– Revenues Are $22.7 Million – – GAAP Net Loss Is $0.07 per Diluted Share; Non-GAAP Net Loss Is $0.01 per Diluted Share – – Company to Return to Lower OPEX Spending in 2009; Expects Non-GAAP Profit for First Quarter –

TEL AVIV (February 05, 2009) –

RADVISION® (Nasdaq: RVSN) reported today that revenues for the fourth quarter of 2008 increased 2% to $22.7 million compared with $22.3 million reported in the fourth quarter of 2007, and above its forecast of $22.5 million.
The Company incurred an operating loss of $2.5 million for the fourth quarter of 2008, which included a restructuring charge of $0.2 million due to a workforce reduction implemented at the end of the fourth quarter. This compares with an operating loss of $0.2 million in the fourth quarter of 2007. Excluding the restructuring charge in the fourth quarter of 2008 and the effects of stock-based compensation expense related to the adoption of FAS123R in both periods, the non-GAAP operating loss was $1.1 million in the fourth quarter of 2008 compared with operating income of $1.1 million in fourth quarter of 2007.
The net loss for the fourth quarter of 2008 was $1.5 million, or $0.07 per diluted share, compared with net income of $2.5 million, or $0.11 per diluted share, in the fourth quarter of 2007. The non-GAAP net loss for the fourth quarter of 2008 was $0.2 million, or $0.01 per diluted share. This excludes the effects of the $0.2 million restructuring charge, stock-based compensation expense of $1.2 million, and a gain of $0.1 million due to the redemption of certain Auction Rate Securities net of other than temporary impairment of available-for-sale Auction Rate Securities, with the total amount of excluded items equivalent to $0.06 per diluted share. In the fourth quarter of 2007, non-GAAP net income was $4.2 million, or $0.19 per diluted share, excluding stock-based compensation expense of $1.4 million and a loss of $0.3 million due to other than temporary impairment of available-for-sale Auction Rate Securities, equivalent to $0.08 per diluted share.
Both the GAAP and Non-GAAP net loss for the fourth quarter were better than the Company’s forecast that the GAAP net loss would be approximately $1.9 million, or $0.09 per diluted share, including stock-based compensation expense of $1.3 million, or $0.06 per diluted share. Excluding this item, the non-GAAP net loss for the fourth quarter of 2008 was expected to approximate $0.6 million, or $0.03 per diluted share.
Total revenues for the fourth quarter of 2008 consisted of $17.4 million for the Networking Business Unit (NBU) and $5.3 million for the Technology Business Unit (TBU). This compares with $17.1 million for the NBU and $5.2 million for the TBU reported in the fourth quarter of 2007.
For the full year 2008, revenues were $84.7 million, the operating loss was $15.2 million and the net loss was $12.9 million, or $0.63 per diluted share. This compares with revenues of $91.6 million, operating income of $1.7 million, and net income of $9.6 million, or $0.43 per diluted share, in 2007.
The non-GAAP operating loss for 2008 was $9.6 million and the net loss was $5.9 million, or $0.29 per diluted share, compared with non-GAAP operating income of $7.1 million and net income of $15.4 million, or $0.69 per diluted share, for 2007. The non-GAAP amounts exclude the effect of the $0.2 million restructuring charge in the fourth quarter of 2008, stock-based compensation expense (which amounted to $5.4 million or $0.26 per diluted share in 2008 and $5.4 million or $0.24 per diluted share in 2007), and an other than temporary impairment of available-for-sale Auction Rate Securities (which totaled $1.4 million or $0.07 per diluted share in 2008 and $0.4 million or $0.02 per diluted share in 2007).
The Company ended 2008 with approximately $121.3 million in cash and liquid investments, equivalent to $6.10 per basic share, a decrease of $0.3 million from September 30, 2008. The decrease reflects the use of $2.6 million for the repurchase of 418,962 Company shares and $0.7 million of capital expenditures, offset by an increase of $3 million in cash flow provided by operating activities.
Boaz Raviv, Chief Executive Officer, commented: “Our on-target NBU revenues and better than expected TBU revenues enabled us to narrow our operating loss in the fourth quarter and near our goal of returning to profitability, as our non-GAAP net loss declined to one cent per share for the quarter. This follows a full year of executing our plan to reassert our technology leadership and return to profitable growth by accelerating our investment in R&D and in marketing and sales. I am pleased to report that our progress to date enables us to return to a lower level of operating expenses in 2009. As a result, we are forecasting a return to profitability in the 2009 first quarter on a non-GAAP basis.”
“The performance of our Networking Business Unit in the fourth quarter reflected strong sales to Cisco, in line with expectations. This was accompanied by 24% year-over-year growth in revenue in the remainder of the room conferencing channel in the fourth quarter, which was evenly distributed across all regions, and included strong growth in APAC, especially in China, better-than-expected sales in EMEA, and solid performance in the Americas, despite sequentially lower Federal sales.
“Our progress in the fourth quarter and past year has been built upon the advancements we made to our SCOPIA platform and SCOPIA Desktop, which today offers the best-in-class solution for high definition video connectivity and integration from the standard room system to the desktop and mobile device. SCOPIA Desktop 5.7 became available in the fourth quarter, with its added ability to send and receive HD business quality 720p video using a standard USB web camera.
“Our fourth quarter benefited from our deepening relationship with our Unified Communications partners IBM and Alcatel Lucent, with results in Europe especially strong. These partnerships provide us with additional opportunity to deliver high-level IT-centric solutions that are our strength, while enabling us to build the RADVISION brand. We have added enhancements to our SCOPIA solution to support each of these partners.
“Our fourth quarter NBU results also included strong sales to our OEM partners LifeSize and AETHRA, as we continue to build upon our position as the only independent provider of network infrastructure. We took another step forward in our relationship with SONY in the fourth quarter, with the announcement of a new strategic reselling agreement in one of their regions in APAC.
“Our Technology Business Unit made solid improvement in the fourth quarter, with record results in APAC and a record number of design wins, with a large portion of those in the Americas. We also had the first sales of our new eVident testing tool for enterprise videoconferencing networks. Despite this improvement, we believe it will be another quarter before TBU is back on track. We are executing the next phase our growth strategy in the TBU, which includes a region-based marketing approach and a deeper, highly responsive focus on strategic customer relationships. We will also continue to move forward with our product development roadmap.”
Mr. Raviv concluded: “The successful execution of our recovery plan in 2008 enables us to continue to pursue our growth objectives in 2009 at a reduced level of OPEX investment. Regrettably, this has required us to reduce our workforce, which has now been completed. Given the uncertainty of economic conditions, we believe that our decision to do so is both prudent and timely. There is no doubt that the current environment is challenging. However, we believe RADVISION has distinctive opportunities in the current economic climate because of the price/value advantage of our products combined with the proven ability of videoconferencing to reduce travel costs, improve efficiency and increase the return on IT infrastructure investments. We plan to fully capitalize on our advantages as we pursue profitable growth.”
Guidance
The following statements are forward-looking, and actual results may differ materially.
The Company expects to report revenues for the first quarter of 2009 of approximately $19.0 million and net loss of approximately $1.0 million or $0.05 per diluted share. This includes stock-based compensation expense related to the adoption of FAS123R of $1.3 million or $0.07 per diluted share. Excluding this item, non-GAAP net income for the first quarter 2009 is expected to be $0.3 million or $0.02 per diluted share. That compares to
revenues for the first quarter of 2008 of $19.6 million and a net loss of $3.1 million or $0.15 per diluted share, which included stock-based compensation expense related to the adoption of FAS123R of $1.3 million or $0.07 per diluted share. Excluding the effect of stock-based compensation expense, the net loss for the first quarter of 2008 was $1.8 million or $0.08 per diluted share. (Full details of the Company’s forecast are available on the Company’s web site at www.radvision.com.)
GAAP versus NON-GAAP Presentation
To supplement the consolidated financial statements presented in accordance with generally accepted accounting principles (“GAAP”), the Company uses non-GAAP measures of operating results, net income and earnings per share, which are adjusted from results based on GAAP to exclude net profit and loss from other than temporary impairment of available-for-sale marketable securities, the expenses recorded for stock compensation in accordance with SFAS 123R and restructuring expenses. These non-GAAP financial measures are provided to enhance overall understanding of the current financial performance and prospects for the future. Specifically, the Company believes the non-GAAP results provide useful information to both management, and investors as these non-GAAP results exclude other than temporary impairment of available-for-sale marketable securities, the expenses recorded for stock compensation in accordance with SFAS 123R and restructuring expenses that the Company believes are not indicative of the core operating results. Further, these non-GAAP results are one of the primary indicators management uses for assessing the Company’s performance, allocating resources and planning and forecasting future periods. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. These non-GAAP measures may be different from the non-GAAP measures used by other companies.
Fourth Quarter 2008 Earnings Conference Call/Webcast
RADVISION will hold a conference call to discuss its fourth quarter 2008 results and first quarter 2009 outlook, today, Thursday, February 5, at 9:00 a.m. (Eastern). To access the conference call, please dial 1-877-601-3546 (International dialers may call +1-210-839-8500) by 8:45 a.m. (Eastern). The passcode “RADVISION” will be required to access the live conference call. A live webcast of the conference call also will be available on the Company’s website and archived on the site until the next quarter. Simply click on the following link or copy it onto your browser: www.radvision.com/Corporate/Investors/FinancialReports/. A replay of the call will be available beginning approximately one hour after the conclusion of the call through 11:00 p.m. (Eastern) on February 11th. To access the replay, please dial 1-888-568-0915 (International dialers may call +1-402-998-1592).
The PowerPoint presentation highlighting key financial metrics as well as the first quarter 2009 estimate also will be available in the Investor Relations section of the company’s website. The presentation will be available beginning at 8:00 a.m. (Eastern) on February 5th and will be archived on the website until the end of the first quarter.
About RADVISION
RADVISION (Nasdaq: RVSN) is the industry’s leading provider of market-proven products and technologies for unified visual communications over IP and 3G networks. With its complete set of standards-based video networking infrastructure and developer toolkits for voice, video, data and wireless communications, RADVISION is driving the unified communications evolution by combining the power of video, voice, data and wireless – for high definition videoconferencing systems, innovative converged mobile services, and highly scalable video-enabled desktop platforms on IP, 3G and emerging next-generation networks. For more information about RADVISION, visit www.radvision.com.
This press release contains forward-looking statements that are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the industry, changes in demand for products, the timing and amount or cancellation of orders and other risks detailed from time to time in RADVISION’s filings with the Securities Exchange Commission, including its Annual Report on Form 20-F. These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statement.

Source: RADVISION