RADVISION Reports Strong Second Quarter 2006 Results; Revenues Reach $22.0 Million; Diluted EPS is $0.14.FAIR LAWN Fair Lawn, borough (1990 pop. 30,548), Bergen co., NE N.J., across the Passaic River from Paterson; inc. 1924. It is residential with light industries. , N.J. -- RADVISION(R) (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : RVSN RVSN Radvision (stock symbol) RVSN Recorded Volume Serial Number (Veritas) RVSN Raketnye Voiska Strategicheskogo Naznacheniya (Russian strategic rocket forces) ) today announced that revenues for the second quarter of 2006 reached a record $22.0 million, representing a 26% increase from $17.5 million reported in the second quarter of 2005. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the second quarter of 2006 was $2.1 million. Excluding the effect of stock-based compensation expense related to the adoption of FAS123R, the Company achieved operating income of $3.3 million. This compares with operating income of $2.2 million in the second quarter of 2005. Net income for the 2006 second quarter was $3.2 million, or $0.14 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. Excluding the effect of stock-based compensation expense, net income was $4.4 million or $0.20 per diluted share. This compares with $2.9 million or $0.13 per diluted share reported in the 2005 second quarter. The Company had forecast that 2006 second quarter revenues would approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. $21.5 million and that net income would approximate $3.1 million or $0.14 per diluted share including stock-based compensation expense related to the adoption of FAS123R. Excluding this item, the Company expected second quarter 2006 net income to be $4.3 million or $0.19 per diluted share. Business unit revenues for the second quarter of 2006 consisted of $16.0 million in Networking Business Unit (NBU NBU New Bulgarian University (Sofia, Bulgaria) NBU National Bank of Ukraine (Kiev, Ukraine) NBU North Bengal University (India) NBU New Better than Used ) sales and $6.0 million in Technology Business Unit (TBU TBU Tomas Bata University (Czech Republic, Zlin) TBU Tertiary Butyl (chemistry) TBU Tape Backup Unit TBU To Be Updated TBU This Binary Universe (band) TBU True But Useless ) sales, representing increases of 35% and 7%, respectively, over the second quarter of 2005. NBU revenues exceeded the Company's forecast and TBU revenues were in line with it. For the first six months of 2006, revenues were $42.1 million, operating income was $4.0 million and net income was $6.1 million or $0.27 per diluted share. Excluding the effect of stock-based compensation expense, operating income for the first six months of 2006 was $6.3 million and net income was $8.4 million or $0.37 per diluted share. For the first half of 2005, revenues were $33.8 million, operating income was $4.1 million and net income was $5.4 million or $0.24 per diluted share. The Company ended the second quarter of 2006 with approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $138.5 million in cash and liquid investments, an increase of $2.8 million from March 31, 2006, and equivalent to $6.23 per basic share. The increase reflects cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses of $2.7 million and income of $541,000 from the exercise of options, offset by $461,000 in capital expenditures. Boaz Boaz (bō`ăz), in the Bible, Ruth's husband, ancestor of David. The spelling in the New Testament is Booz. Boaz took benevolent custody of Ruth. [O.T.: Ruth 2:8–16] See : Kindness Raviv Chaim Yitzak Bezalel Raviv (born July 21, 1979), better known as Raviv, is an Israeli born power pop/dance singer/songwriter. The youngest of 12 sisters and brothers (six brothers and sisters), Raviv was brought up as an orthodox Jew in the north of Israel. , Chief Executive Officer, commented: "Our main growth driver in the second quarter was the successful worldwide launch of our new SCOPIA(TM) v.5 platform and iView management application, which contributed to a 33% increase in our room conferencing See teleconferencing. revenues over the second quarter of 2005 and a 60% increase sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen . We shipped SCOPIA v.5 for the largest phase of the Defense Information Systems Agency (DISA 1. (body) DISA - Defense Information Systems Agency. 2. (standard) DISA - Data Interchange Standards Association. ) DVS-II project that we won with Cisco and Northrop Grumman Northrop Grumman Corporation (NYSE: NOC) is an aerospace and defense conglomerate that is the result of the 1994 purchase of Grumman by Northrop. The company is the third largest defense contractor for the U.S. late last year. Our second quarter DISA sales were made through Cisco, our largest channel partner. Total Cisco revenues rose 70% year-over-year. Our non-Cisco channel sales in the Americas A·mer·i·cas , the See America. also were strong in the quarter. "Revenues from our Click to Meet(R) desktop solution were double those of the 2005 second quarter but were lower than the first quarter mainly because certain budgets for new Federal projects were held back. However, our second quarter included another sale for BVTC BVTC Battlefield Video-Teleconferencing Center , or Battlefield Video Conferencing See videoconferencing. (communications) video conferencing - A discussion between two or more groups of people who are in different places but can see and hear each other using electronic communications. , which is deployed by the U.S. Army for real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. war applications. Click to Meet is an essential part of our broad strategy for unified communications The real time redirection of a voice, text or e-mail message to the device closest to the intended recipient at any given time. For example, voice calls to desk phones could be routed to the user's cellphone when required. . We recently announced that Click to Meet supports Microsoft's RTVideo advanced video codec See H.264. as well as demonstrated its High Definition capabilities, as we continue to develop first-to-market advances. We expect Click to Meet sales to resume sequential One after the other in some consecutive order such as by name or number. growth in the third quarter. "3G revenues rose 11% from the second quarter of 2005 reflecting sales to mobile operators and applications service providers both in EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. and Asia Pacific but were below the record level achieved in the first quarter. Our 3G revenues continue to fluctuate because 3G video is mainly in the trial and pilot phase. "Our TBU revenues grew 7% from the second quarter of 2005. That growth included strong sales of licenses for our SIP (1) (Session Initiation Protocol) An IP telephony signaling protocol developed by the IETF. Primarily used for voice over IP (VoIP) calls, SIP can also be used for video or any media type; for example, SIP has been used to set up multi-player Quake games. and SIP Server toolkits. We recently announced the availability of an IMS-compliant SIP Toolkit An integrated set of software routines or utilities (tools) that are used to develop and maintain applications and databases. There are toolkits for developing almost anything. See tool, developer's toolkit, library, class library and CASE. , the first in what will become a comprehensive portfolio of IMS (1) See IP Multimedia Subsystem. (2) (Information Management System) An early IBM hierarchical DBMS for IBM mainframes. IMS was widely implemented throughout the 1970s under MVS and continues to be used under z/OS. development products. They also included license sales of our 3G-324 toolkits along with related sales in professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. and of our 324M ProLab(TM) testing tool. Earlier this week we reported that Quanta quan·ta n. Plural of quantum. Computer, one of China's leading developers of computers, storage devices and displays, will use our 3G-324 Toolkit and testing tool to develop a video-enabled 3G mobile handset The part of the telephone that contains the speaker and the microphone. On a desktop phone, the part you hold in your hand is the handset. On a cellphone, the entire phone is the handset. See multihandset cordless and headset. based on Windows Mobile The Windows platform from Microsoft for handheld devices, including PDAs, cellphones and Portable Media Centers. See Pocket PC, Pocket PC Phone Edition, Smartphone and Portable Media Center. 5.0 operating system operating system (OS) Software that controls the operation of a computer, directs the input and output of data, keeps track of files, and controls the processing of computer programs. and running on an Intel application chip and Qualcomm (QUALCOMM Incorporated, San Diego, CA, www.qualcomm.com) A wireless communications and software company founded in 1985 by Dr. Irwin Jacobs. Originally involved in satellite tracking and fleet management, QUALCOMM has become widely known for its CDMA technology used in cellphones and baseband Electronic data prior to any modification. It refers to analog or digital data before they are merged with other signals (multiplexed) or intermixed into a carrier wave (modulated). See multiplexing and modulation. chip." Mr. Raviv concluded: "Our growth in the second quarter reflected our focus on execution and the advancement A gift of money or property made by a person while alive to his or her child or other legally recognized heir, the value of which the person intends to be deducted from the child's or heir's eventual share in the estate after the giver's death. of our technology leadership. We will continue to pursue our strategy of enabling and advancing unified communications." Guidance The following statements are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. , and actual results may differ materially. The Company expects revenues for the third quarter of 2006 to be approximately $23.2 million and net income to approximate $3.4 million or $0.15 per diluted share. This includes stock-based compensation expense related to the adoption of FAS123R of $1.3 million or $0.06 per diluted share. Excluding this item, third quarter 2006 net income is expected to be $4.7 million or $0.21 per diluted share. That compares to third quarter 2005 revenues of $19.1 million and net income of $4.0 million or $0.18 per diluted share. (Full details are available on the Company's web site at www.radvision.com.) Second Quarter 2006 Earnings Conference Call/Webcast RADVISION will hold a conference call to discuss its second quarter 2006 results and third quarter outlook, today, Thursday Thursday: see week. , July July: see month. 27, 2006 at 9:00 a.m. (Eastern). To access the conference call, please dial 1-888-323-2711 (International dialers may call +1-212-547-0460) by 8:45 a.m. (Eastern) on July 27th. The passcode "RADVISION" will be required to access the live conference call. A live webcast of the conference call also will be available on the Company's website and archived on the site until the next quarter. Simply click on the following link or copy it onto your browser browser Software that allows a computer user to find and view information on the Internet. The first text-based browser for the World Wide Web became available in 1991; Web use expanded rapidly after the release in 1993 of a browser called Mosaic, which used : http://www.radvision.com/Corporate/Investors/IR_2Q06_webcast.htm. A replay of the call will be available beginning approximately one hour after the conclusion of the call through 11:59 p.m. (Eastern) on August 3rd. To access the replay, please dial 1-888-566-0573 (International dialers may call +1-203-369-3068). The PowerPoint A presentation graphics program from Microsoft for Macintosh and Windows. It was the first desktop presentation program for the Mac and provides the ability to create output for overheads, handouts, speaker notes and film recorders. presentation highlighting key financial metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. as well as the third quarter 2006 estimate also will be available in the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the company's website. The presentation will be available beginning at 8:00 a.m. (Eastern) on July 27th and will be archived on the website until the end of the third quarter. About RADVISION RADVISION (NASDAQ: RVSN) is the industry's leading provider of market-proven products and technologies for unified visual communications over IP and 3G networks. With its complete set of standards-based video networking infrastructure and developer toolkits for voice, video, data and wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. , RADVISION is driving the unified communications evolution by combining the power of video, voice, data and wireless - for high definition videoconferencing A real time video session between two or more users or between two or more locations. Although the first videoconferencing was done with traditional analog TV and satellites, inhouse room systems became popular in the early 1980s after Compression Labs pioneered digitized video systems systems, innovative converged mobile services, and highly scalable video-enabled desktop platforms on IP, 3G and emerging next-generation networks. For more information about RADVISION, visit www.radvision.com. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the industry, changes in demand for products, the timing and amount or cancellation cancellation (See: cancel) CANCELLATION. Its general acceptation, is the act of crossing a writing; it is used sometimes to signify the manual operation of tearing or destroying the instrument itself. Hyde v. Hyde, 1 Eq. Cas. Abr. 409; Rob. of orders and other risks detailed from time to time in RADVISION's filings with the Securities Exchange Commission, including its Annual Report on Form 20-F. These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statement.
RADVISION LTD.
Consolidated Statements of Income
(U.S. Dollars in thousands, except per share data)
Three months ended Six months ended
June 30, June 30,
--------------------- ----------------------
2006 2005 2006 2005
--------- --------- --------- ----------
(Unaudited) (Unaudited)
--------------------- ----------------------
Revenues $ 22,004 $ 17,473 $ 42,140 $ 33,753
Cost of revenues 4,429 3,103 8,080 5,879
--------- --------- --------- ----------
Gross profit 17,575 14,370 34,060 27,874
--------- --------- --------- ----------
Operating costs and
expenses:
Research and
development 6,160 5,054 11,905 9,709
Marketing and selling 7,767 6,006 15,166 11,763
General and
administrative 1,515 1,152 2,976 2,311
--------- --------- --------- ----------
Total operating costs
and expenses 15,442 12,212 30,047 23,783
--------- --------- --------- ----------
Operating income 2,133 2,158 4,013 4,091
Financial income, net 1,433 768 2,704 1,329
--------- --------- --------- ----------
Income before taxes 3,566 2,926 6,717 5,420
Taxes on income, net 355 30 609 30
--------- --------- --------- ----------
Net income $ 3,211 $ 2,896 $ 6,108 $ 5,390
========= ========= ========= ==========
Basic net earnings per
Ordinary share $ 0.14 $ 0.14 $ 0.28 $ 0.26
========= ========= ========= ==========
Weighted Average
Number of Shares
Outstanding During
the Period - Basic 22,216,021 20,994,973 22,105,694 20,854,595
========== ========== ========== ==========
Diluted net earnings
per Ordinary share $ 0.14 $ 0.13 $ 0.27 $ 0.24
========= ========= ========= ==========
Weighted Average
Number of Shares
Outstanding During
the Period - Diluted 22,604,467 22,020,946 22,532,464 22,027,068
========== ========== ========== ==========
RADVISION LTD.
Consolidated Statements of Income
Reconciliation of GAAP to NON-GAAP Operating Results(1)
(U.S. Dollars in thousands, except per share data)
Three months ended
June 30,
-------------------------------------------------
2006 2005
-------------------------------------------------
(Unaudited)
-------------------------------------------------
Non GAAP
adjustment
share-based Non GAAP
GAAP results compensation results GAAP results
(as reported) (1) Pro Forma (as reported)
-------------------------------------------------
Revenues $ 22,004 $ - $ 22,004 $ 17,473
Cost of revenues 4,429 96 4,333 3,103
------------ ------ ----------- ------------
Gross profit 17,575 96 17,671 14,370
------------ ------ ----------- ------------
Operating costs and
expenses:
Research and
development 6,160 382 5,778 5,054
Marketing and
selling 7,767 500 7,267 6,006
General and
administrative 1,515 237 1,278 1,152
------------ ------ ----------- ------------
Total operating costs
and expenses 15,442 1,119 14,323 12,212
------------ ------ ----------- ------------
Operating income 2,133 1,215 3,348 2,158
Financial income, net 1,433 - 1,433 768
------------ ------ ----------- ------------
Income before taxes 3,566 1,215 4,781 2,926
Taxes on income, net 355 - 355 30
------------ ------ ----------- ------------
Net income $ 3,211 $1,215 $ 4,426 $ 2,896
============ ====== =========== ============
Basic net earnings
per Ordinary share $ 0.14 $ 0.06 $ 0.20 $ 0.14
============ ====== =========== ============
Weighted Average
Number of Shares
Outstanding During
the Period - Basic 22,216,021 22,216,021 20,994,973
============ =========== ============
Diluted net earnings
per Ordinary share $ 0.14 $ 0.06 $ 0.20 $ 0.13
============ ====== =========== ============
Weighted Average
Number of Shares
Outstanding During
the Period - Diluted 22,604,647 22,604,647 22,020,946
============ =========== ============
(1) To supplement our consolidated financial statements presented in
accordance with generally accepted accounting principles (GAAP),
we use non GAAP measures of operating results, net income and
earnings per share, which are adjusted from results based on GAAP
to exclude the expenses we recorded for stock compensation in
accordance with SFAS 123R. These non GAAP financial measures are
provided to enhance overall understanding of our current financial
performance and our prospects for the future. Specifically, we
believe the non GAAP results provide useful information to both
management, and investors as these non GAAP results exclude the
expenses we recorded for stock compensation in accordance with
SFAS 123R that we believe are not indicative of our core operating
results. Further, these non GAAP results are one of the primary
indicators management uses for assessing our performance,
allocating resources and planning and forecasting future periods.
These measures should be considered in addition to results
prepared in accordance with GAAP, but should not be considered a
substitute for or superior to GAAP results. These Non GAAP
measures may be different than the non GAAP measures used by other
companies.
RADVISION LTD.
Consolidated Statements of Income
Reconciliation of GAAP to NON-GAAP Operating Results(1)
(U.S. Dollars in thousands, except per share data)
Six months ended
June 30,
-------------------------------------------------
2006 2005
-------------------------------------------------
(Unaudited)
-------------------------------------------------
Non GAAP
adjustment
share-based Non GAAP
GAAP results compensation results GAAP results
(as reported) (1) Pro Forma (as reported)
-------------------------------------------------
Revenues $ 42,140 $ - $ 42,140 $ 33,753
Cost of revenues 8,080 165 7,915 5,879
------------ ------ ----------- ------------
Gross profit 34,060 165 34,225 27,874
------------ ------ ----------- ------------
Operating costs and
expenses:
Research and
development 11,905 681 11,224 9,709
Marketing and
selling 15,166 939 14,227 11,763
General and
administrative 2,976 458 2,518 2,311
------------ ------ ----------- ------------
Total operating costs
and expenses 30,047 2,078 27,969 23,783
------------ ------ ----------- ------------
Operating income 4,013 2,243 6,256 4,091
Financial income, net 2,704 - 2,704 1,329
------------ ------ ----------- ------------
Income before taxes 6,717 2,243 8,960 5,420
Taxes on income, net 609 - 609 30
------------ ------ ----------- ------------
Net income $ 6,108 $2,243 $ 8,351 $ 5,390
============ ====== =========== ============
Basic net earnings
per Ordinary share $ 0.28 $ 0.10 $ 0.38 $ 0.26
============ ====== =========== ============
Weighted Average
Number of Shares
Outstanding During
the Period - Basic 22,105,694 22,105,694 20,854,595
============ =========== ============
Diluted net earnings
per Ordinary share $ 0.27 $ 0.10 $ 0.37 $ 0.24
============ ====== =========== ============
Weighted Average
Number of Shares
Outstanding During
the Period - Diluted 22,532,464 22,532,464 22,027,068
============ =========== ============
(1) To supplement our consolidated financial statements presented in
accordance with generally accepted accounting principles (GAAP),
we use non GAAP measures of operating results, net income and
earnings per share, which are adjusted from results based on GAAP
to exclude the expenses we recorded for stock compensation in
accordance with SFAS 123R. These non GAAP financial measures are
provided to enhance overall understanding of our current financial
performance and our prospects for the future. Specifically, we
believe the non GAAP results provide useful information to both
management, and investors as these non GAAP results exclude the
expenses we recorded for stock compensation in accordance with
SFAS 123R that we believe are not indicative of our core operating
results. Further, these non GAAP results are one of the primary
indicators management uses for assessing our performance,
allocating resources and planning and forecasting future periods.
These measures should be considered in addition to results
prepared in accordance with GAAP, but should not be considered a
substitute for or superior to GAAP results. These Non GAAP
measures may be different than the non GAAP measures used by other
companies.
RADVISION LTD.
Consolidated Balance Sheet
(U.S. Dollars in thousands)
June 30, December 31,
2006 2005
-------- ------------
ASSETS Unaudited Audited
--------- -----------
CURRENT ASSETS:
Cash and cash equivalents *) $ 12,308 $ 32,927
Short-term bank deposits *) 32,040 17,503
Short-term marketable securities *) 43,756 46,015
Trade receivables, net 13,145 12,257
Other accounts receivable and prepaid expenses 3,635 4,318
Inventories 4,744 2,593
--------- ---------
Total current assets 109,628 115,613
--------- ---------
LONG-TERM INVESTMENTS AND RECEIVABLES:
Long-term bank deposits *) 17,367 11,395
Long-term marketable securities *) 32,984 17,111
Severance pay fund 3,247 2,931
--------- ---------
Total long-term investments and receivables 53,598 31,437
--------- ---------
Property and equipment, net 3,584 3,190
--------- ---------
Goodwill 2,966 2,966
--------- ---------
Intangible assets, net 2,996 3,542
--------- ---------
Total assets $172,772 $156,748
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $ 3,917 $ 1,783
Deferred revenues 8,996 8,533
Accrued expenses and other accounts payable 12,717 12,122
--------- ---------
Total current liabilities 25,630 22,438
--------- ---------
Accrued severance pay 4,098 3,643
--------- ---------
Total liabilities 29,728 26,081
--------- ---------
SHAREHOLDERS' EQUITY:
Share capital 227 218
Additional paid-in capital 120,463 116,446
Deferred stock compensation 2,243 -
Retained earnings (accumulated deficit) 20,111 14,003
--------- ---------
Total shareholders' equity 143,044 130,667
--------- ---------
Total liabilities and shareholders' equity $172,772 $156,748
========= =========
*) Total cash and liquid investments $138,455 $124,951
========= =========
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