Aladdin Knowledge Systems Reports Record Quarterly Earnings
Record net income of $3.7 million, representing 56 percent growth year-over-year
Revenues of $19.6 million, representing 16 percent growth year-over-year
CHICAGO and TEL AVIV, ISRAEL, October 27, 2005
- Aladdin Knowledge Systems Ltd. (NASDAQ: ALDN) the worldwide leader in Software Digital Rights Management
(DRM) and USB-based authentication solutions, and a leading innovator in enterprise
secure content management (Enterprise Security), today announced financial results
for the third quarter of fiscal year 2005 ended September 30, 2005.
Revenues for the third quarter of 2005 increased 16.1 percent to $19.6 million from
$16.9 million for the same period in 2004. Aladdin's core operating segments, Software
DRM and Enterprise Security, continued to experience double digit year-over-year
revenue growth rates. Software DRM revenues for the third quarter increased 16.7
percent to $14.0 million from $12.0 million in the same period in 2004. Enterprise
Security revenues for the third quarter of 2005 increased 14.5 percent to $5.6 million
from $4.9 million in the same period in 2004. Revenues for the first nine months
of 2005 were $60.0 million, an increase of 19.3 percent from the $50.3 million recorded
over the same period in 2004.
Net income for the third quarter of 2005 was $3.7 million, or $0.25 per basic share
and $0.24 per diluted share. Net income for the third quarter of 2004 was $2.3 million
or $0.20 per basic and $0.18 per diluted share. For the first nine months of 2005,
net income was $8.5 million or $0.62 per basic share and $0.59 per diluted share,
as compared with net income of $6.2 million or $0.52 per basic and $0.48 per diluted
share for the first nine months of 2004.
Cash, cash equivalents and marketable securities totaled $73.4 million at September
30, 2005, up $47.5 million from $25.9 million reported at December 31, 2004, with
no outstanding debt. The increase includes the receipt of $38.8 million in net proceeds,
following the successful completion of the Company's offering of ordinary shares
which closed on March 30, 2005.
Yanki Margalit, Chairman and CEO of Aladdin Knowledge Systems, stated, "Our performance
in the third quarter was highlighted by robust operating margins, record quarterly
net income and strong cash flow from operations as we to continue to leverage our
strategic positioning in the growing end markets for our Software DRM and Enterprise
Security solutions. Through our ongoing focus on operating efficiency, Aladdin remains
well-positioned to continue delivering solid results for its shareholders."
Financial and Operating Highlights
- Revenues increase 16.1 percent year-over-year to $19.6 million.
- Gross profit totals $15.6 million, or 79.4% of revenue.
- Net income increases 55.9 percent year-over-year to a record
- Cash flow from operations totals $4.2 million in third quarter.
- Software Security (DRM)
- Aladdin HASP® HL added support for the protection and
licensing of native Windows x64 applications.
- Aladdin HASP® HL software protection and licensing solution
launched as the first anti-piracy offering to support Apple's® move to Intel®-based
- HASP® HL was named the "markedly superior" hardware-based
protection solution in a head-to-head comparative analysis conducted by AppLabs,
a leader in performance analysis.
- Vision Numeric, the world's largest Artistic CAD/CAM software
supplier selected HASP® HL to protect its vast array of products against piracy.
- eToken User Authentication
- Aladdin announced a partnership with PGP Corporation, a global
leader in enterprise data security and encryption solutions, to minimize the vulnerability
of proprietary information stored on laptop computers. Users of PGP Destktop Professional
product will be able to store their PGP keys on an Aladdin eToken.
- eSafe ® Integrated Proactive
Content Security System
- Aladdin eSafe 5 was named "hot pick" information security product
by Information Security Magazine.
- eSafe content security response team survey of the top 2,000
known spyware threats found that 15 percent are specifically designed for identity
- eSafe received Checkmark Spyware certification through West
Coast Labs, a leading independent testing company.
For further information on product highlights, please refer to the press room on
the Company's Web site which can be found at http://www.Aladdin.com/about/pressroom.asp.
Future Business Outlook
Aladdin continues to provide a business outlook on a quarterly basis. The Company
undertakes no obligation to update its estimates. Based on current business activities
and general economic conditions, Aladdin's management believes revenues for the
fourth quarter of fiscal 2005 will be in the range of $20.7 million to $22.8 million
and diluted earnings per share are expected to be in the range of $0.24 to $0.26.
By comparison, the Company reported $18.8 million in revenue and basic and diluted
earnings per share of $0.21 and $0.20, respectively, in the fourth quarter of 2004.
The Company will hold a teleconference today, October 27, at 9:00 a.m. EDT to discuss
the quarterly results. To participate in the call, please dial (800) 399-0427 in
North America, or +1 (706) 643-1624 internationally, approximately five minutes
prior to the scheduled call start time. The call is being simultaneously Web cast and can be
accessed on the Aladdin Web site at www.Aladdin.com/investor. Please visit the Web
site at least 15 minutes prior to the scheduled call time to register for the Web
cast and download any necessary audio software.
A replay of the call can also be accessed via telephone from 11:00 a.m. EDT on October
27 through 11:59 p.m. on November 4 by calling (800) 642-1687 in North America,
or +1 (706) 645-9291 internationally, and entering the following access code: 1358521.
A Web cast replay of the call will also be made and can be accessed on the Aladdin
Web site at www.Aladdin.com/investor.
About Aladdin Knowledge Systems
Aladdin Knowledge Systems Ltd. is a global provider of security solutions that reduce
software theft, authenticate network users and protect against unwanted Internet
and e-mail content, including spam, viruses and spyware. Its security products are
organized into two segments: Software Digital Rights Management (DRM) and Enterprise
Security. Aladdin's Software DRM products allow software publishers to protect their
intellectual property and increase revenues by reducing losses from software theft
and piracy. Its Enterprise Security solutions enable organizations to secure their
information technology assets by controlling who has access to their networks (authentication)
and what content their users can utilize (content security). Visit the Aladdin Web
site at www.Aladdin.com.
Safe Harbor Statement
Click here to view tables
All trademarks and registered trademarks are the property
of their respective holders.
Zintel Public Relations
Investor Relations Contact:
Aladdin Investor Relations