ALLOT
ALLOT
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Ticker: ALLT
ISIN: IL0010996549

Allot Announces First Quarter 2019 Financial Results

  • 11
Allot Announces First Quarter 2019 Financial Results
17% Year-Over-Year Growth in Revenue and improvement in profitability parameters

PR Newswire

HOD HASHARON, Israel, May 14, 2019 /PRNewswire/ -- Allot Ltd. (NASDAQ: ALLT) (TASE: ALLT), a global provider of leading innovative network intelligence and security solutions for service providers worldwide, today announced its first quarter 2019 financial results.

Allot Logo (PRNewsfoto/Allot Communications Ltd.)

 First Quarter 2019 – Financial Highlights

  • Revenues were $25.3 million, up 17% year-over-year;
  • GAAP gross margin improved to 71.2% up from 68.1% in Q1 2018; Non-GAAP gross margin improved to 72.4% up from 69.6% in Q1 2018;
  • GAAP operating loss narrowed to $3.3 million compared to $3.5 million in Q1 2018; Non-GAAP operating loss narrowed to $1.8 million compared to $2.3 million in Q1 2018; 

Financial Outlook

  • Management maintains its 2019 expectations of revenues between $106-110 million, representing continued double-digit year-over-year growth;
  • Continue to expect full year 2019 book to bill ratio at above 1;
  • Management goal to sign security OPEX deals with an aggregate MAR (Maximum Annual Revenue) of $100M during 2019, remains unchanged.

Management Comment

Erez Antebi, President & CEO of Allot, commented: "We are pleased with the continued strong year-over-year growth in revenue as well as the improvement in profitability parameters in the quarter, and we are on target with our longer-term goals.  Our momentum in the quarter remained positive and includes the win of a contract to provide a full suite of solutions comprising of network-based traffic management and network security solutions to Rakuten Mobile in Japan. Our pipeline of potential security OPEX deals remains strong and we are actively working to close further deals. We look forward to continued and sustainable growth in 2019 and beyond."

Q1 2019 Financial Results Summary

Total revenues for the quarter were $25.3 million, up 17% compared to $21.7 million in the first quarter of 2018.

Gross profit on a GAAP basis for the quarter was $18.0 million (gross margin of 71.2%), a 22% improvement compared with $14.8 million (gross margin of 68.1%) in the first quarter of 2018.

Gross profit on a non-GAAP basis for the quarter of was $18.3 million (gross margin of 72.4%), a 21% improvement compared with $15.1 million (gross margin of 69.6%) in the first quarter of 2018.

Operating loss on a GAAP basis for the quarter was $3.3 million, an improvement compared with an operating loss of $3.5 million, in the first quarter of 2018.

Non-GAAP operating loss for the quarter of 2019 was $1.8 million, an improvement compared with a non-GAAP operating loss of $2.3 million in the first quarter of 2018.

Net loss on a GAAP basis for the quarter was $3.3 million, or $0.1 per basic and diluted share, an improvement compared with a net loss of $3.7 million, or $0.11 per basic and diluted share, in the first quarter of 2018.

Non-GAAP net loss for the quarter was $1.9 million, or $0.05 per basic and diluted share, an improvement compared with a non-GAAP net loss of $2.4 million, or $0.07 per basic and diluted share, in the first quarter of 2018.

Cash and investments as of March 31, 2019 totaled $101.5 million, compared to $103.9 million as of December 31, 2018.

Conference Call & Webcast:

The Allot management team will host a conference call to discuss first quarter 2019 earnings results today, May 14, 2019 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: 0-800-917- 5108, Israel: +972-3-918-0609

A live webcast and, following the end of the call, an archive of the conference call, will be accessible on the Allot website at: http://investors.allot.com/index.cfm  

About Allot

Allot Ltd. (NASDAQ: ALLT, 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 21 million subscribers in Europe. Allot. See. Control. Secure.

For more information, visit www.allot.com

GAAP to Non-GAAP Reconciliation:

Non-GAAP net income is defined as GAAP net income after excluding stock-based compensation expenses, amortization of acquisition-related intangible assets, deferred tax asset adjustment, exchange rate differences related to revaluation of assets and liabilities denominated in non-dollar currencies 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 fourth 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




March 31,




2019


2018




(Unaudited)


(Unaudited)









Revenues

$       25,342


$       21,732



Cost of revenues

7,293


6,924



Gross profit  

18,049


14,808









Operating expenses:






Research and development costs, net

7,174


5,793



Sales and marketing

11,477


10,033



General and administrative

2,705


2,466



Total operating expenses

21,356


18,292



Operating loss

(3,307)


(3,484)



Financial and other income, net

532


230



Loss before income tax expenses

(2,775)


(3,254)









Tax expenses

558


432



Net Loss

(3,333)


(3,686)









 Basic net loss per share

$          (0.10)


$          (0.11)









 Diluted net loss per share

$          (0.10)


$          (0.11)









Weighted average number of shares used in 






computing basic net loss per share

33,983,863


33,555,980









Weighted average number of shares used in 






computing diluted net loss per share

33,983,863


33,555,980



 

 

TABLE  - 2





ALLOT 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








March 31,








2019


2018








(Unaudited)
















GAAP cost of revenues

$        7,293


$        6,924






 Share-based compensation (1) 

(60)


(80)






 Amortization of intangible assets (2) 

(232)


(232)






Non-GAAP cost of revenues

$        7,001


$        6,612
















 GAAP gross profit 

$     18,049


$     14,808






 Gross profit adjustments 

292


312






 Non-GAAP gross profit 

$     18,341


$     15,120
















 GAAP operating expenses 

$     21,356


$     18,292






 Share-based compensation (1) 

(685)


(624)






 Amortization of intangible assets (2) 

(188)


(175)






 Expenses related to M&A activities (3) 

(295)


(38)






 Non-GAAP operating expenses 

$     20,188


$     17,455
















 GAAP financial and other income 

$           532


$           230






 Exchange rate differences* 

(2)


150






 Non-GAAP Financial and other income 

$           530


$           380
















 GAAP taxes on income 

$           558


$           432






 Tax expenses in respect of net deferred tax asset recorded   

(16)


(19)






 Non-GAAP taxes on income 

$           542


$           413
















 GAAP Net Loss 

$      (3,333)


$      (3,686)






 Share-based compensation (1) 

745


704






 Amortization of intangible assets (2) 

420


407






 Expenses related to M&A activities (3) 

295


38






 Exchange rate differences 

(2)


150






 Tax expenses in respect of net deferred tax asset recorded 

16


19






 Non-GAAP Net Loss 

$      (1,859)


$      (2,368)
















 GAAP Loss per share (diluted) 

$        (0.10)


$        (0.11)






 Share-based compensation 

0.02


0.02






 Amortization of intangible assets 

0.02


0.01






 Expenses related to M&A activities 

0.01


0.00






 Exchange rate differences 

(0.00)


0.01






 Tax expense in respect of net deferred tax asset recorded 

0.00


0.00






 Non-GAAP Net loss per share (diluted) 

$        (0.05)


$        (0.07)


























Weighted average number of shares used in 









computing GAAP diluted net loss per share

33,983,863


33,555,980


























Weighted average number of shares used in 









computing non-GAAP diluted net loss per share

33,983,863


33,555,980
















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

 






















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








March 31,








2019


2018








(Unaudited)
















(1) Share-based compensation:










Cost of revenues

$             60


$             80







Research and development costs, net

169


155







Sales and marketing

283


222







General and administrative

233


247








$           745


$           704
















 (2) Amortization of intangible assets 










Cost of revenues

$           232


$           232







Sales and marketing

188


175








$           420


$           407
















 (3) Expenses related to M&A activities 










General and administrative 

$              -


$             38







Research and development costs, net

295


-








$           295


$             38














































 

TABLE  - 3


ALLOT LTD.


AND ITS SUBSIDIARIES


CONSOLIDATED  BALANCE  SHEETS


(U.S. dollars in thousands)
















March 31,


December 31,




2019


2018




(Unaudited)


(Audited)






ASSETS






CURRENT ASSETS:






Cash and cash equivalents


$            17,430


$            16,336


Short term deposits


18,557


22,543


Restricted deposit


548


465


Marketable securities 


64,713


64,290


Trade receivables, net


28,686


26,093


Other receivables and prepaid expenses


5,449


3,647


Inventories


13,255


11,345


Total current assets


148,638


144,719








LONG-TERM ASSETS:






Restricted deposit


257


257


Severance pay fund


341


345


Operating lease right-of-use assets


7,137


-


Deferred taxes


314


281


Other assets 


533


600


Total long-term assets


8,582


1,483


PROPERTY AND EQUIPMENT, NET


6,362


6,249


GOODWILL AND INTANGIBLE ASSETS, NET


36,223


37,393


Total assets


$          199,805


$          189,844








LIABILITIES AND SHAREHOLDERS'
EQUITY






CURRENT LIABILITIES:






Trade payables


$            10,370


$               7,813


Deferred revenues


13,299


13,855


Short-term operating lease liabilities


2,460


-


Other payables and accrued expenses


23,805


21,052


Total current liabilities


49,934


42,720








LONG-TERM LIABILITIES:






Deferred revenues


4,211


4,247


Long-term operating lease liabilities


4,471


-


Accrued severance pay


737


806


Other long term liabilities


5,763


6,168


Total long-term liabilities


15,182


11,221


SHAREHOLDERS' EQUITY


134,689


135,903


Total liabilities and shareholders' equity


$          199,805


$          189,844








 

 

TABLE  - 4

ALLOT LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS 

(U.S. dollars in thousands)







Three Months Ended



March 31,



2019


2018



(Unaudited)


(Unaudited)







Cash flows from operating activities:










Net Loss

$        (3,333)


$     (3,686)


Adjustments to reconcile net income  to net cash used in operating activities:





Depreciation

616


498


Stock-based compensation related to options granted to employees

745


704


Amortization of intangible assets

420


407


Capital loss 

-


3


Decrease (Increase) in accrued severance pay, net

(65)


33


Decrease in other assets

67


788


Decrease in accrued interest and  amortization of premium on marketable securities 

77


246


Changes in operating leases, net

(206)


-


Decrease (Increase) in trade receivables

(2,593)


746


Increase in other receivables and prepaid expenses

(1,147)


(1,879)


Increase in inventories

(1,910)


(277)


Decrease (Increase) in long-term deferred taxes, net

(33)


19


Increase in trade payables

2,557


602


Increase (Decrease) in employees and payroll accruals

1,023


(499)


Increase (Decrease) in deferred revenues

(592)


731


Increase in other payables and accrued expenses

1,893


486


Net cash used in operating activities

(2,481)


(1,078)







Cash flows from investing activities:





Decrease (Increase) in restricted deposit

(83)


200


Redemption of short-term deposits 

3,986


14,100


Purchase of property and equipment

(729)


(694)


Investment in marketable securities

(11,584)


(7,061)


Proceeds from redemption or sale of marketable securities

11,379


4,991


Acquisitions

-


(3,048)


Net cash provided by investing activities

2,969


8,488







Cash flows from financing activities:










Exercise of employee stock options 

606


83


Net cash provided by financing activities

606


83












Increase in cash and cash equivalents

1,094


7,493


Cash and cash equivalents at the beginning of the period

16,336


15,342







Cash and cash equivalents at the end of the period

$        17,430


$     22,835












 

 

 

Investor Relations Contact:

GK Investor Relations

Ehud Helft/Gavriel Frohwein

+1 646 688 3559

allot@gkir.com

 

 

Public Relations Contact:

Jodi Joseph Asiag

Director of Corporate Communications

jasiag@allot.com

 

 

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SOURCE Allot Ltd.

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