AudioCodes Reports Third Quarter 2014 Results

AudioCodes Reports Third Quarter 2014 Results

Oct 30, 2014

Third Quarter 2014 Highlights:

  • Revenues totaled $38.9 million, an 11.2% increase over the year ago quarter
  • Quarterly networking revenues totaled $33.1 million, an increase of 14.7% year-over-year
  • GAAP net loss of $708,000, or $0.02 per diluted share
  • Non-GAAP net income of $1.6 million, or $0.04 per diluted share
  • Revenues from sales of SBC products grew more than 100% year-over-year
  • Revenues from our new products group category grew more than 30% over the previous quarter
  • Board of Directors approved a share repurchase program. Company acquired 505,679 shares at a cost of $2.7 million during the quarter ended September 30, 2014

Details:

Announces appointment of Ofer Segev as new Chief Financial Officer 
effective November 1, 2014

Lod, Israel – October 30, 2014 – AudioCodes (NasdaqGS: 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, 2014.

Revenues for the third quarter of 2014 were $38.9 million, compared to $37.6 million for the second quarter of 2014 and $35.0 million for the third quarter of 2013.

Net loss in accordance with U.S. generally accepted accounting principles (GAAP) was $708,000, or ($0.02) per diluted share, for the third quarter of 2014, compared to a GAAP net loss of $46,000, or ($0.00) per diluted share, for the second quarter of 2014, and GAAP net income of $935,000, or $0.02 per diluted share, for the third quarter of 2013.

Non-GAAP net income for the third quarter of 2014 was $1.5 million, or $0.04 per diluted share, compared to $1.6 million, or $0.04 per diluted share, for the second quarter of 2014, and $1.8 million, or $0.04 per diluted share, for the third quarter of 2013.

Non-GAAP net income excludes: (i) stock-based compensation expenses; (ii) amortization expenses related to intangible assets; and (iii) non-cash deferred tax 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 2014 totaled $2.0 million. Cash and cash equivalents, bank deposits and marketable securities were $89.3 million as of September 30, 2014.

“We are pleased to report our ninth consecutive quarter of revenue growth. Strong demand across our networking business lines drove an increase of networking revenues by 14.7% over the year-ago quarter,” said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes.

“We continued to expand our business in the Microsoft Lync market segment, posting growth of above 10% over the previous quarter and more than 40% over the-year-ago quarter. Targeting 40% growth for 2014, we now expect this business to become close to 20% of our total Company sales for the year. The launch of AudioCodes One Box 365 has proved to be a success in the first few months of deployment and we believe that the One Box 365 product family will enable further expansion of our Microsoft Lync related business.”

“Additionally, we have experienced record sales of our Session Border Controller product line which grew more than 100% over the year-ago quarter and more than 5% over the previous quarter. An Infonetics research report published in August 2014 recognized AudioCodes as the fastest growing vendor in the Enterprise SBC market in 2Q14, capturing the #2 ranking among ESBC vendors, with a 12.2% market share, up nearly double from 6.4% in the same period a year ago. Our SBC offering continues to lead the Lync space. In the recent quarter our products were selected by one of the leading global hotel chains, a 4000 employee pharma company, and a US government organization. We also enjoyed repeat business from our existing installed base, including from one of the world’s largest semiconductors manufacturers,” added Mr. Adlersberg.

“To advance growth initiatives, we increased our focus on the design and deployment of higher-value voice networking solutions and services to the enterprise market. Among our fast growing solutions are One Voice for Lync, One Voice Operation center including network management and voice quality performance monitoring servers, and the recently introduced One Box 365. We are confident that this increased focus on solutions and services will enable us to develop new cutting edge business communications solutions and services that will support further long-term revenue growth,” concluded Mr. Adlersberg.

New Chief Financial Officer

The Company announced that it has appointed Ofer Segev as its new Vice President of Finance and Chief Financial Officer, effective November 1, 2014. Mr. Segev has over 25 years of management experience in the high-tech and services sectors. Mr. Segev has served as Chief Financial Officer of private and public companies, including Ness technologies and he also served as its CEO. Mr. Segev holds a B.A. in economics and accounting from Bar-Ilan University in Israel, and has studied at the Kellogg School of Management at Northwestern University.

“Ofer is joining us at a time when we are very focused on delivering and executing our growth strategy. I am confident that his diverse managerial and professional experience will serve us well in our plans for growth and expansion,” said Shabtai Adlersberg, President and Chief Executive Officer. “I would like to wish Ofer much success in his new role and I am looking forward to him joining our team,” he added.

Guy Avidan, AudioCodes’ Vice President of Finance and Chief Financial Officer, will be leaving AudioCodes at the end of the month after more than four years at the Company in order to pursue new challenges. “Guy has played an important role in the development of the Company in the past four years. He has done an excellent job in leading our financial activities and managing our investor relationship activities” said Shabtai Adlersberg, President, and Chief Executive Officer of AudioCodes. “We have the good fortune that Guy has built a strong and capable financial team and I am confident that a smooth transition will occur. I and the rest of AudioCodes’ management and Board of Directors wish Guy good luck in his future endeavors.”

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. During the quarter ended September 30, 2014, AudioCodes acquired 505,679 shares under this program for total consideration of $2.7 million. In addition, AudioCodes has applied to the competent court in Israel for authorization to repurchase an additional amount of its Ordinary Shares for an aggregate purchase price of up to $15 million.

Conference Call & Web Cast Information

AudioCodes will conduct a conference call at 8:00 A.M., Eastern Time today to discuss the Company’s third quarter 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 Web cast. Investors are invited to listen to the call live via Web cast at the AudioCodes corporate website at www.audiocodes.com.

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