Strong Customer Acceptance of New Subscription Licenses; Further Cost-Saving Measures Include Additional Reduction in Workforce
HAYWARD, Calif., August 17, 2001 Certicom (Nasdaq: CERT; TSE: CIC), a leading provider of mobile e-business security, today announced that revenue for the first quarter of fiscal year (FY) 2002 exceeded $2.30 million (USD). The Company had previously forecasted that Q1 revenue would be at least $2.25 million.
"Our customers have embraced our new subscription model," said Rick Dalmazzi, Certicom’s President and Chief Executive Officer. "Over two-thirds of new license bookings in the first quarter of fiscal 2002 were subscription licenses. As we had anticipated, the subscription model made it easier for customers to adopt our industry-leading security offerings, which resulted in an increase in new licensees in Q1."
Certicom also announced that costs and expenses (excluding non-operating and restructuring charges) in the quarter totaled approximately $13 million, down from over $16 million in the prior quarter. Costs and expenses were lower primarily due to restructuring initiatives that began during the first quarter of fiscal 2002. Those initiatives resulted in cost savings in the latter part of that quarter. The Company estimates that the Q1 FY 2002 net loss was approximately $0.32 per share (excluding non-operating and restructuring charges).
Commitment to Profitability by Q2 FY 2003
The following statements are forward looking, and actual results may differ materially. Please consult the Company’s recent disclosures (including its most recent Form 10-K) on file with the Securities and Exchange Commission (SEC) and the Ontario Securities Commission (OSC) for a further discussion of risks.
Certicom today re-iterated its commitment to generate an operating profit by the second quarter of FY 2003.
"When I accepted the chief financial role, I accepted the commitment to achieve profitability as well," said Greg Capitolo, Certicom’s Chief Financial Officer. "While the continuing pullback in the communications industry makes this more difficult, it has not diminished our commitment -- nor our confidence -- that we can achieve profitability in five quarters. And since our subscription licenses typically require the first year’s cash payments up-front even as revenue is recognized ratably -- we can look forward to greater revenue visibility while managing our cash balances more predictably," Capitolo continued.
The Company will provide more details about the recently completed quarter in its regularly scheduled earnings release conference call on August 30, 2001. Conference call details are provided below.
Reduction of Workforce Announced
Due to the continuing difficult economic environment, the Company has determined that a further re-alignment of its operations is necessary. Accordingly, Certicom will reduce its workforce by approximately 25% by the end of the current fiscal quarter. Cost savings will accrue throughout the quarter, as projects are completed and payroll is reduced.
"The wireless security market is emerging as a distinct and exciting opportunity, even as the global communications industry faces continuing weakness," commented Rick Dalmazzi. "Although focused, innovative technology-leading companies are continuing to invest in the near term, many of the larger, more diversified companies are deferring purchases due to capital constraints. As a result, our bookings last quarter were somewhat disappointing. But all of our customers large and small have recognized the inevitable adoption of wireless technologies, and the accompanying need for efficient security. Certicom has already established itself as the undisputed leader in wireless security. Now we are preparing for the future by continuing to invest in research and development while pragmatically managing our expenses through this period. We believe that when the economy turns positive again, it will serve to accelerate our drive to profitability," Dalmazzi concluded.
Earnings Release Conference Call Scheduled for August 30, 2001
Certicom will hold its regular quarterly earnings release conference call after the earnings announcement on August 30. All parties are invited to listen to the call.
|Topics:||Q1 FY 2002 Earnings Release|
|Time:||2:00 PM Pacific (5:00 PM Eastern)|
|Dial-in:||1-800-360-9865 (U.S. and Canada)|
|(please dial in at least ten minutes prior to the scheduled start time)|
|Replay:||(Available August 30 7:00 PM Pacific to September 1 12:00 AM Pacific)|
|1-800-428-6051 (U.S. and Canada)|
Certicom is a leading provider of information security software and services, specializing in solutions for mobile e-business. The company's products and services are specifically designed to address the challenges imposed by a wireless data environment. Certicom's solutions incorporate its efficient encryption technology and are based on industry standards for information security that utilize public key cryptography. Certicom's products are currently licensed to more than 200 customers including Cisco Systems, Inc., Handspring Inc., Motorola, Inc., Nortel Networks, Openwave Systems, Inc., Palm, Inc., QUALCOMM, Inc., Research In Motion Ltd. and Sony International (Europe) GmbH. Certicom's headquarters and worldwide sales and marketing operations are based in the Silicon Valley in Hayward. For more information, visit Certicom's Web site at http://www.certicom.com.
Certicom is a trademark of Certicom Corp. All other companies and products listed herein are trademarks or registered trademarks of their respective holders.
Except for historical information contained herein, this press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially. Factors that might cause a difference include, but are not limited to, those relating to the acceptance of mobile and wireless devices and the continued growth of e-commerce and m-commerce, the increase of the demand for mutual authentication in m-commerce transactions, the acceptance of Elliptic Curve Cryptography (ECC) technology as an industry standard, the market acceptance of our principal products and sales of our customer's products, the impact of competitive products and technologies, the possibility of our products infringing patents and other intellectual property of fourth parties, and costs of product development. Certicom will not update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect Certicom's financial results is included in the documents Certicom files from time to time with the Securities and Exchange Commission and Canadian securities regulatory authorities.
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