RADVISION Reports Second Quarter 2008 Results

TEL AVIV, Israel--(Business Wire)--
RADVISION(R) (Nasdaq: RVSN) today reported that revenues for the
second quarter of 2008 were $20.8 million compared with $24.7 million
reported in the second quarter of 2007.

The Company incurred an operating loss of $4.3 million for the
second quarter of 2008 compared with operating income of $1.7 million
in the second quarter of 2007. Excluding the effects of stock-based
compensation expense related to the adoption of FAS123R in both
periods, the non-GAAP operating loss was $3.0 million in the second
quarter of 2008 compared with operating income of $3.1 million in
second quarter of 2007.

The net loss for the second quarter of 2008 was $3.9 million, or
$0.19 per diluted share, compared with net income of $3.6 million, or
$0.16 per diluted share, in the second quarter of 2007. Excluding the
effect of stock-based compensation expense (which amounted to $1.3
million or $0.06 per diluted share in the second quarters of both 2008
and 2007) and an other than temporary impairment of available-for-sale
marketable securities (which amounted to $0.4 million or $0.03 per
diluted share in the second quarter of 2008), the non-GAAP net loss
for the second quarter of 2008 was $2.2 million, or $0.10 per diluted
share, compared with non-GAAP net income of $5.0 million, or $0.22 per
diluted share, in the second quarter of 2007.

The Company had forecasted that revenues for the second quarter of
2008 would approximate $20.5 million and that the net loss would be
approximately $3.6 million, or $0.17 per diluted share, including
stock-based compensation expense of $1.3 million, or $0.06 per diluted
share, related to the adoption of FAS123R. Excluding this item, the
non-GAAP loss for the second quarter of 2008 was expected to
approximate $2.3 million, or $0.11 per diluted share.

Business unit revenues for the second quarter of 2008 consisted of
$15.5 million in Networking Business Unit (NBU) sales compared with
$18.8 million in the second quarter of 2007, and $5.3 million in
Technology Business Unit (TBU) sales compared with $5.9 million in the
second quarter of 2007. The Company had forecasted NBU revenues of
$15.0 million and TBU revenues of $5.5 million for the second quarter
of 2008.

For the first six months of 2008, revenues were $40.5 million, the
operating loss was $8.4 million and the net loss was $6.9 million, or
$0.33 per diluted share. This compares with revenues of $48.6 million,
operating income of $3.3 million, and net income of $6.9 million, or
$0.30 per diluted share, in the first six months of 2007. Excluding
the effect of stock-based compensation expense (which amounted to $2.6
million or $0.12 per diluted in the first six months of 2008 and $2.7
million or $0.11 per diluted in the first six months of 2007) and an
other than temporary impairment of available-for-sale marketable
securities (which amounted to $0.4 million or $0.02 per diluted share
in the first six months of 2008), the non-GAAP operating loss for the
first six months of 2008 was $5.8 million and the net loss was $3.9
million, or $0.19 per diluted share, compared with non-GAAP operating
income of $6.0 million and net income of $9.6 million, or $0.41 per
diluted share, for the first six months of 2007.

The Company ended the second quarter of 2008 with approximately
$123.5 million in cash and liquid investments, equivalent to $5.98 per
basic share, a decrease of $4.1 million from March 31, 2008. The
decrease reflects the use of $2.9 million for the repurchase of
408,199 Company shares, $0.9 million of capital expenditures and a
decrease of $0.3 million in cash flow used in operating activities,
which includes a current estimate of an other than temporary decline
in Auction Rate Securities held for investment in the amount of $0.2
million.

Boaz Raviv, Chief Executive Officer, commented: "In the second
quarter of 2008, we continued to execute our intensive plan to
reassert our technology leadership and deepen our partner and reseller
relationships. Our plan has required heightened investment in OPEX
spending, which was in line with our forecast in the second quarter,
as were our overall results.

"A major outcome of our R&D investment was the introduction in
June of Version 5.6 of our SCOPIA platform that has important advances
including high definition videoconferencing to the desktop through our
SCOPIA Desktop browser-based plug in, and adds recording, playback and
content management to SCOPIA's streaming capabilities. The market
response has been very positive. This week, we announced the general
availability of Version 3.0 of our SCOPIA Interactive Video Platform,
with enhanced scalability, port density and performance as well as a
PC web-embedded video add-on and pre-installed software and
applications for "solution in a box" deployment.

"Our past investment in technology and partner support benefited
our second quarter revenues, leading to stronger than expected results
for our NBU. This was mainly due to higher than forecasted sales to
our channel partner Cisco, which included demo equipment for a new
product that we had in development for them. U.S. Federal sales also
were higher than expected in the second quarter and our sales through
LifeSize showed very strong sequential growth. These positive
contributors more than offset a temporary fall-off in revenues from a
partner in Europe and a quiet quarter in APAC, although sales in
China, Korea and Southeast Asia did well.

"Our second quarter TBU revenues benefited from strong year over
year growth in our ProLab Testing Suite and SIP, but were slightly
lower than forecast due to slippage of a few deals into the third
quarter. As part of our strategic plan, we are combining the
technology leadership of our TBU with an expanded marketing focus and
new business initiatives. These include the introduction of our first
TBU product targeted to the Enterprise market, eVident, which enables
enterprises and system integrators to test the quality of the
videoconference experience and do advanced trouble shooting."

Mr. Raviv concluded: "We are focused on making continued progress
in implementing our plan and expect to achieve further improvement in
revenues in the Third Quarter. However, the pace of that improvement
is not as fast as we had targeted. Although we have adjusted our OPEX
budget in light of this, the devaluation of the dollar is inflating
those costs substantially. We have decided to make the necessary
expenditures to continue our progress and ultimately reach our goal.
That may push our return to profitability into early 2009."

Guidance

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

The Company expects to report revenues for the third quarter of
2008 of approximately $21.5 million and a net loss of approximately
$3.6 million or $0.18 per diluted share. This includes stock-based
compensation expense related to the adoption of FAS123R of $1.3
million or $0.07 per diluted share. Excluding this item, the non-GAAP
net loss for the third quarter 2008 is expected to be $2.3 million or
$0.11 per diluted share. That compares to revenues for the third
quarter of 2007 of $20.7 million and net income of $0.2 million or
$0.01 per diluted share, which included stock-based compensation
expense of $1.4 million or $0.06 per diluted share related to the
adoption of FAS123R. Excluding the effect of stock-based compensation
expense, net income for the third quarter of 2007 was $1.6 million or
$0.07 per diluted share. (Full details are available on the Company's
web site at www.radvision.com.)

GAAP versus NON-GAAP Presentation

To supplement the consolidated financial statements presented in
accordance with generally accepted accounting principles ("GAAP"), the
Company uses non-GAAP measures of operating results, net income and
earnings per share, which are adjusted from results based on GAAP to
exclude other than temporary impairment of available-for-sale
marketable securities and the expenses recorded for stock compensation
in accordance with SFAS 123(R). These non-GAAP financial measures are
provided to enhance overall understanding of the current financial
performance and prospects for the future. Specifically, the Company
believes the non-GAAP results provide useful information to both
management, and investors as these non-GAAP results exclude other than
temporary impairment of available-for-sale marketable securities and
the expenses recorded for stock compensation in accordance with SFAS
123(R) that the Company believes are not indicative of the core
operating results. Further, these non-GAAP results are one of the
primary indicators management uses for assessing the Company's
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 from the non-GAAP measures used by other companies.

Second Quarter 2008 Earnings Conference Call/Webcast

RADVISION will hold a conference call to discuss its second
quarter 2008 results and third quarter outlook, today, Thursday, July
31, at 9:00 a.m. (Eastern). To access the conference call, please dial
1-877-601-3546 (International dialers may call +1-210-839-8500) by
8:45 a.m. (Eastern). 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:
www.radvision.com/Corporate/Investors/FinancialReports/. A replay of
the call will be available beginning approximately one hour after the
conclusion of the call through 11:00 p.m. (Eastern) on August 7th. To
access the replay, please dial 1-800-272-5957 (International dialers
may call +1-402-220-9718).

The PowerPoint presentation highlighting key financial metrics as
well as the third quarter 2008 estimate also will be available in the
Investor Relations section of the company's website. The presentation
will be available beginning at 8:00 a.m. (Eastern) on July 31st 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, RADVISION is
driving the unified communications evolution by combining the power of
video, voice, data and wireless - for high definition
videoconferencing 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 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 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.

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*T
RADVISION LTD. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
----------------------------------------------------------------------
U.S. dollars in thousands, except per share data

Three months ended Six months ended
June 30, June 30,
----------------------- -----------------------
2008 2007 2008 2007
----------- ----------- ----------- -----------
Unaudited
-----------------------------------------------

Revenues $ 20,845 $ 24,694 $ 40,452 $ 48,559
Cost of revenues 4,628 4,833 8,825 9,707
----------- ----------- ----------- -----------

Gross profit 16,217 19,861 31,627 38,852
----------- ----------- ----------- -----------

Operating costs and
expenses:
Research and
development 9,233 7,650 17,373 15,315
Marketing and
selling 9,030 8,183 18,413 16,176
General and
administrative 2,253 2,292 4,252 4,050
----------- ----------- ----------- -----------

Total operating costs
and expenses 20,516 18,125 40,038 35,541
----------- ----------- ----------- -----------

Operating income
(loss) (4,299) 1,736 (8,411) 3,311
Financial income, net 412 1,806 1,456 3,527
----------- ----------- ----------- -----------

Income (loss) before
taxes on income (3,887) 3,542 (6,955) 6,838
Taxes benefit 12 84 9 58
----------- ----------- ----------- -----------

Net income (loss) $ (3,875) $ 3,626 $ (6,946) $ 6,896
=========== =========== =========== ===========

Basic net earnings
(loss) per Ordinary
share $ (0.19) $ 0.16 $ (0.33) $ 0.31
=========== =========== =========== ===========

Weighted Average
Number of Shares
Outstanding During
the Period - Basic 20,637,359 22,255,258 20,880,041 22,282,586
=========== =========== =========== ===========

Diluted net earnings
(loss) per Ordinary
share $ (0.19) $ 0.16 $ (0.33) $ 0.30
=========== =========== =========== ===========
Weighted Average
Number of Shares
Outstanding During
the Period - Diluted 20,637,359 22,945,898 20,880,041 23,040,875
=========== =========== =========== ===========
*T

RADVISION LTD. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

U.S. dollars in thousands, except per share data

Reconciliation of GAAP to NON-GAAP Operating Results

To supplement the consolidated financial statements presented in
accordance with generally accepted accounting principles ("GAAP"), the
Company uses non-GAAP measures of operating results, net income and
earnings per share, which are adjusted from results based on GAAP to
exclude other than temporary impairment of available-for-sale
marketable securities and the expenses recorded for stock compensation
in accordance with SFAS 123(R). These non-GAAP financial measures are
provided to enhance overall understanding of the current financial
performance and prospects for the future. Specifically, the Company
believes the non-GAAP results provide useful information to both
management, and investors as these non-GAAP results exclude other than
temporary impairment of available-for-sale marketable securities and
the expenses recorded for stock compensation in accordance with SFAS
123(R) that the Company believes are not indicative of the core
operating results. Further, these non-GAAP results are one of the
primary indicators management uses for assessing the Company's
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.

The following table reconciles the GAAP to non-GAAP operating
results:

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Three months ended
June 30, 2008
------------------------------------
(Unaudited)
------------------------------------
Non-GAAP
GAAP results adjustment Non-GAAP
(as share-based results
reported) compensation Pro Forma
------------ ------------- ---------

Gross profit $ 16,217 $ 94 $ 16,311
Total operating costs and
expenses $ 20,516 $(1,173) $ 19,343
Operating loss $(4,299) $ 1,267 $(3,032)
Loss before taxes on income $(3,887) $ 1,713 $(2,174)
Net loss $(3,875) $ 1,713 $(2,162)
============ ============= =========
Basic net loss per Ordinary share $ (0.19) $ 0.09 $ (0.10)
============ ============= =========
Diluted net loss per Ordinary
share $ (0.19) $ 0.09 $ (0.10)
============ ============= =========
*T

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*T
Three months ended
June 30, 2007
----------------------------------
(Unaudited)
----------------------------------
GAAP Non-GAAP Non-GAAP
results adjustment results
(as share-based Pro
reported) compensation Forma
----------- ------------- --------

Gross profit $19,861 $ 92 $19,953
Total operating costs and expenses $18,125 $(1,242) $16,883
Operating income $ 1,736 $ 1,334 $ 3,070
Income before taxes on income $ 3,542 $ 1,334 $ 4,876
Net income $ 3,626 $ 1,334 $ 4,960
=========== ============= ========
Basic net earnings per Ordinary
share $ 0.16 $ 0.06 $ 0.22
=========== ============= ========
Diluted net earnings per Ordinary
share $ 0.16 $ 0.06 $ 0.22
=========== ============= ========
*T

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RADVISION LTD. AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
----------------------------------------------------------------------
U.S. dollars in thousands, except per share data

Six months ended
June 30, 2008
------------------------------------
(Unaudited)
------------------------------------
Non-GAAP
GAAP results adjustment Non-GAAP
(as share-based results
reported) compensation Pro Forma
------------ ------------- ---------

Gross profit $ 31,627 $ 195 $ 31,822
Total operating costs and
expenses $ 40,038 $(2,376) $ 37,662
Operating loss $(8,411) $ 2,571 $(5,840)
Loss before taxes on income $(6,955) $ 3,017 $(3,938)
Net loss $(6,946) $ 3,017 $(3,929)
============ ============= =========
Basic net loss per Ordinary share $ (0.33) $ 0.14 $ (0.19)
============ ============= =========
Diluted net loss per Ordinary
share $ (0.33) $ 0.14 $ (0.19)
============ ============= =========
*T

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*T
Six months ended
June 30, 2007
----------------------------------
(Unaudited)
----------------------------------
Non-GAAP
adjustment
share-based
GAAP compensation Non-GAAP
results and patent results
(as settlement Pro
reported) reserve Forma
----------- ------------- --------

Gross profit $38,852 $ 188 $39,040
Total operating costs and expenses $35,541 $(2,476) $33,065
Operating income $ 3,311 $ 2,664 $ 5,975
Income before taxes on income $ 6,838 $ 2,664 $ 9,502
Net income $ 6,896 $ 2,664 $ 9,560
=========== ============= ========
Basic net earnings per Ordinary
share $ 0.31 $ 0.12 $ 0.43
=========== ============= ========
Diluted net earnings per Ordinary
share $ 0.30 $ 0.11 $ 0.41
=========== ============= ========
*T

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RADVISION LTD. AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
----------------------------------------------------------------------
U.S. dollars in thousands, except per share data

December
June 30, 31,
2008 2007
--------- ---------
Unaudited Audited
--------- ---------
ASSETS

CURRENT ASSETS:
Cash and cash equivalents *) $ 22,460 $ 45,370
Short-term bank deposits *) 40,847 42,242
Short-term marketable securities *) 11,603 28,037
Trade receivables 15,627 15,011
Other accounts receivable and prepaid expenses 7,447 8,464
Inventories 1,088 1,691
--------- ---------

Total current assets 99,072 140,815
--------- ---------

LONG-TERM INVESTMENTS AND RECEIVABLES:
Long-term bank deposits *) 5,280 -
Long-term marketable securities *) 43,274 15,093
Long-term prepaid expenses 1,448 1,618
Severance pay fund 5,571 4,555
Long-term deferred tax asset 3,700 3,394
--------- ---------

Total long-term investments and receivables 59,273 24,660
--------- ---------

Property and equipment, net 5,738 5,237
--------- ---------

Goodwill 2,966 2,966
--------- ---------

Other intangible assets, net 816 1,362
--------- ---------

Total assets $ 167,865 $ 175,040
========= =========

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Trade payables $ 2,287 $ 2,389
Deferred revenues 7,839 6,829
Accrued expenses and other accounts payable 14,417 12,607
--------- ---------

Total current liabilities 24,543 21,825
--------- ---------

Accrued severance pay 6,714 5,656
--------- ---------

Total liabilities 31,257 27,481
--------- ---------

SHAREHOLDERS' EQUITY:
Ordinary shares of NIS 0.1 par value 234 234
Additional paid-in capital 137,898 135,327
Treasury stock (28,022) (21,662)
Accumulated other comprehensive income (129) 55
Retained earnings 26,627 33,605
--------- ---------

Total shareholders' equity 136,608 147,559
--------- ---------

Total liabilities and shareholders' equity $ 167,865 $ 175,040
========= =========

*) Total cash and liquid investments $ 123,464 $ 130,742
========= =========
*T

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RADVISION LTD. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
----------------------------------------------------------------------
U.S. dollars in thousands

Six months ended
June 30,
-------------------
2008 2007
--------- ---------
Unaudited
-------------------
Cash flows from operating activities:
--------------------------------------------------
Net income (loss) $ (6,946) $ 6,896
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,916 1,843
Accrued interest, amortization of premium and
accretion of discount on marketable
securities and bank deposits, net 858 (141)
Stock- based compensation 2,571 2,664
Gain on sale of property and equipment (6) -
Tax benefit relating to loss carryforwards
resulting from exercise of stock options - (167)
Increase in trade receivables, net (616) (4,859)
Decrease in other accounts receivable and
prepaid expenses 657 864
Decrease in inventories 603 314
Increase (decrease) in long-term prepaid
expenses 170 (1,788)
Increase in deferred tax asset (183) (1,125)
Decrease in trade payables (102) (787)
Increase (decrease) in deferred revenues 1,010 (1,584)
Increase (decrease) in accrued expenses and
other accounts payable 1,810 (2,375)
Accrued severance pay, net 42 303
--------- ---------

Net cash provided by operating activities 1,784 58
--------- ---------

Cash flows from investing activities:
--------------------------------------------------
Proceeds from redemption of marketable
securities 38,382 26,631
Purchase of marketable securities (50,380) (30,548)
Proceeds from withdrawal of bank deposits 72,924 84,107
Purchase of bank deposits (77,363) (76,827)
Purchase of property and equipment (1,871) (3,269)
Proceeds from sale of property and equipment 6 -
--------- ---------

Net cash provided by (used in) investing
activities (18,302) 94
--------- ---------

Cash flows from financing activities:
--------------------------------------------------
Purchase of treasury stock (6,416) (16,714)
Issuance of Ordinary shares and treasury stock
for cash upon exercise of options 24 5,950
Tax benefit related to exercise of stock
options - 167
--------- ---------

Net cash used in financing activities (6,392) (10,597)
--------- ---------

Decrease in cash and cash equivalents (22,910) (10,445)
Cash and cash equivalents at beginning of period 45,370 23,110
--------- ---------

Cash and cash equivalents at end of period $ 22,460 $ 12,665
========= =========

Supplemental disclosure of non-cash flows from
investing and financing activities:
--------------------------------------------------
Receivables on account of shares $ - $ 44
========= =========
*T

RADVISION
Adi Sfadia, Chief Financial Officer, +1 201-689-6340
cfo@radvision.com
or
Comm-Partners LLC
June Filingeri, +1 203-972-0186
junefil@optonline.net

Copyright Business Wire 2008