Capelle a/d IJssel, 3 februari 2006 - Internet Security Systems (ISS) (Nasdaq: ISSX) heeft in 2005 een omzet geboekt van USD 329.772.000, een toename van 42% ten opzichte van de omzet in 2004, die USD 289.893.000 bedroeg. De GAAP-nettowinst over heel 2005 bedroeg USD 38.545.000 of USD 0,82 per aandeel. In 2004 bedroeg de GAAP-nettowinst USD 26.293.000 of USD 0,54 per aandeel.
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Internet Security Systems
Jos Nijsen
Managing Director Benelux
Telefoon: 010 28 62 600
E-mail:
jnijsen@iss.netwww.iss.netProgress Communications
Richard Verbeek
Account Director
Telefoon: 020 36 31 152
E-mail:
richard@progresscommunications.nlwww.progresscommunications.nl
Internet Security Systems Reports Fourth Quarter and Annual 2005 Results; Also Provides 2006 Business Outlook BRUSSELS- January 31, 2006 - Internet Security Systems, Inc. (ISS) (NASDAQ: ISSX) today announced financial results for the fourth quarter and fiscal year ended December 31, 2005. Additionally, the Company is providing its Business Outlook for the first quarter ending March 31, 2006 and for the full 2006 year.
Fourth Quarter and Annual 2005 Revenues
Revenues were $91,035,000 for the fourth quarter of 2005 compared with fourth quarter 2004 revenues of $80,556,000. Revenues for the year ended December 31, 2005 were $329,772,000 compared with $289,893,000 for the year ended December 31, 2004.
GAAP Earnings
Reported net income under generally accepted accounting principles (GAAP) for the fourth quarter of 2005 was $12,647,000, or $0.27 per diluted share, compared to $9,202,000, or $0.19 per diluted share, in the fourth quarter of 2004. Reported GAAP net income for the year ended December 31, 2005 was $38,545,000, or $0.82 per diluted share, compared to $26,293,000, or $0.54 per diluted share, for the year ended December 31, 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. Expected non-GAAP net income per diluted share for 2006 excludes the items above, compensation expense associated with the expensing of stock options in accordance with FAS 123(R), and future restricted stock expense. Non-GAAP net income for the fourth quarter of 2005 was $13,750,000, or $0.29 per diluted share, compared to $10,356,000, or $0.22 per diluted share, in the fourth quarter of 2004. Non-GAAP net income for the year ended December 31, 2005 was $43,069,000, or $0.91 per diluted share, compared to $30,866,000, or $0.64 per diluted share, for the year ended December 31, 2004.
"More than two years ago, we launched our Proventia® platform with the ambitious goal of transforming ISS into the leading provider of end-to-end enterprise security," said Thomas Noonan, president and CEO of Internet Security Systems. "I am pleased to report that 2005 was another banner year in our transformation, with strong growth and a solid foundation for the future. Not only did we deliver 42 percent year-over-year earnings growth, we now have an integrated security platform unsurpassed in the industry. This highly scalable common architecture will serve as the foundation from which ISS continues to develop new products and services that challenge the security status quo and prevent new Internet threats from impacting networks before these threats are even discovered."
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 first quarter of 2006, 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 on Forms 10-K and 10-Q 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 first quarter is expected to run from March 15, 2006 until financial results are released in April 2006.
This Business Outlook assumes that the enterprise spending environment remains consistent with ISS' experience in 2005. This Business Outlook also assumes that the competitive landscape will not change significantly during 2006, recognizing that there will continue to be competitive alternatives to our product offerings.
For the year ending December 31, 2006, ISS currently expects to achieve revenues in the range of $366,000,000 to $376,000,000. GAAP net income is expected to be in the range of $0.71 to $0.75 per diluted share. Non-GAAP net income is expected to be in the range of $1.01 to $1.05 per diluted share. For the quarter ending March 31, 2006, ISS currently expects to achieve revenues in the range of $82,000,000 to $85,000,000. GAAP net income is expected to be in the range of $0.13 to $0.15 per diluted share. Non-GAAP net income is expected to be in the range of $0.20 to $0.22 per diluted share.
Non-GAAP net income excludes: (i) non-cash acquisition related charges (net of taxes), consisting of amortization of intangibles and compensation charges for unvested stock options, estimated to be $1,150,000 for the quarter ending March 31, 2006 and $4,600,000 for the year ending December 31, 2006; and (ii) compensation expense (net of taxes) associated with the expensing of stock options in accordance with FAS 123(R) and future restricted stock expenses, estimated to be approximately $2,000,000 or $0.05 per diluted share for the quarter ending March 31, 2006 and approximately $10,000,000 or $0.20 per diluted share for the year ending December 31, 2006.
Non-GAAP financial measures used in this press release are reconciled to the appropriate GAAP measures in the tables contained in the Consolidated Statements of Operations and the Business Outlook Reconciliation included with this press release. Reconciliation 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.
Earnings Conference Call
The Company's conference call regarding this press release is being held Tuesday, January 31, 2006 at 4:30 p.m. Eastern Time and can be accessed as follows:
DATE/TIME: Tuesday, January 31, 2006 at 4:30 p.m. ET
DIAL IN: Domestic 800-819-9193
International +1-913-981-4911
Pass code 2360542
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 February 7, 2006.
REBROADCAST DIAL IN: Domestic 888-203-1112
International +1-719-457-0820
Pass code 2360542
Additional investor information can be accessed on the Internet Security Systems(tm) Web site or by contacting the Investor Relations department at +1-404-236-4053.
About Internet Security Systems, Inc.
Internet Security Systems, Inc. (ISS) 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. 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 net income estimates for the first quarter and full year 2006. 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 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; changes in accounting policies, standards, guidelines or principles that may be adopted by regulatory agencies or the Financial Accounting Standards Board (including without limitation the impact of expensing stock options); 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 and ISS' Quarterly Report on Form 10-Q for the third quarter ended September 30, 2005. 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 net income, which excludes the after-tax effect of non-cash acquisition related expenses and stock option expensing relating to FAS 123(R), is an additional meaningful measure of operating performance. 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. ISS believes that its presentation of Non-GAAP net income 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.
Internet Security Systems is a trademark, and Proventia and X-Force are registered trademarks of Internet Security Systems, Inc.