Audiocodes Ltd 6-K, filed Jan 28, 2020
Audiocodes Ltd (AUDC)
About this 6-K
Audiocodes Ltd filed this 6-K on January 28, 2020.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the Month of January 2020
Commission file number 0-30070
AUDIOCODES LTD.
(Translation of registrant’s name into English)
1 Hayarden Street • Airport City, Lod 7019900 • ISRAEL
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
On January 28, 2020, AudioCodes Ltd. (the “Registrant”) issued a press release announcing financial results for the fourth quarter and full year periods ended December 31, 2019, and other matters. A copy of this press release is attached hereto as Exhibit 1 and incorporated by reference herein.
The information set forth in (a) the first, second, third, sixth (excluding the reference to Non-GAAP gross margin in the fifth sentence thereof), seventh (excluding the last sentence thereof concerning Non-GAAP net income), eighth and ninth paragraphs following the heading “Details,” and the two paragraphs following the heading “Share Buy Back Program and Cash Dividend” of and (b) the condensed consolidated balance sheets, condensed consolidated statements of operations and condensed consolidated statements of cash flows contained in, the press release attached as Exhibit 1 to this Report on Form 6-K are hereby incorporated by reference into (i) the Registrant’s Registration Statement on Form S-8, File No. 333-11894; (ii) the Registrant’s Registration Statement on Form S-8, File No. 333-13268; (iii) the Registrant’s Registration Statement on Form S-8, File No. 333-105473; (iv) the Registrant’s Registration Statement on Form S-8, File No. 333-144825; (v) the Registrant’s Registration Statement on Form S-8, File No. 333-160330; (vi) the Registrant’s Registration Statement on Form S-8, File No. 333-170676; (vii) the Registrant’s Registration Statement on Form S-8, File No. 333-190437; (viii) the Registrant’s Registration Statement on Form S-8, File No. 333-210438; and (ix) the Registrant’s Registration Statement on Form S-8, File No. 333-230388.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| AUDIOCODES LTD. | |||
| (Registrant) | |||
| By: | /s/ NIRAN BARUCH | ||
| Niran Baruch | |||
| Vice President Finance and | |||
| Chief Financial Officer | |||
Dated: January 28, 2020
EXHIBIT INDEX
| Exhibit No. | Description | |
| 1 | Press release, dated January 28, 2020, announcing financial results for the fourth quarter and full year periods ended December 31, 2019, and other matters. |
Exhibit 1
 |
AudioCodes Press Release |
P R E S S R E L E A S E
| Company Contacts | IR Agency Contact | |
|
Niran Baruch, AudioCodes Tel: +972-3-976-4000 |
Shirley Nakar, Tel: +972-3-976-4000 shirley@audiocodes.com |
Brett Maas, Managing Director Hayden IR Tel: +1-646-536-7331 brett@haydenir.com |
AudioCodes Reports Fourth Quarter and Full Year 2019 Results
Lod, Israel – January 28, 2020 - AudioCodes (NASDAQ: AUDC) Press Release
Fourth Quarter and Full Year 2019 Highlights
| · | Quarterly revenues increased by 15.3% year-over-year to $52.8 million; |
full 2019 year revenues increased by 13.7% to $200.3 million;
| · | Quarterly service revenues increased by 15.9% year-over-year to $17.5 million; |
full 2019 year service revenues increased by 14.7% to $64.6 million;
| · | Quarterly and full 2019 year UC-SIP revenues increased more than 20% year-over-year; |
| · | AudioCodes entered into a royalty buyout agreement with the Israel National Authority for Technology and Innovation (“IIA”) in November 2019 (detailed below). The agreement provided for a payment of $32.2 million to the IIA. This required payment of $32.2 million is included in expenses in the GAAP results for the three months and full year ended December 31, 2019; |
| · | GAAP results: |
| · | Quarterly GAAP gross margin percentage was 3.9%; |
| · | Quarterly GAAP operating loss percentage was 49.2%; |
| · | Quarterly GAAP net loss was $8.2 million, or ($0.28) per diluted share; |
| · | Full 2019 year GAAP net income was $4.0 million, or $0.13 per diluted share; |
| · | Non-GAAP results: |
| · | Quarterly Non-GAAP gross margin percentage was 65.1%; |
| · | Quarterly Non-GAAP operating margin percentage was 15.7%; |
| · | Quarterly Non-GAAP net income was $8.1 million, or $0.26 per diluted share; |
| · | Full 2019 year Non-GAAP net income was $27.8 million, or $0.89 per diluted share; and |
| · | Net cash provided by operating activities was $2.4 million for the quarter and $23.2 million for the full year. |
AudioCodes Reports Fourth Quarter and Full Year 2019 Results | Page 1 of 10 |
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AudioCodes Press Release |
Details
AudioCodes, a leading vendor of advanced voice networking and media processing solutions for the digital workplace, today announced financial results for the fourth quarter and full year periods ended December 31, 2019.
Revenues for the fourth quarter of 2019 were $52.8 million compared to $51.4 million for the third quarter of 2019 and $45.8 million for the fourth quarter of 2018. Revenues were $200.3 million in 2019 compared to $176.2 million in 2018.
Net loss was $8.2 million, or ($0.28) per diluted share, for the fourth quarter of 2019, compared to net income of $4.5 million, or $0.15 per diluted share, for the fourth quarter of 2018. Net income in 2019 was $4.0 million, or $0.13 per diluted share, compared to $13.5 million, or $0.45 per diluted share, in 2018.
On a Non-GAAP basis, net income was $8.1 million, or $0.26 per diluted share, for the fourth quarter of 2019 compared to $6.3 million, or $0.20 per diluted share, in the fourth quarter last year. Non-GAAP net income in 2019 was $27.8 million, or $0.89 per diluted share, compared to $20.0 million, or $0.65 per diluted share, in 2018.
Non-GAAP net income excludes: (i) share-based compensation expenses; (ii) amortization expenses related to intangible assets; (iii) expenses related to the payment required to be made pursuant to the royalty buyout agreement announced in November 2019 (detailed below); (iv) expenses or income related to revaluation of an earn-out liability in connection with the acquisition of Active Communications Europe; (v) financial income or expenses related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies and (vi) 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.
As announced in November 2019, the Company and one of its Israeli subsidiaries entered into a royalty buyout agreement (the “Royalty Buyout Agreement”) with the Israel National Authority for Technology and Innovation (“IIA”) relating to certain grants they had received from the IIA. The contingent net royalty liability to the IIA at the time of the Royalty Buyout Agreement with respect to these grants was approximately $49 million (the “Debt”), including interest to the date of the Royalty Buyout Agreement. As part of the Royalty Buyout Agreement, the Company agreed to pay approximately $32.2 million to the IIA (to settle the $49 million Debt in full) in three annual installments starting in 2019. Pursuant to the Royalty Buyout Agreement, AudioCodes eliminated all royalty obligations related to its future revenues with respect to these grants. The Royalty Buyout Agreement has a positive impact on Non-GAAP gross margin starting in the fourth quarter of 2019 and will have a positive impact on GAAP gross margin starting in the first quarter of 2020. The $32.2 million expense is included in the GAAP cost of revenues for the fourth quarter of 2019 and impacts GAAP results for the three months and full year ended December 31, 2019.
AudioCodes Reports Fourth Quarter and Full Year 2019 Results | Page 2 of 10 |
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AudioCodes Press Release |
During the fourth quarter of 2019, the Company utilized the deferred tax asset recorded in 2016 and created a new deferred tax asset based on its earnings history and expected future operating results. The total deferred tax asset amounted to $20.5 million as of December 31, 2019. This deferred tax asset represents the approximate amount of the Company’s net operating losses and temporary tax differences that the Company estimates it will utilize over the next few years. GAAP net income for the fourth quarter and full 2019 year reflect the effect of the tax benefit associated with the creation of this deferred tax asset. Non-GAAP net income excludes this non-cash deferred tax benefit.
Net cash provided by operating activities was $2.4 million for the fourth quarter of 2019 and $23.2 million for 2019. Both numbers were impacted by the $10.7 million payment made in December 2019 which was the first installment pursuant to the Royalty Buyout Agreement.
Cash and cash equivalents, long and short-term bank deposits and short-term marketable securities were $71.9 million as of December 31, 2019 compared to $65.4 million as of December 31, 2018. The increase in cash and cash equivalents, long and short-term bank deposits and short-term marketable securities was the result of cash provided by operating activities offset, in part, by the use of cash in 2019 for repurchasing of the Company’s ordinary shares pursuant to its share repurchase program, payment of cash dividends and the payment related to the first installment pursuant to the Royalty Buyout Agreement.
"We are pleased to report record financial results for the fourth quarter and full year 2019,” said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes.
“The year 2019 ended on a strong note, underscoring strong performance for the full year, our best year ever. Underlining our success is our continued leadership of the Enterprise Voice segment with our voice connectivity solutions, delivery of strong results for our voice networking business, and increased investment in two new developing markets: the meeting space and Voice.ai. Growing our top line revenue by 13.7% year-over-year, the second year in a row of double digit revenue growth, improving non-GAAP annual operating income to 14.1% from 11.7% in the prior year, and growing non-GAAP annual net income by 38.9% compared to 2018, all demonstrate the strength of our Company’s performance. A key factor driving this significant growth is the strength in our UC-SIP business which increased more than 20% year-over-year. Our success in growing our UC-SIP business is echoed in a strong industry position and successful execution in the markets we serve.”
"In 2019 we continued to invest and develop technologies and solutions in the Voice.ai business unit which has demonstrated success in growing the number of project wins. In the second half of 2019 we have announced the launch of a new effort targeting a set of solutions and devices for the emerging meeting space. Coupling these new technologies with our strong position in the UC and UCaaS markets in the Microsoft Teams and Skype for Business ecosystem should further enhance our ability to expand our business. Looking forward, and based on current business momentum, we are confident in our ability to continue to expand our business in 2020 and beyond. We plan to continue our investment in future offerings, and focus on the return on investment to our shareholders."
AudioCodes Reports Fourth Quarter and Full Year 2019 Results | Page 3 of 10 |
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AudioCodes Press Release |
Share Buy Back Program and Cash Dividend
In August 2019, AudioCodes received court approval in Israel to purchase up to an aggregate of $12 million (“Permitted Amount”) of additional ordinary shares pursuant to its share repurchase program. The court approval also permitted AudioCodes to declare a dividend of any part of the Permitted Amount during the approved validity period. This court approval will expire on February 3, 2020.
In December 2019, the Company submitted a new application to the Israeli court, requesting approval of an additional repurchase program for $12 million of ordinary shares. The application also requested the court to permit AudioCodes to declare a dividend of any part of this amount. The new application was submitted to the court and a decision is expected during February 2020.
Conference Call & Web Cast Information
AudioCodes will conduct a conference call at 8:30 A.M., Eastern Time today to discuss the Company's fourth quarter and full year of 2019 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 voice networking and media processing 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.
AudioCodes Reports Fourth Quarter and Full Year 2019 Results | Page 4 of 10 |
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AudioCodes Press Release |
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; 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.
©2019 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 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 Reports Fourth Quarter and Full Year 2019 Results | Page 5 of 10 |
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AudioCodes Press Release |
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
| December 31, | December 31, | |||||||
| 2019 | 2018 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 64,773 | $ | 31,503 | ||||
| Short-term and restricted bank deposits | 6,416 | 12,381 | ||||||
| Short-term marketable securities and accrued interest | - | 19,602 | ||||||
| Trade receivables, net | 27,501 | 22,279 | ||||||
| Other receivables and prepaid expenses | 5,626 | 5,885 | ||||||
| Inventories | 28,275 | 22,620 | ||||||
| Total current assets | 132,591 | 114,270 | ||||||
| LONG-TERM ASSETS: | ||||||||
| Long-term and restricted bank deposits | $ | 694 | $ | 1,894 | ||||
| Deferred tax assets | 20,466 | 4,350 | ||||||
| Operating lease right-of-use assets | 29,250 | - | ||||||
| Severance pay funds | 19,370 | 17,518 | ||||||
| Total long-term assets | 69,780 | 23,762 | ||||||
| PROPERTY AND EQUIPMENT, NET | 4,392 | 3,865 | ||||||
| GOODWILL, INTANGIBLE ASSETS AND OTHER, NET | 37,123 | 37,475 | ||||||
| Total assets | $ | 243,886 | $ | 179,372 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Current maturities of long-term bank loans | $ | 2,473 | $ | 2,487 | ||||
| Trade payables | 6,628 | 6,188 | ||||||
| Other payables and accrued expenses | 46,191 | 22,541 | ||||||
| Deferred revenues | 33,538 | 23,727 | ||||||
| Short-term operating lease liabilities | 8,579 | - | ||||||
| Total current liabilities | 97,409 | 54,943 | ||||||
| LONG-TERM LIABILITIES: | ||||||||
| Accrued severance pay | $ | 20,313 | $ | 18,728 | ||||
| Long-term bank loans | 1,200 | 3,687 | ||||||
| Deferred revenues and other liabilities | 9,831 | 7,466 | ||||||
| Long-term operating lease liabilities | 22,659 | - | ||||||
| Total long-term liabilities | 54,003 | 29,881 | ||||||
| Total shareholders’ equity | 92,474 | 94,548 | ||||||
| Total liabilities and shareholders' equity | $ | 243,886 | $ | 179,372 | ||||
AudioCodes Reports Fourth Quarter and Full Year 2019 Results | Page 6 of 10 |
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AudioCodes Press Release |
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except share and per share data
| Year ended | Three months ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| (Unaudited) | (Audited) | (Unaudited) | ||||||||||||||
| Revenues: | ||||||||||||||||
| Products | $ | 135,646 | $ | 119,887 | $ | 35,271 | $ | 30,650 | ||||||||
| Services | 64,641 | 56,336 | 17,526 | 15,127 | ||||||||||||
| Total Revenues | 200,287 | 176,223 | 52,797 | 45,777 | ||||||||||||
| Cost of revenues: | ||||||||||||||||
| Products | 59,022 | 51,878 | 15,340 | 13,450 | ||||||||||||
| Services | 14,129 | 13,739 | 3,215 | 3,668 | ||||||||||||
| Expense related to royalty buyout agreement with the IIA | 32,178 | - | 32,178 | - | ||||||||||||
| Total Cost of revenues | 105,329 | 65,617 | 50,733 | 17,118 | ||||||||||||
| Gross profit | 94,958 | 110,606 | 2,064 | 28,659 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development, net | 41,199 | 34,661 | 10,941 | 9,035 | ||||||||||||
| Selling and marketing | 51,535 | 49,335 | 13,650 | 11,958 | ||||||||||||
| General and administrative | 11,778 | 10,251 | 3,424 | 2,538 | ||||||||||||
| Total operating expenses | 104,512 | 94,247 | 28,015 | 23,531 | ||||||||||||
| Operating income (loss) | (9,554 | ) | 16,359 | (25,951 | ) | 5,128 | ||||||||||
| Financial income (expenses), net | (1,761 | ) | 228 | 231 | 42 | |||||||||||
| Income (loss) before taxes on income | (11,315 | ) | 16,587 | (25,720 | ) | 5,170 | ||||||||||
| Tax benefit (taxes on income) | 15,292 | (3,094 | ) | 17,487 | (640 | ) | ||||||||||
| Net income (loss) | $ | 3,977 | $ | 13,493 | $ | (8,233 | ) | $ | 4,530 | |||||||
| Basic net earnings (loss) per share | $ | 0.14 | $ | 0.47 | $ | (0.28 | ) | $ | 0.16 | |||||||
| Diluted net earnings (loss) per share | $ | 0.13 | $ | 0.45 | $ | (0.28 | ) | $ | 0.15 | |||||||
| Weighted average number of shares used in computing basic net earnings (loss) per share (in thousands) | 29,252 | 28,928 | 29,423 | 29,147 | ||||||||||||
| Weighted average number of shares used in computing diluted net earnings (loss) per share (in thousands) | 30,800 | 30,220 | 29,423 | 30,525 | ||||||||||||
AudioCodes Reports Fourth Quarter and Full Year 2019 Results | Page 7 of 10 |
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AudioCodes Press Release |
AUDIOCODES LTD. AND ITS SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME
U.S. dollars in thousands, except per share data
| Year ended | Three months ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| (Unaudited) | (Audited) | (Unaudited) | ||||||||||||||
| GAAP net income (loss) | $ | 3,977 | $ | 13,493 | $ | (8,233 | ) | $ | 4,530 | |||||||
| GAAP net earnings (loss) per share | $ | 0.13 | $ | 0.45 | $ | (0.28 | ) | $ | 0.15 | |||||||
| Cost of revenues: | ||||||||||||||||
| Share-based compensation (1) | 183 | 186 | 62 | 48 | ||||||||||||
| Amortization expenses (2) | 272 | 667 | 68 | 145 | ||||||||||||
| Expense related to royalty buyout agreement with the IIA (3) | 32,178 | - | 32,178 | - | ||||||||||||
| 32,633 | 853 | 32,308 | 193 | |||||||||||||
| Research and development, net: | ||||||||||||||||
| Share-based compensation (1) | 937 | 651 | 289 | 206 | ||||||||||||
| Selling and marketing: | ||||||||||||||||
| Share-based compensation (1) | 2,171 | 1,238 | 811 | 377 | ||||||||||||
| Amortization expenses (2) | 60 | 60 | 15 | 15 | ||||||||||||
| 2,231 | 1,298 | 826 | 392 | |||||||||||||
| General and administrative: | ||||||||||||||||
| Share-based compensation (1) | 2,001 | 1,212 | 797 | 358 | ||||||||||||
| Revaluation of earn-out liability (4) | (23 | ) | 200 | - | - | |||||||||||
| 1,978 | 1,412 | 797 | 358 | |||||||||||||
| Financial expenses: | ||||||||||||||||
| Exchange rate differences (5) | 2,172 | - | (158 | ) | - | |||||||||||
| Income taxes: | ||||||||||||||||
| Deferred tax (6) | (16,099 | ) | 2,334 | (17,731 | ) | 582 | ||||||||||
| Non-GAAP net income | $ | 27,829 | $ | 20,041 | $ | 8,098 | $ | 6,261 | ||||||||
| Non-GAAP diluted net earnings per share | $ | 0.89 | $ | 0.65 | $ | 0.26 | $ | 0.20 | ||||||||
| (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 Mailvision and Active Communications Europe assets. |
| (3) | Expense related to royalty buyout agreement with the IIA. |
| (4) | Expenses or income related to revaluation of an earn-out liability in connection with the acquisition of Active Communications Europe. |
| (5) | Financial income or expenses related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies. |
| (6) | 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 Reports Fourth Quarter and Full Year 2019 Results | Page 8 of 10 |
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AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
| Year ended | Three months ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| (Unaudited) | (Audited) | (Unaudited) | ||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||
| Net income (loss) | $ | 3,977 | $ | 13,493 | $ | (8,233 | ) | $ | 4,530 | |||||||
| Adjustments required to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||
| Depreciation and amortization | 2,044 | 2,309 | 522 | 643 | ||||||||||||
| Amortization of marketable securities premiums and accretion of discounts, net | 79 | 353 | - | 82 | ||||||||||||
| Increase (decrease) in accrued severance pay, net | (267 | ) | 120 | (391 | ) | 77 | ||||||||||
| Share-based compensation expenses | 5,292 | 3,287 | 1,959 | 989 | ||||||||||||
| Decrease (increase) in deferred tax assets, net | (16,282 | ) | 2,251 | (17,763 | ) | 562 | ||||||||||
| Decrease (increase) in accrued interest and exchange rate effect of loans, marketable securities and bank deposits | 140 | (32 | ) | 20 | 47 | |||||||||||
| Changes in operating leases, net | 1,988 | - | 1,603 | - | ||||||||||||
| Decrease (increase) in trade receivables, net | (5,609 | ) | 2,979 | (3,603 | ) | 7,374 | ||||||||||
| Decrease (increase) in other receivables and prepaid expenses | 143 | (330 | ) | (339 | ) | 2,803 | ||||||||||
| Decrease (Increase) in inventories | (5,809 | ) | (6,991 | ) | 1,868 | (1,491 | ) | |||||||||
| Increase (decrease) in trade payables | 440 | 549 | (1,191 | ) | (439 | ) | ||||||||||
| Increase (decrease) in other payables and accrued expenses | 24,691 | (835 | ) | 23,267 | (3,596 | ) | ||||||||||
| Increase in deferred revenues | 12,342 | 8,427 | 4,694 | 35 | ||||||||||||
| Net cash provided by operating activities | 23,169 | 25,580 | 2,413 | 11,616 | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||||
| Investment in short-term deposits | - | (8,436 | ) | - | (4,936 | ) | ||||||||||
| Proceeds from short-term deposits | 10,962 | - | - | - | ||||||||||||
| Proceeds from long-term deposits | 1,200 | 1,107 | 300 | 300 | ||||||||||||
| Proceeds from redemption of marketable securities | 29,413 | 7,577 | 10,028 | 6,000 | ||||||||||||
| Purchase of marketable securities | (10,025 | ) | - | (19 | ) | - | ||||||||||
| Purchase of property and equipment | (1,949 | ) | (1,340 | ) | (273 | ) | (362 | ) | ||||||||
| Net cash provided by (used in) investing activities | 29,601 | (1,092 | ) | 10,036 | 1,002 | |||||||||||
AudioCodes Reports Fourth Quarter and Full Year 2019 Results | Page 9 of 10 |
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AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
| Year ended | Three months ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| (Unaudited) | (Audited) | (Unaudited) | ||||||||||||||
| Cash flows from financing activities: | ||||||||||||||||
| Purchase of treasury shares | (8,002 | ) | (14,321 | ) | - | (2,752 | ) | |||||||||
| Repayment of bank loans | (2,470 | ) | (2,508 | ) | (617 | ) | (621 | ) | ||||||||
| Cash dividends paid to shareholders | (6,720 | ) | (5,761 | ) | - | - | ||||||||||
| Payment related to the acquisition of ACS | (410 | ) | (151 | ) | - | - | ||||||||||
| Proceeds from issuance of shares upon exercise of options and warrants | 3,102 | 5,521 | 869 | 938 | ||||||||||||
| Net cash provided by (used in) financing activities | (14,500 | ) | (17,220 | ) | 252 | (2,435 | ) | |||||||||
| Net increase in cash, cash equivalents, and restricted cash | 38,270 | 7,268 | 12,701 | 10,183 | ||||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 31,503 | 24,235 | 57,072 | 21,320 | ||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 69,773 | $ | 31,503 | $ | 69,773 | $ | 31,503 | ||||||||
AudioCodes Reports Fourth Quarter and Full Year 2019 Results | Page 10 of 10 |