NW_20020220_VASCO Reports Fourth Quarter and Year End Results

OAKBROOK TERRACE, Ill. – February 20, 2002 – VASCO Data Security International, Inc. (NASDAQ & EASDAQ: VDSI; www.vasco.com), a global provider of security products that enable e-business and e-commerce, today announced financial results for the fourth quarter and year ended December 31, 2001. Revenues for the quarter of $6,030,838 were in line with the guidance released by the Company on December 12, 2001. This represents a decrease in revenue of 42% from the record revenue of $10,319,470 reported in the fourth quarter of 2000.

For the fourth quarter of 2001, the Company reported an operating loss, before restructuring charges and non-cash compensation for stock options to certain officers of the Company, of $1,971,775 compared with operating income before these items (and before acquisition costs in 2000) of $419,252 for the fourth quarter of 2000. Net loss before restructuring charges was $1,608,937, or $0.07 per basic and diluted share, compared with net income of $150,964 , or a loss of $0.01 per share for the fourth quarter of 2000. The net loss after restructuring charges of $4,283,752 was $5,892,689, or $0.22 per basic and diluted share, compared with $150,964, or a loss of $0.01 per share for the fourth quarter of 2000. 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.

The Company reported revenues of $26,726,849 for the year ended December 31, 2001, a 5% decrease from the prior year, in which reported revenues were $28,065,680. The Company incurred a net loss for the year ended December 31, 2001, before restructuring charges, of $0.32 per basic and diluted share.
The net loss after restructuring charges for the year ended December 31, 2001, was $12,033,971, or $0.47 per basic and diluted share. This compares with a net loss of $4,161,772 or $0.17 per basic and diluted share, for the year 2000.

"Our results are actually better than the guidance which we communicated to the market on December 12, 2001. Our company added over 70 new customers and delivered the year’s two millionth Digipass during Q4", stated Mario Houthooft, VASCO President and CEO.
"We are pleased that our cost restructuring is complete, and our Company is moving forward into 2002 with a substantially lower cost structure. With our expanded product offering, growing partnership network, and total focus of our resources on our core business, we are well on our way to achieving our goal of profitability in 2002."

Dennis D. Wilson, Executive Vice President and Chief Financial Officer of VASCO, noted: “VASCO emphasized efficient balance sheet management during the quarter. We ended the quarter with over $6.0 million of cash, which is substantially higher than expected. Our DSO's decreased from 75 days at September 30, to 56 days at December 31. Our operating results were positively influenced to our tight cost controls, foreign currency gains and year-end tax planning strategies. We expect that the Company has sufficient cash and working capital to achieve its financial goals during the year 2002."

Highlights Q4, 2001-

- Leading Czech Bank Ceska Sporitelna to use VASCO's Digipass 700. The largest bank in the Czech Republic, Ceska Sporitelna (CS), will offer Digipass products to its customers as an e-banking security tool. VASCO closed the deal together with its Czech partners DNS and A&&L soft. In total, Ceska Sporitelna orders 50,000 units of Digipass 700.

- VASCO sells over 800,000 Digipass 800 in one year.
VASCO further penetrates the banking and Smart Card market. The success of Digipass 800 is due to secure, flexible and cost effective access to applications in existing banking IT infrastructures via existing banking smart cards.

- VASCO partners with Europay-Mastercard, Transale, Cyota, Cryptomathic, URoam, Politzer & Haney.
VASCO signs new partners worldwide in various sectors, from financial services over remote access to PKI.

- VASCO expands Solution Partner Network with 94% and Channel Partner
Network with 31% in 2001.
VASCO's partner network has grown spectacularly during 2001. 16 new solution partners and 25 new channel partners joined VASCO's network.

- VASCO launches Digipass 850
As the next generation of “secure e-portal”, the Digipass 850 is the first device in the world that can either be connected to a PC’s USB port, acting as a secure PC/SC-compliant smart card reader, or used unconnected to add channel-independent strong authentication and e-signature capability to any smart card platform. With the Digipass 850, organizations now have a flexible and secure tool for supporting the deployment of smart cards for applications ranging from Public Key Infrastructures, e-banking, e-commerce, e-purse, and network security – all in a single device.
 

- VASCO launches VACMAN Server 6.0
With VACMAN Server 6.0, organizations can now easily and affordably provide full Authentication, Authorization, and Administration (AAA) security for their corporate networks and web-based applications through the means that fit their business needs. The software also makes it easy for organizations to implement VASCO’s family of Digipass trusted user platforms for strong authentication and e-signature security, ranging from hardware authenticators and smart cards to Digipass software and secure mobile phones and PDA’s.

VASCO Data Security International, Inc. reported the following (see attachment #1)

VASCO will hold a conference call to discuss its financial results on Wednesday, February 20, 2002, at 11.30 a.m. (EST)/16.30 p.m. (GMT)/17.30 p.m. (CET). During the call Mario Houthooft, VASCO’s President and Chief Executive Officer, and Dennis Wilson, VASCO’s Executive Vice President and Chief Financial Officer, will discuss the results. VASCO will broadcast the conference call live via the Internet at www.vasco.com.
This Webcast will also be archived for later listening at www.vasco.com. In addition, a replay by telephone will be available until 12:00 p.m. (EST) on February 25. To access the replay, in the USA dial +1 303 804 1855, and enter passcode 1567527, or internationally dial +44 20 8288 4459, and enter passcode 653892.

About VASCO
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:

Media:
Jochem Binst, +32 2 456 9810, [email protected]

Investor Relations:
Annemieke Blondeel, USA +1 630 932 8844, Europe +44 20 8298 9960, [email protected]