BindView Announces Financial Results for Third Quarter 2002.Business Editors/High-Tech Writers HOUSTON--(BUSINESS WIRE)--Oct. 24, 2002 BindView Corporation (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 : BVEW BVEW Binary View ), a leading provider of IT security management solutions, today announced results for the quarter and nine months ended Sept. 30, 2002. Revenues for the third quarter of 2002 were $15.9 million compared with $16.7 million in the third quarter of 2001. Revenues for the quarter increased six percent over the second quarter of 2002. License revenues for the quarter were $8.5 million, compared with $9.7 million for the third quarter of 2001. License revenues for the third quarter reflected a decline in new licenses from the Company's products for Novell-based platforms and lower than expected license revenues in Europe and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. . Services revenues for the quarter increased to $7.5 million compared with $6.9 million in the third quarter of 2001. During the current quarter, revenues from the Company's products for Microsoft-based platforms grew 14 percent from the third quarter of 2001 and accounted for approximately 73 percent of revenues, up from 60 percent of revenues for the same period last year. Revenues from the Company's products for Novell-based platforms declined 37 percent and accounted for 22 percent of revenues, down from 33 percent in the third quarter of 2001. For the third quarter of 2002, 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. narrowed to $3.1 million, compared with $13.8 million in the third quarter of 2001. Excluding the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges in both quarters, this improvement reflected a reduction in operating costs operating costs npl → gastos mpl operacionales and expenses of $5.1 million. Net loss for the quarter totaled $2.9 million, or $0.06 per share, compared with a net loss of $12.8 million, or $0.25 per share, in the third quarter of 2001. The net loss for the current quarter, excluding the restructuring and asset impairment charge of $1.9 million, or $0.04 per share, was $1.1 million, or $0.02 per share. Gross profit for the third quarter totaled $14.4 million, compared with $14.9 million for the same period in 2001, reflecting the decrease in license revenues. Gross margin for the quarter was 90.1 percent, up from 89.6 percent for the same period in the preceding year. The expansion in gross margin reflected the improvement in operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. of the Company's technical support and professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. units. "Despite the difficult operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. , we grew revenues sequentially and continued to see growth in our sales pipeline," commented Eric Pulaski, president 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 BindView. "Looking forward, we will continue to be sharply focused on sales and marketing activities to drive higher revenue growth. Accordingly, we believe that our efforts will result in sequential revenue growth for the fourth quarter with net earnings and positive cash flow." "During the quarter we applied our extensive experience in security management to expand into a new market opportunity with the successful introduction of the BindView Policy Center, a highly competitive security policy development and management system," continued Pulaski. "Our ability to develop and introduce technologies that are critical for keeping IT infrastructures secure will enable BindView to extend its leadership position and support future growth." Recent Highlights: - BindView added a new product line, the BindView Policy Center and introduced the line's first product, Policy Operations Center The facility or location on an installation, base, or facility used by the commander to command, control, and coordinate all crisis activities. See also base defense operations center; command center. . BindView Policy Center helps organizations proactively assess their compliance to corporate and regulatory policy. - The Company launched bv-Control for Web Services (1) Loosely, any online service delivered over the Web. Such usage appears in articles from non-technical sources, but not in IT-oriented publications, because definition #2 below describes the correct use of the term. and bv-Admin for Microsoft .NET See .NET. Web Services. These products help Web administrators effectively secure and manage Microsoft Internet Information Server See IIS. Microsoft Internet Information Server - Internet Information Server (IIS (Internet Information Services) Microsoft's Web server. IIS runs under the server versions of Windows, adding HTTP server capability to the Windows operating system. ) as well as the new Microsoft .NET Web Services. These BindView products reinforce the Company's leading role in security management and commitment to deliver innovative solutions for next generation technologies. - The Company unveiled its new Password Self Service solution, a Web-based application See Web application. that allows individual users to reset their own user passwords and unlock their accounts, helping to save valuable time for both system administrators and users. - BindView's bv-Control for Windows outperformed five other finalists to win the Security category in Windows and .NET Magazine's Best of Show Award at the Microsoft Enterprise Conference. In addition, bv-Admin for Microsoft Exchange Messaging and groupware software for Windows from Microsoft. Exchange Server is an Internet-compliant e-mail system that runs under Windows NT/2000 and Windows Server 2003. It can be accessed by Web browsers, the Exchange client, versions of Outlook and the earlier Windows Inbox. was selected as a finalist in the Management category and bv-Admin Mobile was selected as a finalist in the Mobility category. - bv-Control for Windows was awarded the coveted cov·et v. cov·et·ed, cov·et·ing, cov·ets v.tr. 1. To feel blameworthy desire for (that which is another's). See Synonyms at envy. 2. To wish for longingly. See Synonyms at desire. Windows & .NET Magazine Readers' Choice Award for Product of the Year. In this competition, the winner was determined only by readers' write-in votes. - BindView was also recently honored with a MSD (MicroSoft Diagnostics) A utility that accompanied Windows 3.1 and DOS 6 that reported on the internal configuration of the PC. A variety of information on disks, video, drivers, IRQs and port addresses was provided. 2D.com People's Choice Award for bv-Admin for Exchange in the Exchange Administration category. This award was chosen by votes from readers of MSD2D.com, an online resource for network administrators. - IDC recognized BindView for the third consecutive year as the worldwide leader in the host-based vulnerability assessment A Department of Defense, command, or unit-level evaluation (assessment) to determine the vulnerability of a terrorist attack against an installation, unit, exercise, port, ship, residence, facility, or other site. (VA) market. BindView was also recognized as the second largest VA software vendor and as the third largest worldwide ID&VA software vendor. Looking forward, IDC expects the ID & VA software market to grow considerably and to exceed $1.4 billion in revenues by 2006. - Earlier this month, more than 300 security and IT professionals from around the globe convened at BindView's highly successful user conference. Leading industry experts from the National Security Agency and Gartner Research were on hand to share perspectives on security management best practices. At Sept. 30, 2002, the Company's cash and cash equivalents were $38.3 million, compared with $43.7 million at the end of the second quarter. The decrease in the cash balance was in line with the Company's expectations and reflected $1.7 million in purchases of the Company's common stock under its share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program. During the third quarter, the Company repurchased 1.9 million shares of its common stock at an average price of $0.93 per share. The Company has no outstanding debt. The Company expects to generate positive cash flow and free cash flow in the fourth quarter before the effects of any stock repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. . Restructuring and Asset Impairment Charge. During the current quarter, the Company took a number of actions to improve operating efficiency and improve sales and marketing productivity. This included a reorganization of its sales and marketing departments, the transfer of development of certain products to its lower-cost India development center and consolidation of office space in its Houston headquarters. The Company took a restructuring and asset impairment charge of $1.9 million ($0.04 per share) relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc these actions, the majority of which related to the estimated cost of sub-leasing excess office space. Appointment to the Board of Directors. BindView also announced that it has appointed Peter T. Dameris, executive vice president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of Quanta quan·ta n. Plural of quantum. Services, to the Company's board of directors. Prior to joining Quanta Services in February 2001, Dameris served as chairman of the board, chief executive officer and president of Metamor Worldwide, Inc., an international IT consulting company Noun 1. consulting company - a firm of experts providing professional advice to an organization for a fee consulting firm business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a that was sold to a large global Internet service provider Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. in 2000. NASDAQ Notification. The Company has been notified by NASDAQ that its stock has traded below the minimum $1 bid per share requirement for 30 consecutive trading days In Business, the trading day is the time span that a particular stock exchange is open. For example, the New York Stock Exchange is, as of 2006, open from 09:30AM to 4:00PM. Trading days never take place on weekends. and that the Company has until Jan. 14, 2003 to regain compliance with this listing requirement. At that time, BindView can appeal the determination to a Listing Qualifications Panel, in accordance with NASDAQ's rules. BindView is considering possible actions to be implemented if its closing bid price does not meet the NASDAQ National Market minimum bid price requirement within the 90-day initial period. Among the actions under consideration would be to transfer BindView common stock to the NASDAQ SmallCap Market, which would provide BindView an additional 270 days to satisfy the minimum $1 bid price requirement and would make it eligible for transfer back to the NASDAQ National Market during that period. Outlook for Fourth Quarter 2002. The Company currently expects that revenues for the fourth quarter of 2002 will range between $18.0 million and $19.5 million and net income will range between $0.7 million ($0.01 per share) and $1.8 million ($0.04 per share). Scheduled Conference. The Company has scheduled a conference call today at 4:00 p.m. CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT to discuss details of the third quarter financial results. Interested parties should call (800) 238-9007, passcode 568332. A Webcast also will be provided live at: www.bindview.com/com/about/ir.cfm. The conference will be available for replay at (888) 203-1112, passcode 568332 from Oct. 24 to Nov. 1, 2002. About BindView Corporation BindView Corporation, the worldwide leader in providing host-based vulnerability assessment software, delivers proactive security management solutions to help safeguard computer systems and networks from security breaches before they occur. Unlike traditional approaches, the company's solutions work from the inside out to help protect business systems from both internal and external threats, thus reducing business risks. BindView's suite of cross-platform software and associated services help secure, automate and reduce the costs of managing information technology infrastructures. More than 20 million licenses of our solutions have been shipped worldwide to approximately 5,000 companies, including more than 80 of the Fortune 100 and 24 of the largest 25 U.S. banks. Contact BindView via e-mail at info@bindview.com or visit BindView's World Wide Web Site at http://www.bindview.com. BindView can also be reached at (800) 749-8439 or at (713) 561-4000. Statements in this news release not based on historical fact are "forward-looking" statements pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Actual results could differ materially because of factors such as, for example, the expected increase in IT security spending and continued improvement in sales execution and marketing effectiveness Marketing Effectiveness is the function of improving how marketers go to market with the goal of optimizing their marketing spend to achieve even better results for both the short-term and long-term. Also related to Marketing ROI and Return on Marketing Investment (ROMI). , risks associated with: competition within the network management software industry; rapid technological change; BindView's ability to execute its revenue- and cost-related strategies; possible customer deferrals of significant purchases in view of uncertainties in the domestic and global economy and factors effecting "execution and marketing effectiveness". Other such factors include the risk factors and other matters described from time to time in BindView'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. filings, Form 10-Q Form 10-Q See 10-Q. filings, and other periodic filings with the Securities and Exchange Commission. Editors Note: BindView(R), the BindView logo, and the BindView product names used in this document are trademarks of BindView Development Corporation, which may be registered in one or more jurisdictions. The names of products of other companies mentioned in this document, if any, may be the registered or unregistered trademarks of the owners of the products.
BindView Development Corporation
Consolidated Statements of Operations (unaudited)
(in thousands, except per share amounts)
Three Months Nine Months
Ended Ended
September 30, September 30,
2002 2001 2002 2001
Revenues:
Licenses $8,455 $9,749 $25,620 $29,798
Services 7,489 6,914 22,132 21,400
------- --------- --------- ---------
15,944 16,663 47,752 51,198
Cost of revenues:
Licenses 137 207 387 843
Services 1,439 1,530 4,367 4,950
------- --------- --------- ---------
1,576 1,737 4,754 5,793
Gross profit 14,368 14,926 42,998 45,405
Operating costs and expenses:
Sales and marketing 8,732 11,371 28,608 39,165
Research and development 4,951 5,623 14,920 17,527
General and administrative 1,950 3,783 5,768 12,307
Restructuring 1,608 6,000 1,608 6,594
Asset Impairment 276 1,979 276 1,979
------- --------- --------- ---------
17,517 28,756 51,180 77,572
Operating loss (3,149) (13,830) (8,182) (32,167)
Other income (loss), net 208 (4,525) 1,913 (3,176)
Loss before income taxes (2,941) (18,355) (6,269) (35,343)
Provision (benefit) for income
taxes - (5,507) 19,562 (10,506)
Net loss $(2,941) $(12,848) $(25,831) $(24,837)
Loss per share - basic and
diluted $(0.06) $(0.25) $(0.50) $(0.48)
Number of shares used to
calculate per
share amounts:
Basic 51,050 51,097 51,314 51,533
Diluted 51,050 51,097 51,314 51,533
BindView Development Corporation
Consolidated Balance Sheets
(in thousands)
September 30, December 31,
2002 2001
(unaudited)
Cash and cash equivalents $38,256 $39,791
Short-term investments -- 3,253
Accounts receivable, net 9,331 10,344
Other 2,135 1,180
Total current assets 49,722 54,568
Property and equipment, net 8,389 9,221
Investments and other 4,768 4,770
Deferred income taxes -- 19,562
Total assets $62,879 $88,121
Accounts payable $2,536 $1,763
Accrued liabilities 5,836 4,954
Accrued compensation 3,326 4,051
Deferred revenues 11,828 10,350
Total current liabilities 23,526 21,118
Deferred revenues 2,031 2,618
Other 122 576
Common stock 1 1
Treasury stock (1,764) (12,738)
Additional paid-in capital 109,707 121,884
Accumulated deficit (69,796) (43,965)
Notes receivable from shareholders (862) (1,188)
Accumulated other comprehensive loss (86) (185)
Total shareholders' equity 37,200 63,809
Total liabilities and
shareholders' equity $62,879 $88,121
Common shares outstanding 50,083 51,377
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