Company Generates Record Revenue of $94.4 Million and Record Bookings of
$108.7 Million
Company To Host Conference Call This Afternoon at 4:30 p.m. ET
BEDFORD, Mass., July 19 /PRNewswire-FirstCall/ -- RSA Security Inc.
(Nasdaq: RSAS) today reported financial results for the second quarter
ended June 30, 2006.
Revenue for the second quarter of 2006 increased 23% to $94.4 million
from $76.5 million for the second quarter of 2005. Net income in accordance
with Generally Accepted Accounting Principles (GAAP) for the second quarter
of 2006 was $2.8 million, or $0.04 per diluted share. Net income for the
second quarter of 2006, adjusted to exclude stock-based compensation
charges, restructuring charges related to the Company's restructuring of
its engineering resources, transaction fees associated with EMC's proposed
acquisition of RSA Security and amortization of intangible assets
associated with RSA Security's acquisition of Cyota and PassMark Security
("Adjusted Net Income"), was $10.6 million, or $0.14 per diluted share
(refer to the "Use of Non-GAAP Financial Measures" section and accompanying
financial tables for reconciliations of GAAP to non-GAAP financial
information). GAAP net income for the second quarter of 2005 was $8.5
million, or $0.12 per diluted share. The Company did not report non-GAAP
net income for the second quarter of 2005.
"RSA Security had another outstanding quarter with both record revenue
and orders, a clear indication that spending on key identity-centric
security initiatives and encryption continues to be a top priority," said
Art Coviello, RSA Security president and chief executive officer. "We
continue to be successful at growing all areas of our business, and we are
excited about the market potential of all of our solutions.
"Further, we are extremely excited about the definitive agreement to be
acquired by EMC that we announced on June 29. Together RSA Security and EMC
can accelerate the much needed integration of critical security measures
into the information infrastructure."
Second-Quarter 2006 Financial Highlights
* Revenue and Bookings: RSA Security generated $94.4 million in revenue
for the second quarter of 2006, compared to $76.5 million in revenue for
the second quarter of 2005. Bookings for the second quarter of 2006 were
$108.7 million, up 38% from bookings during the second quarter of 2005
and up 14% from first quarter 2006 bookings of $95.6 million.
* Net Income: For the second quarter of 2006, the Company generated GAAP
net income of $2.8 million, or $0.04 per diluted share, and Adjusted Net
Income of $10.6 million, or $0.14 per diluted share.
* Backlog, Deferred Revenue and Estimated Unrecognized Revenue from
Managed Service Contracts: The Company closed the quarter with $134.9
million in combined deferred revenue, backlog and estimated unrecognized
revenue from managed service contracts, a 13% increase from the $119.1
million balance at March 31, 2006. This increase was driven in part by
the best ever quarter of consumer bookings, with the total estimated
unrecognized revenue from managed service contracts increasing 37%
during the second quarter, to $41.4 million as of June 30, 2006.
* Cash Position and Share Repurchase: Cash, cash equivalents, and
marketable securities increased to $218.1 million at June 30, 2006 from
$208.2 million at March 31, 2006. During the quarter, in accordance with
the Company's approved share repurchase program, RSA Security
repurchased 450,000 shares of its common stock for $8.5 million. The
board of directors of RSA Security approved an amendment to the share
repurchase program extending it for an additional two years, until June
30, 2008. As of June 30, 2006, there were approximately 6.0 million
shares eligible for repurchase under the plan.
Second-Quarter 2006 Operational Highlights
* Acquisition: RSA Security announced on June 29, 2006 that it had entered
into a definitive agreement to be acquired by EMC. Under the terms of
the agreement, EMC will pay $28.00 per share in cash in exchange for the
each share of RSA Security and the assumption of outstanding options,
for an aggregate purchase price of slightly less than $2.1 billion, net
of RSA Security's existing cash balance. The acquisition is currently
expected to close late in the third quarter or early in the fourth
quarter of 2006 and is subject to customary closing conditions and
regulatory approvals.
* Customers: RSA Security closed business with more than 6,600 customers
in the second quarter, including approximately 900 new customers. The
Company shipped approximately 2.5 million authentication credentials
during the second quarter, a 44% increase from the first quarter of
2006. Approximately 1.3 million of those credentials were consumer
related, a 116% increase from the consumer credentials shipped during
the first quarter of 2006.
* Products and Solutions: During the second quarter, RSA Security
announced an initiative to provide companies with a more comprehensive
approach to enterprise data protection (EDP). RSA Security's EDP
approach is designed to provide a robust framework for protecting an
organization's sensitive data in any place where data reside: at the
application-level; within databases; in files and operating systems; on
laptops and mobile devices, and in storage. In addition, this EDP
framework addresses the management of associated encryption keys, access
control and authentication -- helping organizations mitigate risk and
reduce costs, while protecting consumer, employee and partner
information.
Additionally, the Company announced RSA(R) Access Manager 6.0 software
(formerly RSA ClearTrust(R) software) to help protect Web-based resources
and enforce centralized user access policies as companies grapple with
compliance requirements (e.g., Health Insurance Portability and
Accountability Act and European Data Protection Directive) and strive to
improve their overall security posture. RSA Access Manager is engineered to
provide robust auditing and access control capabilities, while delivering
Web single sign-on (SSO) for a superior end-user experience. New features
in RSA Access Manager 6.0 software include delegated administration,
operational instrumentation and health monitoring, SmartRules(TM) extended
results, extended interoperability with Microsoft technology, expanded
logging, 64-bit computing support and an enhanced graphical user interface
(GUI).
The Company also announced that Broadcom Corporation, a global leader
in semiconductors for wired and wireless communications, is joining the RSA
SecurID(R) Ready for Authenticators program -- an extension of the trusted
RSA Secured(R) Partner Program. As part of this, Broadcom plans to license
RSA SecurID technology for integration within the new Broadcom(R) BCM5890
secure processor. Launched during the second quarter, Broadcom's BCM5890 is
a secure silicon processor with integrated radio frequency identification
(RFID) technology. By embedding RSA SecurID technology within the BCM5890
secure processor, Broadcom will enable its customers to leverage native
support for one-time passcodes (OTPs).
Business Outlook
The Company continues to see strong demand for its products and
services across all areas of its business, including all geographic areas.
In light of the definitive agreement to be acquired by EMC announced on
June 29, 2006, the Company is not providing financial guidance for its
operations for the third quarter of 2006.
Use of Non-GAAP Financial Measures
The Company is providing non-GAAP financial measures as the Company
believes that these figures are helpful in allowing investors to more
accurately assess the ongoing nature of RSA Security's operations. We
believe that these non-GAAP measures, which exclude from our net income and
earnings per share stock-based compensation charges, restructuring charges
related to our restructuring of our engineering resources, amortization of
intangible assets associated with our recent acquisitions of Cyota and
PassMark Security, and certain fees associated with the proposed
transaction with EMC, and which include in our cash flow from operations
(in the Supplemental Financial Data table) the tax benefit from the
exercise of stock options, when viewed in addition to and not in lieu of
our reported GAAP results, assist investors in understanding our results of
operations and evaluating our performance as compared to our results and
performance in prior periods, because the prior comparative periods did not
include stock-based compensation charges, the engineering restructuring
charges or the amortization of intangible assets from our acquisition of
Cyota and PassMark Security. Further, as we begin to apply Statement of
Financial Accounting Standards No. 123R, "Share Based Payment" (SFAS 123R),
we believe it is useful for investors to understand how the expenses and
other adjustments associated with the application of SFAS 123R are
reflected in our income statements. Finally, we have observed that many of
our competitors and other companies in our industry exclude similar items
from their publicly disclosed results, and we believe that excluding the
items from our own results may assist investors in comparing our
performance to that of other companies.
In addition, our management uses the non-GAAP measures discussed in
this release to conduct and evaluate our business, and we believe that
investors benefit from seeing our results "through the eyes of management."
We establish and manage our stock-based compensation programs,
restructuring plans and acquisition strategy on a corporate-wide basis, and
our business unit managers are not responsible for, and cannot control, the
impact of the associated charges on their business units. Accordingly, our
management excludes these charges internally when measuring the success of
our various business units and product lines. Further, our incentive bonus
program for employees, including executives, is based on corporate
performance measures that exclude some or all of these charges, again
because the costs are the result of corporate-wide decisions over which the
individual business unit managers and individual employees have limited or
no control.
Our use of non-GAAP financial measures is subject to a number of
limitations. For example, we are excluding charges such as stock-based
compensation charges, restructuring charges and amortization charges that
are true costs of our business and these non-GAAP financial measures may
not be directly comparable to the amounts reported by other companies.
However, we believe that excluding these non-cash and/or non-recurring
items allows our investors to better analyze our operations. The
presentation of the non-GAAP financial information included in this press
release and the accompanying financial tables is not intended to be
considered in isolation or as a substitute for the financial information
prepared and presented in accordance with GAAP.
GAAP earnings per share for the second quarter of 2006 include pre-tax
charges as follows: a restructuring charge of $368,000 related to the
Company's previously announced restructuring of its engineering resources,
$500,000 in transaction fees associated with EMC's proposed acquisition of
RSA Security, stock-based compensation charges of $7.1 million related to
the Company's adoption of SFAS 123R and $1.4 million of amortization of
intangible assets primarily related to intangible assets acquired as a
result of the Company's acquisitions of Cyota and PassMark Security.
Second Quarter 2006 Financial Results:
Reconciliation of Earnings per Diluted Share GAAP to Adjusted Net Income
Per Share*
(Per diluted share)
Earnings per diluted share (GAAP) $0.04
Restructuring charge and transaction fees $0.01
SFAS 123R stock option expense $0.08
Amortization of intangible assets $0.01
Earnings per diluted share (non-GAAP)* $0.14
*Figures are per diluted share and are post-tax assuming a GAAP effective
tax rate.
Conference Call and Web Cast Information
RSA Security will host a conference call today at 4:30 p.m. ET. A live
Web cast of this conference call will be available on the "Investor" page
of the Company's Web site; http://www.RSASecurity.com. To access this call
by telephone, dial (866) 592-8995 or (706) 634-1223. A replay will be
available through midnight on Thursday, July 27, 2006 at (800) 642-1687 or
(706) 645- 9291. Both live and replay numbers have a pass code of 2676842.
About RSA Security Inc.
RSA Security Inc. is the expert in protecting online identities and
digital assets. The inventor of core security technologies for the
Internet, the Company leads the way in strong authentication, encryption
and anti-fraud protection, bringing trust to millions of user identities
and the transactions that they perform. RSA Security's portfolio of
award-winning identity & access management solutions helps businesses to
establish who's who online -- and what they can do.
With a strong reputation built on a 20-year history of ingenuity,
leadership and proven technologies, we serve more than 21,000 customers --
including financial institutions representing hundreds of millions of
consumers around the globe -- and interoperate with over 1,000 technology
and integration partners. For more information, please visit
http://www.rsasecurity.com
RSA, SecurID, Secured and ClearTrust 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.
This press release contains forward-looking statements regarding RSA
Security's financial performance and prospects and the Company's proposed
acquisition by EMC Corporation. 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 our ability to successfully integrate the employees and
operations of our most recent acquisitions, Cyota, Inc. and Passmark
Security, Inc., the ability to realize anticipated synergies and cost
savings as a result of the Cyota and Passmark acquisitions, general global
economic conditions, 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, the
successful completion of the acquisition by EMC 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 16, 2006.
IMPORTANT ADDITIONAL INFORMATION TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION (SEC)
RSA Security has filed a preliminary proxy statement with the SEC and
plans to file with the SEC and mail to its stockholders a definitive proxy
statement in connection with the transaction. The definitive proxy
statement will contain important information about EMC, RSA Security, the
merger and related matters. Investors and security holders are urged to
read the definitive proxy statement carefully when it is available.
Investors and security holders will be able to obtain free copies of
the proxy statement and other documents filed with the SEC by EMC and RSA
Security through the web site maintained by the SEC at http://www.sec.gov.
Free copies of the proxy statement, when available, and each company's
other filings with the SEC also may be obtained from the respective
companies. Free copies of EMC's filings may be obtained by directing a
request to EMC. You can request this information via the web at
http://www.EMC.com/IR/request or by sending a written request to EMC
Investor Relations, EMC Corporation, 176 South Street, Hopkinton, MA 01748.
Free copies of RSA Security's filings may be obtained by directing a
request to RSA Security. You can request this information via the web by
visiting the "Investors" section of http://www.RSASecurity.com or by
sending a written request to RSA Security Investor Relations, RSA Security,
174 Middlesex Turnpike, Bedford, MA 01730. In addition, investors and
security holders may access copies of the documents filed with the SEC by
EMC on EMC's website at http://www.EMC.com, and investors and security
holders may access copies of the documents filed with the SEC by RSA
Security on RSA Security's website at http://www.RSASecurity.com, when they
become available.
RSA Security, and its directors and executive officers, may be deemed
to be participants in the solicitation of proxies from RSA Security's
stockholders with respect to the transactions contemplated by the merger
agreement. Information regarding RSA Security's directors and executive
officers is contained in RSA Security's Annual Report on Form 10-K for the
year ended December 31, 2005 and its preliminary proxy statement related to
the acquisition by EMC, which are filed with the SEC. As of June 30, 2006,
RSA Security's directors and executive officers beneficially owned (as
calculated in accordance with SEC Rule 13d-3) approximately 4,142,362
shares, or 5.3% , of RSA Security's common stock. You can obtain free
copies of these documents from RSA Security using the contact information
set forth above. Additional information regarding interests of such
participants is included in the preliminary proxy statement filed with the
SEC and the definitive proxy statement that will be filed with the SEC and
available free of charge as indicated above.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
Revenue
Products $64,978 $54,767 $126,486 $109,401
Maintenance, professional
and managed services 29,433 21,761 55,432 42,745
Total revenue 94,411 76,528 181,918 152,146
Cost of revenue
Products 12,649 9,640 25,392 18,172
Maintenance, professional
and managed services 8,071 6,391 15,439 12,483
Amortization of technology
related intangible assets 1,184 224 2,204 407
Total cost of revenue 21,904 16,255 43,035 31,062
Gross profit 72,507 60,273 138,883 121,084
Costs and expenses
Research and development 19,294 15,516 36,563 31,470
Marketing and selling 33,534 28,302 62,838 57,444
General and administrative 16,950 7,999 28,470 16,346
Amortization of intangible
assets 254 -- 508 --
Restructurings 368 -- 2,992 --
Total 70,400 51,817 131,371 105,260
Income from operations 2,107 8,456 7,512 15,824
Interest income and other 1,065 2,400 2,526 4,291
Income before provision for
income taxes 3,172 10,856 10,038 20,115
Provision for income taxes 414 2,388 1,950 4,425
Net income $2,758 $8,468 $8,088 $15,690
Basic earnings per share
Per share amount $0.04 $0.12 $0.11 $0.22
Weighted average shares 74,632 70,923 73,227 71,187
Diluted earnings per share
Per share amount $0.04 $0.12 $0.11 $0.21
Weighted average shares 74,632 70,923 73,227 71,187
Effect of dilutive equity
instruments 1,967 1,817 1,852 2,356
Adjusted weighted average
shares 76,599 72,740 75,079 73,543
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share data)
June 30, December 31,
2006 2005
ASSETS
Current assets
Cash and cash equivalents $64,516 $69,050
Marketable securities 153,587 118,702
Accounts receivable (less allowance for
doubtful accounts of $1,564 in 2006 and
$1,600 in 2005) 62,571 55,738
Inventory 4,348 4,813
Prepaid expenses and other assets 16,982 14,211
Total current assets 302,004 262,514
Property and equipment, net 75,106 69,764
Other assets
Deferred taxes 5,662 8,108
Intangible and other assets 49,294 41,534
Goodwill, net 319,910 275,864
Total other assets 374,866 325,506
Total assets $751,976 $657,784
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable, accrued expenses and other
liabilities $60,329 $53,212
Current portion of accrued restructurings 7,178 5,962
Income taxes accrued and payable 13,962 18,442
Deferred revenue 54,271 47,453
Total current liabilities 135,740 125,069
Accrued restructurings, long-term 7,442 9,793
Deferred revenue, long-term 16,407 7,429
Other 6,063 8,633
Total liabilities 165,652 150,924
Stockholders' equity 586,324 506,860
Total liabilities and shareholders' equity $751,976 $657,784
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
Cash flows from operating activities
Net income $2,758 $8,468 $8,088 $15,690
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 4,711 3,109 8,783 6,004
Tax benefit from exercise of
stock options -- 395 -- 1,214
Stock-based compensation 7,129 -- 9,912 --
Deferred taxes (1,089) -- (1,593) --
Increase (decrease) in cash from
changes in:
Accounts receivable (12,434) (3,022) (6,303) 4,311
Inventory 1,803 (938) 466 (1,036)
Prepaid expenses and other
assets (5,169) (2,045) (5,877) (1,318)
Accounts payable, accrued
expenses and other
liabilities 7,160 2,303 4,782 (7,268)
Accrued restructurings (1,323) (1,105) (1,135) (2,410)
Refundable income taxes and
income taxes accrued and
payable (1,743) 1,334 (4,691) 553
Deferred revenue 12,885 3,251 14,080 854
Net cash provided by
operating activities 14,688 11,750 26,512 16,594
Cash flows from investing activities
Purchase of marketable securities (42,929) (31,852) (109,832) (96,177)
Sales/maturities of marketable
securities 40,375 38,013 75,049 95,247
Purchases of property and equipment (5,108) (1,993) (9,012) (4,202)
Acquisitions (8,408) -- (8,408) --
Other (85) (601) (1,068) (1,237)
Net cash (used for) provided by
investing activities (16,155) 3,567 (53,271) (6,369)
Cash flows from financing activities
Proceeds from exercise of stock
options and purchase plans 14,939 1,052 25,163 4,672
Share repurchase (8,514) (8,647) (9,730) (21,088)
Excess tax benefit from exercise
of stock options 2,352 -- 6,799 --
Net cash provided by (used for)
financing activities 8,777 (7,595) 22,232 (16,416)
Effect of exchange rate changes on
cash and cash equivalents (20) 57 (7) (77)
Net increase (decrease) in cash and
cash equivalents 7,290 7,779 (4,534) (6,268)
Cash and cash equivalents, beginning
of period 57,226 54,163 69,050 68,210
Cash and cash equivalents, end of
period $64,516 $61,942 $64,516 $61,942
Supplemental Financial Data
(Unaudited)
(In thousands, except per share data)
Three Months Ended
June 30, Sept 30, Dec 31, March 31, June 30,
2005 2005 2005 2006 2006
Revenue
Enterprise solutions (1) $68,700 $67,722 $74,543 $76,016 $81,194
Developer solutions 7,828 8,515 5,688 6,117 6,923
Consumer solutions (1) NR NR 1,501 5,374 6,294
Total $76,528 $76,237 $81,732 $87,507 $94,411
Products $54,767 $53,774 $58,970 $61,508 $64,978
Services (2) 21,761 22,463 22,762 25,999 29,433
Total $76,528 $76,237 $81,732 $87,507 $94,411
Domestic $42,823 $42,968 $43,265 $46,845 $52,754
International 33,705 33,269 38,467 40,662 41,657
Total
$76,528 $76,237 $81,732 $87,507 $94,411
Other Financial Data
Total authentication
credentials (3) 1,031,000 1,051,219 1,551,076 1,723,526 2,479,999
Consumer authentication
credentials (3) NR NR 516,195 623,398 1,349,030
Cash and cash equivalents
and marketable
securities $284,206 $302,689 $187,752 $208,222 $218,103
Day sales outstanding
(DSO) 58 57 59 51 60
GAAP cash flow from
operations $11,750 $24,023 $15,444 $11,824 $14,688
Non-GAAP cash flow from
operations (4) $11,750 $24,023 $15,444 $16,271 $17,040
GAAP cash flow from
operations per diluted
share $0.16 $0.33 $0.21 $0.16 $0.19
Non-GAAP cash flow from
operations per diluted
share (5) $0.16 $0.33 $0.21 $0.22 $0.22
Book to bill ratio (6) 1.0 1.0 1.3 1.1 1.2
Total deferred revenue
balance $51,899 $48,846 $54,882 $56,040 $70,678
Total estimated
unrecognized revenue
from managed service
contracts (7) NR NR $24,224 $30,207 $41,397
Total product and
services backlog (8) $10,304 $12,662 $31,673 $32,873 $22,829
Total NR NR $110,779 $119,120 $134,904
Short-term deferred
revenue $44,317 $42,190 $47,453 $47,391 $54,271
Short-term estimated
unrecognized revenue from
managed service
Contracts NR NR $11,399 $15,308 $21,031
Short-term product and
services backlog NR NR $21,325 $23,114 $14,793
Total (9) NR NR $80,177 $85,813 $90,095
NR reflects metric not reported
(1) Consumer solutions previously reported as part of enterprise
solutions.
(2) Services revenue includes maintenance and professional services
revenue in addition to revenue related to Cyota's managed service
offerings.
(3) Includes RSA SecurID tokens as well as software tokens, smart cards
and USB.
(4) Non-GAAP cash flow from operations includes the tax benefit from the
exercise of stock options. See Use of Non-GAAP Financial Measures in
the main text of the press release.
(5) Non-GAAP cash flow from operations per diluted share is calculated as
non-GAAP cash flow from operations divided by dilutive weighted
average shares outstanding during the period. See Use of Non-GAAP
Financial Measures in the main text of the press release.
(6) The book to bill ratio is equal to the ratio of total orders booked
for the period plus the expected change in value of estimated
unrecognized revenue from managed service contracts as compared to
total revenue for the period.
(7)* Total estimated unrecognized revenue from managed service contracts
is equal to contracted monthly fixed fees associated with the service
plus contracted monthly variable fees based on an estimated number of
units for the remaining term of the contract. Contract terms are
typically 1-3 years. Contracts are billed monthly and are therefore
excluded from deferred revenue. This metric primarily relates to
Cyota's managed service offerings.
(8)* Total product and services backlog is equal to contracted orders for
products and maintenance and professional services which have not been
fulfilled.
(9)* Short-term represents the portion of these metrics that is expected
to be recognized as revenue in the next 12 months.
* These metrics represent management's estimates. Certain of these
managed service contracts are terminable upon notice of the customer.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
Three Months Ended June 30, 2006
SFAS 123R Other
GAAP Adjustment Adjust- Non-GAAP
ment
Revenue
Products $64,978 -- -- $64,978
Maintenance, professional
and managed services 29,433 -- -- 29,433
Total revenue 94,411 -- -- 94,411
Cost of revenue
Products 12,649 200 -- 12,449
Maintenance, professional
and managed services 8,071 82 -- 7,989
Amortization of technology
related intangible assets 1,184 -- 1,184 --
Total cost of revenue 21,904 282 1,184 20,438
Gross profit 72,507 282 1,184 73,973
Costs and expenses
Research and development 19,294 528 -- 18,766
Marketing and selling 33,534 797 -- 32,737
General and administrative 16,950 5,522 500 10,928
Amortization of intangible
assets 254 -- 254 --
Restructurings 368 -- 368 --
Total 70,400 6,847 1,122 62,431
Income from operations 2,107 7,129 2,306 11,542
Interest income and other 1,065 -- -- 1,065
Income before provision for
income taxes 3,172 7,129 2,306 12,607
Provision for income taxes 414 1,303 333 2,050
Net income $2,758 $5,826 $1,973 $10,557
Diluted earnings per share
Per share amount $0.04 $0.14
Weighted average shares 74,632 74,632
Effect of dilutive equity
instruments 1,967 1,967
Adjusted weighted average
shares 76,599 76,599
Condensed Consolidated Statements of Operations
(Unaudited)
The following table sets forth certain consolidated financial data as a
percentage of our total revenue:
For the three months ended,
June 30, 2006
GAAP Adjustment(a) Non-GAAP
Revenue
Products 68.9% --% 68.9 %
Maintenance, professional and managed
services 31.1 -- 31.1
Total revenue 100.0 100.0
Cost of revenue
Products 13.4 0.2 (b) 13.2
Maintenance, professional and managed (b)
services 8.5 0.1 8.4
Amortization of technology related (c)
intangible assets 1.3 1.3 --
Total cost of revenue 23.2 1.6 21.6
Gross margin 76.8 1.6 78.4
Costs and expenses
Research and development 20.4 0.6 (b) 19.8
Marketing and selling 35.5 0.8 (b) 34.7
General and administrative 18.0 6.4 (e) 11.6
Amortization of intangible assets 0.3 0.3 (c) --
Restructurings 0.4 0.4 (d) --
Total 74.6 8.5 66.1
Income from operations 2.2 10.1 12.3
Interest income and other 1.1 -- 1.1
Income before provision for income taxes 3.3 10.1 13.4
Provision for income taxes 0.4 1.8 2.2
Net income 2.9% 8.3% 11.2 %
(a) In absolute terms
(b) SFAS 123R stock option expense
(c) Amortization of intangible assets
(d) Restructuring charge
(e) SFAS 123R stock option expense and merger related expenses
Press contact:
Matt Buckley
RSA Security Inc.
(781) 515-6212
mbuckley@rsasecurity.com
SOURCE RSA Security Inc.
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Related links:
http://www.rsasecurity.com/
CONTACT:
Matt Buckley of RSA Security Inc.,
+1-781-515-6212, mbuckley@rsasecurity.com
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