Lod, Israel – April 28, 2010 – AudioCodes Ltd. (NasdaqGS: AUDC), a leading provider of Voice over IP (VoIP) technologies and Voice Network products, today announced financial results for the first quarter 2010, ended March 31, 2010.
Revenues for the first quarter 2010 were $34.8 million compared to $34.2 million for the fourth quarter of 2009 and $29.3 million for the first quarter of 2009.
Net income in accordance with U.S. generally accepted accounting principles (GAAP) was $1.7 million, or $0.04 per share, for the first quarter of 2010 compared to GAAP net income of $1.2 million, or $0.03 per share, for the fourth quarter of 2009, and a GAAP net loss of $3.3 million, or ($0.08) per share, for the first quarter of 2009.
Non-GAAP net income for the first quarter of 2010 was $2.5 million, or $0.06 per diluted share, compared to non-GAAP net income of $2.5 million, or $0.06 per diluted share, for the fourth quarter of 2009, and a non-GAAP net loss of $1.6 million, or ($0.04) per diluted share, for the first quarter of 2009.
Non-GAAP net income excludes (i) stock-based compensation expenses, (ii) amortization expenses related to intangible assets, and (iii) an adjustment to expenses related to the Company’s Senior Convertible Notes due to implementation of FASB Staff Position APB 14-1. 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.
During the first quarter of 2010, AudioCodes generated $3.3 million in cash from operating activities compared to $26,000 in the first quarter of 2009.
Cash and cash equivalents, short-term and long-term deposits and short-term marketable securities were $54.7 million as of March 31, 2010, compared to $52.9 million as of December 31, 2009 and $113.5 million as of March 31, 2009. The year-over-year decline in this amount was attributable to the repurchase of approximately $73.1 million in principal amount of the Company’s Senior Convertible Notes in the fourth quarter of 2009, offset, in part, by cash provided by operating activities.
“AudioCodes’ first quarter performance was highlighted by solid growth in our core enterprise and service provider markets and year-over-year improvements in revenues, net income, and cash flow from operations. Our focus on partnering with world leading application software vendors, investments in growing our global network of value add resellers and developing highly integrated converged voice and data intelligent network devices for unified IP communications and collaboration are beginning to yield results,” commented Shabtai Adlersberg, Chairman of the Board, President and CEO of AudioCodes. “The new product offerings for 2010 are expanding our addressable markets and, with improving enterprise capital spending trends, we believe that AudioCodes is positioned to continue its growth in 2010 and beyond,” concluded Shabtai Adlersberg.
Nachum Falek, AudioCodes' Vice President of Finance and CFO, will be leaving AudioCodes at the end of the month, after ten years with the Company in order to pursue new challenges. Until a suitable replacement is appointed, Shabtai Adlersberg, President, Chairman and Chief Executive Officer of AudioCodes, will assume executive management of AudioCodes' large and capable finance department and will be the acting CFO of AudioCodes.
“Nachum has played a significant role in the development of the Company in his ten years here. He has done an excellent job in leading our financial and investor relationship activities while assisting me in the daily management at AudioCodes,” said Shabtai Adlersberg, President, Chairman and Chief Executive Officer of AudioCodes. “We have the good fortune that Nachum 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 Nachum good luck in his future endeavors.”
In connection with the preparation of AudioCodes’ financial statements for the year ended December 31, 2009, the Company adjusted the deferred tax liability related to the adoption of FASB Staff Position 14-1 ("FSP 14-1"). FSP 14-1 was adopted by the Company effective for financial statements issued for periods starting January 1, 2009. FSP 14-1 required the Company to separately account for the liability and equity components of its Senior Convertible Notes and required retroactive adjustment for prior periods. The adjustment, which reversed tax income previously recorded in connection with the application of FSP 14-1, was a non-cash item that impacted AudioCodes’ GAAP results of operations for the years ended December 31, 2008 and 2009. This adjustment does not affect the Company’s Non-GAAP results as previously reported. The Company repurchased almost all of its Senior Convertible Notes in the fourth quarter of 2009.
As a result of the adjustment, for the years ended December 31, 2008 and 2009, AudioCodes recorded additional income tax expense in the amount of $1.2 million and $735,000, respectively, in the Company’s statements of operations. As a result, AudioCodes’ GAAP net loss for 2008 is $85.8 million, or ($2.08) per share, and for 2009 is $3.3 million, or ($0.08) per share, compared to a net loss for 2008 of $84.6 million, or ($2.05) per share, and for 2009 of $2.6 million, or ($0.05) per share, previously reported in the Company’s press release dated February 3, 2010. The audited financial statements that will be included in the Company’s Annual Report on Form 20-F for the year ended December 31, 2009 to be filed with the U.S. Securities and Exchange Commission will reflect this adjustment.
Conference Call & Web Cast Information
AudioCodes will conduct a conference call at 9:00 A.M., Eastern Time on April 28, 2010 to discuss the Company’s first quarter 2010 operating 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.
