EX-1 2 v429687_ex1.htm EXHIBIT 1

 

Exhibit 1

 

 

 

 

Company Contacts   IR Agency Contact
     

Niran Baruch,
VP Finance & Chief Accounting 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

Philip Carlson/Collin Dennis

KCSA Strategic Communications

Tel: +1-212-896-1233

audc@kcsa.com

 

AudioCodes Reports Fourth Quarter and Full Year 2015 Results

 

Lod, Israel - January 26, 2016 -

 

Fourth Quarter and Full Year 2015 Highlights:

 

·Quarterly revenues increased by 4.2% over the previous quarter to $35.6 million; full year 2015 revenues totaled $139.8 million;
·Quarterly service revenues increased by 3.4% over the previous quarter to $9.9 million; full year 2015 service revenues totaled $37.8 million.
·Quarterly Non-GAAP gross margin was a record 60.5%; Full Year 2015 Non-GAAP gross margin totaled 60.0%;
·Quarterly Non-GAAP operating margin grew to a record 8.9%;
·Quarterly Non-GAAP net income was $2.8 million, or $0.07 per diluted share; full year 2015 Non-GAAP net income was $5.9 million, or $0.14 per diluted share;
·Cash flow from operating activities was $7.7 million for the quarter and $17.6 million for the full year 2015;
·AudioCodes repurchased 1.1 million shares of its ordinary shares at an aggregate cost of $4.5 million during the quarter;

 

Details:

 

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, 2015.

 

AudioCodes Reports Fourth Quarter and Full Year 2015 Results

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Revenues for the fourth quarter of 2015 were $35.6 million, compared to $34.2 million for the third quarter of 2015 and $39.1 million for the fourth quarter of 2014. Revenues were $139.8 million in 2015 compared to $151.6 million in 2014.

 

Net income was $2.8 million, or $0.07 per diluted share, for the fourth quarter of 2015, compared to $946,000, or $0.02 per diluted share, for the fourth quarter of 2014. Full year 2015 net income was $366,000, or $0.01 per diluted share, compared to a net loss of $(86,000), or $(0.00) per diluted share, in 2014.

 

On a Non-GAAP basis, quarterly net income was $2.8 million, or $0.07 per diluted share, compared to $2.5 million, or $0.06 per diluted share, in the fourth quarter last year. Full year Non-GAAP net income was $5.9 million, or $0.14 per diluted share, compared to $6.8 million, or $0.16 per diluted share, in 2014.

 

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 or expenses. 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 2015 totaled $7.7 million and $17.6 million for the full year 2015. Cash and cash equivalents, bank deposits and marketable securities were $80.4 million as of December 31, 2015 compared to $85.7 million as of December 31, 2014. The decrease in cash and cash equivalents, bank deposits and marketable securities for the full year 2015, was the result of the use of cash for the continued repurchasing of the Company’s ordinary shares pursuant to its share repurchase program and the acquisition of Active Communications Europe.

 

“We are pleased to report strong financial results for the fourth quarter and solid progress in our key business lines for the full year 2015,” said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes. “AudioCodes’ 2015 performance was underlined by successful execution of our strategic plan to focus on the growing needs of enterprises and service providers to realign their operations towards unified communications (UC) and the transition to an ALL-IP network. In the fourth quarter of 2015 we enjoyed strong business momentum related to the Microsoft Skype for Business (SfB) solution and in our session border controller (SBC) activities, which provided sequential revenue growth of more than 20%. Enjoying a record gross margin of 60.5% in our sales, and good control of operating expenses, we also achieved record performance in operating margin which increased to 8.9% of revenues and strong positive cash flow.”

 

AudioCodes Reports Fourth Quarter and Full Year 2015 Results

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“We continued to invest in our UC and SIP-related (UC-SIP) activities and announced an agreement to acquire Active Communications Europe to further strengthen our ability to provide advanced software solutions for the emerging Microsoft SfB online application. We intend to further invest in the transition to a world of All-IP networks and solidify our leading position in connecting businesses to the emerging Cloud-Centric world. Investments made in these areas over the past few years continue to contribute to our sustained growth and leadership in the enterprise voice business. These investments, coupled with increased focus on software products, solutions and services, are expected to provide further strength and support to our success in coming years”, concluded Mr. Adlersberg.

 

Share Buy Back Program

 

During the quarter ended December 31, 2015, AudioCodes acquired 1.1 million shares under the existing share repurchase program for a total consideration of approximately $4.5 million. As of December 31, 2015 and since beginning the repurchase of its shares in August 2014, AudioCodes had acquired an aggregate of 5.8 million shares for an aggregate consideration of approximately $24.8 million.

 

In January 2016, AudioCodes received court approval in Israel to purchase up to an aggregate of $15 million of additional ordinary shares pursuant to this program. The current court approval for share repurchases will expire on May 19, 2016.

 

Acquisition of Active Communications Europe

 

On December 31, 2015 (the “Closing Date”), AudioCodes entered into a definitive agreement to acquire Active Communications Europe, a provider of communications solutions that increase the effectiveness of departments, individuals and organizations. Active Communications Europe is a Microsoft Silver Partner specializing in Unified Communications.

 

The consideration for this transaction consists of payment of $3 million in cash to the stockholders of Active Communications Europe, plus an earn-out arrangement. The fair value of the earn-out was estimated at $2.1 million and was recorded as a liability in AudioCodes financial statements as of the Closing Date. The Company allocated the acquired assets and liabilities assumed based on a preliminary Purchase Price Allocation (“PPA”) performed by an independent financial advisor. Following the transaction, Active Communications Europe became a wholly owned subsidiary of AudioCodes.

 

AudioCodes Reports Fourth Quarter and Full Year 2015 Results

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Conference Call & Web Cast Information

 

AudioCodes will conduct a conference call at 8:00 A.M., Eastern Time today to discuss the Company’s fourth quarter and full year 2015 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.

 

About AudioCodes

 

AudioCodes Ltd. (NASDAQ, TASE: 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.

 

To download AudioCodes investor relations app, which offers access to its SEC filings, press releases, videos, audiocasts and more, please visit Apple’s App Store for the iPhone and iPad or Google Play for Android mobile devices.

 

AudioCodes Reports Fourth Quarter and Full Year 2015 Results

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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.

 

©2016 AudioCodes Ltd. All rights reserved. AudioCodes, AC, HD VoIP, HD VoIP Sounds Better, IPmedia, Mediant, MediaPack, What’s Inside Matters, OSN, SmartTAP, VMAS, VoIPerfect, VoIPerfectHD, Your Gateway To VoIP, 3GX, VocaNom, AudioCodes One Voice 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.

 

AudioCodes Reports Fourth Quarter and Full Year 2015 Results

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AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

U.S. dollars in thousands

 

   December 31,   December 31, 
   2015   2014 
   (Unaudited)   (Audited) 
ASSETS          
           
CURRENT ASSETS:          
Cash and cash equivalents  $18,908   $14,797 
Short-term and restricted bank deposits   5,661    7,630 
Short-term marketable securities and accrued interest   2,480    543 
Trade receivables, net   25,622    31,056 
Other receivables and prepaid expenses   4,405    6,244 
Inventories   16,778    14,736 
Total current assets   73,854    75,006 
           
LONG-TERM ASSETS:          
Long-term and restricted bank deposits  $3,034   $4,066 
Long-term marketable securities   50,294    58,684 
Deferred tax assets   1,659    4,192 
Severance pay funds   16,086    17,835 
Total long-term assets   71,073    84,777 
           
PROPERTY AND EQUIPMENT, NET   4,090    3,856 
           
GOODWILL, INTANGIBLE ASSETS AND OTHER, NET   40,246    36,745 
           
Total assets  $189,263   $200,384 
           
LIABILITIES AND EQUITY          
           
CURRENT LIABILITIES:          
Current maturities of long-term bank loans  $5,338   $4,686 
Trade payables   7,304    10,111 
Other payables and accrued expenses   20,060    15,758 
Deferred revenues   12,885    10,233 
Total current liabilities   45,587    40,788 
           
LONG-TERM LIABILITIES:          
Accrued severance pay  $16,377   $17,908 
Long-term bank loans   6,032    5,105 
Deferred revenues and other liabilities   3,814    2,862 
Total  long-term liabilities   26,223    25,875 
           
Total equity   117,453    133,721 
Total liabilities and equity  $189,263   $200,384 

 

AudioCodes Reports Fourth Quarter and Full Year 2015 Results

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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, 
   2015   2014   2015   2014 
   (Unaudited)   (Audited)   (Unaudited) 
Revenues:                    
Products  $101,990   $118,561   $25,704   $30,012 
Services   37,769    33,018    9,945    9,105 
Total Revenues   139,759    151,579    35,649    39,117 
Cost of revenues:                    
Products   47,227    54,349    11,879    13,582 
Services   9,744    8,243    2,470    2,370 
Total Cost of revenues   56,971    62,592    14,349    15,952 
Gross profit   82,788    88,987    21,300    23,165 
Operating expenses:                    
Research and development, net   27,996    32,275    6,664    7,938 
Selling and marketing   43,360    45,534    10,260    11,278 
General and administrative   8,726    7,677    1,913    1,986 
Total operating expenses   80,082    85,486    18,837    21,202 
Operating income   2,706    3,501    2,463    1,963 
Financial income (expenses), net   442    (196)   (158)   (28)
Income before taxes on income   3,148    3,305    2,305    1,935 
Income tax benefit (expense), net   (2,782)   (3,391)   491    (989)
                     
Net income (loss)  $366   $(86)  $2,796   $946 
                     
Basic net earnings (loss) per share  $0.01   $(0.00)  $0.07   $0.02 
                     
Diluted net earnings (loss) per share  $0.01   $(0.00)  $0.07   $0.02 
                     
Weighted average number of shares used in computing basic net earnings (loss) per share (in thousands)   40,178    42,286    38,443    42,738 
                     
Weighted average number of shares used in computing diluted net earnings (loss) per share (in thousands)   40,565    42,286    38,771    43,205 

 

AudioCodes Reports Fourth Quarter and Full Year 2015 Results

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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, 
   2015   2014   2015   2014 
   (Unaudited)   (Audited)   (Unaudited) 
Revenues:                    
Products  $101,990   $118,561   $25,704   $30,012 
Services   37,769    33,018    9,945    9,105 
Total Revenues   139,759    151,579    35,649    39,117 
Cost of revenues:                    
Products   46,422    53,503    11,675    13,379 
Services   9,456    8,008    2,399    2,309 
Total Cost of revenues (1) (2)   55,878    61,511    14,074    15,688 
Gross profit   83,881    90,068    21,575    23,429 
                     
Operating expenses:                    
Research and development, net (1)   27,567    31,690    6,588    7,816 
Selling and marketing (1) (2)   42,106    44,065    10,003    10,911 
General and administrative (1)   7,944    6,910    1,810    1,818 
Total operating expenses   77,617    82,665    18,401    20,545 
Operating income   6,264    7,403    3,174    2,884 
Financial income (expenses), net   442    (196)   (158)   (28)
Income before taxes on income   6,706    7,207    3,016    2,856 
Taxes on income, net (3)   (805)   (453)   (178)   (314)
                     
Net income  $5,901   $6,754   $2,838   $2,542 
                     
Diluted net earnings per share  $0.14   $0.16   $0.07   $0.06 
                     
Weighted average number of shares used in computing diluted net earnings per share (in thousands)   40,809    43,568    39,035    43,524 

 

 

(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, and Mailvision assets.
(3)Excluding non-cash deferred tax expenses (benefits).

 

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 Reports Fourth Quarter and Full Year 2015 Results

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AUDIOCODES LTD. AND ITS SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME

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

 

   Year ended   Three months ended 
   December 31,   December 31, 
   2015   2014   2015   2014 
   (Unaudited)   (Audited)   (Unaudited) 
GAAP net income (loss)  $366   $(86)  $2,796   $946 
                     
GAAP net earnings (loss) per share  $0.01   $(0.00)  $0.07   $0.02 
                     
Cost of revenues:                    
Stock-based compensation (1)   101    89    27    16 
Amortization expenses (2)   992    992    248    248 
    1,093    1,081    275    264 
Research and development, net:                    
Stock-based compensation (1)   429    585    76    122 
                     
Selling and marketing:                    
Stock-based compensation (1)   1,061    1,105    242    276 
Amortization expenses (2)   193    364    15    91 
    1,254    1,469    257    367 
General and administrative:                    
Stock-based compensation (1)   782    767    103    168 
                     
Income taxes:                    
Deferred tax (3)   1,977    2,938    (669)   675 
                     
Non-GAAP net income  $5,901   $6,754   $2,838   $2,542 
Non-GAAP diluted net earnings per share  $0.14   $0.16   $0.07   $0.06 

 

(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, and Mailvision assets.
(3)Non-cash deferred tax expenses (benefits).

 

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 Reports Fourth Quarter and Full Year 2015 Results

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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, 
   2015   2014   2015   2014 
   (Unaudited)   (Audited)   (Unaudited) 
Cash flows from operating activities:                    
Net income (loss)  $366   $(86)  $2,796   $946 
Adjustments required to reconcile net income or loss to net cash provided by operating activities:                    
Depreciation and amortization   2,963    3,230    613    800 
Amortization of marketable securities premiums and accretion of discounts, net   1,107    820    256    312 
Increase (decrease) in accrued severance pay, net   218    (223)   (59)   (108)
Stock-based compensation expenses   2,373    2,546    448    582 
Decrease (increase) in long- term deferred tax assets   1,975    2,940    (671)   676 
Decrease in accrued interest on loans, marketable securities, convertible notes and bank deposits   55    152    113    141 
Decrease (increase) in trade receivables, net   5,575    (4,625)   598    (955)
Decrease (increase)  in other receivables and prepaid expenses   1,777    (2,249)   1,277    1926 
Decrease (increase) in inventories   (2,013)   (925)   (481)   319 
Increase (decrease) in trade payables   (2,987)   2,896    (183)   (434)
Increase (decrease) in deferred revenues   3,758    3,595    702    (447)
Increase (decrease) in other payables and accrued expenses   2,395    (2,114)   2,297    (1,391)
                     
Net cash provided by operating activities   17,562    5,957    7,706    2,367 
                     
Cash flows from investing activities:                    
Purchase of marketable securities   -    (60,286)   -    - 
Proceeds from sale of marketable securities   2,557    -    -    - 
Decrease in short-term deposits, net   1,969    1,471    (105)   571 
Decrease (increase) in long-term bank deposits   1,032    2,685    (1,994)   851 
Proceeds from redemption of marketable securities   2,711    15,390    -    - 
Purchase of property and equipment   (1,976)   (2,539)   (299)   (1,089)
Purchase of intangible asset   -    (100)   -    (100)
Net cash paid in acquisition of subsidiary   (1,960)   -    (1,960)   - 
                     
Net cash provided by (used in) investing activities   4,333    (43,379)   (4,358)   233 

 

AudioCodes Reports Fourth Quarter and Full Year 2015 Results

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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, 
   2015   2014   2015   2014 
   (Unaudited)   (Audited)   (Unaudited) 
Cash flows from financing activities:                    
Purchase of treasury stock   (19,523)   (5,267)   (4,532)   (2,534)
Repayment of senior convertible notes   -    (338)   -    (53)
Repayment of long-term bank loans   (4,685)   (4,686)   (1,366)   (1,367)
Proceeds from bank loans   6,264    -    6,264    - 
Consideration related to payment of acquisition of Mailvision   (233)   (233)   -    - 
Proceeds from issuance of shares upon exercise of options and warrants   393    2,236    57    85 
Proceeds from issuance of shares, net   -    29,744    -    - 
                     
Net cash provided by (used in) financing activities   (17,784)   21,456    423    (3,869)
                     
Increase (decrease) in cash and cash equivalents   4,111    (15,966)   3,771    (1,269)
Cash and cash equivalents at the beginning of the period   14,797    30,763    15,137    16,066 
Cash and cash equivalents at the end of the period  $18,908   $14,797   $18,908   $14,797 

 

AudioCodes Reports Fourth Quarter and Full Year 2015 Results

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