Allot Communications Announces Fourth Quarter and Full Year 2016 Financial Results
HOD HASHARON,
Q4 2016 - Financial Highlights
- GAAP and non-GAAP Revenues were
$23.5M ; - GAAP gross margin was 69%, Non-GAAP gross margin was 71%;
- GAAP operating profit of
$1.3M , Non-GAAP operating profit of$1.8M ;
Book-to-bill below one;
2016 - Financial Highlights
- GAAP Revenues were
$90.4M , Non-GAAP Revenues were$90.5M ; - GAAP gross margin was 69%, Non-GAAP gross margin was 71%;
- GAAP operating loss of
$6.8M , Non-GAAP operating profit of$0.4M ; - Book-to-bill below one;
Management Comment
Mr. Antebi, continued, "A significant part of the role of the new management team will be to improve on the company's execution and to realize its full potential, and I look forward to working with the team and taking the company to the next level."
Q4 2016 Financial results
On a GAAP basis, total revenues for the fourth quarter of 2016 were
On a non-GAAP basis, total revenues for the fourth quarter of 2016 were
Net cash and cash equivalents as of
2016 Financial results
On a GAAP basis, total revenues for the full year of 2016 were
On a non-GAAP basis, total revenues for the full year of 2016 were
During the year of 2016, the Company recorded negative operating cash flow of
2017 Outlook
Management expects 2017 revenues in the range of
Conference Call & Webcast:
The Allot management team will host a conference call to discuss fourth quarter and year end 2016 earnings results today,
US: +1-347-293-1926,
A recording of the conference call will be available from
A live webcast of the conference call can be accessed on the
The webcast will also be archived on the website following the conference call.
About
GAAP to Non-GAAP Reconciliation:
The difference between GAAP and non-GAAP revenues is related to the acquisitions made by the Company and represents revenues adjusted for the impact of the fair value adjustment to acquired deferred revenue related to purchase accounting. Non-GAAP net income is defined as GAAP net income after including deferred revenues related to the fair value adjustment resulting from purchase accounting and excluding stock-based compensation expenses, amortization of acquisition-related intangible assets, deferred tax asset adjustment, restructuring expenses and other acquisition-related expenses.
These non-GAAP measures should be considered in addition to, and not as a substitute for, comparable GAAP measures. The non-GAAP results and a full reconciliation between GAAP and non-GAAP results are provided in the accompanying Table 2. The Company provides these non-GAAP financial measures because it believes they present a better measure of the Company's core business and management uses the non-GAAP measures internally to evaluate the Company's ongoing performance. Accordingly, the Company believes they are useful to investors in enhancing an understanding of the Company's operating performance.
Safe Harbor Statement
This release contains forward-looking statements, which express the current beliefs and expectations of Company management. Such statements involve a number of known and unknown risks and uncertainties that could cause our future results, performance or achievements to differ significantly from the results, performance or achievements set forth in such forward-looking statements. Important factors that could cause or contribute to such differences include risks relating to: our ability to compete successfully with other companies offering competing technologies; the loss of one or more significant customers; consolidation of, and strategic alliances by, our competitors, government regulation; the timing of completion of key project milestones which impact the timing of our revenue recognition; lower demand for key value-added services; our ability to keep pace with advances in
technology and to add new features and value-added services; managing lengthy sales cycles; operational risks associated with large projects; our dependence on third party channel partners for a material portion of our revenues; court approval of the Company's proposed share buy-back program; and other factors discussed under the heading "Risk Factors" in the Company's annual report on Form 20-F filed with the
TABLE - 1 | ||||||||
| ||||||||
AND ITS SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
( | ||||||||
Three Months Ended |
Year Ended | |||||||
|
| |||||||
2016 |
2015 |
2016 |
2015 | |||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Audited) | |||||
Revenues |
$ 23,487 |
$ 25,382 |
$ 90,369 |
$ 99,967 | ||||
Cost of revenues |
7,348 |
13,185 |
27,895 |
33,427 | ||||
Gross profit |
16,139 |
12,197 |
62,474 |
66,540 | ||||
Operating expenses: |
||||||||
Research and development costs, net |
5,461 |
6,476 |
24,221 |
26,422 | ||||
Sales and marketing |
7,476 |
10,142 |
35,290 |
43,318 | ||||
General and administrative |
1,910 |
3,209 |
9,812 |
12,702 | ||||
Total operating expenses |
14,847 |
19,827 |
69,323 |
82,442 | ||||
Operating profit (loss) |
1,292 |
(7,630) |
(6,849) |
(15,902) | ||||
Financial and other income (loss), net |
423 |
232 |
1,059 |
(584) | ||||
Profit (loss) before income tax expenses |
1,715 |
(7,398) |
(5,790) |
(16,486) | ||||
Tax expenses |
773 |
2,982 |
2,204 |
3,356 | ||||
Net profit (loss) |
942 |
(10,380) |
(7,994) |
(19,842) | ||||
Basic net profit (loss) per share |
$ 0.03 |
$ (0.31) |
$ (0.24) |
$ (0.59) | ||||
Diluted net profit (loss) per share |
$ 0.03 |
$ (0.31) |
$ (0.24) |
$ (0.59) | ||||
Weighted average number of shares |
||||||||
used in computing basic net |
||||||||
earnings per share |
33,090,708 |
33,559,698 |
33,202,309 |
33,419,917 | ||||
Weighted average number of shares |
||||||||
used in computing diluted net |
||||||||
earnings per share |
33,415,193 |
33,559,698 |
33,202,309 |
33,419,917 | ||||
TABLE - 2 | ||||||||
| ||||||||
AND ITS SUBSIDIARIES | ||||||||
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
( | ||||||||
Three Months Ended |
Year Ended | |||||||
|
| |||||||
2016 |
2015 |
2016 |
2015 | |||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Audited) | |||||
GAAP Revenues |
$ 23,487 |
$ 25,382 |
$ 90,369 |
$ 99,967 | ||||
Fair value adjustment for acquired deferred revenues write down |
31 |
271 |
165 |
304 | ||||
Non-GAAP Revenues |
$ 23,518 |
$ 25,653 |
$ 90,534 |
$ 100,271 | ||||
GAAP cost of revenue |
$ 7,348 |
$ 13,185 |
$ 27,895 |
$ 33,427 | ||||
Share-based compensation (1) |
(109) |
(79) |
(345) |
(324) | ||||
Amortization of intangible assets (2) |
(367) |
(6,373) |
(1,173) |
(8,075) | ||||
Restructuring expenses (4) |
- |
- |
(127) |
- | ||||
Non-GAAP cost of revenue |
$ 6,872 |
$ 6,733 |
$ 26,250 |
$ 25,028 | ||||
GAAP gross profit |
$ 16,139 |
$ 12,197 |
$ 62,474 |
$ 66,540 | ||||
Gross profit adjustments |
507 |
6,723 |
1,810 |
8,703 | ||||
Non-GAAP gross profit |
$ 16,646 |
$ 18,920 |
$ 64,284 |
$ 75,243 | ||||
GAAP operating expenses |
$ 14,847 |
$ 19,827 |
$ 69,323 |
$ 82,442 | ||||
Share-based compensation (1) |
(845) |
(1,545) |
(4,667) |
(6,846) | ||||
Amortization of intangible assets (2) |
(132) |
(284) |
(535) |
(658) | ||||
Expenses related to M&A activities (3) |
962 |
- |
962 |
(678) | ||||
Restructuring expenses (4) |
- |
- |
(1,163) |
- | ||||
Non-GAAP operating expenses |
$ 14,832 |
$ 17,998 |
$ 63,920 |
$ 74,260 | ||||
GAAP financial and other income (loss) |
$ 423 |
$ 232 |
$ 1,059 |
$ (584) | ||||
Expenses related to M&A activities (3) |
(348) |
(89) |
(179) |
193 | ||||
Non-GAAP Financial and other income (loss) |
$ 75 |
$ 143 |
$ 880 |
$ (391) | ||||
GAAP taxes on income |
$ 773 |
$ 2,982 |
$ 2,204 |
$ 3,356 | ||||
Tax expenses (in respect of net deferred tax asset recorded) |
(36) |
(2,628) |
(230) |
(2,628) | ||||
Non-GAAP taxes on income |
$ 737 |
$ 354 |
$ 1,974 |
$ 728 | ||||
GAAP Net income (loss) |
$ 942 |
$ (10,380) |
$ (7,994) |
$ (19,842) | ||||
Share-based compensation (1) |
954 |
1,624 |
5,012 |
7,170 | ||||
Amortization of intangible assets (2) |
499 |
6,657 |
1,708 |
8,733 | ||||
Expenses related to M&A activities (3) |
(1,310) |
(89) |
(1,141) |
871 | ||||
Restructuring expenses (4) |
- |
- |
1,290 |
- | ||||
Fair value adjustment for acquired deferred revenues write down |
31 |
271 |
165 |
304 | ||||
Tax expenses (in respect of net deferred tax asset recorded) |
36 |
2,628 |
230 |
2,628 | ||||
Non-GAAP Net income (loss) |
$ 1,152 |
$ 711 |
$ (730) |
$ (136) | ||||
GAAP Loss per share (diluted) |
$ 0.03 |
$ (0.31) |
$ (0.24) |
$ (0.59) | ||||
Share-based compensation |
0.03 |
0.05 |
0.15 |
0.21 | ||||
Amortization of intangible assets |
0.01 |
0.20 |
0.05 |
0.26 | ||||
Expenses related to M&A activities |
(0.04) |
0.00 |
(0.03) |
0.03 | ||||
Restructuring expenses |
- |
- |
0.04 |
- | ||||
Fair value adjustment for acquired deferred revenues write down |
0.00 |
0.01 |
0.00 |
0.02 | ||||
Tax expenses (in respect of net deferred tax asset recorded) |
0.00 |
0.07 |
0.01 |
0.07 | ||||
Non-GAAP Net income (Loss) per share (diluted) |
$ 0.03 |
$ 0.02 |
$ (0.02) |
$ (0.00) | ||||
Weighted average number of shares used in |
||||||||
computing GAAP diluted net earnings per share |
33,415,193 |
33,559,698 |
33,202,309 |
33,419,917 | ||||
Weighted average number of shares used in |
||||||||
computing non-GAAP diluted net earnings per share |
33,697,889 |
33,829,088 |
33,202,309 |
34,013,721 | ||||
TABLE - 2 cont. |
|||||||||
|
|||||||||
AND ITS SUBSIDIARIES |
|||||||||
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||
( |
|||||||||
Three Months Ended |
Year Ended |
||||||||
|
|
||||||||
2016 |
2015 |
2016 |
2015 |
||||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Audited) |
||||||
(1) Share-based compensation (*): |
|||||||||
Cost of revenues |
$ 109 |
$ 79 |
$ 345 |
$ 324 |
|||||
Research and development costs, net |
244 |
366 |
1,223 |
1,637 |
|||||
Sales and marketing |
322 |
631 |
1,745 |
2,802 |
|||||
General and administrative |
279 |
548 |
1,699 |
2,407 |
|||||
$ 954 |
$ 1,624 |
$ 5,012 |
$ 7,170 |
||||||
(2) Amortization of intangible assets |
|||||||||
Cost of revenues |
$ 367 |
$ 6,373 |
$ 1,173 |
$ 8,075 |
|||||
Sales and marketing |
132 |
284 |
535 |
658 |
|||||
$ 499 |
$ 6,657 |
$ 1,708 |
$ 8,733 |
||||||
(3) Expenses related to M&A activities |
|||||||||
General and administrative |
$ (962) |
$ - |
$ (962) |
$ 452 |
|||||
Research and development costs, net |
- |
- |
- |
45 |
|||||
Sales and marketing |
- |
- |
- |
181 |
|||||
Financial expenses |
(348) |
(89) |
(179) |
193 |
|||||
$ (1,310) |
$ (89) |
$ (1,141) |
$ 871 |
||||||
(4) Restructuring expenses |
|||||||||
Cost of revenues |
$ - |
$ - |
$ 127 |
$ - |
|||||
Research and development costs, net |
- |
- |
370 |
- |
|||||
Sales and marketing |
- |
- |
720 |
- |
|||||
General and administrative |
- |
- |
73 |
- |
|||||
$ - |
$ - |
$ 1,290 |
$ - |
||||||
(*) Excluding share-based compensation related to the restructuring plan, which was already included under restructuring expenses. | |||||||||
TABLE - 3 | ||||
| ||||
AND ITS SUBSIDIARIES | ||||
CONSOLIDATED BALANCE SHEETS | ||||
( | ||||
|
| |||
2016 |
2015 | |||
(Unaudited) |
(Audited) | |||
ASSETS |
||||
CURRENT ASSETS: |
||||
Cash and cash equivalents |
$ 23,326 |
$ 15,470 | ||
Short term deposits |
29,821 |
42,700 | ||
Restricted cash |
0 |
203 | ||
Marketable securities |
60,507 |
64,921 | ||
Trade receivables, net |
24,158 |
23,874 | ||
Other receivables and prepaid expenses |
3,750 |
4,513 | ||
Inventories |
7,235 |
10,169 | ||
Total current assets |
148,797 |
161,850 | ||
LONG-TERM ASSETS: |
||||
Severance pay fund |
252 |
282 | ||
Deferred taxes |
267 |
501 | ||
Other assets |
1,136 |
2,712 | ||
Total long-term assets |
1,655 |
3,495 | ||
PROPERTY AND EQUIPMENT, NET |
4,387 |
5,189 | ||
GOODWILL AND INTANGIBLE ASSETS, NET |
35,972 |
37,681 | ||
Total assets |
$ 190,811 |
$ 208,215 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||
CURRENT LIABILITIES: |
||||
Trade payables |
$ 3,275 |
$ 7,107 | ||
Deferred revenues |
11,133 |
14,066 | ||
Other payables and accrued expenses |
10,538 |
13,921 | ||
Total current liabilities |
24,946 |
35,094 | ||
LONG-TERM LIABILITIES: |
||||
Deferred revenues |
3,597 |
4,912 | ||
Accrued severance pay |
592 |
651 | ||
Other long term liabilities |
4,502 |
4,153 | ||
Total long-term liabilities |
8,691 |
9,716 | ||
SHAREHOLDERS' EQUITY |
157,174 |
163,405 | ||
Total liabilities and shareholders' equity |
$ 190,811 |
$ 208,215 | ||
TABLE - 4 | |||||||
| |||||||
AND ITS SUBSIDIARIES | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
( | |||||||
Three Months Ended |
Year ended Ended | ||||||
|
| ||||||
2016 |
2015 |
2016 |
2015 | ||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Audited) | ||||
Cash flows from operating activities: |
|||||||
Net income (Loss) |
$ 942 |
$ (10,380) |
$ (7,994) |
$ (19,842) | |||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||
Depreciation |
569 |
631 |
2,334 |
2,752 | |||
Stock-based compensation related to options granted to employees |
1,005 |
1,628 |
5,181 |
7,170 | |||
Amortization of intangible assets |
499 |
6,658 |
1,709 |
8,733 | |||
Capital loss |
4 |
190 |
24 |
328 | |||
Decrease (Increase) in accrued severance pay, net |
(4) |
197 |
(29) |
349 | |||
Decrease in other assets |
828 |
1,237 |
1,575 |
1,205 | |||
Decrease in accrued interest and amortization of premium on marketable securities |
215 |
253 |
1,238 |
967 | |||
Decrease (Increase) in trade receivables |
2,795 |
(872) |
(284) |
(847) | |||
Decrease (Increase) in other receivables and prepaid expenses |
206 |
(2,092) |
699 |
(2,623) | |||
Decrease (Increase) in inventories |
1,410 |
(120) |
2,934 |
(60) | |||
Decrease in long-term deferred taxes, net |
49 |
1,543 |
234 |
1,403 | |||
Increase (Decrease) in trade payables |
302 |
1,532 |
(3,832) |
2,218 | |||
Increase (Decrease) in employees and payroll accruals |
(241) |
1,819 |
(851) |
901 | |||
Increase (Decrease) in deferred revenues |
(2,664) |
313 |
(4,248) |
1,961 | |||
Decrease in other payables and accrued expenses |
(1,719) |
(1,000) |
(2,156) |
(429) | |||
Net cash provided by (used in) operating activities |
4,196 |
1,537 |
(3,466) |
4,186 | |||
Cash flows from investing activities: |
|||||||
Redemption of (Investment in) restricted cash |
- |
(203) |
203 |
(203) | |||
Redemption of (Investment in) short-term deposits |
(2,502) |
(5,950) |
12,879 |
16,300 | |||
Purchase of property and equipment |
(398) |
(617) |
(1,582) |
(2,223) | |||
Proceeds from sale of property and equipment |
26 |
- |
26 |
- | |||
Investment in marketable securities |
(7,598) |
(13,286) |
(28,695) |
(34,098) | |||
Proceeds from redemption or sale of marketable securities |
10,403 |
5,822 |
32,208 |
22,221 | |||
Acquisitions |
- |
193 |
- |
(9,859) | |||
Net cash provided by (used in) investing activities |
(69) |
(14,041) |
15,039 |
(7,862) | |||
Cash flows from financing activities: |
|||||||
Exercise of employee stock options |
20 |
28 |
115 |
132 | |||
Purchase of treasury stocks |
(506) |
(166) |
(3,832) |
(166) | |||
Net cash provided by financing activities |
(486) |
(138) |
(3,717) |
(34) | |||
Increase (Decrease) in cash and cash equivalents |
3,641 |
(12,642) |
7,856 |
(3,710) | |||
Cash and cash equivalents at the beginning of the period |
19,685 |
28,112 |
15,470 |
19,180 | |||
Cash and cash equivalents at the end of the period |
$ 23,326 |
$ 15,470 |
$ 23,326 |
$ 15,470 | |||
Investor Relations Contact:
GK Investor Relations
+1 646-688-3559
allot@gkir.com
Public Relations Contact:
International dialing +972-54-268-1500
sorr@allot.com
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