PR Newswire | Apr 27, 2021 02:01AM EDT

04/27 01:00 CDT

AudioCodes Reports First Quarter 2021 Results LOD, Israel, April 27, 2021

LOD, Israel, April 27, 2021 /PRNewswire/ --

First Quarter Highlights

* Quarterly revenues increased by 13.1% year-over-year to $58.8 million; * Quarterly service revenues increased by 23.3% year-over-year to $21.8 million; * GAAP results:- Quarterly GAAP gross margin was 68.4%; - Quarterly GAAP operating margin was 17.2%; and- Quarterly GAAP net income was $10.0 million, or $0.29 per diluted share; * Non-GAAP results:- Quarterly Non-GAAP gross margin was 68.7%;- Quarterly Non-GAAP operating margin was 22.5%; and- Quarterly Non-GAAP net income was $12.7 million, or $0.37 per diluted share; * Net cash provided by operating activities was $13.0 million for the quarter. * AudioCodes declared a cash dividend of 16 cents per share. The dividend, in the aggregate amount of $5.3 million, was paid on March 4, 2021. * AudioCodes repurchased 350,000 of its ordinary shares during the quarter at an aggregate cost of $10.3 million.

Details

AudioCodes (NASDAQ: AUDC), a leading vendor of advanced communications software, products and productivity solutions for the digital workplace, today announced the financial results for the first quarter ended March 31, 2021.

Revenues for the first quarter of 2021 were $58.8 million compared to $52.0 million for the first quarter of 2020.

Net income was $10.0 million, or $0.29 per diluted share, for the first quarter of 2021, compared to a net income of $5.3 million, or $0.17 per diluted share, for the first quarter of 2020.

On a Non-GAAP basis, net income was $12.7 million, or $0.37 per diluted share, for the first quarter of 2021 compared to $7.8 million, or $0.25 per diluted share, in the first quarter of 2020.

Non-GAAP net income excludes: (i) share-based compensation expenses; (ii) amortization expenses related to the acquisition of Active Communications Europe assets; (iii) financial income or expenses related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies and (iv) non-cash deferred tax expenses (benefit). A reconciliation of net income 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 was $13.0 million for the first quarter of 2021. Cash and cash equivalents, long and short-term bank deposits and long and short-term marketable securities were $182.5 million as of March 31, 2021 compared to $186.3 million as of December 31, 2020. 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 and the payment of a cash dividend in the first quarter of 2021, offset, in part, by cash from operating activities.

"We are pleased to report strong financial results for the first quarter of 2021," said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes.

"We enjoyed solid business momentum in our enterprise-related activities driven by secular growth opportunities within the UCaaS and Contact Center markets. Our UCaaS business grew over 15% year-over-year and our contact center business grew over 20% year-over-year. These two businesses, which form our Enterprise Business offering, contributed more than 80% of our first quarter revenue. Services revenue grew 23.3% year-over-year and was driven mainly by strength in our professional and managed services offerings. Most importantly we continued to make progress in pivoting to recurring revenues with strong traction experienced in our AudioCodes Live offering operations."

"As in previous quarters, communications and collaboration, as well as work from home trend, continue to play center stage in today's world and the emerging digital workplace. Our investment in enhancing our portfolio of products and solutions for real-time cloud communications, the Microsoft Teams ecosystem and the new emerging intelligent contact center have proven successful in expanding our business in recent years and provide a strong basis for our expected growth in coming years.

Mr. Adlersberg continued, "We have enjoyed solid execution in our Voice.ai operations. Revenue for our Voice.ai operations grew over 100% year-over-year. Recording solutions for UCaaS and contact center, conversational IVR, meeting space solutions and voice-enablement for virtual intelligent agents lead our success in this area. We now expect to reach revenue of $10 million based on our organic growth in this business in the coming 24 months," concluded Mr. Adlersberg.

Share Buy Back Program andCash Dividend

In January 2021, the Company received court approval in Israel to purchase up to an aggregate amount of $30 million of additional ordinary shares. The court approval also permits AudioCodes to declare a dividend of any part of this amount. The approval is valid through July 19, 2021.

On February 4, 2021, the Company declared a cash dividend of $0.16 per share. The dividend, in the aggregate amount of approximately $5.3 million, was paid on March 4, 2021 to all of the Company's shareholders of record on February 18, 2021.

During the quarter ended March 31, 2021, the Company acquired 350,000 of its ordinary shares under its share repurchase program for a total consideration of $10.3 million.

Conference Call & Web Cast Information

AudioCodes will conduct a conference call at 8:30 A.M., Eastern Time today to discuss the Company's first quarter of 2021 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.

About AudioCodes

AudioCodes Ltd. (NASDAQ, TASE: AUDC) is a leading vendor of advanced communications software, products and productivity solutions for the digital workplace. AudioCodes enables enterprises and service providers to build and operate all-IP voice networks for unified communications, contact centers, and hosted business services. AudioCodes offers a broad range of innovative products, solutions and services that are used by large multi-national enterprises and leading tier-1 operators around the world.

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; possible adverse impact of the COVID-19 pandemic on our business and results of operations; 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.

(c)2021 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, AudioCodes Meeting Insights, AudioCodes Room Experience 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.

Summary financial data follows

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

March 31, December 31,

2021 2020

(Unaudited) (Audited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents $ 108,248 $ 40,934

Restricted cash 5,100 5,100

Short-term and restricted bank deposits 661 84,817

Short-term marketable securities and accrued interest 634 449

Trade receivables, net 36,190 34,518

Other receivables and prepaid expenses 6,300 8,631

Inventories 27,972 29,193

Total current assets 185,105 203,642

LONG-TERM ASSETS:

Long-term and restricted bank deposits $ 94 $ 94

Long-term marketable securities and accrued interest 67,810 54,895

Deferred tax assets 10,996 12,081

Operating lease right-of-use assets 23,863 25,430

Severance pay funds 20,034 20,597

Total long-term assets 122,797 113,097

PROPERTY AND EQUIPMENT, NET 4,406 4,593

GOODWILL, INTANGIBLE ASSETS AND OTHER, NET 36,717 36,791

Total assets $ 349,025 $ 358,123

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Current maturities of long-term bank loans $ 900 $ 1,200

Trade payables 6,452 6,984

Other payables and accrued expenses 25,972 28,531

IIA settlement liability 11,295 11,684

Deferred revenues 41,128 37,182

Short-term operating lease liabilities 8,764 9,178

Total current liabilities 94,511 94,759

LONG-TERM LIABILITIES:

Accrued severance pay $ 20,967 $ 21,830

Deferred revenues and other liabilities 12,736 12,243

Long-term operating lease liabilities 15,575 19,436

Total long-term liabilities 49,278 53,509

Total shareholders' equity 205,236 209,855

Total liabilities and shareholders' equity $ 349,025 $ 358,123

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands, except per share data

Three months ended

March 31,

2021 2020

(Unaudited)

Revenues:

Products $ 37,021 $ 34,334

Services 21,817 17,688

Total Revenues 52,022 58,838

Cost of revenues:

Products 13,536 13,762

Services 5,031 3,981

Total Cost of revenues 18,567 17,743

Gross profit 40,271 34,279

Operating expenses:

Research and development, net 12,047 11,582

Selling and marketing 14,476 13,269

General and administrative 3,625 3,265

Total operating expenses 30,148 28,116

Operating income 10,123 6,163

Financial income, net 1,578 1,306

Income before taxes on income 7,469 11,701

Taxes on income, net (1,708) (2,205)

Net income $ 9,993 $ 5,264

Basic net earnings per share $ 0.30 $ 0.18

Diluted net earnings per share $ 0.29 $ 0.17



Weighted average number of shares used in computing basic net earnings per share (in thousands) 29,540

32,895



Weighted average number of shares used in computing diluted net earnings per share (in thousands) 31,046

34,089

AUDIOCODES LTD. AND ITS SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME

U.S. dollars in thousands, except per share data

Three months ended

March 31,

2021 2020

(Unaudited)

GAAP net income $ 5,264 $ 9,993

GAAP net earnings per share $ 0.17 $ 0.29

Cost of revenues:

Share-based compensation (1) 76 50

Amortization expenses (2) 68 68

144 118

Research and development, net:

Share-based compensation (1) 577 243

Selling and marketing:

Share-based compensation (1) 1,300 759

Amortization expenses (2) 6 15

1,306 774

General and administrative:

Share-based compensation (1) 1,034 607

1,034 607

Financial (income):

Exchange rate differences (3) (1,530) (1,282)

Income taxes:

Deferred tax (4) 1,219 2,030



Non-GAAP net income $ 7,754

$ 12,743

Non-GAAP diluted net earnings per share $ 0.37 $ 0.25

(1) Share-based compensation expenses related to options and restricted share units granted to employees and others.

(2) Amortization of intangible assets related to the acquisitions of Active Communications Europe assets.

(3) Financial income related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies.

(4) Non-cash deferred tax expenses (benefit).

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

Three months ended

March 31,

2021 2020

(Unaudited)

Cash flows from operating activities:

Net income $ 9,993 $ 5,264

Adjustments required to reconcile net income to net cashprovided by operating activities:

Depreciation and amortization 559 568

Amortization of marketable securities premiums and 129 -accretion of discounts, net

Increase (decrease) in accrued severance pay, net (300) 312

Share-based compensation expenses 2,987 1,659

Decrease in deferred tax assets, net 1,207 2,017

Increase in accrued interest and exchange rate effect of (69) (12)loans, marketable securities and bank deposits

Decrease in operating lease right-of-use assets 1,779 1,876

Decrease in operating lease liabilities (4,487) (4,244)

Changes in IIA settlement liability, net (389) (606)

Increase in trade receivables, net (1,672) (775)

Decrease (increase) in other receivables and prepaid 842 (75)expenses

Decrease in inventories 1,026 1,287

Decrease in trade payables (532) (1,275)

Decrease in other payables and accrued expenses (2,709) (1,909)

Increase in deferred revenues 4,656 2,698

Net cash provided by operating activities 13,020 6,785

Cash flows from investing activities:

Proceeds from short-term deposits, net 84,156 150

Proceeds from long-term deposits - 150

Purchase of marketable securities (14,314) -

Purchase of property and equipment (103) (348)

Net cash provided by (used in) investing activities 69,739 (48)

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

U.S. dollars in thousands

Three months ended

March 31,

2021 2020

(Unaudited)

Cash flows from financing activities:

Purchase of treasury shares (10,255) -

Repayment of bank loans (300) (619)

Cash dividends paid to shareholders (5,302) (3,866)

Proceeds from issuance of shares upon exercise of options and warrants 412 348

Net cash used in financing activities (15,445) (4,137)

Net increase in cash, cash equivalents, and restricted cash 67,314 2,600

Cash, cash equivalents and restricted cash at beginning of period 46,034 69,773

Cash, cash equivalents and restricted cash at end of period $ 113,348 $ 72,373

Company Contacts

Roger L. ChuchenNiran Baruch, VP, Investor RelationsChief Financial Officer AudioCodesAudioCodes Tel: 732-764-2552Tel: +972-3-976-4000 Mobile: 347-752-0780niran.baruch@audiocodes.com roger.chuchen@audiocodes.com

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SOURCE AudioCodes