Radware Ltd Announces 3Q10 Results

* Record quarterly revenues of $36.8 million

* Record Non-GAAP operating income of $5.1 million

* Record Non-GAAP EPS of $0.26

Oct 27, 2010, 06:00 ET from Radware Ltd

TEL AVIV, Israel, Oct. 27 /PRNewswire-FirstCall/ -- Radware (Nasdaq: RDWR), a leading provider of integrated application delivery solutions for business-smart networking, today reported record quarterly revenues of $36.8 million for the third quarter of 2010. This represents an increase of 25.8% compared with revenues of $29.2 million for the third quarter of 2009, and an increase of 4.4% compared with revenues of $35.2 million in the second quarter of 2010.

Net income on a GAAP basis for the third quarter of 2010 was $3.7 million or $0.17 per diluted share, compared with a net income of $0.2 million or $0.01 per diluted share for the third quarter of 2009.

Net income on a Non-GAAP basis for the third quarter of 2010 was $5.6 million or $0.26 per diluted share, compared with a net income of $2.1 million or $0.11 per diluted share in the third quarter of 2009.

At the end of the third quarter of 2010, the company's overall cash position including cash, short-term and long-term bank deposits and marketable securities amounted to $172.2 million, representing an increase in the company's cash position of approximately $23 million in the third quarter or $52 million in the last 12 months.

"We are pleased with the continued upward progression that we are seeing - supported by yet another record quarter in revenues in addition to record operating income, EPS and cash balance," stated Roy Zisapel, CEO Radware. "We are very excited by the prospects of our new products designed specifically for data center consolidation and virtualization and believe they provide us with a stronger competitive imprint in the industry. This year is proving to be a very significant year for Radware solidifying our position as a key influencer in the application delivery and network security markets."

During the quarter ended September 30, 2010, Radware released the following significant announcements:

  • Radware Introduces its Virtual Application Delivery Infrastructure Strategy
  • South African Service Provider, Internet Solutions, Leverages Radware's AppDirector to Supply the ISP Market with Superior Application Delivery Performance
  • Alteon Reseller Kapsch CarrierCom AG Signs with Radware
  • Radware's New AppDirector 2.30: Unleashing the Industry's Leading Security-Integrated ADC Solution
  • Radware Achieves Oracle Validated Integration with Oracle's PeopleSoft Enterprise 9.1
  • Radware helps 2xmoinscher.com to Ensure Business Continuity and PCI Compliance for their Visitors with an Unmatched Quality of Experience
  • Radware's Award-Winning AppDirector® Solution Achieves Oracle Validated Integration with Oracle® E-Business Suite (EBS) 12.1
  • Radware Addresses Securing Network Assets when Exposed to the Mobile Internet
  • Radware's AppDirector Achieves IPv6 Ready Logo
  • Radware Earns 2010 TMC Labs Innovation Award
  • Radware's vAdapter Achieves VMware Ready™ Status
  • Radware's AppDirector Achieves Oracle Validated Integration with Oracle's Siebel Customer Relationship Management 8.1
  • Radware Wins Three Communications Solutions 2009 Product of the Year Awards

Company management will host a quarterly investor conference call at 8:45 AM ET on Wednesday, October 27, 2010. The call will focus on financial results for the quarter ending September 30, 2010, and certain other matters related to the company's business.

Please use the following dial-in numbers to participate in the third quarter 2010 call:

Participants in the US call: Toll Free 1 877 392 9880

International participants call: 1 760 666 3769

The conference call will be webcast on Wednesday October 27, 2010 at 8:45am ET 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.

About Radware

Radware (Nasdaq: RDWR), a global leader in integrated application delivery solutions, assures the full availability, maximum performance, and complete security of business-critical applications for nearly 10,000 enterprises and carriers worldwide. With APSolute®, Radware's comprehensive and award-winning suite of application delivery and network security 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 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 ASC No. 718, amortization of intangible assets, acquisition-related expenses and exchange rate differences, net on balance sheet items included in finance income. Such exchange rate differences may vary from period to period due to changes in exchange rates driven by general market conditions or other circumstances outside of the normal course of Radware's operations. Management believes that exclusion of these charges allows comparisons of operating results that are consistent across past, present and future periods. 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, 2009

September 30, 2010

(Unaudited)

Current assets

Cash and cash equivalents

19,843

23,544

Available-for-sale marketable securities

29,117

29,204

Short term bank deposits

10,130

27,720

Trade receivables, net

16,603

13,431

Other receivables and prepaid expenses

2,934

3,298

Inventories

9,792

10,175

88,419

107,372

Long-term investments

Available-for-sale marketable securities

42,021

66,779

Long-term bank deposits

25,000

25,000

Severance pay funds

2,514

2,659

69,535

94,438

Property and equipment, net

11,220

10,612

Other assets

Intangible assets, net

14,794

13,086

Other long-term assets

467

565

Goodwill

24,465

24,465

39,726

38,116

Total assets

208,900

250,538

Current liabilities

Trade payables

5,699

5,503

Deferred revenues, other payables and accrued expenses

33,147

45,082

38,846

50,585

Long-term liabilities

20,581

21,076

Shareholders' equity

Share capital

465

501

Additional paid-in capital

191,941

215,102

Accumulated other comprehensive income

935

1,432

Treasury stock, at cost

(18,036)

(18,036)

Accumulated deficit

(25,832)

(20,122)

Total shareholders' equity

149,473

178,877

Total liabilities and shareholders' equity

208,900

250,538

Condensed Consolidated Statements of Operations

(U.S. Dollars in thousands, except share and per share data)

For the three months ended September 30,

For the nine months ended September 30,

2009

2010

2009

2010

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Revenues

29,212

36,763

76,786

105,065

Cost of revenues

5,999

7,448

15,767

21,236

Gross profit

23,213

29,315

61,019

83,829

Operating expenses:

Research and development

6,705

8,240

19,329

23,380

Selling and marketing

14,327

15,934

40,823

47,662

General and administrative

2,506

2,526

9,378

7,656

Total operating expenses

23,538

26,700

69,530

78,698

Operating income (loss)

(325)

2,615

(8,511)

5,131

Financial income, net

682

1,294

1,481

1,202

Income (loss) before income taxes

357

3,909

(7,030)

6,333

Income taxes

(206)

(191)

(593)

(623)

Net Income (loss)

151

3,718

(7,623)

5,710

Basic net income (loss) per share

$ 0.01

$ 0.19

$ (0.40)

$ 0.30

Weighted average number of shares used to compute basic net income (loss) per share

18,860,021

19,711,311

18,878,697

19,286,258

Diluted net income (loss) per share

$ 0.01

$ 0.17

$ (0.40)

$ 0.27

Weighted average number of shares used to compute diluted net income (loss) per share

19,036,249

21,921,819

18,878,697

21,146,646

Reconciliation of Supplemental Financial Information

(U.S. Dollars in thousands, except share and per share data)

For the Three months ended September 30,

For the nine months ended September 30,

2009 (Unaudited)

2010 (Unaudited)

2009 (Unaudited)

2010 (Unaudited)

GAAP net Income (loss)

151

3,718

(7,623)

5,710

Stock-based compensation expenses, included in:

Cost of revenues

13

18

55

47

Research and development

176

365

791

943

Selling and marketing

314

711

1,323

1,766

General and administrative

579

470

1,591

1,380

1,082

1,564

3,760

4,136

Amortization of intangible assets included in:

Cost of revenues

427

439

948

1,217

Selling and marketing

630

531

1,299

1,753

1,057

970

2,247

2,970

Acquisition related expenses

-

-

2,485

-

Exchange rate differences, net on balance sheet items included in finance income

(223)

(616)

116

709

Non-GAAP net income

2,067

5,636

985

13,525

Non-GAAP diluted net income per share

$ 0.11

$ 0.26

$ 0.05

$ 0.64

Weighted average number of shares used to compute Non-GAAP diluted net income per share

19,036,249

21,921,819

18,963,382

21,146,646

CONTACTS

Chief Financial Officer

Meir Moshe

+972-3766-8610

Corporate Relations

Joyce Anne Shulman

+1 201 785 3209

joyceannes@radware.com

SOURCE Radware Ltd



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