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Feb 21, 2020 10:43 PM EST
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Allot Announces Fourth Quarter and Full Year 2019 Financial Results

Allot Announces Fourth Quarter and Full Year 2019 Financial Results

February 4, 2020 at 5:00 AM EST
2019 revenue grew by 15% over 2018
Backlog grew 100% year over year to $138 million
Cash balance grew to $118 million
2020 revenues expected to be $135-140 million

HOD HASHARON, Israel, Feb. 4, 2020 /PRNewswire/ -- Allot Ltd. (NASDAQ: ALLT) (TASE: ALLT), a leading global provider of innovative network intelligence and security solutions for service providers and enterprises worldwide, today announced its unaudited fourth quarter and full year 2019 financial results.

 

Allot Logo

 

 Financial Highlights

  • Fourth quarter revenues were $30.6 million, up 14% year-over-year;
  • Full year revenues were $110.1 million, up 15% year-over-year;
  • Backlog increased by $69 million to $138 million at year-end 2019 compared with $69 million at year-end 2018;
  • Year-end cash and investments totaled $117.6 million compared to $103.9 million at year-end 2018;
  • Allot signed in 2019 recurring security revenue agreements with a total MAR* of $85 million.

Financial Outlook

  • Management expects 2020 revenues to grow to between $135-140 million, representing accelerated double digit growth;
  • Management expects to close additional recurring security revenue deals in 2020.  The MAR* of new deals to be signed in 2020 is expected to exceed $140 million;

Management Comment

Erez Antebi, President & CEO of Allot, commented: "We are very pleased with our performance in 2019. Our Visibility & Control business continued to perform well due to ongoing solid execution. We are also happy with our performance in the security space and we had a successful year bringing on several new operators to our security offerings, some of them in a revenue share arrangement. We believe that the recurring revenue and growth we gain from these deals will have a significantly positive long-term impact on our future. We expect to win further such deals in the coming year."

Continued Mr. Antebi, "Looking out to 2020, we expect accelerated top-line growth. While we continue to invest in our offerings and in sales and marketing, our expenses should grow at a slower rate than our revenue and subsequently we expect to reach profitability in the last quarter of 2020 . We look forward to continued growth as we successfully execute on our strategy."

 Q4 2019 Financial Results Summary

Total revenues for the fourth quarter of 2019 were $30.6 million, an increase of 14% compared to $26.9 million in the fourth quarter of 2018.

Gross profit on a GAAP basis for the fourth quarter of 2019 was $20.8 million (gross margin of 68.0%), a 12% improvement compared with $18.6 million (gross margin of 69.1%) in the fourth quarter of 2018.

Gross profit on a non-GAAP basis for the fourth quarter of 2019 was $21.0 million (gross margin of 68.7%), a 11% improvement compared with $18.9 million (gross margin of 70.3%) in the fourth quarter of 2018.

Net loss on a GAAP basis for the fourth quarter of 2019 was $1.7 million, or $0.05 per basic share, compared with a net loss of $1.8 million, or $0.05 per basic share, in the fourth quarter of 2018.

Non-GAAP net loss for the fourth quarter of 2019 was $1.7 million, or $0.05 per basic share, compared with a non-GAAP net loss of $0.5 million, or $0.01 per basic share, in the fourth quarter of 2018.

2019 Financial Results Summary

Total revenues for 2019 were $110.1 million, an increase of 15% compared to $95.8 million in 2018.

Gross profit on a GAAP basis for 2019 was $76.3 million (gross margin of 69.3%), a 15% improvement compared with $66.5 million (gross margin of 69.4%) in 2018.

Gross profit on a non-GAAP basis for 2019 was $77.3 million (gross margin of 70.2%), a 14% improvement compared with $67.8 million (gross margin of 70.7%) in 2018.

Net loss on a GAAP basis for 2019 was $8.7 million, or $0.25 per basic share, an improvement compared with a net loss of $10.4 million, or $0.31 per basic share, in 2018.

Non-GAAP net loss for 2019 was $7.5 million, or $0.22 per basic share, a decrease compared with a non-GAAP net loss of $5.1 million, or $0.15 per basic share, in 2018.

Cash and investments as of December 31, 2019 totaled $117.6 million, compared to $114.8 million as of September 30, 2019 and $103.9 million as of December 31, 2018.

Conference Call & Webcast:

The Allot management team will host a conference call to discuss fourth quarter and full year 2019 earnings results today, February 4, 2020 at 8:30 am ET, 3:30 pmIsrael time. To access the conference call, please dial one of the following numbers:

US:  1-888-668-9141, UK: 0-800-917-5108, Israel: +972-3-918-0609

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

Allot Ltd. (NASDAQ: ALLT, TASE: ALLT) is a provider of leading innovative network intelligence and security solutions for service providers and enterprises worldwide, enhancing value to their customers. Our solutions are deployed globally for network and application analytics, traffic control and shaping, network-based security services, and more. Allot's multi-service platforms are deployed by over 500 mobile, fixed and cloud service providers and over 1000 enterprises. Our industry leading network-based security as a service solution has achieved over 50% penetration with some service providers and is already used by over 23 million subscribers in Europe. Allot. See. Control. Secure.

For more information, visit www.allot.com

*MAR (maximum annual revenue potential of concluded transactions) was estimated by Allot upon transaction signature and constitutes an approximation of the theoretical annual revenues Allot would receive if 100% of the customer's subscribers, as estimated by Allot, signed up for the service.

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, restructuring expenses, changes in taxes and headcount related items, 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 Securities and Exchange Commission. Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

 

 

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



Year Ended


December 31,



December 31,


2019


2018



2019


2018


(Unaudited)


(Unaudited)



(Unaudited)


(Audited)










Revenues

$       30,567


$       26,885



$     110,100


$       95,837

Cost of revenues

9,784


8,296



33,834


29,349

Gross profit 

20,783


18,589



76,266


66,488










Operating expenses:









Research and development costs, net

8,563


6,632



31,461


25,418

Sales and marketing

12,186


10,754



47,105


40,849

General and administrative

1,954


2,616



6,678


10,416

Total operating expenses

22,703


20,002



85,244


76,683

Operating loss

(1,920)


(1,413)



(8,978)


(10,195)

Financial and other income, net

600


601



1,960


2,208

Loss before income tax expenses

(1,320)


(812)



(7,018)


(7,987)










Tax expenses

362


1,005



1,641


2,428

Net Loss

(1,682)


(1,817)



(8,659)


(10,415)










 Basic net loss per share

$          (0.05)


$          (0.05)



$          (0.25)


$          (0.31)



















 Diluted net loss per share

$          (0.05)


$          (0.05)



$          (0.25)


$          (0.31)










Weighted average number of shares used in









computing basic net loss per share

34,450,317


33,860,114



34,250,582


33,710,507










Weighted average number of shares used in









computing diluted net loss per share

34,450,317


33,860,114



34,250,582


33,710,507

 

 

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


Year Ended



December 31,


December 31,



2019


2018


2019


2018



(Unaudited)


(Unaudited)

GAAP cost of revenues

$        9,784


$        8,296


$     33,834


$     29,349

 Share-based compensation (1)

(76)


(60)


(264)


(316)

 Amortization of intangible assets (2)

(152)


(233)


(853)


(930)

 Changes in taxes and headcount related items (5)

-


(17)


75


(17)

Non-GAAP cost of revenues

$        9,556


$        7,986


$     32,792


$     28,086










 GAAP gross profit

$     20,783


$     18,589


$     76,266


$     66,488

 Gross profit adjustments

228


310


1,042


1,263

 Non-GAAP gross profit

$     21,011


$     18,899


$     77,308


$     67,751










 GAAP operating expenses

$     22,703


$     20,002


$     85,244


$     76,683

 Share-based compensation (1)

(942)


(634)


(3,156)


(2,546)

 Amortization of intangible assets (2)

(189)


(175)


(754)


(700)

 Income (Expenses) related to M&A activities (3)

1,246


(93)


3,980


(394)

 Restructuring expenses (4)

-


(62)


-


(62)

 Changes in taxes and headcount related items (5)

-


(40)


(31)


(420)

 Non-GAAP operating expenses

$     22,818


$     18,998


$     85,283


$     72,561










 GAAP financial and other income

$           600


$           601


$        1,960


$        2,208

 Expenses related to M&A activities (3)

-


(75)


-


(224)

 Exchange rate differences*

(119)


-


83


-

 Non-GAAP Financial and other income

$           481


$           526


$        2,043


$        1,984










 GAAP taxes on income

$           362


$        1,005


$        1,641


$        2,428

 Tax expenses in respect of net deferred tax asset recorded

(25)


(123)


(74)


(116)

 Non-GAAP taxes on income

$           337


$           882


$        1,567


$        2,312










 GAAP Net Loss

$      (1,682)


$      (1,817)


$      (8,659)


$   (10,415)

 Share-based compensation (1)

1,018


694


3,420


2,862

 Amortization of intangible assets (2)

341


408


1,607


1,630

 Expenses (Income) related to M&A activities (3)

(1,246)


18


(3,980)


170

 Restructuring expenses (4)

-


62


-


62

 Changes in taxes and headcount related items (5)

-


57


(44)


437

 Exchange rate differences

(119)


-


83


-

 Tax expenses in respect of net deferred tax asset recorded

25


123


74


116

 Non-GAAP Net Loss

$      (1,663)


$         (455)


$      (7,499)


$      (5,138)










 GAAP Loss per share (diluted)

$        (0.05)


$        (0.05)


$        (0.25)


$        (0.31)

 Share-based compensation

0.03


0.02


0.10


0.08

 Amortization of intangible assets

0.01


0.01


0.05


0.05

 Expenses (Income) related to M&A activities

(0.04)


-


(0.12)


0.01

 Restructuring expenses

-


0.00


-


-

 Changes in taxes and headcount related items

-


-


(0.00)


0.01

 Exchange rate differences

(0.00)


-


0.00


-

 Tax expense in respect of net deferred tax asset recorded

0.00


0.01


0.00


0.01

 Non-GAAP Net loss per share (diluted)

$        (0.05)


$        (0.01)


$        (0.22)


$        (0.15)



















Weighted average number of shares used in








computing GAAP diluted net loss per share

34,450,317


33,860,114


34,250,582


33,710,507



















Weighted average number of shares used in








computing non-GAAP diluted net loss per share

34,450,317


33,860,114


34,250,582


33,710,507










* 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


Year Ended



December 31,


December 31,



2019


2018


2019


2018



(Unaudited)


(Unaudited)










(1) Share-based compensation:









Cost of revenues

$             76


$             60


$           264


$           316


Research and development costs, net

230


174


847


678


Sales and marketing

350


227


1,257


928


General and administrative

362


233


1,052


940



$        1,018


$           694


$        3,420


$        2,862










 (2) Amortization of intangible assets









Cost of revenues

$           152


$           233


$           853


$           930


Sales and marketing

189


175


754


700



$           341


$           408


$        1,607


$        1,630










 (3) Expenses (Income) related to M&A activities









General and administrative

$      (1,374)


$              -


$      (4,882)


$             69


Research and development costs, net

128


93


902


325


Financial income

-


(75)


-


(224)



$      (1,246)


$             18


$      (3,980)


$           170










 (4) Restructuring expenses









General and administrative

$              -


$             62


$              -


$             62



$              -


$             62


$              -


$             62










 (5) Changes in taxes and headcount related items 









Sales and marketing

$              -


$             40


$             16


$           262


Cost of revenues

-


17


(75)


17


General and administrative

-


-


15


158



$              -


$             57


$           (44)


$           437




















(*) Excluding share-based compensation related to the restructuring plan, which was already included under restructuring expenses.



 

 

TABLE  - 3

ALLOT LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED  BALANCE  SHEETS

(U.S. dollars in thousands)













December 31,


December 31,



2019


2018



(Unaudited)


(Audited)




ASSETS





CURRENT ASSETS:





Cash and cash equivalents


$            16,930


$            16,336

Short term deposits


5,557


22,543

Restricted deposit


23,183


465

Marketable securities


61,012


64,290

Trade receivables, net


29,008


26,093

Other receivables and prepaid expenses


6,935


3,647

Inventories


10,668


11,345

Total current assets


153,293


144,719






LONG-TERM ASSETS:





Restricted deposit


10,913


257

Severance pay fund


387


345

Operating lease right-of-use assets


6,368


-

Deferred taxes


517


281

Other assets


519


600

Total long-term assets


18,704


1,483






PROPERTY AND EQUIPMENT, NET


8,135


6,249

GOODWILL AND INTANGIBLE ASSETS, NET


35,037


37,393






Total assets


$          215,169


$          189,844






LIABILITIES AND SHAREHOLDERS'
EQUITY





CURRENT LIABILITIES:





Trade payables


$            11,676


$               7,813

Deferred revenues


36,360


13,855

Short-term operating lease liabilities


3,151


-

Other payables and accrued expenses


22,255


21,052

Total current liabilities


73,442


42,720






LONG-TERM LIABILITIES:





Deferred revenues


5,262


-

Long-term operating lease liabilities


3,820


4,247

Accrued severance pay


794


-

Other long term liabilities


-


806

Total long-term liabilities


9,876


6,168






SHAREHOLDERS' EQUITY


131,851


135,903






Total liabilities and shareholders' equity


$          215,169


$          189,844






 

 

TABLE  - 4

ALLOT LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)










Three Months Ended


Year Ended


December 31,


December 31,


2019


2018


2019


2018


(Unaudited)


(Unaudited)


(Unaudited)


(Audited)









Cash flows from operating activities:
















Net Loss

$        (1,682)


$     (1,817)


$      (8,659)


$   (10,415)

Adjustments to reconcile net income  to net cash used in operating activities:








Depreciation

722


601


2,637


2,204

Stock-based compensation related to options granted to employees

1,018


694


3,420


2,862

Amortization of intangible assets

341


408


1,607


1,630

Capital loss

-


-


-


39

Decrease (Increase) in accrued severance pay, net

(21)


(18)


(54)


16

Decrease in other assets

247


83


81


535

Decrease in accrued interest and  amortization of premium on marketable securities

7


193


343


804

Changes in operating leases, net

456


-


603


-

Decrease (Increase) in trade receivables

(8,034)


359


(2,915)


(3,356)

Decrease (Increase) in other receivables and prepaid expenses

(2,886)


184


(3,575)


(1,101)

Decrease (Increase) in inventories

(1,387)


607


(138)


(3,448)

Increase (Decrease) in long-term deferred taxes, net

33


27


(236)


20

Increase (Decrease) in trade payables

4,389


(4,370)


3,863


1,945

Increase (Decrease) in employees and payroll accruals

4,048


(998)


4,635


(1,178)

Increase in deferred revenues

5,760


1,421


23,520


3,566

Increase (Decrease) in other payables, accrued expenses and other long term liabilities

464


3,383


(9,040)


6,906









Net cash provided by operating activities

3,475


757


16,092


1,029









Cash flows from investing activities:








Increase in restricted deposit

(23,331)


(32)


(33,374)


(294)

Redemption of short-term deposits

3,000


1,900


16,986


8,500

Purchase of property and equipment

(918)


(1,427)


(3,708)


(3,485)

Investment in marketable securities

(8,154)


(9,584)


(39,950)


(34,777)

Proceeds from redemption or sale of marketable securities

11,173


8,924


43,555


32,651

Acquisitions

-


-


-


(3,048)

Net cash used in investing activities

(18,230)


(219)


(16,491)


(453)









Cash flows from financing activities:
















Exercise of employee stock options

220


74


993


418

Net cash provided by financing activities

220


74


993


418

















Increase (Decrease) in cash and cash equivalents

(14,535)


612


594


994

Cash, cash equivalents and restricted cash at the beginning of the period

31,465


15,724


16,336


15,342









Cash and cash equivalents at the end of the period

$        16,930


$     16,336


$     16,930


$     16,336

 

 

Investor Relations Contact:
GK Investor Relations

Ehud Helft/Gavriel Frohwein
+1-646-688-3559
allot@gkir.com

Public Relations Contact:
Seth Greenberg, Allot Ltd.
+972-54-922-2294
sgreenberg@allot.com

Cision View original content:http://www.prnewswire.com/news-releases/allot-announces-fourth-quarter-and-full-year-2019-financial-results-300998305.html

SOURCE Allot Ltd.