HAYWARD, Calif., June 4, 2001 - Certicom Corp. (NASDAQ NM: CERT; TSE: CIC), a leading provider of security for mobile e-business, today announced results for its fiscal fourth quarter and year ended April 30, 2001. 

Certicom posted record revenue of $26.6 million for the year ended April 30, 2001, compared to $12.0 million, representing a 121% increase year over year. For the fourth quarter, ended April 30, 2001, Certicom reported revenue of $7.7 million, a 93% increase over revenue of $4.0 million in the same period in fiscal 2000. 

Certicom reported a pro forma net loss of $8.0 million, or $(0.29) per share, which excludes non-cash charges of 4.9 million, for the fourth quarter ended April 30, 2001, compared to a pro forma net loss of $4.3 million, or $(0.19) per share, in the same period a year ago, which excludes non-cash charges of $2.5 million. Including non-cash charges, Certicom reported a net loss of $12.9 million, or $(0.46) per share, for the fourth quarter of fiscal 2001, compared to a net loss of $6.8 million, or $(0.30) per share, in the same period a year ago. 

For fiscal 2001, the company posted a pro forma net loss of $22.1 million, or $(0.84) per share, which excludes non-cash charges of $16.9 million and $1.7 million associated with one-time secondary offering costs, compared to a pro forma net loss of $9.5 million, or $(0.43) per share, for fiscal 2000, which excludes non-cash charges of $8.4 million. Including non-cash and other charges, Certicom reported a net loss of $40.7 million, or $(1.54) per share, for fiscal 2001, compared to a net loss of $17.9 million, or $(0.80) per share, in the same period a year ago. 

"It was an exciting year for Certicom during which we transformed the company from an encryption technology leader to a provider of comprehensive wireless security solutions," said Rick Dalmazzi, President and CEO of Certicom. "Our complete suite of offerings, including our enabling technologies, trust services, and mobile enterprise security products, position Certicom extremely well as we enter the new fiscal year." 

Quarter Highlights

  • Adds Strategic Alliances and New Licensees
  • Ships first generation movianVPN™ Product
  • Expands into Latin America
  • Realigns Operations
  • Expands Subscription-based Revenue Model
  • Appoints new Chief Financial Officer

Strategic Alliances and Partnerships
During the fourth quarter, Certicom announced key alliances and partnerships with Handspring, Hitachi America, Motorola and VeriSign.

  • Handspring will utilize Certicom's industry leading security technologies throughout its wireless product offerings. Combining Certicom's efficient security technology with Handspring's highly-acclaimed wireless products will help bring unique service offerings and trusted m-commerce applications to the industry.
  • Hitachi America selected Certicom as its strategic PKI and security solution partner. The alliance will provide the industry with PKI services and solutions for e-commerce that provide superior user authentication and security to enable safe and secure transactions.
  • Motorola announced the expansion of its global alliance with Certicom to provide the market with advanced levels of security for trusted wireless transactions. Utilizing Certicom's MobileTrust™, consumers using Motorola's WAP server and a broad range of mobile products will be able to perform high value wireless transactions with advanced levels of authentication.
  • VeriSign announced a strategic relationship with Certicom to provide the market with advanced levels of wireless security. VeriSign will leverage the benefits of Certicom's ECC to provide its customers with "hybrid" digital certificates for handheld devices. As part of this relationship, VeriSign will refer wireless developers requiring toolkits to Certicom.

New Licensees
During the fourth quarter, Certicom's sales and business development team successfully closed a number of new licensing agreements in wireless e-business. The company added a number of new customers in key market segments including B2B, B2C, e-commerce and m-commerce, content protection, CRM, enterprise management, Internet connectivity, IP roaming, financial services, mobile enterprise solutions, mobile healthcare, tax preparation and wireless browser and network infrastructure software. 

Certicom announced agreements with wireless technology leaders including APRIVA, GRIC Communications, Handspring, iPass, Motorola, New Era of Networks (NEON), Novatel Wireless, PatientKeeper, Sendo and VeriSign. In addition, Alcatel, Allegro Software, Automated Power Technologies, Cisco Systems, Cybermation, Digital Island, First Data Corp., Genetic Health, Hitachi America, Hotlocker.com, H&R Block and Remedy Corp. have joined Certicom's growing list of enterprise e-business customers. 

Product Highlights
During the quarter, Certicom announced that it is shipping the latest version of movianVPN™, the industry's first broadly interoperable wireless IPSec VPN client for handheld devices. movianVPN 1.1 features additional support for corporate authentication systems, including two factor authentication, such as RSA SecurID® tokens. Customers who have purchased movianVPN for deployment projects include AEGON USA, Applied Biosystems, AT&T, Cargill, Columbia Management, Darden Restaurants, EMC, Fujitsu Communications, Intel, Loews, Novistar, Paxson Communications, Smart and Final, Symantec, Verizon Wireless and WorldCom. 

In addition, Certicom signed movianVPN bundling agreements with industry leaders Cisco Systems and Novatel Wireless. These customers will ship movianVPN software with their popular gateway and wireless products. Cisco and Alcatel licensed Certiom's elliptic curve cryptography (ECC) to enable fast connections to movianVPN users from their leading gateway and DSL modems. Also, movianVPN captured the "Best of Show" award at Internet World Wireless, 2001. 

Certicom's MobileTrust™ digital certificate service continued to show upward momentum. Industry leader Hitachi America chose Certicom's full PKI solution to add trust to their e-commerce platform. Also, many of Certicom's wireless ASP customers have purchased server certificates as a first step in rolling out mutually-authenticated applications. 

International Expansion
During the fourth quarter, Certicom expanded its international efforts to include Latin America. The Company announced key partnerships and licensees in the countries of Argentina, Brazil and Chile including, Cirilo Ayling, Montreal Informatica, TakeNet and Biotech Technologies Chile Certicom is working with these companies to provide complete e-business security solutions based on Certicom's industry leading toolkits and PKI products. 

Mr. Dalmazzi stated, "Though we're pleased with the overall progress we made this quarter, our results were hindered by a difficult economic environment. The new reality of our market is that purchase decisions are being delayed and deferred. Without any clear indication of when conditions will improve, we must react with initiatives to preserve the strength of our company. Though we remain optimistic about the future, we are realistic about the current needs of the business." 

Company Implements Strategic Realignment of Operations
Effective today, Certicom is announcing a realignment of its operations including a reduction of the full-time employee headcount by approximately 30%. This workforce reduction will be accompanied by the elimination of temporary and contract employees and a reduction in overall discretionary spending. Certicom will incur a one-time charge of up to $5.0 million associated with this realignment and related severance during the first quarter of fiscal 2002. 

"Certicom is committed to protecting the financial health of our company as a top priority," said Mr. Dalmazzi. The actions we are taking are effective immediately and will begin to deliver benefits starting today." 

Change to Subscription-based Business Model
Beginning this quarter, the first quarter of fiscal 2002, Certicom will convert its enabling technologies (Security Builder®, SSL Plus™, WTLS Plus™ and the Trustpoint™ PKI products) business to primarily subscription-based licenses. This move complements the already fully subscription-based models of its trust services (MobileTrust CA Service) business and its mobile enterprise security (movianVPN) business. As a result of this business change licensing revenue will be deferred and recognized over the life of the agreement. 

Said Mr. Dalmazzi, "This change will make Certicom's core products easier to obtain by companies wishing to start new projects without incurring a large up-front cost. Incorporating our enabling technologies into their products is often the first step our customers take toward implementing a full security suite from Certicom. We want to make that first step as painless as possible for our customers, especially in the present economic environment." 

Retirement of Richard Brounstein, CFO
Certicom is announcing the retirement of its chief financial officer, Richard Brounstein and has named Gregory Capitolo as his successor. Mr. Brounstein will remain in a consulting role through August 2001 to ensure a smooth transition. 

Mr. Capitolo comes to Certicom with a strong background in both public and private finance. Most recently, he was the Vice President of Finance for Clustra Systems, Inc., a database software company, where he developed the company's financial operating plan and raised Series B private funding of approximately $20 million. Previously, Mr. Capitolo was the Director of Finance for Wind River Systems (Nasdaq: WIND), an embedded software and systems company, where he managed the finance and accounting, management reporting, treasury, tax, SEC reporting and order fulfillment functions. During his two and a half year tenure at Wind River Systems, Mr. Capitolo managed the company's revenue growth from $90 million to $400 million, and managed the financial integration of six acquisitions. Mr. Capitolo also held various high-level accounting and finance roles at Identix Inc., Coopers & Lybrand and KPMG Peat Marwick. Mr. Capitolo holds an MBA from the Amos Tuck School of Business at Dartmouth College and a BS in Accounting from Santa Clara University. 

Mr. Dalmazzi stated, "Rich Brounstein has been a significant contributor to the development of Certicom through its high growth period. I wish him all the best in his retirement." Dalmazzi continued, "I'm delighted to welcome Greg Capitolo to Certicom's management team. Greg's solid accounting background plus his experience in financial management are exactly what Certicom needs during this phase of our development." 

Mr. Dalmazzi continued, "In summary, we look ahead to a year which we believe will begin slowly as companies worldwide take stock of their current financial situation. As adjustments are made and priorities reset, we anticipate a renewed economic vitality and a strong finish to the year. Ubiquitous wireless data is a future phenomenon that will change the way the world does business. We are presently in the early stages of development of this market with first generation devices, networks, applications and user experience. Security remains one of the fundamental enabling components of this market. Certicom is committed to maintaining its position as the recognized leader in this area, and we intend to do it with full attention to fiscal responsibility." 

Investor Conference Call
Certicom's management team will hold a conference call today at 11:00 am Eastern/ 8:00 am Pacific to discuss fiscal 2001 fourth quarter and year end results. The call can be accessed by going to the company's web site at http://ecommerce.certicom.com. A replay of the call will also be posted to Certicom's web site for 90 days. 

About Certicom
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 of 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., Sony International (Europe) GmbH, and VeriSign Inc. 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://ecommerce.certicom.com

Certicom, MobileTrust, movian, movianVPN, SSL Plus, Trustpoint and WTLS Plus are trademarks and/or registered trademarks 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. 

For further information, please contact: 

Starla Ackley Lorraine Kauffman (WEST COAST Media)
IR Manager PR Manager
Certicom Corp. Certicom Corp.
(510) 780-5404 (510) 780-5417
sackley@certicom.com lkauffman@certicom.com
Lillian Armstrong (Analysts) Pamela Rigler (EAST COAST Media)
Lippert/Heilshorn & Associates, Inc. Lippert/Heilshorn & Associates, Inc.
(415) 433-3777 (212) 838-3777
lillian@lhai-sf.com pamela@lhai.com

Condensed Consolidated Balance Sheets 
Condensed Consolidated Statements of Operations 
Pro Forma EPS Reconciliation