Allot Communications Reports Non-GAAP 31.1% Revenue Growth for Q2 2014 - WNEM TV 5

Allot Communications Reports Non-GAAP 31.1% Revenue Growth for Q2 2014

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SOURCE Allot

Non-GAAP Revenues reach $28.2 million, compared with $21.5 million Q2 2013

HOD HASHARON, Israel, Aug. 5, 2014 /PRNewswire/ -- Allot Communications Ltd. (NASDAQ: ALLT), a leading supplier of service optimization and revenue generation solutions for fixed and mobile broadband operators and cloud providers worldwide, today announced its second quarter 2014 results, with non-GAAP revenues reaching $28.2 million.

Q2 2014 - Key Highlights:

  • Non-GAAP Revenues grew 31.1% year on year and remained flat with Q1 2014
  • Non-GAAP Gross Margin was 73.1% (71.4% on a GAAP basis)
  • Non-GAAP Operating Margin was 6.5% (2.3% operating loss on a GAAP basis)
  • Book-to-bill above one
  • Generated $1.4 million of Operating Cash Flow
  • Net Cash as of June 30, 2014 totaled $123.6 million

Financial results:

On a non-GAAP basis, total revenues for Q2 2014 reached $28.2 million, compared with $21.5 million of non-GAAP revenue reported for Q2 2013 and $28.3 million of non-GAAP revenue reported for Q1 2014.  On a non-GAAP basis, net profit for Q2 2014 was $1.9 million, or $0.06 per basic and diluted share. This compares with non-GAAP net loss of $0.9 million, or $0.03 per basic and diluted share, in Q2 2013 and a non-GAAP net profit of $2.1 million, or $0.06 per basic and diluted share, in Q1 2014.

Total GAAP revenues for Q2 2014 reached $28.2 million compared to $21.2 million of revenue reported for Q2 2013 and $28.3 million of GAAP revenue reported for Q1 2014. On a GAAP basis, the net loss for Q2 2014 was $0.6 million, or of $0.02 per basic and diluted share. This compares with a net loss of $3.9 million, or $0.12 per basic and diluted share, in Q2 2013 and a net loss of $0.4 million, or $0.01 per basic and diluted share, in Q1 2014.

Q2 2014 - Key Achievements:

  • During Q2 2014, 18 large orders were received, 3 of which are new customers
  • 12 of the large orders came from mobile-service providers and 3 were from fixed-line service providers
  • In addition, 3 large orders were received for private and public cloud deployments
  • Won a $3 million contract with a tier-1 cable provider to deliver an intelligent traffic management solution to relieve cable access network congestion and provide big data analytics
  • More than $10 million of the booking was based on the new Allot Service Gateway Tera during Q2 2014.

"We are highly encouraged by the rapid adoption of the Allot Service Gateway Tera platform by Tier-1 mobile service providers and expect this to set a strong foundation for future follow-on installations of analytics, security and additional value added services. The business environment continues to show strength and book to bill ratio was, for the 6th quarter in a row, higher than 1. Entering the second half of the year, our funnel is robust and we continue to identify interesting opportunities with service providers that choose more comprehensive solution than in the past." said Andrei Elefant, President & CEO of Allot Communications. "We see an increasing demand for advanced services and sense a shift towards application-centric data plans offering."

Conference Call & Webcast:

The Allot management team will host a conference call to discuss second quarter 2014 earnings results today at 8:30 AM ET, 3:30 p.m. Israel time.

To access the conference call, please dial one of the following numbers: US: +1646 254 3362, UK: +44(0)203 4271914, Israel: +97237630145, participant code 8306866.

A replay of the conference call will be available from 12:00 AM ET on August 6, 2014 for 30 days. To access the replay, please dial: US: +1 347 366 9565; UK: +44 (0)20 3427 0598, access code: 8306866. A live webcast of the conference call can be accessed on the Allot Communications website at www.allot.com. The webcast also will be archived on the website following the conference call.

About Allot Communications

Allot Communications Ltd. (NASDAQ, TASE: ALLT) is a leading global provider of intelligent broadband solutions that put mobile, fixed and enterprise networks at the center of the digital lifestyle and workstyle. Allot's DPI-based solutions identify and leverage the business intelligence in data networks, empowering operators to analyze, protect, improve and enrich the digital lifestyle services they deliver. Allot's unique blend of innovative technology, proven know-how and collaborative approach to industry standards and partnerships enables network operators worldwide to elevate their role in the digital lifestyle ecosystem and to open the door to a wealth of new business opportunities. For more information, please visit www.allot.com.

GAAP to Non-GAAP Reconciliation:

The discrepancy 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 profit is defined as GAAP net profit 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, regulatory matters, acquisition-related expenses and compensation expenses related to the acquisitions.

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 may contain 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 expressed or implied by 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; 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; 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.

Investor Relations Contact:

Rami Rozen
AVP Corporate Development
International access code +972-52-569-4441
rrozen@allot.com

Public Relations Contact:

Maya Lustig
Director Corporate Communications
International access code +972-54-677-8100
mlustig@allot.com

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


Six Months Ended


June 30,


June 30,


2014


2013


2014


2013


(Unaudited)


(Unaudited)









Revenues

$     28,166


$     21,212


$     56,450


$     45,326

Cost of revenues

8,056


5,753


16,252


12,493

Gross profit  

20,110


15,459


40,198


32,833









Operating expenses:








Research and development costs, net

7,188


6,898


14,409


13,800

Sales and marketing

10,637


9,896


21,133


19,723

General and administrative

2,931


2,666


5,818


5,304

Total operating expenses

20,756


19,460


41,360


38,827

Operating loss

(646)


(4,001)


(1,162)


(5,994)

Financial and other income, net

87


168


236


355

loss before income tax benefit

(559)


(3,833)


(926)


(5,639)









Tax expenses

61


32


82


73

Net loss

(620)


(3,865)


(1,008)


(5,712)









 Basic net loss per share

$       (0.02)


$       (0.12)


$       (0.03)


$       (0.18)

















 Diluted net loss per share

$       (0.02)


$       (0.12)


$       (0.03)


$       (0.18)









Weighted average number of shares








used in computing basic  net








earnings per share

33,111,197


32,630,280


33,025,671


32,596,317









Weighted average number of shares








used in computing diluted net








earnings per share

33,111,197


32,630,280


33,025,671


32,596,317



















 

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


Six Months Ended



June 30,


June 30,



2014


2013


2014


2013



(Unaudited)


(Unaudited)










 GAAP net loss as reported 

$        (620)


$     (3,865)


$    (1,008)


$     (5,712)










Non-GAAP adjustments








Fair value adjustment for acquired deferred revenues write down

11


276


23


313

Expenses recorded for stock-based compensation









Cost of revenues

90


115


178


201


Research and development costs, net

487


412


956


823


Sales and marketing

811


874


1,632


1,620


General and administrative

599


649


1,213


1,235

Expenses related to M&A activities and compliance with regulatory matters (*)









General and administrative 

25


21


33


33


Research and development costs, net

-


22


-


28


Sales and marketing

-


12


-


12

Intangible assets amortization 









Cost of revenues

400


503


799


1,006


Sales and marketing

65


57


131


115










Total adjustments

2,488


2,941


4,965


5,386










 Non-GAAP net profit (loss) 

$       1,868


$        (924)


$      3,957


$        (326)










Non- GAAP basic net profit (loss) per share

$         0.06


$       (0.03)


$        0.12


$       (0.01)










Non- GAAP diluted net profit (loss) per share

$         0.06


$       (0.03)


$        0.12


$       (0.01)



















Weighted average number of shares








used in computing basic net








earnings per share

33,111,197


32,630,280


33,025,671


32,596,317










Weighted average number of shares








used in computing diluted net








earnings per share

33,947,801


32,630,280


33,927,121


32,596,317



















(*) Mostly legal, finance and compensation expenses related to the acquisition










 

 



TABLE  - 3

ALLOT COMMUNICATIONS LTD.

AND ITS SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP  CONSOLIDATED  REVENUES

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










Three Months Ended


Six Months Ended


June 30,


June 30,


2014


2013


2014


2013


(Unaudited)


(Unaudited)









GAAP Revenues

$ 28,166


$ 21,212


$ 56,450


$ 45,326









Fair value adjustment for acquired deferred revenues write down

11


276


23


313









Non-GAAP Revenues

$ 28,177


$ 21,488


$ 56,473


$ 45,639

















 



TABLE  - 4

ALLOT COMMUNICATIONS LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED  BALANCE  SHEETS

(U.S. dollars in thousands)













June 30,


December 31,



2014


2013



(Unaudited)


(Audited)




ASSETS





CURRENT ASSETS:





Cash and cash equivalents


$            59,829


$           42,813

Short term deposits


8,500


38,000

Marketable securities and restricted cash

55,287


40,798

Trade receivables, net


23,786


16,908

Other receivables and prepaid expenses

8,819


8,218

Inventories


13,877


13,798

Total current assets


170,098


160,535






LONG-TERM ASSETS:





Severance pay fund


278


254

Deferred taxes


1,436


1,602

Other assets 


2,544


771

Total long-term assets


4,258


2,627






PROPERTY AND EQUIPMENT, NET

5,925


5,874

GOODWILL AND INTANGIBLE ASSETS, NET

29,291


30,221






Total assets


$          209,572


$        199,257






LIABILITIES AND SHAREHOLDERS' EQUITY




CURRENT LIABILITIES:





Trade payables


$               7,493


$             3,191

Deferred revenues


11,793


12,504

Other payables and accrued expenses

12,180


10,906

Total current liabilities


31,466


26,601






LONG-TERM LIABILITIES:





Deferred revenues


3,522


2,447

Accrued severance pay


303


282

Total long-term liabilities


3,825


2,729






SHAREHOLDERS' EQUITY


174,281


169,927






Total liabilities and shareholders' equity

$          209,572


$        199,257






TABLE  - 5

ALLOT COMMUNICATIONS LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS 

(U.S. dollars in thousands)








Three Months Ended


Six Months Ended


June 30,


June 30,


2014

2013


2014

2013


(Unaudited)


(Unaudited)







Cash flows from operating activities:












Net Loss

$     (620)

$  (3,865)


$  (1,008)

$  (5,712)

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






Depreciation

762

867


1,562

1,747

Stock-based compensation related to options granted to employees

1,987

2,050


3,979

3,879

Amortization of intangible assets

465

560


930

1,122

Capital loss 

-

14


-

14

Increase in accrued severance pay, net

(7)

(26)


(3)

(2)

Decrease (Increase) in other assets

12

16


(70)

(13)

Decease in accrued interest and amortization of premium on marketable securities 

37

46


245

57

Decrease (Increase) in trade receivables

(2,372)

2,868


(6,878)

(2,483)

Decrease (Increase) in other receivables and prepaid expenses

301

(1,625)


199

(1,669)

Increase in inventories

(403)

(1,101)


(79)

(781)

Decrease in deferred taxes, net

56

-


56

-

Increase in trade payables

2,606

1,602


4,302

221

Increase (Decrease) in employees and payroll accruals

(57)

(538)


1,005

(1,260)

Increase (Decrease) in deferred revenues

(732)

(1,070)


364

(4,058)

Increase (Decrease) in other payables and accrued expenses

(629)

963


247

2,136







Net cash provided by (used in) operating activities

1,406

761


4,851

(6,802)







Cash flows from investing activities:












Decrease (Increase) in restricted deposit

-

(3)


-

1

Redemption of short-term deposits 

22,000

15,000


29,500

76,042

Purchase of property and equipment

(697)

(572)


(1,613)

(1,428)

Investment in marketable securities

(18,081)

(13,704)


(18,981)

(29,366)

Proceeds from redemption or sale of marketable securities

3,363

1,432


4,264

3,711

Loan provided to third party

-

-


(2,735)

-

Proceeds from loan provided to third party

170

-


342

-







Net cash provided by investing activities

6,755

2,153


10,777

48,960







Cash flows from financing activities:












Exercise of employee stock options 

632

105


1,388

269







Net cash provided by financing activities

632

105


1,388

269













Increase in cash and cash equivalents

8,793

3,019


17,016

42,427

Cash and cash equivalents at the beginning of the period

51,036

89,434


42,813

50,026







Cash and cash equivalents at the end of the period

$  59,829

$  92,453


$  59,829

$  92,453







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