ALLT Allot Ltd

HOD HASHARON, Israel, May 9 /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, 2007. Revenues for the first quarter of 2007 totaled $8.3 million, a 9% increase from the $7.6 million of revenues reported in the first quarter of 2006. On a GAAP basis, net loss for the first quarter of 2007 was $434 thousand, or $0.02 per share, as compared with net income of $5 thousand, or $0.00 per share, in the first quarter of 2006. Included in the GAAP net income is the impact of share-based compensation expense. On a pro-forma, non-GAAP basis, excluding the impact of share-based compensation expense in both periods, non-GAAP net loss for the first quarter of 2007 totaled $112 thousand, or $0.00 per share, as compared with a non-GAAP net profit of $87 thousand, or $0.01 per diluted share, for the first quarter of 2006. These non-GAAP measures should be considered in addition to, and not as a substitute for, comparable GAAP measures. A full reconciliation between GAAP and non-GAAP measures is provided in the accompanying Table 3. "As we previously reported, revenues for the first quarter were below our expectation," stated Rami Hadar, Allot Communications' President and Chief Executive Officer. "This weakness was due primarily to a slowdown in sales through some of our distribution channels, principally in the Americas, which are focused on sales to enterprise, education and smaller ISPs. However, we were pleased with the success Allot had during the quarter in terms of securing larger scale DPI projects within a variety of customer verticals and geographic regions. We are encouraged by our continued progress in the Tier 1 and Tier 2 service provider accounts worldwide, which is our strategic objective. Our larger customers this quarter included 5 large service providers in Asia, EMEA and Latin America, two mobile operators and one incumbent telecom operator in Asia, and several government accounts in EMEA and Latin America. "Our high-end carrier class NetEnforcer products continue to address the needs of service providers looking to introduce intelligent IP service optimization solutions to improve their network efficiency, minimize operating costs and increase levels of customer satisfaction. In addition, our next generation 20 GB/s platform, which is tailored to meet the scalability and multi-Gigabit throughput needs of the Tier 1 carrier market, remains on track," concluded Mr. Hadar. As of March 31, 2007, Allot's cash and cash equivalents, including short and long-term deposits and investments in marketable securities, totaled $80.5 million. Financial Guidance The Company reaffirms its previous guidance for the year 2007, and anticipates that net revenues will total approximately $40 million. Conference Call & Webcast The Company's management team plans to host a live conference call and webcast today at 8:30 AM EDT 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: 1-866-966-9446, International: +44-1452-567-098, Israel: 1-809-213-849. A replay of the conference call will be available from 12:01 am EDT on May 10, 2007 through May 16, 2007, at 11:59 pm EDT. To access the replay, please dial: US: 1-866-247-4222, International: +44- 1452-55-0000. Access code for both: 6819658#. 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 our website following the conference call. About Allot Communications Allot Communications Ltd. (NASDAQ:ALLT) is a leading provider of intelligent IP service optimization solutions. Designed for carriers, service providers and enterprises, Allot solutions apply deep packet inspection (DPI) technology to transform broadband pipes into smart networks. This creates the visibility and control vital to manage applications, services and subscribers, guarantee quality of service (QoS), contain operating costs and maximize revenue. Allot believes in listening to customers and provides them access to its global network of visionaries, innovators and support engineers. For more information, please visit http://www.allot.com/. Safe Harbor Statement Information provided in this press release contains statements relating to current expectations, estimates, forecasts and projections about future financial performance, timing of product introductions and events that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to our plans, objectives and expectations for future operations and are based upon management's current estimates and projections of future results or trends. Actual future results may differ materially from those which may be expressed or implied by the forward-looking statements that we make as a result of certain risks and uncertainties, including, among others, changes in general economic and business conditions and specifically, a decline in demand for our products, our inability to timely develop and introduce new technologies, products and applications and loss of market. These factors include, but are not limited to, our inability to successfully defend ourselves against certain complaints filed against us and certain of our directors and officers in the United States District Court for the Southern District of New York, as well as risks discussed under the heading "Risk Factors" in our final prospectus for our IPO filed with the Securities and Exchange Commission on November 16, 2006 and other filings with the Securities and Exchange Commission. These forward-looking statements are made only as of the date hereof, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. This press release also is available at our Web site. 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, 2007 2006 (unaudited) Revenues $8,276 $7,571 Cost of revenues 1,974 1,700 Gross profit 6,302 5,871 Operating expenses: Research and development costs, net 2,453 1,882 Sales and marketing 4,194 3,493 General and administrative 1,043 609 Total operating expenses 7,690 5,984 Operating loss (1,388) (113) Financial and other income, net 957 121 Income (loss) before income tax expenses (431) 8 Income tax expenses 3 3 Net income (loss) (434) 5 Basic net earnings (loss) per share $(0.02) $0.00 Diluted net earnings (loss) per share $(0.02) $0.00 Weighted average number of shares used in computing basic net earnings (loss) per share 21,009,705 12,783,114 Weighted average number of shares used in computing diluted net earnings (loss) per share 23,467,686 14,298,882 TABLE - 2 ALLOT COMMUNICATIONS LTD. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (U.S. dollars in thousands) March 31, December 31, 2007 2006 (unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $9,081 $7,117 Marketable securities and short term deposit 67,404 70,423 Trade receivables 6,409 5,856 Other receivables and prepaid expenses 2,800 1,961 Inventories 4,058 3,337 Total current assets 81,754 88,694 LONG-TERM ASSETS: Marketable securities 4,001 5,750 Severance pay fund 2,851 2,648 Other assets 1,017 1,054 Total long-term assets 15,867 9,452 PROPERTY AND EQUIPMENT, NET 3,681 2,939 GOODWILL 125 99 Total assets $101,427 $101,184 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term bank credit and current maturities, net $0 $6 Trade payables 4,219 4,415 Deferred revenues 4,303 3,788 Other payables and accrued expenses 4,405 4,833 Total current liabilities 12,927 13,042 LONG-TERM LIABILITIES: Deferred revenues 1,671 1,578 Accrued severance pay 2,719 2,377 Total long-term liabilities 4,390 3,955 SHAREHOLDERS' EQUITY 84,110 84,187 Total liabilities and shareholders' equity $101,427 $101,184 TABLE - 3 ALLOT COMMUNICATIONS LTD. AND ITS SUBSIDIARIES RECONCILIATION OF GAAP AND NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. dollars in thousands, except per share data) Three months ended Three months ended March 31, 2007 March 31, 2006 GAAP Adjust- GAAP Adjust- Reported ments* Non-GAAP Reported ments* Non-GAAP Gross profit 6,302 (11) 6,313 5,871 - 5,871 Total operating expenses 7,690 (311) 7,379 5,984 (82) 5,902 Operating income (loss) (1,388) 322 (1,066) (113) 82 (31) Income (loss) before income tax expenses (benefit) (431) 322 (109) 8 8 Net income (434) 322 (112) 5 82 87 Basic net earnings (loss) per share $(0.02) $0.02 $0.00 $0.00 $0.01 $0.01 Diluted net earnings (loss) per share $(0.02) $0.02 $0.00 $0.00 $0.01 $0.01 (*) Adjustment excludes the expenses recorded for stock-based compensation of which: $11,000, $50,000, $119,000 and $142,000 resulted from cost of revenue, research and development expenses, sales and marketing expenses and general and administrative expenses, respectively. DATASOURCE: Allot Communications Ltd. CONTACT: Jay Kalish, Executive Director Investor Relations of Allot Communications Ltd., International access code +972-9-761-9365, Web site: http://www.allot.com/

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