Radware

(Nasdaq:RDWR) will sustain its performance evident in its excellent fourth quarter, CFO Meir Moshe told TheMarker.com.

The company released its fourth quarter 2000 results after trade yesterday. The company beat analyst forecasts for the quarter and did not guide analysts to lower forecasts for 2001.

On the contrary, Radware left its forecasts for 2001 intact. Radware expects sales ranging from $54 million to $59 million, comprising around 45% growth. Before the crash of tech stocks, unchanged forecasts were bad news. Not any more.

Radware's revenue forecast is a tad higher than that of

Salomon Smith Barney

, which expects sales of $54.5 million.

Merrill Lynch

(NYSE:MEL) foresees $54.6 million.

Radware's 2001 earnings forecasts is in the range of $45 million to $49 million, in line with analyst forecasts. The company expects sales in the first quarter of 2001 to total $12.5 million to $13 million, and EPS to come to 10 cents.

Radware is part of the RAD group. The company develops software and hardware for balancing traffic and loads on ITM. Its products are incorporated on websites and on the customer's computer network. They direct surfers to the server that can provide the best, fastest service.

TheMarker.com: Were the 2000 results affected by the slowing market? Will the slowdown affect results in 2001?

Meir Moshe:

"We operate in the intelligent traffic management market, which is expected to grow by at least 50% to 60% annually until 2004... We do feel slowing demand from e-commerce companies, which account for 10% to 15% of our sales, and from competitive local exchange carriers. We hope to compensate for a possible drop in sales by selling to enterprises, where business continues to be strong.

"The company will be investing in research and development in 2001. We therefore believe we will be introducing new products. Even though the United States market is slowing, we believe that the sales there will grow in absolute terms, even if they decrease as a percent of revenues. In 1999 U.S. sales contributed 60% of Radware's total sales. In 2000, U.S. sales came to 47%. The remaining 53% in 2000 was equally divided between Europe and Asia.

"We believe that in the longer term the United States will account for 40% of our sales or even less."

Among Radware's recent product launches is SynApps Architecture, which manages traffic loads and bandwidth, and protects against attacks on traffic on the site that the firewall cannot handle. Radware hopes that SynApps will be adapted to all its product lines by the end of the quarter.

The company has high hopes of its Application Switch, a new hardware platform that enables all its product lines to operate on the same hardware.

You did not mention a slowdown, indicating that rival F5 Networks (Nasdaq:FFIV) is suffering from individual problems, not a general market ailment.

Of course sometimes one benefits from the problems of others, like those of F5. But I don't have a precise estimate on the effect of F5's failure on us. At any rate, it's clear that F5's weakness improves our chances on the market. The view that F5's problems are its own appears to be true.

What about being acquired or acquiring other companies? You have more than $130 million cash in hand.

As for being taken over, the Radware executive and shareholders are the ones to decide about selling the company. Anything is possible given the right price, and this applies to us too. Also, Radware's market cap is very low right now. I don't believe shareholders would be satisfied even with twice or three times the current market cap. (Radware stock is 70% short of its peak. The company's current market price comes to $330 million. TM.)

But a takeover isn't relevant because we intend to move the company forward. We are more likely to acquire companies with complementary technology. A year ago we focused on the Israeli market, and reached advanced negotiations with one firm. But the talks fell when we couldn't agree on value. Today we realize that there is an impressive range of companies on the international market.

We think that the company is deeply undervalued. This thesis is supported by the fact that insiders aren't selling company shares. Accordingly, we are sure that the company's value will rise significantly. We are doing everything we can to make this happen.