VASCO Data Security International Inc reported its financial results for
the first quarter ended March 31, 2007.
Revenues for the first quarter of 2007 increased 93% to $26.4 million
from $13.7 million in the first quarter of 2006. Net income for the first
quarter 2007 increased 324% to $5.0 million, or $0.13 per diluted share,
from $1.2 million, or $0.03 per diluted share, in the first quarter of
2006.
Financial Highlights:
— Gross profit was $17.5 million or 66% of revenue for the first
quarter
of 2007 and compares to gross profit of $9.5 million or 69% of
revenue
in the first quarter of 2006.
— Operating expenses for the first quarter of 2007 were $10.7 million,
an increase of $4.1 million or 63% from $6.6 million reported
for the
first quarter 2006. Operating expenses in 2007 and 2006 included
$0.4 million and $0.3 million, respectively, related to stock based
incentives.
— Operating income for the first quarter was $6.9 million, an increase
of $4.0 million or 137% from $2.9 million reported for the first
quarter of 2006. Operating income as a percentage of revenue
for the
first quarter of 2007 was 26% compared to 21% for the first
quarter of
2006.
— Earnings before interest, taxes, depreciation and amortization was
$7.6 million for the first quarter of 2007, an increase of 231% from
$2.3 million reported for the first quarter of 2006.
— Net cash balances, total cash and cash equivalents less bank
borrowings, at March 31, 2007 totaled $16.8 million compared to
$12.6
million at December 31, 2006.
Operational and Other Highlights:
— A total of 619 new accounts sold in the first quarter 2007,
including
94 banks and 525 Enterprise Security customers. In the first
quarter
of 2006, 341 new accounts were sold, including 34 banks and 307
Enterprise Security customers.
— AIB (Ireland) to use VASCO’s Alphanumeric Digipass 550 and VACMAN
Controller
— KBC (Belgium) offers secure retail e-banking and e-commerce with
Digipass 810
— Discount Bank (Uruguay) secures its private banking customers with
Digipass GO3 and VACMAN Controller
— Reliance Money (India) to use Digipass GO3 and VACMAN Controller
Huntington Bank (U.S.A.) secures online corporate business with
Digipass GO3 and VACMAN Controller
— VASCO establishes European Headquarters in Zurich (Switzerland)
— VASCO launches aXs GUARD authentication appliance and adds SSL-VPN
service
— VASCO launches refined Digipass Pack strategy for Small and Medium
Enterprises (‘SME’s)
Guidance for full-year 2007:
VASCO reaffirmed the full-year 2007 guidance provided on February 20,
2007, which included:
— Revenue growth of 35% to 45% for the full-year 2007 over full-year
2006,
— Gross margins as a percentage of revenue of 60% to 68% for the full-
year 2007, and
— Operating margins as a percentage of revenue of 18% to 25%.
“The growth in our revenue and profitability continue to demonstrate
the effectiveness of our Full-Option, All-Terrain Strategy, which was
introduced in the first quarter of 2006,” said Ken Hunt, VASCO’s CEO, and
Chairman. “Throughout 2006, we increased the functionality of our core
platform, VACMAN Controller, and acquired companies/technologies that
expanded the breadth of our product line. The strength of our product
offering is being accepted at record levels by customers looking to
strongly authenticate users to its applications.”
“The results of the first quarter in 2007 reflect the continued strong
growth of the business in both our banking and the enterprise security
markets compared to the first quarter of 2006,” said Jan Valcke, VASCO’s
President and COO. “We are and will continue to invest heavily in our
infrastructure to meet the growing market demand, which is evidenced by a
strong flow of new opportunities and new orders. As we start the second
quarter, we have a backlog of firm orders to be shipped in the second
quarter of $28.0 million, which is 75% higher than the $16.0 million
backlog we had entering the second quarter of 2006 and 51% higher than the
$18.5 million in actual sales reported for Q2 2006.”
Cliff Bown, Executive Vice President and CFO added, “Our balance sheet
continues to be strong. Net cash balances, cash and cash equivalents less
bank borrowings, were $16.8 million, an increase of $4.2 million or 33%
from December 31, 2006. Our working capital was $29.0 million at the end of
the first quarter, an increase of $6.9 million, or 31%, from $22.1 million
at December 31, 2006. Days Sales Outstanding (DSO) in net accounts
receivable increased to 81 days at March 31, 2007 from 72 days at December
31, 2006.”
