RADCOM Returns To Profitability; Continued Momentum In Q2; $5.4M Revenues, $0.06 Non-GAAP EPS

  RADCOM Returns To Profitability; Continued Momentum In Q2; $5.4M Revenues,
                              $0.06 Non-GAAP EPS

- Strong Backlog, Streamlined Execution Increase Visibility for Future Growth
--

-7 Recent Wins in LTE -- the Next Generation of Wireless Networks --

PR Newswire

TEL-AVIV, Israel, July 23, 2013

TEL-AVIV, Israel, July 23, 2013 /PRNewswire/ --RADCOM Ltd. (RADCOM) (NASDAQ:
RDCM), a leading service assurance provider, today reported a 59%
year-over-year increase in revenues and a return to profitability for the
second quarter ended June 30, 2013.

In $ thousands    Q2 2013 Q2 2012   Q1 2013
Revenues          $5,443  $3,424    $4,573
Gross margin      67%     57%       66%
Net income (loss) $204    $(1,811)  $(594)
(GAAP)
Net income (loss) $419    $(1,715)  $(512)
(non-GAAP)
EPS (GAAP)        $0.03   $(0.28)   $(0.09)
EPS (Non-GAAP)    $0.06   $(0.27)   $(0.08)

Results for the 2nd Quarter of 2013
Q2 revenues totaled $5.4 million, up 59% compared with $3.4 million in the
second quarter of 2012 and 19% compared with the first quarter of 2013. The
increase reflects the Company's strong execution of its backlog and continued
momentum in the emerging markets of Latin America and Asia. As a result, the
Company has returned to profitability and is on track with its plan for
delivering significant top-line and bottom-line growth in 2013.

The Company's gross margin for the quarter rose to 67% from 57% in Q2 2012 and
66% in Q1 2013. In addition, operating expenses declined by an additional
$100,000 from the first quarter, reflecting the Company's successful ongoing
streamlining and cost management efforts.

With higher revenues, a stronger gross margin and lower expenses, the Company
recorded both operating and net profit for the quarter. Net income for the
second quarter totaled $204,000, or $0.03 per ordinary share (basic and
diluted), a dramatic improvement compared to the net loss of ($1.8) million,
or ($0.28) per ordinary share (basic and diluted), from Q2 2012, and
($594,000), or ($0.09) per ordinary share (basic and diluted) from Q1 2013.

On a non-GAAP basis, the Company reported net income of $419,000, or $0.06 per
ordinary share (basic and diluted), for the second quarter of 2013, compared
to a net loss of ($1.7) million, or ($0.27) per ordinary share (basic and
diluted), in the second quarter of 2012, and $(512,000), or $(0.08) per
ordinary share (basic and diluted), in the first quarter of 2013.

Comments of Management
Commenting on the results, David Ripstein, RADCOM's CEO, said, "We are very
pleased to report a return to profitability in continuation of the strong
momentum that has been developing for RADCOM over the past three quarters,
demonstrating the success of our backlog execution and cost reduction
programs. This, combined with our growing competitive strength in fast-growing
target markets, positions us favorably to continue building our business in
line with our plan for generating top and bottom line growth in the second
half of 2013.

"Our business is being driven by a strong tailwind: the global explosion in
data traffic, which is forcing operators to invest in next-generation LTE and
VoLTE infrastructures. With the industry's best service assurance technologies
for these environments, we are participating in more and larger tenders with
many of the world's top-tier operators, including both existing and potential
new customers. We are proud to have recently won seven highly competitive LTE
deals, demonstrating our clear technology advantage while creating the
potential for additional future growth."

Results for the 1^st Half of 2013
For the first half of 2013, revenues increased by 32% to $10.0 million from
$7.6 million in the first half of 2012. Net loss for the period improved by
90% to $(390,000), or $(0.06) per ordinary share (basic and diluted), from
$(3.8 million), or $(0.60) per ordinary share (basic and diluted), in the
first half of 2012. Non-GAAP net loss for the period was $(93,000), or $(0.01)
per share (basic and diluted), a 97% improvement compared with $(3.6 million),
or $(0.56) per share (basic and diluted) for the first half of 2012.

PIPE Transaction
In April, RADCOM signed a definitive agreement with investors regarding a $3.5
million private placement transaction (PIPE). Investors in the PIPE
transaction included both existing and new investors in the Company. For
details of the transaction, please refer to the Company's press release of
April 29, 2013 http://www.radcom.com/node/727.

Earnings Conference Call
RADCOM's management will hold an interactive conference call today at 9:00 AM
Eastern Time (16:00 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 July 24^th on RADCOM's website.

About RADCOM
RADCOM provides innovative service assurance and customer experience
management solutions for leading telecom operators and communications service
providers. RADCOM specializes in solutions for next-generation mobile and
fixed networks, including LTE, VoLTE, IMS, VoIP, UMTS/GSM and mobile
broadband. RADCOM's comprehensive, carrier- grade solutions are designed for
big data analytics on terabit networks, and are used to prevent service
provider revenue leakage and to enhance customer care management. RADCOM's
products interact with policy management to provide self-optimizing network
solutions. RADCOM's shares are listed on the NASDAQ Capital Market under the
symbol RDCM. For more information, please visit 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.

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



RADCOM Ltd.
Consolidated Statements of Operations
(1000's of U.S. dollars, except share and per share data)
                          Three months ended        Six months ended
                          June 30,                  June 30,
                          2013         2012         2013          2012
                          (unaudited)  (unaudited)  (unaudited)   (unaudited)
Sales                     $   5,443  $   3,424  $  10,016   $   7,602
Cost of sales             1,781        1,489        3,316         3,036
Gross profit              3,662        1,935        6,700         4,566
Research and development, 1,420        1,392        2,871         3,071
gross
Less - royalty-bearing    279          505          669           730
participation
Research and development, 1,141        887          2,202         2,341
net
Sales and marketing       1,803        2,262        3,790         4,763
General and               491          493          978           1,011
administrative
Total operating expenses  3,435        3,642        6,970         8,115
Operating income          227          (1,707)      (270)         (3,549)
(expenses)
Financing expenses, net   (23)         (104)        (120)         (176)
Income (loss) before tax  204          (1,811)      (390)         (3,725)
on income
Taxes on Income           -            -            -             (120)
Net income (loss)         204          (1,811)      (390)         (3,845)
Basic net income (loss)
per                      $  0.03    $  (0.28)  $   (0.06)  $   (0.60)
ordinary Share
Diluted net income (loss)
per                       $  0.03    $  (0.28)  $   (0.06)  $   (0.60)
ordinary share
Weighted average number
of
 ordinary shares used
in
 computing basic net   7,133,654    6,444,221    6,795,807     6,434,617
income

 (loss) per ordinary
share
Weighted average number
of
 ordinary shares
used in
 computing diluted net 7,381,794    6,444,221    6,795,807     6,434,617
income

 (loss) per ordinary
share



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        Six Months Ended
                            June 30,                  June 30,
                            2013         2012         2013         2012
                            (unaudited)  (unaudited)  (unaudited)  (unaudited)
GAAP net income (loss)     $204         $(1,811)     $(390)       $(3,845)
Stock-based compensation    215          96           297          271
(1)
Non-GAAP net income (loss)  $419         $(1,715)     $(93)        $(3,574)
Non-GAAP net income (loss)  $0.06        $(0.27)      $(0.01)      $(0.56)
per share (diluted)
Number of shares used in
computing Non-GAAP          7,381,794    6,444,221    6,795,807    6,434,617
earnings (loss) per share
(diluted)
(1) Stock-based
compensation:
 Cost of sales            5            3            5            9
 Research and development 80           30           86           98
 Sales and marketing      55           34           61           92
 General and              75           29           145          72
administrative
                            215          96           297          271



RADCOM Ltd.
Consolidated Balance Sheets
(1000's of U.S. dollars)
                                                  As of        As of

                                                  June 30,     December 31,

                                                  2013         2012
                                                  (unaudited)  (audited)
Current Assets
 Cash and cash equivalents                    1,278        1,474
 Restricted Cash                              1,757        1,452
 Trade receivables, net                       5,327        3,292
 Inventories                                  5,635        6,736
 Other receivables                            2,575        2,685
Total Current Assets                              16,572       15,639
Severance pay fund                                3,259        3,090
Property and equipment, net                       286          268
Total Assets                                      20,117       18,997
Liabilities and Shareholders' Equity
Current Liabilities
 Short term bank credit                       -            1,058
 Short term loans                             750          1,527
 Trade payables                               1,262        1,920
 Deferred revenue and advances from customers 2,604        2,100
 Employees and payroll accruals               1,944        1,996
 Other payables and accrued expenses          1,727        1,844
Total Current Liabilities                         8,287        10,445
Long-Term Liabilities
 Deferred revenue                             31           37
 Accrued severance pay                 3,664        3,518
Total Long-Term Liabilities                       3,695        3,555
Total Liabilities                                 11,982       14,000
Shareholders' Equity
 Share capital                                322          251
 Additional paid-in capital                   65,167       61,470
 Accumulated other comprehensive loss         (562)        (322)
 Accumulated deficit                          (56,792)     (56,402)
Total Shareholders' Equity                        8,135        4,997
Total Liabilities and Shareholders' Equity        20,117       18,997



SOURCE RADCOM Ltd.

Website: http://www.radcom.com
 
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