AudioCodes Reports Third Quarter 2016 Results

LOD, Israel, Nov. 1, 2016 /PRNewswire/ --

Third Quarter Highlights

• Quarterly revenues increased by 3.7% over the previous quarter and by 8.7% year-over-year to $37.2 million;
• Revenues related to UC-SIP business increased above 20% compared to the third quarter of 2015;
• Quarterly service revenues increased by 17.4% year-over-year to $11.3 million;
• GAAP gross margin was a record 61.0%, compared to 59.2% in the third quarter of 2015;
• Non-GAAP gross margin was also a record 61.7%, compared to 60.0% in the third quarter of 2015;
• Quarterly GAAP net income was $971,000, or $0.03 per diluted share, compared to a net loss of $130,000, or ($0.00) per diluted share, in the prior year period;
• Quarterly Non-GAAP net income was $2.9 million, or $0.08 per diluted share, compared to a Non-GAAP net income of $1.7 million, or $0.04 per diluted share, in the prior year period;
• Quarterly cash flow from operating activities was $3.4 million;
• AudioCodes repurchased 3,372,000 of its ordinary shares during the quarter at an aggregate cost of $15.0 million.

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 third quarter ended September 30, 2016.

Revenues for the third quarter of 2016 were $37.2 million compared to $35.9 million for the second quarter of 2016 and $34.2 million for the same period last year.

Net income was $971,000, or $0.03 per diluted share, for the third quarter of 2016 compared to net income of $721,000, or $0.02 per diluted share, for the second quarter of 2016 and a net loss of $130,000, or ($0.00) per diluted share, for the same period last year.

On a Non-GAAP basis, the Company reported quarterly net income of $2.9 million, or $0.08 per diluted share, compared to $2.4 million, or $0.06 per diluted share, in the second quarter of 2016 and $1.7 million, or $0.04 per diluted share, for the same period last year.

Non-GAAP net income (loss) excludes: (i) stock-based compensation expenses; (ii) amortization expenses related to intangible assets; (iii) expenses related to deferred payments in connection with the acquisition of Active Communications Europe and (iv) 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 third quarter of 2016 totaled $3.4 million. Cash and cash equivalents, long- and short-term bank deposits and long- and short-term marketable securities were $65.1 million as of September 30, 2016 compared to $75.3 million as of September 30, 2015. The decrease in cash and cash equivalents, long- and short-term bank deposits and long- and short-term marketable securities was the result of the use of cash for the continued repurchasing of the Company's ordinary shares pursuant to its share repurchase program.

"We are pleased to report strong financial results for the third quarter of 2016," said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes. "This improved performance reflects the positive impact of our strategic initiatives and investments in the area of UC-SIP. Revenues related to the UC-SIP business line grew over 20% compared to the third quarter of 2015 and were in line with our objective of growing the business annually at a rate of 15% to 20%. The projected continued growth in the market for unified communications, UCaaS and SIP trunking business services, and the growing global trend of service providers migrating their voice services networks to all-IP are expected to provide continued support for growth in coming years. We are focused on the strategic partnerships that we have formed and continue to foster with market leaders in our markets, as we continue to win customer opportunities and projects. We also continued to buy back shares in the third quarter to return value to shareholders, as we are confident in the continued strength of our future business opportunities," concluded Mr. Adlersberg.

Share Buy Back Program

During the quarter ended September 30, 2016, AudioCodes acquired 3,372,000 of its ordinary shares under its share repurchase program for a total consideration of approximately $15.0 million. As of September 30, 2016, AudioCodes had acquired an aggregate of 10.7 million of its ordinary shares since August 2014 for an aggregate consideration of approximately $46.5 million.

On July 20, 2016, AudioCodes completed a cash self-tender offer and accepted for purchase a total of 3,000,000 of its ordinary shares, the maximum amount of shares subject to the offer, at a cash purchase price of $4.35 per share. The 3,000,000 ordinary shares were purchased under the Company's share purchase program, and are part of the total of 3,372,000 ordinary shares that were purchased during the third quarter of this year.

In October 2016, AudioCodes received court approval in Israel to purchase up to an aggregate of $15 million of additional ordinary shares pursuant to its share repurchase program. The current court approval for share repurchases will expire on April 25, 2017.

Conference Call & Web Cast Information

AudioCodes will conduct a conference call at 8:00 A.M., Eastern Time today to discuss the Company's second quarter 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.

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.

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.

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, User Management Pack, 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.

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SOURCE AudioCodes