EX-10.1 2 ex10.htm Unassociated Document
EXHIBIT 10.1
 
Contact:
David Zigdon, CFO
(972) 3-6455004
davidz@radcom.com

RADCOM REPORTS FINANCIAL RESULTS FOR THE
FIRST QUARTER OF 2005

-- Profitable Quarter With 43% YOY Revenue Growth --

TEL-AVIV, Israel—April 26, 2005-- RADCOM Ltd. (”the Company”) (NASDAQ: RDCM) today announced unaudited financial results for the first quarter ended March 31, 2005.

Financial Results
Revenues for the first quarter of 2005 were $5,017,000, an increase of 43% compared to $3,504,000 in the first quarter of 2004. Gross margin for the quarter was 68% compared 67% in the first quarter of 2004. Net income for the first quarter of 2005 was $134,000, or $0.01 per ordinary share, compared to a net loss of ($576,000), or ($0.05) per ordinary share, for the first quarter of 2004.

The Company’s cash and cash equivalents rose by approximately $1.4 million during the quarter, reflecting positive cash flow from operations, the exercise of warrants by the Company’s PIPE (private placement) investors and the exercise of options by its employees.

Comments of Management
Commenting on the results, Arnon Toussia-Cohen, President and CEO of RADCOM, said, “We are pleased to report a profitable quarter marked by strong year-over-year revenue growth, high gross margins and positive cash flow. In contrast to our normal seasonal trend, sales for the first quarter remained strong, declining by just 1% compared to the fourth quarter of 2004. This demonstrates the momentum that continues to build for our flagship Cellular Performer and Omni-Q solutions in all target markets and the success of our sales and marketing efforts in North America.

“We continue to build our capabilities in China, including the appointment during the quarter of an extremely experienced local General Manager. We are also investing in products to support the ‘triple play’ needs (converged video, voice and data networks) of equipment vendors and service providers. Taken as a whole, we are pleased with our progress and optimistic regarding our prospects.”


Guidance
The following statements are forward-looking in nature, and actual results may differ materially.

Revenues for the second quarter of 2005 are expected to be between $4.8 million and $5.2 million with gross margins similar to the first quarter and both operating and net profit for the period.

RADCOM’s management invites you to take part in an interactive teleconference to discuss the results today, April 26th, at 9:00 a.m. Eastern Standard Time. To participate, please call 1-866-322-0747 from the U.S. or Canada, or +1-706-758-0715 from international locations, approximately five minutes before the call is scheduled to begin. A replay of the call will be available from 9:30 AM Eastern Time on April 26th until midnight May 3rd. To access the replay, please call 1-800-642-1687 from the U.S. or Canada, or +1-706-645-9291 from international locations, and use the access code 5339948. The conference call can also be accessed online at www.radcom.com.

RADCOM designs, manufactures, markets and supports network test and quality management solutions for service providers, developers and enterprises worldwide. The company specializes in comprehensive performance measurement and voice quality management systems for VoIP and cellular converged networks as well as in a line of high quality, integrated, multitechnology WAN/LAN/ATM test solutions. For more information, please visit 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.

(Financial tables follow)


RADCOM Ltd.
 
Consolidated Statements of Operations
(1000's of U.S. dollars, except per share data)
 
   
Three months ended March 31,
  
   
2005
  
2004
  
   
(unaudited)
  
(unaudited)
  
Sales
 
$
5,017
  
$
3,504
  
Cost of sales
    
1,621
   
1,144
 
Gross profit
   
3,396
   
2,360
 
               
Research and development, gross
    
1,415
   
1,246
 
Less - royalty-bearing participation
    
395
   
500
 
Research and development, net
    
1,020
   
746
 
               
Sales and marketing
   
1,866
   
1,744
 
               
General and administrative
    
411
   
452
 
               
Total operating expenses
    
3,297
   
2,942
 
               
Operating income (loss)
    
99
   
(582
)
               
Financing income, net
    
35
   
6
 
               
Net income (loss)
    
134
   
(576
)
               
Basic net earning (loss) per ordinary share
  
$
0.01
  
$
(0.05
)
Diluted net earning (loss) per ordinary share
  
$
0.01
  
$
(0.05
)
Weighted average number of ordinary shares used in computing basic net earnings (loss) per ordinary share
    
14,291,735
    
10,610,274
  
Weighted average number of ordinary shares used in computing diluted net earnings (loss) per ordinary share
   
16,234,918
    
10,610,274
  

(Additional table to follow)



RADCOM Ltd.
Consolidated Balance Sheets
(1000's of U.S. dollars)
 
   
As of
  
As of
  
   
March 31, 2005
  
December 31, 2004
  
   
(unaudited)
  
(unaudited)
  
Current Assets
             
Cash and cash equivalents
   
7,976
    
6,558
  
Marketable securities
    
1,989
    
1,992
  
Trade receivables, net
   
4,072
    
5,341
  
Inventories and inventory prepayments
   
2,451
    
2,400
  
Other current assets
   
829
    
880
  
Total Current Assets
    
17,317
    
17,171
  
               
Assets held for severance benefits
    
1,820
    
1,784
  
 
              
Property and equipment, net
    
1,197
    
1,174
  
 
              
Total Assets
    
20,334
    
20,129
  
     
   
 
Liabilities and Shareholders' Equity
              
Current Liabilities
             
Trade payables
   
1,943
    
2,027
  
Current deferred revenue
   
1,084
    
889
  
Other payables and accrued expenses
   
3,140
    
4,204
  
Total Current Liabilities
    
6,167
    
7,120
  
               
Long-Term Liabilities
             
Long-term deferred revenue
   
929
    
583
  
Liability for employees’ severance pay benefits
    
2,447
    
2,402
  
Total Long-Term Liabilities
    
3,376
    
2,985
  
               
Total Liabilities
    
9,543
    
10,105
  
               
Shareholders' Equity
             
Share capital
   
105
    
101
  
Additional paid-in capital
    
44,342
    
43,698
  
Accumulated other comprehensive loss
    
(28
)
  
(13
)
Accumulated deficit
    
(33,628
)
  
(33,762
)
Total Shareholders' Equity
    
10,791
   
10,024
 
     
   
 
Total Liabilities and Shareholders' Equity
    
20,334
    
20,129