EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1

Exhibit 99.1

 
RADWARE ANNOUNCES SECOND QUARTER 2018 EARNINGS

Second Quarter 2018 Results and Financial Highlights
 
·
Revenues of $57 Million, up 12% from the second quarter of 2017
 
·
Non-GAAP EPS of $0.10; GAAP EPS of $0.04

TEL AVIV, ISRAEL, AUGUST 1, 2018 — Radware® (NASDAQ: RDWR), a leading provider of cyber security and application delivery solutions, today announced its consolidated financial results for the quarter ended June 30, 2018.
 
“We are pleased to report another strong quarter, with continued growth in bookings, revenue, and profitability. We remain committed to our mission of ensuring network and application availability and security. The cyber threats landscape continues to evolve, and as threats grow more complex, our innovation around adaptive and analytics-based early attack detection, surgical mitigation, and advanced automation, all become more valuable” said Roy Zisapel, Radware President & CEO.

Financial Highlights for the Second Quarter of 2018
 
Revenues for the second quarter of 2018 totaled $57.3 million, up 12% from revenues of $51.0 million for the second quarter of 2017:
 
·
Revenues in the Americas region were $23.9 million for the second quarter of 2018, down 2% from revenues of $24.3 million in the second quarter of 2017. For the first six months of 2018, revenues in the Americas region were up 13% over the same period in 2017
 
·
Revenues in the EMEA region were $19.8 million for the second quarter of 2018, up 51% from revenues of $13.1 million in the second quarter of 2017. For the first six months of 2018, revenues in the EMEA region increased 26% over the same period of 2017
 
·
Revenues in the APAC region were $13.6 million for the second quarter of 2018, same as in the second quarter of 2017. For the first six months of 2018, revenues in the APAC region decreased 3% over the same period of 2017
 
Net profit on a GAAP basis for the second quarter of 2018 was $1.7 million or $0.04 per diluted share, compared with net loss of ($4.1) million or ($0.09) per diluted share for the second quarter of 2017.
 
Non-GAAP net income for the second quarter of 2018 was $5.0 million or $0.10 per diluted share, compared with non- GAAP net income of $1.2 million or $0.03 per diluted share for the second quarter of 2017.
 
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 and litigation costs. 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 June 30, 2018, the Company had cash, cash equivalents, short-term and long-term bank deposits and marketable securities of $367.2 million, up from $358.1 million as of the end of March 31, 2018.

Conference Call

Radware management will host a call on Wednesday, August 1, 2018 at 8:30 am ET to discuss its second quarter 2018 results and the company’s outlook for the third quarter of 2018.

Participants in the US call: Toll Free 833-241-4257

Participants Internationally call:  +1-647-689-4208

Conference ID: 8599407

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 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. 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, 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)
 
 
  
June 30,
    
December 31,
  
 
  
2018
    
2017
  
 
  
(Unaudited)
    
(Unaudited)
  
Assets
            
 
            
Current assets
            
Cash and cash equivalents
    
61,676
      
65,237
  
Available-for-sale marketable securities
    
41,234
      
42,573
  
Short-term bank deposits
    
149,622
      
93,151
  
Trade receivables, net
    
18,598
      
16,150
  
Other receivables and prepaid expenses
    
7,687
      
12,252
  
Inventories
    
18,443
      
18,772
  
 
    
297,260
      
248,135
  
 
                
Long-term investments
                
Available-for-sale marketable securities
    
55,948
      
54,427
  
Long-term bank deposits
    
58,718
      
88,911
  
Severance pay funds
    
3,039
      
3,251
  
 
    
117,705
      
146,589
  
 
                
Property and equipment, net
    
22,453
      
23,642
  
Intangible assets, net
    
9,932
      
10,415
  
Other long-term assets
    
18,492
      
8,133
  
Goodwill
    
32,174
      
32,174
  
Total assets
    
498,016
      
469,088
  
 
                
Liabilities and shareholders' equity
                
 
                
Current Liabilities
                
Trade payables
    
4,744
      
5,367
  
Deferred revenues
    
76,758
      
69,829
  
Other payables and accrued expenses
    
25,212
      
32,174
  
 
    
106,714
      
107,370
  
 
                
Long-term liabilities
                
Deferred revenues
    
43,719
      
43,482
  
Other long-term liabilities
    
5,413
      
2,880
  
 
    
49,132
      
46,362
  
 
                
Shareholders' equity
                
Share capital
    
685
      
673
  
Additional paid-in capital
    
368,318
      
349,250
  
Accumulated other comprehensive loss, net of tax
    
(1,212
)
    
(443
)
Treasury stock, at cost
    
(116,442
)
    
(116,442
)
Retained earnings
    
90,821
      
82,318
  
Total shareholders' equity
    
342,170
      
315,356
  
 
                
Total liabilities and shareholders' equity
    
498,016
      
469,088
  


Radware Ltd.
Condensed Consolidated Statements of Income
(U.S Dollars in thousands, except share and per share data)
 
 
  
For the three months ended
    
For the six months ended
  
 
  
June 30,
    
June 30,
  
 
  
2018
    
2017
    
2018
    
2017
  
 
  
(Unaudited)
    
(Unaudited)
    
(Unaudited)
    
(Unaudited)
  
 
                        
Revenues
    
57,287
      
50,956
      
111,823
      
99,868
  
Cost of revenues
    
10,340
      
9,634
      
20,280
      
18,628
  
Gross profit
    
46,947
      
41,322
      
91,543
      
81,240
  
 
                                
Operating expenses:
                                
Research and development, net
    
14,633
      
15,013
      
29,295
      
29,253
  
Selling and marketing
    
27,803
      
26,410
      
55,986
      
52,389
  
General and administrative
    
3,811
      
4,380
      
7,866
      
9,160
  
Total operating expenses
    
46,247
      
45,803
      
93,147
      
90,802
  
 
                                
Operating income (loss)
    
700
      
(4,481
)
    
(1,604
)
    
(9,562
)
Financial income, net
    
1,701
      
640
      
3,390
      
1,747
  
Income (loss) before taxes on income
    
2,401
      
(3,841
)
    
1,786
      
(7,815
)
Taxes on income
    
(727
)
    
(218
)
    
(1,107
)
    
(322
)
Net income (loss)
    
1,674
      
(4,059
)
    
679
      
(8,137
)
 
                                
Basic net income (loss) per share
    
0.04
      
(0.09
)
    
0.02
      
(0.19
)
 
                                
   Weighted average number of shares used to compute basic net earnings (loss) per share
    
44,839,420
      
43,821,006
      
44,583,442
      
43,282,607
  
 
                                
Diluted net earnings (loss) per share
    
0.04
      
(0.09
)
    
0.01
      
(0.19
)
 
                                
   Weighted average number of shares used to compute diluted net earnings (loss) per share
    
47,396,099
      
43,821,006
      
46,936,309
      
43,282,607
  



 
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 six months ended
  
 
  
June 30,
    
June 30,
  
 
  
2018
    
2017
    
2018
    
2017
  
 
  
(Unaudited)
    
(Unaudited)
    
(Unaudited)
    
(Unaudited)
  
GAAP gross profit
    
46,947
      
41,322
      
91,543
      
81,240
  
Stock-based compensation
    
59
      
61
      
117
      
116
  
Amortization of intangible assets
    
212
      
419
      
442
      
672
  
Non-GAAP gross profit
    
47,218
      
41,802
      
92,102
      
82,028
  
 
                                
GAAP research and development, net
    
14,633
      
15,013
      
29,295
      
29,253
  
Stock-based compensation
    
679
      
1,028
      
1,610
      
1,926
  
Non-GAAP Research and development, net
    
13,954
      
13,985
      
27,685
      
27,327
  
 
                                
GAAP selling and marketing
    
27,803
      
26,410
      
55,986
      
52,389
  
Stock-based compensation
    
1,774
      
1,875
      
3,678
      
3,499
  
Amortization of intangible assets
    
21
      
24
      
41
      
47
  
Non-GAAP selling and marketing
    
26,008
      
24,511
      
52,267
      
48,843
  
 
                                
GAAP general and administrative
    
3,811
      
4,380
      
7,866
      
9,160
  
Stock-based compensation
    
378
      
583
      
785
      
1,003
  
Acquisition costs
    
-
      
-
      
-
      
340
  
Litigation costs
    
143
      
600
      
413
      
1,619
  
Non-GAAP general and administrative
    
3,290
      
3,197
      
6,668
      
6,198
  
 
                                
GAAP total operating expenses
    
46,247
      
45,803
      
93,147
      
90,802
  
Stock-based compensation
    
2,831
      
3,486
      
6,073
      
6,428
  
Acquisition costs
    
-
      
-
      
-
      
340
  
Amortization of intangible assets
    
21
      
24
      
41
      
47
  
Litigation costs
    
143
      
600
      
413
      
1,619
  
Non-GAAP total operating expenses
    
43,252
      
41,693
      
86,620
      
82,368
  
 
                                
GAAP operating income (loss)
    
700
      
(4,481
)
    
(1,604
)
    
(9,562
)
Stock-based compensation
    
2,890
      
3,547
      
6,190
      
6,544
  
Acquisition costs
    
-
      
-
      
-
      
340
  
Amortization of intangible assets
    
233
      
443
      
483
      
719
  
Litigation costs
    
143
      
600
      
413
      
1,619
  
Non-GAAP operating income (loss)
    
3,966
      
109
      
5,482
      
(340
)
 
                                
GAAP finance income
    
1,701
      
640
      
3,390
      
1,747
  
Exchange rate differences, net on balance sheet items included in financial income
    
26
      
659
      
(177
)
    
806
  
Non-GAAP finance income
    
1,727
      
1,299
      
3,213
      
2,553
  
 
                                
GAAP income (loss) before taxes on income
    
2,401
      
(3,841
)
    
1,786
      
(7,815
)
Stock-based compensation
    
2,890
      
3,547
      
6,190
      
6,544
  
Acquisition costs
    
-
      
-
      
-
      
340
  
Amortization of intangible assets
    
233
      
443
      
483
      
719
  
Litigation costs
    
143
      
600
      
413
      
1,619
  
Exchange rate differences, net on balance sheet items included in financial income
    
26
      
659
      
(177
)
    
806
  
Non-GAAP income before taxes on income
    
5,693
      
1,408
      
8,695
      
2,213
  
 
                                
GAAP net income (loss)
    
1,674
      
(4,059
)
    
679
      
(8,137
)
Stock-based compensation
    
2,890
      
3,547
      
6,190
      
6,544
  
Acquisition costs
    
-
      
-
      
-
      
340
  
Amortization of intangible assets
    
233
      
443
      
483
      
719
  
Litigation costs
    
143
      
600
      
413
      
1,619
  
Exchange rate differences, net on balance sheet items included in financial income
    
26
      
659
      
(177
)
    
806
  
Non GAAP net income
    
4,966
      
1,190
      
7,588
      
1,891
  
 
                                
GAAP Net earnings (loss) per diluted share
    
0.04
      
(0.09
)
    
0.01
      
(0.19
)
Stock-based compensation
    
0.06
      
0.08
      
0.13
      
0.15
  
Acquisition costs
    
0.00
      
0.00
      
0.00
      
0.01
  
Amortization of intangible assets
    
0.00
      
0.01
      
0.01
      
0.02
  
Litigation costs
    
0.00
      
0.01
      
0.01
      
0.04
  
Exchange rate differences, net on balance sheet items included in financial income
    
0.00
      
0.01
      
(0.00
)
    
0.02
  
Non GAAP Net earnings per diluted share
    
0.10
      
0.02
      
0.16
      
0.04
  
 
                                
Weighted average number of shares used to compute Non-GAAP diluted net earnings per share
    
47,396,099
      
45,054,172
      
46,936,309
      
44,279,284
  


Radware Ltd.
Condensed Consolidated Statements of Cash Flow
(U.S. Dollars in thousands)
 
 
  
For the three months ended
    
For the six months ended
  
 
  
June 30,
    
June 30,
  
 
  
2018
    
2017
    
2018
    
2017
  
 
  
(Unaudited)
    
(Unaudited)
    
(Unaudited)
    
(Unaudited)
  
Cash flow from operating activities:
                        
 
                        
Net income (loss)
    
1,674
      
(4,059
)
    
679
      
(8,137
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
                                
Depreciation and amortization
    
2,443
      
2,987
      
4,948
      
5,806
  
Stock based compensation
    
2,890
      
3,547
      
6,190
      
6,544
  
Amortization of premium, accretion of discounts and accrued interest on available-for- sale marketable securities, net
    
414
      
270
      
690
      
631
  
Accrued interest on bank deposits
    
(146
)
    
150
      
(212
)
    
1,532
  
Increase (decrease) in accrued severance pay, net
    
(97
)
    
41
      
142
      
176
  
Decrease (increase) in trade receivables, net
    
(2,564
)
    
3,352
      
(2,601
)
    
1,902
  
Decrease (increase) in other current assets and prepaid expenses and other long-term assets
    
(2,501
)
    
(196
)
    
4,697
      
838
  
Decrease (increase) in inventories
    
477
      
(1,063
)
    
329
      
(2,341
)
Increase (decrease) in trade payables
    
424
      
1,574
      
(623
)
    
(136
)
Increase (decrease) in deferred revenues
    
(1,700
)
    
8,135
      
7,166
      
14,949
  
Increase (decrease) in other payables and accrued expenses
    
1,245
      
(3,374
)
    
(6,682
)
    
(4,096
)
Net cash provided by operating activities
    
2,559
      
11,364
      
14,723
      
17,668
  
 
                                
Cash flows from investing activities:
                                
 
                                
Purchase of property and equipment
    
(1,187
)
    
(2,475
)
    
(3,276
)
    
(4,357
)
Proceeds from (investment in) other long-term assets, net
    
131
      
(31
)
    
40
      
16
  
Investment in bank deposits, net
    
(9,067
)
    
(1,219
)
    
(26,067
)
    
(35,126
)
Investment in sale, redemption of and purchase of available-for-sale marketable securities ,net
    
(686
)
    
(5,910
)
    
(1,872
)
    
(2,023
)
Payment for acquisition of subsidiary, net of cash acquired
    
0
      
0
      
0
      
(8,269
)
Net cash used in investing activities
    
(10,809
)
    
(9,635
)
    
(31,175
)
    
(49,759
)
 
                                
Cash flows from financing activities:
                                
 
                                
Proceeds from exercise of stock options
    
7,939
      
1,228
      
12,891
      
2,538
  
Net cash provided by financing activities
    
7,939
      
1,228
      
12,891
      
2,538
  
 
                                
Increase (decrease) in cash and cash equivalents
    
(311
)
    
2,957
      
(3,561
)
    
(29,553
)
Cash and cash equivalents at the beginning of the period
    
61,987
      
47,129
      
65,237
      
79,639
  
Cash and cash equivalents at the end of the period
    
61,676
      
50,086
      
61,676
      
50,086