AXENT Reports Third Quarter 2000 Results; Symantec Acquisition On Track to Close by Year-End 2000.Business/Technology Editors ROCKVILLE, Md.--(BUSINESS WIRE)--Oct. 18, 2000 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), the world's leading Internet security ''This article or section is being rewritten at Internet security is the process of protecting data and privacy of devices connected to internet from information robbery, hacking, malware infection and unwanted software. solutions provider for e-business, which announced on July 27, 2000 that it entered into a definitive agreement to be acquired by Symantec Corporation (NASDAQ: SYMC SYMC Symantec Corporation (stock symbol) ), today reported financial results for the third quarter ended September 30, 2000. AXENT(R) management will review the Company's financial and operational results for the quarter in a conference call at 6:00 P.M., EST EST electroshock therapy. EST abbr. electroshock therapy today. Interested parties can access the call at 1-888-318-6428 (outside 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. , please dial 1-334-323-9854) and enter security code 66862. FINANCIAL OVERVIEW Revenue Third quarter revenues were $34,085,000, compared to revenues of $28,472,000 for the third quarter of 1999. Revenues for the nine months ended September 30, 2000 were $98,481,000, compared to revenues of $76,345,000 for the same period last year. Net Income Net income for the third quarter of 2000, excluding the amortization of acquired intangibles and acquisition-related charges, was $2,099,000, or $0.07 per share, compared to $710,000, or $0.03 per share for the third quarter of 1999. Net income for the nine months ended September 30, 2000, excluding the amortization of acquired intangibles and acquisition-related charges, was $6,253,000, or $0.21 per share, compared to a loss of $2,346,000 or ($0.09) per share for the same period last year. Update on Acquisition by SYMANTEC(R) On July 27, 2000, AXENT announced that it entered into a definitive agreement to be acquired by Symantec in a stock-for-stock transaction. Under the terms of the agreement, AXENT shareholders will receive 0.50 shares of Symantec common stock for each share of AXENT common stock they own. Completion of the transaction is subject to, among other things, approval by shareholders of both companies and customary regulatory approvals. The 30-day waiting period imposed by the Hart-Scott-Rodino Antitrust Improvements Act The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (Public Law 94-435, known commonly as the HSR Act) is a set of amendments to the antitrust laws of the United States, principally the Clayton Antitrust Act. The HSR Act was signed into law by President Gerald R. expired on September 3, 2000. The Prospectus/Joint Proxy was filed on September 20, 2000 with the Securities and Exchange Commission. OPERATIONAL OVERVIEW AXENT continued its dominant presence in the e-security marketplace with the following significant achievements: Launched Web Access Management and Control Product Offering AXENT unveiled Webthority(TM), a powerful and practical extranet security solution, that controls access to valuable data and reduces the cost of managing the security of e-business solutions through a "virtual Web site." Webthority authenticates users and offers Web content without users needing to obtain direct access to a company's internal networks. Webthority supports all leading 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. sources and directories on the market, and delivers an integrated Web security solution with intrusion detection See IDS and IPS. and firewall capabilities. Released First in a Series of Security Appliances Security appliances protect computer networks from unwanted data traffic, intruders, email spam, enforce policies, and may also be used to create and manage VPNs. There are a number of types of security appliances. AXENT began early shipments of the VelociRaptor Velociraptor (vəlŏs`ĭrăp'tər) [Gr.,=swift robber], swift bipedal carnivorous dinosaur of the late Cretaceous period. It was relatively small, being approximately 6 ft (1.8 m) long. (R) Firewall appliance A device that provides firewall protection for a network. It includes all the necessary hardware and software in a self-contained package that plugs in between the two networks being isolated. Most firewall appliances are solid state and include a stripped down operating system. . VelociRaptor is the first solution in AXENT's new family of appliances to provide enterprise-class security software pre-installed and pre-configured on Cobalt RaQ The Cobalt RaQ is a 1U rackmount server product line developed by Cobalt Networks, Inc. (later purchased by Sun Microsystems) featuring a modified Red Hat Linux operating system and a proprietary GUI for server management. (TM) server appliances A self-contained computer system specialized for network use. Its applications are pre-installed, and access to setup and configuration is via a Web browser. Server appliances may provide a single application or several applications; for example, a single device may provide file server, . VelociRaptor offers businesses the first "Plug and Protect(TM)", industrial strength firewall and virtual private 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. ) solution in a box, quickly and easily implementing the enterprise-class security of AXENT's Raptor(R) Firewall, from installation and configuration to an up and running affordable, reliable and easy-to-administer solution in just 30 minutes. Initiated Wireless Security Efforts, Delivering WAP (1) (Wireless Access Point) See access point. (2) (Wireless Application Protocol) A standard for providing cellular phones, pagers and other handheld devices with secure access to e-mail and text-based Web pages. Security Assessment AXENT announced that customers worldwide can leverage Enterprise Security Manager(TM) (ESM (1) (Enterprise Storage Management) Managing the online, nearline and offline storage within a large organization. It includes analysis of storage requirements as well as making routine copies of files and databases for backup, archiving, disaster recovery, ), AXENT's market-leading security assessment solution, to help secure the Nokia wireless application protocol (WAP) server. In similar fashion to all servers, the Nokia WAP server, which provides the content for wireless devices such as cell phones, personal data assistants (PDAs), and laptops, can be compromised through vulnerabilities in its operating systems Operating systems can be categorized by technology, ownership, licensing, working state, usage, and by many other characteristics. In practice, many of these groupings may overlap. . Hackers use these "back doors" to gain control of the WAP server, and change content or access critical data. Now with ESM, companies can find and secure these vulnerabilities, and be assured of the security and availability of the WAP server providing the wireless content. Additionally, AXENT recently issued its wireless security statement of direction. AXENT recognizes that wireless technology is a growing and integral part of today's IT infrastructure. As mobile phones, PDAs and other wireless devices begin to proliferate pro·lif·er·ate v. To grow or multiply by rapidly producing new tissue, parts, cells, or offspring. the business landscape, AXENT believes that these wireless devices require the same, if not a higher degree of attention to security as other, more traditional IT entry points. AXENT's Information Security SWAT Team Released 124 New Security Risk Definitions, Delivering the Industry's Most Up-to-Date E-Business Protection Solution AXENT released 124 new security risk definitions included in nine separately released SWAT Security Updates to its market leading ESM, NetRecon(R) and ProwlerIDS(TM) products. These updates provide customers protection against the latest security vulnerabilities in operating systems, applications, and network devices, as well as detect and respond to security threats in real-time, including buffer overflow A common cause of malfunctioning software. If the amount of data written into a buffer exceeds the size of the buffer, the additional data will be written into adjacent areas, which could be buffers, constants, flags or variables. attacks. AXENT's SWAT team is the industry's first security research and development team dedicated to rapidly finding new security threats and creating dynamic security updates that allow AXENT's customers the ability to fortify for·ti·fy v. for·ti·fied, for·ti·fy·ing, for·ti·fies v.tr. To make strong, as: a. To strengthen and secure (a position) with fortifications. b. To reinforce by adding material. their e-defenses quickly against these security threats. Expanded Partnerships to Deliver Best-of-Breed Security Solutions --An OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and relationship with Nexland, the leader in shared Internet access See how to access the Internet. hardware solutions for corporate remote offices and their telecommuters, to bundle AXENT's virtual private network (VPN) solution with their SOHO Soho (sōhō`, sə–), district of Westminster, London, England, known for its continental restaurants. Once a fashionable quarter, it became popular among writers and artists in the 19th cent. routers, creating strong up-sell opportunities; --An OEM relationship with iPlanet to bundle the iPlanet Web Server See Sun Java System Web Server. with Webthority; --Expansion of the scope of AXENT's relationship with Radware (NASDAQ: RDWR RDWR Read and Write ), as the only certified, high-availability, load-balancing solution for Webthority; --Participation in RSA (1) (Rural Service Area) See MSA. (2) (Rivest-Shamir-Adleman) A highly secure cryptography method by RSA Security, Inc., Bedford, MA (www.rsa.com), a division of EMC Corporation since 2006. It uses a two-part key. Security's (NASDAQ: RSAS RSAS RSA Security, Inc. (stock abbreviation, AMEX) RSAS Royal Swedish Academy of Sciences RSAS RAND Strategy Assessment System RSAS Reactor Safety Assessment System ) RSA Secured(TM) Strategic Partner Program to ensure interoperability between Webthority and RSA SecurID(R) authentication technology; and --A partnership with iPolicy Networks, Inc. to embed em·bed also im·bed v. em·bed·ded, em·bed·ding, em·beds v.tr. 1. To fix firmly in a surrounding mass: embed a post in concrete; fossils embedded in shale. and deliver AXENT's network-based intrusion detection technology into iPolicy's multi-gigabit policy router, which will serve customers embracing high bandwidth application deployment. Continued Market Leadership and Awareness in High Profile Industry Publications AXENT products continued to dominate the market, earning two key awards and gaining industry accolades this quarter from top independent publications and test labs, including a prestigious five-star rating for PowerVPN(R) from Secure Computing For the general concept, see . Secure Computing Corporation, or SCC, is a public company (NASDAQ: SCUR) that develops and sells computer security products, such as:
In addition, AXENT's Raptor(R) Firewall and NetProwler performed superbly in the eWeek Hacking See hack and hacker. Challenge, fortifying the publication's OpenHack challenge site against potential intruders. Raptor Firewall was also praised as "still fired up" in an InternetWeek stand-alone review, commending the product's interoperability, flexibility and integrated virtual private network, and noting it as one of the "best application filtering firewalls on the market." About AXENT(R) AXENT Technologies, Inc., a global leader in information security, provides e-security solutions that maximize its customers' business advantage. AXENT delivers integrated products and expert services to assess, protect, enable and manage business processes and information assets, as well as facilitate Trust Level Management(TM) within its customers' environments. Through its unique Lifecycle Security(TM) Methodology, combined with Smart Security Architecture, AXENT delivers the `right' level of trusted e-security for customers. Award-winning solutions offer assessment and policy compliance, firewall, intrusion detection, authentication authorization technology, virtual private networking, Web access and 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. for enterprises and e-business. Headquartered in Rockville, MD, AXENT's customer-proven information security solutions are used by 45 of the Fortune 50, one-third of the Fortune e-50 and governments worldwide. Contact AXENT via e-mail at info@axent.com, or visit AXENT's worldwide Web site at http://www.axent.com. Statements in this release concerning AXENT's financial results for the third quarter of 2000 and its 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 indicated in this press release or other forward-looking statements made by or on behalf of AXENT not to be achieved or actual results to differ materially from expectations, estimates or projections. These factors include, but are not limited to, (1) AXENT's revenues are subject to a number of factors, including fluctuation from quarter to quarter and the significant percentage of sales typically closed at the end of each quarter that make the estimation of revenues and operating results extremely uncertain prior to the end of the quarter, (2) AXENT's revenues may depend upon substantial individual transactions, delays in the receipt of which may produce significant variation in results from quarter to quarter, (3) management's ability to manage growth, accurately forecast revenues and control expenses, (4) the highly competitive environment for AXENT's products and services and the consolidation of the information security industry, (5) the possibility of rapid technological advances and new product introductions in AXENT's market, (6) Year 2000 issues and the responses of prospective customers, (7) AXENT's ability to manage recent and potential acquisitions and (8) other factors identified under the caption "Certain Factors That May Affect Future Results" and "Certain Factors That May Affect Future Performance" in AXENT'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 the year ended December 31, 1999, as filed with the Securities and Exchange Commission. AXENT assumes no obligation to update or correct forward-looking statements due to events or changes after the date of this release. AXENT, the AXENT logo, Lifecycle Security, Trust Level Management, Raptor, Enterprise Security Manager, NetRecon, Intruder An attacker that gains, or tries to gain, unauthorized access to a system. See attacker, intrusion and IDS. Alert, VelociRaptor, ProwlerIDS, Plug and Protect, NetProwler, and PowerVPN, are trademarks or registered trademarks, in the United States and certain other countries, of AXENT Technologies, Inc. or its subsidiaries. CobaltRaQ is a trademark of Cobalt Networks Cobalt Networks was a maker of low-cost servers based on Linux. Founded in 1996 in Mountain View, California under the name Cobalt Microserver, the company pioneered easy to use server appliances featuring secure web user interfaces for Internet service providers (ISPs) , Inc. RSA Secured and SecureID are trademarks or registered trademarks of RSA Security RSA, The Security Division of EMC Corporation, is headquartered in Bedford, Massachusetts, and maintains offices in Ireland, the United Kingdom, Singapore, India, and Japan. RSA organizes the annual RSA conference. , Inc. All other product names and trademarks are property of their respective owners.
AXENT Technologies, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
Sept. 30,
2000 Dec. 31,
(unaudited) 1999
ASSETS
Current assets:
Cash and equivalents $ 48,041 $ 61,534
Marketable securities 77,067 47,331
Accounts receivable, net 31,616 35,954
Other current assets 4,417 3,696
Total current assets 161,141 148,515
Property and equipment, net 13,816 12,427
Goodwill and other intangible assets 24,836 29,554
Other assets 8,459 8,384
Total assets $208,252 $198,880
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 18,653 $ 23,266
Deferred revenue 19,385 17,935
Total current liabilities 38,038 41,201
Long term debt, net of current maturities -- 620
Total liabilities 38,038 41,821
Stockholders' equity 170,214 157,059
Total liabilities and stockholders' equity $208,252 $198,880
AXENT Technologies, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2000 1999 2000 1999
Net revenues:
Product licenses $21,684 $19,129 $63,509 $51,860
Services 12,401 9,343 34,972 24,485
Total net revenues 34,085 28,472 98,481 76,345
Cost of net revenues: 5,774 4,173 15,858 11,037
Gross profit 28,311 24,299 82,623 65,308
Operating expenses:
Sales and marketing 17,361 15,115 49,149 44,430
Research and
development 6,872 6,647 20,696 19,863
General and
administrative 3,627 2,762 10,488 8,131
Amortization of
acquired intangible
assets 1,468(a) 1,301(a) 4,420(a) 2,761(a)
Acquisition
related charges -- -- -- 3,753(a)
Total operating
expenses 29,328 25,825 84,753 78,938
Loss before
interest and taxes (1,017)(a) (1,526)(a) (2,130)(a) (13,630)(a)
Interest income 2,018 1,264 4,739 3,382
Income tax benefit
(provision) (370) (329) (776) 1,388
Net income (loss) $631(a) $(591)(a) $1,833(a) $(8,860)(a)
Basic net income (loss)
per common share : $0.02(a) $(0.02)(a) $0.06(a) $(0.32)(a)
Basic shares
outstanding (000's) 28,942 27,926 28,735 27,409
Diluted net income
(loss) per share: $0.02(a) $(0.02)(a) $0.06(a) $(0.32)(a)
Diluted shares
outstanding (000's) 29,959 27,926 29,800 27,409
(a) Results for the nine months ended September 30, 1999 AXENT
include 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 acquired intangible assets
of $2,761. For the nine months ended September 30, 2000 AXENT recorded
amortization of acquired intangible assets of $4,420. For the three
months ended September 30, 1999 and 2000, respectively, AXENT recorded
amortization of intangible assets of $1,301 and $1,468. Excluding
acquisition related charges and amortization of acquired intangible
assets, results for the three and nine months ended 2000 and 1999,
respectively, are:
For the For the
Three Months Nine Months
Ended Sept. 30, Ended Sept. 30,
2000 1999 2000 1999
Income (loss) before interest,
and taxes $451 $(225) $2,290 $(7,116)
Net income (loss) $2,099 $710 $6,253 $(2,346)
Basic net income (loss)
per common share: $0.07 $0.03 $0.22 $(0.09)
Basic shares outstanding (000's) 28,942 27,926 28,735 27,409
Diluted net income (loss)
per common share: $0.07 $0.03 $0.21 $(0.09)
Diluted shares outstanding (000's) 29,959 28,383 29,800 27,409
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