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Summary financial data follows
 
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
 
  March 31, December 31,
  2013 2012
  Unaudited Audited
ASSETS    
     
CURRENT ASSETS:    
Cash and cash equivalents $ 15,133 $ 15,219
Short-term and restricted bank deposits 9,924 10,330
Short-term marketable securities and accrued interest 19,510 7,966
Trade receivables, net  25,133  24,413
Other receivables and prepaid expenses 8,247 7,274
Inventories 15,531 16,797
Total current assets 93,478 81,999
     
LONG-TERM INVESTMENTS:    
Long-term and restricted bank deposits $ 8,790 $ 9,251
Long-term marketable securities 4,104 15,762
Investments in an affiliated company 1,678 1,084
Deferred tax assets 3,565 3,565
Severance pay funds 16,447 15,772
Total long-term assets 34,584 45,434
     
PROPERTY AND EQUIPMENT, NET 3,391 3,619
     
GOODWILL AND INTANGIBLE ASSETS, NET 34,676 34,952
     
Total assets $ 166,129 $ 166,004
     
LIABILITIES AND EQUITY    
     
CURRENT LIABILITIES:    
Current maturities of long-term bank loans $ 6,936 $ 8,436
Trade payables 5,291 6,817
Other payables and accrued expenses 15,505 15,062
Deferred revenues 6,297 5,086
Total current liabilities 34,029 35,401
     
LONG-TERM LIABILITIES:    
Accrued severance pay $ 17,225 $ 16,284
Long-term bank loans 13,500 14,477
Senior convertible notes 353 353
Deferred revenues and other liabilities 1,848 1,192
Total long-term liabilities 32,926 32,306
     
Total equity 99,174 98,297
Total liabilities and equity  $ 166,129  $ 166,004
 
 
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except per share data
 
  Three months ended
  March 31,
  2013 2012
  (Unaudited)
Revenues:    
Products 26,171 26,818
Services 6,097 5,495
     
Total Revenues $ 32,268 $32,313
     
Cost of revenues:    
Products 11,794 11,971
Services 1,538 1,481
     
Total Cost of revenues 13,332 13,452
     
Gross profit 18,936 18,861
     
Operating expenses:    
Research and development, net 7,310 8,118
Selling and marketing 9,214 10,496
General and administrative 2,039 1,959
     
Total operating expenses 18,563 20,573
     
Operating income (loss) 373 (1,712)
Financial income (expenses), net (203) 228
     
Income (loss) before taxes on income 170 (1,484)
Taxes on income, net (78) (84)
Equity in profit (losses) of an affiliated companies (21) 10
     
Net income (loss) $ 71 $ (1,558)
     
Basic net earnings (loss) per share $ 0.00 $ (0.04)
     
Diluted net earnings (loss) per share $ 0.00 $ (0.04)
Weighted average number of shares used in computing basic net earnings (loss) per share (in thousands)  38,009   40,270
Weighted average number of shares used in computing diluted net earnings (loss) per share (in thousands)  38,577  40,270
 
 
AUDIOCODES LTD. AND ITS SUBSIDIARIES
NON-GAAP PROFORMA STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except per share data
 
  Three months ended
  March 31,
  2013 2012
  (Unaudited)  
Revenues:    
Products 26,171 26,818
Services 6,097 5,495
     
Total Revenues $ 32,268 $32,313
Cost of revenues:    
Products 11,624 11,781
Services 1,499 1,442
     
Total Cost of revenues (1) (2) 13,123 13,223
     
Gross profit 19,145 19,090
     
Operating expenses:    
Research and development, net (1) 7,217 7,982
Selling and marketing (1) (2) 9,033 10,298
General and administrative (1) 1,902 1,791
     
Total operating expenses 18,152 20,071
     
Operating income (loss) 993 (981)
Financial income (expenses), net (203) 228
     
Income (loss) before taxes on income 790 (753)
Taxes on income, net (78) (84)
Equity in profit (losses) of an affiliated companies (21) 10
     
Net income (loss) $ 691 $ (827)
     
Diluted net earnings (loss) per share $ 0.02 $ (0.02)
     
Weighted average number of shares used in computing diluted net earnings (loss) per share (in thousands)  38,896  40,270
 
(1) Excluding stock-based compensation expenses related to options and restricted stock units granted to employees and others.
(2) Excluding amortization of intangible assets related to the acquisitions of Nuera, Netrake and CTI Squared.
 
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 LTD. AND ITS SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)
U.S. dollars in thousands, except per share data
 
  Three months ended
  March 31,
  2013 2012
  (Unaudited)
GAAP net income (loss) $ 71 $ (1,558)
     
GAAP net earnings (loss) per share $ 0.00 $ (0.04)
     
Cost of revenues:    
Stock-based compensation (1) 9 23
Amortization expenses (2) 200 206
  209 229
Research and development, net:    
Stock-based compensation (1) 93 136
     
Selling and marketing:    
Stock-based compensation (1) 105 122
Amortization expenses (2) 76 76
  181 198
General and administrative:    
Stock-based compensation (1) 137 168
     
Non-GAAP net income (loss) $ 691 $ (827)
Non-GAAP Diluted net earnings (loss) per share $ 0.02 $ (0.02)
 
(1) Stock-based compensation expenses related to options and restricted stock units granted to employees and others.
(2) Amortization of intangible assets related to the acquisitions of Nuera, Netrake and CTI Squared.
 
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 LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
U.S. dollars in thousands
 
  Three months ended
  March 31,
  2013 2012
  ( Unaudited)
Cash flows from operating activities:    
Net income (loss)  $ 71  $ (1,558)
Adjustments required to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization  782 706
Amortization of marketable securities premiums and accretion of discounts, net 107  108
Equity in profit (losses) of affiliated company and interest on loans to affiliated company  21 (10)
Increase (decrease) in accrued severance pay, net 266 (105)
Stock-based compensation expenses 344 449
Decrease in accrued interest on marketable securities, bank deposits and structured notes  3 
Decrease (increase) in trade receivables, net (720) 4,348
Increase in other receivables and prepaid expenses (640)   (1,433)
Decrease in inventories 1,266 428
Decrease in trade payables  (1,526) (5,267)
Increase in deferred revenues 1,867 2,273
Increase in other payables and accrued expenses 838  681
     
Net cash provided by operating activities  2,683 623
     
Cash flows from investing activities:    
Short-term deposits, net 406 1,807
Net loans provided to affiliated company (615) --
Proceeds from long-term bank deposits 461 600
Purchase of property and equipment  (278)  (651)
Net cash provided by (used in) investing activities (26) 1,756
 
 
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
U.S. dollars in thousands
 
  Three months ended
  March 31,
  2013 2012
  ( Unaudited)
Cash flows from financing activities:    
Purchase of treasury stock -- (2,513)
Repayment of long-term bank loans  (2,477) (2,355)
Payment for acquisition of NSC non-controlling interest (395) (336)
Proceeds from issuance of shares upon exercise of options, warrants and employee stock purchase plan 129 35
     
Net cash used in financing activities  (2,743) (5,169)
     
Decrease in cash and cash equivalents (86)  (2,790)
Cash and cash equivalents at the beginning of the period  15,219  28,257
     
Cash and cash equivalents at the end of the period  $ 15,133 $ 25,467
CONTACT: Company Contacts         Guy Avidan,         VP Finance & CFO         AudioCodes         Tel: +972-3-976-4000         guy.avidan@audiocodes.com                  Shirley Nakar,         Director, Investor Relations         AudioCodes         Tel: +972-3-976-4000         shirley@audiocodes.com                  IR Agency Contact         Erik Knettel,         Grayling         Tel: +1-646-284-9415         erik.knettel@grayling.com

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