VeriSign Reports Second Quarter Financial Results; New Enterprise and Website Customers Fuel Increased Momentum
MOUNTAIN VIEW, Calif., July 27 /PRNewswire/ -- VeriSign, Inc.
(Nasdaq: VRSN) today announced revenue of $5.3 million for the second quarter
ended June 30, 1998, a 136% increase over revenue of $2.2 million reported in
the quarter ended June 30, 1997. Second quarter revenue increased 32% over
the $4.0 million of revenue reported in the previous quarter ended
March 31, 1998.
Net loss for the second quarter ended June 30, 1998 was $4.9 million, or
$.23 per share compared to a net loss in the quarter ended June 30, 1997 of
$3.6 million, or $.56 per share. Net loss for the quarter ended
March 31, 1998 was $5.2 million or $.27 per share(A). Shares outstanding
increased to 20.8 million at June 30, 1998.
VeriSign also announced that during the second quarter it added more than
40 new enterprise customers for its VeriSign OnSite service and shipped a
record 14,000 website certificates, representing a 117% increase in unit
volumes over the year ago quarter and a 20% increase from the quarter ended
March 31, 1998.
"Our second quarter results strengthen our belief that our digital
certificate and public key infrastructure services will form an important
foundation for the continued acceleration of secure electronic commerce," said
Stratton Sclavos, president and CEO of VeriSign, "We remain singularly focused
on helping our customers deploy intranet, extranet and e-commerce applications
using our scaleable technology and infrastructure and plan to expand our range
of services and partnerships to achieve that goal."
VeriSign now has approximately 120 enterprises, universities and
government agencies utilizing its VeriSign OnSite offering which was first
introduced in the fourth quarter of 1997. New customers in the recent quarter
included Kodak, Sumitomo Bank, Texas Instruments, United Parcel Service, and
U.S. West. According to a recently published report by the Aberdeen Group
entitled "Evaluating the Cost of Ownership for Digital Certificate Projects,"
VeriSign OnSite customers are experiencing the fastest deployment times and
lowest cost of total ownership for their digital certificate projects versus
competitive solutions.
In response to the emerging markets for virtual private networks (VPN's)
and high capacity transaction sites, VeriSign also announced OnSite for IPSec
and OnSite for Secure Servers with support for leading applications and
devices such as Cisco routers, CheckPoint firewalls, and Microsoft and
Netscape web servers. In addition, VeriSign and Network Associates announced a
broad reaching partnership during the quarter to enable cross product support
and promotion of each company's digital certificate-based security solutions.
In VeriSign's website certificate line of business, more than 65,000
website certificates have now been issued to a broad range of merchants,
financial service companies and other organizations conducting electronic
transactions and secure communications over the World Wide Web. VeriSign
announced expanded relationships during the quarter with both Microsoft and
Lotus, as well as, the introduction of website certificate services for the
popular Apache web server product.
On July 6, 1998, VeriSign announced the acquisition of SecureIT Inc., a
leading provider of Internet security services. SecureIT delivers a range of
Internet security services -- including architectural consulting, integration,
testing, and education -- which enable enterprises to deploy secure electronic
commerce and communications applications. The company's specially trained
security consultants and unique security methodologies help organizations
design, implement and test secure end-to-end solutions. SecureIT also offers
certified educational programs and packaged security management tools to help
customers monitor and enhance their Internet-based applications and services.
The transaction will be accounted for as a pooling of interests. Second
quarter results do not include any financial data from the acquisition.
Other recent highlights include the announcement of VeriSign's Open PKI
Partner Program to facilitate development and deployment of business critical
applications utilizing digital certificates and public key infrastructure.
Initial participants include system integrators and consultants such as Ernst
& Young and KPMG, toolkit providers such as RSA Data Security, Entegrity
Solutions and Baltimore Technologies, and application vendors such as Gradient
and SECUDE. VeriSign also announced the further expansion of its
international activities with the addition of HiTrust, Inc., a subsidiary of
Acer Corp., to its VeriSign Trust Network Affiliates Program.
VeriSign, Inc. (Nasdaq: VRSN) is the leading provider of Public Key
Infrastructure (PKI) and digital certificate solutions used by enterprises,
Web sites and consumers to conduct secure communications and transactions over
the Internet. VeriSign's enterprise PKI solutions are available through
VeriSign regional account representatives, resellers, and global affiliates.
The company's Digital IDs for consumers and websites are available through the
company's Web site at verisign.com.
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 and
risks related to the acquisition of SecureIT detailed in the Company's
Form 8-K filed with the SEC on July 21, 1998. 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 and the company's other reports filed with the SEC. 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)
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
1998 1997 1998 1997
Revenues $5,301 $2,249 $9,303 $3,516
Costs and expenses:
Cost of revenues 2,939 1,733 5,771 3,152
Sales and marketing 4,769 2,686 8,886 4,940
Research and development1,931 1,222 3,537 2,251
General and
administrative 1,489 864 2,927 1,817
Total costs and expenses 11,128 6,505 21,121 12,160
Operating loss (5,827) (4,256) (11,818) (8,644)
Other income 637 166 1,013 635
Loss before minority
interest (5,190) (4,090) (10,805) (8,009)
Minority interest in
net loss of subsidiary 325 482 713 787
Net loss $(4,865) $(3,608) $(10,092) $(7,222)
Basic and diluted net loss
per share $(.23) $(.56) $(.54) $(1.13)
Shares used in per share
computations 20,787 6,441 18,593 6,411
VERISIGN, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
June 30, December 31,
1998 1997
Assets
Current assets:
Cash and short-term investments$45,877 $11,894
Receivables 4,328 2,274
Prepaid expenses and other
current assets 1,067 750
Total current assets 51,272 14,918
Property and equipment, net 9,231 8,622
Other assets 880 866
$61,383 $24,406
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $1,865 $2,526
Accrued liabilities 3,830 2,346
Deferred revenue 7,618 4,819
Total current liabilities 13,313 9,691
Minority interest in subsidiary 1,533 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;
20,838,304 and 7,120,238 shares
issued and outstanding,
respectively 21 7
Additional paid-in capital 88,950 44,908
Notes receivable from
stockholders (582) (644)
Deferred compensation (328) (380)
Accumulated deficit (41,524) (31,432)
Total stockholders' equity 46,537 12,469
$61,383 $24,406
A - As previously reported, net loss per share for the quarter ended
March 31, 1998 was 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 continue to omit the presentation of pro forma
net loss per share. Historical net loss per share under the new SEC
guidelines was $.32 for Q198.
Copyright 1998 VeriSign, Inc. 1390 Shorebird Way, Mountain View, CA 94043.
All rights reserved. VeriSign is a registered trademark exclusively
licensed to VeriSign, Inc. VeriSign OnSite, Digital ID and Digital ID Center
are service marks of VeriSign, Inc.
All other trademarks are properties of their respective owners.
SOURCE VeriSign, Inc.
Web Site: verisign.com
Company News On Call: prnewswire.com or fax,800-758-5804, ext. 129373
CONTACT: Dana Evan, Chief Financial Officer, 650-429-3410, orKris Bergmann, Director Investor Relations, 650-429-3416, orbergmann@verisign.com, or Kelly Brieger, media, 650-429-3424 orryan@verisign.com, all of VeriSign |
