NW_20020423_VASCO Reports First Quarter Results

April 23, 2002

OAKBROOK TERRACE, Ill. and BRUSSELS, Belgium, April 23, 2002 -- VASCO Data Security International, Inc. (Nasdaq: VDSI; Nasdaq Europe) (www.vasco.com), a global provider of security products that enable e-business and e-commerce, today announced financial results for the first quarter of 2002. Revenues for the quarter of $6,032,428 were in line with the guidance previously released by the Company. This represents a decrease in revenue of 23% from the revenue of $7,872,725 reported in the first quarter of 2001.

For the first quarter of 2002, the Company reported pro-forma net income, before non-cash compensation for stock options to certain officers of the Company* and amortization of intangible acquisition related assets, of $137,460 or a loss of $.01 per basic and diluted share (after preferred warrant accretion), compared with a net loss before these items of $ 621,510 or a loss of $.03 per basic and diluted share for the first quarter of 2001. Operating income for the quarter before these items was $128,741, compared with an operating loss of $705,879 for the first quarter of 2001 on the same basis.

The Company reported a net loss for the first quarter of 2002 of $160,193 or $.02 per basic and diluted share compared with a net loss of $1,038,574 or $.05 per basic and diluted share for the first quarter of 2001.

Operating expenses for the first quarter of 2002 were $3,845,314 (excluding expense for the previously described stock options), a 36% reduction compared with operating expenses of $6,051,612 for the first quarter of 2001.

Earnings before interest, taxes, depreciation and amortization (EBITDA), and stock option compensation were $351,901 for the first quarter of 2002 compared with a loss before these items of $237,125 in the first quarter of 2001.

"We are especially pleased to report results in line with the guidance given late last year, particularly when you consider the many sector leaders who have missed guidance for this quarter. This is a very challenging market environment, and our cost rationalization has resulted in a lean cost structure that will enable us to withstand this challenge," stated Mario Houthooft, VASCO President and CEO. "Our first quarter saw an expanded partner network, the addition of significant new customers, and the rollout of exciting new products. During the first quarter of 2002, some innovative products have been launched, such as the multilingual VACMAN Server Corporate and Digipass Go 1. Our Company is well positioned to capitalize on a rebound in the sector later in the year."

Q1 2002 Highlights:
· CeBIT 2002: VASCO launches Digipass GO 1 and the multilingual VACMAN Server 6.0 Corporate. GO 1 is the ultra portable and user centric alternative for static passwords and PIN-TAN. With Digipass GO 1, VASCO aims at the worldwide banking and corporate access market, with a strong emphasis on the US corporate networking and remote access market. Digipass GO 1 works seamlessly with VASCO’s VACMAN product family.
VACMAN Server Corporate secures access to an entire network regardless of the location and the number of entry points, while supporting Digipass Strong Authentication. With the release of VACMAN Server Corporate, VACMAN Server is now multilingual, supporting eight of the worlds’ major languages with embedded support for UK English, US English, German, French, International Spanish, Japanese, traditional and simplified Chinese.
· A huge market opens for VASCO's Strong Authentication products by making Digipass Pro 800 available for Europay-Mastercard EMV chip cards, the leading standard in European credit cards. Digipass Pro 800 will be offered as part of the 'Chip Authentication Program' to financial institutions by Europay-Mastercard.
· Bank of Valletta, the largest bank in the Mediterranean Republic of Malta, has chosen VASCO’s Digipass 250 to secure its Internet, Telephony and Call Centre-based operations. Bank of Valetta chose the VASCO technology to protect its customers’ information and transactions via the bank’s multi-channel delivery system.
· The leading Croatian Financial Services Provider MBU will deliver secure financial services based on VASCO, Proton World and Giesecke & Devrient products. A demo project, including VASCO’s Digipass 850, will start shortly. The system will be shown to all of MBU’s member-banks and later offered to the customers of interested Croatian financial institutions.
· Swiss Life/Rentenanstalt to use VASCO’s Digipass 300. The leading Swiss Insurance Company Swiss Life/Rentenanstalt (SWX: RAN; www.swisslife.com) will use VASCO’s Digipass 300. Swiss Life/Rentenanstalt is the market leader with a 28.2% share of the life insurance market in Switzerland. VASCO and Swiss Life entered into this agreement in collaboration with VASCO partner Eracom Technologies Schweiz.
· AuthentiDate and VASCO team up to offer secure and cost effective PKI based Mail by combining AuthentiDate’s Secure Mail System with VASCO’s award winning Digipass technology.
· VASCO signed worldwide over 20 new customers during Q1 2002. VASCO broadens its network of over 700 customers in its traditional strongholds in Europe, but also strengthens its presence in other regions such as the Mediterranean, the Middle East, Eastern Europe and Latin America.

Dennis D. Wilson, Executive Vice President and Chief Financial Officer of VASCO, noted:
“We are also very pleased that our Company was able to generate a significant positive EBITDA balance in the first quarter. This is further evidence that we are achieving the operating efficiencies that we targeted when we refocused our business plan”.
Mr. Wilson continued, “However, due to the continued soft market conditions experienced throughout our sector, we expect Q2 revenues to be slightly above or below Q1 revenues and net income to be flat to slightly lower as we anticipate modest expense increases. In the current market, our visibility for the second half of the year is not sufficient for us to provide continued guidance. However, we believe we can sustain the positive EBITDA that was achieved in the first quarter for the remainder of the year, and we forecast our cash flow breakeven point at between $6.5 and $7.0 million in quarterly revenues. Our cash position at March 31, 2002 was approximately $4.0 million, which is in line with the anticipated cash position in our previous guidance.”

[ see table attachment at the end of this release ]

*The stock options referred to are stock options issued to officers of the Company located outside the US whose services are rendered under consulting agreements. If these officers had been employees in the US, there would be no effect on operating income, net income or earnings per share.

VASCO secures the enterprise from the mainframe to the Internet with infrastructure solutions that enable secure e-business and e-commerce, protect sensitive information, and safeguard the identity of users. The Company's family of Digipass® and VACMAN® products offers end-to-end security through strong authentication, digital signature, network Single Sign-On, and Radius, LAN and Web security, while sharply reducing the time and effort required to deploy and manage security. VASCO's customers include hundreds of financial institutions, blue-chip corporations, and government agencies in more than 50 countries. More information is available at 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,” “expects,” and similar words, 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.
Reference is made to the Company's public filings with the US Securities and Exchange Commission for further information regarding the Company and its operations.

For more information contact:
VASCO Data Security:
Investor Relations:
Annemieke Blondeel, USA +1 630 932 8844, Europe +44 20 8298 99 60, [email protected]
Jochem Binst, +32 2 456 9810, [email protected]