Allot Announces Second Quarter 2019 Financial Results
HOD HASHARON,
Second Quarter 2019 – Financial Highlights
- Revenue growth to
$26.6 million , up 15% year-over-year; - GAAP gross profit up 12% year-over-year to
$18.3 million ; non-GAAP gross profit up 12% to$18.5 million ; - GAAP operating loss of
$1.5 million ; non-GAAP operating loss of $2.1 million.
Financial Outlook
- Management continues to maintain its 2019 expectations of yearly revenues between
$106-110 million , representing continued double-digit year-over-year growth; - Management continue to expect full year 2019 book to bill ratio at above 1.
Management Comment
Second Quarter 2019 Financial Results Summary
Total revenues for the quarter were
Gross profit on a GAAP basis for the quarter was
Gross profit on a non-GAAP basis for the quarter of was
Operating loss on a GAAP basis for the quarter was
Non-GAAP operating loss for the quarter was
Net loss on a GAAP basis for the quarter was $1.5million, or
Non-GAAP net loss for the quarter was
Cash and investments as of
Conference Call & Webcast:
The Allot management team will host a conference call to discuss second quarter 2019 earnings results today,
US: 1-888-407-2553,
A live webcast and, following the end of the call, an archive of the conference call, will be accessible on the Allot website at: http://investors.allot.com/index.cfm
About Allot
For more information, visit www.allot.com
GAAP to Non-GAAP Reconciliation:
Non-GAAP net income is defined as GAAP net income after excluding stock-based compensation expenses, amortization of acquisition-related intangible assets, deferred tax asset adjustment, exchange rate differences related to revaluation of assets and liabilities denominated in non-dollar currencies 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 is 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 fourth 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 |
||||||||
ALLOT LTD. |
||||||||
AND ITS SUBSIDIARIES |
||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||
(U.S. dollars in thousands, except share and per share data) |
||||||||
Three Months Ended |
Six Months Ended |
|||||||
June 30, |
June 30, |
|||||||
2019 |
2018 |
2019 |
2018 |
|||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|||||
Revenues |
$ 26,554 |
$ 23,003 |
$ 51,896 |
$ 44,735 |
||||
Cost of revenues |
8,301 |
6,712 |
15,594 |
13,636 |
||||
Gross profit |
18,253 |
16,291 |
36,302 |
31,099 |
||||
Operating expenses: |
||||||||
Research and development costs, net |
7,633 |
6,298 |
14,807 |
12,091 |
||||
Sales and marketing |
11,209 |
10,182 |
22,686 |
20,215 |
||||
General and administrative |
923 |
2,579 |
3,628 |
5,045 |
||||
Total operating expenses |
19,765 |
19,059 |
41,121 |
37,351 |
||||
Operating loss |
(1,512) |
(2,768) |
(4,819) |
(6,252) |
||||
Financial and other income, net |
571 |
806 |
1,103 |
1,036 |
||||
Loss before income tax expenses |
(941) |
(1,962) |
(3,716) |
(5,216) |
||||
Tax expenses |
592 |
455 |
1,150 |
887 |
||||
Net Loss |
(1,533) |
(2,417) |
(4,866) |
(6,103) |
||||
Basic net loss per share |
$ (0.04) |
$ (0.07) |
$ (0.14) |
$ (0.18) |
||||
Diluted net loss per share |
$ (0.04) |
$ (0.07) |
$ (0.14) |
$ (0.18) |
||||
Weighted average number of shares used in |
||||||||
computing basic net loss per share |
34,213,724 |
33,655,940 |
34,099,428 |
33,606,236 |
||||
Weighted average number of shares used in |
||||||||
computing diluted net loss per share |
34,213,724 |
33,655,940 |
34,099,428 |
33,606,236 |
TABLE - 2 |
||||||||
ALLOT LTD. |
||||||||
AND ITS SUBSIDIARIES |
||||||||
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||
(U.S. dollars in thousands, except per share data) |
||||||||
Three Months Ended |
Six Months Ended |
|||||||
June 30, |
June 30, |
|||||||
2019 |
2018 |
2019 |
2018 |
|||||
(Unaudited) |
(Unaudited) |
|||||||
GAAP cost of revenues |
$ 8,301 |
$ 6,712 |
$ 15,594 |
$ 13,636 |
||||
Share-based compensation (1) |
(61) |
(90) |
(121) |
(170) |
||||
Amortization of intangible assets (2) |
(232) |
(232) |
(464) |
(465) |
||||
Non-GAAP cost of revenues |
$ 8,008 |
$ 6,390 |
$ 15,009 |
$ 13,001 |
||||
GAAP gross profit |
$ 18,253 |
$ 16,291 |
$ 36,302 |
$ 31,099 |
||||
Gross profit adjustments |
293 |
322 |
585 |
635 |
||||
Non-GAAP gross profit |
$ 18,546 |
$ 16,613 |
$ 36,887 |
$ 31,734 |
||||
GAAP operating expenses |
$ 19,765 |
$ 19,059 |
$ 41,121 |
$ 37,351 |
||||
Share-based compensation (1) |
(782) |
(630) |
(1,467) |
(1,254) |
||||
Amortization of intangible assets (2) |
(189) |
(175) |
(377) |
(350) |
||||
Income (Expenses) related to M&A activities (3) |
1,832 |
(151) |
1,537 |
(189) |
||||
Changes in tax related items (4) |
- |
(170) |
- |
(170) |
||||
Non-GAAP operating expenses |
$ 20,626 |
$ 17,933 |
$ 40,814 |
$ 35,388 |
||||
GAAP financial and other income |
$ 571 |
$ 806 |
$ 1,103 |
$ 1,036 |
||||
Exchange rate differences* |
(31) |
(292) |
(33) |
(142) |
||||
Non-GAAP Financial and other income |
$ 540 |
$ 514 |
$ 1,070 |
$ 894 |
||||
GAAP taxes on income |
$ 592 |
$ 455 |
$ 1,150 |
$ 887 |
||||
Tax expenses in respect of net deferred tax asset recorded |
(17) |
(19) |
(33) |
(38) |
||||
Non-GAAP taxes on income |
$ 575 |
$ 436 |
$ 1,117 |
$ 849 |
||||
GAAP Net Loss |
$ (1,533) |
$ (2,417) |
$ (4,866) |
$ (6,103) |
||||
Share-based compensation (1) |
843 |
720 |
1,588 |
1,424 |
||||
Amortization of intangible assets (2) |
421 |
407 |
841 |
815 |
||||
Expenses related to M&A activities (3) |
(1,832) |
(141) |
(1,537) |
47 |
||||
Changes in tax related items (4) |
- |
170 |
- |
170 |
||||
Exchange rate differences |
(31) |
- |
(33) |
- |
||||
Tax expenses in respect of net deferred tax asset recorded |
17 |
19 |
33 |
38 |
||||
Non-GAAP Net Loss |
$ (2,115) |
$ (1,242) |
$ (3,974) |
$ (3,609) |
||||
GAAP Loss per share (diluted) |
$ (0.04) |
$ (0.07) |
$ (0.14) |
$ (0.18) |
||||
Share-based compensation |
0.02 |
0.02 |
0.05 |
0.04 |
||||
Amortization of intangible assets |
0.02 |
0.01 |
0.02 |
0.02 |
||||
Expenses related to M&A activities |
(0.06) |
(0.01) |
(0.05) |
0.00 |
||||
Changes in taxes and headcount related items |
- |
0.01 |
- |
0.01 |
||||
Exchange rate differences |
(0.00) |
- |
(0.00) |
- |
||||
Tax expense in respect of net deferred tax asset recorded |
0.00 |
0.00 |
0.00 |
- |
||||
Non-GAAP Net loss per share (diluted) |
$ (0.06) |
$ (0.04) |
$ (0.12) |
$ (0.11) |
||||
Weighted average number of shares used in |
||||||||
computing GAAP diluted net loss per share |
34,213,724 |
33,655,940 |
34,099,428 |
33,606,236 |
||||
Weighted average number of shares used in |
||||||||
computing non-GAAP diluted net loss per share |
34,213,724 |
33,655,940 |
34,099,428 |
33,606,236 |
||||
* Financial income or expenses related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies. |
TABLE - 2 cont. |
||||||||
ALLOT COMMUNICATIONS LTD. |
||||||||
AND ITS SUBSIDIARIES |
||||||||
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||
(U.S. dollars in thousands, except per share data) |
||||||||
Three Months Ended |
Six Months Ended |
|||||||
June 30, |
June 30, |
|||||||
2019 |
2018 |
2019 |
2018 |
|||||
(Unaudited) |
(Unaudited) |
|||||||
(1) Share-based compensation: |
||||||||
Cost of revenues |
$ 61 |
$ 90 |
$ 121 |
$ 170 |
||||
Research and development costs, net |
214 |
171 |
383 |
326 |
||||
Sales and marketing |
327 |
215 |
610 |
437 |
||||
General and administrative |
241 |
244 |
474 |
491 |
||||
$ 843 |
$ 720 |
$ 1,588 |
$ 1,424 |
|||||
(2) Amortization of intangible assets |
||||||||
Cost of revenues |
$ 232 |
$ 232 |
$ 464 |
$ 465 |
||||
Sales and marketing |
189 |
175 |
377 |
350 |
||||
$ 421 |
$ 407 |
$ 841 |
$ 815 |
|||||
(3) Expenses related to M&A activities |
||||||||
General and administrative |
$ (1,947) |
$ - |
$ (1,947) |
$ 38 |
||||
Research and development costs, net |
115 |
151 |
410 |
151 |
||||
Financial income |
- |
(292) |
- |
(142) |
||||
$ (1,832) |
$ (141) |
$ (1,537) |
$ 47 |
|||||
(4) Changes in tax related items |
||||||||
Sales and marketing |
- |
100 |
- |
100 |
||||
General and administrative |
- |
70 |
- |
70 |
||||
$ - |
$ 170 |
$ - |
$ 170 |
TABLE - 3 |
||||
ALLOT LTD. |
||||
AND ITS SUBSIDIARIES |
||||
CONSOLIDATED BALANCE SHEETS |
||||
(U.S. dollars in thousands) |
||||
June 30, |
December 31, |
|||
2019 |
2018 |
|||
(Unaudited) |
(Audited) |
|||
ASSETS |
||||
CURRENT ASSETS: |
||||
Cash and cash equivalents |
$ 17,517 |
$ 16,336 |
||
Short term deposits |
17,624 |
22,543 |
||
Restricted deposit |
506 |
465 |
||
Marketable securities |
65,681 |
64,290 |
||
Trade receivables, net |
21,863 |
26,093 |
||
Other receivables and prepaid expenses |
4,552 |
3,647 |
||
Inventories |
10,687 |
11,345 |
||
Total current assets |
138,430 |
144,719 |
||
LONG-TERM ASSETS: |
||||
Restricted deposit |
257 |
257 |
||
Severance pay fund |
357 |
345 |
||
Operating lease right-of-use assets |
6,129 |
- |
||
Deferred taxes |
463 |
281 |
||
Other assets |
877 |
600 |
||
Total long-term assets |
8,083 |
1,483 |
||
PROPERTY AND EQUIPMENT, NET |
7,385 |
6,249 |
||
GOODWILL AND INTANGIBLE ASSETS, NET |
35,802 |
37,393 |
||
Total assets |
$ 189,700 |
$ 189,844 |
||
LIABILITIES AND SHAREHOLDERS' |
||||
CURRENT LIABILITIES: |
||||
Trade payables |
$ 6,601 |
$ 7,813 |
||
Deferred revenues |
15,271 |
13,855 |
||
Short-term operating lease liabilities |
2,480 |
- |
||
Other payables and accrued expenses |
21,473 |
21,052 |
||
Total current liabilities |
45,825 |
42,720 |
||
LONG-TERM LIABILITIES: |
||||
Deferred revenues |
4,154 |
4,247 |
||
Long-term operating lease liabilities |
4,031 |
- |
||
Accrued severance pay |
768 |
806 |
||
Other long term liabilities |
590 |
6,168 |
||
Total long-term liabilities |
9,543 |
11,221 |
||
SHAREHOLDERS' EQUITY |
134,332 |
135,903 |
||
Total liabilities and shareholders' equity |
$ 189,700 |
$ 189,844 |
TABLE - 4 |
|||||||
ALLOT LTD. |
|||||||
AND ITS SUBSIDIARIES |
|||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(U.S. dollars in thousands) |
|||||||
Three Months Ended |
Six Months Ended |
||||||
June 30, |
June 30, |
||||||
2019 |
2018 |
2019 |
2018 |
||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
||||
Cash flows from operating activities: |
|||||||
Net Loss |
$ (1,533) |
$ (2,417) |
$ (4,866) |
$ (6,103) |
|||
Adjustments to reconcile net income to net cash used in operating activities: |
|||||||
Depreciation |
617 |
555 |
1,233 |
1,053 |
|||
Stock-based compensation related to options granted to employees |
843 |
720 |
1,588 |
1,424 |
|||
Amortization of intangible assets |
421 |
407 |
841 |
815 |
|||
Capital loss |
- |
36 |
- |
39 |
|||
Decrease (Increase) in accrued severance pay, net |
15 |
(7) |
(50) |
26 |
|||
Decrease (Increase) in other assets |
(344) |
(395) |
(277) |
393 |
|||
Decrease in accrued interest and amortization of premium on marketable securities |
164 |
169 |
241 |
415 |
|||
Changes in operating leases, net |
588 |
- |
382 |
- |
|||
Decrease (Increase) in trade receivables |
6,823 |
(2,635) |
4,230 |
(1,889) |
|||
Decrease (Increase) in other receivables and prepaid expenses |
773 |
1,597 |
(374) |
(282) |
|||
Decrease (Increase) in inventories |
1,676 |
164 |
(234) |
(113) |
|||
Decrease (Increase) in long-term deferred taxes, net |
(149) |
19 |
(182) |
38 |
|||
Increase (Decrease) in trade payables |
(3,769) |
(113) |
(1,212) |
489 |
|||
Increase (Decrease) in employees and payroll accruals |
517 |
214 |
1,540 |
(285) |
|||
Increase in deferred revenues |
1,915 |
943 |
1,323 |
1,674 |
|||
Increase (Decrease) in other payables, accrued expenses and other long term liabilities |
(7,923) |
2,920 |
(6,030) |
3,405 |
|||
Net cash provided by (used in) operating activities |
634 |
2,177 |
(1,847) |
1,099 |
|||
Cash flows from investing activities: |
|||||||
Decrease (Increase) in restricted deposit |
42 |
(352) |
(41) |
(152) |
|||
Redemption of (investment in) short-term deposits |
933 |
(4,000) |
4,919 |
10,100 |
|||
Purchase of property and equipment |
(748) |
(874) |
(1,477) |
(1,568) |
|||
Investment in marketable securities |
(13,020) |
(10,896) |
(24,604) |
(17,957) |
|||
Proceeds from redemption or sale of marketable securities |
12,190 |
11,422 |
23,569 |
16,413 |
|||
Acquisitions |
- |
- |
- |
(3,048) |
|||
Net cash provided by (used in) investing activities |
(603) |
(4,700) |
2,366 |
3,788 |
|||
Cash flows from financing activities: |
|||||||
Exercise of employee stock options |
56 |
59 |
662 |
142 |
|||
Net cash provided by financing activities |
56 |
59 |
662 |
142 |
|||
Increase (Decrease) in cash and cash equivalents |
87 |
(2,464) |
1,181 |
5,029 |
|||
Cash and cash equivalents at the beginning of the period |
17,430 |
22,835 |
16,336 |
15,342 |
|||
Cash and cash equivalents at the end of the period |
$ 17,517 |
$ 20,371 |
$ 17,517 |
$ 20,371 |
Investor Relations Contact: GK Investor Relations Ehud Helft/Gavriel Frohwein +1 646 688 3559 |
Public Relations Contact: Seth Greenberg
Director of Corporate Communications |
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