Long-Term Strategic Growth Plan Still on Track
MISSISSAUGA, Ontario – (October 26, 2005)– Certicom Corp. (TSX: CIC) today announced that its results for the second quarter of fiscal 2006, ending October 31, 2005, are expected to be below market expectations, primarily as a result of the timing of closing anticipated second quarter contracts. Revenue for the second quarter is expected to be in the range of $1.9 million to $2.2 million. All figures are in U.S. dollars.
"Certicom is at various stages of the sales cycle with a number of multinational corporations. These large, multi-year contracts that we are increasingly focused on take longer to conclude, so the timing has been pushed out to future quarters," said Ian McKinnon, President and Chief Executive Officer. "We are confident that our strategic growth plan is on track and our long-term outlook for Certicom remains positive. Our priority is to conclude as many agreements as possible, with a focus on building recurring revenues to deliver sustainable, profitable growth."
There is continuing evidence of growing ECC adoption and high levels of interest, from both the private sector and public sector. ECC is now designated by the NSA as the public-key technology for both classified and sensitive but unclassified information, which means all government departments, agencies and suppliers will need to use it.
Last month, Certicom announced that Japan-based D&M Holdings, makers of the popular Denon, Marantz, and other brands, licensed Certicom ECC patents to implement Digital Transmission Content Protection (DTCP) in many of their products. This was an important first for Certicom as it pushes ECC into the Digital Rights Management (DRM) arena and is a significant validation of its intellectual property portfolio in the consumer electronics market.
Certicom expects to announce its second quarter results on December 8, 2005. The Company has issued this revenue guidance for the second quarter in response to the fact that analyst forecasts differ significantly from the Company's expected results. It is Certicom's practice not to provide guidance on revenue or earnings, and the Company will maintain this policy. Certicom does provide quarterly guidance on operating expenses, and today reconfirmed that operating expenses in the second quarter of fiscal 2006 including cost of sales and bonus accrual, are expected to range from $3.8 million to $4.1 million.
Certicom protects the value of your content, software and devices with government-approved security. Adopted by the National Security Agency (NSA) for classified and sensitive but unclassified government communications, Elliptic Curve Cryptography (ECC) provides the most security per bit of any known public-key scheme. As the undisputed leader in ECC, Certicom security offerings are currently licensed to more than 300 customers including General Dynamics, Motorola, Oracle, Research In Motion and Unisys. Founded in 1985, Certicom's corporate offices are in Mississauga, ON, Canada with worldwide sales headquarters in Reston, VA and offices in the US, Canada and Europe. Visit www.certicom.com
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|Tim Cox||Brendan Ziolo|
|(650) 369-7784||(613) 254-9267|