VASCO Reports Record Results for Third Quarter and First Nine Months of 2006
biz.yahoo.com
Thursday October 26, 2:00 am ET
Revenues for the third quarter 2006 increase 41% over Q3 2005; Operating income increases 96% over Q3 2005. Revenue for the quarter is best in the Company's history; VASCO increases its full-year 2006 guidance for operating margins; Financial results for the periods ended September 30, 2006 and guidance for full-year 2006 to be discussed on conference call today at 10:00 a.m. E.D.T.
OAKBROOK TERRACE, Ill., and BRUSSELS, Belgium, Oct. 26 /PRNewswire-FirstCall/ -- VASCO Data Security International, Inc. (Nasdaq: VDSI; vasco.com ) today reported financial results for the third quarter and nine months ended September 30, 2006.
Revenues for the third quarter of 2006 increased 41% to $18.7 million from $13.3 million in 2005 and, for the first nine months of 2006, increased 37% to $50.9 million from $37.1 million in 2005.
Net income available to common shareholders for the third quarter of 2006 was $3.3 million, or $0.09 per diluted share, an increase of $1.5 million or 88% from $1.8 million, or $0.05 per diluted share in 2005. Net income available to common shareholders for the first nine months of 2006 was $7.5 million, or $0.20 per diluted share, an increase of $2.8 million or 59% from $4.7 million, or $0.13 per diluted share, in 2005.
Financial Highlights:
-- Gross profit was $12.8 million or 68% of revenue for the third quarter
and $34.1 million or 67% of revenue for the first nine months of 2006.
Gross profit was $8.1 million or 61% of revenue for the third quarter
and $23.4 million or 63% of revenue for the first nine months of 2005.
-- Operating expenses for the third quarter and first nine months of 2006
were $7.8 million and $22.1 million, respectively, an increase of 40%
from $5.6 million reported for the third quarter 2005 and an increase
of 33% from $16.7 million reported for the first nine months of 2005.
Operating expenses for the third quarter and first nine months of 2006
included $0.5 million and $1.2 million, respectively, related to
stock-based incentives.
-- Operating income for the third quarter and first nine months of 2006
was $5.0 million and $12.0 million, respectively, an increase of
$2.5 million or 96% from $2.5 million reported for the third quarter of
2005 and an increase of $5.3 million or 77% from the $6.7 million
reported for the first nine months of 2005. Operating income, as a
percentage of revenue, for the third quarter and first nine months of
2006 was 26.6% and 23.5%, respectively, compared to 19.1% and 18.2% for
the comparable periods in 2005.
-- Net income for the third quarter and first nine months of 2006 was
$3.3 million and $7.5 million, respectively, and compares to net income
of $1.8 million reported for the third quarter of 2005 and net income
of $4.7 million reported for the first nine months of 2005.
-- Earnings before interest, taxes, depreciation and amortization was
$5.3 million and $12.2 million for the third quarter and first nine
months of 2006, respectively, an increase of 80% from $3.0 million
reported for the third quarter of 2005 and an increase of 51% from
$8.1 million reported for the first nine months of 2005.
-- Net cash balances, cash balances less borrowing under its line of
credit, at September 30, 2006 totaled $20.4 million compared to
$13.0 million and $14.0 million at June 30, 2006 and December 31, 2005,
respectively.
Operational and Other Highlights:
-- Approximately 2.9 million Digipasses shipped in the third quarter 2006,
an increase of 60% from the third quarter of 2005. For the nine months
ended September 30, 2006, approximately 7.4 million Digipasses were
shipped, an increase of 50% over the same period in 2005.
-- VASCO won 381 new customers in Q3 2006 (58 banks and 323 enterprise
security) and 1,083 for the first nine months of 2006. Year-to-date
new customers include 138 banks and 945 enterprise security.
-- VASCO won 29 U.S. Banks during Q3 2006.
-- Postfinance (Switzerland) uses Digipass 810 for corporate and retail
banking.
-- Garanti Bank (Turkey) secures retail customers with Digipass for Java
Phone.
-- Old National Bank (U.S.A.) uses Digipass 260 for corporate banking.
-- Banca Antonveneta uses VASCO's Digipass GO3 for retail banking.
-- Promedico (The Netherlands) secures medical data with Digipass 300 and
VACMAN Controller.
-- VASCO launches fraud detection & analysis services.
-- VASCO launches Digipass Smart Pack.
-- VASCO is the first company to receive full Belgian EPCI Certification
for Digipass 810.
-- Jean K. Holley elected to VASCO's Board of Directors.
Guidance for full-year 2006:
VASCO is updating its guidance for the full-year 2006 as follows:
-- Revenue growth of 35% to 45% for the full-year 2006 over full-year 2005
is reaffirmed and remains unchanged from prior guidance,
-- Gross margins as a percentage of revenue for full-year 2006 are
projected to be in the range of 60% to 65% and remain unchanged from
prior guidance, and
-- Operating margins as a percentage of revenue for full-year 2006 are
projected to be 20% to 25% as reported in accordance with Generally
Accepted Accounting Principles, up from the previous guidance of 15%
to 20%.
"Our Full-Option, All-Terrain Strategy is being very well received in the market," said Ken Hunt, VASCO's CEO and Chairman. "As evidenced by the record revenue and Digipass units shipped in the third quarter, we are seeing continuing strong interest in our product in all of our markets. The leverage in our business model is also contributing to the strong results as our operating margins as a percentage of revenue have been and are expected to continue to be, as evidenced by our increase in guidance for operating margins, above 20%."
"The results of the third quarter continue the trend of strong growth," said Jan Valcke, VASCO's President and COO. "Our product platform, which allows our customers to use any of our forms of authentication simultaneously, continues to be very well received. It enables our customers to deploy an appropriate, cost-effective method of authentication for each user of their application by selecting the appropriate Digipass product, including Digipass for Web. As a market leader, we also are continuing to see increased interest from distributors, solution partners and companies with complementary technologies. As we start the fourth quarter, we have a backlog of firm orders scheduled to be shipped in the fourth quarter of $21.5 million, which is 69% higher than the $12.7 million backlog we had entering the fourth quarter of 2005 and 23% higher than the $17.5 million actual revenue reported for the fourth quarter of 2005."
Cliff Bown, Executive Vice President and CFO added, "Our balance sheet continues to be strong as a result of the strong operating performance. Our net cash balances increased $7.4 million or 57% from June 30, 2006 while our working capital increased approximately 21% to $24.0 million at September 30, 2006 from $19.9 million at June 30, 2006. Days Sales Outstanding (DSO) in net accounts receivable decreased to approximately 66 days at September 30, 2006 from 81 days at June 30, 2006." |
