EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1

Exhibit 99.1
 

 
Radware Announces Third Quarter 2017 Earnings

Third Quarter 2017 Results and Financial Highlights
 
·
Revenues of $53 Million, up 13% from the third quarter of 2016
·
Non-GAAP EPS of $0.04; GAAP EPS of ($0.03)
·
Operating cash flow for the last twelve months of $47 million

TEL AVIV, ISRAEL, NOVEMBER 1, 2017 — Radware® (NASDAQ: RDWR), a leading provider of cyber security and application delivery solutions securing the digital experience for applications in virtual, cloud and software defined data centers, today announced its consolidated financial results for the quarter ended September 30, 2017.

"We are very pleased with our performance and results for the third quarter, which came in at the high end of our expectations. We enjoyed strong bookings across product lines and geographies, with particularly strong growth in our cloud business," said Roy Zisapel, Radware President & CEO. "With our leading technology, comprehensive offering and flexible deployment models, we are well positioned to address our customers' most pressing security issues. We are committed to consistent execution of our strategy, and look forward to continue benefiting from positive market trends and deliver long-term growth for Radware."

Financial Highlights for the Third Quarter of 2017
 
Revenues for the third quarter of 2017 totaled $53.0 million, up 13% from revenues of $46.9 million for the third quarter of 2016.

Revenues in the Americas region were $26.6 million for the third quarter of 2017, up 33% from revenues of $20.0 million in the third quarter of 2016. Revenues in the EMEA region were $13.8 million for the third quarter of 2017, up 13% from revenues of $12.2 million in the third quarter of 2016. Revenues in the APAC region were $12.7 million for the third quarter of 2017, down 14% from revenues of $14.7 million in the third quarter of 2016.

Net loss on a GAAP basis for the third quarter of 2017 was ($1.5) million or ($0.03) per diluted share, compared with net loss of ($2.4) million or ($0.06) per diluted share for the third quarter of 2016.
 
Non-GAAP net income for the third quarter of 2017 was $1.8 million or $0.04 per diluted share, compared with non- GAAP net income of $1.6 million or $0.04 per diluted share for the third quarter 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 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 September 30, 2017, the Company had cash, cash equivalents, short-term and long-term bank deposits and marketable securities of $330.9 million. Cash generated from operations in the third quarter of 2017 totaled $5.8 million.
 
Conference Call

Radware management will host a call today, November 1, 2017 at 8:30 am ET to discuss its third quarter 2017 results.

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

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

Conference ID:  9186337

A replay will be available for 2 days, starting 2 hours after the end of the call, on telephone number +1-404-537-3406 or (US toll-free) 855-859-2056.

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, including costs and difficulties related to integration of acquired businesses; 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 most recent 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 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

©2017 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
 
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)
 
 
  
September 30,
    
December 31,
  
 
  
2017
    
2016
  
 
  
(Unaudited)
        
Assets
            
 
            
Current assets
            
Cash and cash equivalents
    
53,530
      
79,639
  
Available-for-sale marketable securities
    
25,145
      
20,452
  
Short-term bank deposits
    
87,114
      
125,995
  
Trade receivables, net
    
12,314
      
19,407
  
Other receivables and prepaid expenses
    
3,905
      
4,159
  
Inventories
    
18,724
      
17,114
  
 
    
200,732
      
266,766
  
 
                
Long-term investments
                
Available-for-sale marketable securities
    
70,717
      
74,967
  
Long-term bank deposits
    
94,361
      
19,092
  
Severance pay funds
    
2,830
      
2,597
  
 
    
167,908
      
96,656
  
 
                
Property and equipment, net
    
24,487
      
26,354
  
Intangible assets, net
    
10,525
      
2,399
  
Other long-term assets
    
8,084
      
8,092
  
Goodwill
    
32,174
      
30,069
  
 
                
Total assets
    
443,910
      
430,336
  
 
                
Liabilities and shareholders' equity
                
 
                
Current Liabilities
                
Trade payables
    
4,552
      
5,971
  
Deferred revenues
    
63,534
      
53,061
  
Other payables and accrued expenses
    
25,107
      
26,232
  
 
    
93,193
      
85,264
  
 
                
Long-term liabilities
                
Deferred revenues
    
38,658
      
31,100
  
Other long-term liabilities
    
9,130
      
14,209
  
 
    
47,788
      
45,309
  
 
                
Shareholders' equity
                
Share capital
    
666
      
663
  
Additional paid-in capital
    
338,539
      
325,338
  
Accumulated other comprehensive loss, net of tax
    
(31
)
    
(20
)
Treasury stock, at cost
    
(116,442
)
    
(116,029
)
Retained earnings
    
80,197
      
89,811
  
Total shareholders' equity
    
302,929
      
299,763
  
 
                
Total liabilities and shareholders' equity
    
443,910
      
430,336
  

Radware Ltd.
Condensed Consolidated Statements of Loss
(U.S Dollars in thousands, except share and per share data)
 
 
  
Three months ended
    
Nine months ended
  
 
  
September 30,
    
September 30,
  
 
  
2017
    
2016
    
2017
    
2016
  
 
  
(Unaudited)
    
(Unaudited)
    
(Unaudited)
    
(Unaudited)
  
 
                        
Revenues
    
53,047
      
46,863
      
152,915
      
144,873
  
Cost of revenues
    
9,928
      
8,558
      
28,556
      
26,099
  
Gross profit
    
43,119
      
38,305
      
124,359
      
118,774
  
 
                                
Operating expenses:
                                
Research and development, net
    
14,678
      
13,072
      
43,931
      
39,497
  
Selling and marketing
    
27,189
      
24,853
      
79,578
      
75,630
  
General and administrative
    
4,152
      
4,245
      
13,312
      
13,907
  
Total operating expenses
    
46,019
      
42,170
      
136,821
      
129,034
  
 
                                
Operating loss
    
(2,900
)
    
(3,865
)
    
(12,462
)
    
(10,260
)
Financial income, net
    
2,148
      
1,706
      
3,895
      
4,878
  
Loss before taxes on income
    
(752
)
    
(2,159
)
    
(8,567
)
    
(5,382
)
Taxes on income
    
(725
)
    
(288
)
    
(1,047
)
    
(1,144
)
Net loss
    
(1,477
)
    
(2,447
)
    
(9,614
)
    
(6,526
)
 
                                
Basic net loss per share
    
(0.03
)
    
(0.06
)
    
(0.22
)
    
(0.15
)
 
                                
   Weighted average number of shares used to compute basic net loss per share
    
43,951,325
      
43,752,220
      
43,347,092
      
44,053,422
  
 
                                
Diluted net loss per share
    
(0.03
)
    
(0.06
)
    
(0.22
)
    
(0.15
)
 
                                
   Weighted average number of shares used to compute diluted net loss per share
    
43,951,325
      
43,752,220
      
43,347,092
      
44,053,422
  


 
 
Radware Ltd.
Reconciliation of GAAP to Non-GAAP Financial Information
(U.S Dollars in thousands, except share and per share data)
 
 
  
Three months ended
    
Nine months ended
  
 
  
September 30,
    
September 30,
  
 
  
2017
    
2016
    
2017
    
2016
  
 
  
(Unaudited)
    
(Unaudited)
    
(Unaudited)
    
(Unaudited)
  
GAAP gross profit
    
43,119
      
38,305
      
124,359
      
118,774
  
Stock-based compensation
    
65
      
47
      
181
      
128
  
Amortization of intangible assets
    
379
      
253
      
1,051
      
760
  
Non-GAAP gross profit
    
43,563
      
38,605
      
125,591
      
119,662
  
 
                                
GAAP research and development, net
    
14,678
      
13,072
      
43,931
      
39,497
  
Stock-based compensation
    
957
      
941
      
2,883
      
2,391
  
Non-GAAP Research and development, net
    
13,721
      
12,131
      
41,048
      
37,106
  
 
                                
GAAP selling and marketing
    
27,189
      
24,853
      
79,578
      
75,630
  
Stock-based compensation
    
1,678
      
1,256
      
5,177
      
3,918
  
Amortization of intangible assets
    
23
      
27
      
70
      
79
  
Non-GAAP selling and marketing
    
25,488
      
23,570
      
74,331
      
71,633
  
 
                                
GAAP general and administrative
    
4,152
      
4,245
      
13,312
      
13,907
  
Stock-based compensation
    
570
      
434
      
1,573
      
1,862
  
Acquisition costs
    
-
      
-
      
340
      
-
  
Litigation costs
    
357
      
889
      
1,976
      
3,486
  
Non-GAAP general and administrative
    
3,225
      
2,922
      
9,423
      
8,559
  
 
                                
GAAP total operating expenses
    
46,019
      
42,170
      
136,821
      
129,034
  
Stock-based compensation
    
3,205
      
2,631
      
9,633
      
8,171
  
Acquisition costs
    
-
      
-
      
340
      
-
  
Amortization of intangible assets
    
23
      
27
      
70
      
79
  
Litigation costs
    
357
      
889
      
1,976
      
3,486
  
Non-GAAP total operating expenses
    
42,434
      
38,623
      
124,802
      
117,298
  
 
                                
GAAP operating loss
    
(2,900
)
    
(3,865
)
    
(12,462
)
    
(10,260
)
Stock-based compensation
    
3,270
      
2,678
      
9,814
      
8,299
  
Acquisition costs
    
-
      
-
      
340
      
-
  
Amortization of intangible assets
    
402
      
280
      
1,121
      
839
  
Litigation costs
    
357
      
889
      
1,976
      
3,486
  
Non-GAAP operating income (loss)
    
1,129
      
(18
)
    
789
      
2,364
  
 
                                
GAAP finance income
    
2,148
      
1,706
      
3,895
      
4,878
  
Exchange rate differences, net on balance sheet items included in financial income
    
(729
)
    
176
      
77
      
333
  
Non-GAAP finance income
    
1,419
      
1,882
      
3,972
      
5,211
  
 
                                
GAAP loss before taxes on income
    
(752
)
    
(2,159
)
    
(8,567
)
    
(5,382
)
Stock-based compensation
    
3,270
      
2,678
      
9,814
      
8,299
  
Acquisition costs
    
-
      
-
      
340
      
-
  
Amortization of intangible assets
    
402
      
280
      
1,121
      
839
  
Litigation costs
    
357
      
889
      
1,976
      
3,486
  
Exchange rate differences, net on balance sheet items included in financial income
    
(729
)
    
176
      
77
      
333
  
Non-GAAP income before taxes on income
    
2,548
      
1,864
      
4,761
      
7,575
  
 
                                
GAAP net loss
    
(1,477
)
    
(2,447
)
    
(9,614
)
    
(6,526
)
Stock-based compensation
    
3,270
      
2,678
      
9,814
      
8,299
  
Acquisition costs
    
-
      
-
      
340
      
-
  
Amortization of intangible assets
    
402
      
280
      
1,121
      
839
  
Litigation costs
    
357
      
889
      
1,976
      
3,486
  
Exchange rate differences, net on balance sheet items included in financial income
    
(729
)
    
176
      
77
      
333
  
Non GAAP net income
    
1,823
      
1,576
      
3,714
      
6,431
  
 
                                
GAAP Net loss per diluted share
    
(0.03
)
    
(0.06
)
    
(0.22
)
    
(0.15
)
Stock-based compensation
    
0.07
      
0.06
      
0.22
      
0.19
  
Acquisition costs
    
0.00
      
0.00
      
0.01
      
0.00
  
Amortization of intangible assets
    
0.01
      
0.01
      
0.03
      
0.02
  
Litigation costs
    
0.01
      
0.02
      
0.04
      
0.08
  
Exchange rate differences, net on balance sheet items included in financial income
    
(0.02
)
    
0.00
      
0.00
      
0.01
  
Non GAAP Net income per diluted share
    
0.04
      
0.04
      
0.08
      
0.15
  
 
                                
Weighted average number of shares used to compute non-GAAP diluted net earnings per share
    
45,210,495
      
44,077,078
      
44,431,570
      
44,260,343
  
 

Radware Ltd.
Condensed Consolidated Statements of Cash Flow
(U.S. Dollars in thousands)
 
 
  
Three months ended
    
Nine months ended
  
 
  
September 30,
    
September 30,
  
 
  
2017
    
2016
    
2017
    
2016
  
 
  
(Unaudited)
    
(Unaudited)
    
(Unaudited)
    
(Unaudited)
  
Cash flow from operating activities:
                        
 
                        
Net loss
    
(1,477
)
    
(2,447
)
    
(9,614
)
    
(6,526
)
Adjustments to reconcile net loss to net cash provided by operating activities:
                                
Depreciation and amortization
    
2,861
      
2,614
      
8,667
      
7,709
  
Stock based compensation
    
3,270
      
2,678
      
9,814
      
8,299
  
Gain from sale of available-for-sale marketable securities
    
-
      
(651
)
    
-
      
(1,778
)
Amortization of premium, accretion of discounts and accrued interest on available-for- sale marketable securities, net
    
450
      
385
      
1,081
      
1,277
  
Accrued interest on bank deposits
    
(720
)
    
201
      
812
      
(455
)
Increase (decrease) in accrued severance pay, net
    
44
      
(51
)
    
220
      
290
  
Increase in trade receivables, net
    
5,324
      
4,711
      
7,226
      
5,064
  
Decrease (increase) in other current assets, prepaid expenses and deferred income taxes, net
    
(459
)
    
149
      
379
      
(260
)
Increase (decrease) in inventories
    
731
      
(631
)
    
(1,610
)
    
(490
)
Increase in trade payables
    
(1,415
)
    
(1,036
)
    
(1,551
)
    
(4,204
)
Increase (decrease) in deferred revenues
    
2,713
      
(6,773
)
    
17,662
      
1,821
  
Increase (decrease) in other payables and accrued expenses
    
(5,483
)
    
(421
)
    
(9,579
)
    
4,512
  
Excess tax benefit from stock-based compensation
    
-
      
-
      
-
      
74
  
Net cash provided by (used in) operating activities
    
5,839
      
(1,272
)
    
23,507
      
15,333
  
 
                                
Cash flows from investing activities:
                                
 
                                
Purchase of property and equipment
    
(1,240
)
    
(2,561
)
    
(5,597
)
    
(8,071
)
Proceeds from (investment in) other long-term assets, net
    
(4
)
    
(3
)
    
12
      
-
  
Proceeds from (investment in) bank deposits, net
    
(2,074
)
    
16,097
      
(37,200
)
    
1,708
  
Proceeds from (investment in) sale, redemption of and purchase of available-for-sale marketable securities ,net
    
485
      
4,339
      
(1,538
)
    
7,600
  
Payment for acquisition of subsidiary, net of cash acquired
    
-
      
-
      
(8,269
)
    
-
  
Net cash provided (used in) in investing activities
    
(2,833
)
    
17,872
      
(52,592
)
    
1,237
  
 
                                
Cash flows from financing activities:
                                
 
                                
Proceeds from exercise of stock options
    
851
      
330
      
3,389
      
330
  
Excess tax benefit from stock-based compensation
    
-
      
-
      
-
      
(74
)
Repurchase of shares
    
(413
)
    
-
      
(413
)
    
(11,712
)
Net cash provided by (used in) financing activities
    
438
      
330
      
2,976
      
(11,456
)
 
                                
Increase (decrease) in cash and cash equivalents
    
3,444
      
16,930
      
(26,109
)
    
5,114
  
Cash and cash equivalents at the beginning of the period
    
50,086
      
21,928
      
79,639
      
33,744
  
Cash and cash equivalents at the end of the period
    
53,530
      
38,858
      
53,530
      
38,858