Seattle, WA - February, 2003 -- WatchGuard Technologies, Inc. (Nasdaq: WGRD), a leading provider of Internet security solutions, today announced its financial results for the fourth quarter and year ended December 31, 2002.
WatchGuard reported record revenues of $22.1 million for the fourth quarter of 2002, up 10% from $20.1 million in the previous quarter. Product revenue was $15.9 million, up 12% from $14.2 million in the previous quarter, and service revenue was $6.1 million, up 5% from $5.9 million in the previous quarter. For the full year, WatchGuard reported revenues of $75.5 million, up 17% from $64.3 million in 2001.
For the fourth quarter of 2002, WatchGuard reported record gross margins of 69%, up from 66% in the previous quarter. For the full year, gross margins were 66%, up from 59% in 2001.
Excluding non-cash stock-based compensation, amortization and impairment of acquisition-related intangible assets, and restructuring charges, pro forma net income for the fourth quarter was approximately $200,000, or $0.01 per share, up from a pro forma net loss of $2.1 million or ($0.06) per share in the previous quarter. For the full year 2002, the pro forma net loss was $9.8 million or ($0.32) per share, compared to a pro forma net loss of $12.9 million or ($0.48) per share for 2001.
On a GAAP basis, WatchGuard reported a net loss for the fourth quarter of $11.7 million or ($0.36) per share, and a net loss of $31.6 million or ($1.02) per share for the full year. In accordance with SFAS No. 144, WatchGuard recorded a charge of $6.7 million for the impairment of capitalized software relating to its October 2000 acquisition of Qiave Technologies Corporation. In addition, WatchGuard also increased its reserves under its 2001 and 2002 restructuring plans by $3.8 million in connection with the sublease of excess facilities.
WatchGuard ended 2002 with $89.3 million in cash and securities.
WatchGuard recently announced:
The Tolly Group, an independent testing organization, reported that the Firebox V60, designed for the medium-sized enterprise, significantly outperformed comparable products from NetScreen and Cisco in a variety of tests simulating real-world use.
Infonetics Research ranked WatchGuard as the fastest growing major firewall and VPN appliance-focused vendor in all segments of the SME market, and reported that WatchGuard increased its revenue market share by 1.2 points, solidifying its number two position in the SME market.
Frontier Medical Research, Inc., a Kansas City-based clinical research organization, began implementation of Firebox Vclass appliances to provide the security infrastructure for its IP video conferencing application for clinical trials in the pharmaceutical industry.
The introduction of new features for the Firebox SOHO 6 and SOHO 6tc, including enhanced support for enforcing corporate security policies for telecommuters and branch offices, Internet connection failover protection, and meshed VPNs.
The introduction of active/active high availability with transparent state failover for its Firebox Vclass and RapidStream "Secured by Check Point" lines of appliances.
The worldwide availability of the RS 11000, which provides large enterprise and service provider data center customers with gigabit-plus VPN-1 and multi-gigabit FireWall-1 performance.
"We had another strong quarter with record revenues and gross margins, and we achieved pro forma profitability earlier than expected," said Jim Cady, President and Chief Executive Officer of WatchGuard. "We continued to meet or exceed our expectations for revenues, margins, EPS, unit shipments, cash flow, and DSOs. At the same time, we continued to roll out new product lines while improving our market share in our core SME segment. The market increasingly recognizes WatchGuard as one of the leaders in security innovation."
"During 2002, we strengthened every aspect of our business and expanded our market reach. We continue to bring enterprise-class performance to small to medium-sized enterprises. Businesses of all sizes continue to select the WatchGuard solution for its superior depth of security, simplicity of installation and management, and value-added proactive LiveSecurity service."
Conference Call Information
WatchGuard will host a public conference call today to discuss its fourth quarter and year-end results at 2:00 PM PST (5:00 PM EST). The call may be accessed at www.watchguard.com under "Investor Relations," or by calling (800) 240-5318 (U.S. and Canada) and (303) 205-0033 (International). The conference call ID number is 519402.
About WatchGuard Technologies, Inc.
WatchGuard is a leading provider of dynamic, comprehensive Internet security solutions designed to protect enterprises that use the Internet for e-business and secure communications. The Company is a pioneer in the creation of the plug-and-play Internet security appliance, the Firebox, and server security software. The Company's innovative LiveSecurity Service enables organizations and users to keep their security systems up-to-date, and its ServerLock and AppLock/Web software provide server content and application security to protect critical data and services against unauthorized or unintentional access or manipulation. The Company's RapidStream "Secured by Check Point" product line is specifically designed to address the enterprise customer's need for VPN performance, scalability, and flexibility in a Check Point appliance solution. For more information, please call 206-521-8340 or visit www.watchguard.com.
Certain statements in this press release, including statements about possible or expected future operating results, trends in financial results and business plans, including those related to revenue growth and earnings growth and other statements about our plans, objectives, intentions, and expectations are "forward-looking statements" within the meaning of the Securities Act of 1933, as amended. Forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to known and unknown risks and uncertainties and inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including the risk that our future operating results will fall below expectations and the other risks described under "Important Factors That May Affect Our Operating Results, Our Business and Our Stock Price" in our quarterly report on Form 10-Q for the quarter ended September 30, 2002, and in our Securities and Exchange Commission filings from time to time. Readers are cautioned not to place undue reliance upon these forward-looking statements, which speak only as of the date of this release.
WatchGuard, RapidStream, LiveSecurity, Firebox, ServerLock, and AppLock are either registered trademarks or trademarks of WatchGuard Technologies, Inc. or its subsidiaries in the United States and/or other countries. Check Point is a trademark of Check Point Software Technologies, Ltd. All other trademarks are the property of their respective owners.
WatchGuard USA contact:
Miles Goda
Investor Relations
Phone: 001- 206.613.0826
Andere informatie over WatchGuard is beschikbaar via:
Weber Shandwick Nederland
Michiel Hartkamp
t: 070-31 21 080
e: mhartkamp@webershandwick.com