CyberGuard Announces Third Quarter Fiscal Year 2004 Results.Business Editors/High-Tech Writers 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)--April 26, 2004 CyberGuard Corporation (Nasdaq:CGFW): - Company Reports Record Revenues of $13.036 Million and 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 EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. of $0.07 - Revenues Increase 51 Percent and Pro Forma EPS 75 Percent Over Prior Year; Company Marks Seven Consecutive Quarters of Sequential One after the other in some consecutive order such as by name or number. Revenue Growth CyberGuard Corporation (Nasdaq:CGFW), the technology leader in network security, today reported record revenues of $13.036 million for the quarter ended March 31, 2004. This represents an increase of $4.393 million, or 51 percent, over revenues of $8.643 million for the quarter ended March 31, 2003, and is the seventh consecutive quarter of sequential revenue growth for the company. "This was an exceptional quarter for CyberGuard. Our year-over-year revenue growth of almost $5 million - 51 percent - was extraordinary," stated Pat Clawson Clawson, city (1990 pop. 13,874), Oakland co., SE Mich., a residential suburb between Pontiac and Detroit; settled c.1833, inc. 1920. , chairman and chief executive officer of CyberGuard Corporation. "On a pro forma basis, excluding non-cash acquisition-related expenses, our year-over-year earnings per share were up 75 percent." On a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). or generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting basis which included a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge to account for the impact of non-cash acquisition-related expenses, CyberGuard reported a net loss of $2.109 million, or $0.09 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, for the third quarter ended March 31, 2004, compared to reported net income of $5.148 million, which included an income tax benefit of $4.169 million primarily as a result of the reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its of a portion of the deferred tax asset valuation allowance, and $0.20 per diluted share, for the quarter ended March 31, 2003. On a pro forma or non-GAAP basis, net income for the quarter ended March 31, 2004, was $1.941 million or $0.07 per diluted share, compared to $1.099 million or $0.04 per diluted share, for the same period in 2003. Non-GAAP net income for the quarter ended March 31, 2004, excludes the impact of non-cash acquisition expenses for amortization of intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. , acquisition-related compensation charges for unearned restricted stock, and the deferred tax benefits. Management believes that the pro forma disclosures set forth below provide useful information to show the effect on net income when all acquisition-related costs and non-cash tax benefits are excluded.
Reconciliation of GAAP to non GAAP disclosures
Three Months Nine Months
Ended Ended
March 31, March 31, March 31, March 31,
2004 2003 2004 2003
---- ---- ---- ----
Net (loss) / income on
a GAAP basis $(2,109) $5,148 $1,395 $7,588
Compensation expense
related to unearned
restricted stock in
the SnapGear acquisition 4,113 - 4,387 -
Amortization of acquisition
related intangibles 418 120 821 120
Income tax benefit (481) (4,169) (1,348) (4,169)
-----------------------------------------
Net income on a
non-GAAP basis 1,941 1,099 5,255 3,539
=========================================
Basic earnings per common
share - non-GAAP $0.08 $0.05 $0.23 $0.18
=========================================
Weighted average number
of common shares
outstanding 23,757 20,078 22,431 19,574
=========================================
Diluted earnings per
common share - non GAAP $0.07 $0.04 $0.19 $0.15
=========================================
Weighted average number of
common shares outstanding 28,878 25,567 28,110 24,376
=========================================
"The third quarter was the first full quarter since we acquired SnapGear, and this clearly shows the benefit of that acquisition," said Clawson. "We expect to realize further benefits, however, as we move aggressively to maximize In a graphical environment, to enlarge a window to the full size of the screen. See Win Maximize windows. our channel synergies. To that end, we are promoting one of our sales executives from our EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. operation - Martin Nixon - into a new role as director of channel synergies. He will focus on integrating the channels across all of our divisions to accelerate sales across all channels." Clawson added that the effort was also designed to accelerate the benefit of Webwasher's strong reseller An organization that sells hardware and software to the general public. Resellers purchase products from software publishers and hardware manufacturers. and strategic channel partnerships moving forward. Significant events since the start of the third quarter include: -- January January: see month. 8 - CyberGuard begins shipping new line of enterprise-class 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. with new advanced intrusion prevention See IPS and IDS. features that enable organizations to securely deploy emerging technologies and critical enterprise applications using policies based on deep inspection of HTTP-based applications, streaming media See streaming audio, streaming video and digital media hub. , VoIP, and applications that employ SOAP and 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. . -- January 12 - CyberGuard's NetOctave division enhances 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. , adds support for IPsec (IP SECurity) A security protocol from the IETF that provides authentication and encryption over the Internet. Unlike SSL, which provides services at layer 4 and secures two applications, IPsec works at layer 3 and secures everything in the network. stack from F/X F/X Effects Communications, enabling engineers to significantly reduce the development time and costs for producing 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. ) server products. -- January 13 - Toshiba Toshiba Corporation (株式会社東芝 Kabushiki-gaisha Tōshiba America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. Medical Systems, a leading medical imaging company, chooses the cutting-edge VPN concentrator manufactured by CyberGuard's SnapGear division to deploy secure (VPN) tunnels The following are lists of tunnels:
Vehicle diagnostics enables a mechanic to diagnose the exact mechanical condition of the vehicle and its systems and components. Remote Diagnostics enables to perform such diagnosis without requiring the vehicle to physically be present for checkup. and maintenance within healthcare networks as healthcare providers begin moving toward complying with government's strict HIPAA (Health Insurance Portability & Accountability Act of 1996, Public Law 104-191) Also known as the "Kennedy-Kassebaum Act," this U.S. law protects employees' health insurance coverage when they change or lose their jobs (Title I) and provides standards for patient health, security regulations. -- January 14 - CyberGuard's SnapGear announces major upgrade to SME (1) (Small and Medium-sized Enterprise) See SMB. (2) (Subject Matter Expert) An individual who is well-versed in the policies and procedures of a particular department or division. 575 VPN/firewall appliance A stand-alone hardware device or software environment dedicated to a specific task. See hardware appliance and software appliance. , adding active anti-intrusion plus Web proxy cache A facility in a proxy server that caches incoming Web pages on the hard disk. If the next page requested by a browser is already in the proxy cache, the page is retrieved locally instead of from the Internet. With proxy caches, the browsers must be configured to use the proxy server. features, boosting network security and performance. -- January 20 - CyberGuard's SnapGear launches an embedded Inserted into. See embedded system. firewall network card that fits into standard peripheral slots Slots may refer to:
in PC desktops and servers to enable distributed security control. The PCI (1) (Payment Card Industry) See PCI DSS. (2) (Peripheral Component Interconnect) The most widely used I/O bus (peripheral bus). 635 plug-in An auxiliary program that works with a major software package to enhance its capability. For example, plug-ins are widely used in image editing programs such as Photoshop to add a filter for some special effect. card combats internal and external security threats by putting network security processors inside desktop and PC server boxes. -- January 21 - CyberGuard announces that the technology in its line of information security appliances effectively blocked the mass-mailing Bagle worm worm, common name for various unrelated invertebrate animals with soft, often long and slender bodies. Members of the phylum Platyhelminthes, or the flatworms, are the most primitive; they are generally small and flat-bodied and include the free-living planarians (of using advanced intrusion Unauthorized access to a computer system or network. See intruder and IDS. prevention and deep inspection. -- February February: see month. 2 - CyberGuard appoints Mike Rogers Mike Rogers may refer to:
corporate acquisition and business development, to new position as vice president of corporate development to direct the company's strategic growth initiatives with regard to partnerships and acquisitions. -- February 23 - CyberGuard unveils the future of enterprise security at San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden conference. New Total Stream Protection(TM) pushes beyond conventional deep inspection and intrusion prevention technologies, incorporating a comprehensive set of features for securing business applications and organizational data. -- March 22 - CyberGuard introduces new global education program, naming a worldwide network of exclusive training partners who will instruct in·struct v. in·struct·ed, in·struct·ing, in·structs v.tr. 1. To provide with knowledge, especially in a methodical way. See Synonyms at teach. 2. To give orders to; direct. v. professionals how to optimize optimize - optimisation network information security using CyberGuard products. -- April 26 - CyberGuard announces acquisition of Webwasher, a leading secure content management provider. Conference Call Information CyberGuard will hold a conference call to review its fiscal year 2004 third quarter results on Monday Monday: see week. , April 26, 2003, at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). Participants should dial 706-645-9750 and ask for conference ID number 6914748. A recording of the conference call proceedings will be available from two hours after the call's conclusion on April 26 until midnight Eastern Time on May 3, 2004. Both U.S. and international callers may listen to the recording by dialing 706-645-9291 and requesting conference ID number 6914748. A live Web cast of the call will be hosted on the company's Web site at http://www.cyberguard.com/.htm. Additional financial information can be found at http://www.cyberguard.com/investors/reports.cfm. About CyberGuard Corporation CyberGuard Corporation (Nasdaq:CGFW), the technology leader in network security, provides advanced Total Stream Protection(TM) solutions that protect the critical information assets of Global 2000 companies and governments worldwide. CyberGuard offers a broad line of scalable high performance firewall/VPN appliances, sophisticated security processors and accelerator accelerator: see particle accelerator. (1) A key combination such as Alt-G or Ctrl-Shift H that is used to activate a task. (2) An incubator that expects to develop the company considerably faster than normal. See incubator. products for the SSL (Secure Sockets Layer) The leading security protocol on the Internet. Developed by Netscape, SSL is widely used to do two things: to validate the identity of a Web site and to create an encrypted connection for sending credit card and other personal data. and IPsec markets, and industry leading embedded Linux The Linux operating system configured and enhanced to work in a wide variety of applications, including handheld devices, network appliances, industrial machines and consumer electronics devices. The modularity of the Linux kernel makes it well suited to embedded systems. and Linux Linux Nonproprietary operating system (OS) for digital computers. In 1991 Linus Torvalds of Finland began asking for volunteer programmers over the Internet to collaborate on the development of a UNIX-like OS for personal computers; the “1. security solutions. Headquartered in Ft. Lauderdale Lauderdale is the name of various places:
Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and , the company has branch offices and training centers around the world. More information about 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 June: see month. 30, 2003, and other information filed with the Commission.
CYBERGUARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Amounts in thousands)
March 31, June 30,
2004 2003
---- ----
ASSETS
Cash and cash equivalents $19,360 $12,095
Restricted cash 502 379
Accounts receivable, less allowance for
uncollectible accounts
of $458 at Mar 31, 2004 and $707 at
June 30, 2003 9,237 7,608
Inventories, net 1,604 359
Other current assets 1,235 967
Receivable from insurance company - 6,500
-----------------
Total current assets 31,938 27,908
Property and equipment at cost, less accumulated
depreciation of $4,487 at Mar 31, 2004 and
$3,373 at June 30, 2003 1,349 1,762
Capitalized software, less accumulated amortization
of $2,127 at Mar 31, 2004 and $1,988 at June 30,
2003 1,158 158
Intangibles, less accumulated amortization of
$1,124 at Mar 31, 2004 and $304 at June 30, 2003 2,979 799
Other assets 301 283
Goodwill 6,774 -
Deferred tax asset, net 5,597 4,249
-----------------
Total assets $50,096 $35,159
=================
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $1,781 $1,215
Deferred revenue 7,917 5,697
Litigation payable - 10,400
Accrued expenses and other liabilities 4,860 3,176
-----------------
Total liabilities 14,558 20,488
-----------------
Commitments and Contingencies - -
Shareholders' equity
Preferred stock par value $0.01; authorized 5,000
shares; none issued - -
Common stock par value $0.01; authorized 50,000
shares;
issued and outstanding 24,386 at Mar 31, 2004
and 20,953 at June 30, 2003 244 210
Additional paid-in capital 114,349 94,924
Accumulated deficit (79,147) (80,542)
Accumulated other comprehensive income 92 79
-----------------
Total shareholders' equity 35,538 14,671
-----------------
Total liabilities and shareholders' equity $50,096 $35,159
=================
CYBERGUARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in thousands, except per share data)
Three Months Nine Months
Ended Ended
March 31, March 31, March 31, March 31,
2004 2003 2004 2003
---- ---- ---- ----
Revenues
Products 10,113 6,178 24,497 16,846
Services 2,923 2,465 8,795 7,130
-----------------------------------------
Total revenues 13,036 8,643 33,292 23,976
-----------------------------------------
Cost of revenues
Products 3,671 1,499 7,651 4,120
Services 947 568 2,716 1,841
-----------------------------------------
Total cost of revenues 4,618 2,067 10,367 5,961
-----------------------------------------
Gross profit 8,418 6,576 22,925 18,015
-----------------------------------------
Operating expenses
Research and development 1,714 1,686 5,109 3,941
Selling, general and
administrative 5,432 3,917 13,853 10,782
Compensation expense
related to unearned
restricted stock in
the SnapGear acquisition 4,113 - 4,387 -
-----------------------------------------
Total operating expenses 11,259 5,603 23,349 14,723
-----------------------------------------
Operating (loss) / income (2,841) 973 (424) 3,292
-----------------------------------------
Other income
Interest income, net 45 31 113 85
Loss on sale of assets - - - (33)
Other income 206 (25) 358 75
-----------------------------------------
Total other income 251 6 471 127
-----------------------------------------
(Loss) / Income before
income taxes (2,590) 979 47 3,419
-----------------------------------------
Income tax benefit 481 4,169 1,348 4,169
-----------------------------------------
Net (loss) / income (2,109) 5,148 1,395 7,588
=========================================
Basic (loss) earnings
per common share $(0.09) $0.26 $0.06 $0.39
=========================================
Weighted average number
of common shares
outstanding 23,757 20,078 22,431 19,574
=========================================
Diluted (loss) earnings
per common share $(0.09) $0.20 $0.05 $0.31
=========================================
Weighted average number
of common shares
outstanding 23,757 25,567 28,110 24,376
=========================================
CYBERGUARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in thousands)
Nine Months
Ended
March 31, March 31,
2004 2003
---- ----
Cash flows from operating activities:
Net income $1,395 $7,588
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 1,113 750
Amortization 959 316
Compensation expense related to unearned
restricted stock in the SnapGear acquisition 4,387 -
Loss on disposal of property & equipment - 33
Deferred tax benefit (1,348) (4,249)
Provision for uncollectible accounts receivable 269 218
Compensation expense related to stock options 11 75
Non cash expense for company 401(k) match 316 192
Changes in assets and liabilities (excluding the
effect of acquisition)
Increase in restricted cash (21) (38)
Increase in accounts receivable (1,860) (1,970)
Increase in other current assets (268) (458)
Decrease/(Increase) in inventories 804 (543)
(Increase)/Decrease in other, net (16) 7
(Decrease)/Increase in accounts payable (657) 66
Increase in accrued expenses and other liabilities 1,015 565
Increase in deferred revenue 1,713 1,230
Decrease in litigation receivable 6,500 -
Decrease in litigation payable (10,400) -
-------------------
Net cash provided by operating activities 3,912 3,782
-------------------
Cash flows used in investing activities
Acquisition of SnapGear, net of cash acquired 91 -
Acquisition of certain assets of NetOctave (300)
Capitalized software costs (1,139) (179)
Purchase of property & equipment (522) (315)
-------------------
Net cash used in investing activities (1,570) (794)
-------------------
Cash flows provided by financing activities:
Repayment of notes payable - (111)
Proceeds from stock options exercised 4,599 1,473
Proceeds from warrants exercised 145 -
Proceeds from sale of common stock in stock
purchase plan 167 90
-------------------
Net cash provided by financing activities 4,911 1,452
-------------------
Translation adjustment 12 (68)
Net increase in cash 7,265 4,372
Cash and cash equivalents at beginning of period 12,095 6,166
-------------------
Cash and cash equivalents at end of period $19,360 $10,538
===================
Supplemental disclosure of cash flow information
Cash paid for interest $ - $ 7
===================
Cash paid for income taxes $ 28 $ -
===================
Supplemental disclosure of non-cash information
During January 2001, approximately 310 options to purchase shares
of the Company's common stock were issued at a below market price,
which required the Company to record approximately $11 and $16 in
compensation expense during fiscal year 2003 and 2002.
The Company's former CEO, Scott Hammack, participated in a special
option program where he received no salary for twelve months which
required the Company to record compensation expense of $59 for the
nine months ended March 31, 2003.
In connection with the acquisition of NetOctave, 107 shares valued
at $750 were issued, a contingent purchase consideration of $450 and
costs associated with the closing of $68 were accrued for during the
quarter ended March 31, 2003.
In connection with the acquisition of SnapGear, 1,651 shares
valued at $14,222 were issued and a contingent purchase consideration
of $800 was accrued for. The following assets and liabilities were
acquired:
Current Assets
Cash assets 1,892
Restricted Cash 102
Receivables 39
Inventories 2,112
-------
Total Current Assets 4,145
Non-current assets
Intangible assets 3,000
Goodwill 6,774
Plant & equip 115
-------
Total non-current assets 9,889
Current Liabilities
Trade Creditors 421
Deferred Revenues 507
Accrued Expenses 669
-------
Total Current Liabilities 1,597
Unearned restricted stock 4,387
-------
Total assets acquired 16,824
=======
CyberGuard(R) is a registered trademark and Total Stream Protection(TM) is a trademark of CyberGuard Corporation. All other trademarks are property of their respective owners. |
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