zk1110426.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
OF THE SECURITIES EXCHANGE AS OF 1934

For the month of September 2011
Commission file number: 000-27648

MAGICJACK VOCALTEC LTD.

(Translation of registrant’s name into English)

12 BENNY GAON STREET, BUILDING 2B
POLEG INDUSTRIAL AREA, NETANYA, ISRAEL 42504
(Address of principal executive office)
 
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F x    Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o No x

If “Yes” is marked, indicate below the file number assigned to registrant in connection with Rule 12g3-2(b). Not applicable.
 
Attached hereto are selected quarterly and year to date unaudited condensed consolidated financial information for magicJack VocalTec Ltd. and its subsidiaries, for the period between January 1, 2010 and June 30, 2011.
 
 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
MAGICJACK VOCALTEC LTD.
(Registrant)
  
       
 
By:
/s/ Daniel Borislow  
  Name: Daniel Borislow  
  Title: President and Chief Executive Officer  
       
Date: September 13, 2011
 
 
 
 
 
The following unaudited consolidated financial information presents summary information and does not include notes and other information required by Generally Accepted Accounting Principles in the United States. This information should be read in conjunction with magicJack VocalTec’s audited consolidated financial statements included in the annual report on Form 20-F for the year ended December 31, 2010.
 
MAGICJACK VOCALTEC LTD AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS INFORMATION
(in thousands, except per share information)
 
   
Fiscal Quarter Ended
  
   
March 31,
2010
    
June 30,
2010
    
September 30,
2010
    
December 31,
2010
    
March 31,
2011
    
June 30,
2011
  
                                     
Statement of Operations Information:
              
 
                    
Revenues
   $ 30,798     $ 30,579     $ 29,788     $ 28,513     $ 30,086     $ 28,818  
Cost of revenues
     15,083       14,021       13,750       14,319       12,993       12,096  
   Gross profit
     15,715       16,558       16,038       14,194       17,093       16,722  
Operating expenses
     19,244       15,303       15,099       15,152       14,162       14,248  
   Operating (loss) income
     (3,529 )     1,255       939       (958 )     2,931       2,474  
Interest expense
     (146 )     -       -       -       -       (40 )
Other income (expense), net
     1,156       (798 )     57       203       (1,103 )     750  
Gain on extinguishment of debt
     -       234       -       -       -       -  
   (Loss) income before provision (benefit) for
                                                
      income taxes
     (2,519 )     691       996       (755 )     1,828       3,184  
Provision (benefit) for income taxes
     7       -       180       (219 )     28       24  
   Net (loss) income
   $ (2,526 )   $ 691     $ 816     $ (536 )   $ 1,800     $ 3,160  
                                                 
(Loss) earnings per ordinary share:
                                                
   Basic
   $ (0.28 )   $ 0.05     $ 0.09     $ (0.05 )   $ 0.16     $ 0.28  
   Diluted
   $ (0.28 )   $ 0.05     $ 0.09     $ (0.05 )   $ 0.15     $ 0.27  
 
 
 

MAGICJACK VOCALTEC LTD AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION
(in thousands)
 
   
March 31,
    
June 30,
    
September 30,
    
December 31,
    
March 31,
    
June 30,
  
   
2010
    
2010
    
2010
    
2010
    
2011
    
2011
  
ASSETS
                                    
Current assets:
                                    
   Cash and cash equivalents
   $ 12,280     $ 10,925     $ 21,383     $ 28,628     $ 27,927     $ 19,463  
   Marketable securities, at fair value
     22,932       23,103       21,577       19,331       21,086       20,200  
   Accounts receivable, net
     11,458       9,685       12,730       10,336       11,423       11,662  
   Inventories
     2,700       2,885       3,204       3,008       4,303       6,134  
   Deferred costs
     9,025       9,343       8,638       6,615       5,991       5,170  
   Deposits and other current assets
     1,301       648       1,793       1,541       1,151       1,616  
      Total current assets
     59,696       56,589       69,325       69,459       71,881       64,245  
                                                 
Property and equipment, net
     2,251       1,907       3,685       3,771       3,718       3,402  
Intangible assets, net
     3,123       2,896       8,970       7,275       6,779       12,494  
Goodwill
     17,218       17,218       29,609       32,304       32,304       32,304  
Deposits and other non-current assets
     1,535       1,535       2,064       1,739       1,700       1,810  
      Total assets
   $ 83,823     $ 80,145     $ 113,653     $ 114,548     $ 116,382     $ 114,255  
                                                 
LIABILITIES AND CAPITAL DEFICIT
                                                
Current liabilities:
                                                
   Accounts payable
   $ 5,424     $ 5,141     $ 5,358     $ 2,590     $ 5,417     $ 4,494  
   Accrued expenses and other current liabilities
     8,200       7,448       7,013       9,834       10,419       11,147  
   Accrued bonuses
     -       -       -       1,000       -       -  
   Deferred revenue, current portion
     56,813       55,532       57,688       58,087       54,680       49,025  
   Current portion of long-term debt
     3,943       -       -       -       -       -  
      Total current liabilities
     74,380       68,121       70,059       71,511       70,516       64,666  
                                                 
Deferred revenue, net of current portion
     27,844       31,099       34,183       34,121       39,852       44,151  
Other non-current liabilities
     -       -       1,067       664       629       3,953  
      Total liabilities
     102,224       99,220       105,309       106,296       110,997       112,770  
                                                 
Redeemable ordinary shares, No par value
     5,915       6,067       8,833       8,373       7,200       8,210  
Capital deficit:
                                                
      Total capital deficit
     (24,316 )     (25,142 )     (489 )     (121 )     (1,815 )     (6,725 )
         Total liabilities and capital deficit
   $ 83,823     $ 80,145     $ 113,653     $ 114,548     $ 116,382     $ 114,255  
                                                 
Additional Selected Share Information
                                                
   Ordinary shares outstanding at end of period
     10,523       10,563       11,733       11,806       11,538       11,249  
   Treasury shares repurchased during quarter
     -       -       3       -       342       395  
 
 
 
 
 
MAGICJACK VOCALTEC LTD AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS INFORMATION
(in thousands)
 
   
Three Months
    
Six Months
    
Nine Months
    
Twelve Months
    
Three Months
    
Six Months
  
   
Ended
    
Ended
    
Ended
    
Ended
    
Ended
    
Ended
  
   
March 31,
    
June 30,
    
September 30,
    
December 31,
    
March 31,
    
June 30,
  
   
2010
    
2010
    
2010
    
2010
    
2011
    
2011
  
Cash flows from operating activities:
                                    
   Net (loss) income
   $ (2,526 )   $ (1,835 )   $ (1,019 )   $ (1,555 )   $ 1,800     $ 4,960  
   Adjustments to reconcile net (loss) income to
                                                
      net cash provided by operating activities:
                                                
         Provision for doubtful accounts and billing adjustments
     666       1,901       3,209       6,701       2,742       5,071  
         Stock-based compensation
     4,290       4,990       5,105       5,075       56       324  
         Depreciation and amortization
     729       1,421       2,127       2,946       992       2,055  
         Deferred income tax provision
     -       -       -       187       23       46  
         Interest expense - non-cash
     28       85       85       85       -       40  
         Realized (gain) loss on sale of securities
     (902 )     237       437       694       1,309       757  
         Gain on extinguishment of debt
     -       (234 )     (234 )     (234 )     -       -  
         Contributed services
     -       -       -       75       19       38  
   Changes in operating assets and liabilities
     7,094       9,283       5,796       9,388       (481 )     (7,194 )
Net cash provided by operating activities
     9,379       15,848       15,506       23,362       6,460       6,097  
                                                 
Cash flows from investing activities:
                                                
      Sales of marketable securities, net of purchases
     (5,442 )     (8,791 )     (5,437 )     (4,000 )     (1,120 )     (217 )
      Proceeds from sales of short positions, net of purchases
     -       -       -       -       -       140  
      Purchases of property and equipment
     (39 )     (724 )     (961 )     (2,647 )     (242 )     (617 )
      Merger with Vocaltec, net of cash acquired
     -       -       7,777       7,777       -       -  
      Acquisition of Dialmaxx, net of cash acquired
     -       -       -       (924 )     -       -  
      Acquisition of other intangible assets
     -       (24 )     (37 )     (61 )     (2 )     (1,517 )
   Net cash (used in) provided by investing activities
     (5,481 )     (9,539 )     1,342       145       (1,364 )     (2,211 )
                                                 
Cash flows from financing activities:
                                                
      Proceeds from sale of ordinary shares, net of
                                                
         issuance costs
     -       -       -       565       -       -  
      Repurchase of ordinary shares to settle bonus
                                                
         withholding liability
     (3,981 )     (3,981 )     (3,981 )     (3,960 )     -       -  
      Purchase of treasury stock
     -       -       (81 )     (81 )     (6,518 )     (14,406 )
      Repayment of debt
     (1,000 )     (4,766 )     (4,766 )     (4,766 )     -       -  
      Proceeds from exercise of ordinary share options
     28       28       28       28       721       1,355  
   Net cash used in financing activities
     (4,953 )     (8,719 )     (8,800 )     (8,214 )     (5,797 )     (13,051 )
Net (decrease) increase in cash and cash equivalents
     (1,055 )     (2,410 )     8,048       15,293       (701 )     (9,165 )
Cash and cash equivalents, beginning of period
     13,335       13,335       13,335       13,335       28,628       28,628  
Cash and cash equivalents, end of period
   $ 12,280     $ 10,925     $ 21,383     $ 28,628     $ 27,927     $ 19,463