BEDFORD, Mass., Jul 13, 2000 /PRNewswire via COMTEX/ -- RSA Security Inc. (Nasdaq: RSAS) today reported financial results for the second quarter ended June 30, 2000. Revenue for the second quarter of 2000 increased 29% to $66.7 million, from $51.8 million for the second quarter of 1999. Reported net income for the second quarter of 2000, including the operations of RSA Capital, was $37.2 million ($0.87 per share on a diluted basis), compared to $43.0 million ($1.05 per share on a diluted basis) for the second quarter of 1999. Reported net income for the second quarter of 2000 includes a pre-tax gain of $45.0 million from the sale of shares of the Company's holdings in VeriSign, Inc. and Trintech Group PLC. Earnings for the quarter from the Company's core operating business increased 57% to $9.4 million ($0.22 per share on a diluted basis) from $6.0 million ($0.15 per share on a diluted basis) for the same period in 1999.
Revenue for the six months ended June 30, 2000 was $130.0 million, a 29% increase over the same period last year. Net income from the Company's core operating business increased 64% to $18.0 million, or $0.41 per diluted share, compared to $11.0 million, or $0.27 per diluted share, in the first six months of 1999. Reported net income for the first six months of 2000 was $61.8 million, compared to $84.0 million for the same period last year. Reported net income for the first six months of 2000 includes pre-tax gains of $72.1 million from the sale of shares of the Company's holdings in VeriSign, Inc. and Trintech Group PLC.
"We are pleased with the Company's performance in Q2 and the first half of 2000," said Art Coviello, CEO and president of RSA Security. "Our RSA Keon PKI products are gaining momentum, sales of our RSA BSAFE encryption software are strong, and our RSA SecurID authentication solutions are expanding into the markets for B2B and B2C e-commerce."
About RSA Security Inc.
RSA Security Inc., The Most Trusted Name in e-Security(TM), helps organizations build secure, trusted foundations for e-business through its RSA SecurID(R) two-factor authentication, RSA BSAFE(R) encryption and RSA Keon(R)(TM) public key management systems. With more than a half billion RSA BSAFE-enabled applications in use worldwide, more than six million RSA SecurID users and almost 20 years of industry experience, RSA Security has the proven leadership and innovative technology to address the changing security needs of e-business and bring trust to the new, online economy. RSA Security can be reached at www.rsasecurity.com.
NOTE: BSAFE, Keon, RSA and SecurID are registered trademarks, and The Most Trusted Name in e-Security is a trademark of RSA Security Inc. All other products and services mentioned are trademarks of their respective companies.
This press release contains forward-looking statements regarding RSA Security's financial condition and growth. Such statements involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are delays in product development, technical difficulties, software bugs and errors, competitive pressures, changes in customer and market requirements and standards, market acceptance of new technologies, technological changes in the computer industry, RSA Security's ability to protect its intellectual property and to establish and maintain strategic relationships, general economic conditions and the risk factors detailed from time to time in RSA Security's periodic reports and registration statements filed with the Securities and Exchange Commission, including without limitation RSA Security's Annual Report on Form 10-K filed on March 15, 2000 and its Quarterly Report on Form 10-Q filed on May 11, 2000.
Pro Forma Statement of Operations from Core Operating Business
(in thousands except per share data)
June 30, June 30,
2000 1999 2000 1999
(unaudited) (unaudited)
Revenue $66,700 $51,809 $130,040 $100,481
Gross profit 53,442 41,427 103,892 78,661
Operating expenses:
Research and development 11,256 9,150 22,190 17,378
Marketing and selling 24,001 19,243 45,990 37,186
General and administrative 7,107 6,181 14,789 12,114
Total operating expenses 42,364 34,574 82,969 66,678
Operating income 11,078 6,853 20,923 11,983
Interest income and other 3,087 1,905 6,275 3,948
Income before provision
for income taxes 14,165 8,758 27,198 15,931
Provision for income taxes 4,815 2,671 9,246 4,858
Minority interests -- (130) -- (63)
Net Income $9,350 $5,957 $17,952 $11,010
Net income per share
-- basic $0.24 $0.15 $ 0.46 $ 0.28
Weighted average number
of common shares -- basic 39,370 38,789 39,341 39,254
Net income per share
-- diluted $0.22 $0.15 $ 0.41 $ 0.27
Weighted average number
of common shares -- diluted 42,990 40,756 43,478 41,429
Condensed Consolidated Statement of Operations
(in thousands except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
(unaudited) (unaudited)
Revenue $66,700 $51,809 $130,040 $100,481
Gross profit 53,442 41,427 103,892 78,661
Operating expenses:
Research and development 11,256 9,150 22,190 17,378
Marketing and selling 24,001 19,243 45,990 37,186
General and administrative (ii) 7,896 6,181 15,932 12,114
Restructuring (i) (iii) (2,079) -- (2,079) 6,550
Total operating expenses 41,074 34,574 82,033 73,228
Operating income 12,368 6,853 21,859 5,433
Interest income and other 3,087 1,905 6,275 3,948
Net gain from investments (i) 45,013 67,211 72,051 141,342
Income before provision for
income taxes 60,468 75,969 100,185 150,723
Provision for income taxes 23,236 32,844 38,353 66,676
Minority interests -- (130) -- (63)
Net Income $37,232 $42,995 $61,832 $83,984
Net income per share - basic $0.95 $1.11 $1.57 $2.14
Weighted average number of
common shares -- basic 39,370 38,789 39,341 39,254
Net income per share -- diluted $0.87 $1.05 $1.42 $2.03
Weighted average number of
common shares -- diluted 42,990 40,756 43,478 41,429
Condensed Consolidated Balance Sheet
(in thousands)
June 30, December 31,
2000 1999
(unaudited)
Cash and marketable securities $1,108,428 $1,383,281
Accounts receivable, net 50,539 42,735
Total assets 1,272,610 1,512,124
Stockholders' equity 586,624 611,024
(i) Non-core activities.
(ii) General and administrative expenses included $789 and $1,143 for the
three months and six months ended June 30, 2000, respectively, related to
non-core activities of the Company's RSA Capital unit.
(iii) Revision to initial estimates of restructuring expenses established
in 1999 for facilities exit and other costs.
SOURCE RSA Security Inc.
CONTACT: editorial, Richard Mack, 781-301-5344, or
rhmack@rsasecurity.com, or financial, Steve Casey, 781-301-5131, or
scasey@rsasecurity.com, both of RSA Security Inc.
URL: rsasecurity.com
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KEYWORD: Massachusetts
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