CyberGuard Announces Second Quarter Fiscal Year 2003 Results.Business Editors FORT LAUDERDALE Fort Lauderdale (lô`dərdāl), residential, commercial, and resort city (1990 pop. 149,377), seat of Broward co., SE Fla., on the Atlantic coast; settled around a fort built (c.1837) in the Seminole War, inc. 1911. , Fla.--(BUSINESS WIRE)--Jan. 23, 2003 CyberGuard Corporation (AMEX AMEX See: American Stock Exchange :CFW CFW Custom Firmware CFW Call Forward CFW Cystic Fibrosis Worldwide CFW Cache Fast Write CFW Citizens for Florida's Waterways CFW Center for Writing (education) CFW Continuous Fillet Weld (engineering) ): -- $8.23 Million Revenues Rise 43 Percent Over Same Quarter Last Year, Set New Record -- Company Reports Profit of $1.5 Million and $.06 Earnings Per Diluted Share CyberGuard Corporation (AMEX:CFW), the technology leader in network security, today reported record revenues of $8.233 million for the quarter ended December December: see month. 31, 2002. That is an increase of $2.480 million or 43 percent over revenues of $5.753 million for the second quarter of fiscal year 2002 and represents the highest quarterly revenues in company history. For the first six months of fiscal year 2003, revenues were $15.333 million, an increase of $5.005 million or 48 percent over revenues of $10.328 million for the first six months of fiscal year 2002. The company also reported a profit for the fifth consecutive quarter. Net income for the second quarter was $1.508 million or $0.06 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share compared to $110,000 or $0.01 per diluted share for the same quarter of the previous fiscal year, an improvement of $1.398 million. Net profit for the first six months of fiscal year 2003 totaled $2.440 million compared to a net loss of ($798,000) for the first six months of fiscal year 2002. Earnings per diluted share for the first six months of fiscal year 2003 were $0.10 compared to a net loss of ($0.04) for the first six months of fiscal year 2002. Scott Hammack, chairman and chief executive officer of CyberGuard Corporation, stated: "Clearly, the company continues to have positive momentum as we realize the results of strategies we began putting in place two years ago. We posted both the highest revenues and the highest profit in our history this past quarter. We now have five consecutive quarters of profitability. That is quite remarkable given the continuing sluggishness in the economy, especially in the information technology sector." Hammack added that he was especially pleased with the significant growth in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. during the past quarter, particularly in the U.S. government division. Significant events since the start of the second quarter include: -- October October: see month. 15 - CyberGuard expands presence in northern Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). ,
signs value-added val·ue-add·ed adj. Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: distribution agreement with EuroTrust. -- October 22 - Saudi Telecom, the Kingdom's only telecommunications company See telecom company. , selects CyberGuard firewalls to secure its network infrastructure. -- November November: see month. 19 - CyberGuard releases version 5.1 on new, faster hardware platform doubling speed of earlier appliance A stand-alone hardware device or software environment dedicated to a specific task. See hardware appliance and software appliance. models and offering new features including intelligent 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 certificate management, stateful Capable of maintaining the status of a process or transaction. See state and stateless. high-availability, faster 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. acceleration, enhanced denial of service A condition in which a system can no longer respond to normal requests. See denial of service attack. (DOS) protection and spam E-mail that is not requested. Also known as "unsolicited commercial e-mail" (UCE), "unsolicited bulk e-mail" (UBE), "gray mail" and just plain "junk mail," the term is both a noun (the e-mail message) and a verb (to send it). prevention. -- January January: see month. 6 - CyberGuard's firewall technology proves interoperable The ability for one system to communicate or work with another. See interoperability. with Baltimore Baltimore, city (1990 pop. 736,014), N central Md., surrounded by but politically independent of Baltimore co., on the Patapsco River estuary, an arm of Chesapeake Bay; inc. 1745. Technologies' Identrus-compliant financial security solution, opening door to expanded global financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. market opportunities. Conference Call Information A conference call to review second quarter results will be held on Thursday, January 23, at 10:00 a.m. Eastern Time. To participate, please dial 1-706-645-9750 and ask for conference ID number 7602219. A recording of the conference call proceedings will be available from two hours after the call's conclusion on January 23 until midnight Eastern Time on Thursday, January 30, 2003. Both U.S. and international callers may listen to the recording by dialing 1-706-645-9291 and requesting conference ID number 7602219. About CyberGuard Corporation CyberGuard Corporation, the technology leader in network security, provides enterprise and electronic commerce security solutions to Global 2000 companies and governments worldwide. CyberGuard's award winning, industrial-strength firewall/VPN products and services protect the integrity of data and applications from unauthorized access. CyberGuard's appliances, which include SL, KS, FS and LX models, hold Common Criteria (Common Criteria for Information Technology Security) An international standard process for defining security objectives and for evaluating compliance with those objectives. The Common Criteria have largely replaced the Trusted Computer Security Evaluation Criteria (TCSEC), the Canadian Evaluation Assurance Level The Evaluation Assurance Level (EAL1 through EAL7) of an IT product or system is a numerical grade assigned following the completion of a Common Criteria security evaluation, an international standard in effect since 1999. 4+ (EAL EAL English as an Additional Language EAL Evaluation Assurance Level EAL Eastern Airlines EAL Emergency Action Level EAL Environmental Analysis Laboratory EAL Evidence Analysis Library (American Dietetic Association) 4+) certification, the most prestigious and rigorous IT security evaluation available. The company has world headquarters in Ft. Lauderdale, Florida, and branch offices worldwide. More information on CyberGuard Corporation can be found at http://www.cyberguard.com. 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. Statements regarding estimates, expectations and future prospects contained in this press release are forward-looking statements. These statements are based upon assumptions and analyses made by the Company in light of current conditions, future developments, and other factors the Company believes are appropriate in the circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or , or information obtained from third parties, and are subject to a number of assumptions, risks and uncertainties. Readers are cautioned that forward-looking statements are not guarantees and that actual results might differ materially from those suggested in the forward-looking statements. Some of the factors that might cause future actual events to differ from those predicted or assumed include: future advances in technologies and computer security; the Company's history of losses; the Company's ability to execute on its business plans; the Company's dependence on outside parties such as its key customers and alliance partners; competition from major computer hardware, software, and networking companies; uncertainties in availability of expansion capital in the future and other risks associated with capital markets; overall network security spending; global economic conditions; and the outcome of a class action lawsuit class action lawsuit A lawsuit in which one party or a limited number of parties sue on behalf of a larger group to which the parties belong. For example, investors may bring a class action lawsuit against a brokerage firm that has actively promoted a tax against the Company. For a more complete discussion regarding forward-looking statements, the reader is referred to the Company's periodic reports filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, including the 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 fiscal year ended June 30, 2002, and other information filed with the Commission. -- Tables Follow --
CYBERGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in thousands, except per share data)
Three Months Six Months
Ended Ended
Dec. Dec. Dec. Dec.
31, 31, 31, 31,
2002 2001 2002 2001
------- ------- ------- -------
Revenues:
Products 5,795 3,968 10,668 6,969
Services 2,438 1,785 4,665 3,359
------- ------- ------- -------
Total revenues 8,233 5,753 15,333 10,328
------- ------- ------- -------
Cost of revenues:
Products 1,398 1,130 2,622 1,866
Services 721 493 1,273 944
------- ------- ------- -------
Total cost of revenues 2,119 1,623 3,895 2,810
------- ------- ------- -------
Gross profit 6,114 4,130 11,438 7,518
------- ------- ------- -------
Operating expenses:
Research and development 1,207 1,003 2,254 2,359
Selling, general and administrative 3,543 2,986 6,865 5,955
------- ------- ------- -------
Total operating expenses 4,750 3,989 9,119 8,314
------- ------- ------- -------
Operating income (loss) 1,364 141 2,319 (796)
------- ------- ------- -------
Other income/(expense):
Interest income/(expense), net 25 5 54 27
Gain/(loss) on sale of assets 3 (14) (33) (17)
Other income/(expense): 116 (22) 100 (12)
------- ------- ------- -------
Total other income/(expense) 144 (31) 121 (2)
Net income (loss) 1,508 110 2,440 (798)
======= ======= ======= =======
Basic earnings (loss) per common
share $0.08 $0.01 $0.13 $(0.04)
======= ======= ======= =======
Weighted average number of common
shares outstanding 19,475 18,667 19,328 18,610
======= ======= ======= =======
Diluted earnings (loss) per common
share $0.06 $0.01 $0.10 $(0.04)
======= ======= ======= =======
Diluted common shares outstanding 24,316 19,267 23,479 18,610
======= ======= ======= =======
CYBERGUARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Amounts in thousands)
Dec. 31, June 30,
2002 2002
-------- --------
ASSETS
Cash and cash equivalents $8,931 $6,166
Restricted cash 75 44
Accounts receivable, less allowance for
uncollectible accounts of $437 at
Dec. 31, 2002, and $109 at June 30, 2002 6,487 5,152
Inventories, net 147 442
Other current assets 1,174 801
-------- --------
Total current assets 16,814 12,605
Property and equipment at cost, less accumulated
depreciation of $2,850 at Dec. 31, 2002, and
$2,335 at June 30, 2002 1,338 1,212
Capitalized software, net 246 219
Other assets 80 94
-------- --------
Total assets $18,478 $14,130
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Note payable $96 $140
Accounts payable 887 778
Deferred revenue 4,677 3,951
Accrued expenses and other liabilities 2,501 2,305
-------- --------
Total liabilities 8,161 7,174
Commitments and Contingencies - -
Shareholders' equity
Preferred Stock par value $0.01; authorized 5
shares; none issued - -
Common stock par value $0.01; authorized 50,000
shares issued and outstanding 19,734 at
Dec. 31, 2002 and 19,100 at June 30, 2002 197 191
Additional paid-in capital 89,662 88,673
Accumulated deficit (79,635) (82,075)
Accumulated other comprehensive income 93 167
-------- --------
Total shareholders' equity 10,317 6,956
-------- --------
Total liabilities and shareholders' equity $18,478 $14,130
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