- Fourth quarter non-GAAP net income of $4.2 million; non-GAAP EPS grows to $0.14 from $0.13 in the third quarter of 2011, despite dilution effect due to public offering

- Cash, cash equivalents and marketable securities totaled $159.4 million; generated approximately $7.7 million in cash from operations during the quarter; $15 million for the year 2011

- Revenues for 2011 increase by 36% to $77.8 million; non-GAAP EPS reaches $0.46

Allot Communications Ltd. (NASDAQ: [ ALLT ]), a leading supplier of service optimization and revenue generation solutions for fixed and mobile broadband service providers worldwide, today announced that sales and profitability continued to increase during the fourth quarter of 2011, and that the Company's net profit tripled for the year 2011 on a non-GAAP basis.

Total revenues for the fourth quarter of 2011 reached $22 million, a 36% increase from the $16.2 million of revenues reported for the fourth quarter of 2010, and a 10% increase from the $20.1 million of revenues reported for the third quarter of 2011. On a GAAP basis, net profit for the fourth quarter of 2011 was $3.5 million, or $0.13 per basic share and $0.12 per diluted share. This compares with net profit of $1.3 million, or $0.06 per basic share and $0.05 per diluted share, in the fourth quarter of 2010, and net profit of $2.1 million, or $0.09 per basic share and $0.08 per diluted share, in the third quarter of 2011. For the full year 2011, revenues reached $77.8 million, representing a 36% increase over the $57 million of revenues in 2010. On a GAAP basis, net profit for the year 2011 was $8.8 million, or $0.35 per basic share and $0.33 per diluted share, as compared with a net loss of $5.8 million, or $0.25 per share (basic and diluted), in 2010.

The weighted average number of diluted shares increased in the fourth quarter of 2011 reflecting the issuance of new shares as part of the Company's public offering which closed on November 15, 2011.

On a non-GAAP basis, excluding the impact of share-based compensation and amortization of certain intangibles, non-GAAP net profit for the fourth quarter of 2011 totaled $4.2 million, or $0.15 per basic share and $0.14 per diluted share, compared with non-GAAP net profit of $1.8 million, or $0.08 per basic share and $0.07 per diluted share, for the fourth quarter of 2010, and non-GAAP net profit $3.4 million or $0.14 per basic share and $0.13 per diluted share, for the third quarter of 2011. For the full year 2011, excluding the impact of share-based compensation and amortization of certain intangibles and one-time expenses related to M&A activities, non-GAAP net profit for the year 2011 reached $12.5 million, or $0.50 per basic share and $0.46 per diluted share, compared with a non-GAAP net profit of $4.1 million, or $0.18 per basic share and $0.17 per diluted share, for the full year 2010.

These non-GAAP measures should be considered in addition to, and not as a substitute for, comparable GAAP measures. The non-GAAP results and a full reconciliation between GAAP and non-GAAP results are provided in the accompanying Tables 2 and 3. The Company provides these non-GAAP financial measures because it believes that they present a better measure of the Company's core business and management uses the non-GAAP measures internally to evaluate the Company's ongoing performance. Accordingly, the Company believes that they are useful to investors in enhancing an understanding of the Company's operating performance.

"Allot continued strong growth in 2011, primarily attributable to its leading position in the mobile market," commented Rami Hadar, Allot Communications' President and Chief Executive Officer. "With video-based applications becoming an ever-increasing challenge for wireline and mobile data networks, we are seeing an increasing number of opportunities throughout Europe, APAC and the Americas. Our Service Gateway provides the broadest and most robust feature set and services for Tier 1 operators. It is a major reason for our being chosen for the largest mobile DPI deployment in the world, which covers both 3G and 4G/LTE topologies."

Recently, the Company achieved the following significant goals:

During the quarter, received orders from 10 large service providers, 5 of which represented new customers; of these, three new large customers were mobile operators;
Deepened penetration into a second Tier 1 account in Europe;
Announced a $9.5 million order from a Tier 1 wireline account in APAC;
Completed LTE deployments in Europe: and
Raised $85 million in a secondary offering.

As of December 31, 2011, cash, cash equivalents, short term deposits and marketable securities totaled $159.4 million, with no debt.

Conference Call & Webcast

The Allot management team will host a conference call to discuss its fourth quarter and year end 2011 earnings results today at 8:30 AM ET, 3:30 PM Israel time.

To access the conference call, please dial one of the following numbers: US: +1-646-254-3364, UK: +44(0)20-7136-2054, Israel: +972-3-721-9510, participant code 4434985.

A replay of the conference call will be available from 12:01 am ET on February 8, 2012 through March 8, 2012 at 11:59 pm ET. To access the replay, please dial: US: +1-347-366-9565, UK: +44(0)20-7111-1244, access code: 4434985#.

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 the website following the conference call.

About Allot Communications

Allot Communications Ltd. (NASDAQ: [ ALLT ]) is a leading provider of intelligent data traffic optimization and monetization solutions for fixed and mobile broadband operators and large enterprises. Allot's scalable, carrier-grade solutions provide the visibility, topology awareness, security, application control and subscriber management that are vital to managing fixed and mobile data, enhancing user experience, containing operating costs, and enabling service providers to generate revenues from their broadband networks. Allot's rich portfolio of solutions leverages dynamic actionable recognition technology (DART) to transform broadband pipes into smart networks that can rapidly and efficiently deploy value added Internet services. For more information, please visit [ http://www.allot.com ].

Safe Harbor Statement

Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to the Company's plans, objectives and expectations for future operations. These forward-looking statements are based upon management's current estimates and projections of future results or trends. Actual results may differ materially from those projected as a result of certain risks and uncertainties. These factors include, but are not limited to: our ability to increase the breadth and functionality of the Service Gateway platform through additional partnerships, changes in general economic and business conditions; the Company's inability to develop and introduce new technologies, products and applications; loss of market; and other factors discussed under the heading "Risk Factors" in the Company's annual report on Form 20-F filed with the Securities and Exchange Commission. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

 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 Year Ended December 31, December 31, ------------------------- -------------------------- 2011 2010 2011 2010 -------- -------- --------- -------- (Unaudited) (Unaudited) (Audited) --------------------------- --------- -------- Revenues $ 22,028 $ 16,207 $ 77,753 $ 56,972 Cost of revenues 6,290 4,590 22,175 15,985 -------- -------- --------- -------- Gross profit 15,738 11,617 55,578 40,987 -------- -------- --------- -------- Operating expenses: Research and development costs, net 3,692 3,003 13,222 11,264 Sales and marketing 7,268 5,747 26,543 22,021 General and administrative 1,689 1,454 7,474 5,473 -------- -------- --------- -------- Total operating expenses 12,649 10,204 47,239 38,758 Operating profit 3,089 1,413 8,339 2,229 Financial and other income (expenses), net 238 (176) 415 (7,907) -------- -------- --------- -------- Profit (loss) before income tax expenses 3,327 1,237 8,754 (5,678) Tax expenses (income) (170) (112) (55) 84 -------- -------- --------- -------- Net profit (loss) 3,497 1,349 8,809 (5,762) -------- -------- --------- -------- Basic net profit (loss) per share $ 0.13 $ 0.06 $ 0.35 $ (0.25) -------- -------- --------- -------- Diluted net profit (loss) per share $ 0.12 $ 0.05 $ 0.33 $ (0.25) -------- -------- --------- -------- Weighted average number of shares used in computing basic net earnings per share 27,709,271 23,219,144 25,047,771 22,831,014 -------- -------- --------- -------- Weighted average number of shares used in computing diluted net earnings per share 29,556,655 24,627,967 27,071,872 22,831,014 -------- -------- --------- --------

 TABLE - 2 ALLOT COMMUNICATIONS LTD. AND ITS SUBSIDIARIES RECONCILATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. dollars in thousands, except per share data) Three Months Ended Year Ended December 31, December 31, ------------------------- -------------------- 2011 2010 2011 2010 ------- ------ ------ ----- (Unaudited) (Unaudited) ------------------------- -------------------- GAAP net profit (loss) as reported $ 3,497 $ 1,349 $ 8,809 $ (5,762) ------- ------ ------ ----- Non-GAAP adjustments Expenses recorded for stock-based compensation Cost of revenues 35 23 103 95 Research and development costs, net 155 79 442 352 Sales and marketing 317 196 1,001 851 General and administrative 179 163 710 692 Expenses related to M&A activities General and administrative - 1,336 Core technology amortization- cost of revenues 30 30 121 120 ------- ------ ------ ----- Total adjustments to operating profit 716 491 3,713 2,110 Financial and other expenses, net 7,712 ------- ------ ------ ----- Total adjustments 716 491 3,713 9,822 ------- ------ ------ ----- Non-GAAP net profit $ 4,213 $ 1,840 $ 12,522 $ 4,060 ------- ------ ------ ----- Non- GAAP basic net profit per share $ 0.15 $ 0.08 $ 0.50 $ 0.18 ------- ------ ------ ----- Non- GAAP diluted net profit per share $ 0.14 $ 0.07 $ 0.46 $ 0.17 ------- ------ ------ ----- Weighted average number of shares used in computing basic net earnings per share 27,709,271 23,219,144 25,047,771 22,831,014 ------- ------ ------ ----- Weighted average number of shares used in computing diluted net earnings per share 29,668,381 25,050,767 27,183,472 24,113,668 ------- ------ ------ -----

 TABLE - 3 ALLOT COMMUNICATIONS LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS on a NON-GAAP BASIS (U.S. dollars in thousands, except share and per share data) Three Months Ended Year Ended December 31, December 31, ------------------------ -------------------------- 2011 2010 2011 2010 ------ ------ ------- ----- (Unaudited) (Unaudited) ------------------------ -------------------------- Revenues $ 22,028 $ 16,207 $ 77,753 $ 56,972 Cost of revenues 6,225 4,537 21,951 15,770 ------ ------ ------- ----- Gross profit 15,803 11,670 55,802 41,202 ------ ------ ------- ----- Operating expenses: Research and development costs, net 3,537 2,924 12,780 10,912 Sales and marketing 6,951 5,551 25,542 21,170 General and administrative 1,510 1,291 5,428 4,781 ------ ------ ------- ----- Total operating expenses 11,998 9,766 43,750 36,863 Operating profit 3,805 1,904 12,052 4,339 Financial and other income (expenses), net 238 (176) 415 (195) ------ ------ ------- ----- Profit before income tax expenses 4,043 1,728 12,467 4,144 Tax expenses (income) (170) (112) (55) 84 ------ ------ ------- ----- Net profit 4,213 1,840 12,522 4,060 ------ ------ ------- ----- Basic net profit per share $ 0.15 $ 0.08 $ 0.50 $ 0.18 ------ ------ ------- ----- Diluted net profit per share $ 0.14 $ 0.07 $ 0.46 $ 0.17 ------ ------ ------- ----- Weighted average number of shares used in computing basic net earnings per share 27,709,271 23,219,144 25,047,771 22,831,014 ------ ------ ------- ----- Weighted average number of shares used in computing diluted net earnings per share 29,668,381 25,050,767 27,183,472 24,113,668 ------ ------ ------- -----

 TABLE - 4 ALLOT COMMUNICATIONS LTD. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (U.S. dollars in thousands) December 31, December 31, 2011 2010 ----------- ----------- (Unaudited) (Audited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 116,682 $ 42,858 Short term deposits 24,000 - Marketable securities and restricted cash 18,718 16,591 Trade receivables, net 11,926 10,739 Other receivables and prepaid expenses 5,950 4,958 Inventories 10,501 10,830 --------- -------- Total current assets 187,777 85,976 --------- -------- LONG-TERM ASSETS: Severance pay fund 178 162 Other assets 356 340 --------- -------- Total long-term assets 534 502 --------- -------- --------- -------- PROPERTY AND EQUIPMENT, NET 5,352 5,193 --------- -------- GOODWILL AND INTANGIBLE ASSETS, NET 3,395 3,516 --------- -------- Total assets $ 197,058 $ 95,187 --------- -------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Trade payables $ 2,684 $ 5,140 Deferred revenues 16,694 10,828 Other payables and accrued expenses 9,462 10,167 --------- -------- Total current liabilities 28,840 26,135 --------- -------- LONG-TERM LIABILITIES: Deferred revenues 5,430 3,873 Accrued severance pay 219 191 --------- -------- Total long-term liabilities 5,649 4,064 --------- -------- --------- -------- SHAREHOLDERS' EQUITY 162,569 64,988 --------- -------- Total liabilities and shareholders' equity $ 197,058 $ 95,187 --------- --------

 TABLE - 5 ALLOT COMMUNICATIONS LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in thousands) Three Months Ended Year Ended December 31, December 31, --------------------------------------------- 2011 2010 2011 2010 --------------------------------------------- (Unaudited) (Unaudited) (Unaudited) (Audited) Cash flows from operating activities: Net income (Loss) $ 3,497 $ 1,349 $ 8,809 $ (5,762) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 706 616 2,754 2,577 Write-off of property and of equipment, net - (158) - - Stock-based compensation related to options granted to employees and non-employees 686 462 2,256 1,990 Amortization of intangible assets 30 30 121 123 Capital loss 1 15 10 70 Increase in accrued severance pay, net 7 148 12 75 Decrease (Increase) in other assets 4 (48) 98 41 Decease (Increase) in accrued interest and amortization of premium on marketable securities 85 (189) 151 (189) Decrease (Increase) in trade receivables 873 (3,201) (1,187) (2,897) Increase in other receivables and prepaid expenses (1,876) (2,126) (1,083) (1,495) Decrease (Increase) in inventories (1,453) (1,151) 329 (5,784) Decrease in long-term deferred taxes (114) - (114) 49 Increase (Decrease) in trade payables (1,398) 541 (2,708) 1,998 Increase (Decrease) in employees and payroll accruals (233) 1,793 (748) 1,868 Increase in deferred revenues 7,742 4,118 7,423 7,188 Decrease in other payables and accrued expenses (851) (779) (1,178) (213) Realized loss related to sale of available-for-sale marketable securities - - - 7,712 --------------------------------------------- Net cash provided by operating activities 7,706 1,420 14,945 7,351 --------------------------------------------- Cash flows from investing activities: Decrease (Increase) in restricted deposit 409 - (78) - Investment in short-term deposits (6,000) (24,000) - Redemption of short-term deposits - - - 1,264 Purchase of property and equipment (915) (348) (2,953) (2,334) Proceeds from sale of property and equipment - 130 30 168 Investment in marketable securities (504) (11,522) (4,735) (16,765) Proceeds from redemption or sale of marketable securities 200 1,400 2,603 13,652 Net cash used in --------------------------------------------- investing activities (6,810) (10,340) (29,133) (4,015) --------------------------------------------- Cash flows from financing activities: Issuance of share capital related to secondary offering 85,174 - 85,174 - Exercise of warrants and employee stock options 818 1,850 2,838 3,052 --------------------------------------------- Net cash provided by financing activities 85,992 1,850 88,012 3,052 --------------------------------------------- Increase in cash and cash equivalents 86,888 (7,070) 73,824 6,388 Cash and cash equivalents at the beginning of the year 29,794 49,928 42,858 36,470 Cash and cash equivalents at the end --------------------------------------------- of the year $ 116,682 $ 42,858 $ 116,682 $ 42,858 ---------------------------------------------

Investor Relations Contact:

Jay Kalish
Executive Director Investor Relations
International access code +972-54-221-1365
[ jkalish@allot.com ]

SOURCE Allot Communications Ltd.

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Allot Communications Reports 10% Revenue Rise and Continued Net Profit Growth for Fourth Quarter of 2011

Allot Communications Reports 10% Revenue Rise and Continued Net Profit Growth for Fourth Quarter of 2011

Revenues reach $22 million; EPS was $0.14 on a non-GAAP basis ($0.12 on a GAAP basis)