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 01, 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 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 | |||