ISS Reports Record First Quarter.ATLANTA--(BUSINESS WIRE)--April 21, 1999-- - Results Include Record Revenues, Operating Profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. and Net Income ISS ISS See Institutional Shareholder Services (ISS). Group, Inc., parent company of 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. (ISS) (Nasdaq: ISSX ISSX Internet Security Systems Inc. (stock abbreviation, AMEX) ), today announced revenues of $15,986,000 for the quarter ended March 31, 1999, a 163% increase over $6,073,000 for the corresponding period in 1998. With such strong revenue performance, the Company reported 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. of $493,000 while continuing its aggressive product and sales expansion plans. Net income of the Company for the quarter was $1,300,000 or $.07 per share. The Company's income is not fully-taxed due to the existence of net operating loss carryforwards Net operating loss carryforwards Application of losses to offset earnings in future years. . However, it's the Company's understanding that estimates of the Company's performance by many market analysts who follow the Company are based on fully-taxed earnings. For comparisons to such published estimates, the Company's earnings per share would have been $.05 per share, assuming a tax rate of 35%. "ISS' business remains strong, as the Company continues on its path of success as a leader in the market for internet information risk management solutions," said Tom Noonan, president and chief executive officer, ISS. "Our best-of-breed strategy has continued to be validated val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. in the marketplace as evidenced by our success with customers, international growth, and strategic alliances with other key players in the industry. This validation See validate. validation - The stage in the software life-cycle at the end of the development process where software is evaluated to ensure that it complies with the requirements. included the execution of the largest enterprise licensing agreement of SAFEsuite(R) in the Company's history during the quarter." Noonan added, "As a key enabler of all internet commerce, ISS has a clear cut vision and leading technology for assuring the availability and integrity of critical enterprise applications and systems." Highlights of the first quarter include: Secondary Offering During the quarter, ISS successfully completed a secondary offering for 2,589,000 shares of its Common Stock including 1,389,000 newly issued shares sold by the Company and 1,200,000 sold by existing stockholders. The net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). to the Company from this offering after expenses were approximately $77,000,000. Product Delivery and Excellence Following its aggressive delivery of five new products in the fourth quarter of 1998, ISS shipped Database Scanner 2.0 in February, a new version of its leading database management solution with added support for Sybase database See SQL Server. servers. ISS also continued its history of winning industry awards from leading industry associations and publications including the "Best Network Security Product" (RealSecure) from the CODIE Excellence in Software Awards, highest product rating (Internet Scanner) from PC/Computing Magazine, and "1998 Product of the Year" (RealSecure) from Network Magazine. ISS was also named one of the "Top 50 Most Dynamic Companies" by Forbes in their April 5 issue. Strategic Agreements ISS continued to build on its vision of industry-wide security management 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. with the availability of the first Software Development Kit (SDK (Software Developer's Kit) See developer's toolkit and Windows SDK. SDK - Software Developers Kit (or "Software Development Kit"). ) for the Adaptive Network Security Alliance (ANSA ANSA - Advanced Network Systems Architecture ). The SDK enables ANSA partners to develop critical interoperability within their products for simpler management of adaptive security technology across the enterprise. ISS announced that Check Point Software, IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) ERS ERS, n.pr See extended rotated side-bent. , and Netrex Secure Solutions were the first companies to utilize the APIs to integrate adaptive security functionality into their product and service offerings. In March, ISS announced support and involvement in Microsoft's Commerce Alliance, with a commitment to optimize optimize - optimisation select ISS SAFEsuite products for use with Microsoft Site Server Commerce Edition. Also during the quarter, ISS announced an 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 with German-based Schumann AG, whereby ISS will provide an integrated solution combining Schumann's Security Administration Manager (SAM)(R) with ISS' information risk management technology to enable customers to centrally manage access control with vulnerability and threat detection. In March, ISS announced Secure Computing For the general concept, see . Secure Computing Corporation, or SCC, is a public company (NASDAQ: SCUR) that develops and sells computer security products, such as:
(2) Verifying the identity of a user logging into a network. and professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. offerings. ISS also announced a strategic alliance with Remedy, a leading provider of help desk systems, to meet customers' needs for an integrated solution combing combing, process that follows carding in the preparation of fibers for spinning, lays the fibers parallel, and removes noils (short fibers). The modern combing machine is a specialized carding machine. ISS' leading vulnerability and threat management functionality with Remedy Help Desk (tm) 4.0. International Growth ISS continued to grow its global presence with the opening of three new offices in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. , meeting significant customer demands for ISS SAFEsuite solutions. Channel Commitment ISS announced the SecurEcommerce Program offering channel partners targeted ISS SAFEsuite bundles to provide security management for specific electronic commerce environments. In February, ISS also announced the ISS Consultant Information Risk Management (IRM (1) (Information Resource Management) See Information Systems and information management. (2) (Inherited Rights Mask) In NetWare 3.x and 4. ) Program to make it easier for consultants to leverage ISS' leading SAFEsuite family of products to effectively manage enterprise security risks. The program extends ISS' flexibility in providing customized products and pricing based on consultants' individual business needs and scope. About ISS ISS is the pioneer and leading provider of adaptive network security software delivering enterprise-wide information protection solutions. ISS' award-winning SAFEsuite(R) family of products enables information risk management within intranet, extranet and electronic commerce environments. By combining proactive vulnerability detection with real-time intrusion detection and response, ISS' adaptive security approach creates a flexible cycle of continuous security improvement, including security policy implementation and enforcement. ISS SAFEsuite solutions strengthen the security of existing systems and have dramatically improved the security posture for organizations worldwide, making ISS a trusted security advisor for firms in the Global 2000, 21 of the 25 largest U.S. commercial banks and over 35 governmental agencies. For more information, call ISS at 678-443-6000 or 800-776-2362 or visit the ISS Web site at www.iss.net. NOTE TO EDITORS: This release, other than histo limited to, the following: the level of demand the Company's ability to develop new and enhanced products; the Company's ability to attract and retain key personnel; the mix of distribution channels through which the Company's products are sold; the growth in the acceptance and use of the Internet and of private Internet-based networks or "intranets"; the extent to which unauthorized access to and use of online information is perceived as a threat to network security; customer budgets; the assertion of infringement claims with respect to the Company's intellectual property; foreign currency exchange rates; and risks concerning the rapid change of technology; and general economic factors. These risks and others are discussed in the Company's periodic filings with the Securities and Exchange Commission. These filings can be obtained either by contacting ISS Investor Relations Investor relations The process by which the corporation communicates with its investors. or through the Securities and Exchange Commission's Web site at "http://www.sec.gov". Internet Security Systems, SAFEsuite, RealSecure, Database Scanner and Internet Scanner are trademarks of Internet Security Systems, Inc. All other companies and products mentioned are trademarks and property of their respective owners. -0-
ISS Group, Inc.
Consolidated Statements of Operations
(Amounts in thousands, except per share amounts)
(Unaudited)
Three months ended
Mar. 31, Dec. 31, Mar. 31,
1999 1998 1998
---------------------------------
Revenues:
Perpetual licenses $10,950 $8,906 $4,875
Subscriptions 3,487 2,598 1,169
Professional services 1,549 1,591 29
---------------------------------
15,986 13,095 6,073
Costs and expenses:
Cost of Revenues 2,186 1,867 513
Research and development 3,822 3,312 1,636
Charge for in-process research and
development - 802 -
Sales and marketing 7,825 7,051 4,648
General and administrative 1,409 1,262 981
Amortization 251 230 -
---------------------------------
15,493 14,524 7,778
---------------------------------
Operating income (loss) 493 (1,429) (1,705)
Interest income, net 882 694 66
Profit before income taxes 1,375 (735) (1,639)
Provision for income taxes (75) (62) -
---------------------------------
Net income (loss) $1,300 $(797) ($1,639)
Basic net income (loss) per share
of Common Stock $0.07 ($0.05) ($0.19)
Diluted net income (loss) per share
of Common Stock $0.07 ($0.05) ($0.19)
Weighted average number of shares:
Basic 17,776 17,045 8,741
Diluted 19,436 17,045 8,741
Unaudited pro forma net income
(loss) per share of Common Stock ($0.12)
Unaudited weighted average number
of shares used in calculating
unaudited pro forma net loss per
share of Common Stock 13,968
ISS GROUP, INC.
SELECTED CONSOLIDATED BALANCE SHEET DATA
(Amounts in thousands)
(Unaudited)
Mar. 31, Dec. 31,
1999 1998
-----------------------
Cash and Cash Equivalents $ 133,976 $ 52,632
Accounts Receivables 13,982 12,586
Total Assets 161,339 78,021
Deferred Revenues 9,371 6,678
Stockholder's Equity
Common Stock & PIC 154,957 76,127
Retained Earnings (7,992) (9,292)
Cummul. Adj. For Currency Revaluation 81 142
Deferred Compensation (569) (662)
Total Stockholder's Equity $ 146,477 $ 66,315
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