VocalTec Announces First Quarter 2010 Results
63% year over year growth in revenues to $1.7 million
HERZLIYA, Israel, May 11 /PRNewswire-FirstCall/ -- VocalTec Communications Ltd. (Nasdaq: VOCL), a global provider of VoIP and convergence solutions for communications service providers, today reported results for the first quarter ended March 31, 2010.
Revenues for the first quarter of 2010 were $1.7 million, an increase of 63% over the $1.0 million reported in the first quarter of 2009, resulting from growth in product sales.
Gross margin for the first quarter of 2010 was 61% compared with 64% for the first quarter of 2009.
The non-GAAP financial measures included below exclude the amortization of intangible assets and share based compensation expenses, which amounted to $0.2 million in the quarter.
On a non-GAAP basis, operating expenses in the first quarter of 2010 were $2.1 million compared with $1.9 million in the first quarter of 2009. The increase in operating expenses was primarily attributed to expenses relating to the new mobile activity as a result of the Outsmart acquisition.
On a non-GAAP basis, operating loss for the first quarter of 2010 was $1.0 million compared to a non-GAAP operating loss of $1.2 million in the first quarter of 2009.
On a non-GAAP basis, net loss for the first quarter of 2010 was $1.1 million or $0.19 per share, compared with a non-GAAP net loss of $1.1 million, or $0.17 per share, in the first quarter of 2009.
Net loss on a GAAP basis for the first quarter of 2010 was $1.3 million or $0.22 per share, compared with a net loss of $1.5 million, or $0.21 per share, in the first quarter of 2009. In the first quarter of 2010, amortization of intangible assets and share based compensation expenses amounted to $0.03 per share.
As of March 31, 2010, the Company had net cash and cash equivalents, short-term bank deposits and restricted cash on the balance sheet, in the amount of $8.9 million, or $1.51 per share.
Commenting on the results, Ido Gur, VocalTec's President and CEO, said, "Our first quarter 2010 results marks a strong year over year improvement in revenues, and we believe is a good start to 2010. Our expenses increased during the quarter due to our increased investment in our new mobile activity in which we see significant potential. As the year progresses and we realize many of the synergies of our recent acquisition, we plan our quarterly operating expenses to fall to the 2009 levels."
Mr. Gur continued, "We are on track to achieve accelerated growth in our 2010 revenues compared to 2009, and we remain focused on our goal of sustained profitability. In parallel to our ongoing activity, we are investing in our ability to capitalize on mobile VoIP, which represents a significant growth market for us. Based on feedback from potential customers, we see strong interest in our current mobile VoIP offering, increasing our confidence level in our strategic direction."
Conference Call
Mr. Ido Gur, President and CEO of VocalTec, invites investors to participate in a conference call scheduled for later today, Tuesday, May 11, 2010. The conference call will be held at 9:00am ET. On the call, VocalTec's management will review and discuss the results and will be available to answer questions.
To participate, please call one of the following teleconferencing numbers, 5 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international dial-in number.
US Dial-in Number: 1 866 860 9642
ISRAEL Dial-in Number: 03 918 0644
INTERNATIONAL Dial-in Number: +972 3 918 0664
For those unable to listen to the live call, a replay of the call will be available from a link in the investor relations section of VocalTec's website, at: www.vocaltec.com
About VocalTec
VocalTec Communications (NasdaqCM: VOCL) is a global provider of carrier-class Voice-over-IP and Convergence solutions for fixed and wireless service providers. A pioneer in VoIP technology since 1994, VocalTec develops and markets an extensive VoIP offering including VoIP peering, VoIP trunking, SIP to SS7, Softswitch and Mobile VoIP Solutions enabling the flexible deployment of next-generation networks (NGNs). Partnering with prominent system integrators and equipment manufacturers, VocalTec serves an installed base of dozens of leading carriers worldwide. VocalTec is led by a management team comprised of respected industry veterans.
Visit our website at http://www.vocaltec.com
Check out our blog at http://blog.vocaltec.com/
Follow us on Twitter at http://twitter.com/vocaltec
Forward Looking Statements
This press release contains historical information and forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 with respect to the business, financial condition and results of operations of VocalTec. The words "believe," "expect," "intend," "plan," "should" and similar expressions are intended to identify forward-looking statements. Such statements reflect the current views, assumptions and expectations of the Company with respect to future events and are subject to risks and uncertainties. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in the telecommunications and VoIP markets and in general economic and business conditions, loss of key customers and unpredictable sales cycles, competitive pressures, market acceptance of new products, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors, both referenced and not referenced in this press release. Various risks and uncertainties may affect the Company and its results of operations, as described in reports filed by the Company with the Securities and Exchange Commission from time to time. Should one or more of these or other risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected, intended, planned or projected. The Company does not intend or assume any obligation to update these forward-looking statements.
Contacts: |
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VocalTec |
CCG Investor Relations |
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Yair Golan |
Kenny Green |
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+972 9 970 3803 |
(646) 201-9246 |
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CONSOLIDATED STATEMENT OF OPERATIONS Reconciliation of GAAP to non GAAP results * All data in thousands of U.S. dollars |
|||||
Three months ended |
Three months ended |
||||
March 31, |
March 31, |
||||
2010 |
2009 |
||||
GAAP results (as reported) |
GAAP results (as reported) |
||||
Sales |
|||||
Products |
1,294 |
541 |
|||
Services |
385 |
490 |
|||
1,679 |
1,031 |
||||
Cost of sales |
|||||
Products |
540 |
245 |
|||
Services |
116 |
124 |
|||
656 |
369 |
||||
Amortization of intangible assets |
- |
- |
|||
656 |
369 |
||||
Gross profit |
1,023 |
662 |
|||
Operating Expenses |
|||||
Research and development, net. |
730 |
757 |
|||
Selling and marketing |
1,024 |
865 |
|||
General and administrative |
486 |
606 |
|||
Amortization of intangible assets |
15 |
6 |
|||
Total Operating Expenses |
2,255 |
2,234 |
|||
Operating loss |
(1,232) |
(1,572) |
|||
Other Income |
|||||
Financial Income (expense), net |
(53) |
108 |
|||
Net incomet (loss) before income taxes |
(1,285) |
(1,464) |
|||
Income taxes (tax benefit) |
|||||
Net loss |
(1,285) |
(1,464) |
|||
GAAP net loss |
(1,285) |
(1,464) |
|||
Adjustments |
|||||
Impairment of goodwill |
|||||
Amortization of intangible assets |
|||||
included in cost of sales |
- |
- |
|||
included in operating expenses |
15 |
6 |
|||
Equity based compensation expense |
|||||
included in cost of sales |
4 |
5 |
|||
included in research and development |
56 |
93 |
|||
included in sales and marketing |
47 |
61 |
|||
included in general and administrative |
69 |
166 |
|||
Non-GAAP net loss |
(1,094) |
(1,133) |
|||
*To supplement our consolidated financial statement presented in accordance with generally accepted accounting principles (GAAP), we use NON-GAAP measures of operating results, net income, which are adjusted from results based on GAAP to exclude the expense we recorded for share-based compensation and amortization of intangible assets. These NON-GAAP financial measures are provided to enhance overall understanding of our current financial performance and our prospects for the future. Specifically, we believe the NON-GAAP results provide useful information to both management and investors as these NON- GAAP results exclude matters that we believe are not indicative of our core operating results. Further, these NON-GAAP results are one of the primary indicators management uses for assessing our performance, allocating resources and planning and forecasting future periods. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. These NON-GAAP measures may be different than the NON-GAAP measures used by other companies. |
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VOCALTEC COMMUNICATIONS CONSOLIDATED BALANCE (In thousands of U.S. dollars) |
||||||
March 31 |
December 31 |
|||||
2010 |
2009 |
|||||
Current Assets |
||||||
Cash and Cash equivalents |
2,102 |
7,510 |
||||
Short term deposits |
6,723 |
3,049 |
||||
Restricted cash |
54 |
23 |
||||
Trade receivables, net |
165 |
199 |
||||
Unbilled receivables |
838 |
|||||
Other receivables |
816 |
459 |
||||
Severance pay funds |
76 |
- |
||||
Inventories |
175 |
63 |
||||
Work in progress |
378 |
762 |
||||
Total Current Assets |
11,327 |
12,065 |
||||
Severance pay funds |
752 |
826 |
||||
Equipment |
477 |
487 |
||||
Intangible assets, net |
461 |
480 |
||||
Total Assets |
13,017 |
13,858 |
||||
Current Liabilities |
||||||
Trade payable |
787 |
851 |
||||
Accrued expenses |
2,045 |
2,053 |
||||
Accrued severance pay |
76 |
- |
||||
Deferred revenues |
1,624 |
1,313 |
||||
Total Current Liabilities |
4,532 |
4,217 |
||||
Long Term Liabilities |
||||||
Accrued severance pay |
963 |
1,030 |
||||
Other long term liabilities |
103 |
107 |
||||
Total Long Term |
1,066 |
1,137 |
||||
Total |
5,598 |
5,354 |
||||
Shareholders Equity |
||||||
Share capital |
218 |
216 |
||||
Additional paid-in capital |
96,018 |
95,820 |
||||
Treasury stock |
(669) |
(669) |
||||
Accumulated deficit |
(88,148) |
(86,863) |
||||
Total Shareholders Equity |
7,419 |
8,504 |
||||
Total Liabilities and Shareholders Equity |
13,017 |
13,858 |
||||
SOURCE VocalTec Communications Ltd.
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