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RADCOM ACCELERATES MOMENTUM IN Q4: Q4 SALES REACH $7M, 2011 SALES REACH $22M

RADCOM ACCELERATES MOMENTUM IN Q4: Q4 SALES REACH $7M, 2011 SALES REACH $22M

- Strong Backlog Gives Visibility for Stronger 2012 -

 

TEL-AVIV, Israel – January 26, 2012-- RADCOM Ltd. (RADCOM) (NASDAQ: RDCM) today announced its financial results for the fourth quarter and full year ended December 31, 2011.

 

Financial Overview

 

In $ thousands 

Q4 2011 

Q3 2011 

Q4 2010 

Revenues 

$7,004

$3,499

$5,363

Gross margin 

69.9%

60.4%

64.6%

Operating income (loss) (GAAP) 

$360

$(1,983)

$39

Operating income (loss) (non-GAAP) 

$564

$(1,788)

$461

Net income (loss) (GAAP) 

$64

$(2,169)

$78

Net income (loss) (non-GAAP) 

$268

$(1,974)

$500

 

Fourth Quarter of 2011:  Revenues totaled $7.0 million, up 31% compared with $5.4 million for Q4 2010 and more than double their level in Q3 2011. Gross margin for the quarter increased to 69.9% from 64.6% in Q4 2010.

Annual bookings and backlog reached near-historic highs, reflecting the Company’s accelerating momentum with top-tier operators throughout the world.  

Operating income increased to $360,000 from $39,000 in Q4 2010, according to U.S. generally accepted accounting principles (GAAP). Excluding share-based compensation expenses from all periods, the Company’s non-GAAP operating income for Q4 2011 totaled $564,000, up 22% compared with $461,000 for Q4 2010.

The Company’s net income for the quarter totaled $64,000 ($0.01 basic and diluted per share), a slight decrease compared with $78,000 ($0.01 basic and diluted per share) for Q4 2010. The decrease derived from the period’s unusually high financial expenses, which were caused primarily by fluctuations in the exchange rate of the Brazilian real against the U.S. dollar.

Excluding share-based compensation expenses from all periods, the Company’s non-GAAP net income for Q4 2011 totaled $268,000 ($0.04 diluted per share) compared with $500,000 ($0.08 diluted per share) for Q4 2010. The decrease reflects the higher financial expenses, as described above, together with the Company’s strategic scale-up of its sales, marketing and support organizations, including the development of its direct sales offices in Singapore, Brazil and India, and the expansion of its support capabilities to meet the business growth implied by current near-historic levels of annual bookings and backlog. Management expects its operating expenses during the coming quarters to remain at a similar level.

 Full Year 2011: The Company's revenues rose 15% to $22.0 million for the full year of 2011 from $19.2 million in 2010. Gross margin for the year increased to 69.6% from 66.2% in 2010.

According to U.S. GAAP, the Company reported a net loss for 2011 of $(1.9) million ($(0.30) basic and diluted per share) compared with a net income of $570,000 ($0.11 basic per share and $0.10 diluted per share) for 2010. This reflected the significant net loss recorded in the third quarter, together with investments made throughout the year to build the Company’s sales and marketing infrastructure. Excluding share-based compensation expenses and changes in the fair value of warrants from all periods, non-GAAP net loss for 2011 was $(1.1) million ($(0.17) diluted per share) compared with net income of $1.7 million ($0.28 diluted per share) for 2010.

 

Comments of Management

Commenting on the results, Mr. David Ripstein, RADCOM’s President and CEO, said, “Our success is being driven by one of the strongest trends in the telecom industry: the explosion of smartphone traffic and its devastating effect on network quality. As a result, 2011 was a period of accelerating revenue momentum and strategic investment that enabled us to reach near-record annual bookings and gross margins, giving us an extremely strong backlog that enables us to project a much stronger 2012.”

 

Mr. Ripstein continued, “This visibility led us to invest throughout 2011 to expand our direct sales capabilities, developing our offices in Singapore, India and Brazil, while also extending our technological edge. Since we expect to maintain a similar level of operational expenses in 2012, a growing proportion of each new sale will contribute to the bottom line. We are therefore confident and excited as we move into 2012. With rising sales, growing markets and a correctly-sized organization, we are fully focused on moving to the next level and on achieving significant top-line and bottom-line growth.”   

 

Earnings Conference Call


RADCOM's management will hold an interactive conference call today at 9:00 AM Eastern Time (16:00 Israel Time) to discuss the results and to answer participants' questions. To join the call, please call one of the following numbers approximately five minutes before the call is scheduled to begin:

From the US (toll-free): + 1-888-668-9141

From other locations: +972-3-918-0610

For those unable to listen to the call at the time, a replay will be available from January 27th on RADCOM's website.

###

 

About RADCOM

RADCOM provides innovative service assurance solutions for communications service providers and equipment vendors. RADCOM specializes in solutions for next-generation networks, both wireless and wireline. RADCOM’s comprehensive, carrier-strength solutions are used to prevent service provider revenue leakage and to enable management of customer care. RADCOM’s products facilitate fault management, network service performance analysis, troubleshooting and pre-mediation with an OSS/BSS. RADCOM's shares are listed on the NASDAQ Capital Market under the symbol RDCM. For more information, please visit www.RADCOM.com.


Non-GAAP Information

Certain non-GAAP financial measures are included in this press release. These non-GAAP financial measures are provided to enhance the reader's overall understanding of our financial performance. By excluding non-cash stock-based compensation that has been expensed in accordance with ASC Topic 718 and changes in fair value of warrants that has been expensed in accordance with ASC 815-40, our non-GAAP results provide information to both management and investors that is useful in assessing our core operating performance and in evaluating and comparing our results of operations on a consistent basis from period to period. These non-GAAP financial measures are also used by management to evaluate financial results and to plan and forecast future periods.  The presentation of this additional information is not meant to be considered a substitute for the corresponding financial measures prepared in accordance with GAAP.


Risks Regarding Forward-Looking Statements

Certain statements made herein that use words such as “estimate,” “project,” “intend,” “expect,” “'believe”, "may", "might", "predict", "potential", "anticipate", "plan" or similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks and uncertainties that could cause the actual results, performance or achievements of the Company to be materially different from those that may be expressed or implied by such statements, including, among others, changes in general economic and business conditions and specifically, decline in the demand for the Company’s products, inability to timely develop and introduce new technologies, products and applications, and loss of market share and pressure on prices resulting from competition. For additional information regarding these and other risks and uncertainties associated with the Company’s business, reference is made to the Company’s reports filed from time to time with the United States Securities and Exchange Commission. The Company does not undertake to revise or update any forward-looking statements for any reason.

 

 

 

Condensed Consolidated Statements of Operations

(1000's of U.S. dollars, except share and per share data)

 

 

Three months ended
December 31,

 

Twelve months ended
December 31,

 

2011

 

2010

 

2011

 

2010

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

Sales

 $ 7,004

 

 $ 5,363

 

 $21,987

 

 $19,173

Cost of sales

2,110

 

1,901

 

6,680

 

6,486

Gross profit

4,894

 

3,462

 

15,307

 

12,687

Research and development, gross

1,534

 

1,111

 

5,866

 

4,310

Less - royalty-bearing participation

229

 

283

 

1,235

 

1,424

Research and development, net

1,305

 

 828

 

4,631

 

2,886

Sales and marketing

 2,716

 

 2,048

 

9,962

 

6,971

General and administrative (1)

513

 

547

 

2,234

 

1,538

Total operating expenses

4,534

 

3,423

 

16,827

 

11,395

Operating income (loss)

   360

 

    39

 

 (1,520)

 

 1,292

Financing income (expenses), net

(296)

 

39

 

  (384)

 

  (722)

 

Net income (loss)

   64

 

      78

 

  (1,904)

 

570

Basic net income (loss) per ordinary

Share

 $    0.01

 

 $    0.01

 

 $    (0.30)

 

 $    0.11

Diluted net income (loss) per ordinary share

$    0.01

 

$    0.01

 

$    (0.30)

 

$    0.10

Weighted average number of 
    ordinary shares used in
    computing basic net income
    (loss) per ordinary share

6,398,885

 

6,049,678

 

6,367,560

 

5,373,515

Weighted average number of 
    ordinary  shares  used in
    computing diluted net income
    (loss) per ordinary share

6,708,515

 

6,592,961

 

6,367,560

 

5,947,310

 

 

(1) Includes a decrease of $269,000 and $595,000 in allowance for doubtful accounts for the three month period and for the twelve month period ended December 31, 2010, respectively.

 

RADCOM Ltd. 

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION

(1000's of U.S. dollars, except share and per share data)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

December 31,

 

December 31,

 

2011

 

2010

 

2011

 

2010

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

 

 

 

 

 

 

 

GAAP net income (loss)

$64

 

$78

 

$(1,904)

 

$570

Stock-based compensation (1)

204

 

422

 

824

 

564

Change in fair value of warrants

-

 

-

 

-

 

524

Non-GAAP net income (loss)

$268

 

$500

 

$(1,080)

 

$1,658

Non-GAAP earnings (loss) per share (diluted)

$0.04

 

$0.08

 

$(0.17)

 

$0.28

 

 

 

 

 

 

 

 

Number of shares used in computing Non-GAAP earnings (loss) per share (diluted)

6,708,515

 

6,592,961

 

6,367,560

 

5,947,310

 

 

 

 

 

 

 

 

(1) Stock-based compensation:

 

 

 

 

 

 

 

   Cost of sales

4

 

1

 

27

 

5

   Research and development

41

 

2

 

218

 

10

   Selling and marketing

34

 

4

 

231

 

36

   General and administrative

125

 

415

 

348

 

513

 

204

 

422

 

824

 

564

 

 

RADCOM Ltd. 

Consolidated Balance Sheets 

(1000's of U.S. dollars)  

 

As of 

 

As of 

 

December 31,

2011

 

December 31,

2010

 

(unaudited)

 

 

Current Assets

 

 

 

     Cash and cash equivalents

2,901

 

5,744

     Trade receivables, net

5,389

 

6,851

     Inventories

6,590

 

3,949

     Other receivables

3,490

 

1,708

Total Current Assets

18,370

 

18,252

Severance pay fund

2,674

 

2,796

Property and equipment, net

301

 

338

Total Assets 

21,345

 

21,386

 

 

 

 

Liabilities and Shareholders' Equity 

 

 

 

Current Liabilities  

 

 

 

     Trade payables

2,703

 

2,759

     Deferred revenue

623

 

451

     Other payables and accrued expenses

4,374

 

3,898

Total Current Liabilities

7,700

 

7,108

Long-Term Liabilities  

 

 

 

     Deferred revenue

161

 

221

     Accrued severance pay         

3,092

 

3,154

Total Long-Term Liabilities

3,253

 

3,375

 

 

 

 

Total Liabilities

10,953

 

10,483

 

 

 

 

Shareholders' Equity  

 

 

 

     Share capital

250

 

234

     Additional paid-in capital

60,557

 

59,180

     Accumulated deficit

(50,415)

 

(48,511)

Total Shareholders' Equity

10,392

 

10,903

 

 

 

 

Total Liabilities and Shareholders' Equity

21,345

 

21,386

 

 

 

 

 

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