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Press Release -- May 11th, 2010
Source: magicJack VocalTec
Tags: Equipment, Exchange, VoIP

VocalTec Announces First Quarter 2010 Results

63% year over year growth in revenues to $1.7 million;

Herzliya, Israel – May 11, 2010, VocalTec Communications Ltd. (NasdaqCM: VOCL), a global provider of VoIP and convergence solutions for communication 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.”

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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:
VocalTec
Yair Golan
+972 9 970 3803
yair@vocaltec.com

CCG Investor Relations
Kenny Green
(646) 201-9246
vocaltec@ccgisrael.com

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