Skip to Content

Stock Quote


30-day Stock Price
1 month stock price graph
Price
Change

Jun 18, 2018 3:00 AM EDT
Copyright Nasdaq.
Minimum 15 minutes delayed

Allot Communications Announces Fourth Quarter and Full Year 2017 Financial Results

Allot Communications Announces Fourth Quarter and Full Year 2017 Financial Results

February 6, 2018 at 5:00 AM EST
Fourth quarter revenues increased 11% compared to third quarter, 2017 revenues from security products grew 42% YoY

HOD HASHARON, Israel, Feb. 6, 2018 /PRNewswire/ -- Allot Communications Ltd. (NASDAQ: ALLT) (TASE: ALLT), a global provider of leading innovative network intelligence and security solutions for service providers worldwide, today announced its fourth quarter and year end 2017 financial results.

Q4 2017 – Financial Highlights

  • Revenues were $23.2 million;
  • GAAP gross margin was 67%; Non-GAAP gross margin was 68%;
  • GAAP operating loss of $4.3 million; Non-GAAP operating loss of $1.3 million;
  • Book-to-bill above one for the fourth consecutive quarter

2017 – Financial Highlights

  • Revenues were $82.0 million;
  • GAAP gross margin was 65%; Non-GAAP gross margin was 68%;
  • GAAP operating loss of $17.4 million; Non-GAAP operating loss of $8.6 million;
  • Security revenues in 2017 grew 42% to $24.2 million compared to 2016;
  • Backlog grew by $13.3 million compared to year-end 2016

Financial outlook:

  • Management expects 2018 revenues to grow to between $91-$95 million with the second half of the year stronger than the first half, reflecting typical seasonality;
  • 2018 Book to Bill expected at above 1;
  • Security revenues expected to continue to grow year-over-year, generating most of the expected growth in 2018

Management Comment

Erez Antebi, President & CEO of Allot Communications, commented:

"In 2017 we made significant progress implementing our strategy to transform Allot into a security company and improve on our execution.  I am pleased with the progress we have made this year, as evidenced by the ongoing growth throughout the year as well as the strong increase in security revenues and backlog.  Several weeks ago, we acquired Netonomy, a technology company developing Home Router security software, and we are pleased to be adding this important element to the Allot Secure platform.  I look forward to continuing the strong growth of the Company as a whole, and more specifically, the security offering in 2018 and beyond."

Q4 2017 Financial Results Summary

Total revenues for the fourth quarter of 2017 were $23.2 million, up 11% compared to $20.9 million in the third quarter of 2017.

Net loss on a GAAP basis for the fourth quarter of 2017 was $4.3 million, or $0.13 per basic share, compared with a net loss of $4.6 million, or $0.14 per basic share, in the prior quarter. During the fourth quarter of 2017, the Company incurred one-time non-cash charges of $1.5 million in connection to changes in tax related items.

Non-GAAP net loss for the fourth quarter of 2017 was $1.5 million, or $0.04 per basic share, compared with a non-GAAP net loss of $1.3 million, or $0.04 per basic share, in the prior quarter.

Cash and investments as of December 31, 2017 totaled $110.0 million. The Company recorded positive operating cash flow of $1.1 million during the fourth quarter of 2017.

2017 Financial Results Summary

Total revenues for the full year of 2017 were $82.0 million, a decrease of 9% compared to $90.4 million in the prior year.

Net loss on a GAAP basis for the full year of 2017 was $18.1 million, or $0.54 per basic share, compared with a net loss of $8.0 million, or $0.24 per basic share, in the prior year. During 2017, the Company incurred a cost of $2.4 million related to its restructuring activities and one-time non-cash charges of $1.5 million in connection to changes in tax related items.

Non-GAAP net loss for the full year of 2017 was $8.7 million, or $0.26 per basic share, compared with a non-GAAP net loss of $0.7 million, or $0.02 per basic share, in the prior year.

The Company recorded a negative operating cash flow of $0.2 million during 2017.

Conference Call & Webcast:

The Allot management team will host a conference call to discuss fourth quarter 2017 earnings results today, February 6, 2018 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: +44(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 Communications website at: http://investors.allot.com/index.cfm  

About Allot Communications

Allot Communications Ltd. (NASDAQ, TASE: ALLT) is a provider of leading innovative network intelligence and security solutions for service providers 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 18 million subscribers in Europe. Allot. See. Control. Secure. For more information, visit www.allot.com  

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, changes in taxes related items 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 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 COMMUNICATIONS 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,


2017


2016


2017


2016


(Unaudited)


(Unaudited)


(Unaudited)


(Audited)









Revenues

$ 23,198


$ 23,487


$ 81,992


$ 90,369

Cost of revenues

7,710


7,348


28,530


27,895

Gross profit

15,488


16,139


53,462


62,474









Operating expenses:








Research and development costs, net

5,753


5,461


21,852


24,221

Sales and marketing

10,810


7,476


38,316


35,290

General and administrative

3,187


1,910


10,696


9,812

Total operating expenses

19,750


14,847


70,864


69,323

Operating income (loss)

(4,262)


1,292


(17,402)


(6,849)

Financial and other income, net

338


423


894


1,059

Profit (loss) before income tax expenses

(3,924)


1,715


(16,508)


(5,790)









Tax expenses

416


773


1,564


2,204

Net income (loss)

(4,340)


942


(18,072)


(7,994)









Basic net income (loss) per share

$ (0.13)


$ 0.03


$ (0.54)


$ (0.24)









Diluted net income (loss) per share

$ (0.13)


$ 0.03


$ (0.54)


$ (0.24)

















Weighted average number of shares used in

computing basic net loss per share

33,412,701


33,090,708


33,253,158


33,202,309

















Weighted average number of shares used in

computing diluted net loss per share

33,412,701


33,415,193


33,253,158


33,202,309

 

 

TABLE  - 2

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,



2017


2016


2017


2016



(Unaudited)


(Unaudited)










 GAAP Revenues 

$    23,198


$    23,487


$    81,992


$    90,369

 Fair value adjustment for acquired
  deferred revenues write down 

-


31


37


165

 Non-GAAP Revenues 

$    23,198


$    23,518


$    82,029


$    90,534










GAAP cost of revenues

$      7,710


$      7,348


$    28,530


$    27,895

 Share-based compensation (1) 

(83)


(109)


(362)


(345)

 Amortization of intangible assets (2) 

(232)


(367)


(938)


(1,173)

 Restructuring expenses (4) 

-


-


(887)


(127)

Changes in taxes related items (5)

(56)


-


(56)


-

Non-GAAP cost of revenues

$      7,339


$      6,872


$    26,287


$    26,250










 GAAP gross profit 

$    15,488


$    16,139


$    53,462


$    62,474

 Gross profit adjustments 

$         372


507


2,280


1,810

 Non-GAAP gross profit 

$    15,860


$    16,646


$    55,742


$    64,284










 GAAP operating expenses 

$    19,750


$    14,847


$    70,864


$    69,323

 Share-based compensation (1) 

(706)


(845)


(2,813)


(4,667)

 Amortization of intangible assets (2) 

(135)


(132)


(539)


(535)

 Expenses related to M&A activities (3) 

(178)


962


(267)


962

 Restructuring expenses (4) 

(200)


-


(1,464)


(1,163)

Changes in taxes related items (5)

(1,416)


-


(1,416)


-

 Non-GAAP operating expenses 

$    17,115


$    14,832


$    64,365


$    63,920










 GAAP financial and other income 

$         338


$         423


$         894


$      1,059

 Expenses related to M&A activities (3) 

84


(348)


625


(179)

 Non-GAAP Financial and other income 

$         422


$           75


$      1,519


$         880










 GAAP taxes on income 

$         416


$         773


$      1,564


$      2,204

 Tax expenses (in respect of net
  deferred tax asset recorded) 

214


(36)


17


(230)

 Non-GAAP taxes on income 

$         630


$         737


$      1,581


$      1,974










 GAAP Net Income (Loss) 

$    (4,340)


$         942


$  (18,072)


$    (7,994)

 Share-based compensation (1) 

789


954


3,175


5,012

 Amortization of intangible assets (2) 

367


499


1,477


1,708

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

262


(1,310)


892


(1,141)

 Restructuring expenses (4) 

200


-


2,351


1,290

Changes in taxes related items (5)

1,472


-


1,472


-

 Fair value adjustment for acquired deferred
   revenues write down 

-


31


37


165

 Tax income (expenses) in respect of net
  deferred tax asset recorded 

(214)


36


(17)


230

 Non-GAAP Net income (Loss) 

$    (1,464)


$      1,152


$    (8,685)


$       (730)










 GAAP Loss per share (diluted) 

$      (0.13)


$        0.03


$      (0.54)


$      (0.24)

 Share-based compensation 

0.02


0.03


0.10


0.15

 Amortization of intangible assets 

0.01


0.01


0.04


0.05

 Expenses related to M&A activities 

0.01


(0.04)


0.03


(0.03)

 Restructuring expenses 

0.01


-


0.07


0.04

 Changes in taxes and headcount related items 

0.05


0.00


0.04


0.00

 Tax expenses (in respect of net deferred
  tax asset recorded) 

(0.01)


0.00


0.00


0.01

 Non-GAAP Net loss per share (diluted) 

$     (0.04)


$        0.03


$      (0.26)


$      (0.02)



















Weighted average number of shares used in 








computing GAAP diluted net earnings per share

33,412,701


33,415,193


33,253,158


33,202,309



















Weighted average number of shares used in 








computing non-GAAP diluted net earnings per share

33,412,701


33,697,889


33,253,158


33,202,309











 

 


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,



2017


2016


2017


2016



(Unaudited)


(Unaudited)










(1) Share-based compensation (*):









Cost of revenues

$      83


$      109


$     362


$     345


Research and development costs, net

155


244


608


1,223


Sales and marketing

307


322


1,015


1,745


General and administrative

244


279


1,190


1,699



$    789


$      954


$   3,175


$   5,012










(2) Amortization of intangible assets









Cost of revenues

$    232


$     367


$      938


$    1,173


Sales and marketing

135


132


539


535



$    367


$     499


$   1,477


$    1,708










(3) Expenses related to M&A activities









General and administrative

$    178


$    (962)


$     267


$     (962)


Research and development costs, net

-


-


-


-


Sales and marketing

-


-


-


-


Financial expenses (income)

84


(348)


625


(179)



$    262


$ (1,310)


$     892


$   (1,141)










(4) Restructuring expenses*









Cost of revenues

$      -


$      -


$     887


$      127


Research and development costs, net

-


-


154


370


Sales and marketing

-


-


976


720


General and administrative

200


-


334


73



$   200


$      -


$   2,351


$   1,290










(5) Changes in taxes related items









Research and development costs, net

$     201


$      -


$     201


$       -


Sales and marketing

1,045


-


1,045


-


Cost of revenues

56


-


56


-


General and administrative

170


-


170


-



$ 1,472


$      -


$   1,472


$      -











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










 

TABLE  - 3

ALLOT COMMUNICATIONS LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED  BALANCE  SHEETS

(U.S. dollars in thousands)













December 31,


December 31,



2017


2016



(Unaudited)


(Audited)




ASSETS





CURRENT ASSETS:





Cash and cash equivalents


$            15,342


$            23,326

Short term deposits


31,043


29,821

Restricted deposit


428


-

Marketable securities 


63,194


60,507

Trade receivables, net


22,737


24,158

Other receivables and prepaid expenses

2,649


3,879

Inventories


7,897


7,235

Total current assets


143,290


148,926






LONG-TERM ASSETS:





Severance pay fund


302


252

Deferred taxes


340


267

Other assets 


1,096


1,136

Total long-term assets


1,738


1,655






PROPERTY AND EQUIPMENT, NET

5,002


4,387

GOODWILL AND INTANGIBLE ASSETS, NET

34,495


35,972






Total assets


$          184,525


$          190,940






LIABILITIES AND SHAREHOLDERS' EQUITY





CURRENT LIABILITIES:





Trade payables


$               5,857


$               3,275

Deferred revenues


11,370


11,133

Other payables and accrued expenses

14,277


10,538

Liability related to settlement of OCS grants




Total current liabilities


31,504


24,946






LONG-TERM LIABILITIES:




Deferred revenues


3,878


3,597

Accrued severance pay


747


592

Other long term liabilities


5,267


4,502

Total long-term liabilities


9,892


8,691






SHAREHOLDERS' EQUITY

143,129


157,303






Total liabilities and shareholders' equity

$          184,525


$          190,940


 

TABLE  - 4

ALLOT COMMUNICATIONS LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS 

(U.S. dollars in thousands)










Three Months Ended


Year Ended


December 31,

December 31,


2017


2016


2017


2016


(Unaudited)


(Unaudited)


(Unaudited)


(Audited)









Cash flows from operating activities:
















Net Income (Loss)

$        (4,340)


$   942


$      (18,072)


$   (7,994)

Adjustments to reconcile net income  to net cash provided by
(used in) operating activities:

-




-



Depreciation

632


569


2,191


2,334

Stock-based compensation related to options granted to employees

787


1,005


3,366


5,141

Amortization of intangible assets

366


499


1,477


1,709

Capital loss 

13


4


27


24

Decrease (Increase) in accrued severance pay, net

(8)


(4)


105


(29)

Decrease (Increase) in other assets

(568)


828


40


1,576

Decrease in accrued interest and  amortization of premium on marketable securities 

319


215


913


1,238

Decrease (Increase) in trade receivables

(86)


2,795


1,421


(284)

Decrease in other receivables and prepaid expenses

1,841


206


1,350


699

Decrease (Increase) in inventories

1,214


1,410


(662)


2,934

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

(272)


49


(72)


234

Increase (Decrease) in trade payables

(611)


302


2,582


(3,832)

Increase (Decrease) in employees and payroll accruals

34


(241)


1,139


(811)

Increase (Decrease) in deferred revenues

(518)


(2,664)


518


(4,248)

Increase (Decrease) in other payables and accrued expenses

2,287


(1,719)


3,448


(2,155)









Net cash provided by (used in) operating activities

1,090


4,196


(229)


(3,464)









Cash flows from investing activities:
















Decrease (Increase) in restricted deposit

(428)


-


(428)


203

Redemption of (Investment in) short-term deposits 

(9,300)


(2,502)


(1,222)


12,879

Purchase of property and equipment

(776)


(398)


(2,833)


(1,582)

Proceeds from sale of property and equipment

-


26


-


26

Investment in marketable securities

(10,913)


(7,598)


(30,123)


(29,695)

Proceeds from redemption or sale of marketable securities

11,075


10,403


26,488


33,208









Net cash provided by (used in) investing activities

(10,342)


(69)


(8,118)


15,039









Cash flows from financing activities:
















Exercise of employee stock options 

266


20


363


113

Purchase of treasury stocks

-


(506)


-


(3,832)









Net cash provided by (used in) financing activities

266


(486)


363


(3,719)

















Increase (Decrease) in cash and cash equivalents

(8,986)


3,641


(7,984)


7,856

Cash and cash equivalents at the beginning of the period

24,328


19,685


23,326


15,470









Cash and cash equivalents at the end of the period

$        15,342


$  23,326


$        15,342


$  23,326










Investor Relations Contact:

GK Investor Relations

Ehud Helft/Gavriel Frohwein

+1 646 688 3559

allot@gkir.com

Public Relations Contact:

Sigalit Orr

Director Corporate Communications

International dialing +972-54-268-1500

sorr@allot.com

Cision View original content:http://www.prnewswire.com/news-releases/allot-communications-announces-fourth-quarter-and-full-year-2017-financial-results-300593986.html

SOURCE Allot Communications Ltd.