Certicom Reports Third Quarter Results
Revenue for the quarter was
“We have continued with the momentum in building a stronger revenue stream from our new market verticals – Energy & Utilities and Semiconductors – and we are currently on track in achieving the objectives of our three-year plan. In spite of the challenging economic environment, Certicom continues to develop significant opportunities in “smart energy” and “smart grid” initiatives in the energy sector. And, we are helping semiconductor companies reduce their operating costs,” said
Operating Highlights for the Quarter
- Acquisition of Certicom by Research In Motion Limited announced.
- Certicom launched its new Asset Management System, which is being
implemented by global leaders in semiconductor manufacturing to
help lower their inventory and supply chain costs and enhance their
competiveness.
- Certicom's Asset Management System has been deployed by nVidia and
other leading companies in the semiconductor market.
- Certicom's Device Authentication Service for ZigBee Smart Energy
shipped more than 500,000 certificates for smart metering devices
to help utilities and customers achieve more efficient energy
consumption.
- Certicom announced that 10 leading suppliers licensed the Company's
Smart Energy technology to address ZigBee Alliance smart energy
markets.
Subsequent to Quarter-end
- Certicom's Board of Directors recommends that shareholders approve
Research In Motion Limited's proposed acquisition of Certicom. A
Special Meeting of shareholders to approve the acquisition will be
held on March 18, 2009.
Financial Review
Revenue for the quarter was
Operating expenses, excluding the Sony litigation and M&A related costs, were
Expenses related to the Sony litigation were
The Company posted an operating profit(3) of
Certicom had
Proposed Acquisition of Certicom by Research In Motion Limited
A Special Committee of independent Directors was formed in early December after an unsolicited bid of
On
Commenting on the transaction, Chairman of the Board Jeff Chisholm, said, “As a long serving member of the Board, I am gratified by the recognition Certicom has received as the global leader in Elliptic Curve Cryptography technology and comprehensive security solutions for a wide range of market verticals. Certicom employees should be rightfully proud that their hard work, especially given the harsh economic environment of the past year, has created significant value for the Company and its shareholders.”
About Certicom
Certicom manages and protects the value of content, applications and devices with government-approved security. Adopted by the National Security Agency (NSA) for government communications, Elliptic Curve Cryptography (ECC) provides the most security per bit of any known public-key scheme. As the global leader in ECC, Certicom’s security offerings are currently licensed to hundreds of multinational technology companies, including IBM, General Dynamics, Motorola, Oracle and Research In Motion. Founded in 1985, Certicom’s corporate offices are in
Certicom, Certicom Security Architecture, Certicom Trust Infrastructure,
Certicom CodeSign, Certicom KeyInject, Security Builder, Security Builder
API, Security Builder BSP, Security Builder Crypto, Security Builder ETS,
Security Builder GSE, Security Builder IPSec, Security Builder NSE,
Security Builder PKI and Security Builder SSL are trademarks or
registered trademarks of Certicom Corp. All other companies and products
listed herein are trademarks or registered trademarks of their respective
holders. Information subject to change.
ENDNOTES:
---------
1. This news release contains references to operating expenses. Certicom
defines operating expenses as total operating expenses excluding
depreciation and amortization and stock-based compensation. It also
excludes interest income, other income (expense) and withholding tax
expense.
-------------------------------------------------------------------------
Three months ended Nine months ended
---------------------------------------
January 31, January 31,
2009 2008 2009 2008
---------------------------------------
Cost of revenues $ 902 $ 826 $ 2,633 $ 2,442
Sales and marketing 2,215 1,955 7,108 5,950
Product development and
engineering 2,437 1,753 6,507 5,162
General and administrative 4,520 1,381 9,583 4,683
--------- --------- --------- ---------
Total operating expenses $ 10,074 $ 5,915 $ 25,831 $ 18,237
Less: Litigation (1,660) (281) (4,636) (1,270)
M&A related expenses (1,742) - (1,742) -
--------- --------- --------- ---------
Total operating expenses
excluding litigation $ 6,672 $ 5,634 $ 19,453 $ 16,967
--------- --------- --------- ---------
--------- --------- --------- ---------
2. This news release contains references to cash, which is defined as
cash and cash equivalents, short term and long term marketable securities
and restricted cash.
January 31, April 30,
2009 2008
Cash and cash equivalents $ 11,128 $ 1,641
Marketable securities 19,991 25,980
Long-term marketable securities - 10,832
-------------------
Total Cash $ 31,119 $ 38,453
-------------------
3. This new release contains reference to operating profit, which is
defined as Loss from Operations less, depreciation and amortization,
Stock-based compensation,, Sony litigation and acquisition expenses.
Three months ended
January 31, 2009
-------------------
Loss from operations $ (3,846)
Less: Depreciation & amortization 313
Stock-based compensation 340
Sony litigation 1,660
Acquisition 1,742
-------------------
Operating profit $ 209
-------------------
CERTICOM CORP.
CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars)
CANADIAN GAAP
January 31, April 30,
2009 2008
---------- ----------
(Unaudited) (Audited)
ASSETS
Current assets:
Cash and cash equivalents....................... $ 11,128 $ 1,641
Marketable securities........................... 19,991 25,980
Accounts receivable, net........................ 5,264 5,426
Unbilled receivables............................ 315 503
Prepaid expenses and other
current assets................................. 560 659
---------- ----------
Total current assets.......................... 37,258 34,209
Long-term marketable securities................... - 10,832
Property and equipment, net....................... 966 1,173
Patents, net...................................... 3,103 2,776
Other assets...................................... 24 24
---------- ----------
Total assets.................................. $ 41,351 $ 49,014
---------- ----------
---------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable................................ $ 3,117 $ 2,255
Accrued liabilities............................. 3,805 2,332
Deferred revenue................................ 3,954 5,123
Obligation under capital lease.................. 13 17
Current portion of lease inducements............ 47 52
---------- ----------
Total current liabilities..................... 10,936 9,779
Other long-term payables.......................... 718 718
Obligation under capital lease, long-term......... 13 30
Lease inducements, net of current portion......... - 35
---------- ----------
Total liabilities............................. 11,667 10,562
Shareholders' equity:
Share capital................................... 38,717 38,624
Contributed surplus............................. 10,508 9,021
Deficit......................................... (18,655) (9,131)
Accumulated other comprehensive loss............ (886) (62)
---------- ----------
Total shareholders' equity.................... 29,684 38,452
---------- ----------
Total liabilities and shareholders' equity.... $ 41,351 $ 49,014
---------- ----------
---------- ----------
CERTICOM CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(In thousands of U.S. dollars, except number of shares
and per share data)
(Unaudited)
CANADIAN GAAP
Three months ended Nine months ended
January 31, January 31,
2009 2008 2009 2008
-------- -------- -------- ---------
Revenues:
Product and intellectual
property..................... $ 5,164 $ 4,409 $ 12,483 $ 7,460
Services...................... 1,717 1,671 5,212 5,626
-------- -------- -------- ---------
Total revenues.............. 6,881 6,080 17,695 13,086
Cost of revenues:
Product and intellectual
property..................... 124 - 330 12
Services...................... 778 826 2,303 2,430
-------- -------- -------- ---------
Total cost of revenues...... 902 826 2,633 2,442
-------- -------- -------- ---------
Gross margin.................... 5,979 5,254 15,062 10,644
Operating expenses:
Sales and marketing........... 2,215 1,955 7,108 5,950
Product development and
engineering.................. 2,437 1,753 6,507 5,162
General and administrative.... 4,520 1,381 9,583 4,683
Depreciation and
amortization................. 313 356 915 994
Stock-based compensation
(Note 7)..................... 340 475 1,485 1,686
-------- -------- -------- ---------
Total operating expenses.... 9,825 5,920 25,598 18,475
-------- -------- -------- ---------
Loss from operations............ (3,846) (666) (10,536) (7,831)
Other income:
Interest income............... 217 461 967 1,447
Interest expense and other
income (expense), net........ 44 31 58 29
-------- -------- -------- ---------
Total other income.......... 261 492 1,025 1,476
-------- -------- -------- ---------
Loss before provision for
income taxes................... (3,585) (174) (9,511) (6,355)
Provision for income taxes.... 2 - 13 19
-------- -------- -------- ---------
Loss for the period............. $ (3,587) $ (174) $ (9,524) $ (6,374)
Deficit, beginning of period.... (15,068) (4,831) (9,131) 1,369
-------- -------- -------- ---------
Deficit, end of period.......... $(18,655) $ (5,005) $(18,655) $ (5,005)
-------- -------- -------- ---------
-------- -------- -------- ---------
Basic and diluted net loss
per share (Note 5)............. $ (0.08) $ 0.00 $ (0.22) $ (0.15)
-------- -------- -------- ---------
-------- -------- -------- ---------
Shares used in basic and
diluted net loss per share
calculations (000s) (Note 5)... 43,746 43,669 43,708 43,545
-------- -------- -------- ---------
-------- -------- -------- ---------
CERTICOM CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands of U.S. dollars)
(Unaudited)
CANADIAN GAAP
Three months ended Nine months ended
January 31, January 31,
2009 2008 2009 2008
-------- -------- -------- ---------
Loss for the period............. $ (3,587) $ (174) $ (9,524) $ (6,374)
Other comprehensive income:
Net unrealized gain (loss)
on derivatives designated
as cash flow hedges
(Note 4)..................... 420 (1,275) (824) (218)
-------- -------- -------- ---------
Comprehensive loss.............. $ (3,167) $ (1,449) $(10,348) $ (6,592)
-------- -------- -------- ---------
-------- -------- -------- ---------
CERTICOM CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(Unaudited)
CANADIAN GAAP
Three months ended Nine months ended
January 31, January 31,
2009 2008 2009 2008
-------- -------- -------- ---------
Cash flows from operating
activities:
Loss for the period........... $ (3,587) $ (174) $ (9,524) $ (6,374)
Adjustments to reconcile
loss to net cash provided
by (used in) operating
activities:
Depreciation and
amortization............... 313 356 915 994
Stock-based
compensation............... 340 475 1,485 1,686
Amortization of lease
inducements................ (13) (13) (39) (39)
Changes in operating assets
and liabilities:
Accounts receivable and
unbilled receivables..... 461 (997) 350 1,815
Prepaid expenses and other
assets................... 52 168 99 216
Accounts payable.......... 200 (823) 862 (1,120)
Accrued liabilities....... 385 476 1,473 (477)
Deferred revenue.......... (480) (955) (1,169) (1,634)
Obligation under capital
lease.................... (6) 53 (21) 53
Other payables............ 420 - (824) (28)
-------- -------- -------- ---------
Net cash used in
operating activities... (1,915) (1,434) (6,393) (4,908)
Cash flows from investing
activities:
Purchase of property and
equipment.................... (75) (171) (400) (604)
Purchase of patents........... (191) (194) (621) (848)
Net maturity of marketable
securities................... 9,211 4,004 16,821 6,190
-------- -------- -------- ---------
Net cash provided by
(used in) investing
activities 8,945 3,639 15,800 4,738
Cash flows from financing
activities:
Proceeds from issuance of
common stock, net............ 41 3 93 2,094
Common shares repurchased
(Note 5)..................... - - - (306)
-------- -------- -------- ---------
Net cash provided by
financing activities... 41 3 93 1,788
Effect of exchange rate on cash
and cash equivalents........... (12) - (13) -
-------- -------- -------- ---------
Net increase (decrease) in cash
and cash equivalents........... (7,059) 2,208 9,487 1,618
Cash and cash equivalents,
beginning of period............ 4,069 2,807 1,641 3,397
-------- -------- -------- ---------
Cash and cash equivalents,
end of period.................. $ 11,128 $ 5,015 $ 11,128 $ 5,015
-------- -------- -------- ---------
-------- -------- -------- ---------
SOURCE Certicom Corp.