NW_20011024_VASCO Announces Third Quarter Results
OAKBROOK TERRACE, Ill. and BRUSSELS, Belgium, Oct 24, 2001 /PRNewswire via COMTEX/ --
Revenues Impacted by Economic Downturn; Major Restructuring Initiative to Cut Operating Expenses by 40% And Target Positive Cash Flow in 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 quarter ended September 30, 2001.
Revenue for the quarter decreased 16% to $4,788,409, from $5,669,766 for the third quarter of 2001 as revenue from the U.S. decreased to 12% of revenues from 29% in the prior year third quarter. Software revenue in the US has been severely affected by the ongoing slump in the software sector. The Company reported a net loss for the quarter of $3,579,534, or $.14 per share, compared with a net loss of $2,302,422, or $.09 per share in the third quarter of 2000. Loss before interest, taxes, depreciation and amortization was $2,734,592 for the third quarter of 2001, compared with $1,911,132 for the same period in 2000.
Revenue for the nine months ended September 30, 2001 was $20,696,011, a 17% increase over revenues of $17,746,210 reported for the same period last year. The Company reported a net loss of $6,142,282, or $.25 per share for the first nine months of 2001, compared with a net loss of $4,312,736 or $.17 per share for the first nine months of 2000. During this period, loss before interest, taxes, depreciation and amortization was $4,027,022, compared with $3,472,594 for the first nine months of the prior year.
"We are announcing a substantial restructuring which will permit the Company to refocus its resources on its core business: strong authentication and digital signature, and secure Internet, corporate network and remote access with our strong line of server products. The objective of this restructuring is to accelerate our path to profitability and positive cash flow by lowering our quarterly revenue breakeven point from approximately $11 million to about $7 million," stated Mario Houthooft, VASCO's President and Chief Executive Officer.
"Our third quarter results are below previous estimates," he added. Although operating expenses were also lower than previous estimates, the economic downturn has substantially affected our ability to sell large projects. Since the outlook for Q4 is continued weakness in the large enterprise software market, especially in the United States, we are undertaking aggressive action in order to protect shareholders' value."
Dennis D. Wilson, Executive Vice President and Chief Financial Officer stated, "We are announcing a staff reduction of 60 persons of our 150 worldwide workforce, mainly in the US and at smaller offices in France, the UK and the Netherlands, whose strategic activities will be assumed by the larger offices. Consolidation of our R&D centers and reallocating resources to focus on our core business will permit significant efficiencies to be achieved over the next twelve months. The restructuring plan is expected to be completed in six months."
He continued, "The majority of the cost reductions, however will be achieved in the next 60 days. Significant reductions will also be made in travel and communication costs, and in finance and administration. Our target is to reduce total operating costs by approximately 40% from Q3 levels. This should permit the company to show positive operating cash flow at quarterly revenues of approximately $7 million per quarter. We expect a restructuring charge in the fourth quarter of between $500,000 and $1 million from this activity. In conjunction with this restructuring, we are also undertaking a complete review of our intangible asset values, which could provide an additional non-cash charge in the fourth quarter which cannot be estimated at this time."
-- VASCO's Digipass 300 and VACMAN Authentication Server products
received OPSEC(TM) Certification from Check Point Software
Technologies, ensuring that Digipass seamlessly interoperates with
Check Point's industry-leading VPN-1(TM)/FireWall-1(R) security
-- Funk Software added native support for VASCO's Digipass family of
two-factor authenticators to its Steel-Belted Radius family of
RADIUS/AAA servers for remote and wireless LAN user authentication,
authorization and accounting, for maximum flexibility for users who
wish to use Digipass authentication to secure their networks.
-- Microsoft certified VACMAN Server 6.0 AAA security software with
Digipass strong authentication for secure messaging with Outlook Web
Access (OWA), offering enhanced security for over 70 million
Microsoft Exchange users worldwide. With the VASCO security solution
now certified by Microsoft, any corporation, financial institution,
and government agency using OWA is assured that the VASCO security
solution is 100% compatible with its Microsoft environment.
-- Launched VACMAN Server 6.0 for Citrix, providing AAA security to
Citrix(R) software. Working seamlessly with the Citrix Nfuse and
MetaFrame central servers, VACMAN Server 6.0 provides secure virtual
single sign-on capabilities with Digipass strong authentication, as
well as centralized management functions to Citrix users.
-- Signed an agreement with Artesia Bank, Brussels, Belgium, to revise
the terms of its outstanding $3.4 million convertible loan with
Artesia. Under its revised terms, the loan will now be convertible
into shares of VASCO Common Stock at the fixed conversion rate of
$7.50 per share rather than a floating rate based on the market price
of the VASCO Common Stock. The maturity date of the convertible loan
is September 30, 2003, with an interest rate of 6%.
-- Joined forces with Netegrity to enhance Web Portal security with
Digipass strong authentication, with Netegrity's SiteMinder now
offering native support for the entire Digipass family of secure user
platforms, from hardware authenticators to mobile phones and PDA's.
-- Introduced Digipass security software making strong authentication
and digital signature security available for Microsoft's Pocket PC
platform. Millions of users of Pocket PC PDA's and smart phones can
benefit from secure access to corporate networks and e-business and
e-commerce applications, with all the mobility and advantages of a
Pocket PC device. According to IDC, over four million Pocket PC
mobile devices have shipped to date, and more than six million
devices will be sold into the enterprise in 2004.
-- Opened a sales office in Sydney, Australia, the financial and
commercial market center of the country, to leverage growth of
Australian e-commerce initiatives. The Australian AAA security
market is expected to achieve a 54% CAGR by 2005. The Sydney office
will further support and leverage the company's already considerable
installed base in the region, which includes remote banking and
corporate network customers such as Austereo, Richard Ellis, Mortgage
Choice, Granny May's, Blake Dawson Waldron, the Queensland Department
of Transport, and BytePower.
-- Stratus Technologies selected VASCO's Digipass to protect the world's
most reliable server technology, with more than 700 Stratus customers
worldwide now able to enhance critical business applications with
Digipass strong authentication security. Stratus customers include
15 out of the world's 20 largest banks, prominent US securities
firms, major credit card companies, the largest stock exchange in
Asia, and the largest options exchange in the world.
Revised Guidance for Q4 and 2002
The Company is also revising its guidance for the fourth quarter and providing guidance for 2002 as follows:
-- Q4 revenues of between $5.5 and $6.5 million, and loss per share of
between $.10 and $.13
-- 2002 revenues of between $30 and $33 million, and earnings per share
of between zero and $.08 per share.
"We ended the third quarter with nearly $8 million of cash," noted Dennis D. Wilson. "Our forecast is to end the year with over $3 million of cash and have positive EBITDA in the first quarter of 2002. We believe we have sufficient cash to reach positive cash flow by that time."
VASCO Data Security International, Inc. reported the following unaudited results (see attached graphic).
Conference Call and Live Webcast
VASCO will hold a conference call to discuss its Q3 earnings on Wednesday, October 24, 2001 at 10:00 a.m. Eastern time. A live webcast of this conference call will be available from the investors section of VASCO's website at www.vasco.com as well as at www.streetevents.com; participants should register for the webcast approximately 15 minutes prior to the event to download and install any necessary software. The webcast will also be archived on the VASCO website. The Conference Call will be recorded, and an Instant Replay will be available 24 hours a day until midnight on Friday, October 26, 2001, by calling:
US: 1 703 736 7336, Passcode 635 462
UK: 020 8288 4459, Passcode 635 462
International: +44 (0) 20 8288 4459, Access code: 635 462
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(R) and VACMAN(R) products offers end-to-end security through strong authentication and digital signature, enterprise Single Sign-On, and LAN 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.
Americas, Mike Lange, +1-630-932-8844, [email protected]
EMEA-APAC, Jochem Binst, +32 2 456 9810,
[email protected]pan.com ,
Annemieke Blondeel, USA +1-630-932-8844, or Europe, +44 20 8308 7080,
[email protected] ,
all of VASCO