Radware Ltd. Announces Third Quarter 2011 Results

Record Quarterly Revenues of $42.2 Million; Record Non-GAAP EPS $0.34; Record Non-GAAP Operating Margin 17%

Oct 26, 2011, 06:00 ET from Radware Ltd

TEL AVIV, Israel, October 26, 2011 /PRNewswire/ --

Radware (NASDAQ: RDWR), a global leader of application delivery and application security solutions for virtual and cloud data centers, today reported record quarterly revenues of $42.2 million for the third quarter of 2011.  This represents an increase of 15% compared with revenues of $36.8 million for the third quarter of 2010, and an increase of 3% compared with revenues of $41.1 million in the second quarter of 2011.

Net income on a GAAP basis for the third quarter of 2011 was $5.4 million or $0.24 per diluted share, compared with net income of $3.7 million or $0.17 per diluted share for the third quarter of 2010.

Net income on a Non-GAAP basis for the third quarter of 2011 was $7.8 million or $0.34 per diluted share, compared with net income of $5.6 million or $0.26 per diluted share in the third quarter of 2010.

During the third quarter 2011 Radware generated $3 million in cash and ended the quarter with $207 million in cash, cash equivalents, deposits and marketable securities.

"This quarter represents yet another record posting for company revenues, earnings per share, and operating margins," stated Roy Zisapel, president and chief executive officer, Radware. "This sustained growth is driven by market interest in our recently announced Attack Mitigation System along with our continued success with our innovative application delivery solutions for data center consolidation, virtualization, and cloud computing."

During the third quarter 2011, Radware released the following significant announcements:

  • Radware Ltd. Announces Second Quarter 2011 Results
  • Radware Announces 2011 Annual General Meeting
  • Radware Claims Three 2010 Communications Solutions Product of the Year Awards
  • Radware Introduces New vDirect Plug-In Joint Solution with VMware vCloud® Director
  • KONAMI Selects Radware's ADC-VX Virtualization Solution For its Online Entertainment Site
  • Radware Reports Results of Annual General Meeting
  • Radware Announces Its Participation in SAP® EcoHub and SAP PartnerEdge™ Program
  • Radware's Attack Mitigation System Delivers the First Fully Integrated Solution to Fight Cyber Attacks in Real Time
  • Radware Announces Third Quarter 2011 Earnings Conference Call
  • Radware Announces $20 Million Share Buyback And Refines Guidance for Third Quarter 2011

Company management will host a quarterly investor conference call at 8:45am ET on October 26, 2011.  The call will focus on financial results for the quarter ending September 30, 2011 and certain other matters related to the Company's business.

The conference call will be webcast on October 26, 2011 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.

Please use the following dial-in numbers to participate in the Second Quarter 2011 call:

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

International participants call: +1 760-666-3769

About Radware

Radware (NASDAQ: RDWR), is a global leader of application delivery and application security solutions for virtual and cloud data centers. Its award-winning solutions portfolio delivers full resilience for business-critical applications, maximum IT efficiency, and complete business agility.  Radware's solutions empower more than 10,000 enterprise and carrier customers worldwide to adapt to market challenges quickly, maintain business continuity and achieve maximum productivity while keeping costs down.  For more information, please visit http://www.radware.com.

Radware encourages you to join our community and follow us on LinkedIn, Radware Blog, Twitter, YouTube and the Radware Connect app for iPhone®.

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, 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,     September 30,
                                           2010              2011
                                                         (Unaudited)
    Current assets
    Cash and cash equivalents                15,284              15,729
    Available-for-sale marketable
    securities                               24,200              14,995
    Short term bank deposits                 51,441              70,157
    Trade receivables, net                   16,543              17,661
    Other receivables and prepaid
    expenses                                  3,402               3,453
    Inventories                               9,722              11,438
                                            120,592             133,433
    Long-term investments
    Available-for-sale marketable
    securities                               82,864             100,777
    Long-term bank deposits                   5,000               5,000
    Severance pay funds                       3,342               3,134
                                             91,206             108,911
 
    Property and equipment, net              11,801              11,664
 
    Other assets
    Intangible assets, net                   12,011               9,134
    Other long-term assets                      560                 603
    Goodwill                                 24,465              24,465
 
    Total assets                            260,635             288,210
 
    Current liabilities
    Trade payables                            5,913               5,844
    Deferred revenues, other
    payables and accrued expenses            47,223              51,337
                                             53,136              57,181
 
    Long-term liabilities                    22,509              22,533
 
    Shareholders' equity
    Share capital                               506                 524
    Additional paid-in capital              218,593             229,286
    Accumulated other comprehensive
    income (loss)                               125              (1,797)
    Treasury stock, at cost                 (18,036)            (18,036)
    Accumulated deficit                     (16,198)             (1,481)
    Total shareholders' equity              184,990             208,496
 
    Total liabilities and
    shareholders' equity                    260,635             288,210
 
                   Condensed Consolidated Statements of Income
           (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,
                                  2010        2011        2010        2011
                              (Unaudited) (Unaudited) (Unaudited) (Unaudited)
 
    Revenues                      36,763      42,196     105,065     121,930
    Cost of revenues               7,448       8,534      21,236      24,731
    Gross profit                  29,315      33,662      83,829      97,199
    Operating expenses:
    Research and development       8,240       9,122      23,380      26,918
    Selling and marketing         15,934      17,282      47,662      51,027
    General and administrative     2,526       2,343       7,656       7,128
    Total operating expenses      26,700      28,747      78,698      85,073
    Operating income               2,615       4,915       5,131      12,126
    Financial income, net          1,294         776       1,202       3,413
    Income before taxes on
    income                         3,909       5,691       6,333      15,539
    Taxes on income                 (191)       (293)       (623)       (822)
    Net Income                     3,718       5,398       5,710      14,717
 
    Basic net earnings per
    share
                                  $ 0.19      $ 0.26      $ 0.30      $ 0.70
    Weighted average number of
    shares used to compute
    basic net earnings per
    share                     19,711,311  21,052,835  19,286,258  20,886,623
 
    Diluted net earnings per
    share
                                  $ 0.17      $ 0.24      $ 0.27      $ 0.64
    Weighted average number of
    shares used to compute
    diluted net earnings per
    share                     21,921,819  22,782,410  21,146,646  22,936,293
               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,
                       2010          2011          2010          2011
                    (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
    GAAP net
    Income                 3,718         5,398         5,710        14,717
    Stock-based
    compensation
    expenses,
    included in:
    Cost of
    revenues                  18            15            47            46
    Research and
    development              365           248           943           787
    Selling and
    marketing                711           731         1,766         2,122
    General and
    administrative           470           209         1,380           872
                           1,564         1,203         4,136         3,827
    Amortization
    of intangible
    assets
    included in:
    Cost of
    revenues                 439           541         1,217         1,623
    Selling and
    marketing                531           421         1,753         1,263
                             970       ­    962         2,970         2,886
    Exchange rate
    differences, net on
    balance sheet items
    included in finance
    income                  (616)          233           709          (263)
    Non-GAAP net
    income                 5,636         7,796        13,525        21,167
 
    Non-GAAP
    diluted net
    earnings per
    share                 $ 0.26        $ 0.34        $ 0.64        $ 0.92
    Weighted
    average number
    of shares used
    to compute
    Non-GAAP
    diluted net
    earnings per
    share
                      21,921,819    22,782,410    21,146,646    22,936,293
 

CONTACTS

Chief Financial Officer Meir Moshe +972-3766-8610

Corporate Media Relations Michael Lordi +1-201-785-3206 mikel@radware.com

SOURCE Radware Ltd