Information Technology

TMCNet:  Radware Ltd. Announces Record Results and Nomination of Chairman

[November 03, 2009]

Radware Ltd. Announces Record Results and Nomination of Chairman

TEL AVIV, Israel, November 3, 2009 /PRNewswire-FirstCall via COMTEX/ -- Radware (NASDAQ: RDWR), the leading provider of integrated application delivery (http://www.radware.com/Products/ApplicationDelivery/default.aspx) solutions for business-smart networking, today reported record quarterly revenues of $29.2 million for the third quarter of 2009. This represents an increase of 24% compared with revenues of $23.5 million for the third quarter of 2008 and an increase of 8% compared with revenues of $27.1 in the second quarter of 2009.
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Net income on a GAAP basis for the third quarter of 2009 was $0.2 million or $0.01 per diluted share compared with a net loss of $8.5 million or $0.44 per diluted share in the third quarter of 2008.

Net income on a Non-GAAP basis for the third quarter of 2009 was $2.3 million or $0.12 per diluted share, compared with a net loss of $4.3 million or $0.22 per diluted share in the third quarter of 2008.

At the end of the third quarter of 2009, the company's overall cash position including cash, short-term and long-term bank deposits and marketable securities amounted to $120.2 million an increase of $5.4 million over previous quarter.

"We are pleased to report yet another record quarter of results along with a significant increase in profitability," advised Roy Zisapel, CEO Radware. "For several quarters now we have been able to sequentially increase market share. This is a direct result of our ability to competitively win key customer accounts, strike several new distribution and reseller partnerships and further capitalize on the Alteon acquisition while we continue to extend and innovate the capabilities of our solutions. In just a year we've cost-effectively and successfully driven the business to over 20% growth with strong profitability leverage." During the quarter ended September 30, 2009, Radware released the following significant announcements: - Radware Receives a 2009 INTERNET TELEPHONY Excellence Award - Radware Discusses Next-Generation Data Center Strategies at its Global Executive Exchange Forums - Radware Prevents Network Downtime for Carolinas HealthCare System, One of the Largest Healthcare Systems in the U.S.

- Radware Upgrades DefensePro Security Solution to Protect Against High-Volume Cybercriminal Activity - Financial Express Selects Radware to Guarantee Performance and Security for Web Applications - Radware's AppDirector Achieves Oracle Validated Integration with Oracle(R) E-Business Suite 12.0 - Optivor Signs Reseller Partnership with Radware for Alteon Products - Radware's AppDirector Ensures 'Always Up' Communications on the Microsoft Office Communications Server 2007 R2 Environment - Radware Provides Full Availability, Performance and Security to Oracle Customers - Radware to Present at DEFCON; The Risk of Software Updates - How to Protect Your Infrastructure When It is the Most Vulnerable? - Radware and RSA Form Technology Partnership to Offer Service for Increased Protection Against Trojan and Phishing Attacks - Key [Nortel] Alteon Reseller Packet Fusion Signs with Radware - Radware First to Offer Comprehensive Protection Against Recent Wave of Cyber Attacks Which Strike US and South Korean Government and Commercial Websites In addition, Radware's Board of Directors has chosen Mr. Yehuda Zisapel to serve as non-employee Chairman of the Board. Mr. Zisapel has served as a member of the Board since the company's inception and served as Chairman of the Board until August 2006. Mr. Zisapel is also a founder and a director of RAD Data Communications Ltd., a worldwide data communications company headquartered in Israel, and BYNET Data Communications Ltd., a distributor of data communications products in Israel and serves as director of other companies in the RAD-Bynet Group, including SILICOM Ltd., and several private companies.

Company management will host a quarterly investor conference call at 8:45 AM EDT on November 3, 2009. The call will focus on financial results for the quarter ending September 30, 2009, and certain other matters related to the Company's business.

The conference call will be webcast on November 3, 2009 at 8:45 AM EST in the "listen only" mode via the Internet at: http://www.radware.com/Company/InvestorRelations/default.aspx and will be available for replay during the next 30 days.

Please use the following dial-in numbers to participate in the third quarter 2009 call: Participants in the US call: Toll Free 1-800-230-1059 International participants call: +1-612-234-9959 About Radware Radware (NASDAQ:RDWR), the global leader in integrated application delivery (http://www.radware.com/Products/ApplicationDelivery/default.aspx) solutions, assures the full availability, maximum performance, and complete security of business-critical applications for nearly 10,000 enterprises and carriers worldwide. With APSolute(R), Radware's comprehensive and award-winning suite of application delivery (http://www.radware.com/Products/ApplicationDelivery/default.aspx) and network security (http://www.radware.com/Products/ApplicationNetworkSecurity/default.aspx) products, companies in every industry can drive business productivity, improve profitability, and reduce IT operating and infrastructure costs by making their networks "business smart". For more information, please visit http://www.radware.com.

Use of Non-GAAP Financial Information In addition to reporting financial results in accordance with generally accepted accounting principles (GAAP), Radware uses non-GAAP measures of net income and earnings per share, which are adjustments from results based on GAAP to exclude stock-based compensation expenses, in accordance with SFAS 123R, non-recurring retention expenses , amortization of intangible assets and acquisition-related expenses. Radware's management believes the non-GAAP financial information provided in this release is useful to investors for the purpose of understanding and assessing Radware's ongoing operations. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of the non-GAAP financial measures discussed in this press release, to the most directly comparable GAAP financial measures, is included with the financial information contained in this press release.

Management uses both GAAP and non-GAAP information in evaluating and operating business internally and, as such, has determined that it is important to provide this information to investors.

This press release may contain forward-looking statements that are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the Application Switching and Network Security industry, changes in demand for Application Switching and Network Security products, the timing and amount or cancellation of orders and other risks detailed from time to time in Radware's filings with the Securities and Exchange Commission, including Radware's Form 20-F.

Condensed Consolidated Balance Sheets (U.S. Dollars in thousands) December 31, September 30, 2008 2009 (Audited) (Unaudited) Current assets Cash and cash equivalents 28,065 26,130 Available-for-sale marketable securities and deposits 60,731 39,954 Trade receivables, net 13,348 15,734 Other receivables and prepaid expenses 2,046 2,259 Inventories 6,712 9,330 110,902 93,407 Long-term investments Available-for-sale marketable securities and deposits 45,112 54,068 Severance pay funds 1,995 2,416 47,107 56,484 Property and equipment, net 11,693 11,911 Other assets Goodwill and other intangible assets 15,762 41,692 Total assets 185,464 203,494 Current liabilities Trade payables 4,646 5,726 Deferred revenues, other payables and accrued expenses 23,964 36,170 28,610 41,896 Long-term liabilities 8,792 16,001 Shareholders' equity Share capital 465 464 Additional paid-in capital 185,985 189,972 Accumulated other comprehensive income (loss) (873) 716 Treasury stock, at cost (17,619) (18,036) Accumulated deficit (19,896) (27,519) Total shareholders' equity 148,062 145,597 Total liabilities and shareholders' equity 185,464 203,494 Condensed Consolidated Statements of Operations (U.S. Dollars in thousands, except share and per share data) For the Three months For the Nine months ended September 30, ended September 30, 2008 2009 2008 2009 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues 23,507 29,212 69,693 76,786 Cost of revenues 4,864 5,999 14,402 15,767 Gross profit 18,643 23,213 55,291 61,019 Operating expenses: Research and development 7,057 6,705 21,616 19,329 Selling and marketing 15,790 14,327 49,977 40,823 General and administrative 4,743 2,506 9,738 9,378 Total operating expenses 27,590 23,538 81,331 69,530 Operating loss (8,947) (325) (26,040) (8,511) Financial income, net 869 682 3,093 1,481 Income (loss) before income taxes (8,078) 357 (22,947) (7,030) Income taxes (410) (206) (943) (593) Net income (loss) (8,488) 151 (23,890) (7,623) Basic net income (loss) per share $ (0.44) $ 0.01 $ (1.22) $ (0.40) Weighted average number of shares used to compute basic net income (loss) per share 19,340,656 18,860,021 19,613,556 18,878,697 Diluted net income (loss) per share $ (0.44) $ 0.01 $ (1.22) $ (0.40) Weighted average number of shares used to compute diluted net income (loss) per share 19,340,656 19,036,249 19,613,556 18,878,697 Reconciliation of Supplemental Financial Information (U.S. Dollars in thousands, except share and per share data) For the Three months For the Nine months ended September 30, ended September 30, 2008 2009 2008 2009 (Unaudited) (Unaudited) (Unaudited) (Unaudited) GAAP net income (loss) (8,488) 151 (23,890) (7,623) Stock-based compensation expenses, included in: Cost of revenues 24 13 77 55 Research and development 361 176 1,157 791 Selling and marketing 560 314 1,798 1,323 General and administrative 730 579 2,234 1,591 1,675 1,082 5,266 3,760 Amortization of intangible assets included in: Cost of revenues 189 427 564 948 Selling and marketing 39 630 117 1,299 Income taxes 40 - 122 - 268 1,057 803 2,247 Non recurring retention expenses 2,231 - 2,231 - Acquisition related expenses - - - 2,485 Non-GAAP net income (loss) (4,314) 2,290 (15,590) 869 Non-GAAP diluted net income (loss) per share $ (0.22) $ 0.12 $ (0.79) $ 0.05 Weighted average number of shares used to compute Non-GAAP diluted net income (loss) per share 19,340,656 19,036,249 19,613,556 18,963,382 CONTACTS Chief Financial Officer Meir Moshe +972-3766-8610 Corporate Relations Christine D. Aruza +1-201-785-3236 christine.aruza@radware.com SOURCE Radware Ltd

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