Momentum Continues To Build For RADCOM: Q1 Sales Up 20% To $5.5M, Significant Increase In Gross Margin To 68% & Positive Cash

Momentum Continues To Build For RADCOM: Q1 Sales Up 20% To $5.5M, Significant
             Increase In Gross Margin To 68% & Positive Cash Flow

PR Newswire

TEL-AVIV, Israel, April 23, 2014

TEL-AVIV, Israel, April 23, 2014 /PRNewswire/ --RADCOM Ltd. (NASDAQ: RDCM), a
leading provider of service assurance and customer experience solutions, today
reported its financial results for the first quarter ended March 31, 2014.

In $ thousands               Q1 2014 Q1 2013 Q4 2013
Revenues                     $5,471  $4,573  $5,707
Gross margin                 67.6%   66.4%   61.2%
Net profit (loss)            $110    $(594)  $117
Net profit (loss) (non-GAAP) $248    $(512)  $187

Financial Results
RADCOM's revenues for the first quarter increased by 20% to $5.5 million from
$4.6 million in the first quarter of 2013. Gross margin for the quarter
reached 68%, a significant improvement compared with 61% in Q4 2013, 62% in
2013 as a whole and 61% in 2012. This reflects the Company's transition from
hardware-based products to higher margin software-based products, which for
the first time this quarter accounted for the majority of the Company's sales.
Management believes that the continued success of its software-based product
families – led by its recently-released MaveriQ solution - will increase its
gross margin significantly over time to above 75%.

Net income for the quarter totaled $110,000, or $0.01 per ordinary share
(basic and diluted), compared with a net loss of $(594,000), or $(0.09) per
ordinary share (basic and diluted), for the first quarter of 2013. On a
non-GAAP basis, net income totaled $248,000, or $0.03 per ordinary share
(basic and diluted), compared with a non-GAAP net loss of $(512,000), or
$(0.08) per ordinary share (basic and diluted), for the first quarter of 2013.

Comments of Management
"We are satisfied with all of our business parameters for the first quarter -
especially with the growth in our revenues, bookings and collections,"
commented Mr. David Ripstein, Radcom's President & CEO. "Our momentum is being
driven by market excitement regarding our software-based products. These
advanced solutions give operators the tools they need to assure high levels of
availability in high-traffic LTE/3G environments. This is bringing us a lot of
opportunities from both new and existing customers."

Mr. Ripstein continued, "In fact, although the MaveriQ, our software-based
product, was released just two months ago, it already accounts for the
majority of our sales, and its higher margins enabled us to deliver a 33%
increase in non-GAAP profit compared with Q4. In the future, our shift from
being a hardware company to a software company will continue to improve our
margins, reduce our inventory and decrease the average time lag between
bookings and revenue recognition. As such, with strong trends working to our
strengths and a clear technology differentiation, we believe we are positioned
for additional growth in 2014 and beyond."

Mr. Ripstein concluded, "Our CFO for the past three years, Mr. Gilad Yehudai,
has decided to pursue a new opportunity. We thank him for his dedicated
service and wish him well in the future. In parallel, we are pleased to
welcome Mr. Uri Birenberg to the Radcom team as our new CFO. Uri is a CPA with
10 years experience in VP Finance, Business Development, M&A and Controller
positions for SunGard, HP and Ernst & Young. We wish him success in the new
position."

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 April 24th 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.



RADCOM Ltd.
Consolidated Statements of Operations
(1000's of U.S. dollars, except share and per share data)
                                                      Three months ended
                                                      March 31,
                                                      2014         2013
                                                      (unaudited)  (unaudited)
Sales                                                 $   5,471  $   4,573
Cost of sales                                         1,772        1,535
Gross profit                                          3,699        3,038
Research and development, gross                       1,568        1,451
Less - royalty-bearing participation                  298          390
Research and development, net                         1,270        1,061
Sales and marketing                                   1,947        1,987
General and administrative                            578          487
Total operating expenses                              3,795        3,535
Operating loss                                        (96)         (497)
Financing income (expenses), net                      206          (97)

                                                      $  110     $ (594)
Net profit (loss)

                                                      $  0.01    $  (0.09)
Basic and diluted net income (loss) per ordinary
Share


Weighted average number of                            7,972,326    6,475,231
 ordinary shares used in
 computing basic net income
 (loss) per ordinary share
Weighted average number of
 ordinary shares used in                           8,510,132    6,475,231
 computing diluted net income (loss) per
ordinaryshare



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
                                                 March 31,
                                                 2014         2013
                                                 (unaudited)  (unaudited)
GAAP net income (loss)                           $110         $(594)
Stock-based compensation (1)                     138          82
Non-GAAP net income (loss)                      $248         $(512)
Non-GAAP net income (loss) per share (diluted)  $0.03        $(0.08)
Number of shares used in computing               8,473,865    6,475,231
Non-GAAP net income (loss) per share (diluted)
(1) Stock-based compensation:
 Cost of sales                                 4            -
 Research and development                      46           6
 Sales and marketing                           50           6
 General and administrative                    38           70
                                                 138          82



RADCOM Ltd.

Consolidated Balance Sheets

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

                                              2014         2013
                                              (unaudited)  (audited)
Current Assets
 Cash and cash equivalents                2,297        1,185
 Restricted cash                          -            1,505
 Trade receivables, net                   6,013        5,723
 Inventories                              3,887        4,352
 Other receivables                        3,302        3,092
Total Current Assets                          15,499       15,857
Severance pay fund                            3,524        3,535
Property and equipment, net                   243          253
Total Assets                                  19,266       19,645
Liabilities and Shareholders' Equity
Current Liabilities
Short term bank credit                       -            629
 Trade payables                             1,499        2,257
Deferred revenue and advances from customers 1,978        1,305
 Employee and payroll accruals             2,262        2,109
Other payables and accrued expenses          1,444        1,795
Total Current Liabilities                     7,183        8,095
Long-Term Liabilities
 Deferred revenue                         55           107
 Accrued severance pay             3,979        3,944
Total Long-Term Liabilities                   4,034        4,051
Total Liabilities                             11,217       12,146
Shareholders' Equity
 Share capital                            338          335
 Additional paid-in capital               66,075       65,791
 Accumulated other comprehensive loss   (652)        (805)
 Accumulated deficit                      (57,712)     (57,822)
Total Shareholders' Equity                    8,049        7,499
Total Liabilities and Shareholders' Equity    19,266       19,645



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



SOURCE RADCOM Ltd.

Website: http://www.radcom.com
 
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