o |
REGISTRATION
STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE
ACT
OF 1934
|
x |
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
o |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
o |
SHELL
COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE
ACT OF 1934
|
Page No. | ||
PART
I
|
3
|
|
ITEM
1.
|
IDENTITY
OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
|
3
|
ITEM
2.
|
OFFER
STATISTICS AND EXPECTED TIMETABLE
|
3
|
ITEM
3.
|
KEY
INFORMATION
|
3
|
|
A. Selected
Financial
Data
|
3
|
|
B. Capitalization
and
Indebtedness
|
4
|
|
C. Reasons
for the Offer and
Use of Proceeds
|
4
|
|
D. Risk
Factors
|
4
|
ITEM
4.
|
INFORMATION
ON THE COMPANY
|
18
|
|
A. History
and Development
of the Company
|
18
|
|
B. Business
Overview
|
20
|
|
C. Organizational
Structure
|
42
|
|
D. Property,
Plants and
Equipment
|
42
|
ITEM
4A.
|
UNRESOLVED
STAFF COMMENTS
|
43
|
ITEM
5.
|
OPERATING
AND FINANCIAL REVIEW AND PROSPECTS
|
43
|
|
A. Operating
Results
|
43
|
|
B. Liquidity
and Capital
Resources
|
59
|
|
C. Research
and Development,
Patents and Licenses
|
61
|
|
D. Trend
Information
|
61
|
|
E. Off-Balance
Sheet
Arrangements
|
62
|
|
F. Tabular
Disclosure of
Contractual Obligations
|
62
|
ITEM
6.
|
DIRECTORS,
SENIOR MANAGEMENT AND EMPLOYEES
|
62
|
|
A. Directors
and Senior
Management
|
62
|
|
B. Compensation
|
66
|
|
C. Board
Practices
|
67
|
|
D. Employees
|
76
|
|
E.
Share
Ownership
|
77
|
ITEM
7.
|
MAJOR
SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|
81
|
|
A. Major
Shareholders
|
81
|
|
B.
Related
Party Transactions
|
84
|
|
C. Interests
of Experts and
Counsel
|
85
|
ITEM
8.
|
FINANCIAL
INFORMATION
|
85
|
|
A. Consolidated
Statements
and Other Financial Information
|
85
|
|
B. Significant
Changes
|
87
|
ITEM
9.
|
THE
OFFER AND LISTING
|
87
|
|
A. Offer
and Listing
Details
|
87
|
|
B. Plan
of
Distribution
|
88
|
|
C. Markets
|
88
|
|
D. Selling
Shareholders
|
88
|
|
E. Dilution
|
89
|
|
F. Expense
of the
Issue
|
89
|
ITEM
10.
|
ADDITIONAL
INFORMATION
|
89
|
|
A. Share
Capital
|
89
|
|
B. Memorandum
and Articles
of Association
|
89
|
|
C. Material
Contracts
|
92
|
|
D. Exchange
Controls
|
92
|
|
E. Taxation
|
92
|
|
F. Dividend
and Paying
Agents
|
103
|
|
G. Statement
by
Experts
|
103
|
|
H. Documents
on
Display
|
103
|
|
I. Subsidiary
Information
|
104
|
ITEM
11.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS
|
104
|
ITEM
12.
|
DESCRIPTION
OF SECURITIES OTHER THAN EQUITY SECURITIES
|
105
|
PART
II
|
105
|
|
ITEM
13.
|
DEFAULTS,
DIVIDEND ARREARAGES AND DELINQUENCIES
|
105
|
ITEM
14.
|
MATERIAL
MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS
|
105
|
ITEM
15.
|
CONTROLS
AND PROCEDURES
|
106
|
ITEM
16.
|
RESERVED.
|
106
|
ITEM
16A.
|
AUDIT
COMMITTEE FINANCIAL EXPERT
|
106
|
ITEM
16B.
|
CODE
OF ETHICS
|
106
|
ITEM
16C.
|
PRINCIPAL
ACCOUNTING FEES AND SERVICES
|
106
|
ITEM
16D.
|
EXEMPTIONS
FROM THE LISTING REQUIREMENTS AND STANDARDS FOR AUDIT
COMMITTEE
|
107
|
ITEM
16E.
|
PURCHASE
OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATES AND
PURCHASERS
|
108
|
PART
III
|
108
|
|
ITEM
17.
|
FINANCIAL
STATEMENTS
|
108
|
ITEM
18.
|
FINANCIAL
STATEMENTS
|
108
|
ITEM
19.
|
EXHIBITS
|
108
|
S
I
G N A T U R E S
|
113
|
Year
Ended December 31,
|
||||||||||||||||
2001
|
2002
|
2003
|
2004
|
2005
|
||||||||||||
(in
thousands, except per share data)
|
||||||||||||||||
Consolidated
Statement of Operations Data:
|
||||||||||||||||
Revenues
|
$
|
46,227
|
$
|
49,095
|
$
|
51,304
|
$
|
64,236
|
$
|
74,012
|
||||||
Cost
of revenues
|
11,036
|
* |
11,574
|
* |
12,270
|
* |
13,880
|
* |
13,110
|
|||||||
Gross
Profit
|
35,191
|
37,521
|
39,034
|
50,356
|
60,902
|
|||||||||||
Operating
expenses:
|
||||||||||||||||
Research
and development
|
17,933
|
15,338
|
14,573
|
17,484
|
20,110
|
|||||||||||
Marketing
and selling
|
16,061
|
* |
17,996
|
* |
19,050
|
* |
23,848
|
* |
24,588
|
|||||||
General
and administrative
|
4,438
|
4,098
|
4,040
|
4,900
|
4,677
|
|||||||||||
Restructuring
costs (income)
|
3,023
|
-
|
(1,061
|
)
|
-
|
-
|
||||||||||
Total
operating expenses
|
41,455
|
37,432
|
36,602
|
46,232
|
49,375
|
|||||||||||
Operating
income (loss)
|
(6,264
|
)
|
89
|
2,432
|
4,124
|
11,527
|
||||||||||
Financial
income, net
|
4,652
|
2,667
|
2,130
|
1,860
|
3,051
|
|||||||||||
Income
before taxes on income
|
$
|
(1,612
|
)
|
$
|
2,756
|
$
|
4,562
|
$
|
5,984
|
14,578
|
||||||
Taxes
on income, net
|
-
|
-
|
-
|
-
|
112
|
|||||||||||
Net
income (loss)
|
$
|
(1,612
|
)
|
$
|
2,756
|
$
|
4,562
|
$
|
5,984
|
$
|
14,690
|
|||||
*
Reclassified
|
Year
Ended December 31,
|
||||||||||||||||
2001
|
2002
|
2003
|
2004
|
2005
|
||||||||||||
(in
thousands, except per share data)
|
Basic
net earnings (loss) per Ordinary share
|
$
|
(0.09
|
)
|
$
|
0.15
|
$
|
0.24
|
$
|
0.30
|
$
|
0.70
|
|||||
Weighted
average number of Ordinary shares used to compute basic net
earnings (loss) per share
|
18,943
|
18,353
|
18,660
|
19,822
|
21,122
|
|||||||||||
Diluted
net earnings (loss) per Ordinary share
|
$
|
(0.09
|
)
|
$
|
0.15
|
$
|
0.23
|
$
|
0.28
|
$
|
0.66
|
|||||
Weighted
average number of Ordinary shares used to compute diluted net earnings
(loss) per share
|
18,943
|
18,983
|
19,963
|
21,399
|
22,215
|
As
at December 31,
|
||||||||||||||||
2001
|
2002
|
2003
|
2004
|
2005
|
||||||||||||
(in
thousands)
|
Consolidated
Balance Sheet Data:
|
||||||||||||||||
Cash
and cash equivalents
|
$
|
6,717
|
$
|
13,825
|
$
|
16,433
|
$
|
20,206
|
$
|
32,927
|
||||||
Working
capital
|
53,377
|
38,158
|
44,411
|
65,395
|
93,175
|
|||||||||||
Total
assets
|
99,767
|
106,671
|
117,012
|
131,882
|
156,748
|
|||||||||||
Shareholders'
equity
|
83,549
|
85,015
|
94,302
|
106,776
|
130,667
|
|||||||||||
·
|
timely
identify new market trends; and
|
·
|
develop,
introduce and support new and enhanced products and technology on
a
successful and timely basis.
|
·
|
benefit
from greater economies of scale;
|
·
|
offer
more aggressive pricing; or
|
·
|
devote
greater resources to the promotion of their products.
|
·
|
difficulty
in combining technology, operations or workforce of the acquired
business;
|
·
|
adverse
effects on our reported operating results due to the amortization
of
intangibles associated with
acquisitions;
|
·
|
diversion
of management attention from running our existing business;
and
|
·
|
increased
expenses, including compensation expenses resulting from newly-hired
employees.
|
·
|
quarterly
variations in our operating results;
|
·
|
operating
results that vary from the expectations of securities analysts and
investors;
|
·
|
changes
in expectations as to our future financial performance, including
financial estimates by securities analysts and investors;
|
·
|
announcements
of technological innovations or new products by us or our competitors;
|
·
|
announcements
by us or our competitors of significant contracts, acquisitions,
strategic
partnerships, joint ventures or capital commitments;
|
·
|
changes
in the status of our intellectual property rights;
|
·
|
announcements
by third parties of significant claims or proceedings against us;
|
·
|
additions
or departures of key personnel;
|
·
|
future
sales of our ordinary shares; and
|
·
|
stock
market price, competitor’s performances and volume fluctuations.
|
·
|
Enable
the Migration of Visual Communications from the Traditional Conference
Room (Videoconferencing) Application to the Desktop, the Home, and
onto
the Road Over IP and Wireless.
We have been working with leading technology vendors such as Cisco
and
Microsoft as well as developing partnerships with broadband and wireless
service providers, to transform videoconferencing from a meeting
room
application to a new mode of personal communication. The announcement
of
our support of Microsoft’s Real Time Communication Server in 2005 and the
integration between the live server of Microsoft and ours, allowing
video
conferencing and data collaboration, was a significant step in this
direction. In 2004, Cisco announced and began deploying desktop video
networks based, in part, on our technology. We have initiated pilots,
based on our Microsoft solution, with enterprise customers around
the
world. 3G operators around the world have performed pilots of our
powered
video telephony and video streaming applications. Our
platforms are key technologies in all of these solutions and we will
continue to work to expand the use of video for communications and
entertainment at the desktop, in the home and over broadband mobile
networks.
|
·
|
Strengthen
and Expand our Relationships with our OEM Customers.
We have established and continue to maintain collaborative working
relationships with many company’s in the IP communication market,
including Aethra, Alcatel, Cisco, Hutchinson, Nokia, Nortel, Samsung,
Siemens and Sony. We work closely with our OEM customers to integrate
our
products and core technology into their solutions. Our core technology
and
our system design expertise enable us to assist these customers in
the
development of complete solutions that contain enhanced features
and
functionality compared to competitive alternatives. We strive to
establish
long-term relationships with our OEM customers by starting with a
few
products and subsequently expanding these relationships by increasing
the
number and range of products sold to these customers. We intend to
expand
the depth and breadth of our existing OEM relationships, while initiating
similar new relationships with other leading OEMs focused on the IP
communication market.
|
·
|
Become
a Key Enabling Technology Solution for IP Communications.
We continue to strive to ensure that our infrastructure solutions
are key
enabling components in larger solution vendors’ portfolios. To that end,
in 2005, we announced the further deepening of our relationships
with
Sony, Cisco and Microsoft and also announced a new OEM relationship
with
Aethra. We also substantially increased the number of telecom equipment
vendors who use our video services platform as part of their larger
solutions.
|
·
|
Continue
to Offer New and Enhanced Products and Features.
We believe that we have consistently been either first, or among
the
first, to market products that support real-time voice, video and
data
communication over packet networks. We were the first-to-market with
IP
gateways that provide combined voice, video and data functionality,
the
first-to-market with software development kits for the development
of
H.323-compliant IP communication products and applications, and the
first
to announce support for SIP (Session Initiation Protocol) in our
infrastructure platform. We were also the first to offer a 3G toolkit
and
3G to IP (H.323 and SIP) bridging. We continue to be active in enhancing
industry standards by improving the call set-up time in video cellular
calls, contributing to Firewall/NAT (network address translation)
traversal standardization (H.460.18/19) and H.248 video enhancements.
We
intend to utilize our technological expertise as a basis for market
leadership by striving to be first-to-market with new and enhanced
products and features that address the increasingly sophisticated
needs of
our customers and the evolving markets they serve. In addition, we
believe
that our participation in the drafting of industry standards gives
us the
ability to quickly identify emerging trends enabling us to develop
new
products and technologies that are at the forefront of technological
evolution in the IP communication
industry.
|
·
|
Deepen
the Distribution Channels for our Products.
We intend to continue to focus our sales and marketing efforts on
deepening the relationship with our distribution channels. Channel
partners provide us feedback from their customers, the end-users
of our
products, which gives us valuable insight into evolving industry
trends
and customer requirements. OEMs, resellers and systems integrators
are all
important channel partners for our products. They provide us with
increased market presence through their distributor relationships
and
existing customer base. In addition, endorsements by key channel
partners
strengthen our brand name awareness.
|
·
|
Leverage
Service Provider Opportunities.
We are working closely with telecom equipment providers, 3G mobile
carriers, and residential IP (wireline) service providers to enable
video
services (both communications and streaming /entertainment) to be
delivered to the home and to mobile devices. In 2005, our 3G products
were
commercially used for the first time. 3G carriers around the world
continued to perform pilots and trials for our video services in
2005 and
we expect that the market will continue to grow into general use
in the
next few years.
|
·
|
Enable
Desktop Conferencing and Communication through Strategic
Partners.
We plan to continue our efforts to maintain our position as a key
enabling
solution provider for major vendors’ activities to drive visual
communication beyond the meeting room and onto the desktop. In this
regard, we intend to strengthen our relationship with Microsoft and
its
sales channels. We also intend to leverage our close relationship
with
Cisco and their efforts in enterprise video telephony by virtue of
our
Cisco AVVID (Architecture for Voice and Video Integrated Data)
certification that we attained in early 2004 for certain products,
such as
MCUs (multipoint conferencing units) and Gateways, and
the integration of such products into Cisco’s MeetingPlace collaboration
product.
|
·
|
Continue
our Active Involvement in Shaping Industry Standards for IP
Communication.
We actively participate in and contribute to the formulation of standards
for IP communication. We intend to continue our active involvement
in the
organizations that define the standards for real-time communication
over
next generation packet networks. Our knowledge and expertise gained
in
participating in the development of these industry standards should
enable
us to continue to be among the first to market our products and technology
based on new standards adopted. We work to continually improve, enhance
and expand our core competency in real time IP communication protocols
including H.323, SIP, MGCP, MEGACO and IMS (IP multimedia subsystem).
Because of our involvement in defining these IP communication standards,
we believe that we are well-positioned to quickly develop enhanced
functionality and new products based on multiple
protocols.
|
·
|
Gateways
- Provide videoconferencing interoperability between IP, circuit-switched
ISDN and next generation 3G end points and
networks.
|
·
|
Gatekeepers
- Control, manage, and monitor real-time voice, video and data traffic
over the visual communication
networks.
|
·
|
Conferencing
Bridges (or multipoint conferencing units, or MCUs) - Enable voice
or
multimedia conferencing over packet and ISDN networks among three
or more
participants.
|
·
|
Data
Collaboration Servers, or DCS - Enable conference participants to
collaborate and share applications. The DCS allows users to view
diagrams,
graphic presentations and slide lectures simultaneously with other
videoconferencing participants. It also makes possible text chats,
whiteboard exchanges, and rapid file transfers during multipoint
videoconferences of three or more
participants.
|
·
|
Pathfinder
- A firewall/NAT (network address translation) traversal solution
to
enable endpoints in different enterprises to communicate with each
other
across their firewall and NAT
devices.
|
·
|
The
CTM solution consists of the following
components:
|
·
|
Conference
Server - a software based MCU (multipoint conferencing unit) that
is
highly scalable.
|
·
|
Conference
Manager - a conference management server that registers users and
sets up
conferences using Microsoft Active Directory
services.
|
·
|
Conference
Client - a web-based client that provides the video-collaboration
environment on the PC.
|
·
|
Video
telephony and conferencing
|
·
|
PC
to mobile video telephony
|
·
|
Video
mail, video messaging
|
·
|
Multimedia
content streaming (television, movies,
etc.)
|
·
|
Video
call centers
|
·
|
Remote
surveillance and reporting
|
·
|
Live
entertainment and communications services
|
·
|
capability
to run the same tests on the application each time the underlying
protocol
version is upgraded;
|
·
|
flexibility
to mix and match scenarios to develop a broad range of testing
possibilities; and
|
·
|
ability
to define numerous scripts and scale up the test scenario by linking
them
as the test plan progresses.
|
·
|
an
increasing need for enterprises to expand their networks to enable
them to
send, access and receive information quickly, economically and globally;
|
·
|
an
increasing use of the Internet and other packet networks for communicating
and engaging in commercial transactions;
|
·
|
an
increase in available bandwidth at declining prices;
|
·
|
the
introduction of new voice, video and data communication services
and
applications;
|
·
|
the
dramatic growth of wireless and broadband mobile networks and the
interest
by consumers to use WiFi and 3G-based devices and networks for new
multimedia services such as video streaming and video
telephony;
|
·
|
the
increasing focus by both major vendors, such as Cisco and Microsoft,
and
IT managers to deploy IP-based multimedia communications to employee
desktops; and
|
·
|
the
emergence of low cost, high quality IP communications devices that
enable
people, both in business and in every day life, to communicate more
effectively and access real-time video over broadband mobile or
residential IP or 3G connections.
|
·
|
The
growth in complexity of the SIP standard which is making in-house
SIP
development by potential customers a more difficult
task.
|
·
|
The
introduction of the IMS next generation network architecture for
both
fixed and wireless operators that mandate SIP as its primary signaling
protocol. Furthermore, IMS SIP (also known as 3GPP SIP) introduces
additional challenges and complexities that were not handled by the
IETF
SIP.
|
·
|
cost-effective
increases in capacity to meet increasing communication traffic demands;
|
·
|
support
for new communication applications, like video conferencing and data
collaboration, for improved workforce productivity;
|
·
|
interoperability
with different network configurations of their customers, suppliers
and
partners; and
|
·
|
cost
savings associated with simplified network management resulting from
creating a single network that handles all communication, rather
than
having to maintain separate telephone and computer networks.
|
Aethra
Ltd
Alcatel
Ltd
Broadreach
Cisco
Comneon
Computer
Assets
Comverse
Conference
Solutions
Counter
Trade
ECI
Emblaze
-Vcon
France
Telecom
|
Glovicom
GS
Plus
Huawei
IPC
Iwatsu
Kelyan
Lab
LG
Logical
CMG
Merck
& Co.
Motorola
MSTEL
Corporation
Nortel
|
Northrop
Grumman
NTT
Oracle
Presidio
Shenzhen
SunLong Communication
Siemens
Sony
Spirent
SVA
Telefonica
TIM
|
·
|
the
ITU-T (International Telecommunication Union - Telecommunication),
which
has published the H.323 and MEGACO standards;
|
·
|
IETF
(Internet Engineering Task Force), which has published the SIP and
MEGACO
standards;
|
·
|
CableLabs,
an organization of cable operators, which is currently working on
defining
the MGCP (media gateway control protocol) standard;
|
·
|
IMTC
(International Multimedia Telecommunications Consortium), a global
organization to promote interoperable multimedia communication solutions
based on international standards;
|
·
|
We
regularly participate in IMTC-sponsored InterOP (Interoperability)
events,
a vendor-neutral forum where IMTC members test the interoperability
of
their products; and
|
·
|
3GPP
(3rd Generation Partnership Project), which develops the IMS standards.
|
Networking
Products
|
Software
development kits
|
|
· Polycom
Networks, a division of Polycom Inc.
· Tandberg
· Codian
Ltd.
· Arel
In
the 3G market:
· Ericsson
· Dilithium
Networks
· NMS
Communications
|
· Trillium
Digital Systems, acquired by Continuous Computing.
· Hughes
Software Systems, acquired by Flextronix Software Systems
· Data
Connection Limited
· Dilithium
Networks
· Netbrics
· Open
source developers and In-house developers employed by manufacturers
of
telecommunication equipment and
systems
|
·
|
Persuasive
evidence of an arrangement exists. We require evidence of an
agreement with a customer specifying the terms and conditions of
the
products or services to be delivered typically in the form of a signed
contract or statement of work accompanied by a purchase
order.
|
·
|
Delivery
has occurred. For software licenses, delivery takes place when the
customer is given access to the software programs via access to a
web site
or shipped medium. For services, delivery takes place as the services
are
provided.
|
·
|
The
fee is fixed or determinable. Fees are fixed or determinable if they
are not subject to a refund or cancellation and do not have payment
terms
that exceed our standard payment terms. Typical payment terms are
between
net 30 days to net 90 days
with an average of net
49 days.
|
·
|
Collection
is probable. We perform a credit review of all customers with
significant transactions to determine whether a customer is credit
worthy
and collection is probable.
|
December
31,
|
||||||||||
2003
|
2004
|
2005
|
||||||||
Revenues
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||
Cost
of revenues
|
23.9
|
* |
21.6
|
* |
17.7
|
|||||
Gross
profit
|
76.1
|
78.4
|
82.3
|
|||||||
Operating
expenses:
|
||||||||||
Research
and development
|
28.4
|
27.3
|
27.2
|
|||||||
Marketing
and selling
|
37.1
|
* |
37.1
|
* |
33.2
|
|||||
General
and administrative
|
7.9
|
7.6
|
6.3
|
|||||||
Restructuring
income
|
(2.1
|
)
|
-
|
-
|
||||||
Total
operating expenses
|
71.3
|
72.0
|
66.7
|
|||||||
Operating
income
|
4.8
|
6.4
|
15.6
|
|||||||
Financial
income, net
|
4.1
|
2.9
|
4.1
|
|||||||
Taxes
on income
|
-
|
-
|
(0.1
|
)
|
||||||
Net
income
|
8.9
|
%
|
9.3
|
%
|
19.8
|
%
|
|
Mar.
31, 2004
|
|
|
|
June
30, 2004
|
|
|
|
Sept.
30,
2004
|
|
|
|
Dec.
31, 2004
|
Mar.
31, 2005
|
June
30,
2005
|
Sept.
30,
2005
|
Dec.
31, 2005
|
||||||||||||
Revenues
|
$
|
14,261
|
$
|
15,705
|
$
|
16,708
|
$
|
17,562
|
$
|
16,280
|
$
|
17,473
|
$
|
19,089
|
$
|
21,170
|
|||||||||||||
Cost
of revenues
|
3,285
|
* |
3,575
|
*
|
3,630
|
*
|
3,390
|
* |
2,776
|
3,103
|
3,401
|
3,830
|
|||||||||||||||||
Gross
profit
|
10,976
|
12,130
|
13,078
|
14,172
|
13,504
|
14,370
|
15,688
|
17,340
|
|||||||||||||||||||||
Operating
expenses:
|
|||||||||||||||||||||||||||||
Research
and development
|
3,780
|
4,282
|
4,883
|
4,539
|
4,655
|
5,054
|
5,171
|
5,230
|
|||||||||||||||||||||
Marketing
and selling
|
5,649
|
* |
5,950
|
* |
6,101
|
* |
6,148
|
* |
5,757
|
6,006
|
6,165
|
6,660
|
|||||||||||||||||
General
and administrative
|
1,240
|
1,210
|
1,213
|
1,237
|
1,159
|
1,152
|
1,165
|
1,201
|
|||||||||||||||||||||
Operating
income
|
307
|
688
|
881
|
2,248
|
1,933
|
2,158
|
3,187
|
4,249
|
|||||||||||||||||||||
Financial
income, net
|
412
|
432
|
500
|
516
|
561
|
768
|
774
|
948
|
|||||||||||||||||||||
Taxes
on income
|
-
|
-
|
-
|
-
|
-
|
(30
|
)
|
(11
|
)
|
153
|
|||||||||||||||||||
Net
income
|
$
|
719
|
$
|
1,120
|
$
|
1,381
|
$
|
2,764
|
$
|
2,494
|
$
|
2,896
|
$
|
3,950
|
$
|
5,350
|
|||||||||||||
As
a percentage of revenues:
|
|||||||||||||||||||||||||||||
Revenues
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
|||||||||||||
Cost
of revenues
|
23
|
23
|
22
|
19
|
17
|
18
|
18
|
18
|
|||||||||||||||||||||
Gross
profit
|
77
|
77
|
78
|
81
|
83
|
82
|
82
|
82
|
|||||||||||||||||||||
Operating
expenses:
|
|||||||||||||||||||||||||||||
Research
and development
|
27
|
27
|
29
|
26
|
29
|
29
|
27
|
25
|
|||||||||||||||||||||
Marketing
and selling
|
40
|
38
|
37
|
35
|
35
|
34
|
32
|
31
|
|||||||||||||||||||||
General
and administrative
|
8
|
8
|
7
|
7
|
7
|
7
|
6
|
6
|
|||||||||||||||||||||
Operating
income
|
2
|
4
|
5
|
13
|
12
|
12
|
17
|
20
|
|||||||||||||||||||||
Financial
income, net
|
3
|
3
|
3
|
3
|
3
|
4
|
4
|
4
|
|||||||||||||||||||||
Taxes
on income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1
|
|||||||||||||||||||||
Net
income
|
5
|
%
|
7
|
%
|
8
|
%
|
16
|
%
|
15
|
%
|
16
|
%
|
21
|
%
|
25
|
%
|
Year
ended
December
31,
|
Israeli
inflation rate %
|
Israeli
devaluation
rate
%
|
Israeli
inflation adjusted for devaluation %
|
|||
2001
|
|
1.4
|
|
9.3
|
|
(7.8)
|
2002
|
|
6.5
|
|
7.3
|
|
(0.8)
|
2003
|
|
(1.9)
|
|
(7.6)
|
|
5.8
|
2004
|
|
1.2
|
|
(1.6)
|
|
2.8
|
2005
|
|
2.4
|
|
6.8
|
|
(4.3)
|
Contractual Obligations |
Payments
due by period
|
|||||||||||||||
Total
|
|
|
less
than 1 year
|
|
|
3-5
years
|
|
|
3-5
years
|
|
|
more
than 5 years
|
||||
Operating
lease obligations
|
$
|
8,224,000
|
$
|
2,710,000
|
$
|
3,488,000
|
$
|
2,026,000
|
$
|
-
|
||||||
Accrued
severance pay
|
3,643,000
|
-
|
-
|
-
|
3,643,000
|
|||||||||||
Total
|
$
|
11,867,000
|
$
|
2,710,000
|
$
|
3,489,000
|
$
|
2,025,000
|
$
|
3,643,000
|
Name
|
Age
|
Position
|
||
Zohar
Zisapel
|
57
|
Chairman
of the Board of Directors
|
||
Boaz
Raviv
|
46
|
Chief
Executive Officer
|
||
Eli
Doron
|
53
|
President
|
||
Tsipi
Kagan
|
40
|
Chief
Financial Officer
|
||
Joseph
Atsmon
|
57
|
Director
|
||
Dan
Barnea
|
60
|
Director
|
||
Liora
Katzenstein
|
50
|
Director
|
||
Andreas
Mattes
|
45
|
Director
|
||
Efraim
Wachtel
|
61
|
Director
|
Name
|
Age
|
Position
|
||
Killko
Caballero
|
47
|
Senior
Vice President of Enterprise Strategy
|
||
Irit
Machtey
|
50
|
Senior
Vice President Organization & Human Resources
|
||
Arnie
Taragin
|
49
|
Corporate
Vice President and General Counsel
|
||
Robert
Rickwood
|
55
|
General
Manager, Europe, Middle East and Africa
|
||
Eitan
Levine
|
42
|
General
Manager, Asia-Pacific
|
||
Ron
Bleakney
|
61
|
General
Manager, the Americas
|
Name
and Principal Position
|
Salaries,
fees, commissions and bonuses
|
Pension,
retirement and other similar benefits
|
All
officers and directors as a group
|
$731,000
|
$88,000
|
·
|
a
breach of the office holder’s duty of care to us or to another person;
|
·
|
a
breach of the office holder’s duty of loyalty to us, provided that the
office holder acted in good faith and had reasonable cause to assume
that
his or her act would not prejudice our company’s interests;
or
|
·
|
a
financial liability imposed upon the office holder in favor of another
person in respect of an act performed by him in his capacity as an
office
holder.
|
·
|
a
financial liability imposed on the office holder in favor of another
person by any judgment, including a settlement or an arbitrator's
award
approved by a court;
|
·
|
reasonable
litigation expenses, including attorney’s fees, actually incurred by the
office holder as a result of an investigation or proceeding instituted
against him or her by a competent authority, provided that such
investigation or proceeding concluded without the filing of an indictment
against the office holder or the imposition of any financial liability
in
lieu of criminal proceedings, or concluded without the filing of
an
indictment against the office holder and a financial liability was
imposed
on the officer holder in lieu of criminal proceedings with respect
to a
criminal offense that does not require proof of criminal intent;
and
|
·
|
reasonable
litigation expenses, including attorneys' fees, incurred by such
office
holder or which were imposed on him by a court, in proceedings we
instituted against him or instituted on our behalf or by another
person,
or in a criminal charge from which he was acquitted, all in respect
of an
act performed in his capacity as an office holder.
|
·
|
Prospectively
undertake to indemnify an office holder, provided that the undertaking
is
limited to types of events, which, in the opinion of the company’s board
of directors, are, at the time of the undertaking, foreseeable due
to the
company's activities and to an amount or standard that the board
of
directors has determined is reasonable under the
circumstances.
|
·
|
Retroactively
indemnify an office holder of our
company.
|
·
|
a
breach by the office holder of his duty of loyalty unless, with respect
to
insurance coverage or indemnification, the office holder acted in
good
faith and had a reasonable basis to believe that the act would not
prejudice the company;
|
·
|
a
breach by the office holder of his duty of care if such breach was
committed intentionally or recklessly, unless the breach was committed
only negligently.
|
·
|
any
act or omission done with the intent to unlawfully yield a personal
benefit; or
|
·
|
any
fine imposed on the office holder.
|
Name
|
Number
of ordinary shares (1)
|
Percentage
of outstanding ordinary shares (2)
|
||
Zohar
Zisapel
|
2,260,079(3)
|
10.16%
|
||
Boaz
Raviv
|
*
|
*
|
||
Eli
Doron
|
*
|
*
|
||
Tsipi
Kagan
|
*
|
*
|
||
Joseph
Atsmon
|
*
|
*
|
||
Dan
Barnea
|
*
|
*
|
||
Liora
Katzenstein
|
*
|
*
|
||
Andreas
Mattes
|
*
|
*
|
||
Efraim
Wachtel
|
*
|
*
|
(1)
|
Beneficial
ownership is determined in accordance with the rules of the Securities
and
Exchange Commission and generally includes voting or investment power
with
respect to securities. Ordinary shares relating to options currently
exercisable or exercisable within 60 days of the date of this annual
report are deemed outstanding for computing the percentage of the
person
holding such securities but are not deemed outstanding for computing
the
percentage of any other person. Except as indicated by footnote,
and
subject to community property laws where applicable, the persons
named in
the table above have sole voting and investment power with respect
to all
shares shown as beneficially owned by
them.
|
(2)
|
The
percentages shown are based on 22,165,272 ordinary shares issued
and
outstanding as of March
27,
2006.
|
(3)
|
Includes
(i) 1,180,554 ordinary shares owned of record by Mr. Zohar Zisapel;
(ii)
75,000 ordinary shares issuable upon the exercise of currently exercisable
options granted to Mr. Zohar Zisapel, of which options to purchase
30,000
ordinary shares have an exercise price of $6.1563 per share and expire
in
June 2011 and options to purchase 45,000 ordinary shares have an
exercise
price of $5.085 per share and expire in June 2012; (iii) 306,456
ordinary
shares owned of record by Lomsha Ltd., an Israeli company controlled
by
Mr. Zohar Zisapel; (iv) 310,856 ordinary shares owned of record by
Michael
and Klil Holdings (93) Ltd., an Israeli company controlled by Mr.
Zohar
Zisapel; and (v) 387,213 ordinary shares owned of record by RAD Data
Communications Ltd., an Israeli company. Mr. Zohar Zisapel is a principal
shareholder and Chairman of the Board of Directors of RAD Data
Communications Ltd. Mr. Zohar Zisapel and his brother, Mr. Yehuda
Zisapel,
have shared voting and dispositive power with respect to the shares
held
by RAD Data Communications Ltd.
|
·
|
the
persons to whom such awards are
granted;
|
·
|
the
form, terms and conditions of the written stock option agreement
evidencing the option, including the type of option and the number
of
shares to which it pertains, the option price, the option period
and its
vesting schedule, and exercisability of the option in special cases
(such
as death, retirement, disability and change of control); and
|
·
|
the
form and provisions of the notice of exercise and payment of the
option.
|
·
|
nominate
a trustee for options issued under Section 102 of the Israeli Tax
Ordinance;
|
·
|
adjust
any or all of the number and type of shares that thereafter may be
made
the subject of options, the number and type of shares subject to
outstanding options, and the grant or exercise price with respect
to any
option, or, if deemed appropriate, make provision for a cash payment
to
the holder of any outstanding option in order to prevent dilution
or
enlargement of the benefits or potential benefits intended to be
made
available under the Option Plans in the event of any dividend or
other
distribution, recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of shares or other
securities;
|
·
|
interpret
the provisions of the Option Plans;
and
|
·
|
prescribe,
amend, and rescind rules and regulations relating to the Option Plans
or
any award there under as it may deem necessary or
advisable.
|
Year
ended December 31,
|
|||||||||||||||||||
2003
|
2004
|
2005
|
|||||||||||||||||
Amount
|
Weighted
average
exercise
price
|
Amount
|
Weighted
average
exercise
price
|
Amount
|
Weighted
average
exercise
price
|
||||||||||||||
Options
outstanding at the beginning of the year
|
4,410,936
|
(1)
|
$
|
6.99
|
4,754,856
|
(2)
|
$
|
7.98
|
4,295,742
|
(3)
|
$
|
9.41
|
|||||||
Granted
|
1,749,700
|
$
|
8.19
|
1,521,750
|
$
|
11.61
|
1,557,100
|
$
|
13.01
|
||||||||||
Exercised
|
(1,072,919
|
)
|
$
|
4.25
|
(1,224,169
|
)
|
$
|
5.31
|
(1,234,979
|
)
|
$
|
7.42
|
|||||||
Forfeited
|
(332,861
|
)
|
$
|
7.96
|
(756,695
|
)
|
$
|
11.47
|
(1,095,040
|
)
|
$
|
11.91
|
|||||||
Options
outstanding at the end of the year
|
4,754,856
|
(2)
|
$
|
7.98
|
4,295,742
|
(3)
|
$
|
9.41
|
3,522,823
|
(4)
|
$
|
10.91
|
|||||||
Options
exercisable at the end of the year
|
1,610,343
|
$
|
8.99
|
1,456,032
|
$
|
9.92
|
959,532
|
$
|
9.11
|
||||||||||
Options
that may be granted as of the end of the year
|
50,098
|
60,333
|
374,435
|
(1)
|
Including
options to purchase 832,500 ordinary shares granted to directors
of our
company and our former chief executive office outside of the Option
Plans,
pursuant to the approval of our shareholders.
|
(2)
|
Including
options to purchase 862,500 ordinary shares granted to directors
of our
company and our former chief executive office outside of the Option
Plans,
pursuant to the approval of our
shareholders.
|
(3)
|
Including
options to purchase 728,750 ordinary shares granted to directors
of our
company and our former chief executive office outside of the Option
Plans,
pursuant to the approval of our shareholders.
|
(4)
|
Including
options to purchase 261,875 ordinary shares granted to directors
of our
company and our former chief executive office outside of the Option
Plans,
pursuant to the approval of our shareholders.
|
Name
|
Number
of ordinary shares beneficially owned (1)
|
Percentage
of outstanding ordinary shares
(2)
|
||
Zohar
Zisapel
|
2,260,079
(3)
|
10.16%
|
||
Yehuda
Zisapel
|
1,233,605
(4)
|
5.57%
|
||
Saranac
Capital Management LP
|
1,444,299
(5)
|
6.52%
|
(1)
|
Beneficial
ownership is determined in accordance with the rules of the Securities
and
Exchange Commission and generally includes voting or investment power
with
respect to securities. Ordinary shares relating to options currently
exercisable or exercisable within 60 days of the date of this annual
report are deemed outstanding for computing the percentage of the
person
holding such securities but are not deemed outstanding for computing
the
percentage of any other person. Except as indicated by footnote,
and
subject to community property laws where applicable, the persons
named in
the table above have sole voting and investment power with respect
to all
shares shown as beneficially owned by
them.
|
(2)
|
The
percentages shown are based on 22,165,272 ordinary shares issued
and
outstanding as of March
27, 2006.
|
(3)
|
Includes
(i) 1,180,554 ordinary shares owned of record by Mr. Zohar Zisapel;
(ii)
75,000 ordinary shares issuable upon the exercise of currently exercisable
options granted to Mr. Zohar Zisapel, of which options to purchase
30,000
ordinary shares have an exercise price of $6.1563 per share and expire
in
June 2011 and options to purchase 45,000 ordinary shares have an
exercise
price of $5.085 per share and expire in June 2012; (iii) 306,456
ordinary
shares owned of record by Lomsha Ltd., an Israeli company controlled
by
Mr. Zohar Zisapel; (iv) 310,856 ordinary shares owned of record by
Michael
and Klil Holdings (93) Ltd., an Israeli company controlled by Mr.
Zohar
Zisapel; and (v) 387,213 ordinary shares owned of record by RAD Data
Communications Ltd., an Israeli company. Mr. Zohar Zisapel is a principal
shareholder and Chairman of the Board of Directors of RAD Data
Communications Ltd. Mr. Zohar Zisapel and his brother, Mr. Yehuda
Zisapel,
have shared voting and dispositive power with respect to the shares
held
by RAD Data Communications Ltd.
|
(4)
|
Includes
(i) 846,392 ordinary shares owned of record by Mr. Yehuda Zisapel;
and
(ii) 387,213 ordinary shares owned of record by RAD Data Communications
Ltd., an Israeli company. Mr. Yehuda Zisapel is a principal shareholder
and a director of RAD Data Communications Ltd. Mr. Yehuda Zisapel
and his
brother, Mr. Zohar Zisapel, have shared voting and dispositive power
with
respect to the shares held by RAD Data Communications Ltd.
|
(5)
|
Based
solely upon, and qualified in its entirety with reference to, a Schedule
13G/A filed with the Securities and Exchange Commission on February
14,
2006. The Schedule 13G/A reflects that Saranac Capital Management
GP LLC
is the general partner of Saranac Capital Management LP and, in such
capacity, may be deemed to have investment discretion over and be
the
beneficial owner of securities held for the account of Saranac Capital
Management LP. Mr. Ross Margolies, in his capacity as the managing
member
of Saranac Capital Management GP LLC, may be deemed to have investment
discretion over, and may be deemed to be the beneficial owner of,
securities held for the account of Saranac Capital Management LP,
in
addition to 20,012 ordinary shares held for the benefit of members
of his
family.
|
AB-NET Ltd.
Axerra
Networks Inc.
BYNET
Data Communication Ltd.
BYNET
Electronics Ltd.
BYNET
Properties Ltd.
BYNET
SEMECH Outsourcing Ltd.
BYNET
Systems Applications Ltd.
BYNET
Personal Computers Ltd.
|
Ceragon
Networks Ltd.
RAD-BYNET
Properties and Services (1981) Ltd.
Modules
INC.
RAD
Data Communication Ltd.
RAD-OP
Inc.
E-BEAT
Software and Internet Services Ltd.
|
RADWARE Ltd.
RADCOM Ltd.
RADWIN Ltd.
RIT
Technologies Ltd.
Sanrad
Inc.
SILICOM Ltd.
WISAIR
Inc.
QOS
Ltd.
|
Year
ended December 31,
|
||||||||||
2003
|
2004
|
2005
|
||||||||
Revenues
(1)
|
$
|
-
|
$
|
214
|
$
|
103
|
||||
Cost
of revenues (3)
|
$
|
66
|
$
|
39
|
$
|
16
|
||||
Research
and development expenses (2)
|
$
|
379
|
$
|
143
|
$
|
81
|
||||
Marketing,
selling, general and administrative expenses (2)
|
$
|
207
|
$
|
455
|
$
|
441
|
||||
Purchase
of property and equipment (4)
|
$
|
530
|
$
|
624
|
$
|
665
|
NASDAQ
National Market
|
Tel
Aviv Stock Exchange
|
||||||||||||
Year
|
High
|
|
|
Low
|
|
|
High
|
Low
|
|||||
2001
|
$
|
16.25
|
$
|
5.02
|
-
|
-
|
|||||||
2002
|
$
|
7.90
|
$
|
4.05
|
$
|
5.95
|
$
|
4.70
|
|||||
2003
|
$
|
13.26
|
$
|
5.05
|
$
|
12.97
|
$
|
5.30
|
|||||
2004
|
$
|
16.00
|
$
|
9.05
|
$
|
15.72
|
$
|
9.17
|
|||||
2005
|
$
|
18.05
|
$
|
9.96
|
$
|
18.40
|
$
|
10.04
|
NASDAQ
National Market
|
Tel
Aviv Stock Exchange
|
||||||||||||
|
|
|
High
|
Low
|
High
|
Low
|
|||||||
2004
|
|
|
|||||||||||
First
Quarter
|
$
|
16.00
|
$
|
11.20
|
$
|
15.72
|
$
|
10.61
|
|||||
Second
Quarter
|
$
|
14.00
|
$
|
10.13
|
$
|
13.78
|
$
|
10.20
|
|||||
Third
Quarter
|
$
|
12.76
|
$
|
9.09
|
$
|
12.28
|
$
|
9.32
|
|||||
Fourth
Quarter
|
$
|
13.91
|
$
|
9.05
|
$
|
13.23
|
$
|
9.17
|
|||||
2005
|
|||||||||||||
First
Quarter
|
$
|
15.17
|
$
|
12.15
|
$
|
15.31
|
$
|
11.83
|
|||||
Second
Quarter
|
$
|
14.87
|
$
|
9.96
|
$
|
13.87
|
$
|
10.01
|
|||||
Third
Quarter
|
$
|
13.71
|
$
|
11.06
|
$
|
13.65
|
$
|
11.09
|
|||||
Fourth
Quarter
|
$
|
18.05
|
$
|
12.50
|
$
|
18.40
|
$
|
12.85
|
NASDAQ
National Market
|
Tel
Aviv Stock Exchange
|
||||||||||||
High
|
Low
|
High
|
Low
|
||||||||||
2005
|
|||||||||||||
September
|
$
|
13.71
|
$
|
11.37
|
$
|
13.62
|
$
|
11.47
|
|||||
October
|
$
|
14.21
|
|
$
|
12.50
|
$
|
13.99
|
$
|
12.81
|
||||
November
|
$
|
17.15
|
$
|
14.15
|
$
|
16.83
|
|
$
|
13.13
|
||||
December
|
$
|
18.05
|
$
|
16.23
|
$
|
18.19
|
$
|
16.24
|
|||||
2006
|
|
||||||||||||
January
|
$
|
19.27
|
$
|
16.60
|
$
|
19.38
|
$
|
15.99
|
|||||
February
|
$
|
21.40
|
$
|
17.91
|
$
|
20.30
|
$
|
17.90
|
Percent
of Foreign
Ownership
|
Rate
of Reduced
Tax
|
Reduced
Tax Period
|
Tax
Exemption Period
|
|||
0-25%
|
25%
|
5
years
|
2
years
|
|||
25-49%
|
25%
|
8
years
|
2
years
|
|||
49-74%
|
20%
|
8
years
|
2
years
|
|||
74-90%
|
15%
|
8
years
|
2
years
|
|||
90-100%
|
10%
|
8
years
|
2
years
|
·
|
amortization
of purchases of acquired technology and patents over an eight-year
period
for tax purposes;
|
·
|
amortization
of specified expenses incurred in connection with a public issuance
of
securities over a three-year period for tax
purposes;
|
·
|
right
to elect, under specified conditions, to file a consolidated tax
return
with additional related Israeli Industrial Companies;
and
|
·
|
accelerated
depreciation rates on equipment and buildings.
|
·
|
broker-dealers,
|
·
|
financial
institutions,
|
·
|
certain
insurance companies,
|
·
|
regulated
investment companies or real estate investment
trusts;
|
·
|
investors
liable for alternative minimum tax,
|
·
|
tax-exempt
organizations,
|
·
|
non-resident
aliens of the U.S. or taxpayers whose functional currency is not
the U.S.
dollar,
|
·
|
persons
who hold the ordinary shares through partnerships or other pass-through
entities,
|
·
|
persons
who acquire their ordinary shares through the exercise or cancellation
of
employee stock options or otherwise as compensation for
services,
|
·
|
investors
that actually or constructively own 10% or more of our voting shares,
and
|
·
|
investors
holding ordinary shares as part of a straddle or appreciated financial
position or a hedging or conversion
transaction.
|
·
|
an
individual who is a citizen or, for U.S. federal income tax purposes,
a
resident of the United States;
|
·
|
a
corporation created or organized in or under the laws of the United
States
or any political subdivision
thereof;
|
·
|
an
estate whose income is subject to U.S. federal income tax regardless
of
its source; or
|
·
|
a
trust that (a) is subject to the primary supervision of a court within
the
United States and the control of one or more U.S. persons or (b)
has a
valid election in effect under applicable U.S. Treasury regulations
to be
treated as a U.S. person.
|
·
|
you
would be required to allocate income recognized upon receiving certain
dividends (an “excess distribution”) or gain recognized upon the
disposition of ordinary shares ratably over the holding period for
such
ordinary shares,
|
·
|
the
amount allocated to each year during which we are considered a PFIC
and
subsequent years, other than the year of the dividend payment or
disposition, would be subject to tax at the highest individual or
corporate tax rate, as the case may be, and an interest charge would
be
imposed with respect to the resulting tax liability allocated to
each such
year,
|
·
|
the
amount allocated to the current taxable year and any taxable year
before
we became a PFIC would be taxable as ordinary income in the current
year,
and
|
·
|
you
would be required to make an annual return on IRS Form 8621 regarding
distributions received with respect to ordinary shares and any gain
realized on your ordinary shares.
|
Year
ended December 31,
|
|||||||
Services Rendered |
2004
|
2005
|
|||||
Audit
(1)
|
$
|
91,500
|
$
|
159,000
|
|||
Tax
(2)
|
25,000
|
$
|
34,000
|
||||
Other
(3)
|
7,000
|
$
|
10,500
|
||||
Total
|
$
|
123,500
|
$
|
203,500
|
(1)
|
Audit
fees relate to services that would normally be provided in connection
with
statutory and regulatory filings or engagements, including services
that
generally only the independent accountant can reasonably
provide.
|
(2) | Tax fees relate to services performed by the tax division for tax compliance, planning, and advice. |
(3) | Other fees include fees for consulting services rendered to us, mainly with respect to implementation of incentive laws in Israel. |
Index to Consolidated Financial Statements |
F-1
|
Report of Independent Registered Public Accounting Firm |
F-2
|
Consolidated Balance Sheets |
F-3
|
Consolidated Statements of Income |
F-4
|
Statements of Changes in Shareholders' Equity |
F-5
|
Consolidated Statements of Cash Flows |
F-6
- F-7
|
Notes to Consolidated Financial Statements |
F-8
- F-34
|
Schedule II |
112
|
Exhibit | Description | ||
1.1
|
Memorandum
of Association of the Registrant
(1)
|
||
1.2
|
Articles of Association of the Registrant(1) | ||
1.3
|
Amendment to Articles of Association of the Registrant |
2.1 | Form of Ordinary Share Certificate(1) | ||
4.1 | Agreement, dated as of April 14, 1995, by and among Registrant, RAD Data Communication Ltd. and Yehuda Zisapel and Zohar Zisapel(1) | ||
4.2 | Agreement, dated as of April 18, 1995, by and among Registrant, Clal Venture Capital Fund LP and Yehuda Zisapel and Zohar Zisapel(1) | ||
4.3 | Agreement, dated as of April 18, 1995, by and among Registrant, Lannet Data Communication Ltd. and Yehuda Zisapel and Zohar Zisapel(1) | ||
4.4 | Agreement, dated as of April 19, 1995, by and among Registrant, ECI Telecom Ltd. and Yehuda Zisapel and Zohar Zisapel(1) | ||
4.5
|
Agreement, dated as of April 24, 1995, by and among Registrant, Zohar Gilon, Avraham Neuman, Yair Tauman and W.S.P. Capital Investment Ltd., and Yehuda Zisapel and Zohar Zisapel(1) | ||
4.6 | Agreement, dated as of April 26, 1995, by and among Registrant, Lerosh Investments Ltd., Gevahim Investments House Limited Ltd., Yoav Chelouche, Permal Emerging Growth V Ltd., Maritime—Julex Investment Ltd., Shraga Blazer and Eli Luz and Yehuda Zisapel and Zohar Zisapel(1) | ||
4.7
|
Agreement, dated as of April 27, 1995, by and among Registrant, Finovelec, Factory Systemes, Houston Venture Partners, Ltd. and Yehuda Zisapel and Zohar Zisapel(1) | ||
4.8 | Agreement, dated September 12, 1996, by and among Registrant and Intel Corporation, as amended(1) | ||
4.9 | Agreement, dated May 12, 1998, by and among Registrant, Evergreen Canada Israel Management Ltd., IJT Technologies Ltd., Periscope I Fund Israeli Partnership, Dovrat Shrem Trust Company Ltd., Rubin Gruber, C.E. Unterberg, Towbin LLC, C.E. Unterberg, Towbin Private Equity Partners LP, C.E. Unterberg, Towbin Private Equity Partners CV, C.E. Unterberg, Private Profit Sharing Plan FBO Alex Bernstein and Steimatzsky Ltd. (1) | ||
4.10 | Form of 2000 Employee Stock Option Plan(2) | ||
4.11 | Key Employee Share Incentive Plan, as amended(1) | ||
4.12 | Consultant Option Plan, as amended(1) | ||
6 | Statements regarding computation of per share earnings |
8. | List of Subsidiaries of the Registrant | ||
12.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended | ||
12.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended | ||
13.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
13.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
15.1 | Consent of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global |
(1) | Filed as an exhibit to our registration statement on Form F-1, registration number 333-30916, as amended, filed with the Securities and Exchange Commission, and incorporated herein by reference. | ||
(2) | Filed as an exhibit to our Annual Report on Form 10-K for the fiscal year ended December 31, 2001, filed with the Securities and Exchange Commission, and incorporated herein by reference. |
Page
|
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated
Balance Sheets
|
F-3
|
Consolidated
Statements of Income
|
F-4
|
Statements
of Changes in Shareholders' Equity
|
F-5
|
Consolidated
Statements of Cash Flows
|
F-6
- F-7
|
Notes
to Consolidated Financial Statements
|
F-8
- F-34
|
Tel-Aviv, Israel | |
|
February 7, 2006 | /s/ Kost Forer Gabbay and Kasierer | |
KOST
FORER GABBAY & KASIERER
|
||
A
Member of Ernst & Young Global
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
CONSOLIDATED BALANCE SHEETS |
December
31,
|
|||||||
2004
|
2005
|
||||||
ASSETS
|
|||||||
CURRENT
ASSETS:
|
|||||||
Cash
and cash equivalents
|
$
|
20,206
|
$
|
32,927
|
|||
Short-term
bank deposits
|
11,799
|
17,503
|
|||||
Short-term
marketable securities
|
39,612
|
46,015
|
|||||
Trade
receivables (net of allowance for doubtful accounts of $ 1,276 and
$ 734
at December 31, 2004 and 2005, respectively)
|
10,063
|
12,257
|
|||||
Other
accounts receivable and prepaid expenses
|
3,900
|
4,318
|
|||||
Inventories
|
1,220
|
2,593
|
|||||
Total
current assets
|
86,800
|
115,613
|
|||||
LONG-TERM
INVESTMENTS AND RECEIVABLES:
|
|||||||
Long-term
bank deposits
|
5,384
|
11,395
|
|||||
Long-term
marketable securities
|
33,365
|
17,111
|
|||||
Severance
pay fund
|
2,733
|
2,931
|
|||||
Total
long-term investments and receivables
|
41,482
|
31,437
|
|||||
PROPERTY
AND EQUIPMENT, NET
|
2,647
|
3,190
|
|||||
GOODWILL
|
647
|
2,966
|
|||||
INTANGIBLE
ASSETS, NET
|
306
|
3,542
|
|||||
Total
assets
|
$
|
131,882
|
$
|
156,748
|
|||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|||||||
CURRENT
LIABILITIES:
|
|||||||
Trade
payables
|
$
|
1,939
|
$
|
1,783
|
|||
Deferred
revenues
|
7,517
|
8,533
|
|||||
Accrued
expenses and other accounts payable
|
11,949
|
12,122
|
|||||
Total
current liabilities
|
21,405
|
22,438
|
|||||
ACCRUED
SEVERANCE PAY
|
3,701
|
3,643
|
|||||
Total
liabilities
|
25,106
|
26,081
|
|||||
COMMITMENTS
AND CONTINGENCIES
|
|||||||
SHAREHOLDERS'
EQUITY:
|
|||||||
Ordinary
shares of NIS 0.1 par value:
|
|||||||
Authorized
- 25,000,000 shares at December 31, 2004 and 2005; Issued and outstanding
- 20,569,018 and 21,803,997 shares at December 31, 2004 and 2005,
respectively
|
196
|
218
|
|||||
Additional
paid-in capital
|
107,267
|
116,446
|
|||||
Retained
earnings (accumulated deficit)
|
(687
|
)
|
14,003
|
||||
Total
shareholders' equity
|
106,776
|
130,667
|
|||||
Total
liabilities and shareholders' equity
|
$
|
131,882
|
$
|
156,748
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS
OF INCOME
|
Year
ended December 31,
|
||||||||||
2003
|
2004
|
2005
|
||||||||
Revenues:
|
||||||||||
Products
|
$
|
35,286
|
$
|
40,212
|
$
|
44,548
|
||||
License
and royalties
|
8,329
|
13,758
|
14,486
|
|||||||
Services
|
7,689
|
10,266
|
14,978
|
|||||||
Total
revenues
|
51,304
|
64,236
|
74,012
|
|||||||
Cost
of revenues:
|
||||||||||
Products
|
10,823
|
12,009
|
9,524
|
|||||||
Services
|
*)
1,447
|
*)
1,871
|
3,586
|
|||||||
Total
cost
of revenues
|
12,270
|
13,880
|
13,110
|
|||||||
Gross
profit
|
39,034
|
50,356
|
60,902
|
|||||||
Operating
costs and expenses:
|
||||||||||
Research
and development
|
14,573
|
17,484
|
20,110
|
|||||||
Selling
and marketing
|
*)
19,050
|
*)
23,848
|
24,588
|
|||||||
General
and administrative
|
4,040
|
4,900
|
4,677
|
|||||||
Restructuring
income
|
(1,061
|
)
|
-
|
-
|
||||||
Total
operating costs and expenses
|
36,602
|
46,232
|
49,375
|
|||||||
Operating
income
|
2,432
|
4,124
|
11,527
|
|||||||
Financial
income, net
|
2,130
|
1,860
|
3,051
|
|||||||
Income
before taxes on income
|
4,562
|
5,984
|
14,578
|
|||||||
Taxes
on income
|
-
|
-
|
112
|
|||||||
Net
income
|
$
|
4,562
|
$
|
5,984
|
$
|
14,690
|
||||
Basic
net earnings per Ordinary share
|
$
|
0.24
|
$
|
0.30
|
$
|
0.70
|
||||
Diluted
net earnings per Ordinary share
|
$
|
0.23
|
$
|
0.28
|
$
|
0.66
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
|
STATEMENTS
OF CHANGES IN SHAREHOLDERS' EQUITY
|
Retained
|
||||||||||||||||||||||
Additional
|
Deferred
|
earnings
|
Total
|
|||||||||||||||||||
Ordinary
shares
|
paid-in
|
stock
|
Treasury
|
(accumulated
|
shareholders'
|
|||||||||||||||||
Number
|
Amount
|
capital
|
compensation
|
stock
|
deficit)
|
equity
|
||||||||||||||||
Balance
as of January 1, 2003
|
18,285,930
|
$
|
187
|
$
|
104,586
|
$
|
(117
|
)
|
$
|
(11,757
|
)
|
$
|
(7,884
|
)
|
$
|
85,015
|
||||||
Purchase
of treasury stock
|
(14,000
|
)
|
-
|
-
|
-
|
(77
|
)
|
-
|
(77
|
)
|
||||||||||||
Exercise
of share options by employees
|
1,072,919
|
-
|
77
|
-
|
6,759
|
(2,151
|
)
|
4,685
|
||||||||||||||
Amortization
of deferred stock compensation
|
-
|
-
|
-
|
117
|
-
|
-
|
117
|
|||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
-
|
4,562
|
4,562
|
|||||||||||||||
Balance
as of December 31, 2003
|
19,344,849
|
187
|
104,663
|
-
|
(5,075
|
)
|
(5,473
|
)
|
94,302
|
|||||||||||||
Exercise
of share options by employees
|
1,224,169
|
9
|
2,604
|
-
|
5,075
|
(1,198
|
)
|
6,490
|
||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
-
|
5,984
|
5,984
|
|||||||||||||||
Balance
as of December 31, 2004
|
20,569,018
|
196
|
107,267
|
-
|
-
|
(687
|
)
|
106,776
|
||||||||||||||
Tax
benefit related to exercise of stock options
|
-
|
-
|
24
|
-
|
-
|
-
|
24
|
|||||||||||||||
Exercise
of share options by employees
|
1,234,979
|
22
|
9,155
|
-
|
-
|
-
|
9,177
|
|||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
-
|
14,690
|
14,690
|
|||||||||||||||
Balance
as of December 31, 2005
|
21,803,997
|
$
|
218
|
$
|
116,446
|
$
|
-
|
$
|
-
|
$
|
14,003
|
$
|
130,667
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
Year
ended December 31,
|
||||||||||
2003
|
2004
|
2005
|
||||||||
Cash
flows from operating activities:
|
||||||||||
Net
income
|
$
|
4,562
|
$
|
5,984
|
$
|
14,690
|
||||
Adjustments
required to reconcile net income to net cash provided by operating
activities:
|
||||||||||
Depreciation
and amortization
|
1,926
|
2,513
|
2,589
|
|||||||
Loss
(gain) on sale of property and equipment
|
(45
|
)
|
75
|
(14
|
)
|
|||||
Restructuring
income
|
(1,061
|
)
|
-
|
-
|
||||||
Accrued
interest and amortization of premium on held-to-maturity marketable
securities and bank deposits
|
998
|
1,589
|
228
|
|||||||
Amortization
of deferred stock compensation
|
117
|
-
|
-
|
|||||||
Decrease
(increase) in trade receivables, net
|
820
|
(1,378
|
)
|
(2,194
|
)
|
|||||
Decrease
(increase) in other accounts receivable and prepaid
expenses
|
124
|
(729
|
)
|
(60
|
)
|
|||||
Decrease
(increase) in inventories
|
27
|
(251
|
)
|
(1,373
|
)
|
|||||
Increase
in deferred tax asset
|
-
|
-
|
(203
|
)
|
||||||
Increase
(decrease) in trade payables
|
(2,077
|
)
|
669
|
(156
|
)
|
|||||
Increase
in deferred revenues
|
3,184
|
1,470
|
966
|
|||||||
Increase
(decrease) in accrued expenses and other accounts payable
|
716
|
(91
|
)
|
(127
|
)
|
|||||
Tax
benefit related to exercise of stock options
|
-
|
-
|
24
|
|||||||
Decrease
in accrued severance pay
|
(238
|
)
|
(214
|
)
|
(256
|
)
|
||||
Net
cash provided by operating activities
|
9,053
|
9,637
|
14,114
|
|||||||
Cash
flows from investing activities:
|
||||||||||
Proceeds
from redemption of held-to-maturity marketable securities
|
56,811
|
35,240
|
42,330
|
|||||||
Purchase
of held-to-maturity marketable securities
|
(75,111
|
)
|
(43,630
|
)
|
(32,939
|
)
|
||||
Proceeds
from withdrawal of bank deposits
|
18,476
|
17,121
|
23,179
|
|||||||
Purchase
of bank deposits
|
(10,119
|
)
|
(17,002
|
)
|
(34,662
|
)
|
||||
Purchase
of property and equipment
|
(1,300
|
)
|
(2,319
|
)
|
(1,956
|
)
|
||||
Proceeds
from sale of property and equipment
|
182
|
23
|
19
|
|||||||
Purchase
of FVC's assets, net (1a)
|
-
|
-
|
(7,001
|
)
|
||||||
Purchase
of VisioNex's assets, net (1b)
|
-
|
(1,320
|
)
|
-
|
||||||
Net
cash used in investing activities
|
(11,061
|
)
|
(11,887
|
)
|
(11,030
|
)
|
||||
Cash
flows from financing activities:
|
||||||||||
Exercise
of share options by employees
|
-
|
2,621
|
9,637
|
|||||||
Purchase
of treasury stock
|
(77
|
)
|
-
|
-
|
||||||
Issuance
of Ordinary shares and treasury stock for cash upon exercise of
options
|
4,693
|
3,402
|
-
|
|||||||
Net
cash provided by financing activities
|
4,616
|
6,023
|
9,637
|
|||||||
Increase
in cash and cash equivalents
|
2,608
|
3,773
|
12,721
|
|||||||
Cash
and cash equivalents at the beginning of the year
|
13,825
|
16,433
|
20,206
|
|||||||
Cash
and cash equivalents at the end of the year
|
$
|
16,433
|
$
|
20,206
|
$
|
32,927
|
||||
Supplemental
disclosure of non-cash activity:
|
||||||||||
Receivables
on account of shares
|
$
|
8
|
$
|
475
|
$
|
15
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
a.
|
In March 2005, the Company acquired the assets and the business of First Virtual Communication Inc. ("FVC"). The net fair value of the assets acquired and the liabilities assumed at the date of acquisition was as follows: |
Working
capital, excluding cash and cash equivalents
|
$
|
265
|
||
Property
and equipment
|
57
|
|||
Technology
|
3,285
|
|||
Distribution
network
|
1,075
|
|||
Goodwill
|
2,319
|
|||
$
|
7,001
|
b.
|
In
July 2004, the Company acquired the assets and the business of
VisioNex
Technologies Inc. ("VisioNex"). The net fair value of the assets
acquired
was as follows:
|
Technology
|
$
|
673
|
||
Goodwill
|
647
|
|||
$
|
1,320
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
1:-
|
GENERAL
|
a.
|
RADVISION
Ltd. ("the Company") is an Israeli corporation which designs, develops
and
supplies products and technology that enable real-time voice, video
and
data communications over packet networks, including the Internet
and other
networks based on the Internet Protocol
("IP").
|
b.
|
Acquisition
of assets and the business of First Virtual Communication Inc
("FVC"):
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
1:-
|
GENERAL
(Cont.)
|
Tangible
assets acquired (including cash and cash equivalents)
|
$
|
1,167
|
||
Liabilities
assumed
|
(350
|
)
|
||
Intangible
assets:
|
||||
Technology
|
3,285
|
|||
Distribution
networks
|
1,075
|
|||
Goodwill
|
2,319
|
|||
Total
consideration
|
$
|
7,496
|
c.
|
Acquisition of assets and the business of VisionNex Technologies Inc.: |
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
1:-
|
GENERAL
(Cont.)
|
Technology
|
$
|
673
|
||
Goodwill
|
647
|
|||
$
|
1,320
|
d.
|
Revenues
derived from the Company's largest customer in 2005, represented
26.5% of
total sales (see Note 12e).
|
NOTE
2:-
|
SIGNIFICANT
ACCOUNTING POLICIES
|
a.
|
Use
of estimates:
|
b.
|
Financial
statements in U.S. dollars:
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
2:-
|
SIGNIFICANT
ACCOUNTING POLICIES
(Cont.)
|
c.
|
Principles
of consolidation:
|
d.
|
Cash
equivalents:
|
e.
|
Marketable
securities:
|
f.
|
Short-term
bank deposits:
|
g.
|
Long-term
bank deposits:
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
2:-
|
SIGNIFICANT
ACCOUNTING POLICIES
(Cont.)
|
h.
|
Inventories:
|
i.
|
Property
and equipment:
|
%
|
|
Computers
and peripheral equipment
|
15
- 33
|
Office
furniture and equipment
|
7
-
15
|
Motor
vehicles
|
15
|
Leasehold
improvements
|
Over
the shorter of the term
of
the lease or useful lives
|
j.
|
Goodwill
and Intangible assets:
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
2:-
|
SIGNIFICANT
ACCOUNTING POLICIES
(Cont.)
|
k.
|
Impairment
of long-lived assets:
|
l.
|
Severance
pay:
|
m.
|
Revenue
recognition:
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
2:-
|
SIGNIFICANT
ACCOUNTING POLICIES
(Cont.)
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
2:-
|
SIGNIFICANT
ACCOUNTING POLICIES
(Cont.)
|
n.
|
Research
and development costs:
|
o.
|
Royalty-bearing
grants:
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
2:-
|
SIGNIFICANT
ACCOUNTING POLICIES
(Cont.)
|
p.
|
Income
taxes:
|
q.
|
Fair
value of financial instruments:
|
r.
|
Accounting
for stock-based compensation:
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
2:-
|
SIGNIFICANT
ACCOUNTING POLICIES
(Cont.)
|
Year
ended December 31,
|
||||||||||
2003
|
2004
|
2005
|
||||||||
Net
income as reported
|
$
|
4,562
|
$
|
5,984
|
$
|
14,690
|
||||
Add:
stock based compensation expense determined under APB 25 intrinsic
value
|
117
|
-
|
-
|
|||||||
Deduct:
stock-based compensation expense determined under fair value method
for
all awards
|
(3,640
|
)
|
(3,588
|
)
|
(3,687
|
)
|
||||
Pro
forma income
|
$
|
1,039
|
$
|
2,396
|
$
|
11,003
|
||||
Basic
net earnings per Ordinary share, as reported
|
$
|
0.24
|
$
|
0.30
|
$
|
0.70
|
||||
Pro
forma basic net earnings per Ordinary share
|
$
|
0.06
|
$
|
0.12
|
$
|
0.52
|
||||
Diluted
net earnings per Ordinary share as reported
|
$
|
0.23
|
$
|
0.28
|
$
|
0.66
|
||||
Pro
forma diluted net earnings per Ordinary share
|
$
|
0.05
|
$
|
0.11
|
$
|
0.50
|
||||
Weighted
average number of shares used to compute pro forma basic net earnings
per
Ordinary share
|
18,660,444
|
19,822,061
|
21,121,908
|
|||||||
Weighted
average number of shares used to compute pro forma diluted net earnings
per Ordinary share
|
19,338,692
|
20,941,474
|
21,850,643
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
2:-
|
SIGNIFICANT
ACCOUNTING POLICIES
(Cont.)
|
s.
|
Concentration
of credit risk:
|
t.
|
Basic
net earnings per share:
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
2:-
|
SIGNIFICANT
ACCOUNTING POLICIES
(Cont.)
|
u.
|
Reclassification:
|
v.
|
New
accounting pronouncements:
|
a)
|
A
"modified prospective" method in which compensation cost is recognized
beginning with the effective date (a) based on the requirements of
Statement 123(R) for all share-based payments granted after the
effective date and (b) based on the requirements of Statement 123
for all
awards granted to employees prior to the effective date of Statement
123(R) that remain unvested on the effective
date.
|
b)
|
A
"modified retrospective" method which includes the requirements of
the
modified prospective method described above, but also permits entities
to
restate based on the amounts previously recognized under Statement
123 for
purposes of pro forma disclosures either (a) all prior periods presented
or (b) prior interim periods of the year of adoption.
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
2:-
|
SIGNIFICANT
ACCOUNTING POLICIES
(Cont.)
|
NOTE
3:-
|
MARKETABLE
SECURITIES
|
Amortized
cost
|
Unrealized
losses, net
|
Estimated
fair value
|
|||||||||||||||||
2004
|
2005
|
2004
|
2005
|
2004
|
2005
|
||||||||||||||
Due
in one year or less
|
|||||||||||||||||||
Debts
of states and political subdivisions
|
$
|
24,334
|
$
|
32,803
|
$
|
(106
|
)
|
$
|
(1,308
|
)
|
$
|
24,228
|
$
|
31,495
|
|||||
Corporate
debentures
|
15,278
|
13,212
|
(160
|
)
|
801
|
15,118
|
14,013
|
||||||||||||
|
|||||||||||||||||||
39,612
|
46,015
|
(266
|
)
|
(507
|
)
|
39,346
|
45,508
|
||||||||||||
Due
after one year through two years
|
|||||||||||||||||||
Debts
of states and political subdivisions
|
27,405
|
12,511
|
(215
|
)
|
749
|
27,190
|
13,260
|
||||||||||||
Corporate
debentures
|
5,960
|
4,600
|
(180
|
)
|
(961
|
)
|
5,780
|
3,639
|
|||||||||||
33,365
|
17,111
|
(395
|
)
|
(212
|
)
|
32,970
|
16,899
|
||||||||||||
$
|
72,977
|
$
|
63,126
|
$
|
(661
|
)
|
$
|
(719
|
)
|
$
|
72,316
|
$
|
62,407
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
3:-
|
MARKETABLE
SECURITIES (Cont.)
|
NOTE
4:-
|
INVENTORIES
|
December
31,
|
|||||||
2004
|
2005
|
||||||
Raw
materials
|
$
|
1,091
|
$
|
2,451
|
|||
Finished
products
|
129
|
142
|
|||||
$
|
1,220
|
$
|
2,593
|
NOTE
5:-
|
PROPERTY
AND EQUIPMENT
|
|
|
|
December
31,
|
||||
|
|
|
2004
|
|
|
2005
|
|
Cost:
|
|||||||
Computers
and peripheral equipment
|
$
|
9,970
|
$
|
11,628
|
|||
Office
furniture and equipment
|
2,612
|
2,836
|
|||||
Motor
vehicles
|
152
|
111
|
|||||
Leasehold
improvements
|
1,850
|
1,979
|
|||||
|
|||||||
|
14,584
|
16,554
|
|||||
Less
- accumulated depreciation
|
11,937
|
13,364
|
|||||
|
|||||||
Depreciated
cost
|
$
|
2,647
|
$
|
3,190
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
6:-
|
INTANGIBLE
ASSETS, NET
|
a.
|
The
following table shows the Company's intangible assets for the periods
presented:
|
December
31,
|
|||||||
2004
|
2005
|
||||||
Cost:
|
|||||||
Technology
|
$
|
673
|
$
|
3,958
|
|||
Distribution
networks
|
-
|
1,075
|
|||||
|
|||||||
|
673
|
5,033
|
|||||
Less
- accumulated amortization
|
367
|
1,491
|
|||||
|
|||||||
Amortized
cost
|
$
|
306
|
$
|
3,542
|
b.
|
Amortization
expenses amounted to $ 367 and $ 1,124 for the years ended
December 31, 2004 and 2005,
respectively.
|
c.
|
Technology
acquired from VisionNex in 2004 is amortized over a period of 1.5
years.
The technology is fully amortized as of December 31, 2005. Technology
acquired from FVC in 2005 is amortized over a period of 4
years.
|
d.
|
Distribution
networks are amortized over a period of 4 years.
|
2006
|
$
|
1,090
|
||
2007
|
1,090
|
|||
2008
|
1,090
|
|||
2009
|
272
|
|||
$
|
3,542
|
NOTE
7:-
|
SHORT-TERM
BANK CREDIT
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
8:-
|
ACCRUED
EXPENSES AND OTHER ACCOUNTS PAYABLE
|
December
31,
|
|||||||
2004
|
2005
|
||||||
Payroll
and related accruals
|
$
|
2,408
|
$
|
3,133
|
|||
Accrued
expenses and other liabilities
|
9,541
|
8,989
|
|||||
$
|
11,949
|
$
|
12,122
|
NOTE
9:-
|
COMMITMENTS
AND CONTINGENCIES
|
a.
|
In
connection with its research and development, the Company received
participation payments from the Israel U.S. Binational Industrial
Research
and Development Foundation ("BIRD-F"), in the total amount of
approximately $ 188. In return for the participation, the Company
is
committed to pay royalties at a rate of 2.5% of proceeds from the
first
year's sales and 5% of the proceeds from the succeeding years' sales,
up
to the amount of the grant. Once the amount of the grant has been
repaid,
royalties will be payable at the rate of 2.5% of proceeds, until
additional royalties equal to one half of the grant amount have been
repaid. The Company's total commitment for royalties payable with
respect
to future sales, based on BIRD-F participations received or accrued,
net
of royalties paid or accrued, totaled approximately $ 276 as of
December 31, 2004 and 2005. During 2005, the Company did not pay
or accrue
royalties to the BIRD-F.
|
b.
|
The
Company and its subsidiaries operate from leased premises in Israel,
the
United States, China, Japan, the United Kingdom and Hong Kong. The
leases
expire through June 2010 (some with renewal options). The Company
leases
its motor vehicles under operating lease agreements that expire on
various
dates, the latest of which is in
2010.
|
2006
|
$
|
2,710
|
||
2007
|
2,043
|
|||
2008
|
1,445
|
|||
2009
|
1,393
|
|||
2010
|
633
|
|||
$
|
8,224
|
c.
|
The
Company obtained bank guarantees in the amount of $ 369 in connection
with
securing its rent agreement of the Company's office space in Israel
and in
connection with custom tax
payments.
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
9:-
|
COMMITMENTS
AND CONTINGENCIES
(Cont.)
|
d.
|
The
Company is committed to pay royalties to several third parties for
the
integration of these third parties' technologies into the Company's
products. Royalties are payable based on the sales volume of these
products, as long as the Company uses these
technologies.
|
e.
|
In
1998, a third party sent correspondence to a related party of the
Company
alleging that some products manufactured by the Company infringe
upon
patents held by the third party and offered to license these patents
to
the Company. In subsequent correspondence, the Company's related
party
requested that the third party specifically substantiate each allegation
of infringement before the Company's related party would be prepared
to
enter into any licensing arrangements. The Company does not believe
that
these allegations will have a material adverse effect upon its business,
financial position, results of operations or liquidity. The Company's
related party has received further correspondence from the third
party, in
which the third party has, among other things, reiterated its claims.
The
Company's related party does not believe the third party has substantiated
its claims and has communicated this belief to the third party. The
Company's related party has advised the Company that the alleged
infringement claims are unresolved.
|
f.
|
In
early 2005, the Company terminated an exclusive distributor agreement
with
a third party in China, due to their alleged material breach of contract.
The third party prepared a law suit against the Company and its principal
officers and sent copies of the law suit to each of our directors.
To the
best of the Company’s knowledge, no such law suit has been filed. Should
such a law suit be filed, the Company intends to vigorously defend
it and
raise substantial counterclaims against the third
party.
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
9:-
|
COMMITMENTS
AND CONTINGENCIES (Cont.)
|
g.
|
Stamp
tax duty:
|
NOTE
10:-
|
SHAREHOLDERS'
EQUITY
|
a. | The Ordinary shares of the Company are traded on the NASDAQ National Market and on the Tel Aviv Stock Exchange. |
b.
|
In
February 2001, the Company announced that its Board of Directors
authorized the purchase of up to 10% of its outstanding Ordinary
shares in
the open market, from time to time, at prevailing market prices.
No time
limit was given with respect to the duration of the share purchase
program.
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
10:-
|
SHAREHOLDERS'
EQUITY (Cont.)
|
c. | The Company adopted an employee share incentive plan which provides for the grant by the Company of option awards to purchase up to an aggregate of 9,129,899 Ordinary shares to officers, employees, directors and consultants of the Company and its subsidiaries. The options vest ratably over vesting periods of about 4 years. The options expire 5 to 10 years from the date of issuance. The incentive plan provides for the grant of options equal in the number of up to 4% of the Company's Ordinary shares on a diluted basis. | |
As of December 31, 2005, 374,435 shares are available for future grant. Options that are cancelled or forfeited before expiration become available for future grant. | ||
Transactions related to the share incentive plan during the years ended December 31, 2003, 2004 and 2005, and the weighted average exercise prices per share at the date of grant, are summarized as follows: |
|
Year
ended December 31,
|
||||||||||||||||||
2003
|
|
|
2004
|
|
|
2005
|
|||||||||||||
Amount
|
Weighted
average
exercise
price
|
Amount
|
Weighted
average
exercise
price
|
Amount
|
Weighted
average
exercise
price
|
||||||||||||||
Options
outstanding at the beginning of the year
|
4,410,936
|
$
|
6.99
|
4,754,856
|
$
|
7.98
|
4,295,742
|
$
|
9.41
|
||||||||||
Granted
|
1,749,700
|
$
|
8.19
|
1,521,750
|
$
|
11.61
|
1,557,100
|
$
|
13.01
|
||||||||||
Exercised
|
(1,072,919
|
)
|
$
|
4.25
|
(1,224,169
|
)
|
$
|
5.31
|
(1,234,979
|
)
|
$
|
7.42
|
|||||||
Forfeited
|
(332,861
|
)
|
$
|
7.96
|
(756,695
|
)
|
$
|
11.47
|
(1,095,040
|
)
|
$
|
11.91
|
|||||||
Options
outstanding at the end of the year
|
4,754,856
|
$
|
7.98
|
4,295,742
|
$
|
9.41
|
3,522,823
|
$
|
10.91
|
||||||||||
Options
exercisable at the end of the year
|
1,610,343
|
$
|
8.99
|
1,456,032
|
$
|
9.92
|
959,532
|
$
|
9.11
|
|
Options
outstanding
|
Options
exercisable
|
||||||||||||||||||
Range
of
exercise
price
|
Outstanding
as
of
December
31, 2005
|
Weighted
average remaining contractual
life (years)
|
Weighted
average exercise price
|
Outstanding
as
of
December
31, 2005
|
Weighted
average exercise price
|
|||||||||||||||
$ |
4.57
|
-
|
$
|
5.57
|
421,628
|
6.28
|
$
|
5.22
|
269,262
|
$
|
5.20
|
|||||||||
$ |
5.81
|
-
|
$
|
6.70
|
323,728
|
6.43
|
$
|
5.80
|
198,663
|
$
|
6.28
|
|||||||||
$ |
7.62
|
-
|
$
|
8.78
|
205,736
|
7.40
|
$
|
9.16
|
81,486
|
$
|
8.26
|
|||||||||
$ |
9.84
|
-
|
$
|
10.58
|
203,881
|
8.72
|
$
|
9.92
|
27,055
|
$
|
9.95
|
|||||||||
$ |
10.80
|
-
|
$
|
12.00
|
681,250
|
8.64
|
$
|
11.37
|
157,384
|
$
|
11.22
|
|||||||||
$ |
12.04
|
-
|
$
|
14.00
|
1,457,600
|
8.78
|
$
|
12.55
|
192,182
|
$
|
12.72
|
|||||||||
$
|
17.73
|
|
195,500
|
9.93
|
$
|
17.73
|
-
|
$
|
-
|
|||||||||||
$
|
28.00
|
|
33,500
|
4.54
|
$
|
28.00
|
33,500
|
$
|
28.00
|
|||||||||||
3,522,823
|
$
|
10.91
|
959,532
|
$
|
9.11
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
10:-
|
SHAREHOLDERS'
EQUITY (Cont.)
|
Year
ended December 31,
|
||||||||||||
2003
|
2004
|
2005
|
||||||||||
Options
|
Weighted
average
fair
value
|
Options
|
Weighted
average
fair
value
|
Options
|
Weighted
average
fair
value
|
|||||||
1,749,700
|
$4.25
|
1,521,750
|
$4.29
|
1,557,100
|
$
4.62
|
NOTE
11:-
|
NET
EARNINGS PER SHARE
|
Year
ended December 31,
|
||||||||||
2003
|
2004
|
2005
|
||||||||
Numerator:
|
||||||||||
Net
income
|
$
|
4,562
|
$
|
5,984
|
$
|
14,690
|
||||
Denominator:
|
||||||||||
Weighted
average number of Ordinary shares outstanding during the year used
to
compute basic net earnings per share
|
18,660,444
|
19,822,061
|
21,121,908
|
|||||||
Incremental
shares attributable to exercise of outstanding options (assuming
proceeds
would be used to purchase treasury stock)
|
1,302,816
|
1,577,263
|
1,093,041
|
|||||||
Weighted
average number of Ordinary shares used to compute diluted net earnings
per
share
|
19,963,260
|
21,399,324
|
22,214,949
|
|||||||
Basic
net earnings per Ordinary share
|
$
|
0.24
|
$
|
0.30
|
$
|
0.70
|
||||
Diluted
net earnings per Ordinary share
|
$
|
0.23
|
$
|
0.28
|
$
|
0.66
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
12:-
|
SEGMENT
REPORTING AND GEOGRAPHICAL
INFORMATION
|
a.
|
The
Company operates under two reportable segments: the Technology Business
Unit ("TBU") and the Networking Business Unit ("NBU").
|
b.
|
The
following is information about reported segment gains and
losses:
|
NBU
|
TBU
|
Total
|
||||||||
2005 | ||||||||||
Total
revenues
|
$
|
51,295
|
$
|
22,717
|
$
|
74,012
|
||||
Expenses
|
49,725
|
12,760
|
62,485
|
|||||||
Segment
income
|
$
|
1,570
|
$
|
9,957
|
11,527
|
|||||
Financial
income
|
3,051
|
|||||||||
Income
before taxes on income
|
$
|
14,578
|
||||||||
Taxes
on income
|
$
|
112
|
||||||||
Net
income
|
$
|
14,690
|
||||||||
Depreciation
and amortization
|
$
|
2,187
|
$
|
402
|
$
|
2,589
|
||||
2004
|
||||||||||
Total
revenues
|
$
|
44,812
|
$
|
19,424
|
$
|
64,236
|
||||
Expenses
|
46,245
|
13,867
|
60,112
|
|||||||
Segment
income
|
$
|
(1,433
|
)
|
$
|
5,557
|
4,124
|
||||
Financial
income
|
1,860
|
|||||||||
Net
income
|
$
|
5,984
|
||||||||
|
||||||||||
Depreciation
and amortization
|
$
|
1,809
|
$
|
704
|
$
|
2,513
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
12:-
|
SEGMENT
REPORTING AND GEOGRAPHICAL INFORMATION
(Cont.)
|
NBU
|
TBU
|
Total
|
||||||||
2003 | ||||||||||
Total
revenues
|
$
|
38,059
|
$
|
13,245
|
$
|
51,304
|
||||
Expenses
|
38,454
|
11,479
|
49,933
|
|||||||
Segment
income (loss)
|
$
|
(395
|
)
|
$
|
1,766
|
1,371
|
||||
Restructuring
income
|
1,061
|
|||||||||
Financial
income
|
2,130
|
|||||||||
Net
income
|
$
|
4,562
|
||||||||
Depreciation
and amortization
|
$
|
1,386
|
$
|
540
|
$
|
1,926
|
c. | Summary information about geographic areas: | |
The following represents total revenues according to the end customer's location for the years ended December 31, 2003, 2004 and 2005, and long-lived assets as of December 31, 2004 and 2005 according to their geographic location: |
2003
|
2004
|
2005
|
||||||||||||||
Total
revenues
|
|
|
Total
revenues
|
|
|
Long-lived
assets
|
|
|
Total
Revenues
|
|
|
Long-lived
assets
|
||||
North
America (principally the United States)
|
$
|
24,407
|
$
|
33,660
|
$
|
481
|
$
|
40,075
|
$
|
485
|
||||||
Europe
|
11,191
|
15,616
|
9
|
16,030
|
80
|
|||||||||||
Far
East
|
12,672
|
11,688
|
262
|
13,064
|
532
|
|||||||||||
Israel
|
3,034
|
3,272
|
2,848
|
4,843
|
8,601
|
|||||||||||
$
|
51,304
|
$
|
64,236
|
$
|
3,600
|
$
|
74,012
|
$
|
9,698
|
d.
|
The
Company does not allocate its assets to its reportable segments
accordingly; asset information by reportable segments is not
presented.
|
e.
|
For
the years ended December 31, 2003, 2004 and 2005, one customer accounted
for approximately 21.3%, 27.2% and 26.5%, respectively, of sales
for that
period.
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
13:-
|
RESTRUCTURING
INCOME
|
NOTE
14:-
|
RELATED
PARTIES BALANCES AND TRANSACTIONS
|
a.
|
Balances
with related parties:
|
December
31,
|
|||||||
2004
|
2005
|
||||||
Trade
receivables
|
$
|
17
|
$
|
66
|
|||
Trade
payables
|
$
|
158
|
$
|
171
|
b.
|
Transactions
with related parties:
|
Year
ended December 31,
|
||||||||||
2003
|
2004
|
2005
|
||||||||
Revenues
(1)
|
$
|
-
|
$
|
214
|
$
|
103
|
||||
Cost
of revenues (3)
|
$
|
66
|
$
|
39
|
$
|
16
|
||||
Research
and development expenses (2)
|
$
|
379
|
$
|
143
|
$
|
81
|
||||
Marketing,
selling, general and administrative expenses (2)
|
$
|
207
|
$
|
455
|
$
|
441
|
||||
Purchase
of property and equipment (4)
|
$
|
530
|
$
|
624
|
$
|
665
|
(1)
|
Includes
revenues from the Company's products and maintenance sold to companies
held by principal shareholders ("affiliated
companies").
|
(2)
|
Includes
administrative services provided to the Company by affiliated companies
that the Company reimburses for the costs incurred in providing these
services.
|
(3)
|
Includes
the purchase of components from affiliated companies.
|
(4)
|
Includes
property and equipment that were purchased from affiliated companies.
|
c.
|
During
2003, the Company recorded restructuring income of $1,061 due to
a
reversal of an accrual relating to the dispute with a related party
(see
Note 13 above).
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
15:-
|
TAXES
ON INCOME
|
a.
|
Reduction
in Israeli tax rates:
|
b.
|
Tax
benefits under the Law for the Encouragement of Capital Investment,
1959
("the Law"):
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
15:-
|
TAXES
ON INCOME (Cont.)
|
c.
|
Measurement
of taxable income under the Income Tax (Inflationary Adjustments)
Law,
1985:
|
d.
|
Tax
benefits under Israel's Law for the Encouragement of Industry (Taxation),
1969:
|
The
Company is an "Industrial Company", as defined by the Law for the
Encouragement of Industry (Taxation), 1969, and as such, is entitled
to
claim public issuance expenses over three tax years and accelerated
depreciation on equipment.
|
e.
|
As
of December 31, 2005, the Company's net operating loss carryforwards
for
tax purposes amounted to approximately $ 4,800. These net operating
losses may be carried forward indefinitely and may be offset against
future taxable income. The Company expects that during the period
in which
these tax losses are utilized its income would be substantially
tax-exempt.
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
15:-
|
TAXES
ON INCOME (Cont.)
|
f.
|
The
U.S. subsidiary's carryforward tax losses through December 31, 2005,
amounted to approximately $ 15,300. These losses may be offset against
any
future U.S. taxable income of the U.S. subsidiary and will expire
in the
years 2011 through 2023. In light of the U.S. subsidiary's recent
history
of operating losses, the Company has recorded a valuation allowance
for
all its deferred tax assets.
|
Utilization
of U.S. net operating losses may be subject to substantial annual
limitation due to the "change in ownership" provisions of the Internal
Revenue Code of 1986 and similar state provisions. The annual limitations
may result in the expiration of net operating losses before
utilization.
|
g.
|
Deferred
income taxes:
|
December
31,
|
|||||||
2004
|
2005
|
||||||
Net
operating loss carryforwards
|
$
|
4,974
|
$
|
6,142
|
|||
Reserves
and allowances
|
1,191
|
1,093
|
|||||
Other
temporary differences
|
16
|
118
|
|||||
Net
deferred tax asset before valuation allowance
|
6,181
|
7,353
|
|||||
Valuation
allowance
|
(6,181
|
)
|
(7,150
|
)
|
|||
|
$ | - |
$
|
203
|
h.
|
The
Company's total income before provision for income taxes is as
follows:
|
Year
ended December 31,
|
||||||||||
2003
|
2004
|
2005
|
||||||||
Domestic
(Israel)
|
$
|
3,948
|
$
|
2,433
|
$
|
12,932
|
||||
Foreign
|
614
|
3,551
|
1,646
|
|||||||
$
|
4,562
|
$
|
5,984
|
$
|
14,578
|
|
RADVISION
LTD. AND ITS SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE
15:-
|
TAXES
ON INCOME (Cont.)
|
i.
|
The
tax benefits is comprised as follows:
|
Year
ended December 31,
|
||||||||||
2003
|
2004
|
2005
|
||||||||
Domestic
(Israel):
|
||||||||||
Deferred
taxes
|
$
|
-
|
$
|
-
|
$
|
203
|
||||
Foreign:
|
||||||||||
Current
taxes
|
-
|
-
|
(91
|
)
|
||||||
|
$ | - |
$
|
-
|
$
|
112
|
j.
|
A
reconciliation between the theoretical tax income, assuming all income
is
taxed at the statutory tax rate applicable to the income of the Company
and the actual tax income as reported in the statements of income
is as
follows:
|
Year
ended December 31,
|
||||||||||
2003
|
2004
|
2005
|
||||||||
Income
before taxes on income
|
$
|
4,562
|
$
|
5,984
|
$
|
14,578
|
||||
Theoretical
tax expense computed at the statutory rate *)
|
$
|
1,648
|
$
|
2,094
|
$
|
4,957
|
||||
Valuation
allowance for deferred tax assets in respect of loss
carryforwards
|
215
|
-
|
-
|
|||||||
Reversal
of valuation allowance
|
-
|
(1,279
|
)
|
(533
|
)
|
|||||
Tax
exempt income due to approved enterprise status
|
(2,034
|
)
|
(1,118
|
)
|
(4,990
|
)
|
||||
Non-deductible
expenses and others
|
171
|
303
|
454
|
|||||||
Actual
tax benefit, net
|
$
|
-
|
$
|
-
|
$
|
(112
|
)
|
|||
Basic
net earnings per Ordinary share
|
$
|
-
|
$
|
-
|
$
|
0.001
|
||||
Diluted
net earnings per Ordinary share
|
$
|
-
|
$
|
-
|
$
|
0.001
|
*)
|
The
tax rates for domestic income are 36%, 35% and 34% for the years
2003,
2004 and 2005, respectively. The tax rate for foreign income is about
35%.
|
Column
A
|
Column
B
|
Column
C
|
Column
D
|
Column
E
|
|||||||||||||||
Additions
|
Deductions
|
||||||||||||||||||
Description
|
Balance
at
beginning
of
period
|
Charged
to
costs
and
expenses
|
Charged
to
shareholders
equity
|
Due
to
write
offs
|
Charged
to
costs
and
expenses
|
Balance
at
end
of
period
|
|||||||||||||
Year
ended December 31, 2005:
|
|||||||||||||||||||
Allowance
for doubtful accounts
|
1,276,000
|
-
|
-
|
356,000
|
186,000
|
734,000
|
|||||||||||||
Provision
for slow-moving inventory or technological obsolescence
|
1,505,000
|
-
|
-
|
594,000
|
16,000
|
895,000
|
|||||||||||||
Deferred
taxes valuation allowances
|
6,181,000
|
-
|
1,639,000
|
-
|
670,000
|
7,150,000
|
|||||||||||||
Total
|
$
|
8,962,000
|
-
|
$
|
1,639,000
|
$
|
950,000
|
$
|
872,000
|
8,779,000
|
|||||||||
Year
ended December 31, 2004:
|
|||||||||||||||||||
Allowance
for doubtful accounts
|
1,704,000
|
-
|
-
|
428,000
|
-
|
1,276,000
|
|||||||||||||
Provision
for slow-moving inventory or technological obsolescence
|
2,452,000
|
465,000
|
-
|
1,412,000
|
-
|
1,505,000
|
|||||||||||||
Deferred
taxes valuation allowances
|
6,679,000
|
-
|
852,000
|
-
|
1,350,000
|
6,181,000
|
|||||||||||||
Total
|
$
|
10,835,000
|
$
|
465,000
|
$
|
852,000
|
$
|
1,840,000
|
$
|
1,350,000
|
$
|
8,962,000
|
|||||||
Year
ended December 31, 2003:
|
|||||||||||||||||||
Allowance
for doubtful accounts
|
1,593,000
|
111,000
|
-
|
-
|
-
|
1,704,000
|
|||||||||||||
Provision
for slow-moving inventory or technological obsolescence
|
3,310,000
|
-
|
-
|
-
|
858,000
|
2,452,000
|
|||||||||||||
Deferred
taxes valuation allowances
|
6,152,000
|
285,000
|
242,000
|
-
|
-
|
6,679,000
|
|||||||||||||
Total
|
$
|
11,055,000
|
$
|
396,000
|
$
|
242,000
|
-
|
$
|
858,000
|
$
|
10,835,000
|
RADVISION LTD. | |
By: /s/ Boaz Raviv | |
Name: Boaz Raviv | |
Title: Chief Executive Officer |