Internet Security Systems (ISS) (Nasdaq: ISSX) heeft in het derde kwartaal van 2005, dat eindigde op 30 september 2005, een omzet gerealiseerd van USD 82.845.000. Dit is een stijging van 14 procent vergeleken met het derde kwartaal van 2004, toen de omzet USD 72.733.000 bedroeg. De nettowinst volgens GAAP bedroeg in het derde kwartaal van 2005 USD 9.792.000 of USD 0,21 per aandeel. In het derde kwartaal van 2004 was deze GAAP-winst USD 6.411.000 of USD 0,14 per aandeel.
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Internet Security Systems Reports Third Quarter Results and Business Outlook; Revenues Increased 14 Percent; Non-GAAP EPS up 44 Percent
Company Announces Next CFO under Succession Plan
BRUSSELS - October 26, 2005 - Internet Security Systems, Inc. (ISS) (NASDAQ: ISSX), a leading global provider of preemptive enterprise security solutions, today announced financial results for the third quarter ended September 30, 2005. ISS also provided its Business Outlook for the fourth quarter and 2005, and announced ISS' next chief financial officer, Raghavan Rajaji, in connection with its succession plan for Rich Macchia announced in May 2005.
Third Quarter Revenues
Revenues were $82,845,000 for the third quarter of 2005, a 14 percent increase compared with third quarter 2004 revenues of $72,733,000.
GAAP Earnings
Reported net income under generally accepted accounting principles (GAAP) for the third quarter of 2005 was $9,792,000, or $0.21 per diluted share, compared to reported net income of $6,411,000, or $0.14 per diluted share, in the third quarter of 2004.
Non-GAAP Earnings
Non-GAAP net income for all periods in 2005 and 2004 excludes the after-tax impact of non-cash acquisition expense for amortization of intangibles and acquisition related compensation charges for unvested stock options. Non-GAAP net income for the third quarter of 2005 was $10,907,000, or $0.23 per diluted share, compared to $7,537,000, or $0.16 per diluted share, in the third quarter of 2004.
"Third quarter marked ISS' seventh consecutive quarter of double-digit, organic revenue growth, demonstrating consistency in our ability to execute on our unique, preemptive approach to security," said Tom Noonan, chairman, president and CEO of Internet Security Systems. "Over the last quarter, ISS increased its enterprise market share, providing us with a solid base for expanding upon the comprehensive, integrated security technologies and services we are able to offer our customers. As we continue to innovate and bring new offerings to market over the next several quarters, ISS intends to meet and exceed the security needs of a wide range of organizations."
Business Outlook
The following Business Outlook is based on current expectations. The statements in this Business Outlook are forward-looking, and actual results may differ materially. These statements do not reflect the potential impact of any mergers, acquisitions or other business combinations that may be completed after the date of this press release.
During the quarter, ISS' corporate representatives may reiterate the company's published Business Outlook during private meetings with investors, investment analysts, the media and others. At the same time, ISS will keep its most current earnings release and any subsequent press releases containing the then current Business Outlook publicly available on its Web site at www.iss.net. Prior to the start of ISS' quiet period for the fourth quarter of 2005, the public can continue to rely on the Business Outlook set forth in this press release as being ISS' current expectations on matters covered, unless ISS publishes a notice stating otherwise. During the quiet period, ISS and its corporate representatives will not comment concerning the previously published Business Outlook. During the quiet period, the company's press releases and filings with the SEC should be considered historical, speaking as of prior to the quiet period only and not subject to update by the company. ISS' quiet period at the end of the fourth quarter is expected to run from December 15, 2005 until financial results are released in 2006.
This Business Outlook assumes that the enterprise spending environment remains stable and the competitive landscape will not change significantly, recognizing that there will continue to be competitive alternatives to our product offerings. In providing this guidance, we have assumed that foreign exchange for the euro and the yen compared to the dollar remains stable at current rates.
For the quarter ending December 31, 2005, ISS currently expects to achieve revenues in the range of $88,000,000 to $92,000,000. GAAP net income is expected to be in the range of $0.23 to $0.25 per diluted share. Non-GAAP net income is expected to be in the range of $0.25 to $0.27 per diluted share.
Assuming achievement of fourth quarter expectations, ISS anticipates revenues for the year ending December 31, 2005 in the range of $327,000,000 to $331,000,000. GAAP net income is expected to be in the range of $0.78 to $0.80 per diluted share. Non-GAAP net income is expected to be in the range of $0.87 to $0.89 per diluted share.
Non-GAAP net income excludes non-cash acquisition related charges, consisting of amortization of intangibles and compensation charges for unvested stock options and the tax effect of these adjustments, estimated to be $1,150,000 for the quarter ending December 31, 2005 and $4,600,000 for the year ending December 31, 2005.
Non-GAAP financial measures used in this press release are reconciled to the appropriate GAAP measures in the schedule following the Consolidated Statements of Operations and in the Business Outlook Reconciliation schedule included with this press release. This information can also be found in ISS' Form 8-K filed today with the Securities and Exchange Commission and available through ISS' Web site at www.iss.net or the Securities and Exchange Commission Web site at www.sec.gov.
CFO Succession Plan
Internet Security Systems also announced today that Raghavan Rajaji is joining the company in November as senior vice president of finance & administration and chief financial officer. The addition of Mr. Rajaji fulfills the succession plan, announced in May 2005, for our current chief financial officer, Rich Macchia. Mr. Macchia will remain with ISS in a full-time capacity through the end of 2005, and will continue transitional services into 2006.
"We are pleased to have obtained a CFO of Raj's caliber," said Tom Noonan, chairman, president and CEO of Internet Security Systems. "He is a seasoned chief financial officer with exceptional finance and administration experience."
Mr. Rajaji joins ISS from Manugistics Group, Inc. (NASDAQ: MANU), where he was executive vice president and chief financial officer since 1999. Manugistics provides supply chain, demand and revenue management software products and services worldwide. Mr. Rajaji's prior experience includes more than 18 years at Occidental Chemical Company, a $5 billion subsidiary of Occidental Petroleum Corporation, where he was senior vice president and chief financial officer. Mr. Rajaji has an undergraduate degree from the University of Calcutta, India and a master's degree in business, with an emphasis in finance, from Virginia Tech in Blacksburg, VA. He is a Certified Public Accountant.
Earnings Conference Call
The Company's conference call regarding this press release is being held Tuesday, October 25, 2005 at 4:30 p.m. Eastern Time and can be accessed as follows:
DATE/TIME: Tuesday, October 25, 2005 at 4:30 p.m. ET
DIAL IN: Domestic 800-289-0726
International +1-913-981-5545
Pass code 7480703
A live Webcast of this conference call will be available at www.iss.net and the archived Webcast will remain accessible on the ISS Web site for one year. An audio rebroadcast of the teleconference will be available through November 3, 2005.
REBROADCAST DIAL IN: Domestic 888-203-1112
International +1-719-457-0820
Pass code 7480703
Additional investor information can be accessed on the Internet Security Systems Web site or by contacting the Investor Relations department at +1-404-236-4053.
About Internet Security Systems, Inc.
Internet Security Systems is the trusted expert to global enterprises and world governments, providing products and services that protect against Internet threats. An established world leader in security since 1994, ISS delivers proven cost efficiencies and reduces regulatory and business risk across the enterprise for customers worldwide. ISS products and services are based on the proactive security intelligence conducted by ISS' X-Force® research and development team - the unequivocal world authority in vulnerability and threat research. Headquartered in Atlanta, Internet Security Systems has additional operations throughout the Americas, Asia, Australia, Europe and the Middle East. For more information, visit the Internet Security Systems Web site at www.iss.net or call +32 (0)2 479 67 97.
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Forward-Looking Statements
This press release, other than historical information, includes forward-looking statements made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Some of these forward-looking statements appear in our Business Outlook - specifically, our revenue and GAAP and non-GAAP income estimates for the fourth quarter and full year 2005. The risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the following: the level of demand for ISS' products; customer budgets; the volume and timing of orders; the mix of products sold and whether revenue is recognized upon sale or deferred to subsequent periods; product and price competition; ISS' ability to develop and timely introduce new and enhanced products; acceptance of new and enhanced products by customers; ISS' ability to accurately forecast and produce demanded quantities of its appliance products and models; ISS' ability to integrate acquisitions or investments; ISS' ability to attract and retain key personnel; reliance on distribution channels through which ISS' products are sold; reliance on contract manufacturers to produce ISS appliance products; availability of component parts of appliance products; ISS' ability to produce products that successfully operate in complex environments and avoid serious product errors and defects; changes in accounting policies, standards, guidelines or principles that may be adopted by regulatory agencies or the Financial Accounting Standards Board; the assertion of infringement claims with respect to ISS' intellectual property; foreign currency exchange rates; risks concerning the rapid change of technology; and general economic factors. These risks and others are discussed in ISS' periodic filings with the Securities and Exchange Commission, including ISS' 2004 Annual Report on Form 10-K. These filings can be obtained either by contacting ISS Investor Relations or through ISS' Web site at www.iss.net or the Securities and Exchange Commission's Web site at www.sec.gov.
Non-GAAP Financial Measures
ISS believes that non-GAAP income measures, which exclude the after-tax effect of non-cash acquisition related expenses, are additional meaningful measures of operating performance. ISS believes that its presentation of non-GAAP income measures provides useful information to investors as a measure of operating performance basic to its ongoing operations, which is more comparable from period to period without the charges related to occasional acquisition activity. ISS uses non-GAAP net income measures to evaluate its internal performance, including as a basis for calculating incentive compensation. Non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be used as a substitute for, or considered superior to, measures of financial performance prepared in accordance with generally accepted accounting principles.
Internet Security Systems is a trademark and X-Force is a registered trademark of Internet Security Systems, Inc.
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