Momentum Continues To Build For RADCOM: Q1 Sales Up 20% To $5.5M, Significant Increase In Gross Margin To 68% & Positive Cash Flow - Cincinnati News, FOX19-WXIX TV

Momentum Continues To Build For RADCOM: Q1 Sales Up 20% To $5.5M, Significant Increase In Gross Margin To 68% & Positive Cash Flow

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SOURCE RADCOM Ltd.

TEL-AVIV, Israel, April 23, 2014 /PRNewswire/ -- RADCOM Ltd. (NASDAQ: RDCM), a leading provider of service assurance and customer experience solutions, today reported its financial results for the first quarter ended March 31, 2014.

In $ thousands

Q1 2014

Q1 2013

Q4 2013

Revenues

$5,471

$4,573

$5,707

Gross margin

67.6%

66.4%

61.2%

Net profit (loss)

$110

$(594)

$117

Net profit (loss) (non-GAAP)

$248

$(512)

$187

Financial Results
RADCOM's revenues for the first quarter increased by 20% to $5.5 million from $4.6 million in the first quarter of 2013. Gross margin for the quarter reached 68%, a significant improvement compared with 61% in Q4 2013, 62% in 2013 as a whole and 61% in 2012. This reflects the Company's transition from hardware-based products to higher margin software-based products, which for the first time this quarter accounted for the majority of the Company's sales. Management believes that the continued success of its software-based product families – led by its recently-released MaveriQ solution - will increase its gross margin significantly over time to above 75%.

Net income for the quarter totaled $110,000, or $0.01 per ordinary share (basic and diluted), compared with a net loss of $(594,000), or $(0.09) per ordinary share (basic and diluted), for the first quarter of 2013. On a non-GAAP basis, net income totaled $248,000, or $0.03 per ordinary share (basic and diluted), compared with a non-GAAP net loss of $(512,000), or $(0.08) per ordinary share (basic and diluted), for the first quarter of 2013.

Comments of Management
"We are satisfied with all of our business parameters for the first quarter - especially with the growth in our revenues, bookings and collections," commented Mr. David Ripstein, Radcom's President & CEO. "Our momentum is being driven by market excitement regarding our software-based products. These advanced solutions give operators the tools they need to assure high levels of availability in high-traffic LTE/3G environments. This is bringing us a lot of opportunities from both new and existing customers."

Mr. Ripstein continued,  "In fact, although the MaveriQ, our software-based product, was released just two months ago, it already accounts for the majority of our sales, and its higher margins enabled us to deliver a 33% increase in non-GAAP profit compared with Q4. In the future, our shift from being a hardware company to a software company will continue to improve our margins, reduce our inventory and decrease the average time lag between bookings and revenue recognition. As such, with strong trends working to our strengths and a clear technology differentiation, we believe we are positioned for additional growth in 2014 and beyond."

Mr. Ripstein concluded, "Our CFO for the past three years, Mr. Gilad Yehudai, has decided to pursue a new opportunity. We thank him for his dedicated service and wish him well in the future. In parallel, we are pleased to welcome Mr. Uri Birenberg to the Radcom team as our new CFO. Uri is a CPA with 10 years experience in VP Finance, Business Development, M&A and Controller positions for SunGard, HP and Ernst & Young. We wish him success in the new position."

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: +972-3-918-0609

For those unable to listen to the call at the time, a replay will be available from April 24th on RADCOM's website.

About RADCOM
RADCOM provides innovative service assurance and customer experience management solutions for leading telecom operators and communications service providers. RADCOM specializes in solutions for next-generation mobile and fixed networks, including LTE, VoLTE, IMS, VoIP, UMTS/GSM and mobile broadband. RADCOM's comprehensive, carrier- grade solutions are designed for big data analytics on terabit networks, and are used to prevent service provider revenue leakage and to enhance customer care management. RADCOM's products interact with policy management to provide self-optimizing network solutions. 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, 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.

 


RADCOM Ltd.
Consolidated Statements of Operations
(1000's of U.S. dollars, except share and per share data)




Three months ended
March 31,


2014


2013


(unaudited)


(unaudited)

Sales

$     5,471


$     4,573

Cost of sales

1,772


1,535

Gross profit

3,699


3,038

Research and development, gross

1,568


1,451

Less - royalty-bearing participation

298


390

Research and development, net

1,270


1,061

Sales and marketing

1,947


1,987

General and administrative

578


487

Total operating expenses

3,795


3,535

Operating loss

(96)


(497)

Financing income (expenses), net

206


(97)

 

Net profit (loss)

$    110


$  (594)

 

Basic and diluted net income (loss) per ordinary Share

$    0.01


$    (0.09)





 

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

7,972,326


6,475,231

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

8,510,132


6,475,231

 

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



March 31,



2014


2013



(unaudited)


(unaudited)






GAAP net income (loss)


$110


$(594)

Stock-based compensation (1)


138


82

Non-GAAP net income  (loss)


$248


$(512)

Non-GAAP  net income (loss) per share (diluted)


$0.03


$(0.08)






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


8,473,865


6,475,231






(1) Stock-based compensation:





   Cost of sales


4


-

   Research and development


46


6

   Sales and marketing


50


6

   General and administrative


38


70



138


82

 

RADCOM Ltd.

Consolidated Balance Sheets

(1000's of U.S. dollars)


As of


As of


March 31,

2014


December 31,

2013


(unaudited)


(audited)

Current Assets




     Cash and cash equivalents

2,297


1,185

     Restricted cash

-


1,505

     Trade receivables, net

6,013


5,723

     Inventories

3,887


4,352

     Other receivables

3,302


3,092

Total Current Assets

15,499


15,857

Severance pay fund

3,524


3,535

Property and equipment, net

243


253

Total Assets

19,266


19,645





Liabilities and Shareholders' Equity




Current Liabilities




 Short term bank credit

-


629

   Trade payables

1,499


2,257

 Deferred revenue and advances from customers

1,978


1,305

    Employee and payroll accruals

2,262


2,109

 Other payables and accrued expenses

1,444


1,795

Total Current Liabilities

7,183


8,095

Long-Term Liabilities




     Deferred revenue

55


107

     Accrued severance pay       

3,979


3,944

Total Long-Term Liabilities

4,034


4,051





Total Liabilities

11,217


12,146





Shareholders' Equity




     Share capital

338


335

     Additional paid-in capital

66,075


65,791

       Accumulated other comprehensive loss

(652)


(805)

     Accumulated deficit

(57,712)


(57,822)

Total Shareholders' Equity

8,049


7,499





Total Liabilities and Shareholders' Equity

19,266


19,645

 

Contact:
Gilad Yehudai
CFO
(972) 77-774-5060
gilady@radcom.com

 

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