Allot Communications Announces First Quarter 2016 Financial Results
HOD HASHARON,
Q1 2016 - Financial Highlights:
- GAAP revenues were
$22.9 , Non-GAAP revenues were$23.0 million , down 22% year over year - GAAP gross margin was 69%, Non-GAAP gross margin was 70%
- GAAP operating margin was negative 18%, Non-GAAP operating margin was negative 8%
- Book-to-bill was below one
- The Company recorded negative operating cash flow of
$1.4 million - Net cash and cash equivalents as of
March 31 st 2016 totaled$120.7 million - During the quarter we repurchased our shares in a total amount of
$1.0 million
Q1 2016 Financial results:
On a GAAP basis, total revenues for the first quarter of 2016 were
On a non-GAAP basis, total revenues for the first quarter of 2016 were
Q1 2016 - Key Achievements:
- During Q1 2016, 11 large orders were received.
- 6 of the large orders came from mobile-service providers.
- 4 of the large orders were from fixed-line service providers
- 1 of the large orders was from cloud service provider.
- During Q1 2016, Allot received two, over
$1 million deals, compared to five in the previous quarter and zero during Q1, 2015. - Leading LATAM Operator Safeguards Businesses from Internet Security Threats with Allot Web Safe Business.
- Launched the Service Gateway 9500, a powerful Intel-based appliance. The product received 6 orders during the first quarter.
- Allot Smart Data Source was selected by five Tier 1 mobile operators and integrates with Oracle communication analytics to enable operators to monetize network data.
- Published its 20th Allot Mobile Trends report, together with
Kaspersky Lab , revealing that Mobile business users incur the highest malware risk.
2016 Outlook
Based on current backlog and the Company's funnel of opportunities, the Company reiterates 2016 guidance and expects revenues to be in the range of
"Q1 results came in below our expectations mainly due to slow turning of backlog into revenues. However, we have several significant projects in deployment which we expect to materialize throughout the year. During the quarter, we launched the SG-9500, an Intel-based service gateway and shipped 6 orders. This new offering extends our addressable market by providing a mid-range solution with low cost of ownership, rich functionality and great scalability." Said
Conference Call & Webcast:
The Allot management team will host a conference call to discuss first quarter 2016 earnings results today at
A replay of the conference call will be available from
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 update and 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 | |||
| |||
2016 |
2015 | ||
(Unaudited) | |||
Revenues |
$ 22,938 |
$ 29,532 | |
Cost of revenues |
7,143 |
7,769 | |
Gross profit |
15,795 |
21,763 | |
Operating expenses: |
|||
Research and development costs, net |
6,862 |
6,809 | |
Sales and marketing |
10,271 |
11,808 | |
General and administrative |
2,697 |
3,250 | |
Total operating expenses |
19,830 |
21,867 | |
Operating loss |
(4,035) |
(104) | |
Financial and other income, net |
115 |
205 | |
Profit (Loss) before income tax benefit |
(3,920) |
101 | |
Tax expenses |
370 |
135 | |
Net loss |
(4,290) |
(34) | |
Basic net loss per share |
$ (0.13) |
$ (0.00) | |
Diluted net loss per share |
$ (0.13) |
$ (0.00) | |
Weighted average number of shares |
|||
used in computing basic net |
|||
earnings per share |
33,481,650 |
33,357,909 | |
Weighted average number of shares |
|||
used in computing diluted net |
|||
earnings per share |
33,481,650 |
33,357,909 |
TABLE - 2 AND ITS SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS ( | ||||||
Three Months Ended |
Three Months Ended | |||||
|
| |||||
(Unaudited) |
(Unaudited) | |||||
$ |
% of Revenues |
$ |
% of Revenues | |||
GAAP Operating loss |
$ (4,035) |
-18% |
$ (104) |
0% | ||
Share-based compensation (1) |
1,655 |
1,867 |
||||
Amortization of intangible assets (2) |
386 |
511 |
||||
Expenses related to M&A activities (3) |
- |
577 |
||||
Fair value adjustment for acquired deferred revenues write down |
65 |
11 |
||||
Non-GAAP Operating income (loss) |
$ (1,929) |
-8% |
$ 2,862 |
10% | ||
GAAP Net loss |
$ (4,290) |
-19% |
$ (34) |
0% | ||
Share-based compensation (1) |
1,655 |
1,867 |
||||
Amortization of intangible assets (2) |
386 |
511 |
||||
Expenses related to M&A activities (3) |
- |
577 |
||||
Fair value adjustment for acquired deferred revenues write down |
65 |
11 |
||||
Financial expenses |
278 |
- |
||||
Tax benefit (in respect of net deferred tax asset recorded) |
62 |
- |
||||
Non-GAAP Net income (loss) |
$ (1,844) |
-8% |
$ 2,932 |
10% | ||
GAAP loss per share (diluted) |
$ (0.13) |
$ (0.00) |
||||
Share-based compensation |
0.05 |
0.05 |
||||
Amortization of intangible assets |
0.01 |
0.02 |
||||
Expenses related to M&A activities |
- |
0.02 |
||||
Fair value adjustment for acquired deferred revenues write down |
0.00 |
0.00 |
||||
Financial expenses |
0.01 |
- |
||||
Tax benefit (in respect of net deferred tax asset recorded) |
0.00 |
- |
||||
Non-GAAP Net income (loss) per share (diluted) |
$ (0.06) |
$ 0.09 |
||||
(1) Share-based compensation: |
||||||
Cost of revenues |
$ 69 |
$ 82 |
||||
Research and development costs, net |
426 |
420 |
||||
Sales and marketing |
622 |
752 |
||||
General and administrative |
538 |
613 |
||||
$ 1,655 |
$ 1,867 |
|||||
(2) Amortization of intangible assets |
||||||
Cost of revenues |
$ 248 |
$ 454 |
||||
Sales and marketing |
138 |
57 |
||||
$ 386 |
$ 511 |
|||||
(3) Expenses related to M&A activities |
||||||
General and administrative |
$ - |
$ 351 |
||||
Research and development costs, net |
- |
$ 45 |
||||
Sales and marketing |
- |
$ 181 |
||||
$ - |
$ 577 |
TABLE - 3 AND ITS SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED REVENUES ( | |||
Three Months Ended | |||
| |||
2016 |
2015 | ||
(Unaudited) | |||
GAAP Revenues |
$ 22,938 |
| |
Fair value adjustment for acquired deferred revenues write down |
65 |
11 | |
Non-GAAP Revenues |
$ 23,003 |
|
TABLE - 4 AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ( | ||||
|
| |||
2016 |
2015 | |||
(Unaudited) |
(Unaudited) | |||
ASSETS |
||||
CURRENT ASSETS: |
||||
Cash and cash equivalents |
$ 24,818 |
$ 21,930 | ||
Short term deposits |
32,700 |
46,500 | ||
Restricted cash |
203 |
|||
Marketable securities and restricted cash |
62,994 |
55,344 | ||
Trade receivables, net |
22,934 |
23,584 | ||
Other receivables and prepaid expenses |
4,489 |
6,634 | ||
Inventories |
9,795 |
8,321 | ||
Total current assets |
157,933 |
162,313 | ||
LONG-TERM ASSETS: |
||||
Severance pay fund |
252 |
260 | ||
Deferred taxes |
439 |
1,620 | ||
Other assets |
2,738 |
3,626 | ||
Total long-term assets |
3,429 |
5,506 | ||
PROPERTY AND EQUIPMENT, NET |
4,916 |
6,011 | ||
GOODWILL AND INTANGIBLE ASSETS, NET |
37,295 |
45,903 | ||
Total assets |
$ 203,573 |
$ 219,733 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||
CURRENT LIABILITIES: |
||||
Trade payables |
$ 6,164 |
$ 5,876 | ||
Deferred revenues |
13,097 |
12,340 | ||
Other payables and accrued expenses |
13,865 |
15,232 | ||
Total current liabilities |
33,126 |
33,448 | ||
LONG-TERM LIABILITIES: |
||||
Deferred revenues |
4,654 |
4,777 | ||
Accrued severance pay |
639 |
292 | ||
Other long term liabilities |
4,314 |
3,915 | ||
Total long-term liabilities |
9,607 |
8,984 | ||
SHAREHOLDERS' EQUITY |
160,840 |
177,301 | ||
Total liabilities and shareholders' equity |
$ 203,573 |
$ 219,733 |
TABLE - 5 AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (
| ||
Three Months Ended | ||
| ||
2016 |
2015 | |
(Unaudited) | ||
Cash flows from operating activities: |
||
Net Loss |
$ (4,290) |
$ (34) |
Adjustments to reconcile net income to net cash provided by operating activities: |
||
Depreciation |
600 |
762 |
Stock-based compensation related to options granted to employees |
1,665 |
1,849 |
Amortization of intangible assets |
386 |
449 |
Capital loss (gain) |
(1) |
4 |
Decrease in accrued severance pay, net |
18 |
12 |
Increase in other assets |
(109) |
(178) |
Decrease in accrued interest and amortization of premium on marketable securities |
338 |
300 |
Increase in trade receivables |
281 |
175 |
Decrease (Increase) in other receivables and prepaid expenses |
334 |
(2,691) |
Decrease in inventories |
374 |
1,788 |
Increase in long-term deferred taxes, net |
62 |
96 |
Increase (Decrease) in trade payables |
155 |
(424) |
Decrease in employees and payroll accruals |
(595) |
(409) |
Increase (Decrease) in deferred revenues |
(1,227) |
100 |
Increase in other payables and accrued expenses |
600 |
99 |
Net cash provided by (used in) operating activities |
(1,409) |
1,898 |
Cash flows from investing activities: |
||
Redemption of short-term deposits |
- |
12,500 |
Investment in short-term deposit |
10,000 |
- |
Purchase of property and equipment |
(327) |
(666) |
Investment in marketable securities |
(8,780) |
(6,727) |
Proceeds from redemption and sale of marketable securities |
10,900 |
5,528 |
Acquisitions of certain assets and liabilities |
- |
(9,859) |
. | ||
Net cash provided by investing activities |
11,793 |
776 |
Cash flows from financing activities: |
||
Exercise of employee stock options |
11 |
76 |
Purchase of treasury stocks, net |
(1,047) |
- |
Net cash provided by (used in) financing activities |
(1,036) |
76 |
Increase in cash and cash equivalents |
9,348 |
2,750 |
Cash and cash equivalents at the beginning of the period |
15,470 |
19,180 |
Cash and cash equivalents at the end of the period |
$ 24,818 |
$ 21,930 |
Investor Relations Contact: |
Public Relations Contact: |
|
|
AVP Corporate Development |
|
International dialing +972-52-569-4441 |
International dialing +972-54-268-1500 |
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