EX-99 2 exhibit_1-1.htm EXHIBIT 1.1 exhibit_1-1.htm
Exhibit 1.1
 



RADWARE Ltd. Announces Third Quarter 2015 Results

2015 third quarter highlights
* Revenues of $48.1 Million
* Non-GAAP gross margin of 82.9%
* Non-GAAP EPS of $0.10
* Repurchase of shares in a total amount of $24.8 million

TEL AVIV, ISRAEL, Oct. 28, 2015 — Radware® (NASDAQ: 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 announced its consolidated financial results for the third quarter and nine months ended September 30, 2015

Commenting on the results, Roy Zisapel president and chief executive officer, Radware, said: “We are disappointed with the lower than expected quarterly revenues, yet we continue to see overall strong market drivers for both cyber security and applications delivery solutions across enterprise, carrier, and cloud data centers."   
 
Mr. Zisapel added “We remain as market leaders with our solutions deployed in top institutions for every major market, from the world’s foremost carriers and service providers, to financial institutions, to retailers and more.”   

Revenues for the third quarter totaled $48.1 million, compared with revenues of $56.8 million for the third quarter of 2014.

Revenues for the first nine months of 2015 totaled $161.3 million, compared with revenues of $160.9 million for the first nine months of 2014.

Net income on a GAAP basis for the third quarter of 2015 was $0.7 million or $0.01 per diluted share, compared with net income of $7.8 million or $0.17 per diluted share for the third quarter of 2014.

Net income on a GAAP basis for the first nine months of 2015 was $14.3 million or $0.30 per diluted share, compared with net income of $15.8 million or $0.34 per diluted share for the first nine months of 2014.

Net income on a Non-GAAP basis for the third quarter of 2015 was $4.8 million or $0.10 per diluted share, compared with net income of $11.2 million or $0.24 per diluted share for the third quarter of 2014.

 
 
 
Net income on a Non-GAAP basis for the first nine months of 2015 was $26.0 million or $0.55 per diluted share, compare with net income of $27.2 million or $0.58 per diluted share for the first nine months of 2014.

A reconciliation of each of the company’s non-GAAP measures to the comparable GAAP measured is included at the end of this press release.

As of September 30, 2015 the Company had cash, cash equivalents, short-term and long-term bank deposits and marketable securities of $310.0 million. During the third quarter we repurchased our shares in a total amount of $24.8 million.

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

 
·
Radware Ltd. Announces Preliminary Results For Third Quarter 2015
 
·
Radware Announces 2015 Annual General Meeting
 
·
Radware’s Attack Mitigation System Helps Protect Online Tech, Hosting/Cloud Services Company
 
·
Radware Report Reveals Slow Websites Will Cost Retailers Big Bucks this Holiday Season

Conference Call

Company management will host a quarterly investor conference call at 8:45am ET on October 28, 2015. The call will focus on financial results for the quarter ending September 30, 2015 and other matters related to the Company’s business.

The conference call will be webcast on October 28, 2015 at 8:45am ET in the “listen only” mode via the Internet at: http://www.radware.com/IR/ and will be available for replay during the next 12 months.

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

Participants in the US call: Toll Free 1 (800) 288-8968
International participants call: +1- 612 332-0228
Conference ID:  370321

About Radware Ltd.

Radware Ltd. (NASDAQ: 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.

CONTACTS
Chief Financial Officer
Doron Abramovitch
+972-3766-8610

Corporate Media Relations:
Deborah Szajngarten
(201) 785-3206
deborah.szajngarten@radware.com

 
 
 

Condensed Consolidated Balance Sheets
(U.S. Dollars in thousands)
 
   
December 31,
 2014
    
September 30,
 2015
  
         
(Unaudited)
  
Current assets
            
Cash and cash equivalents
     44,979       20,755  
Available-for-sale marketable securities
     29,448       17,606  
Short-term bank deposits
     29,989       53,333  
Trade receivables, net
     25,637       24,181  
Other receivables and prepaid expenses
     8,107       8,792  
Inventories
     16,844       16,391  
      155,004       141,058  
Long-term investments
                
Available-for-sale marketable securities
     114,519       90,631  
Long-term bank deposits
     111,754       127,647  
Severance pay funds
     3,040       2,960  
      229,313       221,238  
                 
Property and equipment, net
     20,592       25,275  
Intangible assets, net
     4,756       3,801  
Other assets
     3,234       5,313  
Goodwill
     30,069       30,069  
                 
Total assets
     442,968       426,754  
                 
Current liabilities
                
Trade payables
     9,817       6,026  
Deferred revenues, other payables and accrued expenses
     66,009       69,123  
      75,826       75,149  
                 
Long-term liabilities
     33,445       29,733  
                 
Shareholders’ equity
                
Share capital
     654       661  
Additional paid-in capital
     294,084       310,410  
Accumulated other comprehensive income
     211       2,254  
Treasury stock, at cost
     (41,153 )     (85,660 )
Retained earnings
     79,901       94,207  
Total shareholders’ equity
     333,697       321,872  
                 
Total liabilities and shareholders' equity
     442,968       426,754  

 
 
 
 
Condensed Consolidated Statements of Income
(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,
  
   
2014
    
2015
    
2014
    
2015
  
   
(Unaudited)
    
(Unaudited)
    
(Unaudited)
    
(Unaudited)
  
                         
Revenues
     56,795       48,059       160,860       161,310  
Cost of revenues
     9,926       8,506       29,138       28,290  
Gross profit
     46,869       39,553       131,722       133,020  
Operating expenses:
                                
Research and development, net
     11,306       12,825       32,836       37,015  
Selling and marketing
     23,157       22,739       68,661       68,401  
General and administrative
     4,543       4,481       14,875       12,978  
Total operating expenses
     39,006       40,045       116,372       118,394  
Operating income (loss)
     7,863       (492 )     15,350       14,626  
Financial income, net
     1,467       1,373       4,419       3,473  
Income before taxes on income
     9,330       881       19,769       18,099  
Taxes on income
     (1,574 )     (220 )     (3,983 )     (3,793 )
Net Income
     7,756       661       15,786       14,306  
                                 
Basic net earnings per share
   $ 0.17     $ 0.01     $ 0.35     $ 0.31  
                                 
Weighted average number of shares used to compute basic net earnings per share
     45,068,021       45,842,187       45,029,319       46,180,689  
                                 
Diluted net earnings per share
   $ 0.17     $ 0.01     $ 0.34       0.30  
                                 
Weighted average number of shares used to compute diluted net earnings per share
     46,586,698       46,557,853       46,735,893       47,221,057  

 
 
 
 
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,
  
   
2014
    
2015
    
2014
    
2015
  
   
(Unaudited)
    
(Unaudited)
    
(Unaudited)
    
(Unaudited)
  
GAAP net Income
     7,756       661       15,786       14,306  
Stock-based compensation expenses, included in:
                                
Cost of revenues
     22       30       48       99  
Research and development, net
     463       619       1,009       1,881  
Selling and marketing
     779       1,005       2,090       2,911  
General and administrative
     775       790       2,174       2,182  
      2,039       2,444       5,321       7,073  
Amortization of intangible assets included in:
                                
Cost of revenues
     245       253       809       860  
Selling and marketing
     155       29       481       95  
      400       282       1,290       955  
                                 
Exchange rate differences, net on balance sheet items included in financial income
     (97 )      535       (137 )         1,059  
                                 
Litigation Costs
     1,088       868       4,938       2,639  
                                 
Non-GAAP net income
     11,186        4,790       27,198       26,032  
                                 
Non-GAAP diluted net earnings per share
   $ 0.24     $ 0.10     $ 0.58     $ 0.55  
                                 
Weighted average number of shares used to compute Non-GAAP diluted net earnings per share
         46,586,698           46,557,853           46,735,893           47,221,057