TEL AVIV, Israel, July 24, 2012 /PRNewswire/ --
RADCOM Ltd. (RDCM), a leading service assurance provider, today announced its financial results for the second quarter and first six months of 2012.
"This was a challenging start to 2012, as we were not immune to a slowdown that impacted the entire telecom industry, but our optimism for the business and confidence in a significant improvement remains high," commented David Ripstein, RADCOM's chief executive officer. "We believe that the results we are reporting today do not reflect the demand we are seeing for our technology. Quarterly volatility is not uncommon in the telecom industry, and as a long-time provider to this industry we have seen activity fluctuate. For example, during 2011 we had one quarter with just $3.4 million in revenues, but we generated approximately $22 million revenues for that year. Almost always, slowdowns create pent-up demand, and we believe that this is the case right now. We believe that opportunities have not been lost, rather they are simply being delayed, and this has impacted our ability to close deals. This has expanded the number of opportunities in our pipeline, which is at a very strong level, both in terms of quality and quantity. With a solid $16.5 million backlog, and this encouraging pipeline of opportunities, we remain confident that the second half of 2012 will be stronger than the first half."
Second Quarter of 2012:Revenues for the quarter ended June 30, 2012 totaled $3.4 million, a 42% decrease compared to $5.9 million for the second quarter of 2011, the result of multiple projects which have not been fully completed and are expected to be completed in the coming quarters. Gross margin for the period was 57%, down from 72% during the second quarter of 2011, mainly due to a lower base of revenue with a similar level of fixed costs. Net loss for the quarter was $(1.8) million or $(0.28) per ordinary share (basic and diluted), compared to net income of $78,000, or $0.01 per ordinary share (basic and diluted) for the second quarter of 2011. Excluding non-cash stock-based compensation expenses for all periods, the Company's non-GAAP net loss for the quarter was $(1.7) million, or $(0.27) per ordinary share (basic and diluted), compared to net income of $315,000, or $0.05 per ordinary share (basic and diluted) for the second quarter of 2011. Revenues for the first six months of 2012 were $9.0 million, a 22% decrease compared to $11.5 million for the first six months of 2011. Gross profit for the period was 64%, down from 72% during the first six months of 2011. Net loss for the period was $(2.6) million or $(0.41) per ordinary share (basic and diluted), compared to net income of $201,000, or $0.03 per ordinary share (basic and diluted) for the first six months of 2011. Excluding non-cash stock-based compensation expenses for all periods, the Company's non-GAAP net loss for the first six months of 2012 was $(2.4) million, or $(0.37) per ordinary share (basic and diluted), compared to net income of $626,000, or $0.10 per ordinary share (basic) and $0.09 per ordinary share (diluted) for the first six months of 2011. Mr. Ripstein added, "We anticipate the second half of 2012 to report positive operating income, though our goal of achieving positive operating income for the full year will be challenging due to the slowdown throughout our industry. As we work off our strong backlog in the second half of the year, we expect bookings to increase, to support growth in 2013."
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