11th Straight Quarter of YOY Revenue Growth TEL-AVIV, Israel, July
24 /PRNewswire-FirstCall/ -- RADCOM Ltd. (RADCOM)
(NASDAQ:RDCMNASDAQ:andNASDAQ:TASE:NASDAQ:RDCM) today announced
financial results for the second quarter and six months ended June
30, 2006. Financial Results for the Second Quarter Revenues for the
second quarter of 2006 were $5.7 million, an increase of 18%
compared with $4.8 million for the second quarter of 2005,
representing the Company's 11th straight quarter of year-over-year
revenue growth, and an increase of 12% compared with the $5.1
million recorded in the first quarter of 2006. Gross margin for the
second quarter of 2006 increased to 70% compared with 68% for the
parallel period of 2005 as well as for the first quarter of 2006.
On the basis of U.S. generally accepted accounted principles
(GAAP), the Company recorded net income for the second quarter of
2006 of $208,000, or $0.01 per ordinary share (basic and diluted).
Net income for the quarter included a non-cash share-based
compensation expense of $105,000 taken in respect of the Company's
mandatory adoption of Statement of Financial Accounting Standards
No. 123 (revised 2004), "Share-Based Payment" ("SFAS 123R"). SFAS
123R requires that companies recognize the fair value of
share-based incentives as compensation. The Company is also
presenting its results on a non-GAAP basis excluding share-based
compensation to provide investors and management with insight into
RADCOM's underlying operating results. On such non-GAAP basis,
RADCOM's net income for the second quarter of 2006 was $313,000, or
$0.02 per Share, an increase of 204% compared with $103,000, or
$0.01 per ordinary share (basic and diluted), for the second
quarter of 2005, which did not include share-based compensation.
Financial Results for the First Half Revenues for the first six
months of 2006 rose by 9% to $10.8 million compared to $9.9 million
for the first half of 2005. Gross margin for the first half of 2006
was 69%, a slight rise compared to 68% for the parallel period of
2005. On the basis of U.S. generally accepted accounted principles
(GAAP), the Company recorded net income of $89,000, or $0.01 per
ordinary share (basic and diluted) for the first half of 2006. Net
income for the six-month period included non-cash share-based
compensation expense of $233,000 taken in respect of SFAS 123R, as
explained above. The Company has also presented its results on a
non-GAAP basis excluding share-based compensation to provide
investors and management with insight into RADCOM's underlying
operating results. On such non-GAAP basis, RADCOM's net income for
the first six months of 2006 was $322,000, or $0.02 per share. Net
income for the first six months of 2005, which did not include
share-based compensation, was $237,000, or $0.02 per share.
Comments of Management Commenting on the news, Mr. Arnon
Toussia-Cohen, President and CEO, said, "The second quarter was
another period of revenue growth, profitability and strategic
progress for RADCOM. Our revenues fell marginally short of our
original projections due to accounting policies relating to a
multiple element agreement that prevented the recognition of
revenues associated with an order shipped during the second
quarter. Nevertheless, we were able to post our eleventh straight
quarter of year-over-year revenue growth and a 12% sequential
increase in sales, achieving another solidly profitable quarter for
RADCOM." Mr. Toussia-Cohen continued, "We are very pleased by the
overall development of our business in line with our plan for
building the company to the next level. The rising pace of global
3G deployments continues to drive demand for our 3G service
monitoring solutions, as demonstrated by the follow-on orders that
we continue to receive from cellular operators in North America,
Europe and Australia. In addition, we are seeing a rise in Omni-Q
demand from wireline operators as they ramp up their VoIP and other
converged network deployments." Mr. Toussia-Cohen concluded, "Taken
as a whole, we are optimistic regarding the future and believe that
market trends are working in our favor. We are on track for
achieving a stronger second half of the year and continue working
to build the Company to the next level." Guidance The following
statement is forward-looking in nature, and actual results may
differ materially. See below under "Risks Regarding Forward Looking
Statements". Given the reliance of the Company's performance for
any specific quarter on the timing of a relatively small number of
relatively large orders, the Company's quarterly results of
operations are subject to fluctuations. Nonetheless, management
projects that the Company's revenues for the third quarter of 2006
will range between $6.7 million and $7.1 million, and that its
revenues for the second half of the year will be significantly
improved compared with those of the first half of the year.
Conference Call Information RADCOM's management will hold an
interactive conference call today, July 24th, at 9:00 AM EDT (16:00
Israel Time) to discuss the results and to answer investor
questions. To participate, please call 1-877-209-0397 from the
U.S., or +1-612-332-0819 from international locations,
approximately five minutes before the call is scheduled to begin. A
replay of the call will be available from 10:45 AM Eastern Time on
July 24th until midnight July 31st. To access the replay, please
call 1-800-475-6701 from the U.S., or +1-320-365-3844 from
international locations, and use the access code 836284. The
conference call can also be accessed online at
http://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 user's
overall understanding of our financial performance. By excluding
non-cash equity based compensation that has been expensed in
accordance with SFAS 123R, our non-GAAP results provide information
to both management and investors that is useful in assessing
RADCOM's 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 generally accepted
accounting principles. RADCOM develops, manufactures, markets and
supports innovative network test and service monitoring solutions
for communications service providers and equipment vendors. The
company specializes in Next Generation Cellular as well as Voice,
Data and Video over IP networks. Its solutions are used in the
development and installation of network equipment and in the
maintenance of operational networks. The company's products
facilitate fault management, network service performance monitoring
and analysis, troubleshooting and pre-mediation. RADCOM's shares
are listed on both the Nasdaq Global Market and the Tel Aviv Stock
Exchange under the symbol RDCM. For more information, please visit
http://www.radcom.com/. Risks Regarding Forward Looking Statements
Certain statements made herein that use the words "estimate,"
"project," "intend," "expect", "believe" and 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 which could cause the actual results, performance
or achievements of the Company to be materially different from
those which may be expressed or implied by such statements,
including, among others, changes in general economic and business
conditions and specifically, decline in demand to 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 Securities and
Exchange Commission. The Company does not undertake to update
forward-looking statements. RADCOM Ltd. Consolidated Statements of
Operations (1000's of U.S. dollars, except per share data) Three
months ended Six months ended June 30, June 30, 2006(a) 2005
2006(b) 2005 (unaudited) (unaudited) (unaudited) (unaudited) Sales
$ 5,701 $ 4,837 $ 10,781 $ 9,854 Cost of sales 1,704 1,571 3,319
3,192 Gross profit 3,997 3,266 7,462 6,662 Research and
development, gross 1,620 1,416 3,183 2,831 Less - royalty-bearing
participation 554 489 1,004 884 Research and development, net 1,066
927 2,179 1,947 Sales and marketing 2,374 1,870 4,473 3,736 General
and administrative 475 422 945 833 Total operating expenses 3,915
3,219 7,597 6,516 Operating income (loss) 82 47 (135) 146 Financing
income, net 126 56 224 91 Net income 208 103 89 237 Basic net
earnings per ordinary share $ 0.01 $ 0.01 $ 0.01 $ 0.02 Diluted net
earnings per ordinary share $ 0.01 $ 0.01 $ 0.01 $ 0.02 Weighted
average number of ordinary shares used in computing basic net
earnings per ordinary share 16,074,528 14,792,288 15,661,349
14,540,644 Weighted average number of ordinary shares used in
computing diluted net earnings per ordinary share 16,591,986
16,069,930 16,748,398 16,152,875 Note a: The Company's results for
the second quarter of 2006 according to U.S. GAAP include non-cash
share-based compensation expense of $105,000 allocated as follows:
$3,000 to cost of sales, $25,000 to research and development,
$48,000 to sales and marketing and $29,000 to general and
administrative. Note b: The Company's results for the six months of
2006 according to U.S. GAAP include non-cash share-based
compensation expense of $233,000 allocated as follows: $6,000 to
cost of sales, $52,000 to research and development, $91,000 to
sales and marketing and $84,000 to general and administrative.
RADCOM Ltd. Consolidated Balance Sheets (1000's of U.S. dollars) As
of As of June 30, December 31, 2006 2005 (unaudited) (unaudited)
Current Assets Cash and cash equivalents 11,682 10,520 Trade
receivables, net 8,437 7,856 Inventories 2,364 1,938 Other current
assets 951 380 Total Current Assets 23,434 20,694 Assets held for
severance benefits 2,075 1,863 Property and equipment, net 1,400
1,233 Total Assets 26,909 23,790 Liabilities and Shareholders'
Equity Current Liabilities Trade payables 2,262 2,148 Current
deferred revenue 1,735 1,545 Other payables and accrued expenses
4,010 4,014 Total Current Liabilities 8,007 7,707 Long-Term
Liabilities Long-term deferred revenue 1,229 1,161 Liability for
employees' severance pay benefits 2,727 2,437 Total Long-Term
Liabilities 3,956 3,598 Total Liabilities 11,963 11,305
Shareholders' Equity Share capital 118 107 Additional paid-in
capital 46,974 44,613 Accumulated deficit (32,146) (32,235) Total
Shareholders' Equity 14,946 12,485 Total Liabilities and
Shareholders' Equity 26,909 23,790 Contact: Jonathan Burgin CFO
+(972)-3-645-5004 DATASOURCE: RADCOM Ltd. CONTACT: Contact:
Jonathan Burgin, CFO, +(972)-3-645-5004,
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