SafeNet Management Reiterates Fourth Quarter 2006 Guidance; Sets First Quarter and Full Year 2007 Revenue Guidance; Establishes
10 January 2007 - 3:20AM
Business Wire
SafeNet (NASDAQ: SFNT), setting the standard for information
security, is reiterating its fourth quarter 2006 guidance, setting
revenue guidance for the first quarter and full year 2007 and is
establishing its approach with respect to non-GAAP measurements.
Earnings per share (EPS) guidance will be provided as soon as is
practical after the filing of the restatements. The Company also
announced today that it filed a Form 8-K disclosing certain revenue
recognition restatements for the periods of 2004, 2005 and the
first quarter of 2006, the total impact of which is approximately
$14 million. Management believes a majority of this revenue will
shift to other periods including future periods. While the Company
is in the process of completing its work with regard to closing the
fourth quarter and year end 2006, management remains comfortable
with the revenue range of $78 to $82 million provided earlier,
before the impact of the aforementioned revenue recognition
restatements. SafeNet also announced today that it will be
requesting a listing extension from NASDAQ beyond the January 31,
2007 previously disclosed in order to ensure there is sufficient
time to properly complete the restatement process. The current
status of the process is as follows: -- The Company has largely
completed the stock option accounting review and will be pursuing
the process of attaining pre-filing clearance of our accounting
conclusions from the U.S. Securities and Exchange Commission (SEC)
for these documents. -- Management believes more time may be needed
for all parties to respond to any possible SEC communications. --
The Company continues to focus a significant amount of resources to
the restatement effort to enable the timeliest possible filing of
the documents. The Company intends to release its fourth quarter
and year end 2006 financial results and hold its accompanying
conference call as soon as is practical in February. However, the
Company�s primary focus in its finance department is on advancing
and filing the restatements. Consequently, a precise date cannot be
determined at this time. Management is working to set that date as
soon as possible. Current Business Outlook for Fourth Quarter 2006
and Fiscal Year 2007 The following statements are based on current
expectations. These statements are forward-looking, and actual
results may differ materially. These statements do not reflect the
potential impact of any restatements, mergers, acquisitions or
other business combinations that may be completed after the date of
this release. During the quarter, SafeNet�s corporate
representatives may reiterate the Company�s published Business
Outlook during private meetings with investors, investment
analysts, the media and others. SafeNet is in its quiet period,
which is expected to run until financial results are released in
February 2007. This period may be affected by any delay in the
filing of the Company�s financial statements. During the quiet
period, SafeNet and its corporate representatives will not comment
concerning the previously published Business Outlook and previously
published guidance should no longer be considered the Company�s
then current Outlook. During the quiet period, the Company�s press
releases and filings with the SEC on Forms 10-K and 10-Q should be
considered historical, speaking as of prior to the quiet period
only and not subject to update by the Company. Please refer to our
Form 8-K dated January 9, 2007 pertaining to non-reliance on
previously issued financial statements. For the quarter ending
March 31, 2007, SafeNet is establishing a revenue range consisting
of $67 to $70�million, before the impact of the aforementioned
revenue recognition restatements. This range reflects the normal
seasonality experienced between SafeNet�s fourth and first
quarters, whereby the first quarter revenue results are smaller
than the fourth quarter. For the year ending December�31, 2007,
SafeNet is establishing a revenue range consisting of $318 to
$326�million, before the impact of the aforementioned revenue
recognition restatements. Management expects SafeNet�s organic
revenue growth in 2007 to slightly exceed industry growth
expectations, which the Company�s research indicates is an average
of approximately 10 percent. This growth rate excludes the possible
impact of the revenue restatements discussed above. For all
periods, gross margins are expected to be consistent with the most
recently reported results. In addition, management believes there
will be opportunity for operating leverage as expense growth is
generally expected to be slower than revenue growth during 2007.
Further details on these and other metrics will be provided as soon
as is practical. Discussion of Non-GAAP Philosophy Management
intends to provide non-GAAP EPS financial guidance as soon as is
practical after the Company files its restatements. Non-GAAP net
income is expected to exclude amortization of acquired intangibles,
compensation expense associated with the expensing of stock options
in accordance with FAS 123R, and legal and professional fees
associated with the stock option granting efforts. The Company does
not currently expect to exclude integration charges. SafeNet
management has traditionally used non-GAAP measurements to evaluate
the Company's operating performance and believes that excluding
these items enhances management's and its investors' ability to
evaluate SafeNet's comparable historical operating results. The new
management team has solicited a number of members of the investment
community to gain a current understanding of how a preponderance of
investors are evaluating the operating performance of the business.
Management believes that a significant number of investors are
excluding the legal and professional fees associated with the stock
option granting issues when they focus on SafeNet�s operating
performance. Management�s decision on how non-GAAP measurements
will be reported reflects this belief. Management Presentation to
be Webcast Today Management is scheduled to present at the Needham
Growth Conference today from 4:30 pm to 5:00 pm ET during which
time they intend to speak to much of the information in this press
release. Interested parties can listen to the webcast at
www.safenetinvestor.com. About SafeNet, Inc. SafeNet is a global
leader in information security. Founded more than 20 years ago, the
Company provides complete security utilizing its encryption
technologies to protect communications, intellectual property and
digital identities, and offers a full spectrum of products
including hardware, software, and chips. ARM, Bank of America,
Cisco Systems, the Departments of Defense and Homeland Security,
Adobe, Samsung, Texas Instruments, the U.S. Internal Revenue
Service and scores of other customers entrust their security needs
to SafeNet. For more information, visit www.safenet-inc.com. "Safe
Harbor" Statement under the Private Securities Litigation Reform
Act of 1995 Statements contained in this document that are not
historical facts, including, without limitation, statements
relating to the estimated impact of expensing stock options under
FAS 123R,�could be deemed to be forward-looking statements within
the meaning of Section�27A of the Securities Act of 1933 and
Section�21E of the Securities Exchange Act of 1934. These
statements are based on management�s current expectations and
beliefs, are not guarantees of future performance and are subject
to a number of risks, uncertainties and assumptions that could
cause actual results to differ materially from those described in
the forward-looking statements, such as, among others, economic,
business, competitive, and/or regulatory factors affecting
SafeNet�s business generally, including those set forth in
SafeNet�s Annual Report on Form 10-K for the fiscal year ended
December�31, 2005 and its other filings with the Securities and
Exchange Commission, including its Quarterly Reports on Form 10-Q
and its Current Reports on Form 8-K. If any of these risks or
uncertainties materializes or any of these assumptions proves
incorrect, SafeNet�s results could differ materially from the
expectations in these statements. SafeNet assumes no obligation and
does not intend to update or alter these forward-looking
statements, whether as a result of new information, future events,
or otherwise.
Safenet (NASDAQ:SFNT)
Historical Stock Chart
From May 2024 to Jun 2024
Safenet (NASDAQ:SFNT)
Historical Stock Chart
From Jun 2023 to Jun 2024