AudioCodes Reports Fourth Quarter and Full Year 2015 Results

AudioCodes Reports Fourth Quarter and Full Year 2015 Results

Jan 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:

Lod, Israel - January 26, 2016 - 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.

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.”

“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.

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

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