Q#3 Results..Look good.....Rampant......
Kasten Chase's Q4 2000 Bottom Line Improves 87% Over Q3 2000
Toronto, Ontario --
Kasten Chase (TSE-KCA), a leading provider of high-assurance data
security systems, reported its audited financial results for the
fourth quarter and year ended December 31, 2000.
The company achieved an 87% improvement in its Q4 2000 bottom
line performance, recording a net loss of $108,000 or 1/5 of one
cent ($0.002) per share. The Q3 2000 loss was $807,000 or $0.02
per share. Revenues for the 4th quarter 2000 totaled $5.1
million, representing a quarter over quarter improvement of 14%
over Q3 2000 revenues of $4.4 million.
For fiscal 2000, the company's bottom line improved by 62%,
ending the year with a net loss of $4.5 million or $0.10 per
share as compared with a fiscal 1999 loss of $11.9 million or
$0.32 per share. Revenues for fiscal 2000 totaled $15.2 million.
The company closed the year with an extremely strong balance
sheet, showing $17.5 million in cash and no debt.
Revenues for fiscal 1999 totaled $16.5 million while Q4 1999
revenues were $5.4 million. For fiscal 1999, the company recorded
a net loss of $0.32 per share and for Q4 1999, a net loss of
$0.08 per share.
As a percentage of revenues, operating expenses for fiscal 2000
decreased 41.3% in real dollar terms to represent 78% of
revenues, versus 129% of revenues in fiscal 1999. Operating
expenses for Q4 2000 dropped to 54% of revenue from 102% of
revenue in Q4 1999, representing a real dollar improvement of
50%.
Shareholders' equity for fiscal 2000 improved 171% to close the
year at $24.9 million when compared to $9.2 million for fiscal
1999.
"Our financial results reflect the progress we have made over the
course of fiscal 2000," noted Paul Hyde, chief executive officer
at Kasten Chase. "In line with our strategic decision to narrow
our focus and move into the market for high-assurance data
security, thereby effectively re-launching the company, we
believe we have advanced our ability to realize positive progress
towards sustainable growth in our core business. There is little
doubt that the improvements we have made to our cost base and to
our operational structure go a long way to advancing our
prospects of achieving sustainable profitability," Mr. Hyde
added.
RASP Secure Access is currently deployed in over 160 US
Government agencies and departments with some 287 systems in
place.
Sales of RASP Secure Media, the company's newest product
offering, grew by 90% during Q4 2000 over the previous quarter.
In excess of 1,200 US Government users currently work on
computers protected by RASP Secure Media. RASP Secure Media
received National Security Agency (NSA) certification in June
2000, making it the only US Government approved security product
for the protection of classified data, up to and including Secret
data, resident on fixed and mobile computers.
"We remain pleased with our progress to date, particularly as it
relates to our sales focus and strategies," stated Jim Davies,
president and chief operating officer at Kasten Chase. "We
believe that our initial focus on government markets has afforded
us somewhat of a buffer against corporate spending concerns
currently facing many technology companies. That being said, we
believe that our planned launch into the commercial
high-assurance data security market will be well timed with the
return of higher levels of corporate spending," concluded Mr.
Davies.
"2000 was a year of major restructuring, significant cost
reduction, aggressive market development, major technological
consolidation and advancement, the achievement of improved
financial stability and the strengthening of our senior level
management team," added Mr. Hyde. "We have accomplished a great
deal in a short time and we believe we are now much better
positioned to reap the rewards of our investments as we seek
expanded sales growth in 2001."
The company noted that many of these operational advances have
enhanced its ability to realize improvements in the level of
profit it can extract from its base of revenues. Notable gross
margin improvements are anticipated in 2001 as the company
benefits from its purchase of the Mykotronx Palladium business
from Rainbow Technologies of California. This will result in yet
a further improved profitability quotient over that established
in 2000. It is anticipated that the application of the company's
tax loss carry forward to future potential profits will result in
no taxes payable on near to medium term profits.
"2001 will be a year of continued change and evolution at Kasten
Chase," noted Mr. Hyde. "We continue to manage the challenges of
new product approvals and their potential impact on the
timeliness and availability of our new products for sale. As we
look to the second half of 2001, we will proactively continue to
narrow our business focus and realize the challenges associated
with increasing reliance on revenue growth almost exclusively
from high-assurance data security products for remote and mobile
access, Internet security and our recently announced plans for
commercial and wireless security offerings," Hyde concluded.
"Among potential risks we include the timeliness of orders within
the prescribed financial quarters, although commitments to
purchase and payment for purchases have proven to be stable and
unqualified to date," added Mr. Hyde. "All in all, we remain
positive and optimistic about the longer term future of the
company and we are committed in our resolve to overcome the risks
and meet the challenges ahead as we move into the next phase of
our development."
Below is a brief highlight of some successes enjoyed over the
past year:
* Two financings raised net proceeds of $17.5 million
* US Marine Corps buys 26 RASP Secure Access systems
* US manufacturing base for RASP Secure Access established
* US Secret defense network approves RASP Secure Access for
mobile users
* Partner with EDS, IBM, CSC and General Dynamics for NMCI
contract bid; $6.9 billion Navy Marine Corp Intranet (N/MCI)
contract award uses RASP Secure Access
* General Dynamics adds RASP Secure Access to major US
government contract
* Handheld computing devices available with RASP security
* RASP Secure Access approved for use in 22 European countries
* Kasten Chase and Alcatel partner to provide secure access
solutions
* RASP Secure Media is certified by the US government's
National Security Agency (NSA)
* Partner with WinMagic to develop disk encryption technology
* Jim Davies appointed President and COO, US Air Force
(retired) General George Lampe joins KCA business
development team and the company opens new, expanded US
offices
* Two new distribution channels added for RASP Secure
Solutions
* Scott Air Force base adopts RASP Secure Access
* US Department of Energy selects RASP Secure Media
* US Air Force office of special investigations adopts RASP
Secure Access
* The Executive Office of the President of the United States
deploys RASP Secure Access
* Canadian Government approves RASP Secure Solutions
* US Internal Revenue Service selects RASP Secure Access
* RASP Secure Access for Enterprise Networks launched
* Pacific Air Force data security contract awarded, covering
9 Pacific Air Force bases
* KCA added to the TSE 300 Composite Index; top performer in
2000 |
