Radcom Delivers Strong Q1 2011 With Highest Revenues in 4 Years
6th Straight Quarter of Net Income
TEL-AVIV, Israel, May 3, 2011 /PRNewswire-FirstCall/ -- RADCOM Ltd. (RADCOM) (NASDAQ: RDCM) today announced its financial results for the first quarter of 2011. Financial Overview In $000s Q1 2011 Q1 2010 Change Revenues 5,607 4,438 26% Gross Margin 72% 66% Net Income (GAAP) 123 51 141% Net Income (non-GAAP) 311 284 10% Cash (as of end of 8,982 2,142 319% period)
Revenues for the quarter ended March 31, 2011 totaled $5.6 million, their highest level for a fiscal quarter in four years and a 26% rise compared with $4.4 million for the first quarter of 2010. Gross margin for the period was 72%, its highest level in three years and up strongly from 66% in Q1 2010.
According to U.S. generally accepted accounting principles (GAAP), net income for the quarter was $123,000, or $0.02 per ordinary share (basic and diluted), a 141% increase compared to $51,000, or $0.01 per ordinary share (basic and diluted), for the first quarter of 2010.
Excluding non-cash share-based compensation expenses and changes in the fair value of warrants for all periods, the Company's non-GAAP net income for the quarter reached $311,000, or $0.05 per ordinary share (basic and diluted) for Q1 2011, a 10% increase compared with $284,000, or $0.05 per ordinary share (basic and diluted) for the first quarter of 2010.
The Company's cash balance as of March 31, 2011 reached $9.0 million, up 56% compared with its balance of $5.7 million at the end of 2010.
Comments of Management
Commenting on the results, Mr. David Ripstein, RADCOM's President and CEO, said, "The first quarter was a good start to what we believe will be another strong year for RADCOM. Despite the highly competitive nature of our business, we are pleased to have been able to deliver our highest revenues in four years, strong gross margins and our sixth straight quarter of positive net income. Our success reflects the continued rise in demand for service assurance solutions, a significant trend that is being driven by the phenomenal growth of the smart-phone market. This has created unprecedented quality challenges for service providers in most regions of the world, incentivizing them to invest in solutions like ours.
"We continue to benefit from the success of our focus on customer satisfaction, as demonstrated by our excellent performance in collections and our strong repeat sales. In fact, all indicators confirm that we are moving in a positive direction and operating according to a sound work plan. With growing markets in need of our solutions, an expanding top-tier reference base and proven technology, we are well positioned to continue generating growth throughout 2011 and beyond."
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 equity 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.
RADCOM Ltd.
Consolidated Statements of Income
(1000's of U.S. dollars, except share and per share data)
Three months ended
March 31,
2011 2010
(unaudited) (unaudited)
Sales $ 5,607 $ 4,438
Cost of sales 1,559 1,502
Gross profit 4,048 2,936
Research and development 1,350 1,048
Less - royalty-bearing participation 501 419
Research and development, net 849 629
Sales and marketing 2,508 1,501
General and administrative 612 414
Total operating expenses 3,969 2,544
Operating income 79 392
Financing income (expenses), net 44 (341)
Net income 123 51
Basic net income per ordinary share $ 0.02 $ 0.01
Diluted net income per ordinary share $ 0.02 $ 0.01
Weighted average number of
ordinary shares used in
computing basic net income
per ordinary share 6,324,298 5,087,209
Weighted average number of
ordinary shares used in
computing diluted net income
per ordinary share 6,907,424 5,285,455
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,
2011 2010
(unaudited) (unaudited)
GAAP net income $123 $51
Stock-based compensation (1) 188 33
Change in fair value of warrants - 200
Non-GAAP net income $311 $284
Non-GAAP earnings per share
(diluted) $0.05 $0.05
Number of shares used in computing
Non-GAAP earnings per share
(diluted) 6,907,424 5,285,455
(1) Stock-based compensation:
Cost of sales 8 2
Research and development 50 4
Selling and marketing 66 5
General and administrative 64 22
188 33
RADCOM Ltd.
Consolidated Balance Sheets
(1000's of U.S. dollars)
As of As of
March 31, December 31,
2011 2010
(unaudited)
Current Assets
Cash and cash equivalents 8,982 5,744
Trade receivables, net 4,660 7,402
Inventories 4,231 3,949
Other receivables 2,064 1,708
Total Current Assets 19,937 18,803
Severance pay fund 2,982 2,796
Property and equipment, net 312 338
Total Assets 23,231 21,937
Liabilities and Shareholders' Equity
Current Liabilities
Trade payables 2,886 2,759
Deferred revenue 745 451
Other payables and accrued expenses 4,051 4,449
Total Current Liabilities 7,682 7,659
Long-Term Liabilities
Deferred revenue 212 221
Accrued severance pay 3,394 3,154
Total Long-Term Liabilities 3,606 3,375
Total Liabilities 11,288 11,034
Shareholders' Equity
Share capital 247 234
Additional paid-in capital 60,084 59,180
Accumulated deficit (48,388) (48,511)
Total Shareholders' Equity 11,943 10,903
Total Liabilities and Shareholders'
Equity 23,231 21,937
Contact:
Jonathan Burgin
CFO
+1(972)3-645-5004
[email protected]
SOURCE RADCOM Ltd
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