TEL-AVIV, Israel, April 24 /PRNewswire-FirstCall/ -- RADCOM Ltd. (RADCOM) (NASDAQ: RDCM - News) today announced financial results for the first quarter ended March 31, 2006.
Financial Results
Revenues for the first quarter of 2006 were $5,080,000 compared to $5,017,000 for the first quarter of 2005.
On the basis of U.S. generally accepted accounted principles (GAAP), the Company recorded a net loss for the first quarter of 2006 of $119,000, or $0.01 per ordinary share (basic and diluted). This included a non-cash share-based compensation expense of $128,000 taken in respect of the Company's mandatory adoption of Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payment" ("SFAS 123R") beginning January 1, 2006. SFAS 123R requires that companies recognize the fair value of share-based incentives as compensation. Net income for the first quarter of 2005, which did not include share-based compensation expense, was $134,000, or $0.01 per ordinary share.
The Company has also presented its net income on a non-GAAP basis excluding share-based compensation to provide investors and management with insight into RADCOM's underlying operating results. Excluding share-based compensation, non GAAP net income for the first quarter of 2006 was $9,000, or $0.00 per share.
The Company's cash and cash equivalents at the end of the first quarter of 2006 totaled $12.3 million, an increase of approximately $1.8 million compared to the end of 2005. This increase reflects the exercise of warrants to purchase ordinary shares by the Company's PIPE investors, and the exercise of options to purchase ordinary shares by its employees. As of March 31, 2006, the number of the Company's ordinary shares outstanding totaled 16,063,377.
Comments of Management
Commenting on the results, Arnon Toussia-Cohen, President and CEO of RADCOM, said, "We are obviously disappointed to report a revenue shortfall for the first quarter, which is due primarily to a delay in the closing of a large order from an existing customer that we believe will be placed later during 2006. Nonetheless, we are pleased to have achieved non-GAAP breakeven for the period, a testament to the soundness of our underlying business platform and lean expense model, and remain on track for achieving our 2006 growth objectives. With worldwide 3G deployments gaining momentum, demand for our comprehensive, powerful and flexible 3G service monitoring solutions continues to grow. Interest has been particularly strong from cellular operators, as demonstrated by our recent win of a strategically important multi-quarter deal with Partner Communications Ltd. (NASDAQ: PTNR - News), Israel's GSM cellular service provider, and by the nationwide deployment that we are carrying out for one of North America's largest cellcos."
Mr. Toussia-Cohen continued, "In line with the strategy that we set for ourselves last year, we continue to focus on building our worldwide sales and marketing capabilities. To address significant emerging opportunities in the Far East, we have established strong channels and marketing partnerships in China and an initial presence in Korea, and are currently evaluating other Far Eastern markets."
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