Rail Vision Ltd (RVSN)

[midastouch017]

RADVISION Reports Record First Quarter 2006 Results

Thursday April 27, 8:00 am ET

EPS of $0.13 Exceeds Forecast
Revenues Are on Target at $20.1 Million

FAIR LAWN, N.J.--(BUSINESS WIRE)--April 27, 2006--RADVISION (Nasdaq: RVSN - News) today announced that revenues for the first quarter of 2006 were $20.1 million, representing a 24% increase from $16.3 million reported in the first quarter of 2005 and on target with the Company's forecast.

Operating income for the first quarter of 2006 was $1.9 million. Excluding the effect of stock-based compensation expense related to the adoption of FAS123R, the Company reported operating income of $2.9 million. This compares with operating income of $1.9 million in the first quarter of 2005.

Net income for the 2006 first quarter was $2.9 million, or $0.13 per diluted share. Excluding the effect of stock-based compensation expense, net income was $3.9 million or $0.17 per diluted share. This compares with $2.5 million or $0.11 per diluted share reported in the 2005 first quarter.

The Company had forecast that 2006 first quarter net income would be $2.1 million or $0.09 per diluted share including the effect of stock-based compensation. The Company's forecast for net income excluding the effect of stock-based compensation expense was $3.3 million, or $0.14 per diluted share.

Business unit revenues for the first quarter of 2006 consisted of $14.1 million in Networking Business Unit (NBU) sales and $6.0 million in Technology Business Unit (TBU) sales, representing increases of 32% and 8%, respectively, over the first quarter of 2005 and in line with the Company's forecast.

The Company ended the first quarter of 2006 with approximately $135.7 million in cash and liquid investments, an increase of $10.7 million from December 31, 2005, and equivalent to $6.17 per basic share. The increase reflects cash flow of $8.5 million from operations and income of $3.0 million from the exercise of options, offset by $800,000 in capital expenditures.

Boaz Raviv, Chief Executive Officer, commented: "The 23% increase in our revenues led to a record first quarter for RADVISION. This included an additional $1.8 million in revenues from the Defense Information Systems Agency (DISA) DVS-II project for the U.S. Department of Defense that we won with Northrop Grumman and Cisco in the fourth quarter of 2005. These revenues related to sales of key network access components and were made through Cisco. We also saw strong growth in total revenues in the first quarter from Cisco, our largest channel partner.

"Our first quarter results also include the contribution of Click to Meet(TM), our desktop software solution, which we acquired in late March 2005. Our success with Click to Meet is reflected in a 53% sequential increase in its sales as well as in our announcement today that we have partnered with leading conferencing service provider, InterCall, and with Glowpoint, the leader in IP-based video communications services, to deliver an advanced video conferencing service for use with the Microsoft® Office Live Meeting web collaboration application by pairing it with Click to Meet. This follows our first quarter announcement that Allstream, a leading Canadian communications service provider, licensed Click to Meet to upgrade Live Meeting to video.

"3G revenues in our NBU grew 84% from the 2005 first quarter due to five important wins in Asia Pacific and the contribution from a major deal in Europe that was reported previously. In total, our 3G and desktop solutions represented nearly half of our first quarter NBU revenues and we expect that they will be significant levers for our future growth. We took an important step forward in this regard with the expansion of our partnership with AETHRA, which will make both our 3G and Click to Meet solutions available to their customers under the AETHRA name.

"We also achieved continued growth in our TBU in the first quarter with strong license sales for our 3G-324M and SIP toolkits, which are used by equipment designers to develop products both for today's and tomorrow's technology for video and multimedia services over wireless broadband. We introduced a Java version of our SIP toolkit in the first quarter and were also pleased to win the exclusive license from Microsoft to provide Live Communications Server-Compatible SIP toolkits."

Mr. Raviv concluded: "Our accomplishments in the first quarter were built upon our Company's distinctive vision and the path we have followed towards the convergence of voice, video and data."

Guidance

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

The Company expects revenues for the second quarter 2006 to be approximately $21.5 million and net income to approximate $3.1 million or $0.14 per diluted share. This includes stock-based compensation expense related to the adoption of FAS123R of $1.2 million or $0.05 per diluted share. Excluding this item, second quarter 2006 net income is expected to be $4.3 million or $0.19 per diluted share. That compares to second quarter 2005 revenues of $17.5 million and net income of $2.9 million or $0.13 per diluted share. (Full details are available on the Company's web site at www.radvision.com.)

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