IRE Reports Fourth Quarter Results
BALTIMORE--(BUSINESS WIRE)--Feb. 14, 2000--Information Resource
Engineering, Inc. (IRE) (Nasdaq: IREG), a leading provider of Virtual
Private Network (VPN) technology and solutions for secure business
communications, today reported financial results for the three months
and the year ended December 31, 1999.
As expected, the Company reported a net loss for the three-month
period of $643,000, or $(0.11) per share on a diluted basis on
revenues of $4.5 million, compared with a net loss of $712,000, or
$(0.13) per share on a diluted basis on revenues of $7.1 million for
the same period in 1998. Revenues for the year were $18.9 million,
compared with $23.2 million in 1998. The net loss for the year was
$3.1 million, or $(0.56) per share on a diluted basis, compared with a
net loss of $2.4 million, or $(0.44) per share on a diluted basis, for
the same period in 1998.
Strong demand for the Company's VPN products resulted in new
orders aggregating $7.4 million during the quarter and a backlog of
$6.2 million at the end of the quarter. VPN products that drove the
increase in orders were: SafeNet(TM) VPN Chips, which began shipping
to customers in the fourth quarter; SafeNet/Soft-PK, which generated
significant new contracts; and SafeNet/Enterprise, which was ordered
in high volume by the Internal Revenue Service. European legacy
business revenues declined by $2.9 million in the fourth quarter of
1999, compared to the same quarter in 1998.
During the quarter, the Company reorganized its U.S. Operations
into two separate business units focused on the OEM and end-user
segments in the VPN market. Anthony Caputo, IRE's Chairman and CEO
commented, "The Company has gradually been increasing its focus on the
OEM technology business in response to our understanding of how users
are actually implementing VPNs, and our expectations for how they will
be implementing VPNs in the future as networks continue to evolve. At
the same time, we are continuing to deliver best-of-breed products for
end users that require dedicated VPN solutions. Creating distinct
business units for each market segment will allow us to take a more
focused approach to serving the needs of our customers."
The Company made significant progress in the fourth quarter with
regard to its efforts to embed its SafeNet VPN technology into the
products of major networking companies. The SafeNet DSP, the Company's
"VPN System on a Chip," was designed into seven new networking product
families during the quarter. These new design wins, when added to
previously announced major wins at Cisco Systems, Nortel Networks, and
Cabletron Systems, give the SafeNet DSP a leading position in the
networking arena. Cisco Systems is now shipping its 7000 series
routers with the SafeNet DSP as part of an optional plug-in module for
increased VPN performance.
The Company's interoperable IPSec client, SafeNet/Soft-PK, is
enjoying broad market acceptance. During the fourth quarter, the
Company received contracts aggregating $3.2 million for new versions
and design wins of the product, including a license to Cisco Systems
for Service Provider-related sales. The Company has delivered
approximately $1 million of SafeNet products related to these
contracts, which is included in deferred revenue as of December 31,
1999. In addition, 3Com Corporation licensed and co-branded
SafeNet/Soft-PK for its remote access VPN solution, further
strengthening IRE's position as the OEM market leader and making
SafeNet technology an increasingly prevalent part of the network
infrastructure.
The Company also had a significant customer win in the end-user
market during the fourth quarter, securing a new contract from the IRS
for its "Secure Dial In" application. The $2.4 million contract
includes the purchase of SafeNet VPN gateway, client, and management
products for an implementation that will connect more than 13,000 IRS
employees and facilitate a broad range of secure remote access
transactions. Only $800,000 of this order was shipped to the IRS this
quarter, leaving the remaining portion of the order in backlog.
The Company responded to the market need for effective VPN
management solutions with the introduction of the SafeNet/VPN Policy
Manager. The SafeNet/VPN Policy Manager provides comprehensive policy
management for the widely deployed client SafeNet/Soft-PK, which has
already been adopted by major networking companies such as Cisco,
Lucent, and Network Alchemy/Nokia. The first OEM customer for the
SafeNet/VPN Policy Manager is 3Com Corporation, who licensed the
product along with their purchase of SafeNet/Soft-PK. |
