Radware Ltd. Announces Second Quarter 2015 Results

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* Quarterly Revenues of $56.0 Million 

* Quarterly Non-GAAP EPS $0.2

* Quarterly Non-GAAP Operating Margin of 20

TEL AVIV, Israel, July 28, 2015 (GLOBE NEWSWIRE) -- Radware® RDWR, a leading provider of cyber security and application delivery solutions ensuring optimal service level for applications in virtual, cloud and software defined data centers, today reported quarterly revenues of $56.0 million for the second quarter of 2015. This represents an increase of 6% compared with revenues of $53.1 million for the second quarter of 2014.

Net income on a GAAP basis for the second quarter of 2015 was $7.2 million or $0.15 per diluted share, compared with net income of $3.9 million or $0.08 per diluted share for the second quarter of 2014.

Net income on a Non-GAAP basis for the second quarter of 2015 was $10.8 million or $0.23 per diluted share, compared with net income of $8.2 million or $0.18 per diluted share for the second quarter of 2014.

At the end of the second quarter of 2015, the Company's overall cash position including cash, short-term and long-term bank deposits and marketable securities amounted to $341 million, representing an increase in the Company's cash position of approximately $19 million in the second quarter of 2015.

"We were disappointed by our lower growth during the second quarter, however, we continued our strategic progress on all fronts," says Roy Zisapel, president and chief executive officer, Radware." "The Cisco announced OEM agreement coupled with our existing OEM agreement with Checkpoint and our strong organic growth in our data center security business, clearly positions us for market leadership in this critical market segment. We plan to expand our security business and leverage our market position for sales and continuous profitability growth."

During the second quarter of 2015, Radware released the following significant announcements:

  • Radware Introduces Industry's First Hybrid Cloud Based WAF Service
  • Radware Announces New $40 Million Share Buyback Plan
  • Radware's Attack Mitigation System Selected by Leading CDN Provider
  • Radware Provides Faster Web Page Delivery – New Image Compression Technique Helps Reduce Image Payload
  • Radware's ADC Solution Helps China Railway Build Next Generation e-Ticketing System
  • Radware Launches New Device Fingerprinting Technology to Mitigate Malicious Bot Attacks
  • Radware to Discuss Virtualizing the Mobile Network – Panel Discussion during Light Reading's Big Telecom Event in Chicago
  • Radware and Cisco sign OEM agreement for DDoS Mitigation



Company management will host a quarterly investor conference call at 8:30am ET on July 28, 2015. The call will focus on financial results for the quarter ending June 30, 2015 and other matters related to the Company's business.

The conference call will be webcast on July 28, 2015 at 8:30am ET in the "listen only" mode via the Internet at: http://www.radware.com/IR/ and will be available for replay during the next 30 days. 

Please use the following dial-in numbers to participate in the second quarter 2015 call:

Participants in the US call: Toll Free 1 (800) 230-1092 
International participants call: +1 612 288-0329
Conference ID: 363922

About Radware

Radware RDWR, is a global leader of application delivery and application security solutions for virtual, cloud and software defined data centers. Its award-winning solutions portfolio delivers service level assurance for business-critical applications, while maximizing IT efficiency. 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 www.radware.com

Radware encourages you to join our community and follow us on: Facebook, Google+, LinkedIn, Radware Blog, SlideShare, Twitter, YouTube, Radware Connect app for iPhone® and our security center DDoSWarriors.com that provides a comprehensive analysis on DDoS attack tools, trends and threats.

©2015 Radware, Ltd. All rights reserved. Radware and all other Radware product and service names are registered trademarks or trademarks of Radware in the U.S. and other countries. All other trademarks and names are property of their respective owners.

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, litigation costs 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.

Safe Harbor Statement

This press release may contain statements concerning Radware's future prospects that are "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. Statements preceded by, followed by, or that otherwise include the words "believes", "expects", "anticipates", "intends", "estimates", "plans", and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical facts. Because such statements deal with future events, they are subject to various risks and uncertainties and actual results, expressed or implied by such forward-looking statements, could differ materially from Radware's current forecasts and estimates. Factors that could cause or contribute to such differences include, but are not limited to: the impact of global economic conditions and volatility of the market for our products; changes in the competitive landscape; inability to realize our investment objectives; timely availability and customer acceptance of our new and existing products; risks and uncertainties relating to acquisitions; the impact of economic and political uncertainties and weaknesses in various regions of the world, including the commencement or escalation of hostilities or acts of terrorism; Competition in the market for Application Delivery and Network Security solutions and our industry in general is intense; and other factors and risks on which we may have little or no control. This list is intended to identify only certain of the principal factors that could cause actual results to differ. For a more detailed description of the risks and uncertainties affecting Radware, reference is made to Radware's Annual Report on Form 20-F which is on file with the Securities and Exchange Commission (SEC) and the other risk factors discussed from time to time by Radware in reports filed with, or furnished to, the SEC. Forward-looking statements speak only as of the date on which they are made and, except as required by applicable law, Radware undertakes no commitment to revise or update any forward-looking statement in order to reflect events or circumstances after the date any such statement is made.  Radware's public filings are available from the SEC's website at www.sec.gov or may be obtained on Radware's website at www.radware.com.

 

 Condensed Consolidated Balance Sheets
 (U.S. Dollars in thousands)
  
  December 31,
 2014
 June 30,
 2015
  (Audited) (Unaudited)
Current assets    
Cash and cash equivalents  44,979   28,024 
Available-for-sale marketable securities   29,448   31,731 
Short-term bank deposits  29,989   20,886 
Trade receivables, net  25,637   23,758 
Other receivables and prepaid expenses  8,107   6,939 
Inventories  16,844   16,313 
   155,004   127,651 
Long-term investments    
Available-for-sale marketable securities   114,519   97,436 
Long-term bank deposits  111,754   162,533 
Severance pay funds  3,040   3,067 
   229,313   263,036 
     
     
Property and equipment, net  20,592   23,911 
Intangible assets, net  4,756   4,083 
Other assets  3,234   5,285 
Goodwill  30,069   30,069 
     
Total assets  442,968   454,035 
     
Current liabilities    
Trade payables  9,817   7,314 
Deferred revenues, other payables and accrued expenses  66,009   70,963 
   75,826   78,277 
     
Long-term liabilities  33,445   31,905 
     
Shareholders' equity    
Share capital  654   660 
Additional paid-in capital  294,084   307,100 
Accumulated other comprehensive income  211   3,427 
Treasury stock, at cost  (41,153)  (60,880)
Retained earnings  79,901   93,546 
Total shareholders' equity  333,697   343,853 
     
Total liabilities and shareholders' equity  442,968   454,035 


Condensed Consolidated Statements of Income
(U.S. Dollars in thousands, except share and per share data)
 
 For the Three months ended June 30,  For the Six months ended June 30,
   
  2014  2015  2014  2015 
 (Unaudited)(Unaudited)(Unaudited)(Unaudited)
     
Revenues 53,055  56,027  104,065  113,251 
Cost of revenues   9,766  9,684  19,212  19,784 
Gross profit 43,289  46,343  84,853  93,467 
Operating expenses:    
Research and development, net 10,972  12,239  21,530  24,190 
Selling and marketing 23,092  22,082  45,504  45,662 
General and administrative   5,330  4,400    10,332  8,497 
Total operating expenses 39,394  38,721  77,366  78,349 
Operating income 3,895  7,622  7,487  15,118 
Financial income, net   1,407  1,450    2,952  2,100 
Income before taxes on income 5,302  9,072  10,439  17,218 
Taxes on income   (1,355) (1,886) (2,409) (3,573)
Net Income 3,947  7,186  8,030  13,645 
 
    
Basic net earnings per share
$0.09 $0.16 $0.18 $0.29 
             
Weighted average number of shares used to compute basic net earnings per share  45,075,338   46,304,373   45,009,869   46,350,151 
     
Diluted net earnings per share
$0.08 $0.15 $0.17 $0.29 
             
Weighted average number of shares used to compute diluted net earnings per share  46,750,581   47,659,321   46,810,391   47.552,869 


Reconciliation of Supplemental Financial Information
(U.S. Dollars in thousands, except share and per share data)
   
 
For the Three months ended June 30,  For the Six months ended June 30,
   
  2014  2015  2014  2015 
 (Unaudited)(Unaudited)(Unaudited)(Unaudited)
             
GAAP net Income 3,947  7,186  8,030  13,645 
Stock-based compensation expenses, included in:    
Cost of revenues 16  35  26  69 
Research and development, net 287  644  546  1,262 
Selling and marketing 717  1,017  1,311  1,906 
General and administrative 731  716  1,399  1,392 
  1,751  2,412   3,282  4,629 
Amortization of intangible assets included in:    
Cost of revenues 245  294  564  607 
Selling and marketing   163  28    326    66 
    408   322   890  673 
             
Exchange rate differences, net on balance sheet items included in financial income 91  (107) (40) 525 
             
Litigation Costs 2,031  959    3,850  1,771 
             
Non-GAAP net income 8,228  10,772  16,012   21,243 
     
Non-GAAP diluted net earnings per share$0.18 $0.23 $0.34 $0.45 
             
Weighted average number of shares used to compute Non-GAAP diluted net earnings per share 46,750,581  47,659,321  46,810,391   47,552,869 


Chief Financial Officer Meir Moshe +972-3766-8610 Corporate Media Relations Brian Gallagher +1 201-785-3206 briang@radware.com

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