-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VyJO5P8/wWiRLg9/Ug4WIpPSUHHNMgAVaohWMf9Oj3NgPiX1e45EfwsiCTG9WMro 5h/72611YWO4E0ScR1BQlg== 0000950135-01-502026.txt : 20010717 0000950135-01-502026.hdr.sgml : 20010717 ACCESSION NUMBER: 0000950135-01-502026 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010712 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010716 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RSA SECURITY INC/DE/ CENTRAL INDEX KEY: 0000932064 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER PERIPHERAL EQUIPMENT, NEC [3577] IRS NUMBER: 042916506 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-25120 FILM NUMBER: 1681668 BUSINESS ADDRESS: STREET 1: 36 CROSBY DRIVE CITY: BEDFORD STATE: MA ZIP: 01730 BUSINESS PHONE: 7813015000 MAIL ADDRESS: STREET 1: 36 CROSBY DRIVE CITY: BEDFORD STATE: MA ZIP: 01730 FORMER COMPANY: FORMER CONFORMED NAME: SECURITY DYNAMICS TECHNOLOGIES INC /DE/ DATE OF NAME CHANGE: 19941027 8-K 1 b39990rse8-k.txt RSA SECURITY INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ____________________ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): July 12, 2001 RSA Security Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) Delaware 000-25120 04-2916506 - -------------------------------------------------------------------------------- (State or other juris- (Commission (IRS Employer diction of incorporation) File Number) Identification No.) 36 Crosby Drive, Bedford, Massachusetts 01730 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (781) 301-5000 N/A - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) 2 Item 5. OTHER EVENTS. On July 12, 2001, RSA Security Inc. (the "Company") issued a press release reporting its financial results for the quarter ended June 30, 2001 and providing guidance on its revenue and net income for the three months ending September 30, 2001 and December 31, 2001 and the year ending December 31, 2002. The Company also announced that it has reduced staffing by 8% and has been cutting discretionary program spending to realign its cost structure to fit its revenue expectations and that it expects to take a restructuring charge of approximately $3 to $5 million in the quarter ending September 30, 2001 to cover employee severance and other costs. The full text of the Company's press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits Exhibit No. Description - ----------- ----------- 99.1 Press release, dated July 12, 2001, announcing the financial results of RSA Security Inc. for the quarter ended June 30, 2001. -2- 3 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: July 16, 2001 RSA SECURITY INC. ----------------- (Registrant) By: /s/ John F. Kennedy ----------------------------------- John F. Kennedy Senior Vice President, Finance and Operations, and Chief Financial Officer -3- 4 EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 99.1 Press release, dated July 12, 2001, announcing the financial results of RSA Security Inc. for the quarter ended June 30, 2001. EX-99.1 2 b39990rsex99-1.txt PRESS RELEASE 1 EXHIBIT 99.1 EDITORIAL CONTACT: FINANCIAL CONTACT: Timothy Powers Steve Casey RSA Security Inc. RSA Security Inc. (781) 301-5344 (781) 301-5131 tpowers@rsasecurity.com scasey@rsasecurity.com FOR IMMEDIATE RELEASE RSA Security Announces Q2 Results BEDFORD, MASS., JULY 12, 2001 - RSA Security Inc. (Nasdaq: RSAS) today reported financial results for the second quarter ended June 30, 2001. Revenue for the second quarter of 2001 increased 21% to a record $80.8 million from $66.7 million for the second quarter of 2000. Reported net income for the second quarter of 2001, including the operations of RSA Capital and certain non-cash charges, was $13.3 million ($0.22 per share on a diluted basis) compared to $37.2 million ($0.58 per share on a diluted basis) for the second quarter of 2000. Reported net income for the second quarter of 2001 includes pre-tax gains of $16.1 million from investing activities. Earnings for the second quarter of 2001 from the Company's core operating business was $10.0 million ($0.17 per share on a diluted basis) compared to $9.4 million ($0.14 per share on a diluted basis) for the same period in 2000. Revenue for the six months ended June 30, 2001 was $157.1 million, a 21% increase over the same period last year. Reported net income for the first six months of 2001, including the operations of RSA Capital and certain non-cash charges, was $23.1 million ($0.38 per share on a diluted basis) compared to $61.8 million ($0.95 per share on a diluted basis) for the same period in 2000. Reported net income for the first six months of 2001 includes pre-tax gains of $29.9 million from investing activities. Net income from the Company's core operating business for the first six months of 2001 increased 10% to $19.7 million ($0.33 per diluted share) compared to $18.0 million ($0.28 per diluted share) in the first six months of 2000. "Despite a very difficult economy, we recorded record revenue of $80.8 million in Q2, and earnings per share of $0.17, which were within the range of analysts' estimates," said Art Coviello, CEO and President at RSA Security. "We said last quarter that we believed customers will choose strong partners in a weak economy. Our performance this quarter validates that belief. At a time when many of our competitors are faltering, we continue to grow and have a strategic opportunity to consolidate our market position." Q2 HIGHLIGHTS During the quarter, the Company's RSA Capital segment acquired 3-G International, Inc., a privately held company that develops and delivers smart card and biometric authentication products, to help advance its position as a leading provider of authentication solutions. 2 The Company also opened a new operation in Shannon, Ireland to serve as headquarters for its manufacturing and service operations in the rapidly growing international market. In addition, the Company shipped new products in each of its product families, including: - RSA ACE/Server(R) version 5.0, which is capable of scaling to millions of users and offers new features designed to improve performance and ease administration. - RSA Keon(R) CA version 5.7, which combines the best features of the former Xcert Sentry CA and the RSA Keon Certificate Server software and was completed ahead of schedule. - RSA BSAFE(R) Wireless Core encryption software, which enables developers to build wireless solutions designed to communicate seamlessly with any standards-based application or network. BUSINESS OUTLOOK The Company's guidance for revenue is in the following ranges: - $72 to $80 million in Q3 2001 - $78 to $90 million in Q4 2001 - $350 to $400 million in 2002 The Company's guidance on reported net income, including the operations of RSA Capital and other charges, but exclusive of potential returns from the investment activities of the RSA Ventures unit of RSA Capital, is in the following ranges: - $0.09 to $0.14 per share in Q3 2001 - $0.07 to $0.15 per share in Q4 2001 - $0.45 to $0.67 per share in 2002 The Company's guidance for net income from its core operating business is in the following ranges: - $0.03 to $0.09 per share in Q3 2001 - $0.11 to $0.20 per share in Q4 2001 - $0.50 to $0.75 per share in 2002 3 The Company has reduced staffing by 8% and has been cutting discretionary program spending to realign its cost structure to fit these revenue expectations. The Company expects to take a restructuring charge of approximately $3 to $5 million in Q3 2001 to cover employee severance and other costs. ABOUT RSA SECURITY INC. RSA Security Inc., The Most Trusted Name in e-Security(TM), helps organizations build secure, trusted foundations for e-business through its RSA SecurID two-factor authentication, RSA BSAFE encryption and RSA Keon digital certificate management systems. With approximately one billion RSA BSAFE-enabled applications in use worldwide, more than nine million RSA SecurID authentication users and almost 20 years of industry experience, RSA Security has the proven leadership and innovative technology to address the changing security needs of e-business and bring trust to the online economy. RSA Security can be reached at www.rsasecurity.com. # # # RSA, Keon, SecurID, ACE/Server and BSAFE are registered trademarks, and The Most Trusted Name in e-Security is a trademark of RSA Security Inc. This press release contains forward-looking statements regarding RSA Security's financial condition and growth in future quarters. Such statements involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are general economic conditions, changes in our operating expenses, the timing of the introduction or enhancement of our products and our competitors' products, market acceptance of new products, changes in product pricing, including changes in competitors' pricing policies, development of our direct and indirect distribution channels, integration of acquisitions, personnel departures and new hires, delays in product development, technical difficulties, competitive pressures, changes in customer and market requirements and standards, market acceptance of new technologies, technological changes in the computer industry, our ability to protect our intellectual property and to establish and maintain strategic relationships and the risk factors detailed from time to time in RSA Security's periodic reports and registration statements filed with the Securities and Exchange Commission, including without limitation RSA Security's Annual Report on Form 10-K filed on March 28, 2001 and Quarterly Report on Form 10-Q filed on May 15, 2001. 4 STATEMENTS OF CORE OPERATIONS (in thousands, except per share data)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, 2001 2000 2001 2000 (UNAUDITED) (UNAUDITED) -------------------------- ------------------------ Revenue $80,712 $66,700 $157,052 $130,040 Gross profit 64,707 53,442 126,041 103,892 Operating expenses: Research and development 14,489 11,256 27,664 22,190 Marketing and selling 30,218 24,001 60,655 45,990 General and administrative 7,746 7,107 15,706 14,789 ------- ------- -------- -------- Total operating expenses 52,453 42,364 104,025 82,969 ------- ------- -------- -------- Operating income 12,254 11,078 22,016 20,923 Interest income and other 2,119 3,087 6,119 6,275 ------- ------- -------- -------- Income before provision for income taxes 14,373 14,165 28,135 27,198 Provision for income taxes 4,312 4,815 8,441 9,246 ------- ------- -------- -------- Net Income $10,061 $ 9,350 $ 19,694 $ 17,952 ======= ======= ======== ======== Net income per share - basic $ 0.18 $ 0.16 $ 0.35 $ 0.31 ======= ======= ======== ======== Weighted average number of common shares - basic 56,391 59,055 56,434 59,012 ======= ======= ======== ======== Net income per share - diluted $ 0.17 $ 0.15 $ 0.33 $ 0.28 ======= ======= ======== ======== Weighted average number of common shares - diluted 59,903 64,485 60,308 65,217 ======= ======= ======== ========
5 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (in thousands, except per share data)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, 2001 2000 2001 2000 (UNAUDITED) (UNAUDITED) ---------------------------- ---------------------------- Revenue (i) $80,780 $66,700 $157,120 $130,040 Gross profit (ii) 64,734 53,442 120,741 103,892 Operating expenses: Research and development (iii) 14,996 11,256 28,458 22,190 Marketing and selling (iv) 30,325 24,001 61,040 45,990 General and administrative (v) 9,781 7,896 19,579 15,932 Restructurings (vi) -- (2,079) -- (2,079) In process research and development (vi) 1,570 -- 4,141 -- Amortization of goodwill and intangibles (vi) 2,951 -- 4,285 -- ------- ------- -------- -------- Total operating expenses 59,623 41,074 117,503 82,033 ------- ------- -------- -------- Operating income 5,111 12,368 3,238 21,859 Interest income and other 2,119 3,087 6,598 6,275 Income from investing activities (vi) 16,145 45,013 29,928 72,051 ------- ------- -------- -------- Income before provision for income taxes 23,375 60,468 39,764 100,185 Provision for income taxes 10,104 23,236 16,701 38,353 ------- ------- -------- -------- Net Income $13,271 $37,232 $ 23,063 $ 61,832 ======= ======= ======== ======== Net income per share - basic $ 0.24 $ 0.63 $ 0.41 $ 1.05 ======= ======= ======== ======== Weighted average number of common shares - basic 56,391 59,055 56,434 59,012 ======= ======= ======== ======== Net income per share - diluted $ 0.22 $ 0.58 $ 0.38 $ 0.95 ======= ======= ======== ======== Weighted average number of common shares - diluted 59,903 64,485 60,308 65,217 ======= ======= ======== ========
Net income includes the following non-core activities: (i) Revenue includes $68 for the three and six months ended June 30, 2001 relating to the Company's RSA Capital unit (ii) Gross profit includes revenue of $68 and cost of goods sold of $41 for the three and six months ended June 30, 2001 relating to the Company's RSA Capital unit, cost of goods sold of $5,221 for the write off of prepaid license fees for the six months ended June 30, 2001, and $106 for the six months ended June 30, 2001 relating to the assumption of stock options in connection with the Company's February 2001 acquisition of Xcert International, Inc. 6 (iii) Research and development includes expenses of $507 for the three and six months ended June 30, 2001 relating to the Company's RSA Capital unit and $287 for the six months ended June 30, 2001 relating to the assumption of stock options in connection with the Company's February 2001 acquisition of Xcert International, Inc. (iv) Marketing and selling includes expenses of $107 for the three and six months ended June 30, 2001 relating to the Company's RSA Capital unit and $278 for the six months ended June 30, 2001 relating to the assumption of stock options in connection with the Company's February 2001 acquisition of Xcert International, Inc. (v) General and administrative includes expenses of $2,035 and $789 for the three months ended June 30, 2001 and 2000, respectively, and $3,793 and $1,143 for the six months ended June 30, 2001 and 2000, respectively relating to the Company's RSA Capital unit, and $80 for the six months ended June 30, 2001 relating to the assumption of stock options in connection with the Company's February 2001 acquisition of Xcert International, Inc. (vi) Non-core activities 7 CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
JUNE 30, DECEMBER 31, 2001 2000 (UNAUDITED) ----------------------------- Current assets Cash and cash equivalents $167,128 $301,897 Marketable securities 43,279 33,205 Accounts receivable (less allowance for doubtful accounts of $2,094 in 2001 and $2,006 in 2000) 60,409 54,979 Inventory 8,142 3,707 Prepaid expenses and other assets 18,717 20,389 -------- -------- Total current assets 297,675 414,177 -------- -------- Property and equipment, net 74,154 64,207 Other assets Investments 74,071 87,688 Goodwill, net 53,764 -- Intangible assets, net 22,208 -- Deferred taxes 31,366 20,723 Other 4,108 2,719 -------- -------- Total other assets 185,517 111,130 -------- -------- $557,346 $589,514 ======== ======== Current liabilities Accounts payable $ 11,622 $ 7,663 Accrued payroll and related benefits 9,139 16,023 Accrued expenses and other liabilities 14,053 12,649 Income taxes payable 33,139 26,249 Deferred revenue 28,825 25,444 Deferred taxes 23,219 20,482 -------- -------- Total current liabilities 119,997 108,510 -------- -------- Stockholders' equity 437,349 481,004 -------- -------- $557,346 $589,514 ======== ========
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