LOD, Israel, Aug. 6, 2007 (PRIME NEWSWIRE) -- AudioCodes (Nasdaq:AUDC), a leading provider of Voice over Packet (VoP) technologies and Voice Network products, today announced financial results for the second quarter ended June 30, 2007.
Revenues for the second quarter were $38.4 million compared to $36.5 million for the quarter ended March 31, 2007 and $33.3 million for the quarter ended June 30, 2006. Second quarter revenues increased 5.2% compared to the quarter ended March 31, 2007 and increased 15.5% compared to the second quarter of 2006.
GAAP net loss was $1.0 million, or $0.02 per diluted share, for the second quarter of 2007 compared to a net loss of $2.4 million, or $0.06 per diluted share, for the first quarter of 2007 and net income of $3.3 million, or $0.07 per diluted share, for the second quarter of 2006.
Non-GAAP net income was $1.4 million, or $0.03 per diluted share, in the second quarter of 2007 compared to $506,000, or $0.01 per diluted share, in the first quarter of 2007 and $5.1 million, or $0.11 per diluted share, in the second quarter of 2006. Non-GAAP net income excludes stock-based compensation and amortization expenses related to the Nuera, Netrake and CTI Squared LTD ("CTI Squared") acquisitions. 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 release.
Cash and cash equivalents, short-term and long-term marketable securities, short-term and long-term bank deposits and structured notes were $130.5 million as of June 30, 2007 compared to $132.6 million as of March 31, 2007. In April 2007, the Company made a $5 million cash payment in connection with its acquisition of CTI Squared.
"AudioCodes' second quarter financial results were highlighted by our return to sequential revenue growth coupled with continued strength in our networking business. Our networking business grew over 10% sequentially in the second quarter and more than 30% compared to the second quarter of 2006, with increased penetration of leading service providers, OEMs and enterprise customers worldwide. Underscoring our strong performance was our ability to generate $2.7 million of net cash from our operating activities. During the quarter we made solid progress towards increasing operating efficiencies and initiated a company wide cost reduction program aimed at improving bottom line performance during the second half of 2007 and beyond," stated Shabtai Adlersberg, Chairman, President and CEO of AudioCodes.
"Our financial achievements were complemented by introducing new products for the session border control market, success in growing our mid-density media gateway sales, and completion of the acquisition of CTI Squared, a provider of enhanced messaging and communications platforms. The addition of CTI Squared to our existing suite of media server offerings further demonstrates our strategy of becoming an important and trusted supplier of converged IP communications products to service providers worldwide. New design wins in the quarter further enhance our confidence in our ability to continue our success in emerging VoIP opportunities in the broadband, wireless, IMS and fixed-mobile-convergence markets," concluded Mr. Adlersberg.
Conference Call & Webcast Information
AudioCodes will conduct a conference call on Tuesday, August 7, 2007 to discuss the second quarter 2007 financial results, which will be simultaneously Webcast at 9:00 A.M. Eastern Time. Investors are invited to listen to the call live via Webcast at the investor relations section of the AudioCodes corporate Website at www.audiocodes.com.
About AudioCodes
AudioCodes (Nasdaq:AUDC) provides innovative, reliable and cost-effective Voice over IP (VoIP) technology, Voice Network Products, and Value Added Applications to Service Providers, Enterprises, OEMs, Network Equipment Providers and System Integrators worldwide. AudioCodes provides a diverse range of flexible, comprehensive media gateway, and media processing enabling technologies based on VoIPerfect(tm) - AudioCodes' underlying, best-of-breed, core media architecture. The company is a market leader in VoIP equipment, focused on VoIP Media Gateway, Media Server, Session Border Controllers (SBC), Security Gateways and Value Added Application network products. AudioCodes has deployed tens of millions of media gateway and media server channels globally over the past ten years and is a key player in the emerging best-of-breed, IMS based, VoIP market. The Company is a VoIP technology leader focused on quality and interoperability, with a proven track record in product and network interoperability with industry leaders in the Service Provider and Enterprise space. AudioCodes Voice Network Products feature media gateway and media server platforms for packet-based applications in the converged, wireline, wireless, broadband access, cable, enhanced voice services, video, and Enterprise IP Telephony markets. AudioCodes' headquarters are located in Israel with R&D in the U.S. Other AudioCodes' offices are located in Europe, India, the Far East, and Latin America. 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.
All rights reserved, AudioCodes, AC, Ardito, AudioCoded, NetCoder, TrunkPack, VoicePacketizer, MediaPack, Stretto, Mediant, VoIPerfect and IPmedia, OSN, Open Solutions Network, What's Inside Matters, Your Gateway To VoIP, 3GX and Nuera, Netrake, InTouch, CTI(2) and CTI Squared are trademarks or registered trademarks of AudioCodes Limited. All other products or trademarks are property of their respective owners.
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
---------------------------------------------------------------------
U.S. dollars in thousands
June 30, December 31,
2007 2006
--------- ------------
(Unaudited)
--------- ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 52,387 $ 25,171
Short-term bank deposits and structured
notes 3,700 28,658
Short-term marketable securities and
accrued interest 25,425 29,422
Trade receivables, net 25,492 30,501
Other receivables and prepaid expenses 3,818 3,309
Inventories 19,822 16,093
--------- ---------
Total current assets 130,644 133,154
--------- ---------
LONG-TERM INVESTMENTS:
Long-term bank deposits and structured notes 42,011 30,435
Long-term marketable securities 6,987 19,942
Investments in companies 2,440 3,999
Deferred tax assets 4,089 3,742
Severance pay funds 8,319 7,231
--------- ---------
Total long-term investments 63,846 65,349
--------- ---------
PROPERTY AND EQUIPMENT, NET 7,492 7,847
--------- ---------
INTANGIBLE ASSETS, DEFERRED CHARGES AND OTHER,
NET 21,084 21,853
--------- ---------
GOODWILL 119,855 108,853
--------- ---------
Total assets $ 342,921 $ 337,056
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $ 8,018 $ 7,522
Other payables and accrued expenses 29,152 28,139
--------- ---------
Total current liabilities 37,170 35,661
--------- ---------
DEFERRED TAX LIABILITIES 7,203 7,780
--------- ---------
ACCRUED SEVERANCE PAY 9,559 7,915
--------- ---------
SENIOR CONVERTIBLE NOTES 121,106 121,015
--------- ---------
Total shareholders' equity 167,883 164,685
--------- ---------
Total liabilities and shareholders' equity $ 342,921 $ 337,056
========= =========
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
--------------------------------------------------------------------
In thousands, except per share data
Six months ended Three months ended
June 30, June 30,
------------------- -------------------
2007 2006 2007 2006
-------- -------- -------- --------
(Unaudited) (Unaudited)
------------------- -------------------
Revenues $ 74,987 $ 64,629 $ 38,444 $ 33,295
Cost of revenues 32,881 26,257 16,906 13,564
-------- -------- -------- --------
Gross profit 42,106 38,372 21,538 19,731
Operating expenses:
Research and development,
net 20,381 14,544 10,345 7,255
Selling and marketing 21,750 16,180 10,910 8,105
General and administrative 4,726 3,698 2,171 1,888
-------- -------- -------- --------
Total operating expenses 46,857 34,422 23,426 17,248
-------- -------- -------- --------
Operating income (loss) (4,751) 3,950 (1,888) 2,483
Financial income, net 1,270 2,352 766 1,243
Equity in losses of
affiliated companies 533 386 204 213
-------- -------- -------- --------
Income (loss) before taxes
on income (4,014) 5,916 (1,326) 3,513
Income taxes (tax benefit) (602) 386 (290) 260
-------- -------- -------- --------
Net income (loss) $ (3,412) $ 5,530 $ (1,036) $ 3,253
======== ======== ======== ========
Basic net earnings (loss)
per share $ (0.08) $ 0.13 $ (0.02) $ 0.08
======== ======== ======== ========
Diluted net earnings (loss)
per share $ (0.08) $ 0.13 $ (0.02) $ 0.07
======== ======== ======== ========
Weighted average number of
shares used in computing
basic net earnings (loss)
per share 42,416 41,401 42,519 41,753
======== ======== ======== ========
Weighted average number of
shares used in computing
diluted net earnings
(loss) per share 42,416 44,089 42,519 44,241
======== ======== ======== ========
AUDIOCODES LTD. AND ITS SUBSIDIARIES
NON-GAAP PROFORMA STATEMENTS OF OPERATIONS
--------------------------------------------------------------------
In thousands, except per share data
Six months ended Three months ended
June 30, June 30,
------------------- -------------------
2007 2006 2007 2006
-------- -------- -------- --------
(Unaudited) (Unaudited)
------------------- -------------------
Revenues $ 74,987 $ 64,629 $ 38,444 $ 33,295
Cost of revenues *) **) 31,171 26,005 16,025 13,446
-------- -------- -------- --------
Gross profit 43,816 38,624 22,419 19,849
Operating expenses:
Research and development,
net *) 18,795 13,178 9,594 6,597
Selling and
marketing *) **) 19,363 14,586 9,764 7,364
General and
administrative *) 4,370 3,023 2,160 1,569
-------- -------- -------- --------
Total operating expenses 42,528 30,787 21,518 15,530
-------- -------- -------- --------
Operating income 1,288 7,837 901 4,319
Financial income, net 1,270 2,352 766 1,243
Equity in losses of
affiliated companies 533 386 204 213
-------- -------- -------- --------
Income before taxes on
income 2,025 9,803 1,463 5,349
Income taxes, net **) 136 386 80 260
-------- -------- -------- --------
Non-GAAP net income $ 1,889 $ 9,417 $ 1,383 $ 5,089
======== ======== ======== ========
Non-GAAP diluted net
earnings per share $ 0.04 $ 0.21 $ 0.03 $ 0.11
======== ======== ======== ========
Weighted average number of
shares used in computing
non-GAAP diluted net
earnings per share 43,664 50,770 43,481 50,922
======== ======== ======== ========
*) Excluding stock-based compensation expenses related to options
granted to employees and others as a result of the adoption of
SFAR 123R as of January 1, 2006.
**) Excluding amortization of intangible assets related to the
acquisitions of Nuera and Netrake during the third quarter of 2006
and to the acquisition of CTI Squared during the second quarter of
2007.
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
Six months ended Three months ended
June 30, June 30,
------------------- -------------------
2007 2006 2007 2006
-------- -------- -------- --------
(Unaudited) (Unaudited)
------------------- -------------------
GAAP Net income (loss) $ (3,412) $ 5,530 $ (1,036) $ 3,253
======== ======== ======== ========
GAAP Diluted earnings
(loss) per share $ (0.08) $ 0.13 $ (0.02) $ 0.07
======== ======== ======== ========
Cost of revenues:
Stock-based compensation (*) 331 252 161 118
Amortization expenses(**)
1,379 -- 720 --
-------- -------- -------- --------
1,710 252 881 118
Research and development, net:
Stock-based compensation (*) 1,586 1,366 751 658
Selling and marketing:
Stock-based compensation (*) 1,865 1,594 885 741
Amortization expenses(**)
522 -- 261 --
-------- -------- -------- --------
2,387 1,594 1,146 741
General and administrative:
Stock-based compensation (*)
356 675 11 319
Income tax effect(**) (738) -- (370) --
-------- -------- -------- --------
Non- GAAP Net income $ 1,889 $ 9,417 $ 1,383 $ 5,089
======== ======== ======== ========
Non-GAAP Diluted earnings
per share $ 0.04 $ 0.21 $ 0.03 $ 0.11
======== ======== ======== ========
*) Stock-based compensation expenses related to options granted to
employees and others as a result of the adoption of SFAR 123R as of
January 1, 2006.
**) Amortization of intangible assets related to the acquisitions
of Nuera and Netrake during the third quarter of 2006 and to the
acquisition of CTI Squared during the second quarter of 2007.
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
--------------------------------------------------------------------
U.S. dollars in thousands
Six months ended Three months ended
June 30, June 30,
------------------ ------------------
2007 2006 2007 2006
---- ---- ---- ----
(Unaudited) (Unaudited)
----------- -----------
Cash flows from operating activities:
-------------------------------------
Net income (loss) $ (3,412) $ 5,530 $ (1,036) $ 3,253
Adjustments required to
reconcile net income to
net cash provided by
operating activities:
Depreciation and
amortization 4,049 1,724 1,975 856
Net loss from sale of
marketable securities -- 15 -- --
Amortization of marketable
securities premiums and
accretion of discounts, net 53 121 17 61
Equity in losses of affiliated
companies 533 386 204 213
Increase (decrease) in accrued
severance pay, net 227 71 (21) (58)
Stock-based compensation
expenses 4,138 3,887 1,808 1,836
Amortization of senior
convertible notes discount
and deferred charges 100 99 50 50
Increase in accrued interest on
marketable securities, bank
deposits and structured notes (319) (251) (206) (265)
Decrease (increase) in
deferred tax assets (347) (209) (210) 96
Decrease (increase) in trade
receivables, net 5,126 (1,964) 1,980 (2,035)
Decrease (increase) in other
receivables and prepaid
expenses (633) (904) 272 (554)
Increase in inventories (3,729) (1,815) (1,791) (357)
Increase (decrease) in trade
payables 432 1,025 (1,011) 2,702
Increase (decrease) in other
payables and accrued
expenses (4,811) 614 1,048 (15)
Decrease in deferred tax
liabilities (734) -- (367) --
------- ------- ------- -------
Net cash provided by operating
activities 673 8,329 2,712 5,783
------- ------- ------- -------
Cash flows from investing activities:
-------------------------------------
Proceeds from sale and
maturity of marketable
securities 16,600 1,979 7,800 1,000
Proceeds from sale of bank
deposits 25,000 23,000 -- 5,791
Investments in companies (538) (2,115) (338) (978)
Payment for acquisition of
CTI Squared*) (4,897) -- (4,397) --
Purchase of property and
equipment (1,352) (996) (474) (537)
Investment in
long-term deposit (11,000) -- (11,000) --
------- ------- ------- -------
Net cash provided by
(used in) investing
activities 23,813 21,868 (8,409) 5,276
------- ------- ------- -------
Cash flows from financing activities:
-------------------------------------
Proceeds from issuance of
shares upon exercise of
options and employee
stock purchase plan 2,730 7,359 255 1,044
------- ------- ------- --------
Net cash provided by financing
activities 2,730 7,359 255 1,044
------- ------- ------- --------
Increase (decrease) in cash
and cash equivalents 27,216 37,556 (5,442) 12,103
Cash and cash equivalents at
the beginning of the period 25,171 70,957 57,829 96,410
------- ------- ------- --------
Cash and cash equivalents at
the end of the period $52,387 $108,513 $52,387 $108,513
======= ======== ======= ========
*)Excluding cash and cash equivalents.