RADVISION Reports Better Than Expected Third Quarter 2009 Results

http://www.businesswire.com/news/home/20091029005189/en

Revenues Are $20.4 Million

Operating Income is $1.4 Million; Non-GAAP Operating Income is $2.5 Million

GAAP EPS is $0.06; Non-GAAP EPS is $0.13
TEL AVIV, Israel--(Business Wire)--
RADVISION (Nasdaq: RVSN) reported today that revenues for the third quarter of
2009 were $20.4 million compared with revenues of $21.6 million in the third
quarter of 2008.

Operating income for third quarter of 2009 was $1.4 million compared with an
operating loss of $4.3 million in the third quarter of 2008. On a non-GAAP
basis, operating income was $2.5 million in the third quarter of 2009 compared
with an operating loss of $2.6 million in third quarter of 2008, excluding the
effects of stock-based compensation expense in accordance with SFAS 123R in both
periods.

Net income for the third quarter of 2009 was $1.2 million, or $0.06 per diluted
share, compared with a net loss of $4.5 million, or $0.22 per share, in the
third quarter of 2008. On non-GAAP basis, net income for the third quarter of
2009 was $2.5 million, or $0.13 per diluted share, excluding stock-based
compensation expense of $1.0 million and a loss of $0.3 million due to the
write-down of certain Auction Rate Securities, with the total of $1.3 million
equivalent to $0.07 per diluted share. This compares with a non-GAAP net loss of
$1.7 million or $0.09 per share in third quarter of 2008, which excludes
stock-based compensation expense of $1.7 million and a loss of $1.1 million due
to the write-down of certain Auction Rate Securities, with the total of $2.8
million equivalent to $0.13 per diluted share.

Total revenues for the third quarter of 2009 consisted of $15.6 million for the
Networking Business Unit (NBU) and $4.8 million for the Technology Business Unit
(TBU) compared with $17.3 million for the NBU and $4.3 million for the TBU
reported in the third quarter of 2008.

The Company`s forecast for the third quarter of 2009 presented July 30 was for
revenues of $20 million, non-GAAP operating income of $1.7 million and non-GAAP
net income of $1.8 million or $0.09 per diluted share, excluding stock-based
compensation expense in accordance with SFAS 123R of $1.2 million or $0.06 per
diluted share.

For the first nine months of 2009, revenues were $58.3 million, operating income
was $0.5 million and net income was $0.8 million, or $0.04 per diluted share.
This compares with revenues of $62.0 million, an operating loss of $12.7
million, and a net loss of $11.5 million, or $0.55 per diluted share, in the
first nine months of 2008. On a non-GAAP basis, the Company had operating income
of $3.8 million and net income of $4.6 million or $0.24 per diluted share for
the first nine months of 2009. This excludes the effect of stock-based
compensation expense of $3.3 million and a loss of $0.5 million due to the
write-down of certain Auction Rate Securities, with the total of $3.8 million
equivalent to $0.20 per diluted share. The non-GAAP operating loss for the first
nine months of 2008 was $8.5 million and the net loss was $5.7 million, or $0.27
per diluted share. This excludes stock-based compensation expense of $4.3
million and a loss of $1.5 million due to the write-down of certain Auction Rate
Securities, with the total of $5.8 million equivalent to $0.28 per diluted
share.

The Company ended the third quarter of 2009 with approximately $120.0 million in
cash and liquid investments, equivalent to $6.17 per basic share, an increase of
$1.8 million from June 30, 2009. The increase reflects $2.5 million provided by
operating activities offset by $0.7 million used for capital expenditures.

Boaz Raviv, Chief Executive Officer, commented: "We delivered stronger than
expected revenues and earnings in the third quarter of 2009 largely because of
the immediate success of our next generation MCU, the SCOPIA Elite, along with
our fully refreshed SCOPIA 7.0 product line.

"For more than two years, we have executed our plan to reassert our technology
leadership and return to profitability and growth. Our third quarter performance
shows the tangible results of this effort and includes Cisco`s accelerated
adoption of our SCOPIA Elite. We now face a new challenge because of the
decision by Cisco, our largest customer, to acquire Tandberg. We currently
expect our sales to Cisco in the fourth quarter of 2009 to be in line with our
original expectations. Going forward, while we are embedded in many of Cisco`s
videoconferencing solutions and they may remain a large customer through and
perhaps beyond 2010, we must be prudent and assume that our Cisco sales will
step down progressively through 2010.

"Fortunately, Cisco`s decision comes at time of renewed strength for RADVISION.
In addition to our strong product portfolio, we have been successful in
expanding our OEM and major reseller relationships, which now include IBM,
LifeSize, Alcatel Lucent and Huawei. We plan to release by year-end another
exciting product that our TBU co-developed with our partner Samsung. It is the
recently introduced VC240, which is an affordable all-in-one high definition
video desktop device. The VC240 continues to attract high levels of market
excitement and interest and has opened more doors to us as we continue our
strategy of broadening and deepening our channel and reseller network.
Furthering that goal and continuing our desktop technology advancement, we
recently unveiled our High Definition SCOPIA Desktop video conferencing client
for Apple`s Mac OS X platform. Last week, we announced that the latest version
of SCOPIA Desktop V7.0 has been fully optimized with Microsoft Windows 7 and the
latest Intel technologies including the new high performance Intel Core i7 and
Intel Atom processors."

Mr. Raviv concluded: "We have overcome significant challenges over the past
three years and we intend to become stronger because of our latest challenge. In
fact, Cisco`s decision has disrupted the Unified Communications marketplace and
created new opportunities for RADVISION as the only independent network
infrastructure provider. We are moving quickly to capture those opportunities."

Guidance

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

The Company expects to report revenues for the fourth quarter of 2009 of
approximately $21.5 million and net income of approximately $2.3 million or
$0.12 per diluted share. This includes stock-based compensation expense in
accordance with SFAS 123R of $1.0 million or $0.05 per diluted share. Excluding
this item, non-GAAP net income for the fourth quarter of 2009 is expected to be
$3.3 million or $0.17 per diluted share. That compares to revenues in the fourth
quarter of 2008 of $22.7 million and a net loss of $1.5 million, or $0.07 per
diluted share, which included a $0.2 million restructuring charge, stock-based
compensation expense of $1.2 million, and a gain of $0.1 million due to the
redemption of certain Auction Rate Securities net of other than temporary
impairment of available-for-sale Auction Rate Securities, with the total amount
of these items equivalent to $0.06 per diluted share. Excluding the effect of
these items, the non-GAAP net loss for the fourth quarter of 2008 was $0.2
million, or $0.01 per diluted share. (Full details of the Company`s forecast 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 net profit and loss from other
than temporary impairment of available-for-sale marketable securities and the
expenses recorded for stock compensation in accordance with SFAS 123R. 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 123R 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.

Third Quarter 2009 Earnings Conference Call/Webcast

RADVISION will hold a conference call to discuss its third quarter 2009 results
and fourth quarter outlook, today, Thursday, October 29, 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 November 5th. To access the replay,
please dial 1-866-403-7114 (International dialers may call +1-203-369-0584).

The PowerPoint presentation highlighting key financial metrics as well as the
fourth quarter 2009 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 October 29th and will be archived on the website until
the end of the fourth 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.

- TABLES FOLLOW -

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

Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
Unaudited

Revenues $ 20,429 $ 21,555 $ 58,310 $ 62,007
Cost of revenues 4,304 4,903 12,639 13,728

Gross profit 16,125 16,652 45,671 48,279

Operating costs and expenses:
Research and development 6,611 9,752 20,428 27,125
Marketing and selling 6,699 8,565 20,695 26,978
General and administrative 1,369 2,653 4,048 6,905

Total operating costs and expenses 14,679 20,970 45,171 61,008

Operating income (loss) 1,446 (4,318 ) 500 (12,729 )
Financial income (expense), net 122 (61 ) 1,126 1,395

Income (loss) before taxes on income 1,568 (4,379 ) 1,626 (11,334 )
Taxes on income (408 ) (128 ) (867 ) (119 )

Net income (loss) $ 1,160 $ (4,507 ) $ 759 $ (11,453 )

Basic net earnings (loss) per Ordinary share $ 0.06 $ (0.22 ) $ 0.04 $ (0.55 )

Weighted Average Number of Shares Outstanding During the Period - Basic 19,431,880 20,250,322 19,475,093 20,670,135

Diluted net earnings (loss) per Ordinary share $ 0.06 $ (0.22 ) $ 0.04 $ (0.55 )

Weighted Average Number of Shares Outstanding During the Period - Diluted 19,666,380 20,250,322 19,584,769 20,670,135

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 (loss) and earnings (loss) per share,
which are adjusted from results based on GAAP to exclude net loss from other
than temporary impairment of available for sale marketable securities and the
expenses recorded for stock compensation in accordance with SFAS 123R. 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 123R 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:

Three months ended
September 30, 2009
(Unaudited)
GAAP results Non-GAAP (*) Non-GAAP
(as reported)
results

Gross profit $ 16,125 $ 82 $ 16,207
Total operating costs and expenses $ 14,679 $ (923 ) $ 13,756
Operating income $ 1,446 $ 1,005 $ 2,451
Income before taxes on income $ 1,568 $ 1,301 $ 2,869
Net income $ 1,160 $ 1,301 $ 2,461
Basic net earnings per Ordinary share $ 0.06 $ 0.07 $ 0.13
Diluted net earnings per Ordinary share $ 0.06 $ 0.07 $ 0.13

Three months ended
September 30, 2008
(Unaudited)
GAAP results Non-GAAP (*) Non-GAAP
(as reported) results

Pro Forma

Gross profit $ 16,652 $ 95 $ 16,747
Total operating costs and expenses $ 20,970 $ (1,593 ) $ 19,377
Operating loss $ (4,318 ) $ 1,688 $ (2,630 )
Loss before taxes on income $ (4,379 ) $ 2,758 $ (1,621 )
Net loss $ (4,507 ) $ 2,758 $ (1,749 )
Basic net loss per Ordinary share $ (0.22 ) $ 0.13 $ (0.09 )
Diluted net loss per Ordinary share $ (0.22 ) $ 0.13 $ (0.09 )

(*) Adjustment for share-based compensation and other than temporary impairment
of available for sale marketable securities.

CONSOLIDATED STATEMENTS OF INCOME

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

Nine months ended
September 30, 2009
(Unaudited)
GAAP results Non-GAAP (*) Non-GAAP
(as reported) results

Pro Forma

Gross profit $ 45,671 $ 260 $ 45,931
Total operating costs and expenses $ 45,171 $ (3,030 ) $ 42,141
Operating income $ 500 $ 3,290 $ 3,790
Income before taxes on income $ 1,626 $ 3,845 $ 5,471
Net income $ 759 $ 3,845 $ 4,604
Basic net earnings per Ordinary share $ 0.04 $ 0.20 $ 0.24
Diluted net earnings per Ordinary share $ 0.04 $ 0.20 $ 0.24

Nine months ended
September 30, 2008
(Unaudited)
GAAP results Non-GAAP (*) Non-GAAP
(as reported) results

Pro Forma

Gross profit $ 48,279 $ 290 $ 48,569
Total operating costs and expenses $ 61,008 $ (3,968 ) $ 57,040
Operating loss $ (12,729 ) $ 4,258 $ (8,471 )
Loss before taxes on income $ (11,334 ) $ 5,775 $ (5,559 )
Net loss $ (11,453 ) $ 5,775 $ (5,678 )
Basic net loss per Ordinary share $ (0.55 ) $ 0.28 $ (0.27 )
Diluted net loss per Ordinary share $ (0.55 ) $ 0.28 $ (0.27 )

(*) Adjustment for share-based compensation and other than temporary impairment
of available for sale marketable securities.

CONSOLIDATED BALANCE SHEETS

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

September 30, December 31,
2009 2008
Unaudited Audited
ASSETS

CURRENT ASSETS:
Cash and cash equivalents *) $ 17,213 $ 37,872
Short-term bank deposits *) 71,638 52,026
Short-term marketable securities *) 12,111 14,350
Trade receivables, net 12,476 14,118
Other accounts receivable and prepaid expenses 10,185 6,102
Inventories 1,450 1,185

Total current assets 125,073 125,653

LONG-TERM INVESTMENTS AND RECEIVABLES:
Long-term marketable securities *) 19,009 17,005
Long-term prepaid expenses 1,023 1,278
Severance pay fund 5,980 4,591
Long-term deferred tax asset 4,050 4,995

Total long-term investments and receivables 30,062 27,869

Property and equipment, net 4,795 5,428

Goodwill 2,966 2,966

Other intangible assets, net - 272

Total assets $ 162,896 $ 162,188

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Trade payables $ 1,329 $ 2,052
Deferred revenues 8,967 8,309
Accrued expenses and other accounts payable 12,640 16,389

Total current liabilities 22,936 26,750

Accrued severance pay 7,024 5,855

Total liabilities 29,960 32,605

SHAREHOLDERS' EQUITY:
Ordinary shares of NIS 0.1 par value 234 234
Additional paid-in capital 144,799 141,107
Treasury stock (33,815 ) (32,733 )
Accumulated other comprehensive income (835 ) 348
Retained earnings 22,553 20,627

Total shareholders' equity 132,936 129,583

Total liabilities and shareholders' equity $ 162,896 $ 162,188

*) Total cash and liquid investments $ 119,971 $ 121,253

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

Nine months ended
September 30,
2009 2008
Unaudited
Cash flows from operating activities:
Net income (loss) $ 759 $ (11,453 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 2,415 2,905
Accrued interest, amortization of premium and accretion of discount on (19 ) 1,796

marketable securities and bank deposits, net
Stock -based compensation 3,290 4,258
Gain on sale of property and equipment (1 ) (6 )
Tax benefit relating to loss carryforwards resulting from exercise of stock options (402 ) (273 )
Decrease in trade receivables, net 1,642 905
Decrease (increase) in other accounts receivable and prepaid expenses (3,923 ) 857
Decrease (increase) in inventories (265 ) 708
Decrease in long-term prepaid expenses 255 255
Decrease (increase) in deferred tax asset 239 (258 )
Decrease in trade payables (723 ) (733 )
Increase in deferred revenues 658 958
Increase (decrease) in other accrued expenses and accounts payable (2,792 ) 3,070
Accrued severance pay, net (356 ) 50

Net cash provided by operating activities 777 3,039

Cash flows from investing activities:
Proceeds from redemption of marketable securities 23,235 42,182
Purchase of marketable securities (22,901 ) (53,780 )
Proceeds from withdrawal of bank deposits 72,556 117,018
Purchase of bank deposits (92,106 ) (111,573 )
Purchase of property and equipment (1,511 ) (2,340 )
Proceeds from sale of property and equipment 2 6

Net cash used in investing activities (20,725 ) (8,487 )

Cash flows from financing activities:
Purchase of treasury stock (1,142 ) (8,549 )
Issuance of Ordinary shares and treasury stock for cash upon exercise of options 29 24
Tax benefit related to exercise of stock options 402 273

Net cash used in financing activities (711 ) (8,252 )

Decrease in cash and cash equivalents (20,659 ) (13,700 )
Cash and cash equivalents at beginning of period 37,872 45,370

Cash and cash equivalents at end of period $ 17,213 $ 31,670

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

Copyright Business Wire 2009