketable securities                      --           15,762
Investments in an affiliated company                 --           1,084
Deferred tax assets                                 4,855        3,565
Severance pay funds                                 19,549       15,772
                                                                
Total long-term assets                               31,032       45,434
                                                                
PROPERTY AND EQUIPMENT, NET                          3,191        3,619
                                                                
GOODWILL, INTANGIBLE ASSETS AND OTHER, NET           38,001       34,952
                                                                
Total assets                                         $174,220     $165,789
                                                                
LIABILITIES AND EQUITY                                           
                                                                
CURRENT LIABILITIES:                                             
Current maturities of long-term bank loans          $4,686       $8,436
Trade payables                                       7,215        6,817
Other payables and accrued expenses                  17,874       15,062
Deferred revenues                                    6,940        4,871
                                                                
Total current liabilities                            36,715       35,186
                                                                
LONG-TERM LIABILITIES:                                           
Accrued severance pay                                $19,845      $16,284
Long-term bank loans                                 9,791        14,477
Senior convertible notes                             353          353
Deferred revenues and other liabilities             2,707        1,192
                                                                
Totallong-term liabilities                          32,696       32,306
                                                                
Total equity                                         104,809      98,297
                                                                
Total liabilities and equity                         $174,220     $165,789

                                                                  
AUDIOCODES LTD. AND ITS SUBSIDIARIES                               
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except per                              
share data
                                     Year ended          Three months ended
                                     December 31,        December 31,
                                     2013        2012      2013      2012
                                     (Unaudited) (Audited) (Unaudited)
Revenues:                                                          
Products                              $111,750    $103,651  $29,004   $26,070
Services                              25,482      23,839    7,248     6,736
                                                                  
Total Revenues                        137,232     127,490   36,252    32,806
                                                                  
Cost of revenues:                                                  
Products                              51,996      48,371    13,586    12,613
Services                              6,568       5,923     1,869     1,487
                                                                  
Total Cost of revenues               58,564      54,294    15,455    14,100
                                                                  
Gross profit                         78,668      73,196    20,797    18,706
                                                                  
Operating expenses:                                                
Research and development, net         28,194      28,677    7,200     6,231
Selling and marketing                 39,279      40,040    10,288    9,721
General and administrative            8,456       8,214     2,048     1,733
                                                                  
Total operating expenses              75,929      76,931    19,536    17,685
                                                                  
Operating income (loss)               2,739       (3,735)   1,261     1,021
Financial income (expenses), net      96          453       (55)      87
                                                                  
Income (loss) before taxes on income  2,835       (3,282)   1,206     1,108
Income tax benefit (expense), net     1,404       (541)     1,565     (257)
Equity in losses of an affiliated     (21)        (354)     --       (327)
company, net
                                                                  
Net income (loss)                     $4,218      $(4,177)  $2,771    $524
                                                                  
Basic net earnings (loss) per share  $0.11       $(0.11)   $0.07     $0.01
                                                                  
Diluted net earnings (loss) per       $0.11       $(0.11)   $0.07     $0.01
share
                                                                  
Weighted average number of shares
used in computing basic net earnings  38,241      39,125    38,602    37,931
(loss) per share (in thousands)
                                                                  
Weighted average number of shares
used in computing diluted net         39,097      39,125    39,825    38,169
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
                            Year ended             Three months ended
                            December 31,           December 31,
                            2013         2012        2013         2012
                            (Unaudited)              (Unaudited)
Revenues:                                                       
Products                     $111,750     $103,651    $29,004      $26,070
Services                     25,482       23,839      7,248        6,736
                                                               
Total Revenues               137,232      127,490     36,252       32,806
                                                               
Cost of revenues:                                               
Products                     51,247       47,544      13,365       12,402
Services                     6,398        5,865       1,814        1,487
                                                               
Total Cost of revenues (1)   57,645       53,409      15,179       13,889
(2)
                                                               
Gross profit                79,587       74,081      21,073       18,917
                                                               
Operating expenses:                                             
Research and development,    27,786       28,247      7,076        6,103
net (1)
Selling and marketing (1)    38,317       39,299      10,009       9,592
(2)
General and administrative   7,850        7,613       1,866        1,587
(1)
                                                               
Total operating expenses     73,953       75,159      18,951       17,282
                                                               
Operating income (loss)      5,634        (1,078)     2,122        1,635
Financial income (expenses), 96           453         (55)         87
net
                                                               
Income (loss) before taxes   5,730        (625)       2,067        1,722
on income
Income tax expenses, net (3) (368)        (541)       (207)        (257)
Equity in losses of an       (21)         (354)       --           (327)
affiliated company, net
                                                               
Net income (loss)            $5,341       $(1,520)    $1,860       $1,138
                                                               
Diluted net earnings (loss)  $0.14        $(0.04)     $0.05        $0.03
per share
                                                               
Weighted average number of
shares used in computing     39,439       39,125      40,201       38,375
basic net earnings (loss)
per 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, CTI Squared and Mailvision assets.
(3) 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.

                                                               
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
                            Year ended             Three months ended
                            December 31,           December 31,
                            2013        2012         2013         2012
                            (Unaudited)              (Unaudited)
GAAP net income (loss)       $4,218      $(4,177)     $2,771       $524
                                                               
GAAP net earnings (loss) per $0.11       $(0.11)      $0.07        $0.01
share
                                                               
Cost of revenues:                                               
Stock-based compensation (1) 62          61           28           5
Amortization expenses (2)    857         824          248          206
                            919         885          276          211
Research and development,                                       
net:
Stock-based compensation (1) 408         430          124          128
                                                               
Selling and marketing:                                          
Stock-based compensation (1) 625         437          188          53
Amortization expenses (2)    337         304          91           76
                            962         741          279          129
General and administrative:                                     
Stock-based compensation (1) 606         601          182          146
                                                               
Income taxes:                                                  
Deferred tax (3)             (1,772)     --           (1,772)      --
                                                               
Non-GAAP net income (loss)   $5,341      $(1,520)     $1,860       $1,138
Non-GAAP Diluted net         $0.14       $(0.04)      $0.05        $0.03
earnings (loss) per 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, CTI Squared and Mailvision assets.
(3) 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          Three months ended
                                     December 31,        December 31,
                                     2013        2012      2013      2012
                                     (Unaudited) (Audited) (Unaudited)
Cash flows from operating activities:                              
Net income (loss)                     $4,218      $(4,177)  $2,771    $524
Adjustments required to reconcile net income or
loss to net cash provided by or used in operating                   
activities:
Depreciation and amortization         3,047       2,883     814       747
Amortization of marketable securities
premiums and accretion of discounts,  349         436       81        109
net
Equity in losses of an affiliated     21          350       --      336
company, net
Increase (decrease) in accrued        (495)       (184)     (709)     125
severance pay, net
Stock-based compensation expenses     1,701       1,529     522       332
Increase (decrease) in accrued
interest on marketable securities,    73          4         (42)      (1)
bank deposits and structured notes
Increase in long-term deferred tax    (1,290)     (965)     (1,187)   (965)
assets, net
Decrease (increase) in trade          (2,254)     6,725     1,639     2,520
receivables, net
Decrease (increase) in other          (462)       1,106     2,201     3,514
receivables and prepaid expenses
Decrease (increase) in inventories    2,986       3,618     (418)     1,935
Increase (decrease) in trade payables 403         (5,545)   (1,399)   153
Increase (decrease) in deferred       3,138       270       (5)       171
revenues
Increase (decrease) in other payables 2,493       (3,054)   1,300     (1,265)
and accrued expenses
                                                                  
Net cash provided by operating        13,928      2,996     5,568     8,235
activities
                                                                  
Cash flows from investing activities:                              
Decrease in short-term deposits, net  1,229       3,678     500       377
Investment in affiliated company      (1,211)     (183)     --        (111)
Investments in long-term deposits     --          (131)     --        --
Proceeds from redemption of long-term 2,623                851       --
bank deposits
Proceeds from redemption of           7,600       --        3,600     850
marketable securities upon maturity
Purchase of property and equipment   (1,426)     (2,006)   (363)     (162)
Net cash provided by investing        8,815       1,358     4,588     954
activities

                                                                  
AUDIOCODES LTD. AND ITS SUBSIDIARIES                               
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
U.S. dollars in thousands                                          
                                     Year ended          Three months ended
                                     December 31,        December 31,
                                     2013        2012      2013      2012
                                     (Unaudited) (Audited) (Unaudited)
Cash flows from financing activities:                              
Purchase of treasury stock            --        (6,917)   --      (618)
Repayment of long-term bank loans    (8,436)     (10,242)  (1,366)   (2,866)
Consideration related to payment of   (515)       (336)     --        --
acquisition of NSC
                                                                  
Proceeds from issuance of shares upon 1,752       103       376       68
exercise of options and warrants
                                                                  
Net cash used in financing activities (7,199)     (17,392)  (990)     (3,416)
                                                                  
Increase (decrease) in cash and cash  15,544      (13,038)  9,166     5,773
equivalents
Cash and cash equivalents at the      15,219      28,257    21,597    9,446
beginning of the period
                                                                  
Cash and cash equivalents at the end  $30,763     $15,219   $30,763   $15,219
of the period

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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