AudioCodes Ltd.

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Press Release $AUDC AudioCodes Ltd.

0 COMMENTs 30 Jan
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AudioCodes Reports Fourth Quarter and Full Year 2012 Results

LOD, Israel, Jan. 30, 2013 (GLOBE NEWSWIRE) -- AudioCodes (Nasdaq:AUDC), a leading provider of Voice over IP (VoIP) technologies, products and services, today announced financial results for the fourth quarter and full year ended December 31, 2012.

Revenues for the fourth quarter of 2012 were $32.8 million, compared to $31.4 million for the third quarter of 2012, and $37.2 million for the fourth quarter of 2011. Revenues were $127.5 million in 2012 compared to $155.8 million in 2011.

Net income in accordance with U.S. generally accepted accounting principles (GAAP) was, $524,000, or $0.01 per diluted share, for the fourth quarter of 2012, compared to a GAAP net loss of $1.1 million, or ($0.03) per diluted share, for the third quarter of 2012, and GAAP net income of $670,000, or $0.02 per diluted share, for the fourth quarter of 2011.

The Company reported a GAAP net loss of $4.2 million, or ($0.11) per diluted share, in 2012 compared to GAAP net income of $7.2 million, or $0.17 per diluted share, in 2011.

Non-GAAP net income for the fourth quarter of 2012 was $1.1 million, or $0.03 per diluted share, compared to a non-GAAP net loss of $419,000, or ($0.01) per diluted share, for the third quarter of 2012, and non-GAAP net income of $1.4 million, or $0.04 per diluted share, for the fourth quarter of 2011.

The Company reported a non-GAAP net loss of $1.5 million, or ($0.04) per diluted share, in 2012 compared to non-GAAP net income of $10.8 million, or $0.26 per diluted share, in 2011.

Non-GAAP net income (loss) excludes: (i) stock-based compensation expenses; and (ii) amortization expenses related to intangible assets. 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.

Positive cash flow from operations for the fourth quarter of 2012 totaled $8.2 million. Cash and cash equivalents, bank deposits and marketable securities were $58.5 million as of December 31, 2012, compared to $54.1 million as of September 30, 2012 and $75.6 million as of December 31, 2011. The year-over-year net decrease in cash balances was primarily related to cash used for stock repurchases and the reduction in the Company's accounts payable outstanding as well as $10.2 million used for the repayment of loans.

In October 2011, the Company's Board of Directors authorized a program to repurchase up to 4.0 million of the Company's Ordinary Shares, NIS 0.01 nominal (par) value. During 2012, the Company repurchased a total of approximately 2.76 million of its ordinary shares at an aggregate cost of approximately $6.7 million. As of October 1, 2012, the authorized stock repurchase program was completed, with AudioCodes having repurchased 3.96 million of its ordinary shares at an aggregate cost of approximately $10.7 million.

"We are pleased to report a second consecutive quarter of improved financial performance underlined by sequential growth in revenue, return to profitability and substantial improvement in cash flow from operations," said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes. "Growth in our networking business was driven primarily by higher product sales and services in the areas of Unified Communication and Enterprise Session Border Controllers applications, both representing strategic directions for us. Investments made with our global partners over the past few years continue to contribute in a meaningful way to our return to growth and our leadership in the industry. These investments also provide further strength and support to our expected success in coming years."

"As we look ahead to 2013, AudioCodes stands well positioned to extend its presence within the multi-billion dollar markets for Unified Communications, Contact Centers and Business Services. We believe that our leadership in the Microsoft Lync voice eco-system, as the only single-source provider for Microsoft partners for end-to-end voice product and services solutions, is a clear competitive advantage within one of the most attractive segments of the communications sector. With the recent launch of our 'AudioCodes One Voice for Microsoft Lync' offering, we are simplifying and accelerating voice-enablement of Lync implementations with a complete portfolio of products and services, including, among others, IP Phones, Media Gateways, Enterprise Session Border Controllers (E-SBCs), Survivable Branch Appliances (SBAs) and Session Experience Manager (SEM), as well as complete network management and assessment tools, support and professional services," 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 2012 operating performance, financial results and outlook. The conference call will 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 and Value Added Applications. AudioCodes' underlying technology, VoIPerfectHD(TM), 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 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.

©2013 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,
  2012 2011
  Unaudited Audited
ASSETS    
     
CURRENT ASSETS:    
Cash and cash equivalents  $15,219 $28,257
Short-term and restricted bank deposits 10,330 14,008
Short-term marketable securities and accrued interest 7,966 345
Trade receivables, net 24,413 30,923
Other receivables and prepaid expenses  7,274 7,077
Inventories  16,797 20,415
Total current assets 81,999 101,025
     
LONG-TERM INVESTMENTS:    
Long-term and restricted bank deposits $9,251 $9,120
Long-term marketable securities 15,762 23,823
Investments in an affiliated company 1,084 1,251
Deferred tax assets  3,565 2,600
Severance pay funds  15,772 15,410
Total long-term assets 45,434 52,204
     
PROPERTY AND EQUIPMENT, NET 3,619 3,368
     
GOODWILL AND INTANGIBLE ASSETS, NET 34,952 36,080
     
Total assets $166,004 $192,677
     
LIABILITIES AND EQUITY    
   
CURRENT LIABILITIES:    
Current maturities of long-term bank loans  $8,436 $10,243
Trade payables 6,817 12,362
Other payables and accrued expenses 15,062 18,102
Deferred revenues 5,086 5,235
Total current liabilities 35,401 45,942
     
LONG-TERM LIABILITIES:    
Accrued severance pay $16,284 $16,106
Long-term bank loans 14,477 22,912
Senior convertible notes 353 353
Deferred revenues and other liabilities  1,192 1,345
Total long-term liabilities 32,306 40,716
     
Total equity 98,297 106,019
Total liabilities and equity $166,004 $192,677
 
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,
  2012 2011 2012 2011
  (Unaudited) (Audited) (Unaudited)
Revenues $127,490 $155,827 $32,806 $37,223
Cost of revenues 54,294 64,145 14,100 15,208
Gross profit  73,196 91,682 18,706 22,015
Operating expenses:        
Research and development, net 28,677 32,150 6,231 8,241
Selling and marketing 40,040 43,248 9,721 10,763
General and administrative 8,214 9,028 1,733 2,174
Total operating expenses 76,931 84,426 17,685 21,178
Operating income (loss) (3,735) 7,256 1,021 837
Financial income (expenses), net 453 423 87 (93)
Income (loss) before taxes on income (3,282) 7,679 1,108 744
Taxes on income, net (541) (238) (257) (45)
Equity in losses of an affiliated companies (354) (277) (327) (29)
Net income (loss) $(4,177) $7,164 $524 $670
Basic net earnings (loss) per share  $(0.11) $0.17 $0.01 $0.02
Diluted net earnings (loss) per share  $(0.11) $0.17 $0.01 $0.02
Weighted average number of shares used in computing basic net earnings (loss) per share (in thousands) 39,125 41,438 37,931 41,092
Weighted average number of shares used in computing diluted net earnings (loss) per share (in thousands) 39,125 41,935 38,169 41,411
 
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,  
  2012 2011 2012 2011
  (Unaudited) (Unaudited)
Revenues $127,490 $155,827 $32,806 $37,223
Cost of revenues (1) (2) 53,409 62,994 13,889 14,969
Gross profit  74,081 92,833 18,917 22,254
Operating expenses:        
Research and development, net (1) 28,247 31,624 6,103 8,120
Selling and marketing (1) (2) 39,299 41,981 9,592 10,508
General and administrative (1) 7,613 8,325 1,587 2,015
Total operating expenses 75,159 81,930 17,282 20,643
Operating income (loss) (1,078) 10,903 1,635 1,611
Financial income (expenses), net 453 423 87 (93)
Income (loss) before taxes on income (625) 11,326 1,722 1,518
Taxes on income, net (541) (238) (257) (45)
Equity in losses of an affiliated companies (354) (277) (327) (29)
Net income (loss) $(1,520) $10,811 $1,138 $1,444
Diluted net earnings (loss) per share  $(0.04) $0.26 $0.03 $0.04
Weighted average number of shares used in computing diluted net earnings (loss) per share (in thousands) 39,125 42,371 38,375 41,716
         
         
(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 CTI Squared.
         
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, 
  2012 2011 2012 2011
  (Unaudited) (Unaudited)
         
GAAP net income (loss) $(4,177) $7,164 $524 $670
         
GAAP net earnings (loss) per share $(0.11) $0.17 $0.01 $0.02
         
Cost of revenues:        
Stock-based compensation (1) 61 130 5 33
Amortization expenses (2) 824 1,021 206 206
  885 1,151 211 239
Research and development, net:      
Stock-based compensation (1) 430 526 128 121
         
Selling and marketing:        
Stock-based compensation (1) 437 963 53 179
Amortization expenses (2) 304 304 76 76
  741 1,267 129 255
General and administrative:      
Stock-based compensation (1) 601 703 146 159
         
Non-GAAP net income (loss) $(1,520) $10,811 $1,138 $1,444
Non-GAAP Diluted net earnings (loss) per share $(0.04) $0.26 $(0.03) $0.04
         
         
         
(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 CTI Squared. 
         
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, 
  2012 2011 2012 2011
  (Unaudited) (Audited) (Unaudited)
Cash flows from operating activities:      
Net income (loss) $(4,177) $7,164 $524 $670
Adjustments required to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization 2,883 3,239 747 717
Amortization of marketable securities premiums and accretion of discounts, net  436 416 109 110
Equity in losses of affiliated company and interest on loans to affiliated company 350 277 336 29
Increase (decrease) in accrued severance pay, net (184) (86) 125 (36)
Stock-based compensation expenses 1,529 2,323 332 492
Decrease (increase) in accrued interest on marketable securities, bank deposits and structured notes 4 (182) (1) (1)
Increase in long- term deferred tax assets (965) (339) (965) (339)
Decrease (increase) in trade receivables, net 6,510 (4,602) 2,491 924
Decrease (increase) in other receivables and prepaid expenses 1,106 (716) 3,514 681
Decrease (increase) in inventories 3,618 (4,136) 1,935 (1,959)
Increase (decrease) in trade payables (5,545) (1,157) 153 1,313
Increase (decrease) in deferred revenues 485 1,978 200 (67)
Increase (decrease) in other payables and accrued expenses (3,054) (5,464) (1,265) 1,478
         
Net cash provided by (used in) operating activities 2,996 (1,285) 8,235 4,012
       
Cash flows from investing activities:      
Purchase of marketable securities -- (24,402)  --   --
Short-term deposits, net 3,678 (183) 377 16,552
Net loans provided to affiliated company (183) (211) (111) (211)
Investments in long-term deposits (131) (9,120) -- (9,120)
Proceeds from long-term bank deposits -- -- 850 --
Purchase of property and equipment  (2,006) (1,579) (162) (316)
Net cash provided by (used in) investing activities 1,358 (35,495) 954 6,905
 
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, 
  2012 2011 2012 2011
  (Unaudited) (Audited) (Unaudited)
Cash flows from financing activities:      
Purchase of treasury stock (6,917) (3,812) (618) (3,812)
Proceeds from long-term bank loans -- 24,005 -- 5,255
Repayment of long-term bank loans  (10,242) (6,600) (2,866) (2,100)
Payment for acquisition of NSC non-controlling interest (336) (278) -- --
Proceeds from issuance of shares upon exercise of options, warrants and employee stock purchase plan 103 1,411 68 28
         
Net cash provided by (used in) financing activities (17,392) 14,726 (3,416) (629)
         
Increase (decrease) in cash and cash equivalents (13,038) (22,054) 5,773 10,288
Cash and cash equivalents at the beginning of the period 28,257 50,311 9,446 17,969
         
Cash and cash equivalents at the end of the period $15,219 $28,257 $15,219 $28,257 
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
Source: AudioCodes Ltd.
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About

AudioCodes Ltd. designs, develops, and markets products for voice and data over packet networks. Its networking products and solutions include analog media gateways for toll bypass, residential gateways, hosted, access, and enterprise applications; digital media gateways for wireless, wireline, cable, enterprise, fixed mobile convergence, and unified communications; multi-service business gateways for integrated voice, data, and security access; IP phones; mobile voice over Internet protocol (VoIP) access solutions; media servers for voice and video services and functionalities, such as conferencing, video sharing, and messaging; and value-added applications for unified communications. The company also provides technology products comprising voice over packet processors, VoIP communication boards, media processing boards, and voice and data logging hardware integration board products, as well as signal processor chips. In addition, it offers professional services, which comprise customization and development projects for customers. The company sells its products to original equipment manufacturers, network equipment providers, systems integrators, and distributors in the telecommunications and networking industries. It primarily operates in the United States, Europe, Asia, Latin America, and Israel. The company has strategic partnerships with Microsoft, BroadSoft, Avaya, and Alcatel-Lucent. AudioCodes Ltd. was founded in 1992 and is based in Lod, Israel.
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