HOD HASHARON, Israel, May 14 /PRNewswire-FirstCall/ -- Allot
Communications Ltd. (NASDAQ: ALLT), a leader in IP service optimization
solutions based on deep packet inspection (DPI) technology, today announced
financial results for the first quarter ended March 31, 2008.
Total revenues for the first quarter of 2008 were $8.3 million, similar
to the revenues reported in the first quarter of 2007, and a 5% decrease
from the $8.7 million revenues reported for the fourth quarter of 2007. On
a GAAP basis, net loss for the first quarter of 2008 was $4.8 million, or
$0.22 per share (basic and diluted), as compared with a net loss of $0.4
million, or $0.02 per share (basic and diluted), in the first quarter of
2007, and a net loss of $6.7 million, or $0.31 per share (basic and
diluted), for the fourth quarter of 2007. The net loss and earnings per
share for the fourth quarter of 2007 reflect a reclassification of the
previously announced devaluation of certain Auction Rate Securities (ARS)
as described below in further detail.
On a non-GAAP basis, excluding the impact of share-based compensation
expenses, the impact of expenses related to a law suit, the impact of
amortization of intangible assets acquired from Esphion and the impact of
impairment charges related to certain securities, non-GAAP net loss for the
first quarter of 2008 totaled $1.9 million, or $0.09 per share (basic and
diluted), as compared with a net loss of $112 thousand, or $0.00 per share
(basic and diluted), for the first quarter of 2007. These non-GAAP measures
should be considered in addition to, and not as a substitute for,
comparable GAAP measures. A full reconciliation between non-GAAP and GAAP
net loss is provided in the accompanying Table 2. The Company provides
these non-GAAP financial measures because management believes that 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 that they are useful to
investors in enhancing an understanding of the Company's operating
performance.
"During the quarter we achieved our goals of continued expansion of our
global customer base and continued acceptance of the new Service Gateway,"
commented Rami Hadar, Allot's President and Chief Executive Officer. "We
were pleased to see strong demand for our Service Gateway, which received
Technology Marketing Corporation's (TMC(R)) Unified Communications Magazine
2007 Product of the Year Award. The product delivers DPI services with true
10Gb performance. Its open architecture has attracted the attention of
current and potential customers, as it offers a fully upgradeable platform
which can also offer integrated value added services. During the quarter it
made a meaningful contribution to our revenues, and we expect it to
continue to be one of our main growth drivers during 2008 and beyond,"
concluded Hadar.
During the quarter the Company achieved the following milestones:
- Continued successful deployment of Service Gateway - Omega at major
carriers in Europe and the Asia-Pacific region;
- Completed the acquisition of the business of Esphion Ltd., a
developer of network protection solutions for carriers and internet service
providers, and it is anticipated that a unified solution will be released
at the end of the second quarter of 2008; and
- Added two Tier 1 mobile carriers and several national carriers to its
worldwide customer base.
On January 8, 2008, the Company closed the previously announced
acquisition of Esphion. Under the terms of the agreement, the Company paid
a total of $3.9 million in cash for the purchase of Esphion's assets as
well as for related expenses.
As of March 31, 2008, the Company's cash and cash equivalents,
including short and long-term deposits and investments in marketable
securities, totaled $63.2 million of which $33.2 million were ARS. Since
the announcement of our results for the fourth quarter and full year of
2007, the credit and capital markets have further deteriorated and
reflected continued uncertainty. Recent external valuations showed a
further devaluation of the majority of our ARS portfolio. As a result, the
Company recorded an impairment charge of $2.2 million in its profit and
loss statement, in respect of ARS the devaluation of which is considered
"other than temporary."
In addition, based upon recent valuations and market trends, the
Company reclassified the devaluation of certain ARS for the fourth quarter
and the full year of 2007 reflected in the Company's previous earnings
release dated February 12, 2008, as "other than temporary." This
reclassification resulted in an additional impairment charge of $1.2
million in the Company's profit and loss statement for the fourth quarter
and the full year of 2007. Accordingly, on a GAAP basis, net loss for the
fourth quarter of 2007 was $6.7 million instead of the previously reported
$5.5 million, or $0.31 per share (basic and diluted) instead of the
previously reported $0.25 per share (basic and diluted). On a GAAP basis,
net loss in 2007 totaled $9.9 million instead of the previously reported
$8.7 million, or $0.46 per share (basic and diluted) instead of the
previously reported $0.41 per share (basic and diluted). This
reclassification has no impact on the non-GAAP net loss and earnings per
share previously reported for the fourth quarter and full year of 2007.
The ARS held by the Company are subject to the risks and uncertainties
regarding market conditions, liquidity, impairment and ratings as
previously reported by the Company. The Company believes that based on its
current cash, cash equivalents and marketable securities balances at March
31, 2008 and expected operating cash flows, the current lack of liquidity
of these securities will not have a material impact on the Company's
liquidity, cash flow or its ability to fund its operations.
Conference Call & Webcast
The Company's management team plans to host a live conference call and
webcast today, May 14, 2008, at 8:30 AM EST to discuss the financial
results as well as management's outlook for the business.
To access the conference call, please dial one of the following
numbers: US: 1-866-966-5335, International: +44-20-3003-2666, Israel:
1-809-216-213.
A replay of the conference call will be available from 12:01 am EST on
May 15, 2008 through June 14, 2008 at 11:59 pm EST. To access the replay,
please dial: +44-20-8196-1998, access code: 650204#
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 Ltd. (NASDAQ: ALLT) is a leading provider of
intelligent IP service optimization solutions for DSL, wireless and mobile
broadband carriers, service providers, and enterprises. Allot's rich
portfolio of hardware platforms and software applications utilizes deep
packet inspection (DPI) technology to transform broadband pipes into smart
networks that can rapidly and efficiently deploy value added Internet
services. Allot's scalable, carrier-grade solutions provide the visibility,
security, application control and subscriber management that are vital to
managing Internet service delivery, guaranteeing quality of experience
(QoE), containing operating costs, and maximizing revenue in broadband
networks. For more information, visit http://www.allot.com.
Safe Harbor Statement
Information provided in this press release may contain statements
relating to current expectations, estimates, forecasts and projections
about future events that are "forward-looking statements" as defined in the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements generally relate to the Company's plans, objectives and
expectations for future operations, including the anticipation for the
release of a unified solution of the Service Gateway - Omega and the
Esphion solution at the end of the second quarter, the expectation that
revenues from the Services Gateway will continue to be one of the Company's
main growth drivers during 2008 and beyond, and the Company's belief that
based on its current cash, cash equivalents and marketable securities
balances and expected operating cash flows, the current lack of liquidity
of the ARS will not have a material impact on its liquidity, cash flow or
its ability to fund its operations. These forward-looking statements are
based upon management's current estimates and projections of future results
or trends. Actual future results may differ materially from those projected
as a result of certain risks and uncertainties. These factors include, but
are not limited to: the possibility of further deterioration in the credit
and capital markets or additional ratings downgrades of investments in the
Company's portfolio (including on ARS) resulting in the Company incurring
additional impairments to its investment portfolio; changes in general
economic and business conditions and, specifically, a decline in demand for
the Company's products; the Company's inability to timely integrate the
Esphion solution into the Service Gateway or develop and introduce new
technologies, products and applications; loss of market; 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. 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
March 31,
2008 2007
(Unaudited)
Revenues $ 8,259 $ 8,276
Cost of revenues 2,142 1,974
Gross profit 6,117 6,302
Operating expenses:
Research and development costs, net 3,097 2,453
Sales and marketing 5,044 4,194
General and administrative 1,499 1,043
In-process research and development 244 -
Total Operating expenses 9,884 7,690
Operating loss (3,767) (1,388)
Financial and other income (expenses), net (1,015) 957
Loss before income tax expenses (4,782) (431)
Income tax expenses 31 3
Net loss (4,813) (434)
Basic net loss per share ($0.22) ($0.02)
Diluted net loss per share ($0.22) ($0.02)
Weighted average number of shares
used in computing basic net
loss per share 22,026,771 21,009,705
Weighted average number of shares
used in computing diluted net
loss per share 22,026,771 21,009,705
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
March 31,
2008 2007
(Unaudited)
GAAP net loss as reported $ (4,813) $ (434)
Non-GAAP adjustments:
Cost of revenues
Expenses recorded for stock-based compensation 14 11
Core technology amortization 28 -
42 11
Research and development costs, net
Expenses recorded for stock-based compensation 75 50
Sales and marketing
Expenses recorded for stock-based compensation 128 119
General and administrative
Expenses recorded for stock-based compensation 208 142
Expenses related to a law suit 21 -
229 142
In-process research and development 244 -
Total adjustments to operating loss 718 322
Financial and other income (expenses), net
Impairment of auction rate securities 2,150 -
Total adjustments 2,868 322
Non-GAAP net loss (1,945) (112)
Non- GAAP basic and diluted loss per share ($0.09) ($0.00)
TABLE - 3
ALLOT COMMUNICATIONS LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
March 31, December 31,
2008 2007
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 23,938 $ 28,101
Marketable securities and short term deposits 6,062 7,305
Trade receivables 6,103 6,122*
Other receivables and prepaid expenses 4,580 3,915
Inventories 4,196 4,789
Total current assets 44,879 50,232
LONG-TERM ASSETS:
Marketable securities 33,185 35,371
Severance pay fund 3,571 3,302
Other assets 1,175 1,169
Total long-term assets 37,931 39,842
PROPERTY AND EQUIPMENT, NET 4,883 4,619
GOODWILL AND INTANGIBLE ASSETS, NET 3,791 239
Total assets 91,484 94,932
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $ 3,340 $ 3,409
Deferred revenues 3,929 3,968*
Other payables and accrued expenses 6,364 5,791
Total current liabilities 13,633 13,168
LONG-TERM LIABILITIES:
Deferred revenues 1,464 1,404*
Accrued severance pay 3,523 3,175
Total long-term liabilities 4,987 4,579
SHAREHOLDERS' EQUITY 72,864 77,185
Total liabilities and shareholders' equity 91,484 94,932
* reclassified
Investor Relations Contact:
Doron Arazi
Chief Financial Officer
International access code +972-9-761-9203
darazi@allot.com
SOURCE Allot Communications Ltd
 back to top
CONTACT:
Investor Relations Contact: Doron Arazi,
Chief Financial Officer, International access code
+972-9-761-9203, darazi@allot.com
|
