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RADCOM Announces Second Quarter 1998 Results; Operating Profit and Net Income Up Three-Fold; Record Gross Margins of 71%
Business Wire - July 29, 1998 16:46
TEL-AVIV, Israel--(BUSINESS WIRE)--July 29, 1998--RADCOM LTD. (NASDAQ-NM Symbol: RDCMF) announced today financial results for the second quarter ended June 30, 1998.
Revenues for the three months ended June 30, 1998 increased by 6% to $5,009,521 compared to $4,717,804 for the same period in 1997. Gross profit increased by 16% to $3,555,736 compared to $3,071,568 for the first quarter of 1997, resulting in record gross margins of 71.0%. Operating income for the quarter was $303,222, an increase of 259% as compared to $84,572 for the first quarter of 1997. Net income for the quarter was $606,505, or $0.06 per share fully diluted, an increase of 280% compared to of $159,613, or $0.02 per share fully diluted, for the corresponding period last year.
Revenues for the first half ended June 30, 1998 increased by 14% to $9,525,619 compared to $8,349,037 for the first half of 1997. Gross profit increased by 23% to $6,666,485 compared to $5,406,227 for the first half of 1997, resulting in gross margins of 70.0%. Operating income for the half was $406,719, compared to an operating loss of $585,832 for the first half of 1997. Net income for the period was $1,069,134, or $0.10 per share fully diluted, as compared to a net loss of $449,068, or $0.06 per share fully diluted, for the first half last year.
Commenting on the results, Moty Ben-Arie, CEO of RADCOM said, "We had a productive second quarter and are especially pleased with the continuing improvement in gross margins which benefited from continuing efficiency measures and a higher proportion of software (versus hardware) in the sales mix. Our revenues came in slightly below expectations as a result of the continuing weakness in the ATM market, which, although showing signs of gradual recovery, remains soft, and by our shift in focus to major account marketing.
"During the quarter we established several important new relationships. Both Siemens Private Communications Systems and GTE Corporation standardized on our PrismLite integrated ATM, WAN, LAN protocol analyzer. At the same time, RADCOM is collaborating with the Boeing Company to offer a new family of high-performance protocol analyzers using advanced technology components from each company. The initial products will target the ATM market and will address speeds of 622 Mbps and higher. We are very excited by the potential of this relationship and expect to ship the first integrated product in September.
"Reaction to our extensive new UNI 4.0 ATM signaling simulation test suite, which ensures correct operation, immunity to protocol errors, and performance optimization, has been encouraging. After the close of the quarter, we announced a major software release which includes enhanced support for ISDN simulation, bit error rate testing, real-time protocol filtering, real-time discovery of IP stations and more."
Mr. Ben-Arie concluded, "We are pleased with the progress we made during the quarter and remain optimistic regarding the second half of 1998 as we roll out new products."
RADCOM LTD. designs, manufactures, markets and supports innovative, high performance internetworking test and analysis equipment for data communications networks. The Company's products are used in the development and manufacturing of network equipment, the installation of networks, and the ongoing maintenance of operational networks to facilitate real-time identification, diagnosis, isolation, and resolution of network problems. The Company's sales network includes 14 manufacturer's representatives in North America and, in the rest of the world, a network of more than 30 distributors selling in over 35 countries. RADCOM's test and analysis equipment has been sold to a number of international companies and government agencies including AT&T, Bay Networks, British Telecom, Cisco, CompuServe, Deutsche Telekom, French Navy, GTE, IBM, Microsoft, Oracle, Pacific Bell, Siemens, and 3Com.
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.
RADCOM
Consolidated Statements of Operations
Three months ended Six months ended
June 30 June 30
1998 1997 1998 1997
Sales $ 5,009,521 $4,717,804 $9,525,619 $8,349,037
Cost of sales 1,453,785 1,646,236 2,859,134 2,942,810
Gross profit 3,555,736 3,071,568 6,666,485 5,406,227
Research and development,
gross 1,317,790 1,002,202 2,515,678 2,106,303
Less - royalty-bearing
participations (560,542) (496,199) (1,017,803) (919,199)
Research and development,
net 757,248 506,003 1,497,875 1,187,104
Sales and marketing,
gross 2,383,683 2,422,479 4,467,947 4,550,352
Less - participation of the
Fund for the Encouragement
of Marketing Activities (189,568) (193,000) (283,404) (193,000)
Sales and marketing,
net 2,194,115 2,229,479 4,184,543 4,357,352
General and
administrative 301,151 251,514 577,348 447,603
Total operating
expenses 3,252,514 2,986,996 6,259,766 5,992,059
Operating profit (loss) 303,222 84,572 406,719 (585,832)
Financial (expenses)
income, net 303,283 75,041 662,415 136,764
Net income (loss) for
the year 606,505 159,613 1,069,134 (449,068)
U.S. GAAP
Basic earnings (loss)
per share $0.06 $0.02 $0.10 ($0.06)
Weighted average
number of shares
(basic) 9,932,500 7,354,600 9,932,500 7,339,860
Diluted earnings (loss)
per share $0.06 $0.02 $0.10 ($0.06)
Weighted average
number of shares
(diluted) 9,941,709 7,358,754 9,948,855 7,344,825
ISRAELI GAAP
Basic earnings (loss)
per share $0.06 $0.02 $0.11 ($0.06)
Weighted average
number of shares
(basic) 9,943,500 7,365,600 9,943,500 7,356,265
Diluted earnings (loss)
per share $0.05 $0.02 $0.09 ($0.06)
Weighted average
number of shares
(diluted) 11,385,997 7,371,100 11,416,912 7,361,765
RADCOM
Consolidated Balance Sheets
As of As of
June 30, 1998 Dec. 31, 1997
(unaudited) (audited)
Current Assets
Cash and cash equivalents 6,066,448 6,607,134
Short-term investments 10,460,784 7,108,961
Receivables:
Trade, net 4,466,180 3,909,910
Other 1,517,190 581,479
Inventories 2,769,625 2,349,623
Total Current Assets 25,280,227 20,557,107
Long-Term Investments 6,283,433 11,176,853
Property and Equipment
Cost 5,764,560 4,767,937
Less - accumulated depreciation (2,516,296) (2,001,208)
3,248,264 2,766,729
Total Assets 34,811,924 34,500,689
Liabilities and Shareholders' Equity
Current Liabilities
Short-term credits -- 77,445
Trade 1,450,392 1,658,239
Other payables and accrued expenses 3,250,791 4,036,161
Total Current Liabilities 4,701,183 5,771,845
Liability for Employee Severance
Pay Benefits, net 643,526 488,459
Total Liabilities 5,344,709 6,260,304
Shareholders' Equity
Share capital 50,179 50,179
Additional paid-in capital 35,589,800 35,485,816
Accumulated deficit (6,172,764) (7,295,610)
Total Shareholders' Equity 29,467,215 28,240,385
Total Liabilities and Shareholders'
Equity 34,811,924 34,500,689
CONTACT: RADCOM LTD.
Moty Ben-Arie, CEO
972-3-645-5051
or
Sarit Weiss-Firon, CFO
972-3-645-5004
or
John Mavretish, IR Coordinator
201-529-2020 |
