Vasco Data Security International (Nasdaq: VDSI), today reported its financial results for the first quarter ended March 31, 2007.
Revenues increase 93% over Q1 2006; Operating income increases 137% over Q1 2006. Revenue for the quarter is the best in the Company's history. Financial results for first quarter of 2007 to be discussed on conference call today at 10:00 a.m. E.D.T.
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.
- 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 AlphanuuAlphanumeric 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 Zürich (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."