RADCOM Accelerates Momentum in Q4: Q4 Sales Reach $7M, 2011 Sales Reach $22M Strong Backlog Gives Visibility for Stronger 2012
TEL-AVIV, Israel, January 26, 2012 /PRNewswire/ --
RADCOM Ltd. (RADCOM) (NASDAQ: RDCM) today announced its financial results for the fourth quarter and full year ended December 31, 2011.
In $ thousands Q4 2011 Q3 2011 Q4 2010 Revenues $7,004 $3,499 $5,363 Gross margin 69.9% 60.4% 64.6% Operating income (loss) (GAAP) $360 $(1,983) $39 Operating income (loss) (non-GAAP) $564 $(1,788) $461 Net income (loss) (GAAP) $64 $(2,169) $78 Net income (loss) (non-GAAP) $268 $(1,974) $500
Fourth Quarter of 2011: Revenues totaled $7.0 million, up 31% compared with $5.4 million for Q4 2010 and more than double their level in Q3 2011. Gross margin for the quarter increased to 69.9% from 64.6% in Q4 2010.
Annual bookings and backlog reached near-historic highs, reflecting the Company's accelerating momentum with top-tier operators throughout the world.
Operating incomeincreased to $360,000 from $39,000 in Q4 2010, according to U.S. generally accepted accounting principles (GAAP). Excluding share-based compensation expenses from all periods, the Company's non-GAAP operating income for Q4 2011 totaled $564,000, up 22% compared with $461,000 for Q4 2010.
The Company's net income for the quarter totaled $64,000 ($0.01 basic and diluted per share), a slight decrease compared with $78,000 ($0.01 basic and diluted per share) for Q4 2010. The decrease derived from the period's unusually high financial expenses, which were caused primarily by fluctuations in the exchange rate of the Brazilian real against the U.S. dollar.
Excluding share-based compensation expenses from all periods, the Company's non-GAAP net income for Q4 2011 totaled $268,000 ($0.04 diluted per share) compared with $500,000 ($0.08 diluted per share) for Q4 2010. The decrease reflects the higher financial expenses, as described above, together with the Company's strategic scale-up of its sales, marketing and support organizations, including the development of its direct sales offices in Singapore, Brazil and India, and the expansion of its support capabilities to meet the business growth implied by current near-historic levels of annual bookings and backlog. Management expects its operating expenses during the coming quarters to remain at a similar level.
Full Year 2011: The Company's revenues rose 15% to $22.0 million for the full year of 2011 from $19.2 million in 2010. Gross margin for the year increased to 69.6% from 66.2% in 2010.
According to U.S. GAAP, the Company reported a net loss for 2011 of $(1.9) million ($(o.30) basic and diluted per share) compared with a net income of $570,000 ($0.11 basic per share and $0.10 diluted per share) for 2010. This reflected the significant net loss recorded in the third quarter, together with investments made throughout the year to build the Company's sales and marketing infrastructure. Excluding share-based compensation expenses and changes in the fair value of warrants from all periods, non-GAAP net loss for 2011 was $(1.1) million ($(0.17) diluted per share) compared with net income of $1.7 million ($0.28 diluted per share) for 2010.
Comments of Management
Commenting on the results, Mr. David Ripstein, RADCOM's President and CEO, said, "Our success is being driven by one of the strongest trends in the telecom industry: the explosion of smartphone traffic and its devastating effect on network quality. As a result, 2011 was a period of accelerating revenue momentum and strategic investment that enabled us to reach near-record annual bookings and gross margins, giving us an extremely strong backlog that enables us to project a much stronger 2012."
Mr. Ripstein continued, "This visibility led us to invest throughout 2011 to expand our direct sales capabilities, developing our offices in Singapore, India and Brazil, while also extending our technological edge. Since we expect to maintain a similar level of operational expenses in 2012, a growing proportion of each new sale will contribute to the bottom line. We are therefore confident and excited as we move into 2012. With rising sales, growing markets and a correctly-sized organization, we are fully focused on moving to the next level and on achieving significant top-line and bottom-line growth."
Earnings Conference Call
RADCOM's management will hold an interactive conference call today at 9:00 AM Eastern Time (16:00 Israel Time) to discuss the results and to answer participants' questions. To join the call, please call one of the following numbers approximately five minutes before the call is scheduled to begin:
From the US (toll-free): + 1-888-668-9141
From other locations: +972-3-918-0610
For those unable to listen to the call at the time, a replay will be available from January 27th on RADCOM's website.
RADCOM provides innovative service assurance solutions for communications service providers and equipment vendors. RADCOM specializes in solutions for next-generation networks, both wireless and wireline. RADCOM's comprehensive, carrier-strength solutions are used to prevent service provider revenue leakage and to enable management of customer care. RADCOM's products facilitate fault management, network service performance analysis, troubleshooting and pre-mediation with an OSS/BSS. RADCOM's shares are listed on the NASDAQ Capital Market under the symbol RDCM. For more information, please visit http://www.RADCOM.com.
Certain non-GAAP financial measures are included in this press release. These non-GAAP financial measures are provided to enhance the reader's overall understanding of our financial performance. By excluding non-cash stock-based compensation that has been expensed in accordance with ASC Topic 718 and changes in fair value of warrants that has been expensed in accordance with ASC 815-40, our non-GAAP results provide information to both management and investors that is useful in assessing our core operating performance and in evaluating and comparing our results of operations on a consistent basis from period to period. These non-GAAP financial measures are also used by management to evaluate financial results and to plan and forecast future periods. The presentation of this additional information is not meant to be considered a substitute for the corresponding financial measures prepared in accordance with GAAP.
Risks Regarding Forward-Looking Statements
Certain statements made herein that use words such as "estimate," "project," "intend," "expect," "'believe", "may", "might", "predict", "potential", "anticipate", "plan" or similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks and uncertainties that could cause the actual results, performance or achievements of the Company to be materially different from those that may be expressed or implied by such statements, including, among others, changes in general economic and business conditions and specifically, decline in the demand for the Company's products, inability to timely develop and introduce new technologies, products and applications, and loss of market share and pressure on prices resulting from competition. For additional information regarding these and other risks and uncertainties associated with the Company's business, reference is made to the Company's reports filed from time to time with the United States Securities and Exchange Commission. The Company does not undertake to revise or update any forward-looking statements for any reason.
Condensed Consolidated Statements of Operations (1000's of U.S. dollars, except share and per share data) Three months ended Twelve months ended December 31, December 31, 2011 2010 2011 2010 (unaudited) (unaudited) (unaudited) (unaudited) Sales $ 7,004 $ 5,363 $ 21,987 $ 19,173 Cost of sales 2,110 1,901 6,680 6,486 Gross profit 4,894 3,462 15,307 12,687 Research and development, gross 1,534 1,111 5,866 4,310 Less - royalty-bearing participation 229 283 1,235 1,424 Research and development, net 1,305 828 4,631 2,886 Sales and marketing 2,716 2,048 9,962 6,971 General and administrative (1) 513 547 2,234 1,538 Total operating expenses 4,534 3,423 16,827 11,395 Operating income (loss) 360 39 (1,520) 1,292 Financing income (expenses), net (296) 39 (384) (722) Net income (loss) 64 78 (1,904) 570 Basic net income (loss) per ordinary $ 0.01 $ 0.01 $ (0.30) $ 0.11 Diluted net income (loss) per ordinary share $ 0.01 $ 0.01 $ (0.30) $ 0.10 Weighted average number of ordinary shares used in computing basic net income (loss) per ordinary share 6,398,885 6,049,678 6,367,560 5,373,515 Weighted average number of ordinary shares used in computing diluted net income (loss) per ordinary share 6,708,515 6,592,961 6,367,560 5,947,310
(1) Includes a decrease of $269,000 and $595,000 in allowance for doubtful accounts for the three month period and for the twelve month period ended December 31, 2010, respectively.
RADCOM Ltd. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION (1000's of U.S. dollars, except share and per share data) Three Months Ended Twelve Months Ended December 31, December 31, 2011 2010 2011 2010 (unaudited) (unaudited) (unaudited) (unaudited) GAAP net income (loss) $64 $78 $(1,904) $570 Stock-based compensation (1) 204 422 824 564 Change in fair value of warrants - - - 524 Non-GAAP net income (loss) $268 $500 $(1,080) $1,658 Non-GAAP earnings (loss) per share (diluted) $0.04 $0.08 $(0.17) $0.28 Number of shares used in computing Non-GAAP earnings (loss) per share (diluted) 6,708,515 6,592,961 6,367,560 5,947,310 (1) Stock-based compensation: Cost of sales 4 1 27 5 Research and development 41 2 218 10 Selling and marketing 34 4 231 36 General and administrative 125 415 348 513 204 422 824 564
RADCOM Ltd. Consolidated Balance Sheets (1000's of U.S. dollars) As of As of December 31, December 31, 2011 2010 (unaudited) Current Assets Cash and cash equivalents 2,901 5,744 Trade receivables, net 5,389 6,851 Inventories 6,590 3,949 Other receivables 3,490 1,708 Total Current Assets 18,370 18,252 Severance pay fund 2,674 2,796 Property and equipment, net 301 338 Total Assets 21,345 21,386 Liabilities and Shareholders' Equity Current Liabilities Trade payables 2,703 2,759 Deferred revenue 623 451 Other payables and accrued expenses 4,374 3,898 Total Current Liabilities 7,700 7,108 Long-Term Liabilities Deferred revenue 161 221 Accrued severance pay 3,092 3,154 Total Long-Term Liabilities 3,253 3,375 Total Liabilities 10,953 10,483 Shareholders' Equity Share capital 250 234 Additional paid-in capital 60,557 59,180 Accumulated deficit (50,415) (48,511) Total Shareholders' Equity 10,392 10,903 Total Liabilities and Shareholders' Equity 21,345 21,386
SOURCE RADCOM Ltd