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Radware Ltd. Announces Another Quarter of Record Results

TEL AVIV, Israel, January 28 /PRNewswire-FirstCall/ -- Radware (NASDAQ: RDWR), the leading provider of integrated application delivery solutions for business-smart networking, today reported yet another quarter of record revenues of $24.4 million for the fourth quarter of 2007. The results represent a sequential increase of 6% compared with revenues of $23.0 million for the third quarter of 2007 and an increase of 16% compared with revenues of $ 21.1 million for the fourth quarter of 2006.

TEL AVIV, Israel, January 28 /PRNewswire-FirstCall/ — Radware (NASDAQ: RDWR), the leading provider of integrated application delivery solutions for business-smart networking, today reported yet another quarter of record revenues of $24.4 million for the fourth quarter of 2007. The results represent a sequential increase of 6% compared with revenues of $23.0 million for the third quarter of 2007 and an increase of 16% compared with revenues of $ 21.1 million for the fourth quarter of 2006.

Total revenues for 2007 were $88.6, an increase of 9% compared with revenues of 81.4 million in 2006.

Net loss on a GAAP basis for the fourth quarter of 2007 was $1.8 million or $0.09 per diluted share, compared to a net loss of $2.6 million or $0.14 per diluted share in the third quarter of 2007.

For comparative purposes, net loss for the fourth quarter of 2007, excluding the effects of stock-based compensation expense and amortization of intangible assets and acquisition related expenses, was $0.1 million or break-even diluted earnings per share, compared with a net loss of $1.2 million or $0.06 per diluted share in the third quarter of 2007 and net income of $1.1 million or $0.06 per diluted share in the fourth quarter of 2006.

Net loss on a GAAP basis for 2007 was $12.0 million or $0.62 per diluted share. Net loss excluding the effects of stock-based compensation expense, a one-time inventory write-off and amortization of intangible assets and acquisition related expenses for 2007 was $4.9 million or $0.25 per diluted share, compared with net income of $3.8 million or $0.19 per diluted share in 2006.

At the end of the fourth quarter the company's overall cash position, including cash, short-term and long-term bank deposits and marketable securities totaled to an amount of $154.8 million.

"With yet another record of quarterly revenues we are confirming our position as a key global player in the application delivery market," said Roy Zisapel, President & CEO of Radware. "With our strong product pipeline and continued innovation we are well positioned for continued growth in the coming year" he added.

During the quarter ended December 31, 2007, Radware released the following significant announcements:

– Radware Unveils Industry First Behavioral Server Protections as Part of Its DefensePro Full Spectrum Protection Technology

– Radware Named as Finalist in Info Security Products Guide Global Awards

– Radware Delivers Inflight 3.0 With Key Innovative Features to Facilitate and Speed Deployment of Business-Smart Networks

– Radware's new AppXML Helps Customers Tackle Web Services and SOA Deployment Challenges

– Radware Partners with Norkom Technologies to Help Online Business Fight Fraud and Identity Theft

– Radware's New Application Performance Monitoring Helps Companies Ensure Business-Critical SLAs

– Radware Partners with MSPX to Bring Next Generation Technology to the Public Sector

– Industry Experts to Speak on Federal IT Security Trends at Executive Seminar – Hosted by MSPX, Enterasys and Radware

Company management will host a quarterly investor conference call at 8:45 AM EST on January 28, 2008. The call will focus on financial results for the quarter ended December 31, 2007, and certain other matters related to the Company's business.

The conference call will be webcast on January 28, 2008 at 8:45 AM EST in the "listen only" mode via the Internet at:

http://www.radware.com/Company/InvestorRelations/default.aspx

Please use the following dial-in numbers to participate in the fourth quarter 2007 call:

Participants in the US call: Toll Free 1-888-428-4480

Participants outside of the US call: +1-612-332-0345

About Radware

Radware (NASDAQ:RDWR), the global leader in integrated application delivery solutions, assures the full availability, maximum performance, and complete security of business-critical applications for more than 5,000 enterprises and carriers worldwide. With APSolute(TM), Radware's comprehensive and award-winning suite of intelligent front end, access, and security products, companies in every industry can drive business productivity, improve profitability, and reduce IT operating and infrastructure costs by making their networks "business smart". For more information, please visit http://www.radware.com.

This press release may contain 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 Application Switching and Network Security industry, changes in demand for Application Switching and Network Security products, the timing and amount or cancellation of orders and other risks detailed from time to time in Radware's filings with the Securities and Exchange Commission, including Radware's Form 20-F.

Condensed Consolidated Balance Sheets (U.S. Dollars in Thousands) December 31, December 31, 2006 2007 (Audited) (Audited) Current assets Cash and cash equivalents 25,324 70,547 Short-term marketable securities 115,051 71,327 Trade receivables, net 17,453 17,192 Other receivables and prepaid 1,996 3,195 expenses Inventories 6,892 5,428 166,716 167,689 Long-term investments Long-term bank deposit 9,602 10,236 Long-term marketable securities 14,154 2,735 Severance pay funds 2,907 3,940 26,663 16,911 Property and equipment, net 9,253 12,217 Other assets Intangible assets, net, long-term deferred taxes and other long-term assets 3,582 5,776 Goodwill 9,454 13,474 13,036 19,250 Total assets 215,668 216,067 Current liabilities Trade payables 6,956 7,537 Deferred revenues 15,712 18,395 Other payables and accrued expenses 6,642 8,043 29,310 33,975 Accrued severance pay 3,944 5,379 Total liabilities 33,254 39,354 Shareholders' equity Share capital 478 482 Additional paid-in capital 170,110 176,024 Accumulated other comprehensive income (loss) (242) 150 Treasury stock, at cost (11,069) (11,069) Retained earnings 23,137 11,126 Total shareholders' equity 182,414 176,713 Total liabilities and 215,668 216,067 shareholders' equity Condensed Consolidated Statements of Operations (U.S. Dollars in thousands, except share and per share data) For the For the Three For the Year For the Three months ended ended December Year ended months December 31, 31, 2006 December ended 2007 31, 2007 December 31, 2006 (Audited) (Audited) (Audited) (Audited) Revenues 21,093 24,430 81,410 88,631 Cost of revenues 4,125 4,960 15,791 19,028 Gross profit 16,968 19,470 65,619 69,603 Operating expenses: Research and 4,961 6,342 17,659 23,515 development, net Sales and 12,319 15,124 50,128 57,977 marketing General and 1,545 1,888 6,178 7,114 administrative Total operating 18,825 23,354 73,965 88,606 expenses Operating loss (1,857) (3,884) (8,346) (19,003) Financial income, 2,069 2,296 7,422 7,420 net Income (loss) 212 (1,588) (924) (11,583) before income taxes Income taxes (102) (191) (356) (428) Net income (loss) 110 (1,779) (1,280) (12,011) Basic net $ 0.01 $ (0.09) $ (0.07) $ (0.62) earnings (loss) per share Weighted average number of shares used to compute basic net earnings (loss) 19,265,536 19,533,663 19,325,055 19,477,222 per share Diluted net $ 0.01 $ (0.09) $ (0.07) $ (0.62) earnings (loss) per share Weighted average number of shares used to compute diluted net earnings (loss) 19,531,928 19,533,663 19,325,055 19,477,222 per share Reconciliation of Supplemental Financial Information (U.S. Dollars in thousands, except share and per share data) For the Three For the months For the For the Three ended Year ended Year ended months December December December ended 31, 2007 31, 2006 31, 2007 December 31, 2006 GAAP Net income (loss) 110 (1,779) (1,280) (12,011) Stock-based compensation expenses, included in: Cost of revenues 2 20 63 81 Research and development, 197 338 1,111 1,243 net Sales and marketing 324 449 2,541 1,869 General and administrative 311 397 798 1,344 Income taxes – – – – 834 1,204 4,513 4,537 Amortization of intangible assets and acquisition related expenses, included in: Cost of revenues 74 196 296 599 Research and development, 21 79 84 316 net Sales and marketing 39 190 156 330 General and administrative – (8) – – Income taxes 16 40 64 135 150 497 600 1,380 One-time inventory – – – 1,200 write-off Non-GAAP net income (loss) 1,094 (78) 3,833 (4,894) Non-GAAP diluted net earnings (loss) per share $ 0.06 $ – $ 0.19 $ (0.25) Weighted average number of shares used to compute Non-GAAP diluted net earnings (loss) per share 19,531,928 19,533,663 19,808,950 19,477,222

SOURCE Radware Ltd

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