VASCO Reports Results for Third Quarter and First Nine Months of 2004
biz.yahoo.com
Thursday October 21, 3:00 am ET
Revenues Increase 32% Over Third Quarter of Prior Year; Operating Income Best in the Company's History; Cash Increases $2,598,000 From June 30, 2004 to $8,948,000. Financial Results and Guidance for Full-Year 2004 to be Discussed on Conference Call Today at 10:00 A.M. E.S.T.
OAKBROOK TERRACE, Ill., and BRUSSELS, Belgium, October 21
/PRNewswire-FirstCall/ -- VASCO Data Security International, Inc. (Nasdaq: VDSI), today reported its financial results
for the third quarter and nine-months ended September 30, 2004.
Revenues for the third quarter of 2004 increased 32% to $7,400,000 from $5,599,000 in 2003 and, for the first nine months of 2004, increased 24% to $20,595,000 from $16,670,000 in 2003.
Net income available to common shareholders for the third quarter of 2004 was $1,150,000, or $0.03 per diluted share and compares to a loss of $2,500,000, or $0.08 per diluted share in 2003. Net income available to common shareholders for the first nine months of 2004, was $2,540,000, or $0.08 per diluted share compared to a loss of $1,879,000, or $0.06 per diluted share in 2003. Net income available to common shareholders in 2003 included a charge of $3,720,000 for the beneficial conversion option associated with the Series D 5% Cumulative Preferred Stock issued in the third quarter of 2003.
Financial Highlights:
-- Results reflect the seventh consecutive quarter of operating profit and
positive earnings before interest, taxes, depreciation and amortization
("EBITDA").
-- Results reflect the third consecutive quarter-over-quarter increase in
revenue.
-- Gross profit was $5,156,000 or 70% of revenue for the third quarter and
$14,677,000 or 71% of revenue for the first nine months of 2004. Gross
profit was $3,453,000 or 62% of revenue for the third quarter and
$9,943,000 or 60% of revenue for the first nine months of 2003.
-- Operating expenses for the third quarter and first nine months of 2004
were $3,475,000 and $10,618,000, respectively, an increase of 2% from
$3,395,000 reported for the third quarter 2003 and an increase of 16%
from $9,185,000 reported for the first nine months of 2003.
-- Operating income for the third quarter and first nine months of 2004
was $1,681,000 and $4,059,000, respectively, an increase of $1,623,000
from $58,000 reported for the third quarter of 2003 and an increase of
$3,301,000 from the $758,000 reported for the first nine months of
2003. Operating income as a percentage of revenue for the third
quarter and first nine months of 2004 was 22.7% and 19.7%,
respectively, compared to 1.0% and 4.5% for the comparable periods in
2003.
-- Net income from continuing operations for the third quarter and first
nine months of 2004 was $1,201,000 and $2,737,000, respectively, and
compares to a net loss of $194,000 reported for the third quarter of
2003 and a net income of $525,000 reported for the first nine months of
2003.
-- Net income from total operations for the third quarter and first nine
months of 2004 was $1,201,000 and $2,737,000, respectively, a decrease
of 7% from $1,287,000 reported for the third quarter of 2003 and an
increase of 10% from $2,490,000 reported for the first nine months of
2003, respectively. Net income from total operations in 2003 included
the results of its VACMAN Enterprise business, which was sold in the
third quarter of 2003.
-- Earnings before interest, taxes, depreciation and amortization from
continuing operations was $1,806,000 and $4,562,000 for the third
quarter and first nine months of 2004, respectively, an increase of
464% from $320,000 reported for the third quarter of 2003 and an
increase of 134% from $1,951,000 reported for the first nine months of
2003.
-- Cash balances at September 30, 2004 totaled $8,948,000 compared to
$6,350,000 and $4,817,000 at June 30, 2004 and December 31, 2003,
respectively.
Operational and Other Highlights:
-- VASCO wins 103 new customers in Q3 2004 (15 banks and 88 corporate
customers) and 347 for the first nine months of 2004. Year-to-date new
customers include 48 new banks and 299 corporate customers.
-- Bendigo Bank (Australia) and ABN Amro (Singapore) to use Digipass for
Retail Banking;
-- VASCO Launched Digipass Host Authentication to Tackle Phishing;
-- Network Engines and VASCO Announce Extended Distribution Agreement
(USA);
-- VASCO Strengthens Indirect Sales Network in Europe by Signing Leading
Distributors in UK, Denmark, Switzerland, Belgium, The Netherlands,
France and Italy;
-- VASCO & Protocom Development Systems Launch Digipass Pack for Microsoft
Windows.
"Our strategies to expand the market's awareness of our products are working as evidenced by our year-over-year and quarter-over-quarter growth in revenue and the continued expansion of our customer base," said Ken Hunt, VASCO's CEO, and Chairman. "The improvement in operating margins as a percent of revenue also demonstrate the leverage we have with our operations. With the strong results of the third quarter and first nine months of 2004, we have begun to increase our investment in sales and marketing programs, including expanding our sales staff. With the added investment, we are confident that our strong growth will continue."
"The results of the third quarter reflect the strong growth of the business in markets outside of Europe and the stable revenue in Europe during the quarter," said Jan Valcke, VASCO's President and COO. "Traditionally, Q3 is our weakest quarter, due to the seasonality that slows down the Corporate Network Access market. Nevertheless, in total, the third quarter of 2004 is stronger than Q1 and Q2 of this year. This clearly proves the growing demand for our products, which is also demonstrated by the growth in our backlog. As we start the fourth quarter, we have a backlog of firm orders to be shipped in the fourth quarter of $6.8 million, which is 54% higher than the $4.4 million backlog we had, entering the fourth quarter of 2003. VASCO is quickly growing its business, and is ready for the next episode in its growth cycle."
Cliff Bown, Executive Vice President and CFO added, "Our balance sheet continues to strengthen as a result of the strong operating performance. Cash balances have increased $2,598,000 or 41% from June 30, 2004 and $4,131,000 or 86% from December 31, 2003. Our working capital increased by 22% in the third quarter, from $7,133,000 at June 30, 2004 to $8,700,000 at September 30, 2004. Days Sales Outstanding (DSO) in net accounts receivable decreased to approximately 43 days at September 30, 2004 from 58 days at June 30, 2004." |
