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Radware Announces Fourth Quarter and Full Year 2018 Earnings

By GlobeNewswire,  February 06, 2019, 06:00:00 AM EDT


Fourth Quarter 2018 Results and Financial Highlights

  • Record Revenues of $ 64 Million, up 9% from the fourth quarter of 2017
  • Non-GAAP operating income and margin of $9.8Million and 15%, respectively
  • Non-GAAP EPS of $0.24 GAAP EPS of $0.16

Full Year 2018 Results and Financial Highlights

  • Record Revenues of $ 234 Million, up 11% from 2017
  • Non-GAAP operating income and margin of $22 Million and 9.2%, respectively
  • Non-GAAP EPS of $0.55 ; GAAP EPS of $0.25
  • Operating cash flow of $49 million

TEL AVIV, Israel, Feb. 06, 2019 (GLOBE NEWSWIRE) -- Radware® (NASDAQ:RDWR), a leading provider of cyber security and application delivery solutions, today announced its consolidated financial results for the quarter and year ended December 31, 2018. 

"We are pleased with our strong results for the fourth quarter, concluding a strong year that exceeded our expectations. Revenue growth, profitability and cash generation have all markedly increased from 2017. We continued to execute our strategy, focusing on datacenter and cloud, and delivered on our goals. Our portfolio is the widest and most advanced it has ever been, reflecting innovative technology leadership and a close alignment to customer needs, especially given our focus on subscriptions and cloud security solutions. We look forward to the opportunities ahead of us in 2019 and beyond," said Roy Zisapel, Radware President & CEO.

Financial Highlights for the Fourth Quarter of 2018

Revenues for the fourth quarter of 2018 totaled $63.8 million, up 9% from revenues of $58.5 million for the fourth quarter of 2017:

  • Revenues in the Americas region were $27.7 million for the fourth quarter of 2018, down 4% compared to revenues of $28.7 million in the fourth quarter of 2017.
  • Revenues in the EMEA region were $23.2 million for the fourth quarter of 2018, up 53% from revenues of $15.1 million in the fourth quarter of 2017.
  • Revenues in the APAC region were $12.9 million for the fourth quarter of 2018, down 12% from revenues of $14.6 million in the fourth quarter of 2017.

Net profit on a GAAP basis for the fourth quarter of 2018 was $7.9 million or $0.16 per diluted share, compared with net income of $2.1 million or $0.05 per diluted share for the fourth quarter of 2017.

Non-GAAP net income for the fourth quarter of 2018 was $11.4 million or $0.24 per diluted share, compared with non- GAAP net income of $3.9 million or $0.09 per diluted share for the fourth quarter of 2017.

Financial Highlights for the Full Year of 2018

Revenues for the full year of 2018 totaled $234.4 million, up 11% from revenues of $211.4 million for the full year of 2017:

  • Revenues in the Americas region were $102.5 million for the full year of 2018, up 5% from revenues of $97.9 in the full year of 2017.

  • Revenues in the EMEA region were $75.8 million for the full year of 2018, up 34% from revenues of $56.6 in the full year of 2017.
  • Revenues in the APAC region were $56.2 million for the full year of 2018, down 1% from revenues of $56.9 in the full year of 2017. 

Net profit on a GAAP basis for the full year of 2018 was $11.7 million or $0.25 per share, compared with net loss of ($7.5) million or ($0.17) per diluted share for the full year of 2017.

Non-GAAP net income for the full year of 2017 was $26.0 million or $0.55 per diluted share, compared with non-GAAP net income of $7.6 million or $0.17 per diluted share for the full year 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 December 31, 2018, the Company had cash, cash equivalents, short-term and long-term bank deposits and marketable securities of $401.1 million, up from $382.2 million as of the end of September 30, 2018 and $344.3 million as of December 31st, 2017. Cash generated from operations in the fourth quarter of 2018 totaled $25.7 million. Cash generated from operations in the full year of 2018 totaled $49.3 million. Cash used for share repurchase in the fourth quarter and full year of 2018 totaled $4.3 million.

Conference Call

Radware management will host a call on Wednesday, February 6, 2019 at 8:30 am ET to discuss its fourth quarter and full year 2018 results and the company's outlook for the first quarter of 2019.

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

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

Conference ID: 4794777

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.

©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)
       
  December 31,   December 31,
  2018   2017
  (Unaudited)   (Unaudited)
Assets      
       
Current assets      
Cash and cash equivalents 45,203   65,237
Available-for-sale marketable securities 15,742   42,573
Short-term bank deposits 255,454   93,151
Trade receivables, net 17,166   16,150
Other receivables and prepaid expenses 6,667   12,252
Inventories 18,401   18,772
  358,633   248,135
       
Long-term investments      
Available-for-sale marketable securities 84,669   54,427
Long-term bank deposits 0   88,911
Severance pay funds 2,973   3,251
  87,642   146,589
       
       
Property and equipment, net 23,677   23,642
Intangible assets, net 9,467   10,415
Other long-term assets 20,724   8,133
Goodwill 32,174   32,174
Total assets 532,317   469,088
       
       
Liabilities and shareholders' equity      
       
Current Liabilities      
Trade payables 4,483   5,367
Deferred revenues 83,955   69,829
Other payables and accrued expenses 29,918   32,174
  118,356   107,370
       
Long-term liabilities      
Deferred revenues 43,796   43,482
Other long-term liabilities 6,208   2,880
  50,004   46,362
       
Shareholders' equity      
Share capital 693   673
Additional paid-in capital 383,536   349,250
Accumulated other comprehensive loss, net of tax (1,110)   (443)
Treasury stock, at cost (120,717)   (116,442)
Retained earnings 101,555   82,318
Total shareholders' equity 363,957   315,356
       
Total liabilities and shareholders' equity 532,317   469,088
       

 

                   

 
 
Radware Ltd.
Condensed Consolidated Statements of Income (loss)
(U.S Dollars in thousands, except share and per share data)
               
  For the three months ended   For the year ended
  December 31,   December 31,
  2018   2017   2018   2017
  (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
               
Revenues 63,817   58,454   234,404   211,369
Cost of revenues 11,117   11,060   41,675   39,616
Gross profit 52,700   47,394   192,729   171,753
               
Operating expenses, net:              
Research and development, net 13,945   15,072   57,674   59,003
Selling and marketing 28,137   29,166   111,386   108,744
General and administrative 4,294   4,265   16,145   17,577
Other income 0   (6,900)   0   (6,900)
Total operating expenses, net 46,376   41,603   185,205   178,424
               
Operating income (loss) 6,324   5,791   7,524   (6,671)
Financial income, net 2,397   935   7,274   4,830
Income (loss) before taxes on income 8,721   6,726   14,798   (1,841)
Taxes on income 778   4,605   3,063   5,652
Net income (loss) 7,943   2,121   11,735   (7,493)
               
Basic net income (loss) per share 0.17   0.05   0.26   (0.17)
               
Weighted average number of shares used to compute basic net earnings (loss) per share 46,357,278   43,859,400   45,289,296   43,475,844
               
Diluted net earnings (loss) per share 0.16   0.05   0.25   (0.17)
               
Weighted average number of shares used to compute diluted net earnings (loss) per share 48,279,751   45,728,792   47,691,868   43,475,844
               
               

 

   
  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 year ended
    December 31,   December 31,
    2018   2017   2018   2017
    (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
GAAP gross profit 52,700   47,394   192,729   171,753
  Stock-based compensation 50   60   221   241
  Amortization of intangible assets 212   86   866   1,137
  Acquisition costs -   550   -   550
Non-GAAP gross profit 52,962   48,090   193,816   173,681
                 
GAAP research and development, net 13,945   15,072   57,674   59,003
  Stock-based compensation 694   984   3,123   3,867
  Acquisition costs 20   204   20   204
Non-GAAP Research and development, net 13,231   13,884   54,531   54,932
                 
GAAP selling and marketing 28,137   29,166   111,386   108,744
  Stock-based compensation 1,727   1,717   7,071   6,894
  Amortization of intangible assets 21   24   82   94
Non-GAAP selling and marketing 26,389   27,425   104,233   101,756
                 
GAAP general and administrative 4,294   4,265   16,145   17,577
  Stock-based compensation 775   456   2,087   2,029
  Acquisition costs (222)   -   (222)   340
  Litigation costs 202   76   829   2,052
Non-GAAP general and administrative 3,539   3,733   13,451   13,156
                 
GAAP other income -   (6,900)   -   (6,900)
  Court verdict -   (6,900)   -   (6,900)
Non-GAAP other income -   -   -   -
                 
GAAP total operating expenses, net 46,376   41,603   185,205   178,424
  Stock-based compensation 3,196   3,157   12,281   12,790
  Acquisition costs (202)   204   (202)   544
  Amortization of intangible assets 21   24   82   94
  Litigation costs 202   76   829   2,052
  Court verdict -   (6,900)   -   (6,900)
Non-GAAP total operating expenses, net 43,159   45,042   172,215   169,844
                 
GAAP operating income (loss) 6,324   5,791   7,524   (6,671)
  Stock-based compensation 3,246   3,217   12,502   13,031
  Acquisition costs (202)   754   (202)   1,094
  Amortization of intangible assets 233   110   948   1,231
  Litigation costs 202   76   829   2,052
  Court verdict -   (6,900)   -   (6,900)
Non-GAAP operating income (loss) 9,803   3,048   21,601   3,837
                 
GAAP financial income, net 2,397   935   7,274   4,830
  Exchange rate differences, net on balance sheet items included in financial income, net (59)   558   196   635
Non-GAAP financial income, net 2,338   1,493   7,470   5,465
                 
GAAP income (loss) before taxes on income 8,721   6,726   14,798   (1,841)
  Stock-based compensation 3,246   3,217   12,502   13,031
  Acquisition costs (202)   754   (202)   1,094
  Amortization of intangible assets 233   110   948   1,231
  Litigation costs 202   76   829   2,052
  Court verdict -   (6,900)   -   (6,900)
  Exchange rate differences, net on balance sheet items included in financial income, net (59)   558   196   635
Non-GAAP income before taxes on income 12,141   4,541   29,071   9,302
                 
GAAP taxes on income 778   4,605   3,063   5,652
  Change in the federal rate -   3,249   -   3,249
  Court verdict -   724   -   724
Non-GAAP taxes on income 778   8,578   3,063   9,625
                 
GAAP net income (loss) 7,943   2,121   11,735   (7,493)
  Stock-based compensation 3,246   3,217   12,502   13,031
  Acquisition costs (202)   754   (202)   1,094
  Amortization of intangible assets 233   110   948   1,231
  Litigation costs 202   76   829   2,052
  Exchange rate differences, net on balance sheet items included in financial income, net (59)   558   196   635
  Change in the federal rate -   3,249   -   3,249
  Court verdict -   (6,176)   -   (6,176)
Non-GAAP net income 11,363   3,909   26,008   7,623
                 
GAAP Net earnings (loss) per diluted share 0.16   0.05   0.25   (0.17)
  Stock-based compensation 0.07   0.07   0.26   0.30
  Acquisition costs (0.00)   0.02   (0.00)   0.02
  Amortization of intangible assets 0.00   0.00   0.02   0.03
  Litigation costs 0.00   0.00   0.02   0.05
  Exchange rate differences, net on balance sheet items included in financial income, net (0.00)   0.01   0.00   0.01
  Change in the federal rate 0.00   0.08   0.00   0.07
  Court verdict 0.00   (0.14)   0.00   (0.14)
Non-GAAP Net earnings per diluted share 0.24   0.09   0.55   0.17
                 
                 
Weighted average number of shares used to compute Non-GAAP diluted net earnings per share 48,279,751   45,728,792   47,691,868   44,756,732
                 



 
 
Radware Ltd.
Condensed Consolidated Statements of Cash Flow
(U.S. Dollars in thousands)
               
  For the three months ended   For the year ended
  December 31,   December 31,
  2018   2017   2018   2017
  (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
Cash flow from operating activities:              
               
Net income (loss) 7,943   2,121   11,735   (7,493)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:              
Depreciation and amortization 2,402   2,567   9,782   11,234
Stock based compensation 3,246   3,217   12,502   13,031
Loss (gain) from sale of available-for-sale marketable securities 0   (18)   0   (18)
Amortization of premium, accretion of discounts and accrued interest on available-for- sale marketable securities, net 513   465   1,395   1,546
Accrued interest on bank deposits (962)   (586)   (2,391)   226
Increase (decrease) in accrued severance pay, net 189   (430)   323   (210)
Decrease (increase) in trade receivables, net 1,325   (3,836)   (1,169)   3,390
Decrease (increase) in other receivables and prepaid expenses and other long-term assets (1,359)   (8,258)   3,133   (7,879)
Decrease (increase) in inventories 2,062   (48)   371   (1,658)
Increase (decrease) in trade payables (941)   817   (884)   (734)
Increase in deferred revenues 10,048   11,119   14,440   28,781
Increase (decrease) in other payables and accrued expenses 1,231   826   14   (8,753)
Net cash provided by operating activities 25,697   7,956   49,251   31,463
               
Cash flows from investing activities:              
               
Purchase of property and equipment (3,998)   (1,613)   (8,869)   (7,210)
Proceeds from (investment in) other long-term assets, net 0   (18)   40   (6)
Investment in bank deposits, net (29,935)   0   (71,002)   (37,200)
Proceeds from (investment in) sale, redemption of and purchase of available-for-sale marketable securities, net (2,765)   (2,119)   (5,672)   (3,657)
Payment for acquisition of subsidiary, net of cash acquired 0   0   0   (8,269)
Net cash used in investing activities (36,698)   (3,750)   (85,503)   (56,342)
               
Cash flows from financing activities:              
               
Proceeds from exercise of stock options 2,223   7,501   21,802   10,890
Repayment of contingent consideration (1,310)   0   (1,310)   0
Repurchase of shares (4,274)   0   (4,274)   (413)
Net cash provided by financing activities (3,361)   7,501   16,218   10,477
               
Increase (decrease) in cash and cash equivalents (14,362)   11,707   (20,034)   (14,402)
Cash and cash equivalents at the beginning of the period 59,565   53,530   65,237   79,639
Cash and cash equivalents at the end of the period 45,203   65,237   45,203   65,237
               

 

Source: Radware Inc.

This article appears in: News Headlines

Referenced Stocks: RDWR










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