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

Dividend of 17 cents per share

07/27 01:00 CDT

AudioCodes Reports Second Quarter 2021 Results and Declares Semi-Annual Dividend of 17 cents per share LOD, Israel, July 27, 2021

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

Second Quarter Highlights

* Quarterly revenues increased by 13.2% year-over-year to $60.6 million; Quarterly service revenues increased by 32.8% year-over-year to $22.8 million. * GAAP results:- Quarterly GAAP gross margin was 69.4%; - Quarterly GAAP operating margin was 16.7%; and- Quarterly GAAP net income was $8.2 million, or $0.24 per diluted share. * Non-GAAP results:- Quarterly Non-GAAP gross margin was 69.7%;- Quarterly Non-GAAP operating margin was 22.4%; and- Quarterly Non-GAAP net income was $12.7 million, or $0.37 per diluted share. * Net cash provided by operating activities was $17.1 million for the quarter. * AudioCodes repurchased 236,544 of its ordinary shares during the quarter at an aggregate cost of $7.1 million.

Details

AudioCodes (NASDAQ: AUDC), a leading vendor of advanced communications software, products and productivity solutions for the digital workplace, today announced its financial results for the second quarter ended June 30, 2021.

Revenues for the second quarter of 2021 were $60.6 million compared to $58.8 million for the first quarter of 2021 and $53.5 million for the second quarter of 2020.

Net income was $8.2 million, or $0.24 per diluted share, for the second quarter of 2021, compared to a net income of $6.6 million, or $0.21 per diluted share, for the second quarter of 2020.

On a Non-GAAP basis, net income was $12.7 million, or $0.37 per diluted share, for the second quarter of 2021 compared to $10.5 million, or $0.32 per diluted share, for the second 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. 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 $17.1 million for the second quarter of 2021. Cash and cash equivalents, long and short-term bank deposits and long and short-term marketable securities were $191.9 million as of June 30, 2021 compared to $186.3 million as of December 31, 2020. The increase in cash and cash equivalents, long and short-term bank deposits and long and short-term marketable securities was the result of cash provided by operating activities offset, in part, by the use of cash for the 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.

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

"In the second quarter of 2021 we continued to enjoy solid business momentum in our enterprise activities related to the UCaaS and Contact Center markets. Our UCaaS business grew more than 20% year-over-year and our contact center business grew more than 25% year-over-year. Our Enterprise Business, which has contributed close to 85% of our second quarter revenue, demonstrated growth of above 20% year-over-year and provides a solid base for continued growth.

Key to this continued expansion is our services operations which grew above 25% year-over-year and are key to our go-to-market operations. The increase in revenues from our services operations was driven primarily by strength in our professional and managed services offerings. At the core of this growth is our continued progress in pivoting to recurring revenues with strong execution in our AudioCodes Live offering operations."

"We enjoyed another solid quarter in our Voice.ai operations where revenue for our Voice.ai operations grew more than 100% year-over-year. We continue to invest in enhancing our technological solutions for real-time cloud communications and transitioning our portfolio of products into software as a service solutions. These solutions provide recurring revenues that increases our confidence in our ability to continue to expand our business and provide a strong basis for our expected growth in coming years," concluded Mr. Adlersberg.

Share Buy Back Program

During the quarter ended June 30, 2021, the Company acquired 236,544 of its ordinary shares under its share repurchase program for a total consideration of $7.1 million.

In July 2021, the Company received court approval in Israel to purchase up to an aggregate amount of $35 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 January 03, 2022.

Cash Dividend

AudioCodes also announced that the Company's Board of Directors has declared a cash dividend in the amount of 17 cents per share. The aggregate amount of the dividend is approximately $5.5 million. The dividend is payable on August 26, 2021 to all of the Company's shareholders of record at the close of trading on the NASDAQ Global Select Market on August 11, 2021.

In accordance with Israeli tax law, the dividend is subject to withholding tax at source at the rate of 25% of the dividend amount payable to each shareholder of record, subject to applicable exemptions. If the recipient of the dividend is at the time of distribution or was at any time during the preceding 12-month period the holder of 10% or more of the Company's share capital, the withholding rate is 30%.

The dividend will be paid in U.S. dollars on the ordinary shares of AudioCodes Ltd. that are traded on the Nasdaq Global Select Market or the Tel-Aviv Stock Exchange. The amount and timing of any other dividends will be determined by the Board.

Conference Call & Web Cast Information

AudioCodes will conduct a conference call at 8:30 A.M., Eastern Time today to discuss the Company's second 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: AUDC) (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

June 30, December 31,

2021 2020

(Unaudited) (Audited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents $ 116,421 $ 40,934

Restricted cash 5,100 5,100

Short-term and restricted bank deposits 514 84,817

Short-term marketable securities and accrued interest 552 449

Trade receivables, net 37,003 34,518

Other receivables and prepaid expenses 6,478 8,631

Inventories 24,831 29,193

Total current assets 190,899 203,642

LONG-TERM ASSETS:

Long-term and restricted bank deposits $ 94 $ 94

Long-term marketable securities and accrued interest 69,252 54,895

Deferred tax assets 10,474 12,081

Operating lease right-of-use assets 22,325 25,430

Severance pay funds 21,140 20,597

Total long-term assets 123,285 113,097

PROPERTY AND EQUIPMENT, NET 4,403 4,593

GOODWILL, INTANGIBLE ASSETS AND OTHER, NET 36,647 36,791

Total assets $ 355,234 $ 358,123

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Current maturities of long-term bank loans $ 600 $ 1,200

Trade payables 2,616 6,984

Other payables and accrued expenses 28,763 28,531

IIA settlement liability 11,625 11,684

Deferred revenues 41,246 37,182

Short-term operating lease liabilities 8,936 9,178

Total current liabilities 93,786 94,759

LONG-TERM LIABILITIES:

Accrued severance pay $ 21,381 $ 21,830

Deferred revenues and other liabilities 13,540 12,243

Long-term operating lease liabilities 15,828 19,436

Total long-term liabilities 50,749 53,509

Total shareholders' equity 210,699 209,855

Total liabilities and shareholders' equity $ 355,234 $ 358,123

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

Six months ended Three months ended

June 30, June 30,

2021 2020 2021 2020

(Unaudited) (Unaudited)

Revenues:

Products $ 74,813 $ 70,701 $ 37,792 $ 36,367

Services 44,600 34,843 22,783 17,155

Total Revenues 119,413 105,544 60,575 53,522

Cost of revenues:

Products 26,970 27,793 13,434 14,031

Services 10,112 7,774 5,081 3,793

Total Cost of revenues 37,082 35,567 18,515 17,824

Gross profit 82,331 69,977 42,060 35,698

Operating expenses:

Research and development, net 24,772 22,806 12,725 11,224

Selling and marketing 29,679 25,586 15,203 12,317

General and administrative 7,625 6,578 4,000 3,313

Total operating expenses 62,076 54,970 31,928 26,854

Operating income 20,255 15,007 10,132 8,844

Financial income (expenses), net 996 454 (582) (852)

Income before taxes on income 21,251 15,461 9,550 7,992

Taxes on income, net (3,018) (3,558) (1,310) (1,353)

Net income $ 18,233 $ 11,903 $ 8,240 $ 6,639

Basic net earnings per share $ 0.56 $ 0.40 $ 0.25 $ 0.22

Diluted net earnings per share $ 0.54 $ 0.38 $ 0.24 $ 0.21

Weighted average number of shares used incomputing basic net earnings per share 32,820 30,017 32,745 30,493(inthousands)

Weighted average number of shares used incomputing diluted net earnings per share 34,030 31,554 33,972 32,062(inthousands)

AUDIOCODES LTD. AND ITS SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME

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

Six months ended Three months ended

June 30, June 30,

2021 2020 2021 2020

(Unaudited) (Unaudited)

GAAP net income $ 18,233 $ 11,903 $ 8,240 $ 6,639

GAAP net earnings per share $ 0.54 $ 0.38 $ 0.24 $ 0.21

Cost of revenues:

Share-based compensation (1) 154 99 78 49

Amortization expenses (2) 136 136 68 68

290 235 146 117

Research and development, net:

Share-based compensation (1) 1,242 490 665 247

Selling and marketing:

Share-based compensation (1) 2,845 1,623 1,545 864

Amortization expenses (2) 8 30 2 15

2,853 1,653 1,547 879

General and administrative:

Share-based compensation (1) 2,112 1,264 1,078 657

2,112 1,264 1,078 657

Financial expenses (income):

Exchange rate differences (3) (982) (453) 548 829

Income taxes:

Deferred tax (4) 1,669 3,154 450 1,124

Non-GAAP net income $ 25,417 $ 18,246 $ 12,674 $ 10,492

Non-GAAP diluted net earnings per share $ 0.74 $ 0.57 $ 0.37 $ 0.32

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

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

(3) Financial expenses (income) related to exchange rate differences inconnection with revaluation of assets and liabilities in non-dollar denominatedcurrencies.

(4) Non-cash deferred tax expenses.

Note: Non-GAAP measures should be considered in addition to, and not as asubstitute for, the results prepared in accordance with GAAP. The Companybelieves that non-GAAP information is useful because it can enhance theunderstanding of its ongoing economic performance and therefore uses internallythis non-GAAP information to evaluate and manage its operations. The Companyhas chosen to provide this information to investors to enable them to performcomparisons of operating results in a manner similar to how the Companyanalyzes its operating results and because many comparable companies reportthis type of information.

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

U.S. dollars in thousands

Six months ended Three months ended

June 30, June 30,

2021 2020 2021 2020

(Unaudited) (Unaudited)

Cash flows from operating activities:

Net income $ 18,233 $ 11,903 $ 8,240 $ 6,639

Adjustments required to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 1,158 1,119 599 551

Amortization of marketable securities premiums and 741 - 612 - accretion of discounts, net

Increase (decrease) in accrued severance pay, net (992) 624 (692) 312

Share-based compensation expenses 6,353 3,476 3,366 1,817

Decrease in deferred tax assets, net 1,647 3,127 440 1,110

Increase in accrued interest and exchange rateeffect of 23 1 92 13 loans, marketable securities and bank deposits

Decrease in operating lease right-of-use assets 3,862 3,898 2,083 2,022

Increase (decrease) in operating lease liabilities (4,607) (4,184) (120) 60

Changes in IIA settlement liability, net (59) 61 330 667

Increase in trade receivables, net (2,485) (2,643) (813) (1,868)

Decrease (increase) in other receivables andprepaid 797 (17) (45) 58 expenses

Decrease (increase) in inventories 3,954 (1,408) 2,928 (2,695)

Decrease in trade payables (4,368) (2,017) (3,836) (742)

Increase in other payables and accrued expenses 232 369 2,941 2,278

Increase in deferred revenues 5,589 3,206 933 508

Net cash provided by operating activities 30,078 17,515 17,058 10,730

Cash flows from investing activities:

Proceeds from short-term deposits, net 84,303 451 147 301

Proceeds from long-term deposits - 150 - -

Proceeds from redemption of marketable securities 1,053 - 1,053 -

Purchase of marketable securities (17,525) - (3,211) -

Proceeds from sale of marketable securities 510 - 510 -

Purchase of property and equipment (416) (641) (313) (293)

Net cash provided by (used in) investing activities 67,925 (40) (1,814) 8

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

U.S. dollars in thousands

Six months ended Three months ended

June 30, June 30,

2021 2020 2021 2020

(Unaudited) (Unaudited)

Cash flows from financing activities:

Purchase of treasury shares (17,358) - (7,103) -

Repayment of bank loans (600) (1,238) (300) (619)

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

Proceeds from issuance of shares, net - 85,654 - 85,654

Proceeds from issuance of shares upon exercise of 744 1,051 332 703 options and warrants

Net cash provided by (used in) financing activities (22,516) 81,601 (7,071) 85,738

Net increase in cash, cash equivalents, and restricted 75,487 99,076 8,173 96,476 cash

Cash, cash equivalents and restricted cash atbeginning 46,034 69,773 113,348 72,373 of period

Cash, cash equivalents and restricted cash at end of $ 121,521 $ 168,849 $ 121,521 $ 168,849 period

Company Contacts

Roger L. Chuchen

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

roger.chuchen@audiocodes.com

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SOURCE AudioCodes