Form 6-K AUDIOCODES LTD For: Jan 26

 

 

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

of the Securities Exchange Act of 1934

 

For the Month of January 2021

 

Commission file number 0-30070

 

AUDIOCODES LTD.

(Translation of registrant’s name into English)

 

1 Hayarden Street • Airport City, Lod 7019900 • ISRAEL

(Address of principal executive office)

 

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

 

Form 20-F x    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): ____

 

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

 

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): ____

 

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

 

 

 

On January 26, 2021, AudioCodes Ltd. (the “Registrant”) issued a press release announcing financial results for the fourth quarter and full year periods ended December 31, 2020, and other matters. A copy of this press release is attached hereto as Exhibit 1 and incorporated by reference herein.

 

The information set forth in (a) the first, second, third, sixth and seventh paragraphs following the heading “Details,” and the paragraph following the heading “Court Approval of Share Purchases and/or Cash Dividends” of and (b) the condensed consolidated balance sheets, condensed consolidated statements of operations and condensed consolidated statements of cash flows contained in, the press release attached as Exhibit 1 to this Report on Form 6-K are hereby incorporated by reference into (i) the Registrant’s Registration Statement on Form F-3ASR, File No. 333-238867; (ii) the Registrant’s Registration Statement on Form S-8, File No. 333-11894; (iii) the Registrant’s Registration Statement on Form S-8, File No. 333-13268; (iv) the Registrant’s Registration Statement on Form S-8, File No. 333-105473; (v) the Registrant’s Registration Statement on Form S-8, File No. 333-144825; (vi) the Registrant’s Registration Statement on Form S-8, File No. 333-160330; (vii) the Registrant’s Registration Statement on Form S-8, File No. 333-170676; (viii) the Registrant’s Registration Statement on Form S-8, File No. 333-190437; (ix) the Registrant’s Registration Statement on Form S-8, File No. 333-210438; and (x) the Registrant’s Registration Statement on Form S-8, File No. 333-230388.

 

 

SIGNATURE

 

 

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.

 

	AUDIOCODES LTD.
	(Registrant)
	By:	/s/ NIRAN BARUCH
		Niran Baruch
		Vice President Finance and
		Chief Financial Officer

 

 

Dated: January 26, 2021

 

 

EXHIBIT INDEX

 

Exhibit No.		Description
1		Press release, dated January 26, 2021, announcing financial results for the fourth quarter and full year periods ended December 31, 2020, and other matters.

 

 

 

 

Exhibit 1

 

AudioCodes Press Release

 

P R E S S  R E L E A S E

 

Company Contacts		IR Agency Contact
Niran Baruch, VP Finance & Chief Financial Officer AudioCodes Tel: +972-3-976-4000 [email protected]	Shirley Nakar, Director, Investor Relations AudioCodes Tel: +972-3-976-4000 [email protected]	Brett Maas, Managing Director Hayden IR Tel: +1-646-536-7331 [email protected]

 

AudioCodes Reports Fourth Quarter and Full Year 2020 Results

 

Lod, Israel – January 26, 2021 - AudioCodes (NASDAQ: AUDC) Press Release

 

Fourth Quarter and Full Year 2020 Highlights

 

·

Quarterly revenues increased by 11.1% year-over-year to $58.7 million;

 

full 2020 year revenues increased by 10.2% to $220.8 million;

·

Quarterly service revenues increased by 19.9% year-over-year to $21 million;

 

full 2020 year service revenues increased by 16.7% to $75.4 million; and

·

Quarterly and full 2020 year UC-SIP revenues increased more than 20% year-over-year.

·

GAAP results:

o

Quarterly GAAP gross margin was 71.4%;

o

Quarterly GAAP operating margin was 20.7%;

o

Quarterly GAAP net income was $8.4 million, or $0.24 per diluted share; and

o

Full 2020 year GAAP net income was $27.2 million, or $0.83 per diluted share.

·

Non-GAAP results:

o

Quarterly Non-GAAP gross margin was 71.5%;

o

Quarterly Non-GAAP operating margin was 26.2%;

o

Quarterly Non-GAAP net income was $15.2 million, or $0.44 per diluted share; and

o

Full 2020 year Non-GAAP net income was $46.7 million, or $1.41 per diluted share.

·

Net cash provided by operating activities was $10.1 million for the quarter and $38.5 million for the full year.

 

AudioCodes Reports Fourth Quarter and Full Year 2020 Results

Page 1 of 10

 

AudioCodes Press Release

 

Details

 

AudioCodes (NASDAQ: AUDC), a leading vendor of advanced communications software, products and productivity solutions for the digital workplace, today announced financial results for the fourth quarter and full year periods ended December 31, 2020.

 

Revenues for the fourth quarter of 2020 were $58.7 million compared to $56.6 million for the third quarter of 2020 and $52.8 million for the fourth quarter of 2019. Revenues were $220.8 million in 2020 compared to $200.3 million in 2019.

 

Net income was $8.4 million, or $0.24 per diluted share, for the fourth quarter of 2020, compared to a net loss of $8.2 million, or $(0.28) per diluted share, for the fourth quarter of 2019. Net income was $27.2 million, or $0.83 per diluted share, in 2020 compared to $4.0 million, or $0.13 per diluted share, in 2019.

 

On a Non-GAAP basis, net income was $15.2 million, or $0.44 per diluted share, for the fourth quarter of 2020 compared to $8.1 million, or $0.26 per diluted share, in the fourth quarter of 2019. Non-GAAP net income was $46.7 million, or $1.41 per diluted share, in 2020 compared to $27.8 million, or $0.89 per diluted share, in 2019.

 

Non-GAAP net income excludes: (i) share-based compensation expenses; (ii) amortization expenses related to intangible assets; (iii) expenses related to the payment required to be made pursuant to the royalty buyout agreement with the Israel National Authority for Technology and Innovation (“IIA”)entered into in November 2019; (iv) expenses or income related to revaluation of an earn-out liability in connection with the acquisition of Active Communications Europe; (v) financial income or expenses related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies and (vi) non-cash deferred tax expenses (benefit). A reconciliation of net income on a GAAP basis to a non-GAAP basis is provided in the tables that accompany the condensed consolidated financial statements contained in this press release.

 

Net cash provided by operating activities was $10.1 million for the fourth quarter of 2020 and $38.5 million for 2020. Net cash provided by operating activities in both periods was impacted by the $11.6 million payment made in December 2020 which was the second installment payment pursuant to the royalty buyout agreement.

 

Cash and cash equivalents, long and short-term bank deposits and long and short-term marketable securities were $186.3 million as of December 31, 2020 compared to $71.9 million as of December 31, 2019. The increase in cash and cash equivalents, long and short-term bank deposits and long and short-term marketable securities was the result of the receipt of the net proceeds of the Company’s public offering in June 2020, as well as due to cash provided by operating activities, offset, in part, by the payments of cash dividends during 2020.

 

AudioCodes Reports Fourth Quarter and Full Year 2020 Results

Page 2 of 10

 

AudioCodes Press Release

 

“We are pleased to report record financial results for the fourth quarter and full year 2020,” said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes.

 

“The year 2020 ended on a strong note, underscoring our excellent performance for the full year, and providing continued momentum heading into 2021. With collaboration and work from home trends becoming key for business continuity and workplace productivity in the Covid-19 pandemic era, we have seen increased demand for our comprehensive portfolio of solutions and services for the UCaas and Contact Center markets. Most notable was the more than 17% growth in our Enterprise business during 2020, which now comprises about 78% of revenue, driven mainly by continued success in voice solutions for Microsoft Teams where annual revenue grew by over 300% year-over-year, and more than 30% compared to the third quarter of 2020. Additionally, we witnessed higher than anticipated revenue in the Contact Center business, which grew over 15% in 2020. With continued focus on collaboration tools and on work from home in the coming years, we anticipate similar growth in 2021 and beyond.”

 

Mr. Adlersberg continued, “Given the ramp up in conversational AI opportunities we experienced in the second half of 2020, and looking to the future, we expect voice.ai to be a new growth engine for us over the next several years. In 2020, we experienced over 50% growth in the revenues of our conversational IVR, recording and voice.ai connect solutions. Driven by the current environment and trends, the need for quick and efficient access to contact centers has become a top priority for many. We see rising demand and requirements for automation of customer calls and self-service solutions. Meeting recap is another growth area for us where we integrate an intelligent assistant into our Meeting Insight solution, targeting to automate various enterprise business processes across the organization. As such, we see much potential and growth in voice.ai related applications.”  

 

“As we enter 2021 with growth engines such as solutions for Microsoft Teams, contact centers and conversational AI, we are confident in our decision to continue to invest in future solutions and service offerings in the UCaaS and Contact Center enterprise market and to focus on the return on investment to our shareholders," concluded Mr. Adlersberg.

 

Court Approval of Share Purchases and/or Cash Dividends

 

In January 2021, the Company received court approval in Israel to purchase up to an aggregate amount of $30 million of additional ordinary shares. The court approval also permits AudioCodes to declare a dividend of any part of this amount. The approval is valid through July 19, 2021.

 

AudioCodes Reports Fourth Quarter and Full Year 2020 Results

Page 3 of 10

 

AudioCodes Press Release

 

Conference Call & Web Cast Information

 

AudioCodes will conduct a conference call at 8:30 A.M., Eastern Time today to discuss the Company's fourth quarter and full year of 2020 operating performance, financial results and outlook. Interested parties may participate in the conference call by dialing one the following numbers:

 

United States Participants: +1 (877) 407-0778

 

International Participants: +1 (201) 689-8565

 

The conference call will also be simultaneously webcast. Investors are invited to listen to the call live via webcast at the AudioCodes investor website at http://www.audiocodes.com/investors-lobby

 

 

Follow AudioCodes’ social media channels:

 

AudioCodes invites you to join our online community and follow us on: AudioCodes Voice Blog, LinkedIn, Twitter, Facebook, and YouTube.

 

 

About AudioCodes

 

AudioCodes Ltd. (NASDAQ, TASE: AUDC) is a leading vendor of advanced communications software, products and productivity solutions for the digital workplace. AudioCodes enables enterprises and service providers to build and operate all-IP voice networks for unified communications, contact centers, and hosted business services. AudioCodes offers a broad range of innovative products, solutions and services that are used by large multi-national enterprises and leading tier-1 operators around the world.

 

For more information on AudioCodes, visit http://www.audiocodes.com.

 

Statements concerning AudioCodes' business outlook or future economic performance; product introductions and plans and objectives related thereto; and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters, are "forward-looking statements'' as that term is defined under U.S. Federal securities laws. Forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from those stated in such statements. These risks, uncertainties and factors include, but are not limited to: the effect of global economic conditions in general and conditions in AudioCodes' industry and target markets in particular; shifts in supply and demand; market acceptance of new products and the demand for existing products; the impact of competitive products and pricing on AudioCodes' and its customers' products and markets; timely product and technology development, upgrades and the ability to manage changes in market conditions as needed; possible need for additional financing; the ability to satisfy covenants in the Company’s loan agreements; possible disruptions from acquisitions; the ability of AudioCodes to successfully integrate the products and operations of acquired companies into AudioCodes’ business; possible adverse impact of the COVID-19 pandemic on our business and results of operations; and other factors detailed in AudioCodes' filings with the U.S. Securities and Exchange Commission. AudioCodes assumes no obligation to update the information in this release.

 

AudioCodes Reports Fourth Quarter and Full Year 2020 Results

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AudioCodes Press Release

 

 

©2021 AudioCodes Ltd. All rights reserved. AudioCodes, AC, HD VoIP, HD VoIP Sounds Better, IPmedia, Mediant, MediaPack, What’s Inside Matters, OSN, SmartTAP, User Management Pack, VMAS, VoIPerfect, VoIPerfectHD, Your Gateway To VoIP, 3GX, VocaNom, AudioCodes One Voice, AudioCodes Meeting Insights, AudioCodes Room Experience and CloudBond are trademarks or registered trademarks of AudioCodes Limited. All other products or trademarks are property of their respective owners. Product specifications are subject to change without notice.

 

Summary financial data follows

 

AudioCodes Reports Fourth Quarter and Full Year 2020 Results

Page 5 of 10

AudioCodes Press Release

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

		December 31,				December 31,
		2020				2019
		(Unaudited)				(Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	40,934			$	64,773
Restricted cash			5,100				5,000
Short-term and restricted bank deposits			84,817				1,416
Short-term marketable securities and accrued interest			449				-
Trade receivables, net			34,518				27,501
Other receivables and prepaid expenses			8,631				5,626
Inventories			29,193				28,275
Total current assets			203,642				132,591
LONG-TERM ASSETS:
Long-term and restricted bank deposits		$	94			$	694
Long-term marketable securities and accrued interest			54,895				-
Deferred tax assets			12,081				20,466
Operating lease right-of-use assets			25,430				29,688
Severance pay funds			20,597				19,370
Total long-term assets			113,097				70,218
PROPERTY AND EQUIPMENT, NET			4,593				4,392
GOODWILL, INTANGIBLE ASSETS AND OTHER, NET			36,791				37,123
Total assets		$	358,123			$	244,324
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current maturities of long-term bank loans		$	1,200			$	2,473
Trade payables			6,984				6,628
Other payables and accrued expenses			28,531				24,692
IIA settlement liability			11,684				10,750
Deferred revenues			37,182				33,538
Short-term operating lease liabilities			9,178				8,579
Total current liabilities			94,759				86,660
LONG-TERM LIABILITIES:
Accrued severance pay		$	21,830			$	20,313
Long-term bank loans			-				1,200
IIA settlement liability			-				10,749
Deferred revenues and other liabilities			12,243				9,831
Long-term operating lease liabilities			19,436				23,097
Total long-term liabilities			53,509				65,190
Total shareholders’ equity			209,855				92,474
Total liabilities and shareholders' equity		$	358,123			$	244,324

 

AudioCodes Reports Fourth Quarter and Full Year 2020 Results

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AudioCodes Press Release

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

 

		Year ended								Three months ended
		December 31,								December 31,
		2020				2019				2020				2019
		(Unaudited)				(Audited)				(Unaudited)
Revenues:
Products		$	145,332			$	135,646			$	37,644			$	35,271
Services			75,442				64,641				21,022				17,526
Total Revenues			220,774				200,287				58,666				52,797
Cost of revenues:
Products			54,384				59,022				12,071				15,340
Services			16,574				14,129				4,735				3,215
Expense related to royalty buyout agreement with the IIA			-				32,178				-				32,178
Total Cost of revenues			70,958				105,329				16,806				50,733
Gross profit			149,816				94,958				41,860				2,064
Operating expenses:
Research and development, net			46,072				41,199				12,528				10,941
Selling and marketing			51,217				51,535				13,110				13,650
General and administrative			14,177				11,778				4,104				3,424
Total operating expenses			111,466				104,512				29,742				28,015
Operating income (loss)			38,350				(9,554	)			12,118				(25,951	)
Financial income (expenses), net			(1,703	)			(1,761	)			(2,661	)			231
Income (loss) before taxes on income			36,647				(11,315	)			9,457				(25,720	)
Tax benefit (taxes on income), net			(9,399	)			15,292				(1,076	)			17,487
Net income (loss)		$	27,248			$	3,977			$	8,381			$	(8,233	)
Basic net earnings (loss) per share		$	0.87			$	0.14			$	0.25			$	(0.28	)
Diluted net earnings (loss) per share		$	0.83			$	0.13			$	0.24			$	(0.28	)
Weighted average number of shares used in computing basic net earnings (loss) per share (in thousands)			31,440				29,252				32,907				29,423
Weighted average number of shares used in computing diluted net earnings (loss) per share (in thousands)			32,916				30,800				34,210				29,423

 

AudioCodes Reports Fourth Quarter and Full Year 2020 Results

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AudioCodes Press Release

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME

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

 

		Year ended								Three months ended
		December 31,								December 31,
		2020				2019				2020				2019
		(Unaudited)				(Audited)				(Unaudited)
GAAP net income (loss)		$	27,248			$	3,977			$	8,381			$	(8,233	)
GAAP net earnings (loss) per share		$	0.83			$	0.13			$	0.24			$	(0.28	)
Cost of revenues:
Share-based compensation (1)			181				183				24				62
Amortization expenses (2)			272				272				68				68
Expense related to royalty buyout agreement with the IIA (3)			-				32,178				-				32,178
			453				32,633				92				32,308
Research and development, net:
Share-based compensation (1)			1,535				937				771				289
Selling and marketing:
Share-based compensation (1)			3,635				2,171				967				811
Amortization expenses (2)			60				60				15				15
			3,695				2,231				982				826
General and administrative:
Share-based compensation (1)			3,420				2,001				1,436				797
Revaluation of earn-out liability (4)			-				(23	)			-				-
			3,420				1,978				1,436				797
Financial expenses:
Exchange rate differences (5)			1,973				2,172				2,844				(158	)
Income taxes:
Deferred tax (6)			8,398				(16,099	)			720				(17,731	)
Non-GAAP net income		$	46,722			$	27,829			$	15,226			$	8,098
Non-GAAP diluted net earnings per share		$	1.41			$	0.89			$	0.44			$	0.26

 

(1)

Share-based compensation expenses related to options and restricted share units granted to employees and others.

(2)

Amortization of intangible assets related to the acquisitions of Active Communications Europe assets.

(3)

Expense related to royalty buyout agreement with the IIA.

(4)

Income related to revaluation of an earn-out liability in connection with the acquisition of Active Communications Europe.

(5)

Financial income or expenses related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies.

(6)

Non-cash deferred tax expenses (benefit).

 

Note: Non-GAAP measures should be considered in addition to, and not as a substitute for, the results prepared in accordance with GAAP. The Company believes that non-GAAP information is useful because it can enhance the understanding of its ongoing economic performance and therefore uses internally this non-GAAP information to evaluate and manage its operations. The Company has chosen to provide this information to investors to enable them to perform comparisons of operating results in a manner similar to how the Company analyzes its operating results and because many comparable companies report this type of information.

 

AudioCodes Reports Fourth Quarter and Full Year 2020 Results

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AudioCodes Press Release

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

U.S. dollars in thousands

 

		Year ended								Three months ended
		December 31,								December 31,
		2020				2019				2020				2019
		(Unaudited)				(Audited)				(Unaudited)
Cash flows from operating activities:
Net income (loss)		$	27,248			$	3,977			$	8,381			$	(8,233	)
Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			2,268				2,044				587				522
Amortization of marketable securities premiums and accretion of discounts, net			172				79				134				-
Increase (decrease) in accrued severance pay, net			290				(267	)			(133	)			(391	)
Share-based compensation expenses			8,771				5,292				3,198				1,959
Decrease (increase) in deferred tax assets, net			8,329				(16,282	)			692				(17,763	)
Increase (decrease) in accrued interest and exchange rate effect of loans, marketable securities and bank deposits			(26	)			140				(7	)			20
Decrease in operating lease right-of-use assets			7,913				7,444				2,193				1,543
Increase (decrease) in operating lease liabilities			(6,717	)			(5,456	)			789				60
Changes in IIA settlement liability, net			(9,815	)			21,499				(10,086	)			21,499
Increase in trade receivables, net			(7,017	)			(5,222	)			(3,364	)			(3,216	)
Decrease (increase) in other receivables and prepaid expenses			(1,516	)			259				233				(223	)
Decrease (increase) in inventories			(1,525	)			(5,925	)			929				1,752
Increase (decrease) in trade payables			356				440				390				(1,191	)
Increase in other payables and accrued expenses			3,839				2,805				4,143				1,381
Increase in deferred revenues			5,906				12,342				2,008				4,694
Net cash provided by operating activities			38,476				23,169				10,087				2,413
Cash flows from investing activities:
Investment in short-term deposits			(84,000	)			-				-				-
Proceeds from (investment in) short-term deposits			599				10,962				(75	)			-
Proceeds from long-term deposits			600				1,200				375				300
Proceeds from redemption of marketable securities			-				29,412				-				10,027
Purchase of marketable securities			(54,977	)			(10,025	)			(27,313	)			(19	)
Purchase of property and equipment			(1,530	)			(1,949	)			(418	)			(273	)
Net cash provided by (used in) investing activities			(139,308	)			29,600				(27,431	)			10,035

 

AudioCodes Reports Fourth Quarter and Full Year 2020 Results

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AudioCodes Press Release

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

U.S. dollars in thousands

 

		Year ended								Three months ended
		December 31,								December 31,
		2020				2019				2020				2019
		(Unaudited)				(Audited)				(Unaudited)
Cash flows from financing activities:
Purchase of treasury shares			-				(8,002	)			-				-
Repayment of bank loans			(2,497	)			(2,470	)			(632	)			(617	)
Cash dividends paid to shareholders			(8,442	)			(6,720	)			(855	)			-
Payment related to the acquisition of ACS			-				(410	)			-				-
Proceeds from issuance of shares, net			85,426				-				-				-
Proceeds from issuance of shares upon exercise of options and warrants			2,606				3,103				1,230				870
Net cash provided by (used in) financing activities			77,093				(14,499	)			(257	)			253
Net increase (decrease) in cash, cash equivalents, and restricted cash			(23,739	)			38,270				(17,601	)			12,701
Cash, cash equivalents and restricted cash at beginning of period			69,773				31,503				63,635				57,072
Cash, cash equivalents and restricted cash at end of period		$	46,034			$	69,773			$	46,034			$	69,773

 

AudioCodes Reports Fourth Quarter and Full Year 2020 Results

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