Aladdin Announces Record 1999Fourth Quarter and Year End Results; Fourth Quarter Revenues Up 26%
February 24, 2000 07:02 AM
TEL AVIV, Israel--(BUSINESS WIRE)--February 24, 2000--Aladdin Knowledge Systems ALDN today reported financial results for the fourth quarter and year ended December 31, 1999. Sales for the 1999 fourth quarter hit a record high of $12.4 million, an increase of approximately 26%, compared with $9.8 million in sales reported for the fourth quarter of 1998. Net income for the quarter was $2.7 million, as compared to a loss of $7.0 million for the comparable period of 1998. Basic earnings per share rose to $ 0.24, based on 11,312,000 shares outstanding, compared with a loss of $0.69 per share in the fourth quarter of 1998, based on 10,093,000 million shares outstanding. Diluted earnings per share rose to $0.24, based on 11,606,000 shares outstanding, compared with a loss of $0.68, based on 10,182,000 shares outstanding. Fourth quarter 1999 results included a net capital gain of $2.5 million related to Aladdin's investment in WAVE Systems shares.
For the year ended December 31, 1999 sales rose 24% to $ 44.7 million, compared with $36.1 million in the previous year. In 1999, net income grew to $8.3 million, compared with net income of $692,000 in 1998. Basic earnings per share for the twelve months increased to $0.73, based on 11,284,000 shares outstanding, compared with $0.07 per share for the comparable 1998 period, based on 10,058,000 shares outstanding. Diluted earnings per share for the twelve months increased to $0.72, based on 11,482,000 shares outstanding, compared with $0.07 per share for the comparable 1998 period, based on 10,307,000 shares outstanding. 1998 results included one-time acquisition related expenses.
For the 1999 fourth quarter and full year, R&D expenses were up 60% and 67%, respectively, as compared to 1998. This increased spending represents the Company's deliberate decision to further develop and support the market launches of its eSafe, eToken and Privilege product lines for new Internet security applications. To support these launches, the Company is also expanding its engineering, sales and marketing organizations worldwide. Accordingly SG&A was up 76% in the fourth quarter of 1999 and 79% for the full year, as compared to year ago periods.
Yanki Margalit, Aladdin Chairman and Chief Executive Officer, commented, "We believe the significant market opportunities for our portfolio of Internet security products - eSafe, eToken and Privilege - are worthy of increased investment, and therefore we have made the conscious and deliberate decision to invest the profits from our core business into these new and exciting technologies, forfeiting earnings growth for the coming year."
Mr. Margalit continued, "Throughout the year we have seen a growing awareness of the increased exposure PC users and networks face while being connected to the Internet, and the subsequent need for additional security. During the fourth quarter Aladdin introduced new versions of our award winning eSafe Desktop and eSafe Enterprise 2.2, the complete content security solution for corporation and home users. eSafe is the first content security solution to offer protection from vandals, viruses, data exposure and inappropriate content, and was voted PC Magazine's Editors' Choice Award two consecutive years in a row. With eSafe 2.2, we are now taking proactive measures to protect PC users and networks from malicious vandals by trapping them before they can harm digital content and spread throughout a network."
"On the international front," Mr. Margalit concluded, "we have expanded our global presence with the acquisition of our affiliate Aladdin France, and the eSafe assets of CTI, Aladdin's eSafe distributor in France. Our investments in eToken, the further expansion into Europe, and the November launch of Privilege, which provides vendors with the ability to distribute licenses electronically, will all help Aladdin continue to be the leading provider of Internet and content security in the new millennium."
About Aladdin
Aladdin ALDN is a global leader in securing digital content, from applications software to Internet use and access. Aladdin's products include HASP and Hardlock, software security systems that protect the revenues of developers and publishers; Privilege, a software licensing platform for the Internet; the eSafe line of anti-vandal, anti-virus and content filtering software for PCs and networks connected to the Internet; and eToken for Internet security and authentication. Aladdin serves its customers through nine offices located in the world's major software markets as well as a network of 50 distributors serving more than 100 countries. For more information, visit the Aladdin web site at www.eAladdin.com
Safe Harbor for Forward-Looking Statements
Except for the statements of historical fact, the information presented herein constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include general economic and business conditions, the loss of market share, changes in consumer buying habits and other factors over which Aladdin Knowledge Systems Ltd. has little or no control. |
