KEYWARE REPORTS RECORD REVENUES, INCREASE OF 500% FOR Q4 2000 AND FURTHER IMPROVED EARNINGS Thursday 1 March 2001 PDF Print Company Experiences Strong Results in First Year of New Millennium; Record revenue of $9.6 million or a loss of $0.07 Earnings Per Share Zaventem - 1 March 2001-Keyware (EASDAQ: KEYW), one of the world's leading providers of biometric and centralized authentication solutions, today announced unaudited financial results for the fourth quarter and year ending December 31, 2000. For the fourth quarter of 2000, Keyware's total revenues were $9.550.000; or a 500 % increase in the stated revenue of $1.904.000 for the fourth quarter of 1999. For the fiscal year 2000, the company reported total revenues of $22.944.000 or an increase of 487% over the reported revenues of $3.906.000 for 1999. The increase in revenue in Q4 is mainly coming from organic growth due to increased sales to new and existing customers such as Ubizen, Context, emedicalfiles.com, INS, and Valor, which accounted for 38% of Q4 revenues. Keyware reported a net loss for Q4 2000 of $1.7 million which represents a loss of $0.07 per share based on an average of 23,7 million average diluted shares outstanding compared to a net loss of $2 million for Q4 1999 or a loss of $0,20 per share based on an average of 10 million average diluted shares outstanding. Net loss for fiscal 2000 totalled $10.1 million or $0.55 per share on 18.5 million average diluted shares compared to a loss of $5.3 million or $0.57 per share on 9.2 million average diluted shares during 1999. The company's gross margin increased to 56% in Q4 2000 compared to 49% in Q4 1999. For fiscal year 2000 the consolidated gross margin increased from 47% in 1999 to 49% for the year 2000. The gross profit increased significantly to $5.3 million in Q4 2000 from $0.9 million in Q4 1999. For full fiscal year it saw an increase from $1.8 million in 1999 to $11.3 million in 2000. "Like many other industries, information security - particularly biometric and layered authentication -- are affected by a seasonal buying pattern in which the fourth quarter traditionally is the strongest of the year," stated Francis Declercq, president and CEO of Keyware. "Our Q4 revenues are in line with our expectations and our business plan. Even with the negative impact of the currency translation from BEF/Euro's into US dollar, we have clearly achieved strong results." "If you look at the factors driving the market for the security industry, you will see some very exciting opportunities," said Judith Markowitz, president of J. Markowitz Consultants. "Keyware has played a leading role in cultivating some of these opportunities for itself and for the biometrics industry as a whole. The most notable are its leading-edge development in layered and multibiometric solutions and its leadership in the creation of viable standards. At the same time, Keyware has enhanced its technology portfolio through acquisitions and targeted market strategies so as to position itself to capitalize on some of the most exciting emerging opportunities." Operating Expenses The total operating expenses increased from $6.8 million in 1999 to $21.4 million in 2000 but decreased on percentage of sales from 174% in 1999 to 93% in 2000. Sales & Marketing expenses were $3.5 million in Q4 2000 compared to $0.7 million in Q4 1999. The increase in marketing expenses, although comparable as a percentage of sales, is consistent with the company's business plan and is intended to help increase Keyware's market position by building a strong brand presence in the early phase of the market's development. Main activities were focussed on: * Increased brand building; * The hiring of additional marketing employees; and * The opening of more sales offices. Research & Development expenses were $1.0 million in Q4 2000 compared to $1.1 million in Q4 1999. Total R&D expenses for 2000 were $3.1 million, an increase of 64% compared to $1.9 million in 1999. During Q4 the company focused primarily on integrating the new technologies and R&D resources it had gained through the acquisitions made throughout 2000. It expects its R&D efforts in 2001 to be in line with the expected growth opportunities. General and administrative expenses increased to $1.8 million in Q4 2000 from $0.8 million in Q4 1999. As a percentage of sales, G&A expenses decreased from 44% in Q4 1999 to 18.8% in Q4 2000. For the full year 2000, expenses increased from $2.6 million in 1999 to $6.5 million in 2000. As a percentage of sales, G&A expenses decreased from 65% in 1999 to 28% in 2000. EBITDA The company was able to achieve a strong improvement in EBITDA (earnings before interest, taxes, depreciation and amortization), reporting a positive EBITDA for the first time. It was increased from a negative $1.2 million in Q3 2000 to a positive number of $0.2 million in Q4 2000. Balance sheet as of December 31, 2000 The total assets of Keyware as of December 31, 2000 were $93.9 million. Cash and cash equivalents amounts to $28.2 million in Q4 2000 and represented 30% of the total assets as of December 31, 2000. Cash in Q4 was being used for - The acquisition of ABLE - Increase in working capital - Capital expenditures - Bank debt were $2.5 million in Q4 2000, representing only 3% of total liabilities Stockholders equity of $75.8 million represents 81% of total liabilities and stockholders' equity as of December 31, 2000. Revenue split up per division: Keyware reports its revenue in two divisions: The Technology & Solutions Division, which includes primarily licensing the company's LBV technology to third party companies and to OEM's, and its Applications division, which includes primarily projects for and software sales to corporations. T&S increased it revenues by 524% to $4.6 million in the fourth quarter of 2000, from $0.7 million in the fourth quarter of 1999. It saw an increase of its full fiscal year revenue by 812 % from $0.9 million in 1999 to $8.6 million in 2000. The majority of the growth in Q4 is mainly organic as a result from sales to customers such as British Airways, Sony, Context, Ubizen, Ektelis, INS, and emedicalfiles. The Applications Division increased its revenue by 325 % to $5.0 million in the fourth quarter of 2000, from $1.2 million in the fourth quarter of 1999. For its full fiscal year, this division increased its revenues by 384 % from $3.0 million in 1999 to $14.3 million in 2000. The majority of the growth in Q4 is mainly internal due to sales to customers such as GEFCO, VAG, Solvay Ixelles, SNCB, Cahners Instat, Belgian Football League, Athena Diagnostics, Q8 petroleum and Valor. Revenue split up per geography Of the $9.6 million revenue earned in Q4 2000, $7.6 million came from Europe and $2 million from the United States. For the full fiscal year 2000, $6.2 million of the company's revenues were earned in the United States and $16.7 million in Europe, represents 73% of the total revenues. In the year 2001, the company expects to see a higher percentage of its sales coming from the United States. About Keyware Founded in 1996 and listed on the Easdaq since June 2000, Keyware is one the world's leading providers of a broad range of authentication solutions for real-world business applications, and a pioneer in the field of biometrics, the technology of verifying an individual by means of personal characteristics such as voice, face and fingerprints. Keyware's Centralized Authentication Server (CAS) with LBV-technology allows companies to manage multiple authentication techniques, including biometrics, from one central server. CAS optimizes security and convenience for physical locations, e-commerce, network, smart cards and telecommunications applications. Keyware's award-winning technology is sold globally through an extended network of OEMs, system integrators and VARs. Keyware is co-headquartered in Brussels (Belgium) and Woburn (Mass., USA), and publishes further information on line at: http://www.keyware.com Forward Looking Statements The figures mentioned in this press release are unaudited, and, with the exception of historical information set forth herein, the matters set forth in this news release are forward-looking statements that involve risks and uncertainties. Investors are cautioned that the unaudited figures and all forward-looking statements involve risks and uncertainties and that a number of factors could cause audited figures and/or actual results to differ materially from those contained herein. These factors include, among others, anticipated revenues, technology risks, including dependence on core technology, fluctuations in quarterly results, dependence on new product development, rapid technological and market change, reliance on sales by others, management of growth, dependence on key personnel, rapid expansion, financial risk management, future growth subject to risks, and the dependence on intellectual property rights. Most of these factors and other factors which could cause actual results to differ materially are discussed in the offering circular relating to Keyware Technologies' listing on EASDAQ on June 23, 2000. Keyware plus the Keyware logo, and LBV - Layered Biometric Verification are all trademarks of Keyware. All other company, brand or product names contained in this document may be trademarks or registered trademarks of their respective holders. Keyware's Highlights of Q4 2000 (Addendum) * Keyware, and Gemplus, the world's number one provider of smart card based solutions, signed a partnership agreement to protect smart cards with biometric technology. * Keyware partnered with Baltimore Technologies. This resulted in Keyware's membership to PKI World, the Baltimore Technologies' program that promotes interoperability in PKI by bringing together organisations whose products are based on open industry standards. * Keyware signed a $1.5 million contract with Context Systems appointing Context Systems as a VAR (Value Added Reseller) for Keyware's authentication and biometric products. In a related agreement, Keyware was authorised to use Context Systems' PKI software on a license basis. The implementation of this open architecture PKI software into Keyware's authentication products enables Keyware to centralise different PKI enabled applications from several vendors, such as Baltimore, into its the central CAS-server with LBV-technology. * Keyware was chosen by Ektelis, a leading provider of e-business solutions in Information and Content publishing, to integrate its Centralized Authentication Server (CAS) technology into the Ektos platform. * Keyware announced the appointment of five experienced senior executives to strengthen its management team. The new appointments were Chris Buysse as vice president of Finance, Amaury de Potter d'Indoye as vice president Worldwide Operations and Frank Coucke as vice president Technology and Solutions Division Worlwide. * Keyware acquired ABLE, a provider of Internet communications security servers. As a result of the acquisition, Keyware integrated its CAS technology into ABLE's flagship product, the UNI-Box, which is a comprehensive software solution allowing secure connections between a local area network and the Internet. The integration allows users to manage authentication on the network, telephone system and building entry of an organization. It also gives organizations the ability to support different types of authentication, such as PKI, smart cards, PINs, passwords and biometrics. * Keyware opened its Asia office in Singapore. The increased demand for authentication solutions on smart cards in the Asian market was a major factor in the opening of Keyware's Asian office. Keyware's Highlights First Nine Months of the Year 2000 * Keyware was chosen to provide customized fingerprint smart card authentication for eMedicalFiles.com, LLC. The initial deal is worth over $ 1 million and is expected to result in several million within the next few years. The eMedicalFiles.com system will store and retrieve medical information via a combination of a secure smart card and web-based Internet server. * Keyware acquired Neosys, a Belgian provider of advanced e-commerce solutions. * Securis, a leading supplier of security personnel and services in Belgium, selected Keyware's biometric software solutions for deployment in its client sites. The implementations will include time and attendance applications for Securis' 3,500 staff based in a variety of locations throughout Belgium, including the Brussels Airport. * Keyware, partnered on Litton PRC, Inc.'s core team to provide smart card technology to all agencies of the U.S. government. Litton PRC, a subsidiary of Litton Industries (NYSE: LIT), was one of five prime vendors selected by the General Services Administration for its government-wide Smart Access Common ID program. The GSA program has an estimated value of $1.5 billion over a 10-year period of performance. * Proton World signed an Original Equipment Manufacturer (OEM) Agreement with Keyware. Proton World and Keyware were already technology partners. They introduced their proof-of-concept integration of the Proton e-purse and Keyware's Layered Biometric Verification (LBV) at the Smart Card 2000 trade show in London in February 2000, where it won the Advanced Card Award for the Best New Security Product. * Keyware acquired Newton Online Business Solutions, a fast-growing web design and integration firm located in Waltham, Mass., in order to speed the growth of biometric-enabled Internet applications. * Keyware launched its initial public offering on EASDAQ. * Keyware acquired Alacarte Engineering, one of Europe's foremost suppliers of smart card applications. Smart cards will become a significant platform for biometric authentication technologies, as a protection of confidential transactions. * Keyware signed an agreement with G2 Speech, a leading dictation software provider. G2 Speech will integrate Keyware's voice verification software into G2 Speech's dictation application. * Keyware acquired Riverland Next Generation, a strategic Internet and e-commerce service provider. * Keyware partnered with Interstrat, a strategic systems integrator, to embed its biometric technology into smart cards that will be used to identify trouble-makers in nightclubs in the Netherlands. * Keyware acquired Tech Talk, provider physical access and time management solutions. This will enable Keyware to extend its current biometric authentication applications in the areas of physical access control and time management. * Keyware received funding from the Flemish insurance company De Vaderlandsche (Patriotique) for $3 million. Bruce McLachlan Text 100 Public Relations Tel: +44 (0) 20 8996 4190 Fax: +44 (0) 20 8996 1290 Mob: +44 (0) 7974 161 209 Email: firstname.lastname@example.org Elizabeth Marshall Keyware Tel: + 1 781 933 1311 ext. 235 E-mail: email@example.com Visit our web site at http://www.keyware.com This press release was distributed by ResponseSource Press Release Wire on behalf of Text 100 London in the following categories: Consumer Technology, Personal Finance, Business & Finance, Computing & Telecoms, for more information visit https://pressreleasewire.responsesource.com/about.