GUILDFORD, U.K., Jan. 22, 2004 NetScreen Technologies, Inc. (Nasdaq: NSCN), has announced financial results for its fiscal first quarter ended December 31, 2003.
Revenue in the quarter ended December 31, 2003 was a record $81.0 million, an increase of 59 percent over revenue of $51.1 million in the same quarter last year and an increase of 13 percent over revenue of $71.6 million in the quarter ended September 30, 2003. Net income calculated on the basis of generally accepted accounting principles (GAAP) for the quarter ended December 31, 2003 was $6.4 million, or $0.07 per basic and diluted share, compared to a net income of $3.2 million or $0.04 per basic and diluted share, in the same quarter last year. GAAP income from operations for the quarter ended December 31, 2003 was $10.9 million. GAAP net income and GAAP income from operations for the quarter ended December 31, 2003 include a non-cash charge of $7.1 million for stock-based compensation associated primarily with stock options granted prior to the company's initial public offering and stock options assumed in conjunction with the November 2003 acquisition of Neoteris, Inc. GAAP net income and GAAP income from operations for the quarter ended December 31, 2003 also include a charge of $2.0 million for amortization of intangible assets associated with the acquisition of Neoteris and the September 2002 acquisition of OneSecure, Inc. GAAP net income in the same quarter last year includes the effect of non-cash charges of $6.1 million for stock-based compensation associated primarily with stock options granted prior to the company's initial public offering and a charge of approximately $244,000 for amortization of intangible assets associated with the OneSecure acquisition.
Pro forma net income for the quarter ended December 31, 2003 was $12.9 million, or $0.15 per basic and $0.14 per diluted share, compared to pro forma net income of $10.9 million, or $0.14 per basic and $0.13 per diluted share, in the same quarter last year and pro forma net income of $11.9 million, or $0.15 per basic and $0.14 per diluted share, in the quarter ended September 30, 2003. Pro forma net income and pro forma net income per share information differs from the GAAP results because it excludes the effect of the non-cash stock-based compensation charges and amortization of intangibles charges and the related tax effects.
"The December quarter was very eventful for NetScreen," said Robert Thomas, president and chief executive officer. "We closed the acquisition of Neoteris, the market leader in SSL VPN products, launched three significant new products and had another superbly executed quarter from a financial perspective. We are very pleased with the rapid progress we've made in integrating Neoteris into the NetScreen family. We introduced new products such as the NetScreen-5GT appliance that has embedded antivirus protection provided through our partnership with Trend Micro, Inc., the Deep Inspection firewall, which provides application-level attack prevention and we launched NetScreen-Security Manager 2004, our next generation central management platform. Combined, we believe the acquisition of Neoteris and the new product introductions will be key contributors to our future growth."
Remo Canessa, NetScreen's chief financial officer, stated, "Strong sales in the Americas and Europe in the December quarter led NetScreen to another quarter of record revenues. We were pleased to see pro forma income from operations increase to $20.0 million, 7 percent over the September quarter despite the incremental operating expenses incurred with Neoteris. NetScreen generated a record $30.3 million in operating cash flow in the December quarter bringing our cash and short-term investments balance as of December 31, 2003 to $379.2 million."
Recent Company Highlights:
- Completed the acquisition of Neoteris, Inc., the market leader in the SSL VPN product category, as well as a leader in the application security gateway market.
- Delivered embedded antivirus functionality on the NetScreen-5GT, the industry's first appliance to tightly integrate best-of-breed firewall, VPN, intrusion prevention and gateway antivirus security functionality in a single platform.
- Expanded the NetScreen-5 series with the NetScreen-5GT Extended, which includes functionality for smaller sites of a large enterprise that require multiple redundancy options and additional network segmentation.
- Received Common Criteria EAL4+ certification for the NetScreen-5200 using NSA developed protection profiles, becoming the first firewall platform to achieve this certification level for the stringent profiles. Common Criteria is a standard that helps government organizations evaluate IT security products more effectively.
- Recognized by market research firm IDC, as the only security appliance vendor among the top 5 to grow worldwide factory revenue market share year-over-year.
- Awarded the 2003 Security Technologies Product of the Year for our Neoteris Secure Access products by industry analyst firm Frost & Sullivan.
- Ranked as a market leader in market research firm META Group's METAspectrum(SM) for enterprise firewalls.
- Won the coveted Editor's Choice Award from CMP Media LLC's Network Computing magazine, for the NetScreen-SA 5000 series SSL VPN appliances.
Outlook
The following statements are based on information the company has available today, and will be the company's only statements of this nature until updated in the future. NetScreen assumes no duty to update this information at any time. These statements are forward-looking, and actual results may differ materially.
For the quarter ending March 31, 2004, NetScreen currently expects to achieve revenue growth of between 10 and 12 percent over the December 2003 quarter. On a GAAP basis, gross margins are expected to be between 74 and 75 percent and operating expenses are expected to increase by 13 to 15 percent in the March 2004 quarter. Pro forma gross margins are expected to be between 77 and 78 percent. In addition, the company expects pro forma operating expenses for the March 2004 quarter to increase by 12 to 14 percent over the December 2003 quarter. Pro forma operating expense and pro forma gross margin expectations exclude stock-based compensation and the amortization of intangible assets.
For the fiscal year ending September 30, 2004, NetScreen is raising its projected total revenue to range between $360 million and $375 million, representing year over year revenue growth of approximately 47 percent to 53 percent.
Conference Call
A replay of the webcast will be available at http://ir.netscreen.com/ireye/ir_site.zhtml?ticker=nscn&script=2100 running through February 29, 2004. A taped replay of the conference call will be available through January 30, 2004. The international dial-in number for the replay is +1 706-645-9291. The call's ID number is: 4861311.
About NetScreen Technologies
NetScreen Technologies, Inc., is a leading developer of network security and access solutions for enterprises and carriers worldwide. NetScreen's solutions offer customers multiple layers of network and application-level protection in purpose-built appliances and systems that optimize performance and reduce total operating costs. NetScreen is located at 805 11th Ave., Sunnyvale, Calif., 94089, U.S.A., and in Europe at Victoria House, Cross Lanes, Guildford, Surrey GU1 1UJ, U.K. More information on NetScreen's products in Europe can be found at <http://www.netscreen.com> or by calling +44 0 8700 75 00 00.
###
Voor meer informatie:
NetScreen Technologies Inc.
Penny Still
EMEA PR Manager
Tel: +44 0 7831 581 439
E-mail: pstill@netscreen.com
Lammers van Toorenburg Benelux PR
Cas Heuvelmans / Anja Breunis
Tel: +31 (0)30 6565 070
E-mail: cas@lvtpr.nl / anja@lvtpr.nl
###
NetScreen, Neoteris, Neoteris Access Series and the NetScreen logo are trademarks of NetScreen Technologies, Inc. in the United States and other countries. Other trademarks are the property of their respective owners.
This press release contains forward-looking statements about events and circumstances that have not yet occurred. For example, words such as "will", "can", "allowing", "believes", "continue" and "continuing", or other statements in the future tense, are forward-looking statements. Actual outcomes and results may differ materially from expectations in this press release due to a number of risks and uncertainties. Such risks and uncertainties include whether the market for security products will grow as projected, if at all, whether demand for NetScreen products will continue, whether new products, if and when introduced, will be successful and whether products will perform as expected.