updated 5/3/2011 2:16:57 AM ET 2011-05-03T06:16:57

LOD, Israel, May 3, 2011 (GLOBE NEWSWIRE) -- AudioCodes Ltd. (Nasdaq:AUDC), a leading provider of Voice over IP (VoIP) technologies and Voice Network products, today announced financial results for the first quarter of 2011, ended March 31, 2011.

Revenues for the first quarter of 2011 were $41.0 million compared to $40.5 million for the fourth quarter of 2010 and $34.8 million for the first quarter of 2010.

Net income in accordance with U.S. generally accepted accounting principles (GAAP) was $3.0 million, or $0.07 per diluted share, for the first quarter of 2011 compared to GAAP net income of $5.4 million, or $0.13 per diluted share, for the fourth quarter of 2010, and GAAP net income of $1.7 million, or $0.04 per diluted share, for the first quarter of 2010.

Non-GAAP net income for the first quarter of 2011 was $4.1 million, or $0.10 per diluted share, compared to non-GAAP net income of $4.5 million, or $0.11 per diluted share, for the fourth quarter of 2010, and non-GAAP net income of $2.5 million, or $0.06 per diluted share, for the first quarter of 2010.

Non-GAAP net income excludes (i) stock-based compensation expenses, (ii) amortization expenses related to intangible assets and (iii) for the fourth quarter of 2010, a non-cash deferred tax benefit. A reconciliation between net income on a GAAP basis and non-GAAP net income is provided in the tables that accompany the condensed consolidated financial statements contained in this press release.

Cash and cash equivalents, short-term deposits and short-term and long-term marketable securities were $62.0 million as of March 31, 2011, compared to $64.1 million as of December 31, 2010 and $54.7 million as of March 31, 2010.

"AudioCodes continued to deliver solid sequential and year-over-year revenue growth in the first quarter of 2011 driven by the rising global demand for converged VoIP and data networks solutions," stated Shabtai Adlersberg, Chairman of the Board, President and CEO of AudioCodes. "During the quarter we successfully expanded our partnership activities with leading enterprise and unified communications market leaders such as Microsoft, Alcatel-Lucent and a leading mobile phone market player. We extended our presence in the Enterprise Mobility VoIP market with the debut of our MobilityPLUS productivity suite which extends the Microsoft LYNC 2010 enterprise collaboration solution to enable anywhere, anytime productivity and collaboration with Alcatel-Lucent in the enterprise mid-size Session Border Controllers (E-SBCs) market."

"A favorable sales mix of higher margin offerings generated strong gross margins while higher operating expense was primarily attributable to the continued investment in our global sales and marketing functions. AudioCodes stands at the center of the unified communications connectivity and mobility market and we believe we can increasingly become the preferred voice expert partner in the industry. We believe that these first quarter 2011 developments, coupled with our product portfolio strengths and growing global sales reach, set a strong foundation for continued growth and profitability in 2011," concluded Mr. Adlersberg.

Conference Call & Web Cast Information

AudioCodes will conduct a conference call at 9:00 A.M., Eastern Time today to discuss the Company's first quarter 2011 operational and financial results. The conference call will 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

About AudioCodes

AudioCodes Ltd. designs, develops and sells advanced Voice over IP (VoIP) and converged VoIP and Data networking products and applications to Service Providers and Enterprises. AudioCodes is a VoIP technology market leader focused on converged VoIP & data communications and its products are deployed globally in Broadband, Mobile, Cable, and Enterprise networks. The company provides a range of innovative, cost-effective products including Media Gateways, Multi-Service Business Gateways, Session Border Controllers (SBC), Residential Gateways, IP Phones, Media Servers and Value Added Applications. AudioCodes' underlying technology, VoIPerfectHD™, relies on AudioCodes' leadership in DSP, voice coding and voice processing technologies. AudioCodes High Definition (HD) VoIP technologies and products provide enhanced intelligibility and a better end user communication experience in Voice communications. 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 continuing products' demand; 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 disruptions from acquisitions; the integration of acquired companies' products and operations into AudioCodes' business; and other factors detailed in AudioCodes' filings with the Securities and Exchange Commission. AudioCodes assumes no obligation to update the information in this release.

©2011 AudioCodes Ltd. All rights reserved. AudioCodes, AC, AudioCoded, Ardito, CTI2, CTI², CTI Squared, HD VoIP, HD VoIP Sounds Better, InTouch, IPmedia, Mediant, MediaPack, NetCoder, Netrake, Nuera, Open Solutions Network, OSN, Stretto, TrunkPack, VMAS, VoicePacketizer, VoIPerfect, VoIPerfectHD, What's Inside Matters, Your Gateway To VoIP and 3GX 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,
  2011 2010
  Unaudited Audited
ASSETS    
     
CURRENT ASSETS:    
Cash and cash equivalents $ 24,703 $ 50,311
Short-term deposits 12,802 13,825
Short-term marketable securities and accrued interest 342 --
Trade receivables, net  27,688 25,881
Other receivables and prepaid expenses 6,794 3,646
Deferred tax assets 2,287 2,287
Inventories 17,688 18,043
     
Total current assets 92,304 113,993
     
LONG-TERM INVESTMENTS:    
Long-term marketable securities 24,151  
Investments in companies 1,060 1,317
Deferred tax assets 2,261 2,261
Severance pay funds 15,672 15,039
     
Total long-term investments 43,144 18,617
     
PROPERTY AND EQUIPMENT, NET 3,691 3,703
     
GOODWILL, INTANGIBLE ASSETS, DEFERRED CHARGES AND OTHER, NET 37,020 37,405
     
Total assets $ 176,159 $ 173,718
     
LIABILITIES AND EQUITY    
     
CURRENT LIABILITIES:    
Current maturities of long-term bank loans $ 6,000 $ 6,000
Trade payables 13,069 13,519
Other payables and accrued expenses 20,030 24,168
Deferred revenues 7,085 3,769
     
Total current liabilities 46,184 47,456
     
LONG-TERM LIABILITIES:    
Accrued severance pay 16,553 15,821
Long-term bank loans 8,250 9,750
Senior convertible notes 353 353
Deferred revenues and other liabilities 920 1,158
     
Total  long-term liabilities 26,076 27,082
     
Total equity 103,899 99,180
     
Total liabilities and equity  $ 176,159  $ 173,718
 
 
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
In thousands, except per share data
   
  Three months ended
  March 31,
  2011 2010
  Unaudited
     
Revenues $41,044 $34,804
     
Cost of revenues 17,022 15,571
     
Gross profit 24,022 19,233
     
Operating expenses:    
Research and development, net 8,534 7,356
Selling and marketing 10,221 8,064
General and administrative 2,132 1,968
     
Total operating expenses 20,887 17,388
     
Operating income 3,135 1,845
Financial income (expenses), net 216 (79)
     
Income before taxes on income 3,351 1,766
Taxes on income, net (65) (66)
Equity in profit (losses) of affiliated companies (257) 4
     
Net income $ 3,029 $ 1,704
     
Net loss attributable to the non-controlling interest -- 91
     
Net income attributable to AudioCodes $ 3,029 $ 1,795
     
Basic net earnings per share $ 0.07 $ 0.04
     
Diluted net earnings per share $ 0.07 $ 0.04
     
Weighted average number of shares used in computing basic net earnings per share 41,331 40,301
     
Weighted average number of shares used in computing diluted net earnings per share 42,284 40,731
 
 
AUDIOCODES LTD. AND ITS SUBSIDIARIES
NON-GAAP PROFORMA STATEMENTS OF OPERATIONS
In thousands, except per share data
  Three months ended
  March 31,
  2011 2010
  Unaudited
     
Revenues $41,044 $34,804
     
Cost of revenues (1) (2) 16,686 15,243
     
Gross profit 24,358 19,561
     
Operating expenses:    
Research and development, net (1) 8,407 7,252
Selling and marketing (1) (2) 9,783 7,836
General and administrative (1) 1,918 1,865
     
Total operating expenses 20,108 16,953
     
Operating income 4,250 2,608
Financial income (expenses), net 216 (79)
     
Income before taxes on income 4,466 2,529
Taxes on income, net (65) (66)
Equity in profit (losses) of affiliated companies (257) 4
     
Non-GAAP net income $ 4,144 $ 2,467
     
Net loss attributable to the non-controlling interest -- 91
 

Net income attributable to AudioCodes
 

$ 4,144
 

$ 2,558
 

Non-GAAP diluted net earnings per share
 

$ 0.10
 

$ 0.06
     
Weighted average number of shares used in computing non-GAAP diluted net earnings per share (in thousands)  42,612 40,979
 
(1) Excluding stock-based compensation expenses related to options and restricted stock units granted to employees and others.
(2) Excluding amortization of intangible assets related to the acquisitions of Nuera, Netrake and CTI Squared.
 
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 as well.
 
 
AUDIOCODES LTD. AND ITS SUBSIDIARIES
RECONCILIATION BETWEEN GAAP NET INCOME AND NON-GAAP NET INCOME
In thousands, except per share data
   
  Three months ended
  March 31,
  2011 2010
  Unaudited
 

GAAP Net income
 

 $ 3,029
 

 $ 1,704
     
GAAP Diluted earnings per share  $ 0.07  $ 0.04
     
Cost of revenues:    
Stock-based compensation (1) 27 20
Amortization expenses (2) 309 308
  336 328
Research and development, net:    
Stock-based compensation (1) 127 104
     
Selling and marketing:    
Stock-based compensation (1) 362 153
Amortization expenses (2) 76 75
  438 228
General and administrative:    
Stock-based compensation (1) 214 103
 

Non-GAAP Net income
 

$ 4,144
 

$ 2,467
Non-GAAP Diluted earnings per share  

$ 0.10
 

$ 0.06
 
(1) Stock-based compensation expenses related to options and restricted stock units granted to employees and others.
(2) Amortization of intangible assets related to the acquisitions of Nuera, Netrake and CTI Squared.
 
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,
  2011 2010
  Unaudited
Cash flows from operating activities:    
Net income  $ 3,029  $ 1,704
Adjustments required to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 922 1,033
Amortization of marketable securities premiums and accretion of discounts, net 87 --
Equity in losses (profits) of affiliated companies 257 (13)
Decrease in accrued severance pay, net 99 257
Stock-based compensation expenses 1,140 380
Increase in accrued interest on loans, marketable securities, bank deposits and structured notes (178) --
Increase in trade receivables, net (1,807) (2,664)
Increase in other receivables and prepaid expenses (3,043) (1,591)
Decrease (increase) in inventories 355 (971)
Increase (decrease) in trade payables (450) 4,845
Increase in deferred revenues 3,382 1,233
Decrease in other payables and accrued 

 Expenses and other liabilities
 

(4,164)
 

(955)
     
Net cash provided by (used in) operating activities (371) 3,258
     
Cash flows from investing activities:    
Purchase of marketable securities (24,402)  
Short-term bank deposits, net 1,023 (2,322)
Purchase of property and equipment (525) (329)
     
Net cash used in investing activities (23,904) (2,651)
     
 
 
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Cont.)
U.S. dollars in thousands
  Three months ended

March 31,
  2011 2010
  Unaudited
Cash flows from financing activities:    
Repayment of loan from bank (1,500) (1,500)
Payment for acquisition of NSC non controlling interest (278) --
Proceeds from issuance of shares upon exercise of options and employee stock purchase plan 445 385
     
Net cash used in financing activities (1,333) (1,115)
     
Decrease in cash and cash equivalents (25,608) (508)
Cash and cash equivalents at the beginning of the period 50,311 38,969
     
Cash and cash equivalents at the end of the period  $ 24,703  $ 38,461
     
CONTACT: Guy Avidan,
         VP Finance & CFO
         AudioCodes
         Tel: +972-3-976-4000
         guy.avidan@audiocodes.com
         
         Shirley Nakar,
         Director, Investor Relations
         AudioCodes
         Tel: +972-3-976-4000
         shirley@audiocodes.com
         
         IR Agency Contact
         Erik Knettel,
         Grayling
         Tel: +1-646-284-9415
         erik.knettel@grayling.com

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