AudioCodes(AUDC) - 2022 Q4 - Annual Report

Audit and Tax Fees - Audit fees for 2022 totaled $524,000, an increase of 19% from $440,000 in 2021[287] - Tax fees for 2022 amounted to $194,000, up 81% from $107,000 in 2021[287] - Total fees for 2022 reached $718,000, representing a 31% increase compared to $547,000 in 2021[287] Share Repurchase and Dividends - A total of 1,513,207 ordinary shares were purchased in 2022 at an average price of $25.15 per share[293] - The approximate dollar value of shares that may yet be purchased under the program as of December 31, 2022, is $20,349,414[293] - The company purchased treasury stock amounting to $38,099,000 in 2022[330] - The Company declared cash dividends totaling $11,552 thousand in 2022, an increase from $10,865 thousand in 2021[334] Financial Performance - The company reported a net loss for the year ended December 31, 2022, compared to a profit in the previous year, highlighting a significant shift in financial performance[307] - Total revenues for 2022 reached $275,093 thousand, an increase of 10.5% from $248,920 thousand in 2021[326] - Net income for 2022 was $28,466 thousand, a decrease of 15.4% from $33,751 thousand in 2021[327] - The company reported a total comprehensive income of $17,736 thousand for 2022, down from $31,756 thousand in 2021[327] Assets and Liabilities - Total assets decreased from $349,364,000 in 2021 to $323,831,000 in 2022, a decline of approximately 7.3%[322] - Total liabilities decreased to $134,071 thousand in 2022, down from $143,866 thousand in 2021, a reduction of 6.0%[324] - Total shareholders' equity decreased to $189,760 thousand in 2022, down from $205,498 thousand in 2021, a decline of 7.7%[324] Cash Flow and Investments - Cash flows from operating activities provided $8,281,000 in 2022, significantly lower than $47,344,000 in 2021[332] - The net cash used in investing activities was $(19,673,000) in 2022, compared to $42,622,000 in 2021[332] - Cash, cash equivalents, and restricted cash at the end of 2022 amounted to $24,535 thousand, a significant decrease from $84,523 thousand at the end of 2021[345] Inventory and Receivables - Trade receivables increased from $48,956,000 in 2021 to $56,424,000 in 2022, marking an increase of approximately 15.5%[322] - Inventories rose from $23,988,000 in 2021 to $36,377,000 in 2022, reflecting an increase of about 51.6%[322] - The company reported a decrease in trade receivables of $20,567,000 in 2022, compared to a decrease of $14,438,000 in 2021[332] Research and Development - Research and development expenses increased to $59,842 thousand, up from $53,396 thousand in 2021, reflecting a growth of 12.9%[326] - Research and development grants recognized were $624, $570, and $388 for the years ended December 31, 2022, 2021, and 2020, respectively[362] Taxation - The company recorded a taxable income of $34,183,000 for the year ended December 31, 2022, compared to $39,647,000 in 2021, reflecting a decrease of approximately 11.7%[443] - The current tax expense for domestic operations was $3,707,000 in 2022, significantly higher than $819,000 in 2021, indicating a substantial increase in tax obligations[446] - The effective corporate tax rate for Israeli companies remains at 23% for the years ended December 31, 2022, 2021, and 2020[441] Marketable Securities and Investments - The company’s marketable securities as of December 31, 2022, had a fair value of $78,066,000, down from $89,976,000 in 2021, reflecting unrealized losses of $8,211,000[395] - The company classified all marketable securities as available-for-sale as of December 31, 2022, impacting its financial reporting[342] Internal Controls and Compliance - The company evaluated its disclosure controls and procedures as effective as of December 31, 2022, ensuring timely decisions regarding required disclosures[285] - Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting[285] - The company maintained effective internal control over financial reporting as of December 31, 2022, based on COSO criteria[317] Geopolitical and Economic Factors - The ongoing conflict in Ukraine may have lasting impacts on the company's financial condition and operations due to geopolitical instability[337] - The company generated a significant portion of its revenues in U.S. dollars, reflecting its primary economic environment[339] Employee Compensation and Benefits - Share-based compensation related to options and RSUs granted to employees and non-employees increased to $15,122,000 in 2022 from $14,164,000 in 2021[332] - The total share-based compensation expenses for the year ended December 31, 2022, amounted to $15,122, compared to $14,164 in 2021 and $8,771 in 2020[375] Acquisitions - The acquisition of Callverso Ltd. was completed on November 10, 2021, for a total purchase price of $3,000,000, which included $2,900,000 in cash and an earn-out potential of up to $6,000,000 over three years based on sales performance[387][388]. - The fair value of identifiable assets acquired from Callverso was estimated at $2,311,000, with net identifiable assets acquired totaling $1,662,000 and goodwill of $1,338,000 attributed to expected synergies[391].