NW_20020724_VASCO Reports Second Quarter Results

July 24, 2002

OAKBROOK TERRACE, Ill., and BRUSSELS, Belgium, July 24, 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 second quarter of 2002. Revenues for the quarter of $4,150,253 were slightly higher than guidance previously released by the Company on July 9. Revenues for the second quarter of 2001 were $8,034,877.

Operating loss for the second quarter of 2002 was $1,283,440 compared with an operating loss of $1,525,787 for the second quarter of 2001. Operating expenses declined 43% from the previous year's second quarter from $6,654,486 to $3,787,533. The Company reported a net loss for the second quarter of 2002 of $1,670,429 or $.07 per basic and diluted share compared with a net loss of $1,523,173 or $.06 per basic and diluted share for the second quarter of 2001.

Revenues for the six months ended June 30, 2002 were $10,182,681 compared with $15,907,602 for the first six months of 2001. The operating loss for the six months ended June 30, 2002 was $1,452,352 compared with an operating loss of $2,648,730 for the first six months of 2001. Basic and diluted loss per share for the six months ended June 30, 2002 was $.09 compared with a basic and diluted loss per share of $.11 for the first six months of 2001.

The loss before interest, taxes, depreciation and amortization (EBITDA), and stock option compensation was $1,096,143 for the second quarter of 2002, and $744,242 for the first six months of 2002, compared with a loss before these items of $1,008,496 in the second quarter of 2001, and $1,245,621 for the first six months of 2001. The Company had a cash balance at June 30, 2002 of $3,059,148.

"The results we are reporting today are somewhat improved over the estimate that we gave to the market on July 9," stated Mario Houthooft, VASCO President and CEO, "In spite of a very challenging market environment, we were able to grow our corporate network access revenues 150% in 2002 over the annualized rate in the fourth quarter of 2001. This is a result of the refocus and reorganization of our Company that we announced in the fourth quarter of last year. Unfortunately, during the second quarter we saw a continued delay in the buying decisions of some of our largest customers. We believe that as the market rebounds, our lean cost structure, along with our significant penetration of the corporate access market, and our continued dominant position in the AAA market in the financial sector, will enable our Company to deliver outstanding margin and operating ratios. At this moment, we can see that order intake is getting more solid."

Dennis Wilson, Executive Vice President and Chief Financial Officer commented, "Our cash position is exactly where we anticipated it would be at the beginning of the quarter. We are very pleased with the progress in cost reductions, and additional cost reductions will take effect in the third and fourth quarters of this year. By year end, we anticipate that our cost structure will be reduced by 50% over 2001 levels. Additionally, our focus for the third quarter will be to reduce DSO's from the current 90 day range. A reduction in this ratio will result in freeing up additional cash for operations."

VASCO Data Security International, Inc.
Consolidated Statement of Operations (unaudited)
(please see table at the bottom of this release)

Q2 2002 Highlights
· During Q2 2002, VASCO won 85 new customers in the corporate networking area
· 12 new banking customers bought VASCO products during Q2 2002
· BCA will use VASCO’s Digipass 250 and VACMAN Programmer
· VASCO unlocks new banking potential in Latin-America, signing contracts with Redbanc (Chile), Lloyds Bank (Guatemala) and Banco Aleman Platina (Panama)
· VASCO’s revenue in the Corporate Access Market for Small & Medium Sized Enterprises grows rapidly during first half 2002, up 150% over 2001 annualised rate. To accomplish a further penetration of the Corporate Network Access Market , VASCO partnered during Q2 with leading companies as E92plus and STS/BUSINESSONE.
· VASCO joins the Cisco AVVID Program with VACMAN Radius Middleware and Digipass Pro 300
· VASCO announces partnerships with Element and Whale
· VASCO awards Fortis Bank and Telindus for their outstanding accomplishments

Please join us during our upcoming conference call on July 24, 2002, at 10:30 a.m. EDT - 16:30h CET.
During the Conference Call, Mr Mario Houthooft, CEO and Mr Dennis Wilson, CFO, will discuss VASCO’s Results for the Second Quarter 2002.
To participate in this Conference Call, please dial one of the following numbers:
USA: +1 800.374.0844
International: +44
and mention access code: VASCO to be connected to the Conference Call.

The Conference Call is also available in listen-only mode on www.vasco.com. Please log on 15 minutes before the start of the Conference Call in order to download and install any necessary software. The recorded version of the Conference Call will be available on the VASCO website 24 hours a day.

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