EX-99.1 2 tm1921326d1_ex1.htm EXHIBIT 1

Exhibit 1

 

  AudioCodes Press Release

 

P R E S S  R E L E A S E

 

Company Contacts   IR Agency Contact

Niran Baruch,
VP Finance & Chief Financial Officer

AudioCodes

Tel: +972-3-976-4000
Niran.baruch@audiocodes.com

Shirley Nakar,
Director, Investor Relations
AudioCodes

Tel: +972-3-976-4000

shirley@audiocodes.com

Brett Maas, Managing Partner Hayden IR

Tel: +1-646-536-7331

Brett@haydenir.com

 

 

AudioCodes Reports Third Quarter 2019 Results

 

Lod, Israel – October 29, 2019 - AudioCodes (NASDAQ: AUDC) Press Release

 

Third Quarter Highlights

 

·Quarterly revenues increased by 15.5% year-over-year to $51.4 million;

 

·Quarterly service revenues increased by 16.2% year-over-year to $16.3 million;

 

·Quarterly UC-SIP revenues increased more than 15% year-over-year;

 

·Quarterly GAAP gross margin percentage was 62.9%; quarterly Non-GAAP gross margin percentage was 63.2%;

 

·Quarterly GAAP operating margin percentage was 11.7%; quarterly Non-GAAP operating margin percentage was 14.5%;
   
·Quarterly cash flow from operating activities was $4.0 million;

 

·Quarterly GAAP net income was $4.4 million, or $0.14 per diluted share;

 

·Quarterly Non-GAAP net income was $7.4 million, or $0.24 per diluted share;

 

·AudioCodes declared a semi-annual cash dividend of 12 cents per share. The dividend, in the aggregate amount of $3.5 million, was paid on September 3, 2019.

 

 

AudioCodes Reports Third Quarter 2019 Results

Page 1 of 9

 

 

 

  AudioCodes Press Release

 

Details

 

AudioCodes, a leading vendor of advanced voice networking and media processing solutions for the digital workplace, today announced financial results for the third quarter ended September 30, 2019.

 

Revenues for the third quarter of 2019 were $51.4 million compared to $49.5 million for the second quarter of 2019 and $44.5 million for the third quarter of 2018.

 

Net income was $4.4 million, or $0.14 per diluted share, for the third quarter of 2019 compared to $4.1 million, or $0.14 per diluted share, for the third quarter of 2018.

 

On a Non-GAAP basis, net income was $7.4 million, or $0.24 per diluted share, for the third quarter of 2019 compared to $5.8 million, or $0.19 per diluted share, for the third quarter of 2018.

 

Non-GAAP net income excludes: (i) share-based compensation expenses; (ii) amortization expenses related to intangible assets; (iii) expenses or income related to revaluation of an earn-out liability in connection with the acquisition of Active Communications Europe; (iv) financial income or expenses related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies and (v) non-cash deferred tax expenses. A reconciliation of net income 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 was $4.0 million for the third quarter of 2019. Cash and cash equivalents, long- and short-term bank deposits and short-term marketable securities were $69.5 million as of September 30, 2019 compared to $65.4 million as of December 31, 2018. The increase in cash and cash equivalents, long- and short-term bank deposits and short-term marketable securities was the result of cash from operating activities offset, in part, by the use of cash for the continued repurchasing of the Company’s ordinary shares pursuant to its share repurchase program and the payment of cash dividends during 2019.

 

 

Page 2 of 9

 

 

 

  AudioCodes Press Release

 

"We are pleased to report record financial results for the third quarter of 2019,” said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes. “We continue to enjoy growth trends in the UC and UCaaS markets and an increased pace of migration of service providers to All-IP. Our strong execution across our business lines, aided by these growth trends, enabled us to expand our business. We improved our financial performance on both revenues and profits. Our improved operational efficiency and the growth in our operating margin percentage to 14.5% underscored our financial success.”

 

“With greater industry focus on the meeting space, we have increased our investments in this area since the beginning of 2019. Earlier in October we announced our entry into the market in collaboration with Dolby. Our Room Experience (RX) solution suite is designed to address a wide range of customer room environments from huddle rooms to large rooms and the boardroom. Our solutions include a comprehensive portfolio of devices built around Dolby hardware and audio technology in order to deliver an exceptional audio experience in rooms of all sizes.  The initiative also includes Meeting Insights, an enterprise software solution designed to easily capture, organize, share and distribute the content of enterprise meetings using AudioCodes’ state-of-the-art Voice.ai technology.”

 

“A continued theme in our investments is the emerging voice.ai area where we are making progress with encouraging results. We continue to prudently invest in our future offerings and remain focused on maximizing the return on these investments for our shareholders,” concluded Mr. Adlersberg.

 

 

Cash Dividend

 

On August 6, 2019, the Company declared a cash dividend of $0.12 per share. The dividend, in the aggregate amount of $3.5 million, was paid on September 3, 2019 to all of the Company’s shareholders of record on August 19, 2019.

 

 

Page 3 of 9

 

 

 

  AudioCodes Press Release

 

Conference Call & Web Cast Information

 

AudioCodes will conduct a conference call at 8:30 A.M., Eastern Time today to discuss the Company's third quarter of 2019 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 webcast. Investors are invited to listen to the call live via webcast at the AudioCodes investor website at http://www.audiocodes.com/investors-lobby

 

 

Follow AudioCodes’ social media channels:

 

AudioCodes invites you to join our online community and follow us on: AudioCodes Voice Blog, LinkedIn, Twitter, Facebook, and YouTube.

 

About AudioCodes

 

AudioCodes Ltd. (NASDAQ, TASE: AUDC) is a leading vendor of advanced voice networking and media processing solutions for the digital workplace. AudioCodes enables enterprises and service providers to build and operate all-IP voice networks for unified communications, contact centers, and hosted business services. AudioCodes offers a broad range of innovative products, solutions and services that are used by large multi-national enterprises and leading tier-1 operators around the world.

 

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.

 

©2019 AudioCodes Ltd. All rights reserved. AudioCodes, AC, HD VoIP, HD VoIP Sounds Better, IPmedia, Mediant, MediaPack, What’s Inside Matters, OSN, SmartTAP, User Management Pack, VMAS, VoIPerfect, VoIPerfectHD, Your Gateway To VoIP, 3GX, VocaNom, AudioCodes One Voice, AudioCodes Meeting Insights, AudioCodes Room Experience and CloudBond 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

 

Page 4 of 9

 

 

 

  AudioCodes Press Release

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

 

   September 30,   December 31, 
   2019   2018 
   (Unaudited)   (Audited) 
ASSETS        
         
CURRENT ASSETS:          
Cash and cash equivalents  $51,097   $31,503 
Short-term and restricted bank deposits   7,394    12,381 
Short-term marketable securities and accrued interest   10,006    19,602 
Trade receivables, net   24,072    22,279 
Other receivables and prepaid expenses   5,303    5,885 
Inventories   30,172    22,620 
Total current assets   128,044    114,270 
           
LONG-TERM ASSETS:          
Long-term and restricted bank deposits  $994   $1,894 
Deferred tax assets   2,719    4,350 
Operating lease right-of-use assets   30,750    - 
Severance pay funds   18,738    17,518 
Total long-term assets   53,201    23,762 
           
PROPERTY AND EQUIPMENT, NET   4,472    3,865 
           
GOODWILL, INTANGIBLE ASSETS AND OTHER, NET   37,211    37,475 
           
Total assets  $222,928   $179,372 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
           
CURRENT LIABILITIES:          
Current maturities of long-term bank loans  $2,456   $2,487 
Trade payables   7,819    6,188 
Other payables and accrued expenses   23,098    22,541 
Deferred revenues   29,746    23,727 
Short-term operating lease liabilities   8,605    - 
Total current liabilities   71,724    54,943 
           
LONG-TERM LIABILITIES:          
Accrued severance pay  $20,072   $18,728 
Long-term bank loans   1,814    3,687 
Deferred revenues and other liabilities   8,945    7,466 
Long-term operating lease liabilities   22,530    - 
Total long-term liabilities   53,361    29,881 
           
Total shareholders’ equity   97,843    94,548 
Total liabilities and shareholders' equity  $222,928   $179,372 

 

 

Page 5 of 9

 

 

 

  AudioCodes Press Release

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands, except share and per share data

 

 

   Nine months ended   Three months ended 
   September 30,   September 30, 
   2019   2018   2019   2018 
   (Unaudited)   (Unaudited) 
Revenues:                
Products  $100,375   $89,237   $35,079   $30,462 
Services   47,115    41,209    16,333    14,057 
                     
Total Revenues   147,490    130,446    51,412    44,519 
Cost of revenues:                    
Products   43,682    38,428    15,532    13,414 
Services   10,914    10,071    3,529    3,413 
                     
Total Cost of revenues   54,596    48,499    19,061    16,827 
                     
Gross profit   92,894    81,947    32,351    27,692 
                     
Operating expenses:                    
Research and development, net   30,258    25,626    10,599    8,283 
Selling and marketing   37,885    37,377    12,665    12,020 
General and administrative   8,354    7,713    3,091    2,402 
                     
Total operating expenses   76,497    70,716    26,355    22,705 
                     
Operating income   16,397    11,231    5,996    4,987 
Financial income (expenses), net   (1,992)   186    (913)   (37)
                     
Income before taxes on income   14,405    11,417    5,083    4,950 
Taxes on income, net   (2,195)   (2,454)   (716)   (815)
                     
Net income  $12,210   $8,963   $4,367   $4,135 
                     
Basic net earnings per share  $0.42   $0.31   $0.15   $0.14 
                     
Diluted net earnings per share  $0.40   $0.30   $0.14   $0.14 
Weighted average number of shares used in computing basic net earnings per share (in thousands)   29,195    28,855    29,157    28,797 
Weighted average number of shares used in computing diluted net earnings per share (in thousands)   30,705    30,118    30,642    30,272 

 

 

 

Page 6 of 9

 

 

 

  AudioCodes Press Release

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME

U.S. dollars in thousands, except per share data

 

   Nine months ended   Three months ended 
   September 30,   September 30, 
   2019   2018   2019   2018 
   (Unaudited)   (Unaudited) 
GAAP net income  $12,210   $8,963   $4,367   $4,135 
                     
GAAP net earnings per share  $0.40   $0.30   $0.14   $0.14 
                     
Cost of revenues:                    
Share-based compensation (1)   121    138    55    51 
Amortization expenses (2)   204    522    68    174 
    325    660    123    225 
Research and development, net:                    
Share-based compensation (1)   648    445    226    181 
                     
Selling and marketing:                    
Share-based compensation (1)   1,360    861    606    307 
Amortization expenses (2)   45    45    15    15 
    1,405    906    621    322 
General and administrative:                    
Share-based compensation (1)   1,204    854    465    314 
Revaluation of earn-out liability (3)   (23)   200    -    - 
    1,181    1,054    465    314 
Financial expenses:                    
Exchange rate differences (4)   2,330    -    1,072    - 
                     
Income taxes:                    
Deferred tax (5)   1,632    1,752    544    584 
                     
Non-GAAP net income  $19,731   $13,780   $7,418   $5,761 
Non-GAAP diluted net earnings per share  $0.63   $0.45   $0.24   $0.19 

 

(1)Share-based compensation expenses related to options and restricted share units granted to employees and others.
(2)Amortization of intangible assets related to the acquisitions of Mailvision and Active Communications Europe assets.
(3)Expenses or income related to revaluation of an earn-out liability in connection with the acquisition of Active Communications Europe.
(4)Financial income or expenses related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies.
(5)Non-cash deferred tax expenses.

 

 

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.

 

 

Page 7 of 9

 

 

 

  AudioCodes Press Release

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

 

   Nine months ended   Three months ended 
   September 30,   September 30, 
   2019   2018   2019   2018 
   (Unaudited)   (Unaudited) 
Cash flows from operating activities:                    
Net income  $12,210   $8,963   $4,367   $4,135 
Adjustments required to reconcile net income to net cash provided by operating activities:                    
Depreciation and amortization   1,522    1,666    542    561 
Amortization of marketable securities premiums and accretion of discounts, net   79    271    -    83 
Increase in accrued severance pay, net   124    43    239    182 
Share-based compensation expenses   3,333    2,298    1,352    853 
Decrease in deferred tax assets, net   1,481    1,689    528    563 
Decrease (increase) in accrued interest and exchange rate effect of loans, marketable securities and bank deposits   120    (79)   (39)   (64)
Changes in operating leases, net   385    -    (965)   - 
Decrease (increase) in trade receivables, net   (2,006)   (4,395)   617    (1,500)
Decrease (increase) in other receivables and prepaid expenses   482    (3,133)   279    (2,063)
Increase in inventories   (7,677)   (5,500)   (421)   (3,414)
Increase (decrease) in trade payables   1,631    988    (2,036)   530 
Increase (decrease) in other payables and accrued expenses   1,424    2,761    (641)   1,880 
Increase in deferred revenues   7,648    8,392    217    1,736 
                     
Net cash provided by operating activities   20,756    13,964    4,039    3,482 
                     
Cash flows from investing activities:                    
Investment in short-term deposits   -    (3,500)   -    - 
Proceeds from short-term deposits   10,962    -    4,991    400 
Proceeds from long-term deposits   900    807    300    300 
Proceeds from redemption of marketable securities   19,385    1,577    -    - 
Purchase of marketable securities   (10,006)   -    (10,006)   - 
Purchase of property and equipment   (1,676)   (978)   (315)   (362)
                     
Net cash provided by (used in) investing activities   19,565    (2,094)   (5,030)   338 

 

 

Page 8 of 9

 

 

 

  AudioCodes Press Release

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

 

   Nine months ended   Three months ended 
   September 30,   September 30, 
   2019   2018   2019   2018 
   (Unaudited)   (Unaudited) 
Cash flows from financing activities:                    
Purchase of treasury shares   (8,002)   (11,569)   -    (1,058)
                     
Repayment of bank loans   (1,853)   (1,887)   (616)   (625)
Cash dividends paid to shareholders   (6,720)   (5,761)   (3,502)   (5,761)
Payment related to the acquisition of ACS   (410)   (151)   -    - 
Proceeds from issuance of shares upon exercise of options and warrants   2,233    4,583    771    2,906 
                     
Net cash used in financing activities   (14,752)   (14,785)   (3,347)   (4,538)
                     
Net increase (decrease) in cash, cash equivalents, and restricted cash   25,569    (2,915)   (4,338)   (718)
Cash, cash equivalents and restricted cash at beginning of period   31,503    24,235    61,410    22,038 
Cash, cash equivalents and restricted cash at end of period  $57,072   $21,320   $57,072   $21,320 

 

 

Page 9 of 9