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RSA Security Announces Second Quarter Results

  • 22 July, 2005 14:30

<p>Company Generates Revenue of $76.5 Million and Earnings Per Share of $0.12; Increases Stock Repurchase Program</p>
<p>RSA Security Inc. (NASDAQ: RSAS) today reported financial results for the second quarter ended June 30, 2005.</p>
<p>Revenue for the second quarter of 2005 increased to $76.5 million from $75.6 million for the second quarter of 2004. Net income for the second quarter of 2005 increased 6% to $8.5 million, or $0.12 per diluted share, from $8.0 million, or $0.12 per diluted share, for the comparable period a year ago.</p>
<p>“While we improved our performance this quarter in several key areas, we fully expect to capture greater earnings and growth momentum in the second half of the year,” said Art Coviello, president and chief executive officer of RSA Security. “We expect the rollout of our new RSA SecurWorld™ partner program and the sales momentum of several new authentication products will position us to drive these improvements.”</p>
<p>The Company also announced that its board of directors has authorized the repurchase of an additional 2.0 million shares of the Company’s common stock under its share repurchase program originally announced in September 2004. The board of directors also extended the share repurchase program until June 30, 2006. The original plan authorized the repurchase of up to 6.7 million shares of the Company's common stock during 2004 and 2005. As of June 30, 2005, under the original plan, there were 5.1 million shares available for repurchase.</p>
<p>Second-Quarter Financial Highlights</p>
<p>· Revenue: Revenue for the second quarter of 2005 increased to $76.5 million from $75.6 million for the second quarter of 2004. RSA Security’s book-to-bill ratio for the quarter was approximately 1.0 to 1, and the Company closed the quarter with $62.0 million in combined backlog and deferred revenue. This represents a 13% increase from RSA Security’s $55.1 million in backlog and deferred revenue at June 30, 2004.</p>
<p>· Net Income: Net income for the second quarter of 2005 increased 6% to $8.5 million, or $0.12 per diluted share, from $8.0 million, or $0.12 per diluted share, from the second quarter of 2004.</p>
<p>· Cash Position: Cash, cash equivalents, and marketable securities decreased to $284.2 million at June 30, 2005 from $289.7 million at December 31, 2004. During the quarter, in accordance with the Company’s approved share repurchase program, RSA Security repurchased 777,600 shares of its common stock for $8.6 million.</p>
<p>Operational Highlights</p>
<p>· Customers: RSA Security shipped product to approximately 5,400 customers in the second quarter, including 683 new customers. With these new customers, RSA Security’s overall customer base now stands at more than 18,000 worldwide.</p>
<p>· RSA SecurWorld™ Partner Program: RSA Security launched its new RSA SecurWorld™ partner program in the second quarter. This program was created in conjunction with RSA Security’s existing partners and is focused on driving greater volume through the channel, increasing new customer acquisition rates and driving greater revenue and profitability from new products. This new program includes incentives for partners that drive new business and sell new products, as well as for partners who receive sales and technical certification.</p>
<p>· Products: RSA Security shipped an increased number of SD 700s, one of the newest releases in its family of authentication credentials. Additionally, in the second quarter, RSA Security began shipping its SD 800 USB-enabled tokens, as well as the RSA SecurID® Appliance. The USB-enabled combo token device enables customers to manage a broad range of credentials, including one-time-passwords, digital certificates and static passwords in a convenient easy-to-carry device. The RSA SecurID® Appliance has an intuitive user interface and is designed to be easy to deploy, providing small-to-medium sized businesses significantly higher levels of security.</p>
<p>RSA Security also announced its new RSA BSAFE® Data Security Manager software, which is scheduled to be released in the third quarter. This product allows enterprises to secure their digital assets. RSA BSAFE Data Security Manager enables companies to more easily enforce security policies, provides audit and usage logs in order to meet regulatory requirements and enables strong data security to be incorporated into applications and databases.</p>
<p>Business Outlook</p>
<p>While the third quarter is typically a seasonally slower quarter, the Company expects increased levels of business activity from new products in the second half of this year. Therefore, the Company is providing financial guidance for both the third and fourth quarters of 2005.</p>
<p>RSA Security’s financial guidance for the third and fourth quarters of 2005 is only current as of today, Thursday, July 21st, 2005, and the Company undertakes no obligation to update its estimates:</p>
<p>Third Quarter Guidance:</p>
<p>· Total quarterly revenue in the range of $74 million to $78 million.</p>
<p>· Diluted earnings per share in the range of $0.11 to $0.14.</p>
<p>Fourth Quarter Guidance:</p>
<p>· Total quarterly revenue in the range of $81 million to $85 million.</p>
<p>· Diluted earnings per share in the range of $0.15 to $0.19.</p>
<p>Conference Call Details</p>
<p>In conjunction with this announcement, RSA Security hosted a conference call to discuss the Company's financial results, highlights of the quarter and business strategy. A live webcast of this conference call will be available on the "Investor" page of the Company's website, and a webcast archive will be available for approximately three months. To access this call by telephone, dial +1 (877) 502-9276 or + 1 (913) 981-5591. A replay will be available through midnight on Wednesday, July 27, 2005 at +1 (719) 457-0820 or +1 (888) 203-1112. Both live and replay numbers have a pass code of 5132942.</p>
<p>About RSA Security</p>
<p>RSA Security Inc. helps organisations and individuals confidently protect identities and information access. The company secures more than 15 million user identities, safeguards trillions of business transactions annually, and manages the confidentiality of data in tens of thousands of applications worldwide. RSA Security’s portfolio of award-winning solutions – including identity &amp; access management, secure mobile &amp; remote access, secure enterprise access, secure transactions and consumer identity protection – sets the standard in the industry. Our strong reputation is built on a 20-year history of ingenuity, leadership and proven technologies, and our more than 17,000 customers around the globe. Together with more than 1,000 technology and integration partners, RSA Security inspires confidence in everyone to experience the power and promise of the Internet. For more information, please visit www.rsasecurity.com.</p>
<p>RSA, BSAFE, SecurWorld and SecurID are either registered trademarks or trademarks of RSA Security Inc. in the United States and/or other countries. All other products and services mentioned are trademarks of their respective companies.</p>
<p>This press release contains forward-looking statements regarding RSA Security’s financial guidance for both the third and fourth quarters of 2005. These statements involve a number of risks and uncertainties. Some of the important factors that could cause actual results to differ materially from those indicated by the forward-looking statements are general economic conditions, including the global economy, changes in our operating expenses, the long and unpredictable nature of the sales cycle for some of our products, the timing of the introduction or enhancement of our products and our competitors’ and strategic partners’ products, changes in product pricing, including changes in competitors’ pricing policies, development and performance of our direct and indirect distribution channels, delays in product development, competitive pressures, changes in customer and market requirements and standards, market acceptance of new products and technologies, technological changes in the computer industry, and the risk factors detailed from time to time in RSA Security’s periodic reports and registration statements filed with the Securities and Exchange Commission, including, without limitation, RSA Security’s Annual Report on Form 10?K filed on March 14, 2005.</p>
<p>Media Contact:</p>
<p>Maggie Jacka, Kinetics</p>
<p>(02) 9976-6611</p>
<p>maggie@kinetics.com.au</p>

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