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NW_19990804_VASCO Data Security Announces Second Quarter Results

News Release
|   August 4, 1999

OAKBROOK TERRACE, ILLINOIS and BRUSSELS, BELGIUM – August 4, 1999 – VASCO Data Security International, Inc. (OTCBB: VDSI) today announced its consolidated financial results for its second quarter ended June 30, 1999. Revenues for the quarter increased 26% to $4,451,000, up from $3,525,000 for the second quarter of 1998. Total revenue for the six months ended June 30, 1999, increased 46% to $8,759,000, up from $6,138,000 over the same period of 1998.


Operating income for the quarter before acquisition-related costs reached $408,000, or $0.02 per share, as compared with operating income before acquisition-related costs of $213,000, or $0.01 per share, for the second quarter of 1998. For the six months ended June 30, 1999, operating income before acquisition-related costs increased to $191,000, or $0.01 per share, as compared to an operating loss of $86,000, or $0.00 per share, before acquisition-related costs for the same period of 1998.


The company reported a decrease in net loss for the second quarter of 1999 to $389,000, or $0.02 per share, as compared with a net loss of $865,000, or $0.04 per share, for the second quarter of 1998. For the six months ended June 30, 1999, net loss decreased to $1,393,000, or $0.06 per share, as compared to a net loss of $1,603,000, or $0.08 per share, for the same period of 1998.


The company attributes its revenue growth for the quarter to ongoing orders from its large customer base of financial institutions, Fortune 1000 corporations, and government agencies in over 45 countries around the globe, as well as orders from new customers. VASCO’s more than 130 financial institution customers are ordering VASCO products due to their growing movement toward Internet banking, while the company continues to expand its revenue base among organizations seeking to secure access to sensitive information.


In addition, VASCO’s maturing reseller channel is steadily increasing its contribution to revenue. The channel’s contribution is due in part to ongoing sales and marketing support provided by VASCO, as well as to the increasing acceptance of new security products such as the Digipass 700 – an interactive assistant for secure financial transactions -- and Digipass technology supporting PKI (Public Key Infrastructure) applications.


"We’re pleased with our progress for the quarter and the year to date," stated Mario Houthooft, President and CEO of VASCO Data Security. "These results show that businesses in our worldwide markets continue to require cost-effective Internet and network security solutions that they can use today. Banks are moving their business to the Internet in increasing numbers to obtain a far lower cost of doing business, while corporations and government agencies are expanding access to their networks to suppliers, customers, and consumers through the Internet. All these efforts require easy-to-use and affordable security, which is why VASCO Data Security expects to grow along with the explosive growth in e-business and e-commerce."

About VASCO Data Security


VASCO Data Security, a U.S. corporation, secures access to information and applications for financial institutions, corporations, and government agencies in more than 45 countries around the world. With over 2.75 million Digipass™ security devices sold, VASCO Data Security is now the number one provider of strong authentication solutions to the banking industry, and number two overall. Today, more than 130 banks and financial institutions rely on VASCO Data Security to secure their Internet, PC, and phone banking applications. For more information, call VASCO’s U.S. headquarters at 1.800.238.2726, its European headquarters at +32 71.37.27.11, or visit www.vasco.com.


Forward Looking Statements


Statements made in this news release that relate to future plans, events or performances are forward-looking statements. Any statement containing words such as "believes," "anticipates," "plans," or "expects" is forward-looking, and these statements involve risks and uncertainties and are based on current expectations. Consequently, actual results could differ materially from the expectations expressed in these forward-looking statements.

For more information please contact:

Americas:
Media: Kerry Roche, Bridgeman Communications, +1 617 742 7270, kerry@bridgeman.com
Investor Relations: Todd Fromer, KCSA Public Relations Worldwide, +1 212 682 6300, tfromer@kcsa.com
VASCO: Mike Lange, +1 630 932 8844, mbl@vasco.com

Europe/Asia:
Media (Benelux): Bob Pieters, Anthonissen & Associates, +32 3 286 7777, bob.pieters@anthonissen.be
Media (Europe/Asia): Sven Kersten, HBI, +49 89 99 38 87 33, sven_kersten@hbi.de
Investor Relations: Annemieke Blondeel, LBConsult, +44 208 308 7080, a.blondeel@dial.pipex.com
VASCO: Ariane Bosmans, +32 2 456 9810, arb@vasco.com