Revenue for the second quarter of 2011 was $43.0 million, an increase of 74% compared to the second quarter of 2010; Operating income for the second quarter of 2011 was $3.4 million, an increase of 116% compared to the second quarter of 2010. Guidance for full-year revenue growth in 2011 over 2010 increased. Financial results for the period ended June 30, 2011 and guidance for full-year 2011 to be discussed on conference call today at 10:00 a.m. E.D.T.
OAKBROOK TERRACE, Ill. and ZURICH, July 26, 2011 /PRNewswire/ -- VASCO Data Security International, Inc. (Nasdaq: VDSI) (www.vasco.com), today reported financial results for the second quarter and six months ended June 30, 2011.
Revenue for the second quarter of 2011 increased 74% to $43.0 million from $24.7 million in the second quarter of 2010, and for the first six months of 2011, increased 63% to $79.3 million from $48.7 million for the first six months of 2010.
Net income for the second quarter of 2011 was $2.6 million, or $0.07 per diluted share, an increase of $1.2 million, or 88%, from $1.4 million, or $0.04 per diluted share, for the second quarter of 2010. Net income for the first six months of 2011 was$5.1 million, or $0.13 per diluted share, an increase of $3.1 million, or 160%, from $2.0 million, or $0.05 per diluted share, for the comparable period in 2010.
Other Financial Highlights:
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Gross profit was $26.3 million, or 61% of revenue, for the second quarter of 2011 and $49.0 million, or 62% of revenue, for the first six months of 2011. Gross profit was $17.4 million and $34.1 million for the second quarter and first six months of 2010, respectively, or 70% of revenue for both periods of 2010.
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Operating expenses for the second quarter and first six months of 2011 were $22.9 million and $42.5 million, respectively, an increase of 44% from $15.9 million reported for the second quarter of 2010 and an increase of 34% from $31.8 million reported for the first six months of 2010.
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Operating expenses for the second quarter and first six months of 2011 included $0.8 million and $1.3 million, respectively, of expenses related to stock-based incentives. Operating expenses for the second quarter and first six months of 2010 included $0.6 million and $1.2 million, respectively, of expenses related to stock-based incentives.
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Operating income for the second quarter and first six months of 2011 was $3.4 million and $6.5 million, respectively, an increase of $1.8 million, or 116%, from $1.6 million reported for the second quarter of 2010 and an increase of $4.2 million, or 181%, from $2.3 million reported for the first six months of 2010. Operating income as a percentage of revenue for the both second quarter and first six months of 2011 was 8% compared to 6% and 5% for the comparable periods in 2010.
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Earnings before interest, taxes, depreciation and amortization (EBITDA) was $5.3 million and $9.8 million for the second quarter and first six months of 2011, respectively, an increase of 134% from $2.2 million reported for the second quarter of 2010 and an increase of 159% from $3.8 million reported for the first six months of 2010.
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Cash balances at June 30, 2011 totaled $84.6 million compared to $86.0 million and $85.5 million at March 31, 2011 and December 31, 2010, respectively. There were no bank borrowings at any of the periods ended June 30, 2011, March 31, 2011 or December 31, 2010.
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Operational and Other Highlights:
· VASCO acquired Alfa & Ariss, a specialist in open identity and access management, on April 1, 2011.
· VASCO's cloud-based DIGIPASS as a Service authentication was made available for Google™ Apps.
· Belgian cloud service provider Thinfactory put DIGIPASS as a Service at the disposal of the end-users of its online web store.
· VASCO entered the global SSL certificate market with CertiID SSL and EV SSL Certificates.
· VASCO launched its CertiID managed PKI offering trusted certificates to corporations' employees and business partners.
· VASCO launched DIGIPASS 836, a smart card reader with an optical interface and replaceable batteries.
· The University of Colorado at Boulder used VASCO's DIGIPASS GO 6 and IDENTIKEY Server to secure access to its new supercomputer and its network.
· Indiana University deployed VASCO's DIGIPASS to provide secure access to its institutional data and online applications.
· Soliton Systems, a leading Japanese network solution vendor, embedded VACMAN® Controller in its Net'Attest EPS series product line, its all-in-one authentication server appliances.
Guidance for full-year 2011:
VASCO is revising its guidance for the full-year 2011 as follows:
· Expected revenue growth of more than 40% for the full-year 2011 over full-year 2010, as compared to expected full-year revenue growth of more than 20% announced at the end of the first quarter of 2011; and
· Operating margins, excluding expenses related to the amortization of acquisition-related intangible assets, for full-year 2011 are projected to be in the range of 8% to 12% of revenue, no change from guidance previously announced, but are expected to be at the lower end of the range.
"The second quarter of 2011 continued to show strong revenue growth from our traditional businesses," stated T. Kendall Hunt, Chairman & CEO. "Revenues in the second quarter of 2011 were the highest in the company's history, reflecting strong growth from the banking market partially offset by a decline in revenues from the enterprise and application security market. We expect to report strong revenue growth for full-year 2011 over 2010. We believe that our strong order intake, which includes a significant number of orders scheduled to ship and invoice in 2011 and beyond, is an important and concrete sign that our business is gaining momentum. We also continued to invest in our DIGIPASS as a Service product line. The addition of Google™ Apps to our platform was a significant addition and we continue to work on integrating other important SAAS applications into our platform."
"In addition to our strong order intake, we have a strong pipeline of potential new orders and we expect that we will experience continued strong revenue growth in the second half of the year, driven primarily by the performance of the banking sector," stated Jan Valcke, VASCO's President and COO. "We also believe that our non-banking business will improve as a result of programs designed to support our reseller channel and their efforts. With the projected strong growth in revenues from the banking market in 2011, which includes high volume transactions with lower average selling prices, we expect our gross margins as a percentage of revenue will continue to be below the comparable quarters of 2010. Looking forward, we believe that as the performance from our non-banking business improves and our services strategy gains traction, our gross margins will improve."
Conference Call Details
In conjunction with this announcement, VASCO Data Security International, Inc. will host a conference call today, July 26, 2011, at 10:00 a.m. EDT - 16:00h CET. During the Conference Call, Mr. Ken Hunt, CEO, Mr. Jan Valcke, President and COO, and Mr.Cliff Bown, CFO, will discuss VASCO's Results for the Second Quarter and First Six Months Ended June 30, 2011.
To participate in this Conference Call, please dial one of the following numbers:
USA/Canada: +1 800-268-2160
International: +1 303-223-4375
And mention VASCO to be connected to the Conference Call.
The Conference Call is also available in listen-only mode on www.vasco.com. Please log on 15 minutes before the start of the Conference Call in order to download and install any necessary software. The recorded version of the Conference Call will be available on the VASCO website 24 hours a day for at least 60 days.
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