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 2018

Commission File Number: 001-33129

ALLOT LTD.

 (Translation of registrant’s name into English)

22 Hanagar Street

Neve Ne'eman Industrial Zone B

Hod-Hasharon 45240

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.

 

Form 20-F ☒          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 6, 2018, Allot Ltd. issued a press release announcing the Third Quarter 2018 Financial Results.

A copy of the press release entitled “Allot Announces Third Quarter 2018 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 6, 2018

 

EXHIBIT INDEX

The following exhibit has been filed as part of this Form 6-K:

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Allot Announces

Third Quarter 2018 Financial Results

 

Revenues increased 16% Year over Year with Continued Improvement in Margins

Hod Hasharon, Israel – November 6, 2018 - Allot Ltd. (NASDAQ: ALLT, TASE: ALLT), a global provider of leading innovative network intelligence and security solutions for service providers worldwide, today announced its third quarter 2018 financial results.

 

 Third Quarter 2018 – Financial Highlights

 

·

Revenues were $24.2 million, up 16% year-over-year and up 5% sequentially;

 

·

GAAP gross margin improved to 69.4% up from 62.4% in Q3 2017;

 

·

Non-GAAP gross margin improved to 70.7% up from 68.2% in Q3 2017;

 

·

GAAP operating loss narrowed to $2.5 million compared to $4.4 million in Q3 2017;

 

·

Non-GAAP operating loss narrowed to $1.1 million compared to $1.3 million in Q3 2017;

 

·

Book-to-bill below one in Q3 and above one for the nine-months ended September 30, 2018;

 

·

Cash and cash equivalents as of September 30, 2018 totaled $104.7 million;

 

 

·

Management is increasing 2018 revenue expectations to between $93 - $95 million;

 

·

Full year 2018 Book to Bill ratio is expected at above 1;

 

 

Erez Antebi, President & CEO of Allot, commented: “Our strong growth continues, and we are very much on track with our plans. In line with our strategy, we have recently successfully closed a couple of security deals in which we provide products and support and we share in the ongoing revenue with the CSP as the services gain increased traction with end users.  I am confident in our direction.  As we continue to improve our execution, I am very encouraged to see a growing market acceptance supporting our belief that CSPs have a big opportunity in delivering secure connectivity to the mass market.

 

Continued Mr. Antebi: “Our DPI business is showing strength as we continue to win new deals and new accounts. Overall, the value of the new deals we won during the first three quarters of 2018 is approximately double of that which we won during all of 2017.  These new customers are creating a strong foundation for sustainable growth.”

 

 

 

Total revenues for the third quarter of 2018 were $24.2 million, an improvement of 16% compared to $20.9 million in the third quarter of 2017. Revenues for the nine months ended September 30, 2018, were $69.0 million compared to $58.8 million during the same period in 2017, an increase of 17%.

 

Gross profit on a GAAP basis for the third quarter of 2018 was $16.8 million (gross margin of 69.4%), a 29% improvement compared with $13.0 million (gross margin of 62.4%) in the third quarter of 2017.

 

Gross profit on a non-GAAP basis for the third quarter of 2018 was $17.1 million (gross margin of 70.7%), a 20% improvement compared with $14.2 million (gross margin of 68.2%) in the third quarter of 2017. The higher level of gross margin was driven by a favorable sales mix delivered in the quarter.

 

Net loss on a GAAP basis for the third quarter of 2018 was $2.5 million, or $0.07 per basic share, an improvement compared with a net loss of $4.6 million, or $0.14 per basic share, in the third quarter of 2017.

 

Non-GAAP net loss for the third quarter of 2018 was $1.1 million, or $0.03 per basic share, an improvement compared with a non-GAAP net loss of $1.3 million, or $0.04 per basic share, in the third quarter of 2017.

 

Cash and cash equivalents as of September 30, 2018 totaled $104.7 million, compared to $105.9 million in June 30, 2018.

 

# # #

 

Conference Call & Webcast:

 

The Allot management team will host a conference call to discuss third quarter 2018 earnings results today, November 6, 2018 at 8:30 am ET, 3:30 pm Israel 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.

 

Allot 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 20 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 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 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 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,
		2018				2017				2018				2017
		(Unaudited)								(Unaudited)
Revenues		$	24,217			$	20,857			$	68,952			$	58,794
Cost of revenues			7,417				7,840				21,053				20,820
Gross profit			16,800				13,017				47,899				37,974
Operating expenses:
Research and development costs, net			6,695				5,202				18,786				16,099
Sales and marketing			9,880				9,779				30,095				27,506
General and administrative			2,755				2,449				7,800				7,509
Total operating expenses			19,330				17,430				56,681				51,114
Operating loss			(2,530	)			(4,413	)			(8,782	)			(13,140	)
Financial and other income, net			571				82				1,607				556
Loss before income tax expenses			(1,959	)			(4,331	)			(7,175	)			(12,584	)
Tax expenses			536				294				1,424				1,148
Net loss			(2,495	)			(4,625	)			(8,599	)			(13,732	)
Basic net loss per share		$	(0.07	)		$	(0.14	)		$	(0.26	)		$	(0.41	)
Diluted net loss per share		$	(0.07	)		$	(0.14	)		$	(0.26	)		$	(0.41	)
Weighted average number of shares used in computing basic  net loss per share			33,761,279				33,303,744				33,658,485				33,199,633
Weighted average number of shares used in computing diluted net loss per share			33,761,279				33,303,744				33,658,485				33,199,633

TABLE  - 2

ALLOT 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,
		2018				2017				2018				2017
		(Unaudited)								(Unaudited)
GAAP Revenues		$	24,217			$	20,857			$	68,952			$	58,794
Fair value adjustment for acquired deferred revenues write down			-				-				-				37
Non-GAAP Revenues		$	24,217			$	20,857			$	68,952			$	58,831
GAAP cost of revenues		$	7,417			$	7,840			$	21,053			$	20,820
Share-based compensation (1)			(86	)			(87	)			(256	)			(279	)
Amortization of intangible assets (2)			(232	)			(232	)			(697	)			(706	)
Restructuring expenses (4)			-				(887	)			-				(887	)
Non-GAAP cost of revenues		$	7,099			$	6,634			$	20,100			$	18,948
GAAP gross profit		$	16,800			$	13,017			$	47,899			$	37,974
Gross profit adjustments			318				1,206				953				1,908
Non-GAAP gross profit		$	17,118			$	14,223			$	48,852			$	39,882
GAAP operating expenses		$	19,330			$	17,430			$	56,681			$	51,114
Share-based compensation (1)			(658	)			(489	)			(1,912	)			(2,107	)
Amortization of intangible assets (2)			(175	)			(135	)			(525	)			(404	)
Expenses related to M&A activities (3)			(112	)			-				(301	)			(89	)
Restructuring expenses (4)			-				(1,264	)			-				(1,264	)
Changes in tax related items (5)			(210	)			-				(380	)			-
Non-GAAP operating expenses		$	18,175			$	15,542			$	53,563			$	47,250
GAAP financial and other income		$	571			$	82			$	1,607			$	556
Expenses related to M&A activities (3)			(7	)			162				(149	)			541
Non-GAAP Financial and other income		$	564			$	244			$	1,458			$	1,097
GAAP taxes on income		$	536			$	294			$	1,424			$	1,148
Tax expenses (in respect of net deferred tax asset recorded)			44				(67	)			7				(197	)
Non-GAAP taxes on income		$	580			$	227			$	1,431			$	951
GAAP Net Loss		$	(2,495	)		$	(4,625	)		$	(8,599	)		$	(13,732	)
Share-based compensation (1)			744				576				2,168				2,386
Amortization of intangible assets (2)			407				367				1,222				1,110
Expenses related to M&A activities (3)			105				162				152				630
Restructuring expenses (4)			-				2,151				-				2,151
Changes in tax related items (5)			210				-				380				-
Fair value adjustment for acquired deferred revenues write down			-				-				-				37
Tax expenses (in respect of net deferred tax asset recorded)			(44	)			67				(7	)			197
Non-GAAP Net Loss		$	(1,073	)		$	(1,302	)		$	(4,684	)		$	(7,221	)
GAAP Loss per share (diluted)		$	(0.07	)		$	(0.14	)		$	(0.26	)		$	(0.41	)
Share-based compensation			0.02				0.02				0.07				0.07
Amortization of intangible assets			0.01				0.01				0.04				0.03
Expenses related to M&A activities			0.00				0.01				0.00				0.02
Restructuring expenses			-				0.06				-				0.06
Changes in taxes related items			0.01				-				0.01				-
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				0.00				0.00				0.01
Non-GAAP Net Loss per share (diluted)		$	(0.03	)		$	(0.04	)		$	(0.14	)		$	(0.22	)
Weighted average number of shares used in computing GAAP diluted net earnings per share			33,761,279				33,303,744				33,658,485				33,199,633
Weighted average number of shares used in computing non-GAAP diluted net earnings per share			33,761,279				33,303,744				33,658,485				33,199,633

TABLE  - 2 cont.

ALLOT 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,
		2018				2017				2018				2017
		(Unaudited)								(Unaudited)
(1) Share-based compensation (*):
Cost of revenues		$	86			$	87			$	256			$	279
Research and development costs, net			178				7				504				453
Sales and marketing			264				221				701				708
General and administrative			216				261				707				946
		$	744			$	576			$	2,168			$	2,386
(2) Amortization of intangible assets
Cost of revenues		$	232			$	232			$	697			$	706
Sales and marketing			175				135				525				404
		$	407			$	367			$	1,222			$	1,110
(3) Expenses related to M&A activities
General and administrative		$	31			$	-			$	69			$	89
Research and development costs, net			81				-				232				-
Financial expenses (income)			(7	)			162				(149	)			541
		$	105			$	162			$	152			$	630
(4) Restructuring expenses
Cost of revenues		$	-			$	887			$	-			$	887
Research and development costs, net			-				154				-				154
Sales and marketing			-				976				-				976
General and administrative			-				134				-				134
		$	-			$	2,151			$	-			$	2,151
(5) Changes in tax related items
Sales and marketing		$	122			$	-			$	222			$	-
General and administrative			88				-				158				-
		$	210			$	-			$	380			$	-

 

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