EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1


Exhibit 99.1

 
RADWARE ANNOUNCES FIRST QUARTER 2019 EARNINGS

First Quarter 2019 Results and Financial Highlights
 
·
Revenues of $61 Million, up 13% from the first quarter of 2018
·
Non-GAAP EPS of $0.18; GAAP EPS of $0.09
·
Operating cash flow of $23 Million

TEL AVIV, ISRAEL, MAY 1, 2019 — Radware® (NASDAQ: RDWR), a leading provider of cyber security and application delivery solutions, today announced its consolidated financial results for the quarter ended March 31, 2019.
 
“We delivered solid earnings for the quarter, exceeding our expectation for revenues, profitability, and cash generation. We are on track to meet our goals for the full year 2019. We successfully closed the ShieldSquare acquisition and are rapidly integrating the Bot Management offering into our portfolio. With a new solution for Cloud Workload Protection, we also continue to enhance and expand our solution portfolio organically. Our high-quality and comprehensive portfolio positions us to capture the market opportunities that arise from the increasing demand for cloud security services.” said Roy Zisapel, Radware President & CEO.
 
Financial Highlights for the First Quarter of 2019
 
Revenues for the first quarter of 2019 totaled $61.4 million, up 13% from revenues of $54.5 million for the first quarter of 2018:
 
·
Revenues in the Americas region were $24.7 million for the first quarter of 2019, up 2% compared to revenues of $24.2 million in the first quarter of 2018.
 
·
Revenues in the Europe, Middle East and Africa (“EMEA”) region were $18.4 million for the first quarter of 2019, up 21% from revenues of $15.1 million in the first quarter of 2018.
 
·
Revenues in the Asia-Pacific (“APAC”) region were $18.4 million for the first quarter of 2019, up 21% from revenues of $15.2 million in the first quarter of 2018.
 
Net income on a GAAP basis for the first quarter of 2019 was $4.4 million or $0.09 per diluted share, compared with net loss of $1.0 million, or $0.02 per diluted share for the first quarter of 2018.
 
Non-GAAP net income for the first quarter of 2019 was $8.9 million or $0.18 per diluted share, compared with non- GAAP net income of $2.6 million or $0.06 per diluted share for the first quarter of 2018.
 
Non-GAAP results are calculated excluding, as applicable, 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 March 31, 2019, the Company had cash, cash equivalents, short-term and long-term bank deposits and marketable securities of $420.1 million, up from $401.1 million as of December 31, 2018. Net cash provided by operating activities in the first quarter of 2019 totaled $23.5 million.
 

Share Repurchase Plan
The Company also announced that its Board of Directors has authorized a new one-year plan to repurchase up to $40 million of its issued and outstanding ordinary shares. The Company currently has court approval for the repurchase plan until August 6, 2019 and intends to continue filing extension requests on an ongoing basis as required by the Israeli courts. The share repurchase plan authorizes management to repurchase ordinary shares, from time to time, in open market transactions, in privately negotiated transactions or in other legally permissible ways depending on market conditions, share price, trading volume and other factors. Such repurchases, which will be funded from available working capital, will be made in accordance with applicable U.S. securities laws and regulations, including Rule 10b-18 under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company may repurchase all or a portion of the authorized repurchase amount pursuant to a plan that is compliant with Rule 10b5-1 of the Exchange Act that is designed to facilitate these purchases. The share repurchase plan does not obligate the Company to repurchase any specific number of shares and may be suspended or terminated at any time at management’s discretion.

Conference Call

Radware management will host a call on Wednesday, May 1, 2019 at 8:30 am ET to discuss its first quarter 2019 results and the Company’s outlook for the second quarter of 2019.

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

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

Conference ID: 5797227

A replay will be available for two days, starting two hours after the end of the call, at 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 Measures
In addition to reporting financial results in accordance with generally accepted accounting principles (GAAP), Radware uses non-GAAP measures of gross profit, research and development expense, sales and marketing expense, general and administrative expense, other income, total operating expenses, operating income, financial income, income before taxes on income, net income and earnings per share, which are adjustments from results based on GAAP to exclude stock-based compensation expenses, amortization of intangible assets, acquisition costs, litigation costs and exchange rate differences, net on balance sheet items included in finance income. Management believes that exclusion of these charges allows for meaningful comparisons of operating results across past, present and future periods. Radware’s management believes the non-GAAP financial measures provided in this release are useful to investors for the purpose of understanding and assessing Radware’s ongoing operations. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of each non-GAAP financial measure 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 financial measures in evaluating and operating the business and, as such, has determined that it is important to provide this information to investors.
 

Safe Harbor Statement

This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements made herein that are not statements of historical fact, including statements about Radware’s plans, outlook, beliefs or opinions, are forward-looking statements. Generally, forward-looking statements may be identified by words such as “believes,” “expects,” “anticipates,” “intends,” “estimates,” “plans,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could.” 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 or other investments; 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; intense competition in the market for Application Delivery and Network Security solutions and in our industry in general; changes in government regulation; outages, interruptions or delays in hosting services or our internal network system; compliance with open source and third party licenses; the risk that our intangible assets or goodwill may become impaired; our dependence on independent distributors to sell our products; long sales cycles for our solutions; changes in foreign currency exchange rates; undetected defects or errors in our products or a failure of our products to protect against malicious attacks; the availability of components and manufacturing capacity; the ability of vendors to provide our hardware platforms and components for our main accessories; our ability to protect our proprietary technology; intellectual property infringement claims made by third parties; changes in tax laws; our ability to attract, train and retain highly qualified personnel; and other factors and risks over 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, refer to Radware’s Annual Report on Form 20-F, filed 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.
 
©2019 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)
  
 
            
 
  
March 31,
    
December 31,
  
 
  
2019
    
2018
  
 
  
(Unaudited)
    
(Unaudited)
  
Assets
            
 
            
Current assets
            
Cash and cash equivalents
    
52,361
      
45,203
  
Available-for-sale marketable securities
    
9,996
      
15,742
  
Short-term bank deposits
    
250,354
      
255,454
  
Trade receivables, net
    
14,346
      
17,166
  
Other receivables and prepaid expenses
    
8,632
      
7,071
  
Inventories
    
17,185
      
18,401
  
 
    
352,874
      
359,037
  
 
                
Long-term investments
                
Available-for-sale marketable securities
    
101,346
      
84,669
  
Long-term bank deposits
    
6,011
      
0
  
Severance pay funds
    
2,187
      
2,973
  
 
    
109,544
      
87,642
  
 
                
 
                
Property and equipment, net
    
23,430
      
23,677
  
Other long-term assets
    
21,221
      
20,724
  
Operating lease right-of-use assets
    
20,539
      
0
  
Goodwill and intangible assets, net
    
54,913
      
41,641
  
Total assets
    
582,521
      
532,721
  
 
                
Liabilities and shareholders' equity
                
 
                
Current Liabilities
                
Trade payables
    
3,830
      
4,483
  
Deferred revenues
    
89,068
      
83,955
  
Operating lease liabilities
    
5,197
      
0
  
Other payables and accrued expenses
    
29,628
      
29,596
  
 
    
127,723
      
118,034
  
 
                
Long-term liabilities
                
Deferred revenues
    
50,122
      
43,796
  
Operating lease liabilities
    
15,717
      
0
  
Other long-term liabilities
    
8,733
      
6,934
  
 
    
74,572
      
50,730
  
 
                
Shareholders' equity
                
Share capital
    
701
      
693
  
Additional paid-in capital
    
394,361
      
383,536
  
Accumulated other comprehensive income (loss), net of tax
    
6
      
(1,110
)
Treasury stock, at cost
    
(120,765
)
    
(120,717
)
Retained earnings
    
105,923
      
101,555
  
Total shareholders' equity
    
380,226
      
363,957
  
 
                
Total liabilities and shareholders' equity
    
582,521
      
532,721
  
 

 


Radware Ltd.
  
Condensed Consolidated Statements of Income (Loss)
  
(U.S Dollars in thousands, except share and per share data)
  
 
            
 
  
For the three months ended
March 31,   
  
 
  
 
  
2019
    
2018
  
 
  
(Unaudited)
    
(Unaudited)
  
 
            
Revenues
    
61,397
      
54,536
  
Cost of revenues
    
11,009
      
9,940
  
Gross profit
    
50,388
      
44,596
  
 
                
Operating expenses, net:
                
Research and development, net
    
15,230
      
14,662
  
Selling and marketing
    
26,661
      
28,183
  
General and administrative
    
4,764
      
4,055
  
Total operating expenses, net
    
46,655
      
46,900
  
 
                
Operating income (loss)
    
3,733
      
(2,304
)
Financial income, net
    
1,791
      
1,689
  
Income (loss) before taxes on income
    
5,524
      
(615
)
Taxes on income
    
1,156
      
380
  
Net income (loss)
    
4,368
      
(995
)
 
                
Basic net income (loss) per share
    
0.09
      
(0.02
)
 
                
   Weighted average number of shares used to compute basic net earnings (loss) per share
    
46,612,325
      
44,325,008
  
 
                
Diluted net earnings (loss) per share
    
0.09
      
(0.02
)
 
                
   Weighted average number of shares used to compute diluted net earnings (loss) per share
    
48,572,366
      
44,325,008
  
 
                
 
 
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
  
 
  
March 31,
  
 
  
2019
    
2018
  
 
  
(Unaudited)
    
(Unaudited)
  
GAAP gross profit
    
50,388
      
44,596
  
Stock-based compensation
    
55
      
58
  
Amortization of intangible assets
    
411
      
230
  
Non-GAAP gross profit
    
50,854
      
44,884
  
 
                
GAAP research and development, net
    
15,230
      
14,662
  
Stock-based compensation
    
710
      
931
  
Non-GAAP Research and development, net
    
14,520
      
13,731
  
 
                
GAAP selling and marketing
    
26,661
      
28,183
  
Stock-based compensation
    
1,569
      
1,904
  
Amortization of intangible assets
    
17
      
20
  
Non-GAAP selling and marketing
    
25,075
      
26,259
  
 
                
GAAP general and administrative
    
4,764
      
4,055
  
Stock-based compensation
    
767
      
407
  
Acquisition costs
    
264
      
-
  
Litigation costs
    
82
      
270
  
Non-GAAP general and administrative
    
3,651
      
3,378
  
 
                
GAAP total operating expenses, net
    
46,655
      
46,900
  
Stock-based compensation
    
3,046
      
3,242
  
Acquisition costs
    
264
      
-
  
Amortization of intangible assets
    
17
      
20
  
Litigation costs
    
82
      
270
  
Non-GAAP total operating expenses, net
    
43,246
      
43,368
  
 
                
GAAP operating income (loss)
    
3,733
      
(2,304
)
Stock-based compensation
    
3,101
      
3,300
  
Acquisition costs
    
264
      
-
  
Amortization of intangible assets
    
428
      
250
  
Litigation costs
    
82
      
270
  
Non-GAAP operating income
    
7,608
      
1,516
  
 
                
GAAP financial income, net
    
1,791
      
1,689
  
Exchange rate differences, net on balance sheet items included in financial income, net
    
631
      
(203
)
Non-GAAP financial income, net
    
2,422
      
1,486
  
 
                
GAAP income (loss) before taxes on income
    
5,524
      
(615
)
Stock-based compensation
    
3,101
      
3,300
  
Acquisition costs
    
264
      
-
  
Amortization of intangible assets
    
428
      
250
  
Litigation costs
    
82
      
270
  
Exchange rate differences, net on balance sheet items included in financial income, net
    
631
      
(203
)
Non-GAAP income before taxes on income
    
10,030
      
3,002
  
 
                
GAAP net income (loss)
    
4,368
      
(995
)
Stock-based compensation
    
3,101
      
3,300
  
Acquisition costs
    
264
      
-
  
Amortization of intangible assets
    
428
      
250
  
Litigation costs
    
82
      
270
  
Exchange rate differences, net on balance sheet items included in financial income, net
    
631
      
(203
)
Non-GAAP net income
    
8,874
      
2,622
  
 
                
GAAP Net earnings (loss) per diluted share
    
0.09
      
(0.02
)
Stock-based compensation
    
0.06
      
0.07
  
Acquisition costs
    
0.01
      
0.00
  
Amortization of intangible assets
    
0.01
      
0.01
  
Litigation costs
    
0.00
      
0.01
  
Exchange rate differences, net on balance sheet items included in financial income, net
    
0.01
      
(0.00
)
Non-GAAP Net earnings per diluted share
    
0.18
      
0.06
  
 
                
Weighted average number of shares used to compute Non-GAAP diluted net earnings per share
    
48,572,366
      
46,424,462
  
 

 

Radware Ltd.
  
Condensed Consolidated Statements of Cash Flow
  
(U.S. Dollars in thousands)
  
 
            
 
  
For the three months ended
  
 
  
December 31,
  
 
  
2019
    
2018
  
 
  
(Unaudited)
    
(Unaudited)
  
Cash flow from operating activities:
            
 
            
Net income (loss)
    
4,368
      
(995
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
                
Depreciation and amortization
    
2,687
      
2,504
  
Stock based compensation
    
3,101
      
3,300
  
Amortization of premium, accretion of discounts and accrued interest on available-for-sale marketable securities, net
    
178
      
276
  
Accrued interest on bank deposits
    
(829
)
    
(66
)
Increase in accrued severance pay, net
    
868
      
239
  
Decrease (increase) in trade receivables, net
    
3,170
      
(37
)
Decrease (increase) in other receivables and prepaid expenses and other long-term assets
    
(1,965
)
    
7,199
  
Decrease (increase) in inventories
    
1,216
      
(148
)
Decrease in trade payables
    
(710
)
    
(1,047
)
Increase in deferred revenues
    
11,020
      
8,866
  
Increase (decrease) in other payables and accrued expenses
    
9
      
(7,927
)
Operating lease liabilities, net
    
375
      
0
  
Net cash provided by operating activities
    
23,488
      
12,164
  
 
                
Cash flows from investing activities:
                
 
                
Purchase of property and equipment
    
(1,961
)
    
(2,089
)
Investment in other long-term assets, net
    
(29
)
    
(91
)
Investment in bank deposits, net
    
(82
)
    
(17,000
)
Investment in sale, redemption of and purchase of available-for-sale marketable securities ,net
    
(9,661
)
    
(1,186
)
Payment for acquisition of subsidiary, net of cash acquired
    
(12,282
)
    
0
  
Net cash used in investing activities
    
(24,015
)
    
(20,366
)
 
                
Cash flows from financing activities:
                
 
                
Proceeds from exercise of stock options
    
7,733
      
4,952
  
Repurchase of shares
    
(48
)
    
0
  
Net cash provided by financing activities
    
7,685
      
4,952
  
 
                
Increase (decrease) in cash and cash equivalents
    
7,158
      
(3,250
)
Cash and cash equivalents at the beginning of the period
    
45,203
      
65,237
  
Cash and cash equivalents at the end of the period
    
52,361
      
61,987