Radware (Nasdaq: RDWR), the leading provider of intelligent integrated solutions for ensuring the fast, reliable and secure delivery of networked and Web-enabled applications over IP today reported revenues of $20.2 million for the third quarter of 2006, an increase of 6% compared with revenues of $19.0 million for the third quarter of 2005, and $20.1 million revenues for the second quarter of 2006.
Net loss on a GAAP basis for the third quarter of 2006 was $1.1 million or $0.06 per diluted share, compared to net loss of $0.6 million or $0.03 per diluted share in the second quarter of 2006.
For comparative purposes, net income excluding the effects of stock-based compensation expense for the third quarter of 2006 was $0.6 million or $0.03 per diluted share, compared with net income of $0.3 million or $0.02 per diluted share in the second quarter of 2006 and net income of $1.6 million or $0.08 per diluted share in the third quarter of 2005.
In the third quarter of 2006 the Company continued to maintain a positive operational cash flow. During the third quarter the company continued to implement its buy-back program and repurchased additional 488 thousand shares of its stock for approximately $6.2 million, leading to a balance of $163.9 million in cash, cash equivalents and investments.
"Improving sales performance continues to be a top business priority. We are keenly focused on achieving this goal as well as making progress on several fronts to strengthen the company's business fundamentals to increase our growth rates and improve profitability," said Roy Zisapel, CEO at Radware. "This quarter we began implementing a restructuring plan to establish the foundation on which to build a strong team and create an infrastructure for scaling the business and leveraging market conditions for driving revenue growth and market share."
"We are executing on our vision for application delivery and are introducing new innovative capabilities to address evolving application delivery requirements of the new class of emerging SOA-based applications," Zisapel continued. "More and more companies are moving to deploy business- oriented IT strategies that align IT infrastructure with business processes to improve their business agility. We believe offering solutions for optimizing the new generation of SOA-based applications such as XML web-services has the potential to change the current landscape of the application delivery market and make Radware an even more strategic partner for our large enterprise and carrier customers."
During the quarter ended September 30, 2006, Radware released the following significant announcements:
-- Osram Shines Bright with Radware Application Delivery Solutions
-- Christopher R. McCleary Elected Chairman of the Board
-- Radware Reactivates Stock Repurchase Program
-- Radware Ltd. Announces Q2 Results
Company management will host a quarterly investor conference call at 8:45 AM EST on October 30, 2006. The call will focus on financial results for the quarter ended September 30, 2006, and certain other matters related to the Company's business.
The conference call will be webcast on October 30, 2006 at 8:45 AM EST in the "listen only" mode via the Internet at: http://www.radware.com/content/company/investorrelations/default.asp
Please use the following dial-in numbers to participate in the third quarter 2006 call:
Participants in the U.S. call: 1-866-254-5940 (Toll Free)
Participants outside the U.S. call: 1-612-288-0318
About Radware
Radware (Nasdaq: RDWR) is the global leader in integrated application delivery solutions, assuring the full availability, maximum performance and complete security of all business critical networked applications while dramatically cutting operating and scaling costs. Over 5,000 enterprises and carriers worldwide use Radware application-smart switches to drive business productivity and improve profitability by adding critical application intelligence to their IP infrastructure, making networks more responsive to specific business processes. Radware's APSolute product family provides the most complete set of application front-end, remote access and security capabilities for application-smart networking to ensure faster, more reliable and secure business transactions. Learn more on how Radware application delivery solutions can enable you to get the most of your investments in IT infrastructure and people. http://www.radware.com.
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 industry, changes in demand for Application Switching 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 Statements of Operations
(U.S. Dollars in thousands, except share and per share data)
For the Three For the Three For the Nine For the Nine
months ended months ended months ended months ended
September 30, September 30, September 30, September 30,
2005 2006 2005 2006
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues 19,018 20,213 56,546 60,317
Cost of revenues 3,797 3,925 10,843 11,666
Gross profit 15,221 16,288 45,703 48,651
Operating expenses:
Research and
development, net 3,298 4,598 9,655 12,698
Sales and marketing 10,279 12,803 28,892 37,809
General and
administrative 1,316 1,627 3,873 4,633
Total operating
expenses 14,893 19,028 42,420 55,140
Operating income
(loss) 328 (2,740) 3,283 (6,489)
Financial income, net 1,300 1,938 3,817 5,353
Income (loss) before
income taxes 1,628 (802) 7,100 (1,136)
Income taxes (39) (294) (110) (254)
Net income (loss) 1,589 (1,096) 6,990 (1,390)
Basic net earnings
(loss) per share $ 0.08 $ (0.06) $ 0.37 $ (0.07)
Weighted average number
of shares used to
compute basic net
earnings (loss)
per share 18,920,493 19,359,051 18,731,111 19,344,895
Diluted net
earnings (loss)
per share $ 0.08 $ (0.06) $ 0.35 $ (0.07)
Weighted average
number of shares
used to compute
diluted net
earnings (loss)
per share 19,814,061 19,359,051 20,118,693 19,344,895
Reconciliation of Supplemental Financial Information
(U.S. Dollars in thousands, except share and per share data)
For the Three For the Three For the Nine For the Nine
months ended months ended months ended months ended
September 30, September 30, September 30, September 30,
2005 2006 2005 2006
GAAP Net income
(loss) 1,589 (1,096) 6,990 (1,390)
Stock-based
compensation expenses,
included in:
Cost of revenues - 24 - 61
Research and
development, net - 374 - 914
Sales and marketing - 764 - 2,217
General and
administrative - 258 - 487
Income taxes - 233 - -
- 1,653 - 3,679
Non-GAAP Net income 1,589 557 6,990 2,289
Non-GAAP Diluted
net earnings
per share $ 0.08 $ 0.03 $ 0.35 $ 0.11
Weighted average
number of shares
used to compute
Non-GAAP diluted
net earnings
per share 19,814,061 19,594,886 20,118,693 19,901,291
Condensed Consolidated Balance Sheets
(U.S. Dollars in Thousands)
December 31, September 30,
2005 2006
(Audited) (Unaudited)
Current assets
Cash and cash equivalents 56,263 47,460
Short-term bank deposits 10,195 -
Short-term marketable securities 60,443 73,517
Trade receivables, net 14,661 15,847
Other receivables and prepaid expenses 1,451 1,864
Inventories 5,254 6,859
148,267 145,547
Long-term investments
Long-term bank deposit 9,458 9,470
Long-term marketable securities 28,134 33,487
Severance pay funds 2,178 2,723
39,770 45,680
Property and equipment, net 5,968 8,166
Other assets
Intangible assets, net, long-term
deferred taxes and other
long-term assets 3,888 3,720
Goodwill 6,454 6,454
10,342 10,174
Total assets 204,347 209,567
Current liabilities
Trade payables 5,329 4,549
Deferred revenues, other payables
and accrued expenses 18,933 22,065
24,262 26,614
Accrued severance pay 2,659 3,597
Total liabilities 26,921 30,211
Shareholders' equity
Share capital 470 493
Additional paid-in capital 153,010 167,038
Accumulated other comprehensive loss (404) (133)
Deferred stock compensation (67) -
Treasury stock, at cost - (11,069)
Retained earnings 24,417 23,027
Total shareholders' equity 177,426 179,356
Total liabilities and
shareholders' equity 204,347 209,567