RADCOM Announces Financial Results for Third Quarter and First Nine Months of 2012

RADCOM Announces Financial Results for Third Quarter and First Nine Months of
                                     2012

Bookings in Q3 almost doubled compared to Q2 and $18.5 Million of Backlog
reinforces path to growth and profitability

PR Newswire

TEL AVIV, Israel, October 23, 2012

TEL AVIV, Israel, October 23, 2012 /PRNewswire/ --

RADCOM Ltd. (RDCM), a leading service assurance provider, today announced its
financial results for the third quarter and first nine months of 2012.

Discussion of Financial Results

Third Quarter of2012: Revenues for the quarter ended September 30, 2012
totaled $3.0 million, a 12% decrease compared to $3.4 million for the third
quarter of 2011, the result of multiple projects which have been booked, but
not fully completed and are expected to be completed and recognized in the
coming quarters. Gross margin for the quarter was 57%, compared to 60% for the
third quarter of 2011.

Net loss for the quarter ended September 30, 2012 was $(1.8) million or
$(0.28) per ordinary share (basic and diluted), compared to a loss of ($2.2M),
or $(0.34) per ordinary share (basic and diluted) for the third quarter of
2011. The decrease in the loss is mainly a result of cost cutting measures
taken by the company.

Excluding non-cash stock-based compensation expenses for all periods, the
Company's non-GAAP net loss for the quarter ended September 30, 2012 was
$(1.7) million, or $(0.26) per ordinary share (basic and diluted), compared to
net loss of $(2.0) million or $(0.31) per ordinary share (basic and diluted)
for the third quarter of 2011.

First 9 Months of 2012: Revenues for the first nine months of 2012 were $12.0
million, a 19% decrease compared to $15.0 million for the first nine months of
2011. Gross profit for the period was 62%, compared to 69% during the first
nine months of 2011. The decrease in the gross profit is mainly a result of
the lower sales. Net loss for the period was $(4.4) million or $(0.69) per
ordinary share (basic and diluted), compared to a net loss of $(2.0) million
or $(0.31) per ordinary share (basic and diluted) for the first nine months of
2011. Excluding non-cash stock-based compensation expenses for all periods,
the Company's non-GAAP net loss for the first nine months of 2012 was $(4.0)
million, or $(0.63) per ordinary share (basic and diluted), compared to a loss
of $(1.3) million or $(0.21) per ordinary share (basic and diluted) for the
first nine months of 2011.

Comments of Management

"We are emerging from the slowdown that has impacted the telecom industry.
This is evidenced in ourQ3 bookings which have almost doubled compared to
the previous quarter," commented David Ripstein, RADCOM's chief executive
officer "however, our product mix has been weighted more heavily towards
larger contracts with longer completion cycles and that has delayed revenue
recognition. We were unable to recognize the recently announced, $3 million
Tier-1 contract in Q3, due to revenue recognition accounting guidelines. This
recognition would have significantly improved the quarter results, and also
inhibits our goal of being operationally profitable for the second half of
this year, however, it will be recognized in the coming quarters. The
improved trends in the telecom industry witnessed in the last few months has
led to a higher bookings rate. Our customers satisfaction with our products
also result in a higher volume of repeat orders from our install base. This
will help us attain our goal of moving to profitability, complete work more
rapidly and hopefully experience less fluctuation. Our backlog continued to
grow, now at $18.5 million, and we are encouraged that we'll deliver a better
Q4 to close the year."

Earnings conference call
RADCOM's management will hold an interactive conference call today at 9:00
a.m. Eastern Time (15:00 Israel Time) to discuss the results and to answer
participants' questions. To join the call, please call one of the following
numbers approximately five minutes before the call is scheduled to begin:

From the US (toll-free): + 1-888-668-9141

From other locations: +972-3-918-0609

For those unable to listen to the call at the time, a replay will be available
from October 24^th on RADCOM's website.

About RADCOM

RADCOM provides innovative service assurance solutions for communications
service providers and equipment vendors. RADCOM specializes in solutions for
next-generation networks, both wireless and wireline. RADCOM's comprehensive,
carrier-strength solutions are used to prevent service provider revenue
leakage and to enable management of customer care. RADCOM's products
facilitate fault management, network service performance analysis,
troubleshooting and pre-mediation with an OSS/BSS. RADCOM's shares are listed
on the NASDAQ Capital Market under the symbol RDCM. For more information,
please visit http://www.RADCOM.com.

Non-GAAP Information

Certain non-GAAP financial measures are included in this press release. These
non-GAAP financial measures are provided to enhance the reader's overall
understanding of our financial performance. By excluding non-cash stock-based
compensation that has been expensed in accordance with ASC Topic 718, our
non-GAAP results provide information to both management and investors that is
useful in assessing our core operating performance and in evaluating and
comparing our results of operations on a consistent basis from period to
period. These non-GAAP financial measures are also used by management to
evaluate financial results and to plan and forecast future periods. The
presentation of this additional information is not meant to be considered a
substitute for the corresponding financial measures prepared in accordance
with GAAP.

Risks Regarding Forward-Looking Statements

Certain statements made herein that use words such as "estimate," "project,"
"intend," "expect," "'believe", "may", "might", "predict", "potential",
"anticipate", "plan" or similar expressions are intended to identify
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements involve known
and unknown risks and uncertainties that could cause the actual results,
performance or achievements of the Company to be materially different from
those that may be expressed or implied by such statements, including, among
others, changes in general economic and business conditions and specifically,
decline in the demand for the Company's products, inability to timely develop
and introduce new technologies, products and applications, and loss of market
share and pressure on prices resulting from competition. For additional
information regarding these and other risks and uncertainties associated with
the Company's business, reference is made to the Company's reports filed from
time to time with the United States Securities and Exchange Commission. The
Company does not undertake to revise or update any forward-looking statements
for any reason.





  
                         RADCOM Ltd.
                  Consolidated Statements of Operations
      
            (1000's of U.S. dollars, except share and per share data)

   
                                             Three months ended        Nine months ended
                                              September 30,              September 30,
                                          2012          2011         2012          2011
                                      (unaudited)    (unaudited)  (unaudited)  (unaudited)
    Sales                               $ 3,030       $ 3,449     $ 12,068      $ 14,983
    Cost of sales                         1,303         1,366        4,566         4,570
    Gross profit                          1,727         2,083        7,502        10,413
    Research and development, gross       1,539         1,457        4,602         4,332
    Less - royalty-bearing participation    411           257        1,141         1,006
    Research and development, net         1,128         1,200        3,461         3,326
    Sales and marketing                   1,964         2,346        6,734         7,246
    General and administrative              438           520        1,449         1,721
    Total operating expenses              3,530         4,066       11,644        12,293
    Operating loss                       (1,803)       (1,983)      (4,142)       (1,880)
    Financing expenses, net                  (7)         (186)        (184)          (88)
    Loss before taxes                    (1,810)       (2,169)      (4,326)       (1,968)
    Taxes                                     -             -        (120)             -
    Net loss                             (1,810)       (2,169)    $ (4,446)       (1,968)
    Basic and Diluted net loss per
      ordinary share                    $ (0.28)      $ (0.34)    $ ( 0.69)      $ (0.31)
    Weighted average number of
    ordinary shares used in
    computing basic and diluted
     net loss per ordinary share      6,450,465     6,373,675    6,439,478     6,357,003

                                    RADCOM Ltd.
              RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
              (1000's of U.S. dollars, except share and per share data)
                       Three Months Ended            Nine Months Ended
                          September 30,                September 30,
                      2012            2011         2012            2011
                   (unaudited)     (unaudited)  (unaudited)     (unaudited)

    GAAP net loss     $(1,810)        $(2,169)     $(4,446)        $(1,968)
    Stock-based
    compensation(1)       126             195          397             620
    Non-GAAP net
    loss              $(1,684)        $(1,974)     $(4,049)        $(1,348)
    Non-GAAP loss
    per share
    (diluted)          $(0.26)         $(0.31)      $(0.63)         $(0.21)

    Number of
    shares used in
    computing
    Non-GAAP loss
    per share
    (diluted)        6,450,465       6,373,675    6,439,478       6,357,003

    (1)Stock-based
    compensation:
    Cost of sales            3               6           12              23
    Research and
    development             46              70          144             177
    Selling and
    marketing               41              52          133             197
    General and
    administrative          36              67          108             223
                           126             195          397             620

                                         RADCOM Ltd.

                                 Consolidated Balance Sheets

                                    (1000's of U.S. dollars)                                                  As of         As of
                                              September 30,  December 31,

                                                      2012           2011
                                                (unaudited)
    Current Assets
    Cash and cash equivalents                       $ 1,076       $ 2,901

    Restricted cash                                     724             -

    Trade receivables, net                            5,035         5,389
    Inventories                                       6,555         6,590
    Other receivables                                 3,858         3,490
    Total Current Assets                             17,248        18,370
    Severance pay fund                                2,885         2,674
    Property and equipment, net                         272           301
    Total Assets                                     20,405        21,345

    Liabilities and Shareholders' Equity
    Short term loan and bank credit                     847             -
    Trade payables                                    2,676         2,703
    Deferred revenue                                    817           623
    Other payables and accrued expenses               6,396         4,374
    Total Current Liabilities                        10,736         7,700
    Long-Term Liabilities
    Deferred revenue                                     74           161
    Accrued severance pay                             3,303         3,092
    Total Long-Term Liabilities                       3,377         3,253

    Total Liabilities                                14,113        10,953

    Shareholders' Equity

    Share capital                                       251           250
    Additional paid-in capital                       61,195        60,754
    Accumulated other comprehensive loss               (293)         (197)
    Accumulated deficit                             (54,861)      (50,415)
    Total Shareholders' Equity                        6,292        10,392

    Total Liabilities and Shareholders'
    Equity                                         $ 20,405      $ 21,345



Contact:
Gilad Yehudai
CFO
(972)77-774-5060
gilady@radcom.com 

INVESTOR INQUIRIES:
Brett Maas
Hayden IR
brett@haydenir.com
(646)536-7331
or
James Carbonara, Regional Vice President
Hayden IR
(646)755-7412
Email: james@haydenir.com

SOURCE RADCOM Ltd