Vasco Data Security International (Nasdaq: VDSI), today reported financial results for the fourth quarter and full year ended December 31, 2009.
Revenue for the fourth quarter of 2009 increased 10% to $31.9 million from $28.9 million in 2008 and, for the full year 2009, decreased 24% to $101.7 million from $133.0 million in 2008.
Net income for the fourth quarter of 2009 was $5.6 million, or $0.15 per fully diluted share, an increase of $2.8 million, or 100%, from $2.8 million, or $0.07 per fully diluted share, for the fourth quarter of 2008. Net income for the full year 2009 was $12.6 million, or $0.33 per fully diluted share, a decrease of $11.7 million, or 48%, from $24.3 million, or $0.64 per fully diluted share for the full year 2008.
• Gross profit was $22.4 million or 70% of revenue for the fourth quarter of 2009 and $71.2 million or 70% of revenue for the full year 2009. Gross profit was $18.7 million or 65% of revenue for the fourth quarter of 2008 and $92.0 million or 69% of revenue for the full year 2008.
• Operating expenses for the fourth quarter and full year 2009 were $17.0 million and $57.7 million, respectively, an increase of 1% from $16.9 million reported for the fourth quarter 2008 and a decrease of 10% from $63.8 million reported for the full year 2008. Operating expenses for the fourth quarter included $0.5 million related to stock-based incentives. For the full year 2009, operating expenses reflected a benefit of $0.3 million related to stock-based incentives, including the reversal in the first quarter of 2009 of $2.0 million of long-term performance-based incentive award reserves that had been accrued at 12/31/08. Operating expenses for the fourth quarter and full year 2008 included $0.8 million and $3.1 million of expense, respectively, related to stock-based incentives.
• Operating income for the fourth quarter and full year 2009 was $5.4 million and $13.4 million, respectively, an increase of $3.6 million, or 197%, from $1.8 million reported for the fourth quarter of 2008 and a decrease of $14.7 million,$14.7 million, or 52%, from the $28.1 million reported for the full year 2008. Operating income as a percentage of revenue for the fourth quarter and full year 2009 was 17% and 13%, respectively, compared to 6% and 21% for the comparable periods in 2008.
• Earnings before interest, taxes, depreciation and amortization was $7.0 million and $18.9 million for the fourth quarter and for the full year 2009, respectively, an increase of 140% from $2.9 million reported for the fourth quarter of 2008 and a decrease of 40% from $31.3 million reported for the full year 2008.
• Net cash balances, total cash and cash equivalents less bank borrowings, at December 31, 2009 totaled $67.6 million compared to $71.2 million and $57.7 million at September 30, 2009 and December 31, 2008, respectively.
Operational and Other Highlights:
• VASCO won 428 new customers in Q4 2009 (60 new banks and 368 new enterprise security customers). For the full year 2009, VASCO won 1,485 new customers (211 banks and 1,274 enterprise security customers). Although management considers the number of new customers as an indicator of the momentum of our business and effectiveness of our distribution channel, the number of new customers is not indicative of future revenue.
• VASCO reinforces its presence in the Middle East by opening an office in the Kingdom of Bahrain.
• IJZA secures electronic files in the youth care sector with DIGIPASS and IDENTIKEY. IJZA II is an online client registration program making youth care patients' files available over the internet.
• SecurIT integrates VASCO authentication in its TrustBuilder solution for Tivoli Access Manager
• VASCO announces that DIGIPASS® for Mobile is available for iPhoneTM and iPod TouchTM
• VASCO enhances DIGIPASS 830 with an alpha-numeric screen. DIGIPASS 830a combines e-signature functionality with EMV-CAP compliance.
• VASCO extends its PKI-based product line with two new authenticators: DIGIPASS® KEY 200 and DIGIPASS® KEY 860. DIGIPASS KEY 200 is a USB device with a PKI smart card and secure USB mass storage on a single device.
• VASCO launches DIGIPASS Authentication for Windows Logon and announces IDENTIKEY Server Enterprise Edition.
• VASCO launches multi-application security model for strong authentication. A unique authentication and signature ID is stored in VASCO's comprehensive and centralised IDENTIKEY server, which can be expanded to support multiple access points and applications
• VASCO lightens the supply chain burden by offering fulfillment services to financial institutions.
• VASCO empowers its channel with new aXsGUARD Gatekeeper.
Guidance for full-year 2010:
VASCO is providing guidance for the full-year 2010 as follows:
• Revenue growth of 15% to 20% for the full-year 2010 over full-year 2009,
• Operating margins as a percentage of revenue for full-year 2010 are projected to be in the range of 5% to 10%.
"We believe that the results for the fourth quarter of 2009 are solid evidence that the negative impact created by the economic turmoil over the last year has started to abate," stated T. Kendall Hunt, Chairman & CEO. "While the full year 2009 results were down from 2008, we are proud of the fact that not only were we able to remain profitable in each quarter of 2009, but also continued to invest in new products and markets that will support our future growth. While we expect that our business will continue to be impacted by the economic uncertainties in the world markets, we expect that we will return to a trend of solid growth in 2010 over the comparable periods in 2009."
"The results for the fourth quarter from both our banking and enterprise and application security markets showed solid improvement from the third quarter of 2009," said Jan Valcke, VASCO's President and COO. "In addition, we saw that the strategies that we put into place in prior years proved valuable in remaining profitable in 2009. Growth in our non-banking business helped us improve our margins and remain profitable throughout the year. Looking forward, we believe that the continued investment in our products throughout 2009 will allow us to increase our product offerings in new markets, including new vertical application markets and services, which will result in a more diversified customer base with less reliance on any one market in future years."
Cliff Bown, Executive Vice President and CFO added, "During the fourth quarter of 2009 our working capital balances continued to grow even though our cash balances declined slightly. During the fourth quarter our working capital increased $5.6 million, or 7%, from September 30, 2009 and our net cash balance decreased $3.6 million or 5% from September 30, 2009. For the full year, our net cash balance increased $9.9 million, or 17%, and our working capital increased $13.0 million, or 17%, from December 31, 2008."