UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2016

Commission File Number: 001-33129

Allot Communications Ltd.

(Translation of registrant's name into English)

22 Hanagar Street

Neve Ne’eman Industrial Zone B

Hod-Hasharon 4501317

Israel

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________

 

 

EXPLANATORY NOTE

On November 1, 2016, Allot Communications Ltd. issued a press release announcing the Third Quarter 2016 Financial Results.

 

A copy of the press release entitled “Allot Communications Announces Third Quarter 2016 Financial Results” is attached to this Form 6-K as Exhibit 99.1.

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

Date: November 1, 2016

EXHIBIT INDEX

 

The following exhibits have been filed as part of this Form 6-K:

 

 Allot Communications Announces

Third Quarter 2016 Financial Results

Hod Hasharon, Israel – November 1, 2016 - Allot Communications Ltd. (NASDAQ: ALLT, TASE: ALLT), a leading global provider of security and monetization solutions that enables service providers to protect and personalize the digital experience, today announced its third quarter 2016 financial results.

 

 Q3 2016 – Highlights

 

·

Revenues were $21M;

 

·

GAAP gross margin was 67%, Non-GAAP gross margin was 70%;

 

·

GAAP operating loss of $3.2M, Non-GAAP operating loss of $0.3M;

 

·

Re-organization has lowered ongoing operating expenses to between $15-15.5M per quarter;  and

 

·

Book-to-bill below one; Revenue guidance updated, expecting $87-90M for 2016.

 

 

On a GAAP basis, total revenues for the third quarter of 2016 were $21.0 million compared to $23.0 million of revenue reported for the second quarter of 2016 and $23.5 million of revenue reported for the third quarter of 2015. Net loss for the third quarter of 2016 was $3.4 million, or $0.10 per basic and diluted share. This compares with a net loss of $1.2 million, or $0.04 per basic and diluted share, in the second quarter of 2016 and a net loss of $3.4 million, or $0.10 per basic and diluted share, in the third quarter of 2015.

 

On a non-GAAP basis, total revenues for the third quarter of 2016 were $21.0 million compared to $23.0 million of revenue reported for the second quarter of 2016 and $23.5 million of revenue reported for the third quarter of 2015. On a non-GAAP basis, net loss for the third quarter of 2016 was $0.5 million, or $0.01 per basic and diluted share. This compares with non-GAAP net profit of $0.4 million, or $0.01 per basic and diluted share, in the second quarter of 2016 and non-GAAP net loss of $0.7 million, or $0.02 per basic and diluted share, in the third quarter of 2015.

 

Net cash and cash equivalents as of September 30, 2016 totaled $110.9 million. The Company recorded negative operating cash flow of $5.0 million during the quarter.

 

 

Andrei Elefant, President & CEO of Allot Communications, commented, "Our core markets remain tough and 2016 continues to be a slower year than we had originally expected.  Our orders to-date have been of a smaller scale and more diversified than we saw in past years. In light of our weaker traditional end-markets, we continue to evolve our strategy towards new growth markets, shifting towards sales of security and monetization solutions. At the same time, we took steps to lower our cost base and we expect that it will enable us to return to profitability in the coming quarters, particularly as we transition to security and monetization solutions.”

 

 

“From a strategic standpoint, the third quarter showed a number of important developments, demonstrating that our strategy is on track,” continued Mr. Elefant. "We have since launched our Secure Service Gateway. This solution which is focused on web and network security, delivers integrated network visibility, security and control for enterprises in a single, scalable appliance, and we are already beginning to see initial traction for this product. Furthermore, our project with a major European operator continues to gain more subscribers signing on to their mobile security solution, provided by Allot. According to the customer, in the first nine months of 2016 the service blocked 50,000 ransomware attacks to four million subscribers who use the service. Our strategic collaboration with Intel Security, developing the McAfee Unified Security, Powered by Allot solution for consumer and small business markets, is on track and we are progressing as planned. We look forward to maximizing the potential of our relationship in future quarters. Our overall strategic progress as we move through the end of 2016 validates the significant value that we hope to bring as a player in the security as a service domain in 2017 and beyond.”

 

 

The Company has updated its 2016 guidance. Revenues are expected in the range of $87-$90 million for the full year of 2016, both on a GAAP and non-GAAP basis.

 

# # #

 

Conference Call & Webcast:

 

The Allot management team will host a conference call to discuss third quarter 2016 earnings results today, November 1, 2016 at 8:30 AM ET, 2:30 p.m. Israel time. To access the conference call, please dial one of the following numbers:

 

US: +1-646-254-3367, UK: +44(0)20-3427-1909, Israel: +972-3-721-9510, participant code 1920290.

 

A recording of the conference call will be available from 12:00PM ET on November 1^st, 2016 for 30 days. To access the recording, please dial: +1-347-366-9565; UK: +44(0)20-3427-0598, access code: 1920290.

 

A live webcast of the conference call can be accessed on the Allot Communications website at: http://www.allot.com.

 

The webcast will also be archived on the website following the conference call.

 

Allot Communications (NASDAQ: ALLT, TASE: ALLT) is a leading provider of security and monetization solutions that enables service providers to protect and personalize the digital experience. Allot’s flexible and highly scalable service delivery framework leverages the intelligence in data networks, enabling service providers to get closer to their customers, safeguard network assets and users, and accelerate time-to-revenue for value-added services. We employ innovative technology, proven know-how and a collaborative approach to provide the right solution for every network environment. Allot solutions are currently deployed at 5 of the top 10 global mobile operators and in thousands of CSP and enterprise networks worldwide. For more information, please 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 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								Nine Months Ended
		September 30,								September 30,
		2016				2015				2016				2015
		(Unaudited)								(Unaudited)
Revenues		$	20,985			$	23,461			$	66,882			$	74,585
Cost of revenues			6,880				6,042				20,547				20,242
Gross profit			14,105				17,419				46,335				54,343
Operating expenses:
Research and development costs, net			5,942				6,446				18,760				19,946
Sales and marketing			8,697				10,532				27,814				33,176
General and administrative			2,635				2,867				7,902				9,492
Total operating expenses			17,274				19,845				54,476				62,614
Operating loss			(3,169	)			(2,426	)			(8,141	)			(8,271	)
Financial and other income (loss), net			309				(910	)			637				(816	)
Loss before income tax expenses			(2,860	)			(3,336	)			(7,504	)			(9,087	)
Tax expenses			561				67				1,431				374
Net loss			(3,421	)			(3,403	)			(8,935	)			(9,461	)
Basic net loss per share		$	(0.10	)		$	(0.10	)		$	(0.27	)		$	(0.28	)
Diluted net loss per share		$	(0.10	)		$	(0.10	)		$	(0.27	)		$	(0.28	)
Weighted average number of shares
used in computing basic net
loss per share			33,012,229				33,512,755				33,241,185				33,443,418
Weighted average number of shares
used in computing diluted net
loss per share			33,012,229				33,512,755				33,241,185				33,443,418

 

 

 

TABLE  - 2

ALLOT COMMUNICATIONS LTD.

AND ITS SUBSIDIARIES

RECONCILATION OF GAAP TO NON-GAAP  CONSOLIDATED  STATEMENTS  OF  OPERATIONS

(U.S. dollars in thousands, except per share data)

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2016				2015				2016				2015
		(Unaudited)								(Unaudited)
GAAP Revenues		$	20,985			$	23,461			$	66,882			$	74,585
Fair value adjustment for acquired deferred revenues write down			33				11				134				33
Non-GAAP Revenues		$	21,018			$	23,472			$	67,016			$	74,618
GAAP cost of revenue		$	6,880			$	6,042			$	20,547			$	20,242
Share-based compensation (1)			(62	)			(80	)			(236	)			(245	)
Amortization of intangible assets (2)			(326	)			(620	)			(807	)			(1,701	)
Restructuring expenses (4)			(127	)			-				(127	)			-
Non-GAAP cost of revenue		$	6,365			$	5,342			$	19,377			$	18,296
GAAP gross profit		$	14,105			$	17,419			$	46,335			$	54,343
Gross profit adjustments			548				711				1,304				1,979
Non-GAAP gross profit		$	14,653			$	18,130			$	47,639			$	56,322
GAAP operating expenses		$	17,274			$	19,845			$	54,476			$	62,614
Share-based compensation (1)			(1,015	)			(1,674	)			(3,820	)			(5,302	)
Amortization of intangible assets (2)			(133	)			(158	)			(403	)			(374	)
Expenses related to M&A activities (3)			-				(101	)			-				(678	)
Restructuring expenses (4)			(1,163	)			-				(1,163	)			-
Non-GAAP operating expenses		$	14,963			$	17,912			$	49,090			$	56,260
GAAP financial and other income (loss)		$	309			$	(910	)		$	637			$	(816	)
Expenses related to M&A activities (3)			26				18				169				282
Non-GAAP Financial and other income (loss)		$	335			$	(892	)		$	806			$	(534	)
GAAP taxes on income		$	561			$	67			$	1,431			$	374
Tax expenses (in respect of net deferred tax asset recorded)			(62	)			-				(194	)			-
Non-GAAP taxes on income		$	499			$	67			$	1,237			$	374
GAAP Net Loss		$	(3,421	)		$	(3,403	)		$	(8,935	)		$	(9,461	)
Share-based compensation (1)			1,077				1,754				4,056				5,547
Amortization of intangible assets (2)			459				778				1,210				2,075
Expenses related to M&A activities (3)			26				119				169				960
Restructuring expenses (4)			1,290				-				1,290				-
Fair value adjustment for acquired deferred revenues write down			33				11				134				33
Tax expenses (in respect of net deferred tax asset recorded)			62				-				194				-
Non-GAAP Net Loss		$	(474	)		$	(741	)		$	(1,882	)		$	(846	)
GAAP Loss per share (diluted)		$	(0.10	)		$	(0.10	)		$	(0.27	)		$	(0.28	)
Share-based compensation			0.03				0.05				0.12				0.16
Amortization of intangible assets			0.02				0.03				0.03				0.06
Expenses related to M&A activities			0.00				-				0.01				0.03
Restructuring expenses			0.04				-				0.04				-
Fair value adjustment for acquired deferred revenues write down			0.00				-				0.00				-
Tax expenses (in respect of net deferred tax asset recorded)			0.00				-				0.01				-
Non-GAAP Net Loss per share (diluted)		$	(0.01	)		$	(0.02	)		$	(0.06	)		$	(0.03	)
Weighted average number of shares
used in computing GAAP diluted net
loss per share			33,012,229				33,512,755				33,241,185				33,443,418
Weighted average number of shares
used in computing non-GAAP diluted net
loss per share			33,012,229				33,512,755				33,241,185				33,443,418

 

TABLE  - 2 cont.

ALLOT COMMUNICATIONS LTD.

AND ITS SUBSIDIARIES

RECONCILATION OF GAAP TO NON-GAAP  CONSOLIDATED  STATEMENTS  OF  OPERATIONS

(U.S. dollars in thousands, except per share data)

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2016				2015				2016				2015
		(Unaudited)								(Unaudited)
(1) Share-based compensation (*):
Cost of revenues		$	62			$	80			$	236			$	245
Research and development costs, net			273				426				978				1,271
Sales and marketing			333				680				1,422				2,172
General and administrative			409				568				1,420				1,859
		$	1,077			$	1,754			$	4,056			$	5,547
(2) Amortization of intangible assets
Cost of revenues		$	326			$	620			$	807			$	1,701
Sales and marketing			133				158				403				374
		$	459			$	778			$	1,210			$	2,075
(3) Expenses related to M&A activities
General and administrative		$	-			$	101			$	-			$	452
Research and development costs, net			-				-				-				45
Sales and marketing			-				-				-				181
Finanacial expenses			26				18				169				282
		$	26			$	119			$	169			$	960
(4) Restructuring expenses
Cost of revenues		$	127			$	-			$	127			$	-
Research and development costs, net			370				-				370				-
Sales and marketing			720				-				720				-
General and administrative			73				-				73				-
		$	1,290			$	-			$	1,290			$	-

 

(*) 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)

 

		September 30,				December 31,
		2016				2015
		(Unaudited)				(Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	19,685			$	15,470
Short term deposits			27,319				42,700
Restricted cash			-				203
Marketable securities			63,853				64,921
Trade receivables, net			26,953				23,874
Other receivables and prepaid expenses			4,210				4,513
Inventories			8,645				10,169
Total current assets			150,665				161,850
LONG-TERM ASSETS:
Severance pay fund			249				282
Deferred taxes			316				501
Other assets			1,965				2,712
Total long-term assets			2,530				3,495
PROPERTY AND EQUIPMENT, NET			4,588				5,189
GOODWILL AND INTANGIBLE ASSETS, NET			36,471				37,681
Total assets		$	194,254			$	208,215
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables		$	2,973			$	7,107
Deferred revenues			13,082				14,066
Other payables and accrued expenses			12,571				13,921
Total current liabilities			28,626				35,094
LONG-TERM LIABILITIES:
Deferred revenues			4,312				4,912
Accrued severance pay			593				651
Other long term liabilities			4,316				4,153
Total long-term liabilities			9,221				9,716
SHAREHOLDERS' EQUITY			156,407				163,405
Total liabilities and shareholders' equity		$	194,254			$	208,215

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