News Column

Radware Ltd. Announces Fourth Quarter 2013 Results

January 28, 2014

* Record Annual Revenues of $193 Million * Record Quarterly Revenues of $53 Million * Quarterly Non-GAAP EPS $0.22 TEL AVIV, Israel , Jan. 28, 2014 (GLOBE NEWSWIRE) -- Radware (Nasdaq:RDWR), a global leader of application delivery and application security solutions for virtual and cloud data centers, today reported quarterly revenues of $53.0 million for the fourth quarter of 2013. This represents an increase of 10% compared with revenues of $48.0 million for the third quarter of 2013, and an increase of 6% compared with revenues of $49.8 million in the fourth quarter of 2012. Net income on a GAAP basis for the fourth quarter of 2013 was $5.7 million or $0.12 per diluted share, compared with net income of $2.9 million or $0.06 per diluted share for the third quarter of 2013 and to $9.1 million or $0.20 per diluted share in the fourth quarter of 2012. Net income on a Non-GAAP basis for the fourth quarter of 2013 was $10.1 million or $0.22 per diluted share, compared with net income of $7.8 million or $0.17 per diluted share for the third quarter of 2013 and to $11.2 million or $0.24 per diluted share in the fourth quarter of 2012. Revenues for 2013 amounted to $193.0 million , an increase of 2% compared with revenues of $189.2 million in 2012. At the end of the fourth quarter 2013, the company's overall cash position including cash, short-term and long term bank deposits and marketable securities amounted to $285.7 million . The earnings per share presented for all prior periods were restated to reflect the effects of the stock split that occurred on April 12, 2013 . "We are pleased with record postings of our annual and quarterly revenues," says Roy Zisapel , president and chief executive officer, Radware . "Specifically, the continued growth in the Americas coupled with the improved results in EMEA, translated into strong momentum for our business. We believe our industry leading application delivery and our fast growing application security solutions will enable us to continue to grow our revenues in the coming year." During the fourth quarter 2013, Radware released the following significant announcements: Radware Announces Lineup of Fall Speaking Engagements Radware Announces Lineup of European and UK Speaking Engagements Radware Announces ElasticScale SDN-Based Network Service Scalability Solution New Radware Research Reveals Top Retailers Sites Too Slow, Struggle to Meet Customer Needs Radware Joins Open Networking Foundation Working Group to Help Accelerate the Adoption of Open SDN Radware to Discuss Future of Cloud Computing During OpenStack Summit in Hong Kong Radware's Alteon Application Delivery Controller Natively Provides Load Balancing Services for OpenStack Private and Public Cloud Applications High Abandonment Rate for Mobile Shopping Carts Is Attributed to Slow Load Times, According to Radware : Warning to Retailers Depending on Cyber Monday Radware Positioned as a Leader in the Magic Quadrant for Application Delivery Controllers for Fifth Time Recognized for Having Most Completeness of Vision in 2013 Radware Launches Alteon NG Next Generation Application Delivery Controller Radware's Alteon Virtual Appliance Cloud Now Available on AWS Marketplace Radware Nominated as a Finalist for "Best Enterprise Security Solution" by SC Magazine Retailers Beware: Radware Study Reveals Strong Correlation Between Slow Network Speed and Brand Perception Company management will host a quarterly investor conference call at 8:45am ET on January 28, 2014 . The call will focus on financial results for the quarter ending December 31, 2013 and other matters related to the Company's business. The conference call will be webcast on January 28, 2014 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 30 days. Please use the following dial-in numbers to participate in the fourth quarter 2013 call: Participants in the US call : Toll Free (877) 260-8900 International participants call: +1 612 332-0634 Conference ID: 314833 About Radware Radware (Nasdaq:RDWR), is a global leader of application delivery and application security solutions for virtual and cloud data centers. Its award-winning solutions portfolio delivers full resilience for business-critical applications, maximum IT efficiency, and complete business agility. 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; LinkedIn , Radware Blog , Twitter , YouTube and the Radware Connect app for iPhone . 2014 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, acquisition related expenses, litigation costs and expenses related to tax settlement 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. 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. These statements are based on current expectations and projections that involve a number of risks and uncertainties. There can be no assurance that future results will be achieved, and actual results could differ materially from forecasts and estimates. These risks and uncertainties, as well as others, are discussed in greater detail in Radware's Annual Report on Form 20-F and Radware's other filings with the Securities and Exchange Commission . Forward-looking statements speak only as of the date on which they are made and 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 Securities and Exchange Commission's website at www.sec.gov or may be obtained on Radware's website at www.radware.com . Consolidated Balance Sheets (U.S. Dollars in thousands) December 31 , 2012 December 31 , 2013 (Audited) (Unaudited) Current assets Cash and cash equivalents 20,048 20,067 Available-for-sale marketable securities 14,004 30,372 Short term bank deposits 54,155 84,387 Trade receivables, net 18,408 24,911 Other receivables and prepaid expenses 3,975 6,323 Inventories 12,545 14,190 123,135 180,250 Long-term investments Available-for-sale marketable securities 121,114 113,377 Long-term bank deposits 65,625 37,497 Severance pay funds 2,957 3,319 189,696 154,193 Property and equipment, net 13,589 17,523 Intangible assets, net 5,128 5,070 Other long-term assets 1,637 1,629 Goodwill 24,465 30,069 Total assets 357,650 388,734 Current liabilities Trade payables 9,915 8,798 Deferred revenues 36,304 38,674 Other payables and accrued expenses 14,913 19,232 61,132 66,704 Long-term liabilities Deferred revenues 16,486 20,036 Other long term Liabilities 8,802 7,874 25,288 27,910 Shareholders' equity Share capital 599 611 Additional paid-in capital 249,739 262,809 Accumulated other comprehensive income 2,078 1,733 Treasury stock, at cost (18,082) (25,984) Retained earnings 36,896 54,951 Total shareholders' equity 271,230 294,120 Total liabilities and shareholders' equity 357,650 388,734 Condensed Consolidated Statements of Income (U.S. Dollars in thousands, except share and per share data) For the three months ended December 31 , For the Year ended December 31 , 2012 2013 2012 2013 (Unaudited) (Unaudited) (Audited) (Unaudited) Revenues 49,838 53,027 189,171 192,997 Cost of revenues (9,407) (10,054) (35,719) (36,735) Gross profit 40,431 42,973 153,452 156,262 Operating expenses: Research and development, net 8,968 10,723 36,187 40,983 Selling and marketing 19,902 21,928 76,646 82,815 General and administrative 2,476 4,708 9,696 14,895 Total operating expenses 31,346 37,359 122,529 138,693 Operating income 9,085 5,614 30,923 17,569 Financial income, net 1,038 1,101 4,792 4,494 Income before income taxes 10,123 6,715 35,715 22,063 Income taxes (1,012) (993) (3,958) (4,008) Net income 9,111 5,722 31,757 18,055 Basic net earnings per share $0.21 $0.13 $0.73 $0.40 Weighted average number of shares used to compute basic net earnings per share 44,160,896 44,749,807 43,709,278 44,760,197 Diluted net earnings per share $0.20 $0.12 $0.68 $0.39 Weighted average number of shares used to compute diluted net earnings per share 46,670,422 46,595,955 46,588,894 46,716,929 *) On April 12, 2013 , the Company affected a stock split of the Company's ordinary shares of two (2) for one (1). The earnings per share amounts and the share data presented for all prior periods were restated to reflect the effects of the stock split. Reconciliation of Supplemental Financial Information (U.S. Dollars in thousands, except share and per share data) For the Three months ended December 31 , For the Year ended December 31 , 2012 (Unaudited) 2013 (Unaudited) 2012 (Unaudited) 2013 (Unaudited) GAAP net income 9,111 5,722 31,757 18,055 Stock-based compensation expenses, included in: Cost of revenues 11 14 66 53 Research and development 212 434 1,103 1,562 Selling and marketing 599 667 3,298 2,550 General and administrative 196 516 916 1,207 1,018 1,631 5,383 5,372 Amortization of intangible assets included in: Cost of revenues 467 550 1,869 2,165 Selling and marketing 292 229 1,166 917 759 779 3,035 3,082 Exchange rate differences, net on balance sheet items included in financial income, net 277 253 355 703 Acquisition related expenses - - - 485 Litigation costs - 1,695 - 3,470 Tax settlement - - - 835 Non-GAAP net income 11,165 10,080 40,530 32,002 Non-GAAP diluted net earnings per share $0.24 $0.22 $0.87 $0.69 Weighted average number of shares used to compute Non-GAAP diluted net earnings per share 46,670,422 46,595,955 46,588,894 46,716,929 *) On April 12, 2013 , the Company affected a stock split of the Company's ordinary shares of two (2) for one (1). The earnings per share amounts and the share data presented for all prior periods were restated to reflect the effects of the stock split. CONTACT: Chief Financial Officer Meir Moshe +972-3766-8610 Corporate Media Relations Brian Gallagher +1 201-785-3206 briang@radware.com Source: Radware Ltd.


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