Baltimore Technologies Reports Record Fourth Quarter Revenues and 1999 Results.Business Editors DUBLIN, Ireland--(BUSINESS WIRE)--Feb. 23, 2000 Dramatic Growth in Software Revenues Reflects the Strong Demand for Baltimore's E-security Solutions and Increase in Global Expansion Baltimore Technologies Baltimore Technologies was an internet security firm founded in 1976 by Michael Purser. It was acquired in 1996 by a team financed by Dermot Desmond and led by Fran Rooney, who became CEO. (London:BLM BLM n abbr (US) (= Bureau of Land Management) → les domaines ) (Nasdaq:BALT BALT bronchus-associated lymphoid tissue. BALT Bronchiole-associated lymphoid tissue, see MALT ), a global leader in e-security solutions, today announced record revenue of Stg(pound)7.1 million (US$11.5 million) for the fourth quarter ended December 31, 1999, an 11% increase over revenue of Stg(pound)6.4 million (US$10.3 million) reported in the quarter ended September 30, 1999. For 1999, Baltimore Technologies posted revenue of Stg(pound)23.3 million (US$37.6 million), a 28% increase over revenue for the unaudited pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma year ended 31 December 1998. Baltimore ended the year with another strong quarter in software license revenue reflecting the increasing demand for Baltimore's security software products and solutions. In line with management expectations, software revenue in Quarter 4 increased to 58% of total revenue, up from 11% in the first Quarter. Overall, software license revenues of (pound)9 million (US$14.5 million) for the year represented 39% of total annual revenue compared to 10% for the corresponding pro-forma unaudited period last year, reflecting a 391% increase. This increase in software revenues from (pound)0.5 million (US$0.8 million) in the first quarter to 4.1 million (US$6.7 million) in the fourth quarter has improved the Gross Margin to 65% for the full year compared to 55% for the unaudited pro-forma 1998 period. Commenting on the full year results, Fran Rooney Fran Rooney (born 1956 in Dublin, Ireland) is one of Ireland's best known businessmen. Fran Rooney grew up in Ringsend and started his career in the Irish Government sector with various roles in the Postal, Telecoms and Civil Aviation sectors. , Chief Executive Officer of Baltimore Technologies said, "1999 was a very successful year for Baltimore Technologies with significant progress being made towards our objective of becoming the leader in the provision of e-security infrastructure solutions. We are pleased to report record revenues for the year with significantly increased software license revenues in line with our stated strategy. Based on the strength of our sales prospects and established global presence, we are confident of a strong future for Baltimore." In line with stated strategy, Baltimore Technologies also reported a loss before interest, taxes, depreciation and amortisation Noun 1. amortisation - the reduction of the value of an asset by prorating its cost over a period of years amortization reduction, step-down, diminution, decrease - the act of decreasing or reducing something 2. (LBITDA) for the year of 19.9 million (US$32.2 million). This reflects the planned increase in sales and marketing activity, continued focus on Research & Development and the establishment of the infrastructure required to support a global operation. "Baltimore Technologies business has grown dramatically over the year which is evident from the strong market demand for our e-security solutions. During the period we continued to enhance our technology base, open new offices worldwide and expand into new markets such as mobile commerce. We announced collaborations with companies such as PricewaterhouseCoopers, Logica and Hewlett Packard which, demonstrates the important role partners play in overall strategy. Looking forward, we are confident Baltimore is well positioned to sustain and manage this dynamic growth across all business areas and to execute our business plan to become the global leader in e-security solutions," stated Fran Rooney, 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. . Significant Highlights in Q4 and 1999: Listing on NASDAQ During quarter four, Baltimore Technologies successfully completed its NASDAQ listing, raising over (pound)96 million (US$158 million) through the offering of 7.6 million shares. The funds raised will fuel continued growth, enabling the company to maintain and expand its technological leadership and facilitate its global expansion plans both organically and through selective merger and acquisition opportunities. Global Expansion During 1999, Baltimore Technologies expanded its global sales and support footprint by opening 9 new offices, bringing to 22 the number of offices worldwide with 480 employees. The company now has three development centres located in Dublin, Boston and Sydney and offers 24 X 7 global support for its international client base. "During 1999 we made great strides in our sales, marketing, technology, services and partnerships to position us as one of the world's leading e-security companies. Our ability to execute and deliver solutions is often the key differentiation factor in customers choosing Baltimore Technologies. By working closely with our customers in implementing their mission-critical applications, we aim to foster strategic long term relationships," commented Fran Rooney. Increased demand for Baltimore Technologies e-security solutions Baltimore Technologies closed 1999 with another strong quarter for its e-security products and services, adding new customers across a range of sectors, generating growth in its sales pipeline and achieving greater geographic penetration. During 1999, the company's significant market presence in Europe was further strengthened with leading banks, telecommunication operators and Governments choosing its security technology. Industry leading companies including ABN Amro ABN AMRO Algemene Bank Nederland-Amsterdam Roterdam Bank (Dutch bank) , Deutsche Bank Deutsche Bank AG (IPA: /'dɔɪ.tʃə/[1]) (ISIN: DE0005140008, NYSE: DB) (English: German Bank , Ulster Bank, NatWest, National Health Service (UK) and the UK Ministry of Defence are using Baltimore's products for a variety of e-business applications including business to business exchanges, online banking, secure email and enterprise security. Developments in Eastern Europe Eastern Europe The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991. also opened new market opportunities with Baltimore's products being licensed by customers including Poland's leading bank, PKOBP. Baltimore Technologies is also achieving strong growth in the America's especially in the financial sector where customers including Identrus and Imperial Bank have licensed its technology. The company is experiencing increased demand in the US and expects its NASDAQ listing, proposed acquisition of GTE GTE General Telephone & Electronics GTE Génie Thermique et Énergie (French) GTE Gas Turbine Engine GTE Global Tropospheric Experiment GTE Geothermal Energy GTE Gas Turbine Efficiency plc (Sweden & USA) CyberTrust and strong sales pipeline to further its position and foothold foot·hold n. 1. A place providing support for the foot in climbing or standing. 2. A firm or secure position that provides a base for further advancement. foothold Noun 1. in the US market. In Asia Pacific, Baltimore Technologies continued to see strong demand for its Public Key Infrastructure (PKI (Public Key Infrastructure) A framework for creating a secure method for exchanging information based on public key cryptography. The foundation of a PKI is the certificate authority (CA), which issues digital certificates that authenticate the identity of ) and encryption The reversible transformation of data from the original (the plaintext) to a difficult-to-interpret format (the ciphertext) as a mechanism for protecting its confidentiality, integrity and sometimes its authenticity. Encryption uses an encryption algorithm and one or more encryption keys. technology, securing further strategic contracts with organizations such as Australian Tax Office and Australia Payments Clearing Association, consolidating the Company's market position in the region. Baltimore Technologies also saw return on its investment in Japan with the winning of several deals in association with its partner NSJ NSJ Non Solo Jumpers . These included Sony, Fuji, NEC (NEC Corporation, Tokyo, www.nec.com, www.necus.com) An electronics conglomerate known in the U.S. for its monitors. In Japan, it had the lion's share of the PC market until the late 1990s (see PC 98). NEC was founded in Tokyo in 1899 as Nippon Electric Company, Ltd. , NTT NTT Nippon Telegraph and Telephone Corporation NTT New Technology Telescope NTT National Technology Transfer, Inc NTT Name That Tune (TV game show) NTT National Tree Trust NTT Number Theoretic Transform Data. In the Commercial Certificate Authority (CCA (1) (Common Cryptographic Architecture) Cryptography software from IBM for MVS and DOS applications. (2) (Compatible Communications A ) business, momentum continued to build in Quarter four with several key announcements including contracts with Diginotar in The Netherlands, ID.Safe in Singapore and WISeKey in Switzerland. Baltimore Technologies ended the year with over 30 Commercial CA clients worldwide using Baltimore UniCERT CA system to provide a secure, authenticated au·then·ti·cate tr.v. au·then·ti·cat·ed, au·then·ti·cat·ing, au·then·ti·cates To establish the authenticity of; prove genuine: a specialist who authenticated the antique samovar. infrastructure for e-business. Global Partner Network Baltimore Technologies continued to extend its global reach with the appointment of over nine new partners to the Baltimore TrustedWorld Program in quarter four. During the year, the program expanded to a network of over 140 partners worldwide including, Logica, and PricewaterhouseCoopers, all offering a range of business and technology solutions, expanding Baltimore's access to service regional and industry sectors. Baltimore also recently announced its strategic 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 agreement for Hewlett Packard to sell Baltimore Technologies' Public Key Infrastructure (PKI) security products, including its award-winning UniCERT system, through the HP global sales network. In January 1999, Baltimore Technologies launched the Baltimore PKI World program which by year end had nearly 40 leading software vendors as members including Netscape, Siemens, Gemplus, Checkpoint (programming) checkpoint - Saving the current state of a program and its data, including intermediate results, to disk or other non-volatile storage, so that if interrupted the program could be restarted at the point at which the last checkpoint occurred. and Cisco. This program proactively encourages interoperability The capability of two or more hardware devices or two or more software routines to work harmoniously together. For example, in an Ethernet network, display adapters, hubs, switches and routers from different vendors must conform to the Ethernet standard and interoperate with each other. and support for Baltimore UniCERT with a range of PKI based solutions, therefore ensuring Baltimore customers have maximum choice when choosing their complete e-security solution. Baltimore Technologies held its inaugural Global e-Security annual convention in November 1999, which was attended by over 600 users, vendors, experts and industry leaders from around the world. This event was co-sponsored by Baltimore partners, Cisco, Gemplus, Isocor, PricewaterhouseCoopers and Sun Microsystems Sun Microsystems, Inc. (NASDAQ: JAVA[3]) is an American vendor of computers, computer components, computer software, and information-technology services, founded on 24 February 1982. . The success of this convention provides an excellent foundation for Baltimore Global e-Security 2000 convention to be held later this year. Innovation & Technology Baltimore Technologies' strategy is to translate original ideas into deliverable solutions in a rapid timeframe, delivering products that are either first or best. During the year, Baltimore continued to invest in research and development, spending approximately 31% of revenues. This investment resulted in the release of new innovative, world first products including X/Secure, the world's first commercial product for securing XML XML in full Extensible Markup Language. Markup language developed to be a simplified and more structural version of SGML. It incorporates features of HTML (e.g., hypertext linking), but is designed to overcome some of HTML's limitations. documents and enabled Baltimore to gain an early leadership in the mobile commerce security market through the release of W/Secure for wireless e-security. Baltimore Technologies also expanded the features and functionality of its PKI offering through the launch of Baltimore UniCERT Version 3. Enhancements included support for the Netscape Directory Server, Intel hardware based security, the Chrysalis chrysalis (krĭs`əlĭs): see pupa. Luna 3 token and a version to run on the Sun Solaris operating system operating system (OS) Software that controls the operation of a computer, directs the input and output of data, keeps track of files, and controls the processing of computer programs. . Baltimore also developed the Attribute Certificate Server and an exciting new module for UniCERT called the Advanced Registration Module (ARM) that automates the registration process. Since the launch of UniCERT v3, the system has received many highly favourable reviews and won many awards from the press and analysts. Earlier this year, Baltimore Technologies continued to drive developments in secure mobile commerce with the launch of its revolutionary wireless e-security framework, Baltimore Telepathy telepathy, supposed communication between two persons without recourse to the senses. The word was formulated in 1882 by Frederic William Henry Myers, English poet, essayist, and a leading founder of the Society for Psychical Research in London. . The Baltimore Telepathy initiative is a complete wireless e-security solution for mobile commerce. Telepathy enables business to provide new services to mobile customers by providing encryption technology for secure communications and transactions from end-users to a company's existing e-commerce and IT system. The Baltimore Telepathy initiative is targeted at e-commerce companies, network operators and software developers who need to deploy secure mobile commerce applications and systems. In addition to products and solutions, Baltimore Telepathy also offers a partner network for the wireless market. Since its launch in January 2000, over 20 organizations have joined including Sonera SmartTrust, Brokat and Logica. In association with partners, Baltimore Technologies is currently holding its worldwide secure mobile seminar series. Strategic M&A activity Since the period end Baltimore Technologies have announced the proposed US$150 million acquisition of GTE CyberTrust Solutions Inc., a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of GTE Corporation (NYSE NYSE See: New York Stock Exchange :GTE). The proposed acquisition will be funded through the issuance of Baltimore Technologies Stock. By providing the following complementary business elements, the acquisition will strengthen Baltimore Technologies' market position, especially in the US: -- Hosting facilities in the US and Japan which, having been built up with a $25m investment, provide a significant growth opportunity as customers increasingly demand outsourced PKI-based services -- US blue-chip customer base -- Ownership of embedded Web Browser root keys, and associated trust businesses The acquisition is expected to increase Baltimore Technologies' market-share in security systems for e-business and e-commerce security, particularly in the Public Key Infrastructure (PKI) marketplace. About Baltimore Technologies Baltimore Technologies develops and markets security products and services to enable companies to develop trusted, secure systems for e-business, the Internet and mobile commerce. Its products include a wide range of Public Key Infrastructure (PKI) systems, wireless e-security solutions, cryptographic cryp·tog·ra·phy n. 1. The process or skill of communicating in or deciphering secret writings or ciphers. 2. Secret writing. cryp toolkits, security applications and hardware cryptographic devices. Baltimore's global professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. organization offers a wide variety of consulting, training and deployment support to its customers worldwide. Baltimore Technologies markets and sells its solutions worldwide directly and through the TrustedWorld channel program. TrustedWorld includes many of the world's leading technology companies and a wide variety of global, regional and local business alliance partners. Baltimore Technologies employs over 450 people worldwide and operates from over 20 cities with headquarters in Dublin, Ireland; London, UK; Boston, USA and Sydney, Australia. Baltimore Technologies plc is a public company with dual listings on NASDAQ (BALT) and the London Stock Exchange London Stock Exchange London marketplace for securities. It was formed in 1773 by a group of stockbrokers who had been doing business informally in local coffeehouses. (BLM). Intel Corporation (company) Intel Corporation - A US microelectronics manufacturer. They produced the Intel 4004, Intel 8080, Intel 8086, Intel 80186, Intel 80286, Intel 80386, Intel 486 and Pentium microprocessor families as well as many other integrated circuits and personal computer networking is a minority shareholder in the Company. Baltimore Technologies made e-commerce history in 1998 when President Clinton and Ireland's Prime Minister Ahern digitally signed Any message or key that has been encrypted with a digital signature. When a user's public key is digitally signed by a certification authority (CA), it is known as a digital certificate or digital ID. See digital signature and digital certificate. an inter-governmental communiqu using security technology provided by Baltimore. For further information and press releases on Baltimore Technologies, please visit http://www.baltimore.com Baltimore Technologies, e|security, TrustedWorld, PKIWorld and Baltimore product names including UniCERT, MailSecure, PKI-Plus and J/CRYPTO are all trademarks of Baltimore Technologies plc. All other trademarks are the property of their respective owners. Certain statements that are not historical facts including certain statements made over the course of this document may be forward-looking in nature. Such 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. involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance and achievements of the Company to be materially different from any future results, performance or achievements implied by such forward-looking statements.
GROUP FINANCIAL HIGHLIGHTS
Pro Forma 8 month
Year ended for the period
31 December Year ended Percentage ended
1999 31 Dec. Change 31 Dec.
1998 1998
$m(*) pound m pound m(**) % lb.m
(audited) (unaudited) (audited)
Revenue 37.6 23.3 18.2 28% 9.9
Software
revenue 14.5 9.0 1.8 391% 0.2
included
above
Gross profit 24.3 15.1 10.0 50% 5.1
Gross profit % 65% 65% 55% 18% 51%
Loss before
interest,
tax,
depreciation
and
amortisation
of goodwill
and
intangibles
(LBITDA) (32.2) (19.9) (6.0) (235%) (4.8)
Operating
loss (53.7) (33.3) (17.8) (87%) (5.4)
Amortisation
of goodwill
and
intangibles
included
above 19.2 11.9 11.4 4% 0.4
Loss before
taxation (50.6) (31.4) (18.0) (75%) (5.2)
Shareholders'
funds 238.8 147.9 n/a -- 25.1
Loss per
share - Basic
(cents/pence)(165.9) (102.7) (60.8) 69% (27.8)
Employees at
end of period 480 480 337 42% 272
(*) Translated at the rate of 1 = $1.6150
(**) Includes 12 Months Results for both Baltimore (Ireland)
and Security Domain and is based on an effective acquisition date
for both Companies of 1 January 1999.
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