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VASCO Reports Results for Second Quarter and First Six Months of 2016

  • Q2 Total revenue of $54.3 million
  • Q2 GAAP operating income of $3.4 million
  • Q2 GAAP earnings per share of $0.07
  • Q2 Non-GAAP earnings per share of $0.151

OAKBROOK TERRACE, Ill. and ZURICH, Switzerland, July 28, 2016 (GLOBE NEWSWIRE) -- VASCO Data Security International, Inc. (VDSI), today reported financial results for the second quarter and six months ended June 30, 2016.

“We continued to perform well with strong results during the second quarter as we made additional progress in the key areas of gross profit margins, expanding our software-based mobile application protection business, generating recurring revenue, and using VASCO’s extensive global resources to build a strong foundation in the rapidly growing e-signature market," stated T. Kendall Hunt, Chairman & CEO. “The second quarter of 2015 included significant revenue from the largest deal in our history so year-over-year comparisons remain challenging, however our core hardware business is strong with sequential quarterly growth and, for our software business, we are seeing the benefit of our increased focus on North America.”

Revenue from continuing operations for the second quarter of 2016 decreased 17% to $54.3 million from $65.4 million in the second quarter of 2015, and for the first six months of 2016, decreased 23% to $101.1 million from $130.5 million for the first six months of 2015.

Net income from continuing operations for the second quarter of 2016 was $2.8 million, or $0.07 per fully diluted share, a decrease of $11.0 million, or 80% from $13.9 million, $0.35 per fully diluted share, for the second quarter of 2015. Net income from continuing operations for the first six months of 2016 was $5.0 million, or $0.13 per diluted share, a decrease of $22.5 million, or 82%, from $27.5 million, or $0.69 per diluted share, for the comparable period in 2015.

Operating income from continuing operations for the second quarter of 2016 was $3.4 million, a decrease of $12.4 million, or 79%, from $15.8 million reported for the second quarter of 2015. Operating income from continuing operations for the first six months of 2016 was $6.5 million, a decrease of $25.3 million, or 80%, from $31.8 million reported for the first six months of 2015. Operating income as a percentage of revenue for both the second quarter and first six months was 6% compared to 24% for the comparable periods in 2015.

Net income, which includes the impact of our discontinued operations, for the second quarter of 2016 was $2.8 million, or $0.07 per diluted share, a decrease of $11.0 million, or 80%, from $13.9 million, or $0.35 per diluted share, for the second quarter of 2015. Net income for the first six months of 2016 was $5.0 million, or $0.13 per diluted share, a decrease of $22.5 million, or 82%, from $27.5 million, or $0.69 per diluted share, for the comparable period in 2015.

Non-GAAP net income from continuing operations (which excludes both long-term incentive compensation and amortization of intangible assets) for the second quarter of 2016 was $6.1 million, or $0.15 per fully diluted share, a decrease of $9.8 million, or 62% from $15.9 million, or $0.40 per fully diluted share, for the second quarter of 2015. Non-GAAP net income from continuing operations for the first six months of 2016 was $11.7 million, or $0.30 per fully diluted share, a decrease of $19.7 million, or 63% from $31.4 million, or $0.79 per fully diluted share, for the comparable period in 2015.

1 An explanation of the use of Non-GAAP measures is included below under the heading “Non-GAAP Financial Measures.” A reconciliation of GAAP to Non-GAAP financial measures has also been provided in tables below.

Other Financial Highlights:

  • Gross profit from continuing operations was $38.5 million, or 71% of revenue, for the second quarter of 2016 and $72.5 million, or 72% of revenue, for the first six months of 2016. Gross profit was $38.5 million, or 59% of revenue, for the second quarter of 2015 and $76.2 million, or 58% of revenue the first six months of 2015.
  • Operating expenses from continuing operations for the second quarter and first six months of 2016 were $35.1 million and $66.0 million, respectively, an increase of 54% and 49% from $22.7 million and $44.3 million reported for the second quarter of 2015 and first six months of 2015, respectively.
  • Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations was $6.3 million and $12.4 million for the second quarter and first six months of 2016, respectively, a decrease of 64% from $17.5 million reported for the second quarter of 2015 and a decrease of 64% from $34.8 million reported for the first six months of 2015.
  • Cash, cash equivalents and short-term investments at June 30, 2016 totaled $135.7 million compared to $125.2 million and $123.5 million at March 31, 2016 and December 31, 2015, respectively.

Operational and Other Highlights:

  • VASCO extended its biometric authentication capabilities with the addition of face recognition to its DIGIPASS® for Apps application protection solution.
  • DIGIPASS for Apps and DIGIPASS for Mobile application security solutions won the prestigious SIIA CODiE Award and honors from SC Magazine, respectively.
  • VASCO expanded the power, usability and accessibility of e-signatures for global organizations with its eSignLive™ Spring ’16 release.
  • VASCO launched DIGIPASS SecureClick, a FIDO U2F one-button authenticator that allows users to easily add two-factor authentication to popular online applications.

Guidance for full-year 2016:

VASCO is maintaining guidance for the full-year 2016 as follows:

  • Revenue is expected to be in the range of $205 million to $215 million, and
  • Operating income as a percentage of revenue, excluding the amortization of purchased intangible assets, is projected to be in the range of 10% to 12%.

Conference Call Details

In conjunction with this announcement, VASCO Data Security International, Inc. will host a conference call today, July 28, 2016, at 4:30 p.m. EDT/22:30h CEST. During the conference call, Mr. Ken Hunt, CEO, Mr. Jan Valcke, President and COO, and Mr. Mark Hoyt, CFO, will discuss VASCO’s results for the second quarter 2016.

To participate in this conference call, please dial one of the...


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