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Radware Ltd.$23.16($.25)(1.07%)

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 Radware Announces Fourth Quarter and Full Year 2019 Earnings
   Wednesday, February 12, 2020 6:00:00 AM ET

Fourth Quarter 2019 Results and Financial Highlights

  • Record Revenues of $67.4 million, up 6% from the fourth quarter of 2018

  • Non-GAAP operating income and margin of $9.5 million and 14%, respectively

  • Non-GAAP EPS of $0.23; GAAP EPS of $0.15

Full Year 2019 Results and Financial Highlights

  • Record Revenues of $252.1 million, up 8% from 2018

  • Non-GAAP operating income and margin of $33.5 million and 13%, respectively

  • Non-GAAP EPS of $0.84, up 53% from 2018; GAAP EPS of $0.47

  • Net cash provided by operating activities of $53 million

TEL AVIV, Israel, Feb. 12, 2020 (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, 2019.



“We are pleased with our performance in the fourth quarter, with record quarterly bookings and revenues,” said Roy Zisapel, Radware’s President & CEO. “Radware today is at a stronger financial, technological and competitive position than it has ever been. The intensity and complexity of the cyber-attacks landscape continue to drive demand for managed security services and strong growth in our cloud and subscriptions business. We look forward to continuing to bring value to our customers as we address additional cyber security challenges, while delivering growth and profitability.”

Financial Highlights for the Fourth Quarter of 2019
Revenues for the fourth quarter of 2019 totaled $67.4 million, up 6% from revenues of $63.8 million for the fourth quarter of 2018:

  • Revenues in the Americas region were $29.7 million for the fourth quarter of 2019, up 7% compared to revenues of $27.7 million in the fourth quarter of 2018.

  • Revenues in the APAC region were $17.1 million for the fourth quarter of 2019, up 32% from revenues of $12.9 million in the fourth quarter of 2018.

  • Revenues in the EMEA region were $20.6 million for the fourth quarter of 2019, down 11% from revenues of $23.2 million in the fourth quarter of 2018.

Net income on a GAAP basis for the fourth quarter of 2019 was $7.3 million, or $0.15 per diluted share, compared with net income of $7.9 million, or $0.16 per diluted share, for the fourth quarter of 2018.

Non-GAAP net income for the fourth quarter of 2019 was $10.9 million, or $0.23 per diluted share, compared with non- GAAP net income of $11.4 million, or $0.24 per diluted share, for the fourth quarter of 2018.

Financial Highlights for the Full Year of 2019
Revenues for the full year of 2019 totaled $252.1 million, up 8% from revenues of $234.4 million for the full year of 2018:

  • Revenues in the Americas region were $106.4 million for the full year of 2019, up 4% from revenues of $102.5 in the full year of 2018.

  • Revenues in the APAC region were $70.4 million for the full year of 2019, up 25% from revenues of $56.2 in the full year of 2018.

  • Revenues in the EMEA region were $75.3 million for the full year of 2019, down 1% from revenues of $75.8 in the full year of 2018.

Net income on a GAAP basis for the full year of 2019 was $22.6 million, or $0.47 per diluted share, compared with net income of $11.7 million, or $0.25 per diluted share, for the full year of 2018.

Non-GAAP net income for the full year of 2019 was $40.6 million, or $0.84 per diluted share, compared with non-GAAP net income of $26.0 million, or $0.55 per diluted share, for the full year of 2018.

Non-GAAP results are calculated excluding, as applicable, the impact of stock-based compensation expenses, amortization of intangible assets, acquisition costs, litigation costs, exchange rate differences, net on balance sheet items included in finance income, other gain adjustment and tax effect related to amortization of deferred tax liability related to intangible assets and other gain adjustment. A reconciliation of each of the Company’s non-GAAP measures to the comparable GAAP measure is included at the end of this press release.

As of December 31, 2019, the Company had cash, cash equivalents, short-term and long-term bank deposits and marketable securities of $427.7 million, up from $401.1 million as of December 31, 2018. Net cash provided by operating activities in the fourth quarter of 2019 totaled $4.0 million. Net cash provided by operating activities in the full year of 2019 totaled $52.9 million.

Conference Call

Radware management will host a call on Wednesday, February 12, 2020 at 8:30 a.m. ET to discuss its fourth quarter and full year 2019 results and the Company’s outlook for the first quarter and full year of 2020.

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

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

Conference ID: 8198484

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, 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, 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, exchange rate differences, net on balance sheet items included in finance income,  other gain adjustment and tax effect related to amortization of deferred tax liability related to intangible assets and other gain adjustment. 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.” For example, when we discuss the strong growth in our cloud and subscriptions business, we are using forward-looking statements. In addition, the announced financial results are preliminary, unaudited and subject to year-end audit adjustment. 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 or the impact of the recent coronavirus outbreak; 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; outages, interruptions or delays in hosting services or our internal network system; 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 .

©2020 Radware Ltd. All rights reserved. Any 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,
 2019 2018
    
 (Unaudited) (Unaudited)
Assets   
    
Current assets   
Cash and cash equivalents40,751 45,203
Available-for-sale marketable securities36,924 15,742
Short-term bank deposits100,276 255,454
Trade receivables, net22,610 17,166
Other receivables and prepaid expenses8,032 7,071
Inventories13,940 18,401
 222,533 359,037
    
Long-term investments   
Available-for-sale marketable securities112,696 84,669
Long-term bank deposits137,095 -
Severance pay funds2,300 2,973
 252,091 87,642
    
    
Property and equipment, net22,971 23,677
Intangible assets, net14,481 9,467
Other long-term assets24,293 20,724
Operating lease right-of-use assets18,144 -
Goodwill41,144 32,174
Total assets595,657 532,721
    
    
Liabilities and shareholders' equity   
    
Current Liabilities   
Trade payables6,878 4,483
Deferred revenues79,239 83,955
Operating lease liabilities5,193 -
Other payables and accrued expenses34,689 29,596
 125,999 118,034
    
Long-term liabilities   
Deferred revenues50,888 43,796
Operating lease liabilities13,914 -
Other long-term liabilities9,525 6,934
 74,327 50,730
    
Shareholders' equity   
Share capital710 693
Additional paid-in capital414,581 383,536
Accumulated other comprehensive income (loss), net of tax1,145 (1,110)
Treasury stock, at cost(145,226) (120,717)
Retained earnings124,121 101,555
Total shareholders' equity395,331 363,957
    
Total liabilities and shareholders' equity595,657 532,721
    


 
Radware Ltd.
Condensed Consolidated Statements of Income
(U.S Dollars in thousands, except share and per share data)
        
 For the three months ended For the year ended
 December 31, December 31,
 2019 2018 2019 2018
 (Unaudited) (Unaudited) (Unaudited) (Unaudited)
        
Revenues67,362 63,817 252,072 234,404
Cost of revenues11,994 11,117 45,174 41,675
Gross profit55,368 52,700 206,898 192,729
        
Operating expenses, net:       
Research and development, net16,103 13,945 61,841 57,674
Selling and marketing29,121 28,137 109,556 111,386
General and administrative4,375 4,294 18,584 16,145
Total operating expenses, net49,599 46,376 189,981 185,205
        
Operating income5,769 6,324 16,917 7,524
Financial income, net2,745 2,397 8,792 7,274
Income before taxes on income8,514 8,721 25,709 14,798
Taxes on income1,183 778 3,143 3,063
Net income7,331 7,943 22,566 11,735
        
Basic net earnings per share0.16 0.17 0.48 0.26
        
Weighted average number of shares used to compute basic net earnings per share46,900,711 46,357,278 46,816,899 45,289,296
        
Diluted net earnings per share0.15 0.16 0.47 0.25
        
Weighted average number of shares used to compute diluted net earnings per share48,304,507 48,279,751 48,523,120 47,691,868
        


  
 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,
  2019 2018 2019 2018
  (Unaudited) (Unaudited) (Unaudited) (Unaudited)
GAAP gross profit55,368 52,700 206,898 192,729
 Stock-based compensation53 50 224 221
 Amortization of intangible assets486 212 2,304 866
Non-GAAP gross profit55,907 52,962 209,426 193,816
         
GAAP research and development, net16,103 13,945 61,841 57,674
 Stock-based compensation791 694 2,855 3,123
 Acquisition costs- 20 - 20
Non-GAAP Research and development, net15,312 13,231 58,986 54,531
         
GAAP selling and marketing29,121 28,137 109,556 111,386
 Stock-based compensation1,696 1,727 6,954 7,071
 Amortization of intangible assets17 21 69 82
Non-GAAP selling and marketing27,408 26,389 102,533 104,233
         
GAAP general and administrative4,375 4,294 18,584 16,145
 Stock-based compensation742 775 3,032 2,087
 Acquisition costs(18) (222) 246 (222)
 Litigation costs- 202 883 829
Non-GAAP general and administrative3,651 3,539 14,423 13,451
         
GAAP total operating expenses, net49,599 46,376 189,981 185,205
 Stock-based compensation3,229 3,196 12,841 12,281
 Acquisition costs(18) (202) 246 (202)
 Amortization of intangible assets17 21 69 82
 Litigation costs- 202 883 829
Non-GAAP total operating expenses, net46,371 43,159 175,942 172,215
         
GAAP operating income5,769 6,324 16,917 7,524
 Stock-based compensation3,282 3,246 13,065 12,502
 Acquisition costs(18) (202) 246 (202)
 Amortization of intangible assets503 233 2,373 948
 Litigation costs- 202 883 829
Non-GAAP operating income9,536 9,803 33,484 21,601
         
GAAP financial income, net2,745 2,397 8,792 7,274
 Other gain adjustment- - (563) -
 Exchange rate differences, net on balance sheet items included in financial income, net(148) (59) 2,270 196
Non-GAAP financial income, net2,597 2,338 10,499 7,470
         
GAAP income before taxes on income8,514 8,721 25,709 14,798
 Stock-based compensation3,282 3,246 13,065 12,502
 Acquisition costs(18) (202) 246 (202)
 Amortization of intangible assets503 233 2,373 948
 Litigation costs- 202 883 829
 Other gain adjustment- - (563) -
 Exchange rate differences, net on balance sheet items included in financial income, net(148) (59) 2,270 196
Non-GAAP income before taxes on income12,133 12,141 43,983 29,071
         
GAAP taxes on income1,183 778 3,143 3,063
 Amortization of deferred tax liability related to intangible assets39 - 286 -
 Tax related to other gain adjustment- - (52) -
Non-GAAP taxes on income1,222 778 3,377 3,063
         
GAAP net income7,331 7,943 22,566 11,735
 Stock-based compensation3,282 3,246 13,065 12,502
 Acquisition costs(18) (202) 246 (202)
 Amortization of intangible assets503 233 2,373 948
 Litigation costs- 202 883 829
 Other gain adjustment- - (563) -
 Exchange rate differences, net on balance sheet items included in financial income, net(148) (59) 2,270 196
 Amortization of deferred tax liability related to intangible assets(39) - (286) -
 Tax related to other gain adjustment- - 52 -
Non-GAAP net income10,911 11,363 40,606 26,008
         
GAAP diluted net earnings per share0.15 0.16 0.47 0.25
 Stock-based compensation0.07 0.07 0.27 0.26
 Acquisition costs(0.00) (0.00) 0.01 (0.00)
 Amortization of intangible assets0.01 0.00 0.05 0.02
 Litigation costs0.00 0.00 0.02 0.02
 Other gain adjustment0.00 0.00 (0.01) 0.00
 Exchange rate differences, net on balance sheet items included in financial income, net(0.00) (0.00) 0.05 0.00
 Amortization of deferred tax liability related to intangible assets(0.00) 0.00 (0.01) 0.00
 Tax related to other gain adjustment0.00 0.00 0.00 0.00
Non-GAAP diluted net earnings per share0.23 0.24 0.84 0.55
         
         
Weighted average number of shares used to compute Non-GAAP diluted net earnings per share48,304,507 48,279,751 48,523,120 47,691,868
         


 
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,
 2019 2018 2019 2018
 (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Cash flow from operating activities:       
        
Net income7,331 7,943 22,566 11,735
Adjustments to reconcile net income to net cash provided by operating activities:       
Depreciation and amortization2,789 2,402 11,283 9,782
Stock based compensation3,282 3,247 13,065 12,503
Amortization of premium, accretion of discounts and accrued interest on available-for-sale marketable securities, net150 513 618 1,395
Other loss (gain)26 - (537) -
Accrued interest on bank deposits596 (962) 2,123 (2,391)
Increase in accrued severance pay, net64 189 888 323
Decrease (increase) in trade receivables, net(7,557) 1,325 (2,407) (1,169)
Decrease (increase) in other receivables and prepaid expenses and other long-term assets(2,599) (1,765) (7,448) 2,727
Decrease in inventories1,143 2,062 4,461 371
Decrease (increase) in trade payables2,873 (941) 2,338 (884)
Increase (decrease) in deferred revenues(6,416) 10,048 2,260 14,440
Increase in other payables and accrued expenses2,168 1,636 2,679 419
Operating lease liabilities, net109 - 963 -
Net cash provided by operating activities3,959 25,697 52,852 49,251
        
Cash flows from investing activities:       
        
Purchase of property and equipment(2,002) (3,998) (8,155) (8,869)
Proceeds from (investment in) other long-term assets, net(7) - 4 40
Proceeds from (investment in) bank deposits, net2,187 (29,935) 15,960 (71,002)
Investment in sale, redemption of and purchase of available-for-sale marketable securities ,net(1,131) (2,765) (46,363) (5,672)
Payment for acquisition of subsidiary, net of cash acquired- - (12,239) -
Net cash used in investing activities(953) (36,698) (50,793) (85,503)
        
Cash flows from financing activities:       
        
Proceeds from exercise of stock options3,406 2,224 17,999 21,803
Repayment of contingent consideration- (1,310) - (1,310)
Repurchase of shares(5,616) (4,275) (24,510) (4,275)
Net cash provided by (used in) financing activities(2,210) (3,361) (6,511) 16,218
        
Increase (decrease) in cash and cash equivalents796 (14,362) (4,452) (20,034)
Cash and cash equivalents at the beginning of the period39,955 59,565 45,203 65,237
Cash and cash equivalents at the end of the period40,751 45,203 40,751 45,203
        

Radware Logo

Source: Radware Inc.


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