Bullish, Bearish....
MOUNTAIN VIEW, Calif., April 23 /PRNewswire/ -- VeriSign(TM), Inc. (Nasdaq: VRSN)
today announced revenues of $4.0 million for the first quarter ended March 31, 1998, a 216%
increase over revenues of $1.3 million reported in the quarter ended March 31, 1997. First quarter
revenues increased 22% over $3.3 million of revenues reported in the previous quarter ended
December 31, 1997.
Net loss for the first quarter ended March 31, 1998 was $5.2 million, or $.27 per share(1)
compared to a net loss in the quarter ended March 31, 1997 of $3.6 million, or $.21 per share(1).
Net loss for the quarter ended December 31, 1997 was $6.5 million or $.38 per share(1). The
company completed its initial public offering of 3.45 million shares on January 29, 1998; as a result,
shares outstanding increased to 20.7 million for the quarter ended March 31, 1998.
VeriSign's three main lines of business, Consumer certificates, Website certificates, and Enterprise
certificate services, all saw strong growth during the quarter in both unit volumes and revenues.
VeriSign announced that its Website certificate line of business, which includes certificates issued to
merchants, financial institutions and other organizations desiring to set up very secure electronic
commerce sites on the World Wide Web, had a record quarter with over 11,500 website and
content publisher certificates issued in the period. This represents a 94% increase in unit volume
over the year ago quarter and 23% increase from the quarter ended December 31, 1997.
VeriSign also announced that it now has over 75 customers using its Enterprise certificate services
including its VeriSign OnSite offering which was introduced in October of 1997. VeriSign OnSite is
targeted at Fortune 10,000 organizations and government agencies that are deploying intranet,
extranet and e-commerce solutions requiring digital certificates for access control or secure
messaging. VeriSign OnSite includes software that can be installed at the customer site or hosted at
VeriSign as well as back-end certificate processing services to enable enterprise customers to
quickly set-up and deploy their own certificate authority service. Key customers include large
telecommunications companies such as NTT and British Telecommunications, financial institutions
such as NationsBank and Bank of America, Fortune 500 companies such as Hewlett-Packard and
government agencies such as the Federal Bureau of Investigation.
"We are very pleased with our first quarter results as we saw impressive revenue and unit growth in
our key lines of business as well as significant key account wins," said Stratton Sclavos, president
and chief executive officer of VeriSign, Inc. "We believe our current success is indicative of both a
general acceleration in electronic commerce and customer acknowledgment of VeriSign's continued
leadership in the digital certificate marketplace."
Other highlights for the quarter included the release of Microsoft's Outlook98 product with support
for VeriSign certificates, the deployment of VeriSign's publicly accessible certificate directory
populated with over 1 million consumer certificates, and the bundling of VeriSign website certificates
with Lucent's firewall product.
VeriSign was also selected in March to provide digital certificate services for the Automotive
Network Exchange (ANX), a large extranet being built and deployed by the Automotive Industry
Action Group, a consortium sponsored by Ford, Chrysler, General Motors and their suppliers.
In addition, the company announced agreements with several key strategic partners during the
quarter including British Telecommunications, who will act as a VeriSign affiliate in the UK,
Hewlett-Packard's VeriFone division, who will bundle and market VeriSign's SET certificates
services with VeriFone's Internet payment solutions, and the West Group, who will market
co-branded certificates to the legal community for secure messaging applications.
VeriSign, Inc. is the leading provider of digital certificate solutions for intranets, extranets and
Internet commerce. VeriSign E-Commerce Solutions are available through VeriSign regional
account representatives or through VeriSign resellers. For more information visit VeriSign's website
at verisign.com.
NOTE: This press release contains forward-looking statements that involve risks and uncertainties
that could cause actual results to differ materially. Factors that could cause or contribute to such
differences include, but are not limited to, the company's limited operating history, which makes the
prediction of future operating results difficult; the rate at which the Internet and other IP networks
are adopted for communications and commerce; market acceptance of digital certificates and the
company's digital products and services in particular; competition; interruptions or security breaches
in the company's systems; and the company's ability to manage its growth. More information about
potential factors which could affect the company's financial results is included in the final prospectus
for VeriSign's initial public offering dated January 29, 1998. VeriSign assumes no obligation to
update the forward-looking information contained in this press release.
VERISIGN, INC AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Quarter Ended March 31,
1998 1997
(Unaudited) (Unaudited)
Revenues $4,002 $1,267
Costs and expenses:
Cost of revenues 2,832 1,419
Sales and marketing 4,116 2,254
Research and development 1,606 1,029
General and administrative 1,438 953
Total costs and expenses 9,992 5,655
Operating loss (5,990) (4,388)
Other income 375 469
Loss before minority interest (5,615) (3,919)
Minority interest in net loss of subsidiary (388) (305)
Net loss $(5,227) $(3,614)
Basic and diluted net loss per share:
Historical $(.32) $(.57)
Pro forma(1) $(.27) $(.21)
Shares used in per share computations:
Historical 16,362 6,382
Pro forma(1) 19,594 17,036
VERISIGN, INC AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
March 31, December 31,
1998 1997
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $12,195 $3,943
Short-term investments 37,043 7,951
Receivables, net of allowances
of $287 and $214, respectively 4,117 2,274
Prepaid expenses and other current assets 882 750
Total current assets 54,237 14,918
Property and equipment, net 8,794 8,622
Other assets 883 866
$63,914 $24,406
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $1,238 $2,526
Accrued liabilities 3,458 2,346
Deferred revenue 6,162 4,819
Total current liabilities 10,858 9,691
Minority interest in subsidiary 1,858 2,246
Commitments
Stockholders' equity:
Preferred stock, $001 par value;
5,000,000 shares authorized; none issued -- --
Convertible preferred stock, $001 par value;
10,282,883 shares authorized in 1997;
10,031,006 shares issued and outstanding in 1997 -- 10
Common stock, $001 par value;
50,000,000 shares authorized;
20,742,627 and 7,120,238 shares issued
and outstanding, respectively 21 7
Additional paid-in capital 88,834 44,908
Notes receivable from stockholders (644) (644)
Deferred compensation (354) (380)
Accumulated deficit (36,659) (31,432)
Total stockholders' equity 51,198 12,469
$63,914 $24,406
(1) Net loss per share is calculated on a pro forma basis. Subsequent to VeriSign's initial public
offering, the SEC issued additional guidance for the computation of earnings per share under
Statement of Financial Accounting Standards No. 128. Pursuant to such guidance, the Company
has included historical basic and diluted net loss per share in addition to pro forma basic and diluted
net loss per share. The principal difference between the pro forma and the historical net loss per
share computations is the pro forma computation includes preferred stock on an as if converted
basis for all periods presented prior to its actual conversion whereas the historical computation
includes the preferred stock only after their conversion on the effective date of the initial public
offering on January 29, 1998. In future quarters, VeriSign intends to omit the presentation of pro
forma net loss per share. Historical net loss per share under the new SEC guidelines is $.32 for
Q198, $.57 for Q197 and $.93 for Q497. |
