UBIZEN PRESS RELEASE - August 8th 2005: Ubizen REPORTS third quarter 2005
> results
> Leuven, Belgium, August 8th 2005 - Ubizen (Euronext: UBIB), the principal
> provider of Managed Security Solutions for global businesses, today
> announced financial results for its third quarter ended June 30, 2005.
> Total revenues for the third quarter of fiscal 2005 amounted to Euro
> 10.481 mio as compared to total revenues of Euro 10.339 mio for the second
> quarter of fiscal 2005 and Euro 10.693 mio for the third quarter of fiscal
> 2004. Gross profit amounted to Euro 5.039 mio or 48.1% as compared to Euro
> 5.335 mio or 51.6% in the previous quarter, and Euro 5.557 or 52.0% in the
> third quarter of fiscal 2004. The decrease in gross margin from prior
> quarter is largely driven by lower Managed Security Services (MSS)
> margins. This decrease was partially offset by increased margins related
> to the sale of third party products.
> Operating expenses increased to Euro 6.357 mio in the third quarter of
> fiscal 2005 from Euro 5.942 mio in the second quarter, primarily due to
> the write-off of the remaining compensation expense balance of Euro 0.390,
> but decreased from the same period in 2004 where the Company had operating
> expenses of Euro 6.578 mio. These reductions reflect the Company's
> continued focus on cost control.
> EBITDA for the third quarter of fiscal 2005 amounted to Euro -0.468 mio as
> compared to Euro -0.127 mio in the second quarter, and Euro -0.546 mio in
> the third quarter of fiscal 2004.
> Net loss for the third quarter of fiscal 2005 amounted to Euro -0.788 mio
> compared to Euro -0.936 mio in the second quarter and Euro -1.226 mio for
> the third quarter of fiscal 2004. This represents a net loss per share of
> Euro -0.02 for Q3 as compared to Euro -0.03 for the same period last year.
> The above results include a full quarter of activity for the recently
> acquired Cybertrust MSS and CA Chaining businesses versus one month for Q2
> activity. These acquisitions were announced in a press release dated
> February 21, 2005.
>
> I. Revenue and Gross Profit
> In the third quarter, Ubizen recorded revenues of Euro 10.481 mio compared
> to Euro 10.339 mio in Q2 and Euro 10.693 mio in Q3 2004. Gross profit for
> the third quarter amounted to Euro 5.039 mio, representing an overall
> gross profit margin of 48.1% as compared to Euro 5.335 mio or 51.6% in the
> second quarter and Euro 5.557 mio or 52.0% for Q3 in 2004. Third quarter
> 2005 revenue and margin breakdown as follows:
> Contribution Contribution GPM
> (in '000 Euro)
> Managed Security Services 6.475 61.8% 52.2%
> Services 1.823 17.4% 52.9%
> Third-party Products 2.067 19.7% 28.0%
> Software 116 1.1% 100.0%
> Total 10.481 100.0% 48.1%
>
> II. Operating Expenses
> (in '000 Euro) Q3-05 Q2-05 Q3-04
> General and administrative (1.172) (1.241) (1.180)
> Research and development net (1.664) (1.671) (1.733)
> Sales and marketing (1.977) (1.846) (2.337)
> Other Operating Expense (694) (705) (654)
> Compensation Expense (390) (42) (199)
> Depreciation & Amortization (460) (438) (475)
> Total Operating Expenses (6.357) (5.942) (6.578)
> Overall total operating expenses increased to Euro 6.357 mio for Q3 as
> compared to Euro 5.942 mio in the second quarter, and Euro 6.578 mio for
> the same period in 2004.
> The increase in operating expenses is primarily due to the write-off of
> the remaining compensation expense of Euro 390 mio carried on the balance
> sheet off-set by cost reduction measures started in January 2004. Since
> that time the Company has reduced global headcount from 319 to 241 or a
> 24.5% reduction. The Company continues to focus on cost control in an
> effort to further reduce operating expenses.
>
> III. Other Income/Expense
> Other income/expense for Q3 fiscal 2005 primarily includes favourable
> exchange variances from foreign currency transactions.
>
> IV. Balance Sheet and Cash Flow
> Cash at June 30, 2005 was Euro 4.012 mio compared to Euro 3.464 mio at
> March 31, 2005. The increase primarily resulted from Ubizen net borrowing
> of Euro 0.326 mio from Cybertrust, its majority shareholder.
>
> Contact information at Ubizen:
> Ina Suffeleers
> VP Investor Relations
> Email: Ina.Suffeleers@ubizen.com