RADVISION® (Nasdaq: RVSN) today reported that revenues for the second quarter of 2008 were $20.8 million compared with $24.7 million reported in the second quarter of 2007

TEL AVIV (July 31, 2008) –

RADVISION® (Nasdaq: RVSN) today reported that revenues for the second quarter of 2008 were $20.8 million compared with $24.7 million reported in the second quarter of 2007.
The Company incurred an operating loss of $4.3 million for the second quarter of 2008 compared with operating income of $1.7 million in the second quarter of 2007. Excluding the effects of stock-based compensation expense related to the adoption of FAS123R in both periods, the non-GAAP operating loss was $3.0 million in the second quarter of 2008 compared with operating income of $3.1 million in second quarter of 2007.
The net loss for the second quarter of 2008 was $3.9 million, or $0.19 per diluted share, compared with net income of $3.6 million, or $0.16 per diluted share, in the second quarter of 2007. Excluding the effect of stock-based compensation expense (which amounted to $1.3 million or $0.06 per diluted share in the second quarters of both 2008 and 2007) and an other than temporary impairment of available-for-sale marketable securities (which amounted to $0.4 million or $0.03 per diluted share in the second quarter of 2008), the non-GAAP net loss for the second quarter of 2008 was $2.2 million, or $0.10 per diluted share, compared with non-GAAP net income of $5.0 million, or $0.22 per diluted share, in the second quarter of 2007.
The Company had forecasted that revenues for the second quarter of 2008 would approximate $20.5 million and that the net loss would be approximately $3.6 million, or $0.17 per diluted share, including stock-based compensation expense of $1.3 million, or $0.06 per diluted share, related to the adoption of FAS123R. Excluding this item, the non-GAAP loss for the second quarter of 2008 was expected to approximate $2.3 million, or $0.11 per diluted share.
Business unit revenues for the second quarter of 2008 consisted of $15.5 million in Networking Business Unit (NBU) sales compared with $18.8 million in the second quarter of 2007, and $5.3 million in Technology Business Unit (TBU) sales compared with $5.9 million in the second quarter of 2007. The Company had forecasted NBU revenues of $15.0 million and TBU revenues of $5.5 million for the second quarter of 2008.
For the first six months of 2008, revenues were $40.5 million, the operating loss was $8.4 million and the net loss was $6.9 million, or $0.33 per diluted share. This compares with revenues of $48.6 million, operating income of $3.3 million, and net income of $6.9 million, or $0.30 per diluted share, in the first six months of 2007. Excluding the effect of stock-based compensation expense (which amounted to $2.6 million or $0.12 per diluted in the first six months of 2008 and $2.7 million or $0.11 per diluted in the first six months of 2007) and an other than temporary impairment of available-for-sale marketable securities (which amounted to $0.4 million or $0.02 per diluted share in the first six months of 2008), the non-GAAP operating loss for the first six months of 2008 was $5.8 million and the net loss was $3.9 million, or $0.19 per diluted share, compared with non-GAAP operating income of $6.0 million and net income of $9.6 million, or $0.41 per diluted share, for the first six months of 2007.
The Company ended the second quarter of 2008 with approximately $123.5 million in cash and liquid investments, equivalent to $5.98 per basic share, a decrease of $4.1 million from March 31, 2008. The decrease reflects the use of $2.9 million for the repurchase of 408,199 Company shares, $0.9 million of capital expenditures and a decrease of $0.3 million in cash flow used in operating activities, which includes a current
estimate of an other than temporary decline in Auction Rate Securities held for investment in the amount of $0.2 million.
Boaz Raviv, Chief Executive Officer, commented: “In the second quarter of 2008, we continued to execute our intensive plan to reassert our technology leadership and deepen our partner and reseller relationships. Our plan has required heightened investment in OPEX spending, which was in line with our forecast in the second quarter, as were our overall results.
“A major outcome of our R&D investment was the introduction in June of Version 5.6 of our SCOPIA platform that has important advances including high definition videoconferencing to the desktop through our SCOPIA Desktop browser-based plug in, and adds recording, playback and content management to SCOPIA’s streaming capabilities. The market response has been very positive. This week, we announced the general availability of Version 3.0 of our SCOPIA Interactive Video Platform, with enhanced scalability, port density and performance as well as a PC web-embedded video add-on and pre-installed software and applications for “solution in a box” deployment.
“Our past investment in technology and partner support benefited our second quarter revenues, leading to stronger than expected results for our NBU. This was mainly due to higher than forecasted sales to our channel partner Cisco, which included demo equipment for a new product that we had in development for them. U.S. Federal sales also were higher than expected in the second quarter and our sales through LifeSize showed very strong sequential growth. These positive contributors more than offset a temporary fall-off in revenues from a partner in Europe and a quiet quarter in APAC, although sales in China, Korea and Southeast Asia did well.
“Our second quarter TBU revenues benefited from strong year over year growth in our ProLab Testing Suite and SIP, but were slightly lower than forecast due to slippage of a few deals into the third quarter. As part of our strategic plan, we are combining the technology leadership of our TBU with an expanded marketing focus and new business initiatives. These include the introduction of our first TBU product targeted to the Enterprise market, eVident, which enables enterprises and system integrators to test the quality of the videoconference experience and do advanced trouble shooting.”
Mr. Raviv concluded: “We are focused on making continued progress in implementing our plan and expect to achieve further improvement in revenues in the Third Quarter. However, the pace of that improvement is not as fast as we had targeted. Although we have adjusted our OPEX budget in light of this, the devaluation of the dollar is inflating those costs substantially. We have decided to make the necessary expenditures to continue our progress and ultimately reach our goal. That may push our return to profitability into early 2009.”
Guidance
The following statements are forward-looking, and actual results may differ materially.
The Company expects to report revenues for the third quarter of 2008 of approximately $21.5 million and a net loss of approximately $3.6 million or $0.18 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, the non-GAAP net loss for the third quarter 2008 is expected to be $2.3 million or $0.11 per diluted share. That compares to revenues for the third quarter of 2007 of $20.7 million and net income of $0.2 million or $0.01 per diluted share, which included stock-based compensation expense of $1.4 million or $0.06 per diluted share related to the adoption of FAS123R. Excluding the effect of stock-based compensation expense, net income for the third quarter of 2007 was $1.6 million or $0.07 per diluted share. (Full details 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 other than temporary impairment of available-for-sale marketable securities and the expenses recorded for stock compensation in accordance with SFAS 123(R). 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 and the expenses recorded for stock compensation in accordance with SFAS 123(R) 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.
Second Quarter 2008 Earnings Conference Call/Webcast
RADVISION will hold a conference call to discuss its second quarter 2008 results and third quarter outlook, today, Thursday, July 31, 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 August 7th. To access the replay, please dial 1-800-272-5957 (International dialers may call +1-402-220-9718).
The PowerPoint presentation highlighting key financial metrics as well as the third quarter 2008 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 July 31st and will be archived on the website until the end of the third 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