RSAS beats by 1 cent:
Thursday January 20, 4:12 pm Eastern Time
Company Press Release
SOURCE: RSA Security Inc.
RSA Security Inc. Reports Record Q4 & FY 1999 Results
SAN JOSE, Calif., RSA Conference 2000, Jan. 20 /PRNewswire/ -- RSA Security Inc. (Nasdaq: RSAS - news), today reported financial results for the fourth quarter and fiscal year ended December 31, 1999. Revenue for the fourth quarter of 1999 increased 32% to $62.0 million, from $46.9 million for the fourth quarter of 1998. Excluding certain non-operating and one-time items, earnings for the quarter were $9.9 million ($0.23 per share on a diluted basis) compared to $3.3 million ($0.08) for the same period in 1998.
Reported net income for the fourth quarter of 1999 was $41.2 million ($0.96 per share on a diluted basis), compared to $12.6 million ($0.30 per share on a diluted basis) for the fourth quarter of 1998. Reported net income for the fourth quarter of 1999 includes a gain of $60.3 million from the sale of approximately 1,000,000 shares of the Company's common stock holdings in VeriSign, Inc. and Trintech Group. The Company also incurred advertising, rebranding and other one-time charges of approximately $7 million relating to the previously announced corporate name change, as well as additional restructuring charges of $1 million relating to employee terminations. The net impact of these items is a $31.3 million increase to net income.
Revenue for the fiscal year ended December 31, 1999 was $218.1 million, a 27% increase over the prior year. Net income, excluding certain non-operating and one-time items, increased to $28.4 million, or $0.68 per diluted share, compared to $19.0 million, or $0.45 per diluted share, in 1998. Reported net income for 1999 was $183.8 million, or $4.38 per diluted share, compared to $29.4 million, or $0.70 per diluted share, for 1998.
''We are very pleased with the company's performance in Q4 and for the full year,'' said Art Coviello, CEO and president of RSA Security Inc. ''The combination of our RSA Keon product launch, our aggressive communication of the RSA brand and our fifth consecutive quarter of record revenue results has resonated well with our customers and investors.''
About RSA Security Inc.
RSA Security Inc., The Most Trusted Name in e-Security(TM), helps organizations build secure, trusted foundations for e-businesses through its RSA SecurID® two-factor authentication, RSA BSAFE® encryption and RSA Keon(TM) public key management systems. With nearly a half billion RSA BSAFE- enabled applications in use worldwide, more than six million RSA SecurID users and almost 20 years of industry experience, RSA Security has the proven leadership and innovative technology to address the changing security needs of e-business and bring trust to the new, online economy. RSA Security can be reached at www.rsasecurity.com.
Note: BSAFE and SecurID are registered trademarks, and Keon, RSA and The Most Trusted Name in e-Security are trademarks of RSA Security Inc. All other products and services mentioned are trademarks of their respective companies.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
1999 1998 1999 1998
Revenue $61,986 $46,915 $218,125 $171,334
Gross Profit (i) 49,889 35,009 172,963 130,553
Operating expenses:
Research and development 10,503 7,772 37,640 30,221
Purchased research and
development (iii) -- 1,550 -- 1,760
Marketing and selling (ii) 27,775 22,328 89,943 66,788
General and administrative
(ii) 8,030 5,121 27,261 19,007
Legal Settlement (iii) -- -- -- 1,872
Merger and integration (iii) -- -- -- 2,600
Restructuring (iii) 1,000 -- 11,350 0
Total operating expenses 47,308 36,771 166,194 122,248
Operating income 2,581 (1,762) 6,769 8,305
Interest income and other 3,425 2,189 10,007 8,676
Gain on sale of marketable
securities (iii) 60,310 -- 144,610 --
Gain on sale of equity
investment (iii) -- 29,449 129,291 31,285
Gain from increase in market
value of equity investments
(iii) -- -- 12,576 11,976
Equity in loss from
operations of equity
investment (iii) -- (1,800) (525) (4,187)
Investment valuation
reserve (iii) -- (3,647) -- (3,647)
Income before provision for
income taxes 66,316 24,429 302,728 52,408
Provision for income taxes 25,116 11,882 118,982 23,571
Minority interests (10) 42 14 578
Net Income 41,190 12,589 183,760 29,415
Net income per share
- basic $1.05 $0.31 $4.69 $0.72
Net income per share
- diluted $0.96 $0.30 $4.38 $0.69
Weighted average number of
common shares - basic 39,070 40,872 39,171 40,909
Weighted average number of
common shares - diluted 42,831 41,797 41,980 42,497
Condensed Consolidated Balance Sheet
(in thousands)
December 31, December 31,
1999 1998
Cash and marketable securities (iv) $697,247 $158,236
Accounts receivable, net 42,735 36,712
Total Assets 846,438 280,855
Stockholders' equity (iv) 611,024 242,720
(i) 1998 twelve month results, includes a $3.0 million non-recurring cost of revenue related to a license in June 1998.
(ii) 1999 fourth quarter results include costs of $7.0 million in marketing and selling expenses, $ .1 million in general and administrative expenses, and the 1999 twelve month results include costs of $11.8 in marketing and selling, $.7 million in general and administrative expenses associated with the Company's corporate relaunch.
(iii) Non-recurring items.
(iv) Balances at December 31, 1999 reflect the accounting for the Company's VeriSign and Trintech investments as marketable securities held for resale.
Condensed Consolidated Statements of Operations
Excluding non-recurring items
(in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
1999 1998 1999 1998
Revenue $61,986 $46,915 $218,125 $171,334
Gross Profit 49,889 37,355 172,963 135,899
Operating expenses:
Research and development 10,503 7,772 37,640 30,221
Marketing and selling 20,748 22,328 78,100 66,788
General and administrative 7,773 4,300 26,459 18,186
Total operating expenses 39,024 34,400 142,199 115,195
Operating income 10,865 2,955 30,764 20,704
Interest income and other 3,425 2,190 10,007 8,676
Income before provision for
income taxes 14,290 5,145 40,771 29,380
Provision for income taxes 4,359 1,904 12,436 10,925
Minority interests (10) 42 15 578
Net Income 9,921 3,283 28,350 19,033
Net income per share - basic $0.25 $0.08 $0.72 $0.47
Net income per share -
diluted $0.23 $0.08 $0.68 $0.45
Weighted average number of
common shares - basic 39,070 40,872 39,171 40,909
Weighted average number of
common shares - diluted 42,831 41,797 41,980 42,497
SOURCE: RSA Security Inc.
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