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 3Q10 Results

* Record quarterly revenues of $36.8 million
* Record Non-GAAP operating income of $5.1 million
* Record Non-GAAP EPS of $0.26
 
TEL AVIV, ISRAEL.; October 27, 2010 — Radware (NASDAQ: RDWR), a leading provider of integrated application delivery solutions for business-smart networking, today reported record quarterly revenues of $36.8 million for the third quarter of 2010. This represents an increase of 25.8% compared with revenues of $29.2 million for the third quarter of 2009, and an increase of 4.4% compared with revenues of $35.2 million in the second quarter of 2010.

Net income on a GAAP basis for the third quarter of 2010 was $3.7 million or $0.17 per diluted share, compared with a net income of $0.2 million or $0.01 per diluted share for the third quarter of 2009.

Net income on a Non-GAAP basis for the third quarter of 2010 was $5.6 million or $0.26 per diluted share, compared with a net income of $2.1 million or $0.11 per diluted share in the third quarter of 2009.

At the end of the third quarter of 2010, the company’s overall cash position including cash, short-term and long-term bank deposits and marketable securities amounted to $172.2 million, representing an increase in the company's cash position of approximately $23 million in the third quarter or $52 million in the last 12 months.

“We are pleased with the continued upward progression that we are seeing - supported by yet another record quarter in revenues in addition to record operating income, EPS and cash balance,” stated Roy Zisapel, CEO Radware. “We are very excited by the prospects of our new products designed specifically for data center consolidation and virtualization and believe they provide us with a stronger competitive imprint in the industry. This year is proving to be a very significant year for Radware solidifying our position as a key influencer in the application delivery and network security markets."

 
 
 
 
During the quarter ended September 30, 2010, Radware released the following significant announcements:
 
 
·
 Radware Introduces its Virtual Application Delivery Infrastructure Strategy
 
·
South African Service Provider, Internet Solutions, Leverages Radware’s AppDirector to Supply the ISP Market with Superior Application Delivery Performance
 
·
Alteon Reseller Kapsch CarrierCom AG Signs with Radware
 
·
Radware’s New AppDirector 2.30: Unleashing the Industry’s Leading Security-Integrated ADC Solution
 
·
Radware Achieves Oracle Validated Integration with Oracle’s PeopleSoft Enterprise 9.1
 
·
Radware helps 2xmoinscher.com to Ensure Business Continuity and PCI Compliance for their Visitors with an Unmatched Quality of Experience
 
·
Radware’s Award-Winning AppDirector® Solution Achieves Oracle Validated Integration with Oracle® E-Business Suite (EBS) 12.1
 
·
Radware Addresses Securing Network Assets when Exposed to the Mobile Internet
 
·
Radware’s AppDirector Achieves IPv6 Ready Logo
 
·
Radware Earns 2010 TMC Labs Innovation Award
 
·
Radware’s vAdapter Achieves VMware Ready™ Status
 
·
Radware’s AppDirector Achieves Oracle Validated Integration with Oracle’s Siebel Customer Relationship Management 8.1
 
·
Radware Wins Three Communications Solutions 2009 Product of the Year Awards

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

Please use the following dial-in numbers to participate in the third 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 Wednesday October 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
    
September 30,
 2010
  
         
(Unaudited)
  
Current assets
            
Cash and cash equivalents
     19,843       23,544  
Available-for-sale marketable securities
     29,117       29,204  
Short term bank deposits
     10,130       27,720  
Trade receivables, net
     16,603       13,431  
Other receivables and prepaid expenses
     2,934       3,298  
Inventories
     9,792       10,175  
      88,419       107,372  
Long-term investments
                
Available-for-sale marketable securities
     42,021       66,779  
Long-term bank deposits
     25,000       25,000  
Severance pay funds
     2,514       2,659  
      69,535       94,438  
                 
Property and equipment, net
     11,220       10,612  
                 
Other assets
                
Intangible assets, net
     14,794       13,086  
Other long-term assets
     467       565  
Goodwill
     24,465       24,465  
      39,726       38,116  
                 
Total assets
     208,900       250,538  
                 
Current liabilities
                
Trade payables
     5,699       5,503  
Deferred revenues, other payables and accrued expenses
     33,147       45,082  
      38,846       50,585  
                 
Long-term liabilities
     20,581       21,076  
                 
Shareholders’ equity
                
Share capital
     465       501  
Additional paid-in capital
     191,941       215,102  
Accumulated other comprehensive income
     935       1,432  
Treasury stock, at cost
     (18,036 )     (18,036 )
Accumulated deficit
     (25,832 )     (20,122 )
Total shareholders’ equity
     149,473       178,877  
                 
Total liabilities and shareholders' equity
     208,900       250,538  
 
 
 
 
 
Condensed Consolidated Statements of Operations
(U.S. Dollars in thousands, except share and per share data)
 
   
For the three months ended
September 30,
    
For the nine months ended
September 30,
  
   
2009
    
2010
    
2009
    
2010
  
   
(Unaudited)
    
(Unaudited)
    
(Unaudited)
    
(Unaudited)
  
                         
Revenues
     29,212       36,763       76,786       105,065  
Cost of revenues
     5,999       7,448       15,767       21,236  
Gross profit
     23,213       29,315       61,019       83,829  
Operating expenses:
                                
Research and development
     6,705       8,240       19,329       23,380  
Selling and marketing
     14,327       15,934       40,823       47,662  
General and administrative
     2,506       2,526       9,378       7,656  
Total operating expenses
     23,538       26,700       69,530       78,698  
Operating income (loss)
     (325 )     2,615       (8,511 )     5,131  
Financial income, net
     682       1,294       1,481       1,202  
Income (loss) before income taxes
     357       3,909       (7,030 )     6,333  
Income taxes
     (206 )     (191 )     (593 )     (623 )
Net Income (loss)
     151       3,718       (7,623 )     5,710  
                                 
Basic net income (loss) per share
   $ 0.01     $ 0.19     $ (0.40 )   $ 0.30  
                                 
Weighted average number of shares used to compute basic net income (loss) per share
       18,860,021         19,711,311         18,878,697         19,286,258  
                                 
Diluted net income (loss) per share
   $ 0.01     $ 0.17     $ (0.40 )   $ 0.27  
                                 
Weighted average number of shares used to compute diluted net income (loss) per share
       19,036,249         21,921,819         18,878,697         21,146,646  

 
 
 
 
Reconciliation of Supplemental Financial Information
(U.S. Dollars in thousands, except share and per share data)
 
   
For the Three months ended
 September 30,
    
For the nine months ended
September 30,
  
    2009     2010     2009     2010  
   
(Unaudited)
    
(Unaudited)
    
(Unaudited)
    
(Unaudited)
  
                         
GAAP net Income (loss)
      151        3,718       (7,623 )     5,710  
Stock-based compensation expenses, included in:
                                
Cost of revenues
     13       18       55       47  
Research and development
     176       365       791       943  
Selling and marketing
     314       711       1,323       1,766  
General and administrative
     579       470       1,591    
 1,380
  
      1,082       1,564       3,760    
4,136
  
Amortization of intangible assets included in:
                                
Cost of revenues
     427       439       948       1,217  
Selling and marketing
  
630
    
531
    
1,299
    
1,753
  
      1,057    
970
       2,247       2,970  
                                 
Acquisition related expenses
     -       -       2,485    
-
  
                               
Exchange rate differences, net on balance sheet items included in finance income
     (223 )  
(616)
           116            709  
                               
Non-GAAP net income
      2,067        5,636       985       13,525  
                                 
Non-GAAP diluted net income per share
   $ 0.11     $ 0.26     $ 0.05     $ 0.64  
                                 
Weighted average number of shares used to compute Non-GAAP diluted net income per share
         19,036,249           21,921,819           18,963,382           21,146,646