EXHIBIT 99.1
VASCO Reports First Quarter 2003 Results
Profit and positive cash flow achieved. Revenues increase 56% compared to Q4
2002 and decline 7% compared to Q1 2002; Operating expenses down 29% compared to
Q4 2002 and 22% from Q1 2002; Operating income of $330,000 compared to operating
losses of $1,999,000 in Q4 2002 and $169,000 in Q1 2002; Net income of $481,000
compared to net losses of $1,900,000 in Q4 2002, and $160,000 in Q1 2002. Cash
balances increase $1,300,000 from December 31, 2002.
OAKBROOK TERRACE, Ill., and BRUSSELS, Belgium, April 24, 2003 - VASCO Data
Security International, Inc. (Nasdaq NM: VDSI; Nasdaq Europe) ( www.vasco.com),
a global provider of security products that enable e-business and e-commerce,
today announced financial results for the first quarter of 2003. Revenues for
the quarter of $5,611,000 were 56% higher than the fourth quarter of 2002 and 7%
lower than the same quarter of the prior year.
Operating income for the first quarter of 2003 was $330,000 compared with an
operating loss of $1,999,000 for the fourth quarter of 2002 and an operating
loss of $169,000 for the first quarter of 2002. Operating expenses were
$3,118,000, a 29% reduction from $4,374,000 in the fourth quarter 2002 and a 22%
reduction from $3,973,000 in the first quarter of 2002. The Company reported net
income for the first quarter of 2003 of $481,000 compared with a net loss of
$1,900,000 and $160,000 for the fourth quarter of 2002 and first quarter of
2002, respectively. Income per basic and diluted common share was $0.01 for the
first quarter of 2003 compared with a loss per basic and diluted common share of
$0.07 and $0.02 for the fourth quarter of 2002 and for the first quarter of
2002, respectively.
The income before interest, taxes, depreciation and amortization (EBITDA) was
$836,000 for the first quarter of 2003 compared with a loss before these items
of $1,553,000 in the fourth quarter of 2002, and income of $225,000 for the
first quarter of 2002. The company had a cash balance at March 31, 2003 of
$3,892,000 compared to $2,616,000 at December 31, 2002.
"In terms of net income, the first quarter of 2003 was VASCO's best quarter
since it became a public company in 1998," said Ken Hunt, VASCO's CEO, and
Chairman. "In reviewing the results, I am particularly pleased that the new
management team was successful in executing our business plan. We achieved or
exceeded our plan in revenue, margin, cost control and cash management. In
addition, with the current status of our order backlog, which currently includes
firm orders for delivery in the second quarter of $5.5 million, we are well
positioned to achieve our plan for the second quarter."
"The record profits are a reflection of the effectiveness of our fully completed
restructuring and a growing interest in VASCO's products," stated Jan Valcke,
VASCO's President, and COO. "By lowering our expense base we were able to
achieve profitability in a challenging business climate and with modest
revenues. I am further encouraged by the order activity in the first quarter of
2003. Our existing bank customers demonstrated strong demand and we added 170
new customers during the quarter. While the market appears to still be very
cautious relative to spending on investment technology, we see a high level of
interest in improving security through strong authentication. As a result of our
continued investment in expanding product our line, as evidenced by our recent
introduction of Digipass Authentication Server ("DAS"), we are well positioned
to participate in the growth of the IT security sector."
Cliff Bown, Executive Vice President and CFO added, "Our cash flow improved
substantially as a result of being profitable, deposits received under our
just-in-time delivery program and the continued reduction in Days Sales
Outstanding (DSO) in receivables. Through focused programs on managing cash we
have been able to improve the cash flow trend in each successive quarter since
December 2001, to finally become cash flow positive this quarter."
VASCO Data Security International, Inc.
Consolidated Statement of Operations
(Unaudited)
<Table>
<Caption>
Three Months Ended
---------------------------------------------------------------------
March 31, 2002 December 31, 2002 March 31, 2003
--------------------- --------------------- --------------------
Net revenues $ 6,032,000 $ 3,603,000 $ 5,611,000
Cost of goods sold 2,228,000 1,228,000 2,163,000
--------------------- --------------------- --------------------
Gross margin 3,804,000 2,375,000 3,448,000
Operating expenses:
Sales and marketing 2,188,000 1,894,000 1,591,000
Research and development 659,000 789,000 735,000
General and administrative 999,000 1,388,000 790,000
Restructuring expense - 320,000 -
Non-cash compensation (recovery) 127,000 (17,000) 2,000
--------------------- --------------------- --------------------
Total operating expenses 3,973,000 4,374,000 3,118,000
--------------------- --------------------- --------------------
Operating income (loss) (169,000) (1,999,000) 330,000
Interest income (expense) (41,000) (31,000) (49,000)
Other income (expense) 50,000 130,000 200,000
--------------------- --------------------- --------------------
Income (loss) before taxes (160,000) (1,900,000) 481,000
- - -
Income tax expense (benefit) --------------------- --------------------- --------------------
Net income (loss) (160,000) (1,900,000) 481,000
Preferred stock accretion (291,000) (291,000) (291,000)
--------------------- --------------------- ---------------------
Net income available to common $ (451,000) $ (2,191,000) $ 190,000
shareholders ===================== ===================== =====================
Basic and diluted income (loss) per
common share $ (0.02) $ (0.07) $ 0.01
===================== ===================== =====================
Weighted average common shares
outstanding 28,261,000 28,389,000 28,389,000
</Table>
Reconciliation of EBITDA to net income:
<Table>
<Caption>
Three Months Ended
---------------------------------------------------------------------
March 31, 2002 December 31, 2002 March 31, 2003
--------------------- --------------------- --------------------
EBITDA $ 225,000 $ (1,553,000) $ 836,000
Interest expense, net 41,000 31,000 49,000
Tax provision - - -
Depreciation and amortization 344,000 16,000 306,000
-------------------- --------------------- ---------------------
Net income (loss) $ (160,000) $ (1,900,000) $ 481,000
==================== ===================== =====================
</Table>
Highlights of the Quarter
- - VASCO signs 14 new banks and 156 new corporate network access customers
during Q1;
- - VASCO broadens range of Digipass Pack by adding compatibility with
Stonesoft and Netilla;
- - VASCO adds new distributors in Germany (DNS) and South America (Orion) to
its indirect sales network;
- - Costar selects VASCO to provide strong authentication for Costar Property;
- - VASCO launches Digipass Authentication Server, delivering one-time
passwords and digital signatures on mobile phones, text pagers and PDA's
- - VASCO signs letter of intent to sell its Snareworks business.
Please join us during our upcoming conference call on April 24, 2003, at 10:00
a.m. EST - 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 First Quarter 2003.
To participate in this Conference Call, please dial one of the following
numbers:
USA/Canada: +1 800 475 2151
International: +1 973 582 2710
And mention access code: 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.
About VASCO: VASCO designs, develops, markets and supports patented "Identity
Authentication" products for e-business and e-commerce. VASCO's Identity
Authentication software is delivered via its Digipass security products, small
"calculator" hardware devices carried by an end user, or in a software format on
mobile phones, other portable devices, and PCs. For user access control, VASCO's
VACMAN products guarantee that only designated Digipass users get access to the
application. VASCO's target markets are the applications and their several
hundred million users that utilize fixed passwords as security. VASCO's
time-based system generates a "one-time" password that changes with every use,
and is virtually impossible to hack, or break. With 8 million Digipass products
sold and shipped, VASCO has established itself as a world-leader for strong
Identity Authentication with 200 international financial institutions,
approximately 800 blue-chip corporations, and governments representing more than
50 countries.
Forward Looking Statements
Statements made in this news release that relate to future plans, events or
performances are forward-looking statements. Any statement containing words such
as "believes," "anticipates," "plans," "expects," and similar words, is
forward-looking, and these statements involve risks and uncertainties and are
based on current expectations. Consequently, actual results could differ
materially from the expectations expressed in these forward-looking statements.
Reference is made to the Company's public filings with the US Securities and
Exchange Commission for further information regarding the Company and its
operations.
More information is available at www.vasco.com.
For more information contact:
Media: Jochem Binst: +32 2 456 9810, JBINST@VASCO.COM
----------------
Investor Relations: Tony Schor, President, Investor Awareness, Inc.:
847-945-2222, TONYSCHOR@INVESTORAWARENESS.COM
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