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



Radware Announces Fourth Quarter and Full Year 2017 Earnings
 
Fourth Quarter 2017 Results and Financial Highlights
·
Revenues of $58 Million, up 13% from the fourth quarter of 2016
·
Non-GAAP EPS of $0.09; GAAP EPS of 0.05

Full Year 2017 Results and Financial Highlights
·
Revenues of $211 Million, up 8% from 2016
·
Non-GAAP EPS of $0.17; GAAP EPS of )$0.17)

TEL AVIV, ISRAEL, FEBRUARY 7, 2018 — Radware® (NASDAQ: RDWR), a leading provider of cyber security and application delivery solutions, today announced its consolidated financial results for the quarter and year ended December 31, 2017.
 
“We ended 2017 on a very strong note, delivering record bookings and strong revenue growth. The quarter concluded a strong year for Radware, which was highlighted by robust performance in our security business, and high growth in cloud services and product subscriptions,” said Roy Zisapel, Radware President & CEO. “This success provides us with excellent visibility entering 2018, and we have confidence in our growth prospects for the year.”

Financial Highlights for the Fourth Quarter of 2017
 
Revenues for the fourth quarter of 2017 totaled $58.5 million, up 13% from revenues of $51.7 million for the fourth quarter of 2016:
 
·
Revenues in the Americas region were $28.7 million for the fourth quarter of 2017, up 27% from revenues of $22.7 million in the fourth quarter of 2016.
 
·
Revenues in the EMEA region were $15.1 million for the fourth quarter of 2017, up 1% from revenues of $14.9 million in the fourth quarter of 2016.
 
·
Revenues in the APAC region were $14.6 million for the fourth quarter of 2017, up 4% from revenues of $14.1 million in the fourth quarter of 2016.
 
Net income on a GAAP basis for the fourth quarter of 2017 was $2.1 million or $0.05 per diluted share, compared with net loss of ($2.1) million or ($0.05) per diluted share for the fourth quarter of 2016.
 
 
Non-GAAP net income for the fourth quarter of 2017 was $3.9 million or $0.09 per diluted share, compared with non- GAAP net income of $2.5 million or $0.06 per diluted share for the fourth quarter of 2016.
 
Financial Highlights for the Full Year of 2017
 
Revenues for the full year of 2017 totaled $211.4 million, up 8% from revenues of $196.6 million for the full year of 2016:
 
·
Revenues in the Americas region were $97.9 million for the full year of 2017, up 16% from revenues of $84.7 in the full year of 2016.
 
·
Revenues in the EMEA region were $56.6 million for the full year of 2017, up 5% from revenues of $53.7 in the full year of 2016.
 
·
Revenues in the APAC region were $56.9 million for the full year of 2017, down 2% from revenues of $58.1 in the full year of 2016.
 
Net loss on a GAAP basis for the full year of 2017 was ($7.5) million or ($0.17) per share, compared with net loss of ($8.7) million or ($0.20) per diluted share for the full year of 2016.
 
Non-GAAP net income for the full year of 2017 was $7.6 million or $0.17 per diluted share, compared with non-GAAP net income of $8.9 million or $0.20 per diluted share for the full year of 2016.
 
Non-GAAP results are calculated excluding the impact of stock-based compensation, exchange rate differences, net on balance sheet items included in financial income, amortization of intangible assets, acquisition costs, litigation costs and gains, and changes in federal tax rate. 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 December 31, 2017, the Company had cash, cash equivalents, short-term and long-term bank deposits and marketable securities of $344.3 million. Cash generated from operations in the fourth quarter of 2017 totaled $8.0 million. Cash generated from operations in the full year of 2017 totaled $31.5 million.

Investor Meeting

The Company will host a meeting with analysts and institutional investors on February 20, 2018, in New York, where members of Radware’s executive team will provide an update on the Company’s business and outlook. To register for attendance, please email ir@radware.com. The presentation materials and a live webcast of the meeting will be available on the Company’s website. The webcast will remain available for replay during the next 12 months.

Conference Call

Radware management will host a call on Wednesday, February 7, 2018 at 8:30 am ET to discuss its fourth quarter and full year 2017 results and the company’s outlook for the first quarter of 2018.

Participants in the US call: Toll Free 866-393-4306

Participants Internationally call:  +1-734-385-2616

Conference ID: 7879889

 
A replay will be available for 2 days, starting 2 hours after the end of the call, on telephone number +1-416-621-4642 or (US toll-free) 800-585-8367.

A live webcast of the conference call can also be heard by accessing the Company's website at: http://www.radware.com/IR/. The webcast will remain available for replay during the next 12 months.
 
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 gross profit, operating income, financial income, 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 costs, litigation costs and gains, exchange rate differences, net on balance sheet items included in finance income and changes in the federal rate. 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. Furthermore, Radware uses a measure called “total deferred revenues” which is defined as the sum of short and long term deferred revenues on the balance sheet and uncollected billed amounts that were offset against trade receivables, and are not presented on the balance sheet. 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, as amended, 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 cyber security and application delivery solutions for physical, cloud, and software defined data centers. Its award-winning solutions portfolio secures the digital experience by providing infrastructure, application, and corporate IT protection and availability services to enterprises globally. Radware’s solutions empower more than 12,500 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.
 
©2018 Radware Ltd. All rights reserved. The Radware products and solutions mentioned in this press release are protected by trademarks, patents and pending patent applications of Radware in the U.S. and other countries. For more details please see: https://www.radware.com/LegalNotice/. All other trademarks and names are property of their respective owners.
 
CONTACTS
 
Investor Relations:
Anat Earon-Heilborn
+972 723917548
ir@radware.com
 
Media Contacts:
Deborah Szajngarten
Radware
201-785-3206
deborah.szajngarten@radware.com
 
Radware Ltd.
Condensed Consolidated Balance Sheets
(U.S. Dollars in thousands)
 
 
  
December 31,
    
December 31,
  
 
  
2017
    
2016
  
 
  
(Unaudited)
    
(Unaudited)
  
Assets
            
 
            
Current assets
            
Cash and cash equivalents
    
65,237
      
79,639
  
Available-for-sale marketable securities
    
42,573
      
20,452
  
Short-term bank deposits
    
93,151
      
125,995
  
Trade receivables, net
    
16,150
      
19,407
  
Other receivables and prepaid expenses
    
12,252
      
4,159
  
Inventories
    
18,772
      
17,114
  
 
    
248,135
      
266,766
  
 
                
Long-term investments
                
Available-for-sale marketable securities
    
54,427
      
74,967
  
Long-term bank deposits
    
88,911
      
19,092
  
Severance pay funds
    
3,251
      
2,597
  
 
    
146,589
      
96,656
  
 
                
Property and equipment, net
    
23,642
      
26,354
  
Intangible assets, net
    
10,415
      
2,399
  
Other long-term assets
    
8,133
      
8,092
  
Goodwill
    
32,174
      
30,069
  
 
                
Total assets
    
469,088
      
430,336
  
 
                
Liabilities and shareholders' equity
                
 
                
Current Liabilities
                
Trade payables
    
5,367
      
5,971
  
Deferred revenues
    
69,829
      
53,061
  
Other payables and accrued expenses
    
32,174
      
26,232
  
 
    
107,370
      
85,264
  
 
                
Long-term liabilities
                
Deferred revenues
    
43,482
      
31,100
  
Other long-term liabilities
    
2,880
      
14,209
  
 
    
46,362
      
45,309
  
 
                
Shareholders' equity
                
Share capital
    
673
      
663
  
Additional paid-in capital
    
349,250
      
325,338
  
Accumulated other comprehensive loss, net of tax
    
(443
)
    
(20
)
Treasury stock, at cost
    
(116,442
)
    
(116,029
)
Retained earnings
    
82,318
      
89,811
  
Total shareholders' equity
    
315,356
      
299,763
  
 
                
Total liabilities and shareholders' equity
    
469,088
      
430,336
  

 
Radware Ltd.
Condensed Consolidated Statements of Income (Loss)
(U.S Dollars in thousands, except share and per share data)
 
 
  
For the three months ended
    
For the year ended
  
 
  
December 31,
    
December 31,
  
 
  
2017
    
2016
    
2017
    
2016
  
 
  
(Unaudited)
    
(Unaudited)
    
(Unaudited)
    
(Unaudited)
  
 
                        
Revenues
    
58,454
      
51,712
      
211,369
      
196,585
  
Cost of revenues
    
11,060
      
9,596
      
39,616
      
35,695
  
Gross profit
    
47,394
      
42,116
      
171,753
      
160,890
  
 
                                
Operating expenses:
                                
Research and development, net
    
15,072
      
12,235
      
59,003
      
51,732
  
Selling and marketing
    
29,166
      
28,144
      
108,744
      
103,774
  
General and administrative
    
4,265
      
4,226
      
17,577
      
18,133
  
Other income
    
(6,900
)
    
-
      
(6,900
)
    
-
  
Total operating expenses
    
41,603
      
44,605
      
178,424
      
173,639
  
 
                                
Operating income (loss)
    
5,791
      
(2,489
)
    
(6,671
)
    
(12,749
)
Financial income, net
    
935
      
863
      
4,830
      
5,741
  
Income (loss) before taxes on income
    
6,726
      
(1,626
)
    
(1,841
)
    
(7,008
)
Taxes on income
    
(4,605
)
    
(507
)
    
(5,652
)
    
(1,651
)
Net income (loss)
    
2,121
      
(2,133
)
    
(7,493
)
    
(8,659
)
 
                                
Basic net earnings (loss) per share
    
0.05
      
(0.05
)
    
(0.17
)
    
(0.20
)
 
                                
   Weighted average number of shares used to compute basic net earnings (loss) per share
    
43,859,400
      
43,313,644
      
43,475,844
      
43,868,221
  
 
                                
Diluted net earnings (loss) per share
    
0.05
      
(0.05
)
    
(0.17
)
    
(0.20
)
 
                                
   Weighted average number of shares used to compute diluted net earnings (loss) per share
    
45,728,792
      
43,313,644
      
43,475,844
      
43,868,221
  

Radware Ltd.
Reconciliation of GAAP to Non-GAAP Financial Information
(U.S Dollars in thousands, except share and per share data)
 
 
  
For the three months ended
    
For the year ended
  
 
  
December 31,
    
December 31,
  
 
  
2017
    
2016
    
2017
    
2016
  
 
  
(Unaudited)
    
(Unaudited)
    
(Unaudited)
    
(Unaudited)
  
GAAP gross profit
    
47,394
      
42,116
      
171,753
      
160,890
  
Stock-based compensation
    
60
      
52
      
241
      
180
  
Amortization of intangible assets
    
86
      
254
      
1,137
      
1,014
  
Acquisition costs
    
550
      
-
      
550
      
-
  
Non-GAAP gross profit
    
48,090
      
42,422
      
173,681
      
162,084
  
 
                                
GAAP research and development, net
    
15,072
      
12,235
      
59,003
      
51,732
  
Stock-based compensation
    
984
      
948
      
3,867
      
3,339
  
Acquisition costs
    
204
      
-
      
204
      
-
  
Non-GAAP Research and development, net
    
13,884
      
11,287
      
54,932
      
48,393
  
 
                                
GAAP selling and marketing
    
29,166
      
28,144
      
108,744
      
103,774
  
Stock-based compensation
    
1,717
      
1,743
      
6,894
      
5,661
  
Amortization of intangible assets
    
24
      
26
      
94
      
105
  
Non-GAAP selling and marketing
    
27,425
      
26,375
      
101,756
      
98,008
  
 
                                
GAAP general and administrative
    
4,265
      
4,226
      
17,577
      
18,133
  
Stock-based compensation
    
456
      
478
      
2,029
      
2,340
  
Acquisition costs
    
-
      
-
      
340
      
-
  
Litigation costs
    
76
      
784
      
2,052
      
4,270
  
Non-GAAP general and administrative
    
3,733
      
2,964
      
13,156
      
11,523
  
 
                                
GAAP other income
    
(6,900
)
    
-
      
(6,900
)
    
-
  
Court verdict
    
(6,900
)
    
-
      
(6,900
)
    
-
  
Non-GAAP other income
    
-
      
-
      
-
      
-
  
 
                                
GAAP total operating expenses
    
41,603
      
44,605
      
178,424
      
173,639
  
Stock-based compensation
    
3,157
      
3,169
      
12,790
      
11,340
  
Acquisition costs
    
204
      
-
      
544
      
-
  
Amortization of intangible assets
    
24
      
26
      
94
      
105
  
Litigation costs
    
76
      
784
      
2,052
      
4,270
  
Court verdict
    
(6,900
)
    
-
      
(6,900
)
    
-
  
Non-GAAP total operating expenses
    
45,042
      
40,626
      
169,844
      
157,924
  
 
                                
GAAP operating income (loss)
    
5,791
      
(2,489
)
    
(6,671
)
    
(12,749
)
Stock-based compensation
    
3,217
      
3,221
      
13,031
      
11,520
  
Acquisition costs
    
754
      
-
      
1,094
      
-
  
Amortization of intangible assets
    
110
      
280
      
1,231
      
1,119
  
Litigation costs
    
76
      
784
      
2,052
      
4,270
  
Court verdict
    
(6,900
)
    
-
      
(6,900
)
    
-
  
Non-GAAP operating income
    
3,048
      
1,796
      
3,837
      
4,160
  
 
                                
GAAP finance income
    
935
      
863
      
4,830
      
5,741
  
Exchange rate differences, net on balance sheet items included in financial income
    
558
      
341
      
635
      
674
  
Non-GAAP finance income
    
1,493
      
1,204
      
5,465
      
6,415
  
 
                                
GAAP income (loss) before taxes on income
    
6,726
      
(1,626
)
    
(1,841
)
    
(7,008
)
Stock-based compensation
    
3,217
      
3,221
      
13,031
      
11,520
  
Acquisition costs
    
754
      
-
      
1,094
      
-
  
Amortization of intangible assets
    
110
      
280
      
1,231
      
1,119
  
Litigation costs
    
76
      
784
      
2,052
      
4,270
  
Court verdict
    
(6,900
)
    
-
      
(6,900
)
    
-
  
Exchange rate differences, net on balance sheet items included in financial income
    
558
      
341
      
635
      
674
  
Non-GAAP income before taxes on income
    
4,541
      
3,000
      
9,302
      
10,575
  
 
                                
GAAP taxes on income
    
(4,605
)
    
(507
)
    
(5,652
)
    
(1,651
)
Change in the federal rate
    
3,249
      
-
      
3,249
      
-
  
Court verdict
    
724
      
-
      
724
      
-
  
Non-GAAP taxes on income
    
(632
)
    
(507
)
    
(1,679
)
    
(1,651
)
 
                                
GAAP net income (loss)
    
2,121
      
(2,133
)
    
(7,493
)
    
(8,659
)
Stock-based compensation
    
3,217
      
3,221
      
13,031
      
11,520
  
Acquisition costs
    
754
      
-
      
1,094
      
-
  
Amortization of intangible assets
    
110
      
280
      
1,231
      
1,119
  
Litigation costs
    
76
      
784
      
2,052
      
4,270
  
Exchange rate differences, net on balance sheet items included in financial income
    
558
      
341
      
635
      
674
  
Change in the federal rate
    
3,249
      
-
      
3,249
      
-
  
Court verdict
    
(6,176
)
    
-
      
(6,176
)
    
-
  
Non-GAAP net income
    
3,909
      
2,493
      
7,623
      
8,924
  
 
                                
GAAP Net earnings (loss) per diluted share
    
0.05
      
(0.05
)
    
(0.17
)
    
(0.20
)
Stock-based compensation
    
0.07
      
0.07
      
0.30
      
0.26
  
Acquisition costs
    
0.02
      
-
      
0.02
      
-
  
Amortization of intangible assets
    
-
      
0.01
      
0.03
      
0.03
  
Litigation costs
    
-
      
0.02
      
0.05
      
0.10
  
Exchange rate differences, net on balance sheet items included in financial income
    
0.01
      
0.01
      
0.01
      
0.01
  
Change in the federal rate
    
0.08
      
-
      
0.07
      
-
  
Court verdict
    
(0.14
)
    
-
      
(0.14
)
    
-
  
Non GAAP Net earnings per diluted share
    
0.09
      
0.06
      
0.17
      
0.20
  
 
                                
Weighted average number of shares used to compute non-GAAP diluted net earnings per share
    
45,728,792
      
43,721,973
      
44,756,732
      
44,125,436
  


Radware Ltd.
Condensed Consolidated Statements of Cash Flow
(U.S. Dollars in thousands)
 
 
  
For the three months ended
    
For the year ended
  
 
  
December 31,
    
December 31,
  
 
  
2017
    
2016
    
2017
    
2016
  
 
  
(Unaudited)
    
(Unaudited)
    
(Unaudited)
    
(Unaudited)
  
Cash flow from operating activities:
                        
 
                        
Net income (loss)
    
2,121
      
(2,133
)
    
(7,493
)
    
(8,659
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
                                
Depreciation and amortization
    
2,567
      
2,663
      
11,234
      
10,372
  
Stock based compensation
    
3,217
      
3,221
      
13,031
      
11,520
  
Loss (gain) from sale of available-for-sale marketable securities
    
(18
)
    
6
      
(18
)
    
(1,771
)
Amortization of premium, accretion of discounts and accrued interest on available-for- sale marketable securities, net
    
465
      
672
      
1,546
      
1,949
  
Accrued interest on bank deposits
    
(586
)
    
1,633
      
226
      
1,179
  
Increase (decrease) in accrued severance pay, net
    
(430
)
    
111
      
(210
)
    
401
  
Decrease (increase) in trade receivables, net
    
(3,836
)
    
1,939
      
3,390
      
7,003
  
Increase in other current assets, prepaid expenses and deferred income taxes, net
    
(8,258
)
    
(1,542
)
    
(7,879
)
    
(1,804
)
Increase in inventories
    
(48
)
    
(302
)
    
(1,658
)
    
(792
)
Increase (decrease) in trade payables
    
817
      
920
      
(734
)
    
(3,284
)
Increase in deferred revenues
    
11,119
      
11,143
      
28,781
      
12,964
  
Increase (decrease) in other payables and accrued expenses
    
826
      
4,344
      
(8,753
)
    
8,855
  
Excess tax benefit from stock-based compensation
    
-
      
473
      
-
      
547
  
Net cash provided by operating activities
    
7,956
      
23,148
      
31,463
      
38,480
  
 
                                
Cash flows from investing activities:
                                
 
                                
Purchase of property and equipment
    
(1,613
)
    
(1,333
)
    
(7,210
)
    
(9,404
)
Investment in other long-term assets, net
    
(18
)
    
(53
)
    
(6
)
    
(53
)
Proceeds from (investment in) bank deposits, net
    
-
      
29,586
      
(37,200
)
    
31,295
  
Proceeds from (investment in) sale, redemption of and purchase of available-for-sale marketable securities ,net
    
(2,119
)
    
(1,079
)
    
(3,657
)
    
6,521
  
Payment for acquisition of subsidiary, net of cash acquired
    
-
      
-
      
(8,269
)
    
-
  
Net cash provided (used in) in investing activities
    
(3,750
)
    
27,121
      
(56,342
)
    
28,359
  
 
                                
Cash flows from financing activities:
                                
 
                                
Proceeds from exercise of stock options
    
7,501
      
1,253
      
10,890
      
1,583
  
Excess tax benefit from stock-based compensation
    
-
      
(473
)
    
-
      
(547
)
Repurchase of shares
    
-
      
(10,268
)
    
(413
)
    
(21,980
)
Net cash provided by (used in) financing activities
    
7,501
      
(9,488
)
    
10,477
      
(20,944
)
 
                                
Increase (decrease) in cash and cash equivalents
    
11,707
      
40,781
      
(14,402
)
    
45,895
  
Cash and cash equivalents at the beginning of the period
    
53,530
      
38,858
      
79,639
      
33,744
  
Cash and cash equivalents at the end of the period
    
65,237
      
79,639
      
65,237
      
79,639