AXENT Reports Second Quarter 1999 Results.ROCKVILLE Rockville, city (1990 pop. 44,835), seat of Montgomery co., W central Md., a NW suburb of Washington, D.C.; settled c.1760s, inc. as a city 1860. It has several scientific research and technology laboratories that focus on the aerospace, electronics, nuclear energy, , Md.--(BUSINESS WIRE)--July 28, 1999-- AXENT Technologies, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :AXNT), one of the world's leading information security solution providers, today reported second quarter revenues of $26,429,000 for the three months ending June June: see month. 30, 1999, compared to revenues of $22,540,000 for the same three-month period of 1998. Excluding non-recurring items and amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. , AXENT(TM) had a net loss for the three months ended June 30, 1999 of $892,000, or $0.03 per share, compared to net income of $4,050,000, or $0.15 per share, for the same period of 1998. "The results for the quarter were in line with our revised expectations and we continue to see validation See validate. validation - The stage in the software life-cycle at the end of the development process where software is evaluated to ensure that it complies with the requirements. for our e-security strategy," said John Becker Beck´er n. 1. (Zool.) A European fish (Pagellus centrodontus); the sea bream or braise. , chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of AXENT. "This quarter, we received extensive industry, press and customer praise for AXENT's e-security offerings that enable e-business (Electronic-BUSINESS) Doing business online. The term is often used synonymously with e-commerce, but e-business is more of an umbrella term for having a presence on the Web. initiatives and we remain confident in the overall company direction." -0-
Quarterly Highlights
Technology and market leadership
- GartnerGroup named AXENT and its Raptor(R) Firewall solution as
the top "leader" in its very influential Magic Quadrant. The
GartnerGroup Quadrant evaluates security providers on
completeness of vision, which includes the security of the
firewall, plans for networked firewalls and ease of use and
administration, as well as ability to execute, which includes
experience and distribution channels.
- PC Week Labs found NetProwler (TM) 3.0 "the most complete
network-based intrusion detection product tested to date" in a
recent review.
- SC Magazine(TM), the industry's top security publication, gave
AXENT four awards, including "Best Buy" (Defender(TM) and
Intruder Alert(TM)), the "Reader Trust" award for Best General
Security product (Intruder Alert), and the coveted "Academy
Award" for Best Security Management solution (Enterprise Security
Manager(TM)).
- Communications News awarded WebDefender (TM) 2.0 its "Editor's
Choice" award.
New e-security products
- Shipped NetProwler 3.0, a powerful network-based intrusion
detection solution (IDS) and the first solution resulting from
the Internet Tools, Inc. acquisition in January of 1999.
NetProwler features initial integration with Intruder Alert(TM)
to deliver a combined host- and network-based IDS managed and
controlled from a single console.
- Shipped WebDefender 2.0, the first Web access control
solution to simplify user access to any Web server running on
UNIX or NT and facilitate critical Internet initiatives.
Expanded e-security consulting services
- AXENT expanded its security consulting services business into
Europe. AXENT appointed Michael Bacon, a security veteran with 31
years of experience and former director of Information Security
Services at KPMG, to the position of director, European
operations for AXENT's subsidiary Secure Network Consulting, Inc.
(SNCi).
- In addition, AXENT's subsidiary Secure Network Consulting, Inc.
(SNCi) provided services to more than 70 customer organizations
in the second quarter.
E-security strategy aimed at growing e-commerce/e-business opportunity
- In June, AXENT introduced its e-security strategy aimed at
leveraging AXENT's broad line of award-winning products and
unique Lifecycle Security(TM) services to assess, protect, enable
and manage the dynamic security challenges organizations face as
they move their businesses to the Internet.
- AXENT also introduced the Smart Security Architecture, outlining
the appropriate integration between products and services to
deliver the right level of security to AXENT's customers.
Top organizations turn to AXENT
- Network World, CIO and For the Record all profiled the success of
customers leveraging AXENT solutions to move their business to
the Internet, including PNC Bank, Reliant General, Integrated
Health Services, and Regence BlueCross and BlueShield of Oregon.
- AXENT is helping financial institutions worldwide move safely to
e-commerce. Enterprise Security Manager (ESM) is being deployed
to dozens of American Bankers Association's Information Security
Infrastructure Working Group members. ESM enables these top banks
and financial institutions to provide a secure environment for
their customers' financial transactions.
- Top companies in multiple industries turn to AXENT's
award-winning solutions and services to protect and enable new
e-business practices, including E-Trade, PNC Bank, Immunex
Corporation, Credit Lyonnaise, National Board of Medical
Examiners and Toronto Dominion Bank.
About AXENT(TM) AXENT Technologies, Inc., a global leader in information security, provides e-security solutions that maximize In a graphical environment, to enlarge a window to the full size of the screen. See Win Maximize windows. our customers' business advantage. AXENT delivers integrated products and expert services to assess, protect, enable and manage business processes and information assets. Through its unique Lifecycle Security methodology combined with Smart Security Architecture, AXENT delivers the right level of security for customers. Award-winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" solutions offer assessment and policy compliance, firewall, intrusion detection See IDS and IPS. , authentication (1) Verifying the integrity of a transmitted message. See message integrity, e-mail authentication and MAC. (2) Verifying the identity of a user logging into a network. , VPN (Virtual Private Network) A private network that is configured within a public network (a carrier's network or the Internet) in order to take advantage of the economies of scale and management facilities of large networks. , Web-access, single sign-on An identification system that lets users log into multiple Web sites on the Internet with one username and password. Single sign-on systems are also used within an enterprise, enabling users to access all authorized resources in the local network using the same username and password. and user administration for the entire enterprise. Headquartered in Rockville, MD, AXENT's customer-proven information security solutions are used by 45 of the Fortune 50 and governments worldwide. Contact AXENT via e-mail at info@axent.com, or visit AXENT's World Wide Web site at http://vpo.axent.com. Statements in this release concerning AXENT's future prospects are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of provisions of the Federal securities laws and involve risk and uncertainties. Those statements are subject to known and unknown risks and uncertainties that could cause anticipated future results not to be achieved or actual results to differ materially, including, but not limited to, (1) management's ability to manage growth, accurately forecast revenues and control expenses, (2) the highly competitive environment for AXENT's products and services and the consolidation of the information security industry, (3) the possibility of rapid technological advances and new product introductions in AXENT's market, (4) Year 2000 issues and the responses of prospective customers, (5) AXENT's ability to manage recent and potential acquisitions and (6) other factors identified under the caption "Certain Factors That May Affect Future Performance" in the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for 1998 or discussed in the "Risk Factors" section of the Company's Prospectus/Joint Proxy Statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. dated January January: see month. 2, 1998, each as filed with the SEC. The Company assumes no obligation to update or correct forward-looking statements due to events or changes after the date of this release. AXENT, AXENT Technologies, the AXENT logo, Lifecycle Security, Raptor, Enterprise Security Manager, Intruder An attacker that gains, or tries to gain, unauthorized access to a system. See attacker, intrusion and IDS. Alert, NetProwler, Defender and WebDefender are trademarks or registered trademarks, in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and certain other countries, of AXENT Technologies, Inc. or its subsidiaries. SC Magazine is a trademark of West Coast Publishing, Inc. All other product names and trademarks are the property of their respective owners.
AXENT Technologies, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
June 30,
1999 Dec. 31,
(unaudited) 1998
ASSETS
Current assets:
Cash and equivalents $ 97,985 $ 80,035
Marketable securities 8,774 31,774
Accounts receivable, net 25,818 28,300
Other current assets 3,603 4,128
Total current assets 136,180 144,237
Property and equipment, net 11,772 7,482
Goodwill and other intangible assets 29,024 2,340
Other assets 10,297 7,217
Total assets $187,273 $161,276
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 19,760 $ 15,764
Deferred revenue 15,307 11,184
Total liabilities 35,067 26,948
Stockholders' equity 152,206 134,328
Total liabilities and
stockholders' equity $187,273 $161,276
AXENT Technologies, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1999 1998 1999 1998
Net revenues:
Product licenses $ 17,545 $ 17,392 $ 32,731 $ 33,675
Services 8,884 5,148 15,142 9,196
Total net revenues 26,429 22,540 47,873 42,871
Cost of net revenues: 3,721 2,209 6,864 4,246
Gross profit 22,708 20,331 41,009 38,625
Operating expenses:
Sales and marketing 15,659 9,597 29,315 18,738
Research and development 6,922 4,551 13,216 8,709
General and
administrative 2,667 1,430 5,369 2,912
Amortization of
intangible assets 1,309 a 83 a 1,460 a 164 a
Non-recurring charges -- -- 3,753 a 17,422 a
Total operating
expenses 26,557 15,661 53,113 47,945
Income (loss) before
royalties, interest
and taxes (3,849) a 4,670 a (12,104) a (9,320) a
Royalty income -- 558 -- 1,127
Interest income 1,050 1,022 2,118 2,085
Gain on sale of
marketable securities -- -- -- 389 a
Income tax benefit
(provision) 598 (2,283) 1,717 (178)
Net income (loss) $ (2,201) a $(3,967) a $(8,269) a $(5,897) a
Basic net income (loss)
per common share: $ (0.08) a 0.16 a $ (0.30) a $ (0.24) a
Basic shares
outstanding (000's) 27,843 25,195 27,124 24,779
Diluted net income
(loss) per share: $ (0.08) a $ 0.15 a $ (0.30) a $ (0.24) a
Diluted shares
outstanding (000's) 27,843 27,234 27,124 24,779
a) For the six months ended June 30, 1999, AXENT incurred
non-recurring charges of approximately $1,753 associated with the
acquisition of Internet Tools, Inc., $2,000 associated with the
acquisition of PassGo, and amortization of intangible assets of
$1,460. Results for the six months ended June 30, 1998 include a
one-time charge of $17,422 ($13,322 net of taxes) related to the
acquisition of Raptor Systems, Inc., a gain from the sale of residual
MTI marketable securities of $389 ($233 net of taxes), and
amortization of intangible assets of $164. For the three months ended
June 30, 1998 and 1999, respectively, AXENT recorded amortization of
intangible assets of $83 and $1,309. Excluding non-recurring items and
amortization of intangible assets, results for the three and six
months ended 1999 and 1998, respectively, are:
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1999 1998 1999 1998
Income (loss) before
royalties, interest,
and taxes $ (2,540) $ 4,753 $ (6,891) $ 8,266
Net income (loss) $ (892) $ 4,050 $ (3,056) $ 7,356
Basic net income (loss)
per common share $ (0.03) $ 0.16 $ (0.11) $ 0.30
Basic shares outstanding
(000's) 27,843 25,195 27,124 24,779
Diluted net income (loss)
per common share $ (0.03) $ 0.15 $ (0.11) $ 0.27
Diluted shares
outstanding (000's) 27,843 27,234 27,124 26,807
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