AudioCodes Reports Fourth Quarter and Full Year 2014 Results

Jan 27, 2015

Fourth Quarter and Full Year Highlights:

  • Quarterly revenues increased 7.9% year-over-year to $39.1 million; full year 2014 revenues totaled $151.6 million, up 10.5% year over year
  • Quarterly networking revenues increased 13.0% year-over-year; full year 2014 networking revenues increased 14.5% year-over-year
  • Quarterly Non-GAAP gross margin improved to 59.9%; full year 2014 gross margin totaled 59.4%, up from 58.0% a year ago
  • Quarterly Non-GAAP operating margin improved to 7.4%
  • Quarterly Non-GAAP net income was $2.5 million, or $0.06 per diluted share; full year 2014 Non-GAAP net income totaled $6.8 million, up 26.5% year over year
  • Strong momentum in revenues from Microsoft Lync ecosystem

Details:

Lod, Israel – January 27, 2015 – AudioCodes (NasdaqGS: AUDC), a leading provider of converged voice solutions, which enables 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, 2014.

Revenues for the fourth quarter of 2014 were $39.1 million, compared to $38.9 million for the third quarter of 2014 and $36.3 million for the fourth quarter of 2013. Revenues were $151.6 million in 2014 compared to $137.2 million in 2013.

Net income was $946,000, or $0.02 per diluted share, for the fourth quarter of 2014, compared to $2.8 million net income, or $0.07 per diluted share, for the fourth quarter of 2013. Full year 2014 net loss was $(86,000), or $(0.00) per diluted share, compared to net income of $4.2 million, or $0.11 per diluted share, in 2013.

On a Non-GAAP basis, quarterly net income was $2.5 million, or $0.06 per diluted share, compared to $1.9 million, or $0.05 per diluted share, in the fourth quarter last year. Full year Non-GAAP net income was $6.8 million, or $0.16 per diluted share, compared to $5.3 million, or $0.14 per diluted share, last year.

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 2014 totaled $2.4 million. Cash and cash equivalents, bank deposits and marketable securities were $85.7 million as of December 31, 2014 compared to $62.3 million as of December 31, 2013. The increase in cash and cash equivalents from a year ago was primarily a result of the receipt of net proceeds of approximately $29.7 million in connection with a public offering of the Company’s ordinary shares in March 2014.

“We are pleased to report strong financial results for the fourth quarter, our tenth consecutive quarter of improved financial performance, and solid growth for the full year 2014,” said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes. “AudioCodes’ 2014 performance was underlined by the successful execution of our strategic realignment to focusing on the growing needs of enterprise and business customers, driven primarily by sales in the Microsoft Lync voice ecosystem and in the contact center and business services markets. We have achieved a better than anticipated increase in our service revenues in the fourth quarter and full year 2014. Investments made with our global partners in the unified communications market 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.”

“We continue to focus on controlling costs and were able to achieve 7.4% operating margin in the fourth quarter representing the highest level since the beginning of 2012. We continue to generate cash and keep a strong balance sheet” said Ofer Segev, VP Finance & CFO of AudioCodes.

Share Buy Back Program

In August, 2014, AudioCodes announced that its Board of Directors had approved a program to repurchase up to $3.0 million of its Ordinary Shares. In November, 2014, AudioCodes received court approval to repurchase up to an additional $15 million of its Ordinary Shares. During the quarter ended December 31, 2014, AudioCodes acquired 543,212 shares under this program for a total consideration of approximately $2.5 million. As of December 31, 2014, AudioCodes acquired an aggregate of 1,048,891 shares under this program for an aggregate consideration of approximately $5.3 million.

Business Outlook

The Company expects top line growth and operating margin expansion in 2015. AudioCodes is forecasting full year 2015 revenues in the range of $162 million to $167 million. The Company is also forecasting Non GAAP net income per diluted share from in the range of $0.26 to $0.30.

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 2014 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 corporate website at www.audiocodes.com.

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