EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1
 
Exhibit 99.1
 
 


Radware Ltd. Announces Second Quarter 2016 Earnings

2016 Second Quarter Highlights
* Revenues of $49.6 Million
* Non-GAAP EPS of $0.06
* Non-GAAP gross margin of 82.7%
* Repurchase of shares in a total amount of $4.9 Million
 
TEL AVIV, ISRAEL, July 26, 2016 — 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 second quarter ended June 30, 2016.
 
“Despite challenging market conditions this year, we have made solid progress this past quarter with our subscription booking and revenues.” said Roy Zisapel, Radware President & CEO.  “We are starting to bear the fruit of our technological investments with the launch of our new Cloud WAF, the expansions of our DDoS Scrubbing services and our technological achievements in ADC with NFV.  Their availability in the market should help allow us to resume revenues growth in the second half of 2016.”
 
Financial Highlights for the second quarter of 2016
 
Revenues for the second quarter of 2016 totaled $49.6 million, representing a decrease of 11% compared with revenues of $56.0 million for the second quarter of 2015, and an increase of 2% compared with revenues of $48.4 million for the first quarter of 2016.
 
Net loss on a GAAP basis for the second quarter of 2016 was $1.3 million or ($0.03) per share, compared with net income of $7.2 million or $0.15 per diluted share for the second quarter of 2015 and compared with net loss of $2.8 million or ($0.06) per diluted share for the first quarter of 2016.
 
Excluding the impact of the patent litigation expense, stock-based compensation, exchange rate differences, net on balance sheet items and amortization of intangible assets, non-GAAP net income was $2.6 million or $0.06 per diluted share, compared with non- GAAP net income of $10.8 million or $0.23 per diluted share for the second quarter of 2015 and compared with non-GAAP net income of $2.3 million or $0.05 per diluted share for the first quarter of 2016.
 
As of June 30, 2016 the Company had cash, cash equivalents, short-term and long-term bank deposits and marketable securities of $314.8 million.

Cash generated from operations in the second quarter of 2016 totaled $7.8 million.
 
During the second quarter we repurchased our shares in a total amount of $4.9 million.

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.

During the second quarter of 2016, Radware released the following significant announcements:

Product:

· Radware’s New Japan-Based Scrubbing Center Extends Regional Cloud Security Services to Asia Pacific
· Radware’s Virtual Alteon ADC Achieves Industry Highest Performance in OpenStack Environment
· Radware Cloud Security Service Awarded Best Managed Security Service for 2016 by SC Magazine
· Radware Receives ISO27001 and ISO27032 Certifications
· C-Suite Execs Say Won’t Pay Ransom Attacks, Until They Get Hacked, Radware Survey Finds
 
Customers:
 
· Switch Partners With Radware To Provide Attack Mitigation To Its SUPERNAP Data Centers
· Radware’s New Suite of Cloud Security Services Guard Businesses From Ever-Evolving Cyberthreats
· PenTeleData Chooses Radware for DDoS Attack Mitigation
· Myntex Mitigates Massive DDoS Attacks With Radware Cloud DDoS Protection
 
Financial
 
· Radware Announces First Quarter 2016 Earnings Conference Call
· Radware Ltd. Announces First Quarter 2016 Earnings
· Radware Announces Second Quarter 2016 Earnings Conference Call
 
Conference Call

Company management will host a quarterly investor conference call at 8:45am ET on July 26, 2016. The call will focus on financial results for the quarter ending June 30, 2016 and other matters related to the Company’s business.

The conference call will be webcast on July 26, 2016 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.

Participants in the US call: Toll Free 1 (800) 230-1951
 
 
 
Participants Internationally call:  +1- 612-332-0335

Conference ID:  397592

Please find a link to the upcoming webcast presentation on the following web page:
http://www.radware.com/IR/
 
###
 
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.
 
 
About Radware

Radware® (NASDAQ: RDWR), is a global leader of application delivery and cyber 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.
 
©2016 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.

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

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

 
Radware Ltd.  
Condensed Consolidated Balance Sheets  
(U.S. Dollars in thousands)  
       
   
June 30,
2016
    
December 31,
2015
  
   
(Unaudited)
        
Assets
            
             
Current assets
            
Cash and cash equivalents
    
21,928
      
33,744
  
Available-for-sale marketable securities
    
16,341
      
16,003
  
Short-term bank deposits
    
183,465
      
80,922
  
Trade receivables, net
    
26,057
      
26,410
  
Other receivables and prepaid expenses
    
4,382
      
5,042
  
Inventories
    
16,181
      
16,322
  
     
268,354
      
178,443
  
Long-term investments
                
Available-for-sale marketable securities
    
83,904
      
87,814
  
Long-term bank deposits
    
9,143
      
96,643
  
Severance pay funds
    
2,699
      
2,724
  
     
95,746
      
187,181
  
                 
Property and equipment, net
    
27,177
      
26,203
  
Intangible assets, net
    
2,959
      
3,518
  
Other assets
    
6,677
      
5,473
  
Goodwill
    
30,069
      
30,069
  
                 
Total assets
    
430,982
      
430,887
  
                 
Liabilities and shareholders’ equity
                
                 
Current liabilities
                
Trade payables
    
6,087
      
9,255
  
Deferred revenues
    
52,530
      
46,061
  
Other payables and accrued expenses
    
22,547
      
22,098
  
     
81,164
      
77,414
  
Long-term liabilities
                
Deferred revenues
    
27,261
      
25,136
  
Other long-term liabilities
    
14,088
      
9,214
  
     
41,349
      
34,350
  
Shareholders’ equity
                
Share capital
    
661
      
661
  
Additional paid-in capital
    
318,331
      
312,784
  
Accumulated other comprehensive income, net of tax
    
847
      
1,257
  
Treasury stock, at cost
    
(105,761
)
    
(94,049
)
Retained earnings
    
94,391
      
98,470
  
Total shareholders’ equity
    
308,469
      
319,123
  
                 
Total liabilities and shareholders' equity
    
430,982
      
430,887
  
 
 
Radware Ltd.
Condensed Consolidated Statements of Income
(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,
  
   
2016
    
2015
    
2016
    
2015
  
   
(Unaudited)
    
(Unaudited)
    
(Unaudited)
    
(Unaudited)
  
                         
Revenues
    
49,585
      
56,027
      
98,010
      
113,251
  
Cost of revenues
    
8,887
      
9,684
      
17,541
      
19,784
  
Gross profit
    
40,698
      
46,343
      
80,469
      
93,467
  
Operating expenses:
                                
Research and development, net
    
13,001
      
12,239
      
26,425
      
24,190
  
Selling and marketing
    
25,865
      
22,082
      
50,777
      
45,662
  
General and administrative
    
3,893
      
4,400
      
9,662
      
8,497
  
Total operating expenses
    
42,759
      
38,721
      
86,864
      
78,349
  
Operating income (loss)
    
(2,061
)
    
7,622
      
(6,395
)
    
15,118
  
Financial income, net
    
1,232
      
1,450
      
3,172
      
2,100
  
Income (loss) before taxes on income
    
(829
)
    
9,072
      
(3,223
)
    
17,218
  
Taxes on income
    
498
      
1,886
      
856
      
3,573
  
Net income (loss)
    
(1,327
)
    
7,186
      
(4,079
)
    
13,645
  
                                 
Basic net earnings (loss) per share
  
$
(0.03
)
  
$
0.16
    
$
(0.09
)
  
$
0.29
  
                                 
Weighted average number of shares used to compute basic net earnings (loss) per share
    
43,944,924
      
46,304,373
      
44,206,677
      
46,350,151
  
                                 
Diluted net earnings (loss) per share
  
$
(0.03
)
  
$
0.15
    
$
(0.09
)
  
$
0.29
  
                                 
Weighted average number of shares used to compute diluted net earnings (loss) per share
    
43,944,924
      
47,659,321
      
44,206,677
      
47,552,869
  
 
Radware Ltd.
Non-GAAP 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,
  
   
2016
    
2015
    
2016
    
2015
  
    (Unaudited)     (Unaudited)     (Unaudited)    
(Unaudited)
  
                         
GAAP net Income (loss)
    
(1,327
)
    
7,186
      
(4,079
)
    
13,645
  
                                 
Stock-based compensation expenses, included in:
                                
Cost of revenues
    
39
      
35
      
81
      
69
  
Research and development, net
    
667
      
644
      
1,450
      
1,262
  
Selling and marketing
    
1,394
      
1,017
      
2,662
      
1,906
  
General and administrative
    
644
      
716
      
1,428
      
1,392
  
     
2,744
      
2,412
      
5,621
      
4,629
  
                                 
Amortization of intangible assets included in:
                                
Cost of revenues
    
254
      
294
      
507
      
607
  
Selling and marketing
    
26
      
28
      
52
      
66
  
     
280
      
322
      
559
      
673
  
                                 
Exchange rate differences, net on balance sheet items included in financial income
    
460
      
(107
)
    
157
      
525
  
                                 
Litigation costs
    
433
      
959
      
2,597
      
1,771
  
                                 
Non-GAAP net income
    
2,590
      
10,772
      
4,855
      
21,243
  
                                 
Non-GAAP diluted net earnings per share
  
$
0.06
    
$
0.23
    
$
0.11
    
$
0.45
  
                                 
Weighted average number of shares used to compute Non-GAAP diluted net earnings per share
    
44,101,539
      
47,659,321
      
44,354,630
      
47,552,869
  

 
Radware Ltd.
Condensed Consolidated Statements of Cash Flows
(U.S. Dollars in thousands)
 
   
For the Three months
ended on June 30,
    
For the Six months
ended on June 30,
  
   
2016
    
2015
    
2016
    
2015
  
   
(Unaudited)
    
(Unaudited)
    
(Unaudited)
    
(Unaudited)
  
Cash flows from operating activities:
                        
                         
  Net income (loss)
    
(1,327
)
    
7,186
      
(4,079
)
    
13,645
  
 Adjustments to reconcile net income (loss) to net cash provided by operating activities:
                                
Depreciation and amortization
    
2,561
      
2,348
      
5,095
      
4,553
  
Stock based compensation
    
2,744
      
2,412
      
5,621
      
4,629
  
Gain from sale of available-for-sale marketable securities
    
(549
)
    
(229
)
    
(1,126
)
    
(423
)
Amortization of premiums, accretion of discounts and accrued interest on available-for-sale marketable securities, net
    
514
      
486
      
892
      
1,921
  
Accrued interest on bank deposits
    
6
      
(490
)
    
(655
)
    
(831
)
Increase (decrease) in accrued severance pay, net
    
19
      
(6
)
    
341
      
41
  
Decrease in trade receivables, net
    
1,848
      
2,188
      
353
      
1,879
  
Increase in other current assets and prepaid expenses and deferred income taxes, net
    
(106
)
    
(709
)
    
(410
)
    
(829
)
Decrease (increase) in inventories
    
395
      
(60
)
    
141
      
531
  
Increase (decrease) in trade payables
    
1,010
      
207
      
(3,168
)
    
(2,503
)
Increase (decrease) in deferred revenues
    
(73
)
    
(2,448
)
    
8,594
      
2,947
  
Increase in other payables and accrued expenses and other long-term liabilities
    
679
      
3,760
      
4,931
      
1,087
  
Excess tax benefit from stock-based compensation
    
74
      
(230
)
    
74
      
(460
)
                                 
Net cash provided by operating activities
    
7,795
      
14,415
      
16,604
      
26,187
  
                                 
Cash flows from investing activities:
                                
                                 
Purchase of property and equipment
    
(2,881
)
    
(4,247
)
    
(5,510
)
    
(7,200
)
Proceeds from (investment in) other long-term assets
    
(16
)
    
-
      
3
      
(51
)
Investment in bank deposits, net
    
(9,952
)
    
(17,652
)
    
(14,388
)
    
(40,845
)
Proceeds from (investment in) available-for-sale marketable securities
    
155
      
(869
)
    
3,261
      
16,518
  
                                 
Net cash used in investing activities
    
(12,694
)
    
(22,768
)
    
(16,634
)
    
(31,578
)
 
 
Radware Ltd.
Condensed Consolidated Statements of Cash Flows
(U.S. Dollars in thousands)
 
   
For the Three months
ended on June 30,
    
For the Six months
ended on June 30,
  
   
2016
    
2015
    
2016
    
2015
  
   
(Unaudited)
    
(Unaudited)
    
(Unaudited)
    
(Unaudited)
  
                         
Cash flows from financing activities:
                        
                         
Proceeds from exercise of stock options
    
-
      
5,493
      
-
      
7,703
  
Excess tax benefit from stock-based compensation
    
(74
)
    
230
      
(74
)
    
460
  
Repurchase of shares
    
(4,932
)
    
-
      
(11,712
)
    
(19,727
)
                                 
Net cash provided by (used in) financing activities
    
(5,006
)
    
5,723
      
(11,786
)
    
(11,564
)
                                 
Decrease in cash and cash equivalents
    
(9,905
)
    
(2,630
)
    
(11,816
)
    
(16,955
)
Cash and cash equivalents at the beginning of the period
    
31,833
      
30,654
      
33,744
      
44,979
  
                                 
Cash and cash equivalents at the end of the period
    
21,928
      
28,024
      
21,928
      
28,024