Hi Charlie.
I didn't want you to think I never pay attention to this one. So here's some interesting reading.
(PR NEWSWIRE) Secure Computing Reports Fourth-Quarter 1999 Operating Results
Secure Computing Reports Fourth-Quarter 1999 Operating Results and Other
Corporate Developments
SAN JOSE, Calif., Jan. 27 /PRNewswire/ --
Secure Computing Corporation (Nasdaq: SCUR), announced today a fourth quarter
net loss of $7.6 million or $.34 per share, on revenues of $6.9 million,
compared to net income of $1.0 million or $.05 per share, on revenues of $17.8
million in the same quarter last year. The net loss was reduced 4% from $7.9
million in the third quarter.
(Photo: newscom.com )
Products and services revenue, the company's primary area of emphasis,
increased 11% sequentially to $5.9 million against $5.3 million in the third
quarter and decreased 62 % from $15.7 million in the year ago quarter. As
expected, advanced technology contract revenue decreased 14% to $1.0 million
from $1.2 million the third quarter, and decreased 53% from $2.1 million in
the year ago quarter.
There was significant sequential improvement in several other financial
statistics in addition to product and services revenue. Gross margins in the
quarter increased 16 percentage points to 56% from 40% in the third quarter,
due to a higher proportion of software only sales. Days sales outstanding
declined by 42 days, or 37% to 71 days and deferred revenue increased by $1
million, or 38%.
"We are encouraged by our strong sequential products and services revenue
growth and the corresponding progress made during the quarter toward our goal
of being the leading provider of safe secure extranets for e-business," said
John McNulty, chairman and CEO. "We are optimistic about our opportunities as
we continue building the new Secure Computing."
Secure's operating expenses were $11.4 million, up 8% compared with the
previous quarter and down 4% from the same quarter of 1998. As part of
Secure's ongoing strategy to increase its investment in its sales and
marketing while supporting new product launches, costs in those areas were
$7.2 million, up 16% compared to $6.2 million in the fourth quarter of 1998.
Research and development costs of $3.0 million increased 4% sequentially from
the third quarter as the company continues to invest in next generation
products. General and administrative costs of $1.3 million declined 15% from
the third quarter, and were down 23% from the year ago quarter, reflecting a
leaner and more streamlined organization.
In conjunction with the release of fourth quarter financial results, it
was announced today that a new preferred stock financing in the aggregate
amount of $25 million has been arranged with an institutional investor under
common management with Manchester Securities. This financing will be available
in three installments, the first $7.5 million of which was drawn near the end
of the fourth quarter and has already been converted into common stock. Two
additional installments of $8.75 million each will be drawn at the election of
either party, the first on or before April 1, 2000 and the second on or before
November 1, 2000. This is a convertible preferred instrument with a predefined
short conversion window, that for the two future installments is priced at
100% of an average price during the 12 days preceding the settlement date.
This financing is subject to a number of terms, conditions and limitations.
The investor has no additional call right in this placement nor can the
investor maintain a net short position in the Company's stock. The financing
replaces the equity line entered into with Manchester in October of 1999.
"We are very pleased to enter into this financing which we believe is
attractive for the company and meets our capital needs," said Tim McGurran,
senior vice president of operations and chief financial officer.
The company also announced today that Craig Caudill, senior vice president
of worldwide sales has elected to resign to pursue other opportunities.
"We thank Craig for his contributions," said John McNulty. "We appreciate
very much the effort and energy he brought to his job and the progress he
made. We wish him well in his future endeavors."
Mr. Caudill's responsibilities will be assumed by Mr. McNulty as the
Company strives to achieve improved efficiencies, a flatter organization and
more direct accountability of key functions.
About Secure Computing
Headquartered in San Jose, California, Secure Computing Corporation is a
global leader in providing safe, secure extranets for e-business. Secure
Computing solutions provide authentication, authorization, and secure network
access. Secure Computing's worldwide partners and customer base are counted
among the Fortune 50 in financial services, healthcare, telecom,
communications, manufacturing, technology and Internet service providers, as
well as some of the largest agencies of the United States government.
For more information, visit Secure Computing Corporation at
www.securecomputing.com, or by calling: in Europe, +44-1753-826000; in
Asia/Pacific, +61-2-9844-5440,
in the U.S., 800-379-4944, or 408-918-6100
This press release contains the following forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Act of 1934, as amended, and is subject to
the Safe Harbor created by those sections: (1) that the Company will continue
its pursuit of being the leading provider of secure extranets for e-business;
(2) that the Company will receive $25 million in additional preferred stock
financing and that such financing will be available through November 1, 2000;
and (3) that the alternative preferred stock financing will be as advantageous
to the Company as the existing relationship with Manchester Securities.
The following are important factors that could cause actual results to
differ materially from those in these forward-looking statement: with regard
to Statement (1) that the Company's pursuit of providing secure extranets
might not be successful, or that if successful, it will not materially enhance
the Company's financial performance; with regard to Statement (2) the terms of
the new Agreement could be altered by the parties to change the amount of the
financing, the term of financing, or otherwise; and with regard to Statement
(3) that other forms of financing might be more beneficial to the Company or
might better match the Company's present requirements, or that such
requirements might change materially in the future, thus making the substitute
financing agreed upon by the Company less beneficial than other alternatives
including the original equity line with Manchester Securities and that the
sale of shares pursuant to the financing may have a dilutive impact on the
Company's shareholders resulting in a reduction in the market price of the
Company's common stock; and other risk factors detailed from time to time in
Secure Computing's periodic reports and registration statements filed with the
Securities and Exchange Commission. |
