Radcom Reports Financial Results for Q1 2012 On Track for Continued Strong Growth in 2012 and Beyond

TEL-AVIV, Israel, April 23, 2012 /PRNewswire/ --

RADCOM Ltd. (RADCOM) (NASDAQ: RDCM) today announced its financial results for the first quarter ended March 31, 2012.

Financial Results

Revenues for the period totaled $5,614,000 compared with $5,607,000 recorded in the first quarter of 2011. This reflected delays in the recognition of approximately $1 million in revenues associated with the completion of project milestones whose customer sign-offs were not received by the end of the quarter. In parallel, however, the Company received several substantial orders while also increasing its pipeline of potential sales with multi-million dollar opportunities from the Far East, Africa and Latin America. Therefore, Management remains confident regarding its ability to deliver significant growth in 2012.

Operating expenses for the quarter totaled $4.5 million, a level similar to Q4 2011 and up $500,000 compared with Q1 2011. As demonstrated by the stability of the quarter's expenses over the past two quarters, the Company has completed the strategic scale-up of its global sales, marketing and support capabilities, including the establishment of a direct sales presence in Singapore, Brazil and India, and expects to maintain a similar level of expenses in future quarters. As such, an increased portion of revenue growth will contribute to the Company's bottom line performance. During the quarter, the Company also recorded tax expense representing the withholding taxes associated with a large, long-term project in Central America.

With stable revenues but higher expenses compared to last year, the Company recorded a net loss according to U.S. generally accepted accounting principles (GAAP) totaling ($825,000), or ($0.13) per ordinary share (basic and diluted), compared with net income of $123,000, or $0.02 ordinary share (basic and diluted), for Q1 2011. Excluding non-cash share-based compensation expenses, the Company's non-GAAP net loss for the quarter totaled ($650,000), or ($0.1) per ordinary share (basic and diluted), compared with net income of $311,000, or $0.05 per ordinary share (basic and diluted) for Q1 2011.

Comments of Management

Commenting on the results, Mr. David Ripstein, RADCOM's President and CEO, said, "The first quarter was another period of strategic progress in line with an aggressive work plan for achieving significant growth in 2012 and beyond. Having completed our sales and support organization expansion initiatives, we are now positioned as an even stronger contender in the industry's growing number of top-tier, multi-million dollar tenders, with a particularly compelling functionality/technology advantage in the emerging CEM (Customer Experience Management) arena. We are currently participating in a number of high-potential opportunities in all of our target regions. Given the strength of the market, the superiority of our solutions and our historically-strong win rate, we are confident regarding our prospects and look forward to reporting progress and success in the year ahead."

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.

About RADCOM

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.

Non-GAAP Information

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, 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.

                                                       Three months ended
                                                           March 31,
                                                    2012               2011
                                                 (unaudited)        (unaudited)
    Sales                                            $ 5,614            $ 5,607
    Cost of sales                                      1,774              1,559
    Gross profit                                       3,840              4,048
    Research and development, gross                    1,670              1,350
    Less - royalty-bearing participation                 225                501
    Research and development, net                      1,445                849
    Sales and marketing                                2,509              2,508
    General and administrative                           519                612
    Total operating expenses                           4,473              3,969
    Operating income (loss)                            (633)                 79
    Financing income (expenses), net                    (72)                 44
    Net income (loss) before taxes on Income           (705)                123
    Taxes on Income                                    (120)                  -
    Net income (loss)                                  (825)                123
    Basic net income (loss) per ordinary Share      $ (0.13)             $ 0.02
    Diluted net income (loss) per ordinary share    $ (0.13)             $ 0.02
    Weighted average number of
    ordinary shares used in
    computing basic net income
    (loss) per ordinary share                      6,425,013          6,324,298
    Weighted average number of
    ordinary shares used in
    computing diluted net income
    (loss) per ordinary share                      6,425,013          6,907,424


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
                                                  March 31,
                                             2012           2011
                                          (unaudited)    (unaudited)
 
    GAAP net income (loss)                     $(825)           $123
    Stock-based compensation (1)                  175            188
    Non-GAAP net income (loss)                 $(650)           $311
    Non-GAAP earnings (loss) per share
    (diluted)                                 $(0.13)          $0.05
 
    Number of shares used in computing
    Non-GAAP earnings (loss) per share
    (diluted)                               6,425,013      6,907,424
 
    (1) Stock-based compensation:
    Cost of sales                                   6              8
    Research and development                       68             50
    Selling and marketing                          58             66
    General and administrative                     43             64
                                                  175            188


                                 RADCOM Ltd.
 
                         Consolidated Balance Sheets
 
                           (1000's of U.S. dollars)
                                                 As of           As of
                                              March 31,       December 31,
 
                                              2012            2011
                                              (unaudited)
    Current Assets
    Cash and cash equivalents                       1,786            2,901
    Restricted cash                                   726                -
    Trade receivables, net                          6,229            5,389
    Inventories                                     6,346            6,590
    Other receivables                               3,423            3,490
    Total Current Assets                           18,510           18,370
    Severance pay fund                              2,827            2,674
    Property and equipment, net                       286              301
    Total Assets                                   21,623           21,345
 
    Liabilities and Shareholders' Equity
    Current Liabilities
    Trade payables                                  1,995            2,703
    Deferred revenue                                1,064              623
    Other payables and accrued expenses             5,282            4,374
    Total Current Liabilities                       8,341            7,700
    Long-Term Liabilities
    Deferred revenue                                  240              161
    Accrued severance pay                           3,282            3,092
    Total Long-Term Liabilities                     3,522            3,253
 
    Total Liabilities                              11,863           10,953
 
    Shareholders' Equity
    Share capital                                     251              250
    Additional paid-in capital                     60,749           60,557
    Accumulated deficit                          (51,240)         (50,415)
    Total Shareholders' Equity                      9,760           10,392
 
    Total Liabilities and Shareholders'
    Equity                                         21,623           21,345


Contact:
Gilad Yehudai
CFO
+972-77-774-5060
gilady@radcom.com


SOURCE Radcom Ltd



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