EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1
Exhibit 99.1
 

Allot Announces
First Quarter 2018 Financial Results
 
Revenues increased 18% Year over Year

Hod Hasharon, Israel – May 8, 2018 - Allot Communications Ltd. (NASDAQ: ALLT, TASE: ALLT), a global provider of leading innovative network intelligence and security solutions for service providers worldwide, today announced its first quarter 2018 financial results.
 
 Q1 2018 – Financial Highlights
 
·
Revenues were $21.7 million, up 18% year-over-year;
 
·
GAAP gross margin was 68%; Non-GAAP gross margin was 70%;
 
·
GAAP operating loss of $3.5 million; non-GAAP operating loss of $2.3 million;
 
·
Book-to-bill above one for the fifth consecutive quarter;
 
Financial Outlook:
 
·
Management maintains its previously issued guidelines for 2018.
 
·
Management continues to expect 2018 revenues to grow to between $91 - 95 million with the second half of the year stronger than the first half, reflecting typical seasonality;
 
·
2018 Book to Bill is expected at above 1;
 
Management Comment
 
Erez Antebi, President & CEO of Allot, commented:
 
The results in the first quarter of 2018 show we are on track in successfully executing the turnaround process we began last year and the transition to a security company.
 
We see a growing number of communication service providers worldwide realize that offering secure broadband at a premium price creates a substantial revenue potential as well as providing an important service to their customers.
 
Allot’s position as a leading technology provider for such security services puts us in a unique position to take advantage of this market opportunity.  We strongly believe that with over 20 million subscribers  protected by AllotSecure technology worldwide, this is just the beginning.”
 
 
Q1 2018 Financial Results Summary
 
Total revenues for the first quarter of 2018 were $21.7 million, up 18% compared to $18.4 million in the first quarter of 2017.
 
Gross profit on a GAAP basis for the first quarter of 2018 was $14.8 million (gross margin of 68.1%), a 22% improvement compared with $12.1 million (gross margin of 65.7%) in the first quarter of 2017.
 
Gross profit on a non-GAAP basis for the first quarter of 2018 was $15.1 million (gross margin of 69.6%), a 21% improvement compared with $12.5 million (gross margin of 67.5%) in the first quarter of 2017.
 
Net loss on a GAAP basis for the first quarter of 2018 was $3.7 million, or $0.11 per basic share, compared with a net loss of $5.1 million, or $0.15 per basic share, in the first quarter of 2017.
 
Non-GAAP net loss for the first quarter of 2018 was $2.4 million, or $0.07 per basic share, compared with a non-GAAP net loss of $3.6 million, or $0.11 per basic share, in the first quarter of 2017.
 
Cash and investments as of March 31, 2018 totaled $104.7 million. The Company recorded negative operating cash flow of $1.1 million during the first quarter of 2018.
 
# # #
 
Conference Call & Webcast:
 
The Allot management team will host a conference call to discuss first quarter 2018 earnings results today, May 8, 2018 at 8:30 am ET, 3:30 pm Israel time. To access the conference call, please dial one of the following numbers:
 
US: +1-888-668-9141, UK: +44(0) 800-917-5108, Israel: +972-3-918-0609.
 
A live webcast and, following the end of the call, an archive of the conference call, will be accessible on the Allot Communications website at: http://investors.allot.com/index.cfm
 
About Allot Communications

Allot Communications Ltd. (NASDAQ, TASE: ALLT) is a provider of leading innovative network intelligence and security solutions for service providers worldwide, enhancing value to their customers. Our solutions are deployed globally for network and application analytics, traffic control and shaping, network-based security services, and more. Allot’s multi-service platforms are deployed by over 500 mobile, fixed and cloud service providers and over 1000 enterprises. Our industry leading network-based security as a service solution has achieved over 50% penetration with some service providers and is already used by over 20 million subscribers in Europe. Allot. See. Control. Secure. For more information, visit www.allot.com
 
GAAP to Non-GAAP Reconciliation:
 
The difference between GAAP and non-GAAP revenues is related to the acquisitions made by the Company and represents revenues adjusted for the impact of the fair value adjustment to acquired deferred revenue related to purchase accounting. Non-GAAP net income is defined as GAAP net income 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, deferred tax asset adjustment, restructuring expenses, changes in taxes related items and other acquisition-related expenses.
 
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
 
This release contains forward-looking statements, which express the current beliefs and expectations of Company management. Such statements involve a number of known and unknown risks and uncertainties that could cause our future results, performance or achievements to differ significantly from the results, performance or achievements set forth in such forward-looking statements. Important factors that could cause or contribute to such differences include risks relating to: our ability to compete successfully with other companies offering competing technologies; the loss of one or more significant customers; consolidation of, and strategic alliances by, our competitors, government regulation; the timing of completion of key project milestones which impact the timing of our revenue recognition; lower demand for key value-added services; our ability to keep pace with advances in technology and to add new features and value-added services; managing lengthy sales cycles; operational risks associated with large projects; our dependence on third party channel partners for a material portion of our revenues; court approval of the Company’s proposed share buy-back program; 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. Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. 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:
GK Investor Relations
Ehud Helft/Gavriel Frohwein
+1 646 688 3559
allot@gkir.com
Public Relations Contact:
Vered Zur
Vice-President Marketing
International dialing +972-54-240 0042
vzur@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
  
   
March 31,
  
   
2018
    
2017
  
   
(Unaudited)
  
             
Revenues
  
$
21,732
    
$
18,435
  
Cost of revenues
    
6,924
      
6,318
  
Gross profit
    
14,808
      
12,117
  
                 
Operating expenses:
                
Research and development costs, net
    
5,793
      
5,533
  
Sales and marketing
    
10,033
      
8,980
  
General and administrative
    
2,466
      
2,541
  
Total operating expenses
    
18,292
      
17,054
  
Operating loss
    
(3,484
)
    
(4,937
)
Financial and other income, net
    
230
      
362
  
Loss before income tax expenses
    
(3,254
)
    
(4,575
)
                 
Tax expenses
    
432
      
502
  
Net Loss
    
(3,686
)
    
(5,077
)
                 
 Basic net loss per share
  
$
(0.11
)
  
$
(0.15
)
                 
 Diluted net loss per share
  
$
(0.11
)
  
$
(0.15
)
                 
Weighted average number of shares used in computing basic net loss per share
    
33,555,980
      
33,091,845
  
                 
Weighted average number of shares used in computing diluted net loss per share
    
33,555,980
      
33,091,845
  

TABLE  - 2
ALLOT COMMUNICATIONS LTD.
AND ITS SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP  CONSOLIDATED  STATEMENTS  OF  OPERATIONS
(U.S. dollars in thousands, except per share data)
 
   
Three Months Ended
  
   
March 31,
  
   
2018
    
2017
  
   
(Unaudited)
  
             
 GAAP Revenues
  
$
21,732
    
$
18,435
  
 Fair value adjustment for acquired deferred revenues write down
    
-
      
24
  
 Non-GAAP Revenues
  
$
21,732
    
$
18,459
  
                 
GAAP cost of revenues
  
$
6,924
    
$
6,318
  
 Share-based compensation (1)
    
(80
)
    
(95
)
 Amortization of intangible assets (2)
    
(232
)
    
(232
)
Non-GAAP cost of revenues
  
$
6,612
    
$
5,991
  
                 
 GAAP gross profit
  
$
14,808
    
$
12,117
  
 Gross profit adjustments
  
$
312
      
351
  
 Non-GAAP gross profit
  
$
15,120
    
$
12,468
  
                 
 GAAP operating expenses
  
$
18,292
    
$
17,054
  
 Share-based compensation (1)
    
(624
)
    
(749
)
 Amortization of intangible assets (2)
    
(175
)
    
(135
)
 Expenses related to M&A activities (3)
    
(38
)
    
(89
)
 Non-GAAP operating expenses
  
$
17,455
    
$
16,081
  
                 
 GAAP financial and other income
  
$
230
    
$
362
  
 Expenses related to M&A activities (3)
    
150
      
74
  
 Non-GAAP Financial and other income
  
$
380
    
$
436
  
                 
 GAAP taxes on income
  
$
432
    
$
502
  
 Tax expenses (in respect of net deferred tax asset recorded)
    
(19
)
    
(67
)
 Non-GAAP taxes on income
  
$
413
    
$
435
  
                 
 GAAP Net Loss
  
$
(3,686
)
  
$
(5,077
)
 Share-based compensation (1)
    
704
      
844
  
 Amortization of intangible assets (2)
    
407
      
367
  
 Expenses related to M&A activities (3)
    
188
      
163
  
 Fair value adjustment for acquired deferred revenues write down
    
-
      
24
  
 Tax expenses in respect of net deferred tax asset recorded
    
19
      
67
  
 Non-GAAP Net income (Loss)
  
$
(2,368
)
  
$
(3,612
)
                 
 GAAP Loss per share (diluted)
  
$
(0.11
)
  
$
(0.15
)
 Share-based compensation
    
0.02
      
0.03
  
 Amortization of intangible assets
    
0.01
      
0.01
  
 Expenses related to M&A activities
    
0.01
      
0.00
  
 Tax expenses (in respect of net deferred tax asset recorded)
    
0.00
      
0.00
  
 Non-GAAP Net loss per share (diluted)
    
(0.07
)
  
$
(0.11
)
                 
Weighted average number of shares used in computing GAAP diluted net loss per share
    
33,555,980
      
33,091,845
  
                 
Weighted average number of shares used in computing non-GAAP diluted net loss per share
    
33,555,980
      
33,091,845
  
 
TABLE  - 2 cont.
ALLOT COMMUNICATIONS LTD.
AND ITS SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP  CONSOLIDATED  STATEMENTS  OF  OPERATIONS
(U.S. dollars in thousands, except per share data)
 
     
Three Months Ended
  
     
March 31,
  
     
2018
    
2017
  
     
(Unaudited)
  
               
(1)
Share-based compensation (*):
            
 
Cost of revenues
  
$
80
    
$
95
  
 
Research and development costs, net
    
155
      
229
  
 
Sales and marketing
    
222
      
241
  
 
General and administrative
    
247
      
279
  
     
$
704
    
$
844
  
                   
(2)
Amortization of intangible assets
                
 
Cost of revenues
  
$
232
    
$
232
  
 
Sales and marketing
    
175
      
135
  
     
$
407
    
$
367
  
                   
(3)
Expenses related to M&A activities
                
 
General and administrative
  
$
38
    
$
89
  
 
Financial income
    
150
      
74
  
     
$
188
    
$
163
  

TABLE  - 3
ALLOT COMMUNICATIONS LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED  BALANCE  SHEETS
(U.S. dollars in thousands)
 
 
  
March 31,
    
December 31,
  
 
  
2018
    
2017
  
 
  
(Unaudited)
    
(Audited)
  
 
      
ASSETS
            
CURRENT ASSETS:
            
Cash and cash equivalents
  
$
22,835
    
$
15,342
  
Short term deposits
    
16,943
      
31,043
  
Restricted deposit
    
228
      
428
  
Marketable securities
    
64,682
      
63,194
  
Trade receivables, net
    
21,991
      
22,737
  
Other receivables and prepaid expenses
    
4,390
      
2,649
  
Inventories
    
8,174
      
7,897
  
Total current assets
    
139,243
      
143,290
  
 
                
LONG-TERM ASSETS:
                
Severance pay fund
    
303
      
302
  
Deferred taxes
    
282
      
301
  
Other assets
    
347
      
1,135
  
Total long-term assets
    
932
      
1,738
  
 
                
PROPERTY AND EQUIPMENT, NET
    
5,198
      
5,002
  
GOODWILL AND INTANGIBLE ASSETS, NET
    
38,616
      
34,495
  
 
                
Total assets
  
$
183,989
    
$
184,525
  
 
                
LIABILITIES AND SHAREHOLDERS' EQUITY
                
CURRENT LIABILITIES:
                
Trade payables
  
$
6,470
    
$
5,857
  
Deferred revenues
    
11,032
      
11,370
  
Other payables and accrued expenses
    
15,579
      
14,277
  
Total current liabilities
    
33,081
      
31,504
  
 
                
LONG-TERM LIABILITIES:
                
Deferred revenues
    
4,235
      
3,878
  
Accrued severance pay
    
781
      
747
  
Other long term liabilities
    
5,516
      
5,267
  
Total long-term liabilities
    
10,532
      
9,892
  
 
                
SHAREHOLDERS' EQUITY
    
140,376
      
143,129
  
 
                
Total liabilities and shareholders' equity
  
$
183,989
    
$
184,525
  

TABLE  - 4
ALLOT COMMUNICATIONS LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
 
 
  
Three Months Ended
  
 
  
March 31,
  
 
  
2018
    
2017
  
 
  
(Unaudited)
    
(Unaudited)
  
 
            
Cash flows from operating activities:
            
Net Loss
  
$
(3,686
)
  
$
(5,077
)
Adjustments to reconcile net income  to net cash used in operating activities:
                
Depreciation
    
498
      
529
  
Stock-based compensation related to options granted to employees
    
704
      
844
  
Amortization of intangible assets
    
407
      
367
  
Capital loss
    
3
      
4
  
Decrease in accrued severance pay, net
    
33
      
28
  
Decrease in other assets
    
788
      
308
  
Decrease in accrued interest and  amortization of premium on marketable securities
    
246
      
126
  
Decrease in trade receivables
    
746
      
1,260
  
Increase in other receivables and prepaid expenses
    
(1,879
)
    
(622
)
Increase in inventories
    
(277
)
    
(762
)
Decrease in long-term deferred taxes, net
    
19
      
67
  
Increase in trade payables
    
602
      
1,849
  
Increase (Decrease) in employees and payroll accruals
    
(499
)
    
276
  
Increase (Decrease) in deferred revenues
    
731
      
(853
)
Increase in other payables and accrued expenses
    
486
      
491
  
Net cash used in operating activities
    
(1,078
)
    
(1,165
)
 
                
Cash flows from investing activities:
                
Decrease in restricted deposit
    
200
      
-
  
Redemption of short-term deposits
    
14,100
      
473
  
Purchase of property and equipment
    
(694
)
    
(811
)
Investment in marketable securities
    
(7,061
)
    
(6,588
)
Proceeds from redemption or sale of marketable securities
    
4,991
      
4,749
  
Acquisitions
    
(3,048
)
    
-
  
Net cash provided by (used in) investing activities
    
8,488
      
(2,177
)
 
                
Cash flows from financing activities:
                
Exercise of employee stock options
    
83
      
24
  
Net cash provided by financing activities
    
83
      
24
  
                 
Increase (Decrease) in cash and cash equivalents
    
7,493
      
(3,318
)
Cash and cash equivalents at the beginning of the period
    
15,342
      
23,326
  
Cash and cash equivalents at the end of the period
  
$
22,835
    
$
20,008