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Radware Ltd. Announces Fourth Quarter 2011 Results

Record Annual Revenues of $167.0 Million; Record Quarterly Revenues of $45.1 Million; Record Quarterly Non-GAAP EPS $0.42; Record Quarterly Non-GAAP Operating Margin of 20%

TEL AVIV, Israel, February 1, 2012 /PRNewswire/ --

Radware (NASDAQ: RDWR), a global leader of application delivery and application security solutions for virtual and cloud data centers, today reported record quarterly revenues of $45.1 million for the fourth quarter of 2011. This represents an increase of 7% compared with revenues of $42.2 million for the third quarter of 2011, and an increase of 15% compared with revenues of $39.1 million in the fourth quarter of 2010.

Net income on a GAAP basis for the fourth quarter of 2011 was $6.6 million or $0.29 per diluted share, compared with net income of $5.4 million or $0.24 per diluted share for the third quarter of 2011 and to $3.9 million or $0.17 per diluted share in the fourth quarter of 2010.

Net income on a Non-GAAP basis for the fourth quarter of 2011 was $9.5 million or $0.42 per diluted share, compared with net income of $7.8 million or $0.34 per diluted share for the third quarter of 2011 and to $6.6 million or $0.29 per diluted share in the fourth quarter of 2010.

Revenues for 2011 amounted to $167.0 million, an increase of 16% compared with revenues of $144.1 million in 2010.

Net income on a GAAP basis for 2011 amounted to $21.3 million or $0.93 per diluted share, representing an increase of 121% compared with net income of $9.6 million or $0.44 per diluted share in 2010.

Net income on a Non-GAAP basis for 2011 amounted to $30.7 million or $1.34 per diluted share, representing an increase of 53% compared with net income of $20.1 million or $0.92 per diluted share in 2010.

At the end of the fourth quarter of 2011, the company's overall cash position including cash, short-term and long-term bank deposits and marketable securities amounted to $219.1 million, representing an increase in the company's cash position of approximately $12.5 million in the fourth quarter or $40 million in the last 12 months.

"We're very pleased with our continued record results both quarterly and yearly," stated Roy Zisapel, president and chief executive officer, Radware. "Strong demand for our traditional and ADC virtualization products, in combination with our string of attack mitigation successes that have protected high-profile public and private sector customers, is key to this growth."

During the fourth quarter 2011, Radware released the following significant announcements:

  • Radware Provides Application Delivery Control for Juniper Networks MX Series 3D Universal Edge Router
  • Radware Ltd. Announces Third Quarter 2011 Results
  • Radware Announces $20 Million Share Buyback And Refines Guidance for Third Quarter 2011
  • Radware Wins Fourth Consecutive INTERNET TELEPHONY Excellence Award
  • Radware Announces the First Application Delivery Fabric For the ITaaS Economy
  • Radware to Deliver Attack Mitigation System Solution To Tier 1 Wireless Carrier in North America
  • Radware Joins OpenStack Community
  • Radware's Attack Mitigation System Helps Installazioni Impianti Ensure Business Continuity and Defend Against Malicious Network Attacks

Company management will host a quarterly investor conference call at 8:45am ET on February 1, 2012. The call will focus on financial results for the quarter ending December 31, 2011 and certain other matters related to the Company's business.

The conference call will be webcast on February 1, 2012 at 8:45am ET in the "listen only" mode via the Internet at: http://www.radware.com/Company/InvestorRelations/default.aspx and will be available for replay during the next 30 days.

Please use the following dial-in numbers to participate in the fourth quarter 2011 call:

Participants in the US call: Toll Free +1 877-392-9880

International participants call: +1 760-666-3769

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 http://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®.

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, 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. 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 http://www.sec.gov  or may be obtained on Radware's website at http://www.radware.com.

                         Consolidated Balance Sheets
                         (U.S. Dollars in thousands)
 
                                           December 31,      December 31,
 
                                               2010              2011
                                            (Audited)        (Unaudited)
    Current assets
    Cash and cash equivalents                15,284              17,386
    Available-for-sale marketable
    securities                               24,200              10,334
    Short term bank deposits                 51,441              88,773
    Trade receivables, net                   16,543              12,565
    Other receivables and prepaid
    expenses                                  3,402               3,625
    Inventories                               9,722              12,147
                                            120,592             144,830
    Long-term investments
    Available-for-sale marketable
    securities                               82,864             102,644
    Long-term bank deposits                   5,000                   -
    Severance pay funds                       3,342               3,047
                                             91,206             105,691
 
    Property and equipment, net              11,801              11,084
 
    Other assets
    Intangible assets, net                   12,011               8,163
    Deferred tax asset, net                      41                 811
    Other long-term assets                      519                 554
    Goodwill                                 24,465              24,465
 
    Total assets                            260,635             295,598
 
    Current liabilities
    Trade payables                            5,913               5,099
    Deferred revenues                        32,907              28,593
    Other payables and accrued
    expenses                                 14,316              15,139
                                             53,136              48,831
 
    Long-term liabilities
    Deferred revenues                        18,610              23,901
    Accrued severance pay                     3,899               3,545
                                             22,509              27,446
 
    Shareholders' equity
    Share capital                               506                 528
    Additional paid-in capital              218,593             233,353
    Accumulated other comprehensive
    income (loss)                               125              (1,663)
    Treasury stock, at cost                 (18,036)            (18,036)
    Retained earnings (accumulated
    deficit)                                (16,198)              5,139
    Total shareholders' equity              184,990             219,321
 
    Total liabilities and
    shareholders' equity                    260,635             295,598
 


                   Condensed Consolidated Statements of Income
           (U.S. Dollars in thousands, except share and per share data)

                                 For the three months     For the Year ended
                                  ended December 31,          December 31,
                                                             
                                   2010        2011        2010       2011
                               (Unaudited)  (Unaudited) (Audited)  (Unaudited)
 
    Revenues                         39,054      45,090    144,119     167,020
    Cost of revenues                  7,968       8,626     29,204      33,357
    Gross profit                     31,086      36,464    114,915     133,663
    Operating expenses:
    Research and development          8,280       9,146     31,660      36,064
    Selling and marketing            16,947      18,516     64,609      69,543
    General and administrative        2,534       2,501     10,190       9,629
    Total operating expenses         27,761      30,163    106,459     115,236
    Operating income                  3,325       6,301      8,456      18,427
    Financial income, net               855         787      2,057       4,200
    Income before income taxes        4,180       7,088     10,513      22,627
    Income taxes                       (256)       (468)      (879)     (1,290)
    Net income                        3,924       6,620      9,634      21,337
 
    Basic net earnings per
    share                            $ 0.19      $ 0.31     $ 0.49      $ 1.02
                                     
    Weighted average number of
    shares used to compute
    basic net earnings per
    share                        
                                 20,360,557  21,149,334 19,557,545  20,952,866
    Diluted net earnings per
    share                            $ 0.17      $ 0.29     $ 0.44      $ 0.93
                                     
    Weighted average number of
    shares used to compute
    diluted net earnings per
    share                        
                                 22,796,721  22,716,083 21,733,638  22,888,064


                 Reconciliation of Supplemental Financial Information
             (U.S. Dollars in thousands, except share and per share data)

                     For the Three months ended           For the Year
                            December 31,               ended December 31,
                         2010           2011           2010           2011
 
                     (Unaudited)    (Unaudited)    (Unaudited)    (Unaudited)

    GAAP net income          3,924          6,620          9,634         21,337
    Stock-based
    compensation
    expenses,
    included in:
    Cost of
    revenues                    16             20             63             66
    Research and
    development                304            337          1,247          1,124
    Selling and
    marketing                  627          1,013          2,393          3,135
    General and
    administrative             409            261          1,789          1,133
                             1,356          1,631          5,492          5,458
    Amortization of
    intangible
    assets included
    in:
 
    Cost of
    revenues                   540            541          1,757          2,164
    Selling and
    marketing                  531            421          2,284          1,684
                             1,071            962          4,041          3,848
    Exchange rate
    differences, net on
    balance sheet items
    included in financial
    income, net                212            306            921             43
    Non-GAAP net
    income                   6,563          9,519         20,088         30,686
 
    Non-GAAP
    diluted net
    earnings per
    share                   $ 0.29         $ 0.42         $ 0.92         $ 1.34
    Weighted
    average number
    of shares used
    to compute
    Non-GAAP
    diluted net
    earnings per
    share               22,796,721     22,716,083      21,733,638    22,888,064


CONTACTS

Chief Financial Officer
Meir Moshe
+972-3766-8610

Corporate Media Relations
Michael Lordi
+1-201-785-3206
mikel@radware.com

SOURCE Radware Ltd

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