EX-99 2 exhibit_10-1.htm EXHIBIT 10.1 exhibit_10-1.htm
Exhibit 10.1
 
CONTACTS

Chief Financial Officer Radware Ltd.
Meir Moshe
+ 972-3-766-8610

Corporate Relations
Joyce Anne Shulman
+1 201 785 3209
joyceannes@radware.com
For Immediate Release

Radware Ltd Announces 2Q10 Results

* Record quarterly revenues of $35.2 million
 
* Record Non-GAAP operating profit of $4.0 million
 
* Non-GAAP EPS $0.21

TEL AVIV, ISRAEL.; July 27, 2010 — Radware (NASDAQ: RDWR), a leading provider of integrated application delivery solutions for business-smart networking, today reported record quarterly revenues of $35.2 million for the second quarter of 2010. This represents an increase of 30% compared with revenues of $27.1 million for the second quarter of 2009 and an increase of 6% compared with revenues of $33.1 million in the first quarter of 2010.

Net income on a GAAP basis for the second quarter of 2010 was $1.4 million or $0.07 per diluted share, compared with a net loss of $1.7 million or $0.09 per diluted share for the second quarter of 2009.

Net income on a Non-GAAP basis for the second quarter of 2010 was $4.3 million or $0.21 per diluted share, compared with a net income of $0.6 million or $0.03 per diluted share in the second quarter of 2009.

At the end of the second quarter of 2010, the company’s overall cash position including cash, short-term and long-term bank deposits and marketable securities amounted to $149.2 million, representing an increase of approximately $35 million in the company's cash position in the last 12 months.

“Radware has steadily delivered quarter-over-quarter gains for five quarters running now. This continued increase in revenues, in combination with our increase in market share, is a clear indication of our sustained business strength “ stated Roy Zisapel, President & CEO Radware. “We believe with our investments in R&D, differentiated market opportunities and expanded field operations that we can continue to grow both the top and bottom lines.”

During the quarter ended June 30, 2010, Radware released the following significant announcements:
 
·  
Info Security Products Guide Names Radware’s DefensePro® Winner of the 2010 Global Excellence in Intrusion Prevention Solution Customer Trust Award
·  
Radware Plays Key Role in the 2010 World Expo
·  
With Faster Speeds than Ever Before, Radware’s LinkProof® Provides Customers Increased Network Multi homing Capabilities at Throughput Levels up to 16Gbps
 
 
 
 
 
·  
Radware Significantly Reduces Network Downtime for Hooters Restaurants
·  
Radware’s Alteon® 5-series Taken to New Heights
·  
Radware’s DefensePro® Successfully Awarded Three United States Patents Based on Real-time Signatures to Protect and Secure Application and Network Traffic
·  
Shanghai General Motors Adopts Radware APSolute® Application Delivery Solution to Create a High-Availability and Performance Enterprise Network
·  
Radware Launches All-inclusive Security Solution to Protect Data Centers and Networks from New Hybrid Attacks: APSolute Attack Prevention
·  
Radware Wins NGN Magazine’s 2010 NGN Leadership Award

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

Please use the following dial-in numbers to participate in the second 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 Tuesday July 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
    
June 30,
 2010
  
         
(Unaudited)
  
Current assets
            
Cash and cash equivalents
     19,843       22,918  
Available-for-sale marketable securities
     29,117       35,260  
Short term bank deposits
     10,130       11,446  
Trade receivables, net
     16,603       13,687  
Other receivables and prepaid expenses
     2,934       2,880  
Inventories
     9,792       9,755  
      88,419       95,946  
Long-term investments
                
Available-for-sale marketable securities
     42,021       54,597  
Long-term bank deposits
     25,000       25,000  
Severance pay funds
     2,514       2,472  
      69,535       82,069  
                 
Property and equipment, net
     11,220       11,240  
                 
Other assets
                
Intangible assets, net
     14,794       14,056  
Other long-term assets
     467       534  
Goodwill
     24,465       24,465  
      39,726       39,055  
                 
Total assets
     208,900       228,310  
                 
Current liabilities
                
Trade payables
     5,699       4,584  
Deferred revenues, other payables and accrued expenses
     33,147       42,747  
      38,846       47,331  
                 
Long-term liabilities
     20,581       22,167  
                 
Shareholders’ equity
                
Share capital
     465       475  
Additional paid-in capital
     191,941       199,863  
Accumulated other comprehensive income
     935       350  
Treasury stock, at cost
     (18,036 )     (18,036 )
Accumulated deficit
     (25,832 )     (23,840 )
Total shareholders’ equity
     149,473       158,812  
                 
Total liabilities and shareholders' equity
     208,900       228,310  

 
 
 
 
 
Condensed Consolidated Statements of Operations
(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,
  
   
2009
    
2010
    
2009
    
2010
  
   
(Unaudited)
    
(Unaudited)
    
(Unaudited)
    
(Unaudited)
  
                         
Revenues
     27,079       35,206       47,574       68,302  
Cost of revenues
     5,586       7,090       9,768       13,788  
Gross profit
     21,493       28,116       37,806       54,514  
Operating expenses:
                                
Research and development
     6,796       7,753       12,624       15,140  
Selling and marketing
     14,552       16,027       26,496       31,728  
General and administrative
     2,333       2,560       6,872       5,130  
Total operating expenses
     23,681       26,340       45,992       51,998  
Operating income (loss)
     (2,188 )     1,776       (8,186 )     2,516  
Financial income (expenses), net
     702       (145 )     799       (92 )
Income (loss) before income taxes
     (1,486 )     1,631       (7,387 )     2,424  
Income taxes
     (183 )     (228 )     (387 )     (432 )
Net Income (loss)
     (1,669 )     1,403       (7,774 )     1,992  
                                 
Basic net income (loss) per share
   $ (0.09 )   $ 0.07     $ (0.41 )   $ 0.10  
                                 
Weighted average number of shares used to compute basic net income (loss) per share
       18,869,577         19,170,659         18,888,035         19,071,288  
                                 
Basic net income (loss) per share
   $ (0.09 )   $ 0.07     $ (0.41 )   $ 0.10  
                                 
Weighted average number of shares used to compute diluted net income (loss) per share
       18,869,577         21,001,863         18,888,035         20,624,283  
 
 
 
 
 
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,
  
   
2009
    
2010
    
2009
    
2010
  
     
(Unaudited)
      
(Unaudited)
      
(Unaudited)
      
(Unaudited)
  
                                 
GAAP net Income (loss)
     (1,669 )      1,403       (7,774 )     1,992  
Stock-based compensation expenses, included in:
                                
Cost of revenues
     21       14       42       29  
Research and development
     318       280       615       578  
Selling and marketing
     516       553       1,009       1,055  
General and administrative
     519       406       1,012    
910
  
      1,374       1,253       2,678       2,572  
                                 
Amortization of intangible assets included in:
                                
Cost of revenues
     428       399       521       778  
Selling and marketing
  
630
    
592
    
669
    
1,222
  
      1,058    
991
       1,190       2,000  
                                 
Acquisition related expenses
     -       -       2,485    
-
  
                               
Exchange rate differences, net on balance sheet items included in finance income
     (206 )  
696
            339            1,325  
                                 
Non-GAAP net income (loss)
      557        4,343       (1,082 )     7,889  
                                 
Non-GAAP diluted net income (loss) per share
   $ 0.03     $ 0.21     $ (0.06 )   $ 0.38  
                                 
Weighted average number of shares used to compute Non-GAAP diluted net income (loss) per share
         18,947,404         21,001,863           18,888,035           20,624,283