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Radware Ltd. Announces Fourth Quarter 2012 Results

January 29, 2013

TEL AVIV, Israel, January 29, 2013 /PRNewswire/ –

Radware [http://www.radware.com ](R) (NASDAQ: RDWR), a global leader of application
delivery [http://www.radware.com/Products/ApplicationDelivery/default.aspx ] and
application security
[http://www.radware.com/Products/ApplicationNetworkSecurity/default.aspx ] solutions for
virtual and cloud data centers, today reported quarterly revenues of $49.8 million for the
fourth quarter of 2012. This represents an increase of 5% compared with revenues of $47.5
million for the third quarter of 2012, and an increase of 11% compared with revenues of
$45.1 million in the fourth quarter of 2011.

Net income on a GAAP basis for the fourth quarter of 2012 was $9.1 million or $0.39
per diluted share, compared with net income of $8.2 million or $0.35 per diluted share for
the third quarter of 2012 and to $6.6 million or $0.29 per diluted share in the fourth
quarter of 2011.

Net income on a Non-GAAP basis for the fourth quarter of 2012 was $11.2 million or
$0.48 per diluted share, compared with net income of $10.4 million or $0.45 per diluted
share for the third quarter of 2012 and to $9.5 million or $0.42 per diluted share in the
fourth quarter of 2011.

Revenues for 2012 amounted to $189.2 million, an increase of 13% compared with
revenues of $167.0 million in 2011.

Net income on a GAAP basis for 2012 amounted to $31.8 million or $1.36 per diluted
share, representing an increase of 49% compared with net income of $21.3 million or $0.93
per diluted share in 2011.

Net income on a Non-GAAP basis for 2012 amounted to $40.5 million or $1.74 per diluted
share, representing an increase of 32% compared with net income of $30.7 million or $1.34
per diluted share in 2011.

“2012 represented another record year for us,” states Roy Zisapel president and chief
executive officer, Radware. “The transition to virtual data center architectures, private
and public cloud build-outs, the explosion of mobile data, as well as surge in cyber
security attacks led the demand for our application delivery and attack mitigation
solutions.”

“Despite a year of ongoing macro-economic uncertainty, we are pleased by our solid
execution in meeting critical industry demands and look for these IT growth trends to
continue in 2013,” added Zisapel.

During the fourth quarter 2012, Radware released the following significant
announcements:

        - Radware Announces Third Quarter 2012 Earnings Conference Call
        - Brinkster Selects Radware's Attack Mitigation System to Protect its Cloud and
          Hosting Customers Against Cyber Attacks
        - Radware Launches In-Depth Resource for Information Security Professionals
        - Asiasoft Selects Radware to Defend Against Cyber Attacks
        - Radware's ADC Fabric Honored as a Bronze Stevie Winner at the 2012 American
          Business Awards Program
        - Radware Ltd. Announces Third Quarter 2012 Results
        - Radware Introduces Industry's Fastest Attack Mitigation Solution, DefensePro
          x420
        - Radware Reports Results of Annual General Meeting
        - New Report Reveals 65% of Organizations Experience Three DDoS Attacks a Year,
          But Majority are Unprepared to Mitigate Attacks
        - Radware Positioned in the Leaders Quadrant for Application Delivery
          Controllers' 2012 Magic Quadrant
        - Radware and VMware Integrated Virtual ADC Solution Now Generally Available
        - Radware Awarded Contract to Upgrade Existing Network Protection System for a
          Leading U.S. National Cellular Network Provider
        - Radware Launches Smart Choice Cloud Partner Program

Company management will host a quarterly investor conference call at 8:45am ET on
January 29, 2013. The call will focus on financial results for the quarter ending December
31, 2012 and certain other matters related to the Company’s business.

The conference call will be webcast on January 29, 2013 at 8:45a.m. 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 fourth quarter 2012
call:

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

International participants call: +1 760-666-3769

Conference ID: 85827370

About Radware

Radware [http://www.radware.com ] (NASDAQ: RDWR), is a global leader of application
delivery [http://www.radware.com/Products/ApplicationDelivery/default.aspx ] and
application security
[http://www.radware.com/Products/ApplicationNetworkSecurity/default.aspx ] 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
[http://www.linkedin.com/company/165642 ], Radware Blog [http://blog.radware.com ], Twitter
[http://twitter.com/#!/radware ], YouTube [http://www.youtube.com/radwareinc ] and the
Radware Connect [http://itunes.apple.com/us/app/radware-connect/id391124100?mt=8 ] app for
iPhone(R) and our new security center DDoSWarriors.com [http://security.radware.com ] that
provides a comprehensive analysis on DDoS attack tools, trends and threats.

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 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. These statements are based
on current expectations and projections that involve a number of risks and uncertainties.
There can be no assurance that future results will be achieved, and actual results could
differ materially from forecasts and estimates. These risks and uncertainties, as well as
others, are discussed in greater detail in Radware’s Annual Report on Form 20-F and
Radware’s other filings with the Securities and Exchange Commission. Forward-looking
statements speak only as of the date on which they are made and 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 Securities and Exchange Commission’s website at
http://www.sec.govor may be obtained on Radware’s website at

http://www.radware.com.

                             Consolidated Balance Sheets
                             (U.S. Dollars in thousands)
                                           December 31,      December 31,
                                               2011              2012
                                            (Audited)        (Unaudited)
        Current assets
        Cash and cash equivalents                17,386              20,048
        Available-for-sale marketable
        securities                               10,334              14,004
        Short term bank deposits                 88,773              54,155
        Trade receivables, net                   12,565              18,408
        Other receivables and prepaid
        expenses                                  3,218               3,975
        Inventories                              12,147              12,545
                                                144,423             123,135
        Long-term investments
        Available-for-sale marketable
        securities                              102,644             121,114
        Long-term bank deposits                       -              65,625
        Severance pay funds                       3,047               2,957
                                                105,691             189,696
        Property and equipment, net              11,084              13,589
        Other assets
        Intangible assets, net                    8,163               5,128
        Other long-term assets                    1,365               1,637
        Goodwill                                 24,465              24,465
        Total assets                            295,191             357,650
        Current liabilities
        Trade payables                            5,099               9,915
        Deferred revenues                        35,516              36,304
        Other payables and accrued
        expenses                                 14,732              20,301
                                                 55,347              66,520
        Long-term liabilities
        Deferred revenues                        16,978              16,486
        Other long term Liabilities               3,545               3,414
                                                 20,523              19,900
        Shareholders' equity
        Share capital                               528                 553
        Additional paid-in capital              233,353             249,739
        Accumulated other comprehensive
        income (loss)                            (1,663)              2,078
        Treasury stock, at cost                 (18,036)            (18,036)
        Retained earnings                         5,139              36,896
        Total shareholders' equity              219,321             271,230
        Total liabilities and
        shareholders' equity                    295,191             357,650

                       Condensed Consolidated Statements of Income
               (U.S. Dollars in thousands, except share and per share data)
                                     For the three months
                                      ended December 31,      For the Year ended
                                                                 December 31,
                                       2011        2012        2011       2012
                                   (Unaudited)  (Unaudited) (Audited)  (Unaudited)
        Revenues                         45,090      49,838    167,020     189,171
        Cost of revenues                  8,626       9,407     33,357      35,719
        Gross profit                     36,464      40,431    133,663     153,452
        Operating expenses:
        Research and development          9,146       8,968     36,064      36,187
        Selling and marketing            18,516      19,902     69,543      76,646
        General and administrative        2,501       2,476      9,629       9,696
        Total operating expenses         30,163      31,346    115,236     122,529
        Operating income                  6,301       9,085     18,427      30,923
        Financial income, net               787       1,038      4,200       4,792
        Income before income taxes        7,088      10,123     22,627      35,715
        Income taxes                       (468)     (1,012)    (1,290)     (3,958)
        Net income                        6,620       9,111     21,337      31,757
        Basic net earnings per share     $ 0.31      $ 0.41     $ 1.02      $ 1.45
        Weighted average number of
        shares used to compute
        basic net earnings per share 21,149,334  22,080,448 20,952,866  21,854,639
        Diluted net earnings per
        share                            $ 0.29      $ 0.39     $ 0.93      $ 1.36
        Weighted average number of
        shares used to compute
        diluted net earnings per
        share                        22,716,083  23,335,211 22,888,064  23,294,447

                     Reconciliation of Supplemental Financial Information
                 (U.S. Dollars in thousands, except share and per share data)
                         For the Three months ended           For the Year
                                December 31,               ended December 31,
                             2011           2012           2011           2012
                         (Unaudited)    (Unaudited)    (Unaudited)    (Unaudited)
        GAAP net income          6,620          9,111         21,337         31,757
        Stock-based
        compensation
        expenses,
        included in:
        Cost of
        revenues                    20             11             66             66
        Research and
        development                337            212          1,124          1,103
        Selling and
        marketing                1,013            599          3,135          3,298
        General and
        administrative             261            196          1,133            916
                                 1,631          1,018          5,458          5,383
        Amortization of
        intangible
        assets included
        in:
        Cost of
        revenues                   541            467          2,164          1,869
        Selling and
        marketing                  421            292          1,684          1,166
                                    962            759          3,848          3,035
        Exchange rate
        differences, net on
        balance sheet items
        included in financial
        income, net                306            277             43            355
        Non-GAAP net
        income                   9,519         11,165         30,686         40,530
        Non-GAAP
        diluted net
        earnings per
        share                   $ 0.42         $ 0.48         $ 1.34         $ 1.74
        Weighted
        average number
        of shares used
        to compute
        Non-GAAP
        diluted net
        earnings per
        share
                            22,716,083     23,335,211     22,888,064     23,294,447

        Contacts

        Chief Financial Officer
        Meir Moshe
        +972-3766-8610

        Corporate Media Relations
        Brian Gallagher
        +1-201-785-3206
        briang@radware.com

SOURCE Radware Ltd


Source: PR Newswire