Axent Technologies Reports First Quarter 2000 Results.Business/Technology Editors ROCKVILLE, Md.--(BUSINESS WIRE)--April 26, 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), one of the world's leading information security solution providers, today reported that revenues in its FY 2000 first quarter ended March 31, 2000 rose 41% over the same quarter last year, while net income excluding acquisition-related charges and amortization of intangibles was $0.05 per share compared to a loss last year for the same period of ($0.08) per share. 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. John Becker said that the financial results reflected "growth in virtually every financial measurement that can be used to judge the company's progress." The investor call is 5:00pm EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT today. Interested investors can dial in to 1-888-318-6429 (if 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. , 1-334-260-2557) and enter security code 47839. The call will also be available live at www.vcall.com, where it will be archived. P&L RESULTS: The Company said that the growth in revenues, to $30,343,000 in the first quarter of 2000 from $21,444,000 in the first quarter of last year, was due to a 30 % growth in the licensing of the company's products and 68% growth in the sale of services. Product licensing revenues totaled $19,813,000, or 65% of total sales, and service revenues totaled $10,530,000, or 35% of total sales in the first quarter of 2000. In the first quarter of last year, product licensing revenues of $15,186,000 represented 71% of total sales, and service revenues represented 29% of total sales. Gross profit during the 2000 first quarter was $25,696,000, compared to $18,301,000 in the same quarter last year, representing an 85% gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. in both years. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , comprised of sales and marketing, research and development, and general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. , were $25,470,000 in the first quarter of 2000, compared to $22,652,000 in the same period of 1999. Operating expenses as a percentage of total revenues were 84% in the first quarter of 2000, down from 105% for the same period a year ago. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. excluding amortization of intangible assets and acquisition-related charges, was $226,000 in the first quarter of 2000 compared to an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of ($4,351,000) in the same quarter last year. Net income, excluding amortization of intangible assets and acquisition-related charges, was $1,512,000 or $0.05 per share in the first quarter of 2000, compared to a net loss of ($2,164,000) or ($0.08) per share in the same quarter last year. Net income, including amortization of intangible assets and acquisition-related charges, was $33,000 or $0.00 per share in the first quarter of 2000, compared to a net loss of ($6,068,000) or ($0.23) per share in the same quarter last year. AXENT reported a tax provision of $43,000 during the first quarter of 2000 after utilizing net operating losses Net operating losses Losses that a firm can take advantage of to reduce taxes. and other tax credits available to the company. Assuming a normalized tax rate of 30%, the company would have recorded earnings per share of $0.04 assuming 29,609,000 fully diluted shares outstanding. BALANCE SHEET: Due to positive cash flow from the company's operations in the first quarter of 2000, the company reported an increase in cash, cash equivalents, and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has of approximately $12,000,000 since the end of 1999 to $120,819,000, which represents approximately $4.00 per share on a fully diluted basis. The number of days' sales outstanding Days' sales outstanding Average collection period. ("DSO's") declined to 82 compared to 88 at the end of the 1999 fourth quarter. MANAGEMENT COMMENTS REGARDING FINANCIAL RESULTS: Mr. Becker noted that the first quarter of the year is traditionally the company's most difficult quarter. "We are extremely pleased with this performance and believe it bodes well for the balance of the year," he said. "We continue to see new and existing customers purchasing multiple AXENT products and services." Mr. Becker attributed the improvement to operating efficiencies and what he described as "the evolution of AXENT toward being a total solutions provider. We initially grew by selling products that protected what was inside an enterprise's computer network, but as an increasing number of companies move more of their operations in one form or another to the Web, we are providing products and services that will ensure the security of their information wherever it may reside in a global network, part of which is private and part of which is publicly accessible." "This evolution is further evidenced in the increasingly robust service offerings we provide customers," Becker added. He noted that the company now sells a broad range of information security consulting services as well as maintenance contracts and training. REVIEW OF OPERATING ACHIEVEMENTS DURING THE FIRST QUARTER: - Frost & Sullivan named AXENT's market-leading Raptor(R) Firewall the 1999 Product Line Strategy Award Winner. The award is presented to the company that has demonstrated the best product line strategy in the marketplace, meeting customer demand with the highest quality solutions. - Washington Technology recognized AXENT(R) as one of the 50 hot companies reflecting the region's growing diversification and strength. AXENT's inclusion on the list was based on a 517% growth rate over five years and increasing revenue stream. - The company's intrusion detection See IDS and IPS. and assessment solutions (Enterprise Security Manager(TM) and Intruder An attacker that gains, or tries to gain, unauthorized access to a system. See attacker, intrusion and IDS. Alert(TM)) won the prestigious Crossroads 2000 A-List Award in the technology infrastructure category. Based upon customer testimonials, this award demonstrates AXENT's comprehensive security management environment as essential firepower fire·pow·er n. 1. The capacity, as of a weapon, weapons system, military unit, or position, for delivering fire. 2. The ability to deliver fire against an enemy in combat. Noun 1. for large organizations wishing to accelerate their businesses. - SC Magazine validated AXENT's leadership by citing that it had the highest security brand awareness. The results of an SC Magazine study revealed that AXENT has the strongest brand awareness by IT professionals among all corporations in the security business. AXENT gained a strong foothold over Network Associates, Inc. (NASDAQ: NETA NETA New Electricity Trading Arrangements NETA Network Associates, Inc. (stock abbreviation, AMEX) NETA National Educational Telecommunications Association NETA International Electrical Testing Association NETA Norethisterone Acetate ), Cisco Systems “Cisco” redirects here. For other uses, see Cisco (disambiguation). Cisco System,Inc. (NASDAQ: CSCO, HKSE: 4333 ) is an American multinational corporation with 54,000 employees and annual revenue of US $28.48 billion as of 2006. , Inc. (NASDAQ: CSCO CSCO Cisco Systems Incorporated (stock symbol) CSCO Chief Supply Chain Officer ), 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. Systems, Inc. (NASDAQ: ISSX ISSX Internet Security Systems Inc. (stock abbreviation, AMEX) ), 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. (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 ), and CheckPoint Software, Technologies, Ltd. (NASDAQ: CHKP CHKP Check Point Software Technologies Ltd. (stock abbreviation, AMEX) ). - AXENT products continued to outperform the competition with product accolades and awards from top independent publications and labs. These include: - AXENT's PowerVPN(R) secured an "Excellent" Rating in InfoWorld and Checkmark Certification. InfoWorld's Test Center awarded AXENT's 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, PowerVPN 6.5 the highest score of "Excellent" for its ease-of-use, performance and following International Computer Security Association(TM) Internet Protocol See Internet and TCP/IP. (networking) Internet Protocol - (IP) The network layer for the TCP/IP protocol suite widely used on Ethernet networks, defined in STD 5, RFC 791. IP is a connectionless, best-effort packet switching protocol. Security standards. Reviewers cited the product's flexibility, interoperability and cost effectiveness--perfect for companies looking to implement a VPN in their existing network and security architectures. - In addition, PowerVPN 6.5 was the first VPN product to receive certification under the West Coast Labs independent VPN Checkmark certification program validating AXENT's ability to meet their customers' security needs in moving their business to the Internet. - AXENT's NetRecon(TM) wins a perfect score in SC Magazine Competitive Review. NetRecon, AXENT's Internet security scanner solution, received the esteemed five-star rating by SC Magazine. Reviewers praised NetRecon's progressive scanning and root cause analysis technology, and awarded the product a perfect score for features, ease-of-use, performance, documentation, support and value for the money. - Strategic partnerships established for the Linux(R) platform. AXENT believes these key relationships are substantial to its strategy of providing a comprehensive view of e-security anywhere, anytime, anyplace and delivering on its Smart Security Architecture. In this regard, the company cited the following: - AXENT joined the Red Hat, Inc. (NASDAQ: RHAT RHAT Red Hat (stock symbol) RHAT Rainwater Harvesting Association of Tanzania RHAT Register Hba Attributes ) ISV (Independent Software Vendor) A person or company that develops software. It implies an organization that specializes in software only and is not part of a computer systems or hardware manufacturer. Developer Partner Program to deliver powerful e-security solutions as organizations rapidly migrate to the top Linux platform. - AXENT partnered with 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. (NASDAQ: COBT) with the intent to develop the first Linux firewall and VPN appliance. Additionally, AXENT selected the Cobalt Networks(TM) server appliance 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, platform to introduce the first Linux-based intrusion detection system This article is about the computing term. For other uses, see Burglar alarm. An intrusion detection system (IDS) generally detects unwanted manipulations of computer systems, mainly through the Internet. (IDS) appliance. These new tools will allow small- and medium-sized businesses and branch offices to implement enterprise-class, Internet security solutions quickly, easily and within budget. - AXENT and BMC Software BMC Software, Inc. NYSE: BMC, is an American enterprise management software provider, focusing on IT infrastructure applications. BMC was founded in 1980 and is headquartered in Houston, Texas. expanded their relationship and built integrated solutions for 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. (SSO See single sign-on and CSO. SSO - single sign-on ) and centralized cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. user administration. This underscores both companies' commitments to offer customers the most advanced user administration technology and 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. for secure e-business communications worldwide. - AXENT launched new e-security solutions and services solutions to help companies easily secure their e-business needs. These include: - Enhanced Raptor Firewall 6.5 delivers unmatched security and performance for any e-business application. Raptor 6.5 is the industry's only perimeter firewall solution to expand unmatched proxy-based security to virtually any application used in today's fast-growing e-business initiatives. - New PowerVPN 6.5 makes deploying extranets safe and simple with firewall-independent, one-step connect and configure installation, centralized management and a new personal firewall to help companies quickly protect their "always on" Internet workforce. This new solution integrates AXENT's PowerVPN and RaptorMobile(TM), enabling an organization to expand its corporate borders, while moving applications and servers to the Internet quickly and easily. The company initiated relationships with more new clients who continued to select AXENT as their trusted security partner to protect and enable new e-business practices in 2000, including: Reliant General Insurance Services, Inc., ecampus.com, Inc., Intira Corporation, American Freightways American Freightways (AF) was a U.S. Less Than Truckload (LTL) shipping company. Founded in 1982 by the late Sheridan Garrison, American Freightways was originally titled Arkansas Freightways. Corporation (Nasdaq: AFWY), DuPont(R), and the U.S. Navy. About AXENT(R) AXENT Technologies, Inc., a global leader in information security, provides e-security solutions that maximize 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(TM) methodology combined with Smart Security Architecture, AXENT delivers the "right" level of security for customers. Award-winning solutions offer assessment and policy compliance, firewall, intrusion detection, authentication, VPN, Web-access, single sign-on 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, one-third of the Fortune e-50 and governments worldwide. Contact AXENT via e-mail at info@axent.com, or visit AXENT's World Wide Web site at http://www.axent.com. Statements in this release concerning AXENT's financial results for the first quarter 2000 and its future prospects are "forward-looking statements" 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 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 1999, 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, PassGo, NetRecon, Intruder Alert, RaptorMobile and PowerVPN, are trademarks or registered trademarks, in the United States and certain other countries, of AXENT Technologies, Inc. or its subsidiaries; Linux is a registered trademark of Linus Torvalds Linus Benedict Torvalds (born December 28 1969 in Helsinki, Finland) is a Finnish software engineer best known for initiating the development of the Linux kernel. ; DuPont is a registered trademark of E.I. du Pont de Nemours Du Pont de Ne·mours , Pierre Samuel 1739-1817. French-born economist and politician who took part in negotiations after the American Revolution (1783) and in the acquisition of the Louisiana Territory (1803). and Company; Cobalt Networks in a trademark of Cobalt Networks Inc., and International Computer Security Association is a trademark of ICSA See TruSecure. , Inc. All other product names and trademarks are the property of their respective owners.
AXENT Technologies, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
March 31,
2000 Dec. 31,
(unaudited) 1999
ASSETS
Current assets:
Cash and equivalents $ 74,478 $ 61,534
Marketable securities 46,341 47,331
Accounts receivable, net 27,787 35,954
Other current assets 4,048 3,696
Total current assets 152,654 148,515
Property and equipment, net 13,708 12,427
Goodwill and other
intangible assets 28,021 29,554
Other assets 8,762 8,384
Total assets $203,145 $198,880
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $ 16,821 $ 23,266
Deferred revenue 19,448 17,935
Total current liabilities 36,269 41,201
Long term debt, net of current
maturities 560 620
Total liabilities 36,829 41,821
Stockholders' equity 166,316 157,059
Total liabilities and
stockholders' equity $203,145 $198,880
AXENT Technologies, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
For the Three Months
Ended March 31,
2000 1999
Net revenues:
Product licenses $ 19,813 $ 15,186
Services 10,530 6,258
Total net revenues 30,343 21,444
Cost of net revenues: 4,647 3,143
Gross profit 25,696 18,301
Operating expenses:
Sales and marketing 15,263 13,656
Research and development 6,796 6,294
General and administrative 3,411 2,702
Amortization of acquired intangible assets 1,479(a) 151(a)
Acquisition related charges -- 3,753(a)
Total operating expenses 26,949 26,556
Income (loss) before interest and taxes (1,253)(a) (8,255)(a)
Interest income 1,329 1,068
Income tax benefit (provision) (43) 1,119
Net income (loss) $ 33(a) $ (6,068)(a)
Basic net income (loss) per common share: $ 0.00(a) $ (0.23)(a)
Basic shares outstanding (000's) 28,441 26,292
Diluted net income (loss) per share: $ 0.00(a) $ (0.23)(a)
Diluted shares outstanding (000's) 29,609 26,292
(a) Results for the three months ended March 31, 1999, AXENT included
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 $151. For the three months ended March 31, 2000 AXENT
recorded amortization of acquired intangible assets of $1,479.
Excluding acquisition related charges and amortization of acquired
intangible assets, results for the three months ended 2000 and
1999, respectively, are:
For the Three Months
Ended March 31,
2000 1999
Income (loss) before interest, and taxes $ 226 $ (4,351)
Net income (loss) $ 1,512 $ (2,164)
Basic net income (loss) per common share $ 0.05 $ (0.08)
Basic shares outstanding (000's) 28,441 26,292
Diluted net income (loss) per common share $ 0.05 $ (0.08)
Diluted shares outstanding (000's) 29,609 26,292
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