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07.02.2017 11:03:00
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Allot Communications Announces Fourth Quarter and Full Year 2016 Financial Results
HOD HASHARON, Israel, Feb. 7, 2017 /PRNewswire/ -- Allot Communications Ltd. (NASDAQ: ALLT, TASE: ALLT), a leading global provider of security and monetization solutions that enables service providers and enterprises to protect and personalize the digital experience, today announced its fourth quarter and year end 2016 financial results.
Q4 2016 – Financial Highlights
- GAAP and non-GAAP Revenues were $23.5M;
- GAAP gross margin was 69%, Non-GAAP gross margin was 71%;
- GAAP operating profit of $1.3M, Non-GAAP operating profit of $1.8M;
Book-to-bill below one;
2016 – Financial Highlights
- GAAP Revenues were $90.4M, Non-GAAP Revenues were $90.5M;
- GAAP gross margin was 69%, Non-GAAP gross margin was 71%;
- GAAP operating loss of $6.8M, Non-GAAP operating profit of $0.4M;
- Book-to-bill below one;
Management Comment
Erez Antebi, President & CEO of Allot Communications, commented, "In my first days with Allot, I am impressed with much of what I see, most notably the quality and professionalism of the people. I believe the combination Allot has of the right products and technology, the right people and the large customer base is a strong foundation on which we can build Allot's growth."
Mr. Antebi, continued, "A significant part of the role of the new management team will be to improve on the company's execution and to realize its full potential, and I look forward to working with the team and taking the company to the next level."
Q4 2016 Financial results
On a GAAP basis, total revenues for the fourth quarter of 2016 were $23.5 million compared to $25.4 million reported for the fourth quarter of 2015. Net profit for the fourth quarter of 2016 was $0.9 million, or $0.03 per basic and diluted share. This compares with a net loss of $10.4 million, or $0.31 per basic and diluted share, in the fourth quarter of 2015.
On a non-GAAP basis, total revenues for the fourth quarter of 2016 were $23.5 million compared to $25.7 million reported for the fourth quarter of 2015. On a non-GAAP basis, net profit for the fourth quarter of 2016 was $1.2 million, or $0.03 per basic and diluted share. This compares with non-GAAP net profit of $0.7 million, or $0.02 per basic and diluted share, in the fourth quarter of 2015.
Net cash and cash equivalents as of December 31, 2016 totaled $113.7 million. The Company recorded positive operating cash flow of $4.2 million during the quarter. During the fourth quarter of 2016, cash used for the repurchase of the Company's shares in the market totaled $0.5 million.
2016 Financial results
On a GAAP basis, total revenues for the full year of 2016 were $90.4 million compared to $100.0 million in 2015. Net loss for the full year of 2016 was $8.0 million, or $0.24 per basic and diluted share. This compares with a net loss of $19.8 million, or $0.59 per basic and diluted share, in 2015.
On a non-GAAP basis, total revenues for the full year of 2016 were $90.5 million compared to $100.3 million in 2015. On a non-GAAP basis, net loss for the full year of 2016 was $0.7 million, or $0.02 per basic and diluted share. This compares with non-GAAP net loss of $0.1 million, or $0.00 per basic and diluted share, in 2015.
During the year of 2016, the Company recorded negative operating cash flow of $3.4 million and cash used for the repurchase of the Company's shares in the market totaled $3.8 million.
2017 Outlook
Management expects 2017 revenues in the range of $80 - $84 million. The second half of 2017 is expected to be better than the first half and the book to bill ratio for the year is expected to be above 1.
Conference Call & Webcast:
The Allot management team will host a conference call to discuss fourth quarter and year end 2016 earnings results today, February 7, 2017 at 8:30 AM ET, 3:30 p.m.Israel time. To access the conference call, please dial one of the following numbers:
US: +1-347-293-1926, UK: +44(0) 20-3514-1906, Israel: +972-3-918-0609.
A recording of the conference call will be available from 12:00PM ET on February 7, 2017 for 30 days. To access the recording, please dial: +1-888-269-0005; UK: +44(0) 800-917-1246.
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.
About Allot Communications
Allot Communications (NASDAQ: ALLT, TASE: ALLT) is a leading provider of security and monetization solutions that enables service providers and enterprises 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 | Year Ended | |||||||
December 31, | December 31, | |||||||
2016 | 2015 | 2016 | 2015 | |||||
(Unaudited) | (Unaudited) | (Unaudited) | (Audited) | |||||
Revenues | $ 23,487 | $ 25,382 | $ 90,369 | $ 99,967 | ||||
Cost of revenues | 7,348 | 13,185 | 27,895 | 33,427 | ||||
Gross profit | 16,139 | 12,197 | 62,474 | 66,540 | ||||
Operating expenses: | ||||||||
Research and development costs, net | 5,461 | 6,476 | 24,221 | 26,422 | ||||
Sales and marketing | 7,476 | 10,142 | 35,290 | 43,318 | ||||
General and administrative | 1,910 | 3,209 | 9,812 | 12,702 | ||||
Total operating expenses | 14,847 | 19,827 | 69,323 | 82,442 | ||||
Operating profit (loss) | 1,292 | (7,630) | (6,849) | (15,902) | ||||
Financial and other income (loss), net | 423 | 232 | 1,059 | (584) | ||||
Profit (loss) before income tax expenses | 1,715 | (7,398) | (5,790) | (16,486) | ||||
Tax expenses | 773 | 2,982 | 2,204 | 3,356 | ||||
Net profit (loss) | 942 | (10,380) | (7,994) | (19,842) | ||||
Basic net profit (loss) per share | $ 0.03 | $ (0.31) | $ (0.24) | $ (0.59) | ||||
Diluted net profit (loss) per share | $ 0.03 | $ (0.31) | $ (0.24) | $ (0.59) | ||||
Weighted average number of shares | ||||||||
used in computing basic net | ||||||||
earnings per share | 33,090,708 | 33,559,698 | 33,202,309 | 33,419,917 | ||||
Weighted average number of shares | ||||||||
used in computing diluted net | ||||||||
earnings per share | 33,415,193 | 33,559,698 | 33,202,309 | 33,419,917 | ||||
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, | |||||||
2016 | 2015 | 2016 | 2015 | |||||
(Unaudited) | (Unaudited) | (Unaudited) | (Audited) | |||||
GAAP Revenues | $ 23,487 | $ 25,382 | $ 90,369 | $ 99,967 | ||||
Fair value adjustment for acquired deferred revenues write down | 31 | 271 | 165 | 304 | ||||
Non-GAAP Revenues | $ 23,518 | $ 25,653 | $ 90,534 | $ 100,271 | ||||
GAAP cost of revenue | $ 7,348 | $ 13,185 | $ 27,895 | $ 33,427 | ||||
Share-based compensation (1) | (109) | (79) | (345) | (324) | ||||
Amortization of intangible assets (2) | (367) | (6,373) | (1,173) | (8,075) | ||||
Restructuring expenses (4) | - | - | (127) | - | ||||
Non-GAAP cost of revenue | $ 6,872 | $ 6,733 | $ 26,250 | $ 25,028 | ||||
GAAP gross profit | $ 16,139 | $ 12,197 | $ 62,474 | $ 66,540 | ||||
Gross profit adjustments | 507 | 6,723 | 1,810 | 8,703 | ||||
Non-GAAP gross profit | $ 16,646 | $ 18,920 | $ 64,284 | $ 75,243 | ||||
GAAP operating expenses | $ 14,847 | $ 19,827 | $ 69,323 | $ 82,442 | ||||
Share-based compensation (1) | (845) | (1,545) | (4,667) | (6,846) | ||||
Amortization of intangible assets (2) | (132) | (284) | (535) | (658) | ||||
Expenses related to M&A activities (3) | 962 | - | 962 | (678) | ||||
Restructuring expenses (4) | - | - | (1,163) | - | ||||
Non-GAAP operating expenses | $ 14,832 | $ 17,998 | $ 63,920 | $ 74,260 | ||||
GAAP financial and other income (loss) | $ 423 | $ 232 | $ 1,059 | $ (584) | ||||
Expenses related to M&A activities (3) | (348) | (89) | (179) | 193 | ||||
Non-GAAP Financial and other income (loss) | $ 75 | $ 143 | $ 880 | $ (391) | ||||
GAAP taxes on income | $ 773 | $ 2,982 | $ 2,204 | $ 3,356 | ||||
Tax expenses (in respect of net deferred tax asset recorded) | (36) | (2,628) | (230) | (2,628) | ||||
Non-GAAP taxes on income | $ 737 | $ 354 | $ 1,974 | $ 728 | ||||
GAAP Net income (loss) | $ 942 | $ (10,380) | $ (7,994) | $ (19,842) | ||||
Share-based compensation (1) | 954 | 1,624 | 5,012 | 7,170 | ||||
Amortization of intangible assets (2) | 499 | 6,657 | 1,708 | 8,733 | ||||
Expenses related to M&A activities (3) | (1,310) | (89) | (1,141) | 871 | ||||
Restructuring expenses (4) | - | - | 1,290 | - | ||||
Fair value adjustment for acquired deferred revenues write down | 31 | 271 | 165 | 304 | ||||
Tax expenses (in respect of net deferred tax asset recorded) | 36 | 2,628 | 230 | 2,628 | ||||
Non-GAAP Net income (loss) | $ 1,152 | $ 711 | $ (730) | $ (136) | ||||
GAAP Loss per share (diluted) | $ 0.03 | $ (0.31) | $ (0.24) | $ (0.59) | ||||
Share-based compensation | 0.03 | 0.05 | 0.15 | 0.21 | ||||
Amortization of intangible assets | 0.01 | 0.20 | 0.05 | 0.26 | ||||
Expenses related to M&A activities | (0.04) | 0.00 | (0.03) | 0.03 | ||||
Restructuring expenses | - | - | 0.04 | - | ||||
Fair value adjustment for acquired deferred revenues write down | 0.00 | 0.01 | 0.00 | 0.02 | ||||
Tax expenses (in respect of net deferred tax asset recorded) | 0.00 | 0.07 | 0.01 | 0.07 | ||||
Non-GAAP Net income (Loss) per share (diluted) | $ 0.03 | $ 0.02 | $ (0.02) | $ (0.00) | ||||
Weighted average number of shares used in | ||||||||
computing GAAP diluted net earnings per share | 33,415,193 | 33,559,698 | 33,202,309 | 33,419,917 | ||||
Weighted average number of shares used in | ||||||||
computing non-GAAP diluted net earnings per share | 33,697,889 | 33,829,088 | 33,202,309 | 34,013,721 | ||||
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, | ||||||||
2016 | 2015 | 2016 | 2015 | ||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Audited) | ||||||
(1) Share-based compensation (*): | |||||||||
Cost of revenues | $ 109 | $ 79 | $ 345 | $ 324 | |||||
Research and development costs, net | 244 | 366 | 1,223 | 1,637 | |||||
Sales and marketing | 322 | 631 | 1,745 | 2,802 | |||||
General and administrative | 279 | 548 | 1,699 | 2,407 | |||||
$ 954 | $ 1,624 | $ 5,012 | $ 7,170 | ||||||
(2) Amortization of intangible assets | |||||||||
Cost of revenues | $ 367 | $ 6,373 | $ 1,173 | $ 8,075 | |||||
Sales and marketing | 132 | 284 | 535 | 658 | |||||
$ 499 | $ 6,657 | $ 1,708 | $ 8,733 | ||||||
(3) Expenses related to M&A activities | |||||||||
General and administrative | $ (962) | $ - | $ (962) | $ 452 | |||||
Research and development costs, net | - | - | - | 45 | |||||
Sales and marketing | - | - | - | 181 | |||||
Financial expenses | (348) | (89) | (179) | 193 | |||||
$ (1,310) | $ (89) | $ (1,141) | $ 871 | ||||||
(4) Restructuring expenses | |||||||||
Cost of revenues | $ - | $ - | $ 127 | $ - | |||||
Research and development costs, net | - | - | 370 | - | |||||
Sales and marketing | - | - | 720 | - | |||||
General and administrative | - | - | 73 | - | |||||
$ - | $ - | $ 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) | ||||
December 31, | December 31, | |||
2016 | 2015 | |||
(Unaudited) | (Audited) | |||
ASSETS | ||||
CURRENT ASSETS: | ||||
Cash and cash equivalents | $ 23,326 | $ 15,470 | ||
Short term deposits | 29,821 | 42,700 | ||
Restricted cash | 0 | 203 | ||
Marketable securities | 60,507 | 64,921 | ||
Trade receivables, net | 24,158 | 23,874 | ||
Other receivables and prepaid expenses | 3,750 | 4,513 | ||
Inventories | 7,235 | 10,169 | ||
Total current assets | 148,797 | 161,850 | ||
LONG-TERM ASSETS: | ||||
Severance pay fund | 252 | 282 | ||
Deferred taxes | 267 | 501 | ||
Other assets | 1,136 | 2,712 | ||
Total long-term assets | 1,655 | 3,495 | ||
PROPERTY AND EQUIPMENT, NET | 4,387 | 5,189 | ||
GOODWILL AND INTANGIBLE ASSETS, NET | 35,972 | 37,681 | ||
Total assets | $ 190,811 | $ 208,215 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
CURRENT LIABILITIES: | ||||
Trade payables | $ 3,275 | $ 7,107 | ||
Deferred revenues | 11,133 | 14,066 | ||
Other payables and accrued expenses | 10,538 | 13,921 | ||
Total current liabilities | 24,946 | 35,094 | ||
LONG-TERM LIABILITIES: | ||||
Deferred revenues | 3,597 | 4,912 | ||
Accrued severance pay | 592 | 651 | ||
Other long term liabilities | 4,502 | 4,153 | ||
Total long-term liabilities | 8,691 | 9,716 | ||
SHAREHOLDERS' EQUITY | 157,174 | 163,405 | ||
Total liabilities and shareholders' equity | $ 190,811 | $ 208,215 | ||
TABLE - 4 | |||||||
ALLOT COMMUNICATIONS LTD. | |||||||
AND ITS SUBSIDIARIES | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(U.S. dollars in thousands) | |||||||
Three Months Ended | Year ended Ended | ||||||
December 31, | December 31, | ||||||
2016 | 2015 | 2016 | 2015 | ||||
(Unaudited) | (Unaudited) | (Unaudited) | (Audited) | ||||
Cash flows from operating activities: | |||||||
Net income (Loss) | $ 942 | $ (10,380) | $ (7,994) | $ (19,842) | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation | 569 | 631 | 2,334 | 2,752 | |||
Stock-based compensation related to options granted to employees | 1,005 | 1,628 | 5,181 | 7,170 | |||
Amortization of intangible assets | 499 | 6,658 | 1,709 | 8,733 | |||
Capital loss | 4 | 190 | 24 | 328 | |||
Decrease (Increase) in accrued severance pay, net | (4) | 197 | (29) | 349 | |||
Decrease in other assets | 828 | 1,237 | 1,575 | 1,205 | |||
Decrease in accrued interest and amortization of premium on marketable securities | 215 | 253 | 1,238 | 967 | |||
Decrease (Increase) in trade receivables | 2,795 | (872) | (284) | (847) | |||
Decrease (Increase) in other receivables and prepaid expenses | 206 | (2,092) | 699 | (2,623) | |||
Decrease (Increase) in inventories | 1,410 | (120) | 2,934 | (60) | |||
Decrease in long-term deferred taxes, net | 49 | 1,543 | 234 | 1,403 | |||
Increase (Decrease) in trade payables | 302 | 1,532 | (3,832) | 2,218 | |||
Increase (Decrease) in employees and payroll accruals | (241) | 1,819 | (851) | 901 | |||
Increase (Decrease) in deferred revenues | (2,664) | 313 | (4,248) | 1,961 | |||
Decrease in other payables and accrued expenses | (1,719) | (1,000) | (2,156) | (429) | |||
Net cash provided by (used in) operating activities | 4,196 | 1,537 | (3,466) | 4,186 | |||
Cash flows from investing activities: | |||||||
Redemption of (Investment in) restricted cash | - | (203) | 203 | (203) | |||
Redemption of (Investment in) short-term deposits | (2,502) | (5,950) | 12,879 | 16,300 | |||
Purchase of property and equipment | (398) | (617) | (1,582) | (2,223) | |||
Proceeds from sale of property and equipment | 26 | - | 26 | - | |||
Investment in marketable securities | (7,598) | (13,286) | (28,695) | (34,098) | |||
Proceeds from redemption or sale of marketable securities | 10,403 | 5,822 | 32,208 | 22,221 | |||
Acquisitions | - | 193 | - | (9,859) | |||
Net cash provided by (used in) investing activities | (69) | (14,041) | 15,039 | (7,862) | |||
Cash flows from financing activities: | |||||||
Exercise of employee stock options | 20 | 28 | 115 | 132 | |||
Purchase of treasury stocks | (506) | (166) | (3,832) | (166) | |||
Net cash provided by financing activities | (486) | (138) | (3,717) | (34) | |||
Increase (Decrease) in cash and cash equivalents | 3,641 | (12,642) | 7,856 | (3,710) | |||
Cash and cash equivalents at the beginning of the period | 19,685 | 28,112 | 15,470 | 19,180 | |||
Cash and cash equivalents at the end of the period | $ 23,326 | $ 15,470 | $ 23,326 | $ 15,470 | |||
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
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/allot-communications-announces-fourth-quarter-and-full-year-2016-financial-results-300403232.html
SOURCE Allot Communications Ltd.
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