Entrust Announces Second Quarter Financial Results

Revenues were $19.5 million in Q2, 2004, compared to $22.4 million in Q2, 2003 and $23.0 million in Q1, 2004. The company also reported that cash flow from operations was $2.9 million in the quarter, giving the company a cash and marketable investments balance of $103.2 million with no debt. Business and Financial Metrics: - Revenues of $19.5 million consisted of 24% product and 76% services and maintenance. There were no product deals over $1 million. - Q2, 2004 net loss was $2.6 million, or $0.04 per share, compared to a $21.9 million net loss, or $0.35 per share, in Q2, 2003 and a net profit of $519,000, or $0.01 per share, in Q1, 2004. - Cash and marketable investments at June 30, 2004 were $103.2 million. Key uses of cash in the quarter included $4.6 million for the companys stock buyback program, and $2.7 million for the purchase of certain assets of content and anti-spam provider AmikaNow!. Entrust produced cash from operations of approximately $2.9 million for the quarter, representing the second consecutive quarter of positive cash flow from operations. - Deferred revenue increased by $4.1 million to a balance of $23.9 million, which is the highest level in company history. - Services and maintenance comprised $14.9 million of total revenue. Support and maintenance, the largest component of services and maintenance revenue, continued to experience strong renewals, adding $3.3 million to deferred revenue in the quarter. - Entrust Cygnacom, a business unit that focuses on providing security services to the U.S. federal government, achieved its highest revenue levels in company history. Q2, 2004 represents the third consecutive quarterly record revenue level. - Extended Enterprise accounted for 63% and Extended Government, accounted for 37% of the product revenue, in the quarter. Extended Government at 37% of product revenue represented an increase of 27% over Q1, 2004. The finance vertical accounted for approximately 28% of second quarter product revenue. - Entrust Certificate Services achieved its seventh consecutive quarter of revenue growth. - The top five transactions accounted for 10% of Q2, 2004 revenues. The average purchase size this quarter was $90,000, down from $103,000 in Q1, 2004. Technology and Industry Highlights: - Entrust completed its acquisition of assets from the anti-spam and e-mail compliance company, AmikaNow!. The addition of the capabilities of the AmikaNow! assets will further strengthen and expand the portfolio of products within the Entrust Secure Messaging and Secure Data Solutions to provide enterprise and government customers with comprehensive content analysis and risk mitigation tools for improved compliance with corporate e-mail policies and regulatory guidelines. - Bell Canada, Canadas leading telecommunications company, and Entrust announced their intention to team up to offer a joint suite of comprehensive secure identity and access management services that will enable Enterprise customers to reap the full benefits of an integrated, end-to-end security solution offering. Under this strategic agreement, Bell Canada is planning to commence offering a managed authentication/authorization service enabling solutions -- including secure messaging, security for web portals, identity and access management and secure wireless services -- based on and using Entrusts products licensed to Bell Canada. -- Entrust announced that its newly upgraded desktop security platform, Entrust Desktop Solutions, was the first to be validated by the U.S. National Institute of Standards and Technologys (NIST) Federal Bridge Enabled Path Validation Module. It also passed rigorous testing by the Public Key Interoperability Test Suite (PKITS) that was developed by NIST in conjunction with DigitalNet and the National Security Agency (NSA).