2015 Fourth Quarter Highlights

* Revenues of $55.3 Million
* Non-GAAP EPS of $0.17
* Non-GAAP gross margin of 82.6%
* Repurchase of shares in a total amount of $8.4 Million

2015 Full Year Highlights

* Revenues of $216.6 Million
* Non-GAAP EPS of $0.72
* Non-GAAP gross margin of 82.9%
* Repurchase of shares in a total amount of $52.9 Million

TEL AVIV, Israel, Feb. 03, 2016 (GLOBE NEWSWIRE) -- Radware® (NASDAQ:RDWR), a leading provider of cyber security and application delivery solutions ensuring optimal service level for applications in virtual, cloud and software defined data centers,  today announced its consolidated financial results for the fourth quarter and 12 months ended December 31, 2015.

“In the midst of uncertain market conditions, we are pleased to report on a solid fourth quarter for bookings and subscriptions,” said Roy Zisapel, president and chief executive officer, Radware.  “We believe our dedication to data center cyber security and application delivery coupled with our growing success in delivering our solutions as cloud services will help us navigate this volatile market and to lead us back to growth”

Financial Highlights for the fourth quarter of 2015

Revenues for the fourth quarter of 2015 totaled $55.3 million, representing a decrease of 9% compared with revenues of $61.0 million for the fourth quarter of 2014.

Net income on a GAAP basis for the fourth quarter of 2015 was $4.3 million or $0.09 per diluted share, compared with net income of $9.2 million or $0.19 per diluted share for the fourth quarter of 2014.

Net income on a Non-GAAP basis for the fourth quarter of 2015 was $7.6 million or $0.17 per diluted share, compared with net income of $13.1 million or $0.28 per diluted share for the fourth quarter of 2014.

As of December 31, 2015 the company’s deferred revenues totaled $101.2 million, including amounts invoiced to customers for whom revenue has not yet been recognized with corresponding offset of trade receivables balance. This represents an increase of 19% from December 31, 2014.

As of December 31, 2015 the Company had cash, cash equivalents, short-term and long-term bank deposits and marketable securities of $315.1 million.

Cash generated from operations in the fourth quarter of 2015 totaled $15.7 million

During the fourth quarter we repurchased our shares in a total amount of $8.4 million.

Financial Highlights for the full year 2015

Revenues for the full year of 2015 totaled $216.6 million, representing a decrease of 2%, compared with revenues of $221.9 million for the full year of 2014.

Net income on a GAAP basis for 2015 full year was $18.6 million or $0.40 per diluted share, compared with net income of $25.0 million or $0.53 per diluted share for the 2014 full year.

Net income on a Non-GAAP basis for the 2015 full year was $33.7 million or $0.72 per diluted share, compared with net income of $40.3 million or $0.86 per diluted share for the 2014 full year.

Cash generated from operations in 2015 totaled $39.1 million

During 2015 we repurchased our shares in a total amount of $52.9 million.

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.

During the fourth quarter of 2015, Radware released the following significant announcements:

Product

Business

Financial

Other significant product announcement during the first three quarters of 2015: 

Conference Call

Company management will host a quarterly investor conference call at 8:45am ET on February 3, 2016. The call will focus on financial results for the quarter ending December 31, 2015 and other matters related to the Company’s business.

The conference call will be webcast on February 3, 2016 at 8:45am ET in the “listen only” mode via the Internet at: http://www.radware.com/IR/ and will be available for replay during the next 12 months. 

Participants in the US call: Toll Free 1 (800) 230-1059

Participants Internationally call: +1- 612-234-9959

Conference ID: 383063

Please find a link to the upcoming webcast presentation on the following web page:
http://www.radware.com/IR/

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

Radware encourages you to join our community and follow us on: Facebook, Google+, LinkedIn, Radware Blog, SlideShare, Twitter, YouTube, Radware Connect app for iPhone® and our security center DDoSWarriors.com that provides a comprehensive analysis on DDoS attack tools, trends and threats.

©2016 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.

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, 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. 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.

 Consolidated Balance Sheets
 (U.S. Dollars in thousands)
  
  December 31,
 2014
 December 31,
 2015
  (Audited) (Unaudited)
Current assets    
Cash and cash equivalents  44,979   33,744 
Available-for-sale marketable securities   29,448   16,003 
Short-term bank deposits  29,989   80,922 
Trade receivables, net (*)  25,637   26,410 
Other receivables and prepaid expenses  8,107   5,042 
Inventories  16,844   16,322 
   155,004   178,443 
Long-term investments    
Available-for-sale marketable securities   114,519   87,814 
Long-term bank deposits  111,754   96,643 
Severance pay funds  3,040   2,724 
   229,313   187,181 
     
     
Property and equipment, net  20,592   26,203 
Intangible assets, net  4,756   3,518 
Other assets  3,234   5,892 
Goodwill  30,069   30,069 
     
Total assets  442,968   431,306 
     
Current liabilities    
Trade payables  9,817   9,255 
Deferred revenues  41,966   46,061 
Other payables and accrued expenses  24,043   22,098 
   75,826   77,414 
Long-term liabilities    
Deferred revenues  25,382   25,136 
Other long-term liabilities  8,063   9,214 
   33,445   34,350 
     
Shareholders’ equity    
Share capital  654   661 
Additional paid-in capital  294,084   312,784 
Accumulated other comprehensive income  211   1,676 
Treasury stock, at cost  (41,153)  (94,049)
Retained earnings  79,901   98,470 
Total shareholders’ equity  333,697   319,542 
     
Total liabilities and shareholders' equity  442,968   431,306 


(*) Include amounts invoiced to customers for whom revenue has not yet been recognized in the amount of $ 29,976 and $ 17,990, with corresponding offset of trade receivables balance on the balance sheet as of December 31, 2015 and 2014, respectively.


Condensed Consolidated Statements of Income
(U.S. Dollars in thousands, except share and per share data)
 
 For the Three months ended
December 31,
For the Year ended
December 31,
  2014  2015  2014  2015 
 (Unaudited)(Unaudited)(Audited)(Unaudited)
     
Revenues 61,032  55,256  221,892  216,566 
Cost of revenues 10,594  9,910  39,732  38,200 
Gross profit 50,438  45,346  182,160  178,366 
Operating expenses:    
Research and development, net 11,245  12,972  44,081  49,987 
Selling and marketing 24,542  24,946  93,203  93,347 
General and administrative 4,922  4,055  19,797  17,033 
Total operating expenses 40,709  41,973  157,081  160,367 
Operating income 9,729  3,373  25,079  17,999 
Financial income, net 1,383  2,394  5,802  5,867 
Income before taxes on income 11,112  5,767  30,881  23,866 
Taxes on income 1,948  1,504  5,931  5,297 
Net income 9,164  4,263  24,950  18,569 
 
    
Basic net earnings per share$ 0.20 $ 0.09 $ 0.55 $ 0.40 
             
Weighted average number of shares used to compute basic net earnings per share  46,138,320   45,048,937   45,308,554   45,895,321 
     
Diluted net earnings per share$ 0.19 $ 0.09 $ 0.53 $ 0.40 
             
Weighted average number of shares used to compute diluted net earnings per share  47,362,844   45,300,967   46,894,615   46,738,604 


Reconciliation of Supplemental Financial Information
(U.S. Dollars in thousands, except share and per share data)
 
 For the Three months ended
December 31,

For the Year ended
December 31,
 
 2014
2015
2014
2015
 
 (Unaudited)(Unaudited)(Unaudited)(Unaudited) 
      
GAAP net Income  9,164   4,263   24,950   18,569  
Stock-based compensation expenses, included in:     
Cost of revenues 31  42  79  141  
Research and development, net 412  575  1,421  2,456  
Selling and marketing 860  1,187  2,950  4,098  
General and administrative   758    452  2,932  2,634  
  2,061  2,256  7,382  9,329  
Amortization of intangible assets included in:     
Cost of revenues 244  254  1,053  1,114  
Selling and marketing 155    29  636    124  
  399    283  1,689  1,238  
Exchange rate differences, net on balance sheet items included in financial income (26) 87  (163) 1,146  
              
Litigation costs 1,480    744  6,418  3,383  
              
Non-GAAP net income  13,078   7,633   40,276   33,665  
      
Non-GAAP diluted net earnings per share$ 0.28 $ 0.17 $ 0.86 $ 0.72  
              
Weighted average number of shares used to compute Non-GAAP diluted net earnings per share  47,362,844   45,300,967   46,894,615   46,738,604  


Consolidated Statements of Cash Flow

(U.S. Dollars in thousands)

   
   Year end December 31,
    2014   2015 
    (Audited) (Unaudited)
Cash flows from operating activities:     
      
Net income  $  24,950  $  18,569 
Adjustments to reconcile net income to net cash provided by operating activities:     
Depreciation and amortization   8,102   9,401 
Stock based compensation   7,382   9,329 
Gain from sale of available-for-sale marketable securities   (424)  (2,438)
Amortization of premiums, accretion of discounts and accrued interest on available-for-sale marketable securities, net   2,964   3,208 
Accrued interest on bank deposits   1,069   (1,998)
Increase (decrease) in accrued severance pay, net   (158)  125 
Changes in deferred income taxes, net   (1,775)  215 
Increase in trade receivables, net   (726)  (773)
Increase in other receivables and prepaid expenses   (1,913)  (103)
Decrease (increase) in inventories   (2,654)  522 
Increase (decrease) in trade payables   1,019   (562)
Increase in deferred revenues (short-term and long-term)   8,638   3,849 
Increase in other payables and accrued expenses and other long-term liabilities   7,146   424 
Tax benefit related to exercise of stock options   (1,443)  (632)
      
Net cash provided by operating activities   52,177   39,136 
      
Cash flows from investing activities:     
      
Purchase of property and equipment   (9,482)  (13,774)
Investment in (proceeds from) other long-term assets   34   (100)
Investment in bank deposits, net   (20,929)  (33,824)
Proceeds from sale, redemption of and purchase of available-for-sale marketable securities, net   (4,280)  40,845 
Purchase of intangible asset   (1,375)  - 
      
Net cash used in investing activities   (36,032)  (6,853)
      


Consolidated Statements of Cash Flow

(U.S. Dollars in thousands)

   
  Year end December 31,
   2014    2015 
  (Audited)  (Unaudited)
Cash flows from financing activities:     
      
Proceeds from exercise of stock options  22,493    8,746 
Excess tax benefit from stock-based compensation  1,443    632 
Repurchase of shares  (15,169)   (52,896)
      
Net cash provided by (used in) financing activities  8,767    (43,518)
      
Increase in cash and cash equivalents  24,912    (11,235)
Cash and cash equivalents at the beginning of the year  20,067    44,979 
      
Cash and cash equivalents at the end of the year $  44,979   $  33,744 
      
Chief Financial Officer
Doron Abramovitch
+972-3766-8610

Corporate Media Relations:
Deborah Szajngarten
(201) 785-3206 
deborah.szajngarten@radware.com