Financials

2007 Third-Quarter Financial Statements

Unaudited Condensed Consolidated Statements of Operations
Unaudited Condensed Consolidated Balance Sheets
Reconciliations of GAAP to Non-GAAP Measures
Forward Looking Guidance

ENTRUST, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data)
	Three Months Ended September 30		Nine Months Ended September 30
	2007	2006	2007	2006
	(unaudited)		(unaudited)
Revenues:
Product	$8,170	$8,788	$26,244	$22,754
Services and maintenance	15,773	15,243	46,755	44,430
Total revenues	23,943	24,031	72,999	67,184
Cost of revenues:
Product	1,815	1,246	5,785	4,420
Services and maintenance	7,205	7,252	22,412	21,700
Amortization of purchased product rights	355	319	1,032	738
Total cost of revenues	9,375	8,817	29,229	26,858
Total gross profit:	14,568	15,214	43,770	40,326
Operating expenses
Sales and marketing	8,207	9,710	26,113	24,431
Research and development	4,929	5,505	15,590	14,148
General and administrative	2,929	3,426	9,447	10,654
Restructuring charges and adjustments	-	-	-	2,765
Total operating expenses	16,065	18,641	51,150	51,998
Loss from operations	(1,497)	(3,427)	(7,380)	(11,672)
Other income (expense):
Interest income	188	363	544	1,945
Foreign exchange gain (loss)	(88)	(4)	(18)	(275)
Loss from equity investments	-	(51)	(77)	(344)
Writedown of long-term strategic and equity investments	-	-	-	(3,016)
Total other income (expense)	100	308	449	(1,690)
Loss before income taxes	(1,397)	(3,119)	(6,931)	(13,362)
Provision for income taxes	104	120	228	309
Net loss	$(1,501)	$(3,239)	$(7,159)	$(13,671)
Weighted average common shares used
Basic	60,987	59,807	60,717	59,814
Diluted	60,987	59,807	60,717	59,814
Net income (loss) per share
Basic	($0.02)	($0.05)	($0.12)	($0.23)
Diluted	($0.02)	($0.05)	($0.12)	($0.23)

ENTRUST, INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
	Sep. 30, 2007	Dec. 31, 2006
ASSETS
Cash and marketable investments	$21,470	$22,527
Accounts receivable, net of allowance for doubtful accounts	18,336	21,117
Other current assets	3,831	2,904
Property and equipment, net	1,786	2,721
Purchased product rights and purchased non-contractual customer relationships, net	12,154	13,843
Goodwill, net	60,214	60,214
Long-term strategic and equity investment	91	169
Other long-term assets, net	3,780	4,321
Total assets	$121,662	$127,816
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accruals	$16,226	$20,268
Accrued restructuring charges	20,578	24,518
Deferred revenue	28,152	23,575
Long-term liabilities	218	231
Total liabilities	65,174	68,592
Shareholders' equity	56,488	59,224
Total liabilities and shareholders' equity	$121,662	$127,816

The following supplemental tables provide non-GAAP financial measures used by the company's management to evaluate operational results. The company believes this information may be useful to investors. In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), the company's earnings release contains non-GAAP financial measures that exclude the income statement effects of share-based compensation, amortization of purchase product rights, non recurring restructuring and impairment charges. The non-GAAP financial measures disclosed by the company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

Set forth below are reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

For additional information regarding these non-GAAP financial measures, see the Form 8-K dated October 23, 2007 that Entrust has filed with the Securities and Exchange Commission.

ENTRUST, INC. SUPPLEMENTAL RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES (in thousands, except per share data)
	Three Months Ended September 30th		Nine Months Ended September 30th
	2007	2006	2007	2006
Reconciliation of net loss per GAAP to Non-GAAP loss:
GAAP net loss	$(1,501)	$(3,239)	$(7,159)	$(13,671)
Adjustments for share-based compensation expense:
Cost of revenues	77	68	225	191
Sales and marketing	305	282	933	635
Research and development	173	132	574	262
General and administrative	498	442	1,450	1,111
Amortization of other purchased intangibles:
Cost of revenues	38	51	114	51
Sales and marketing	209	217	666	251
Amortization of purchased product rights	355	319	1,032	738
Restructuring charges and adjustments		-	-	2,765
Write-down of long-term strategic and equity investments		-	-	3,016
Tax effect on Non-GAAP adjustments	-	-	-	-
Non-GAAP loss	$154	$(1,728)	$(2,165)	$(4,651)
Reconciliation of net loss per diluted share according to GAAP to Non-GAAP loss per diluted share:
GAAP net loss per diluted share	($0.02)	($0.05)	($0.12)	($0.23)
Adjustments for share-based compensation expense	0.01	0.01	0.05	0.04
Amortization of other purchased intangibles:	-	-	0.01	0.01
Amortization of purchased product rights	0.01	0.01	0.02	0.01
Restructuring charges and adjustments	-	-	-	0.04
Write-down of long-term strategic and equity investments	-	-	-	0.05
Tax effect on Non-GAAP adjustments	-	-	-	-
	0.02	0.02	0.08	0.15
Non-GAAP income (loss) per diluted share	$0.00	($0.03)	($0.04)	($0.08)
Weighted average common shares used	60,987	59,807	60,717	59,814

Forward Looking Guidance Earnings Per Share
	Second Half 2007	Full Year 2007
U.S. GAAP measure	($0.02)	($0.12)
Adjustments to exclude the effects of amortization of purchased intangible assets	$0.02	$0.04
Adjustments to exclude the effects of expenses related to stock-based compensation	$0.04	$0.08
Non-GAAP figures	$0.04	$0.00

Forward Looking Guidance Total Quarterly Costs
	Range Q4 2007
U.S. GAAP measure	$25.5
Adjustments to exclude the effects of amortization of purchased intangible assets	$0.6
Adjustments to exclude the effects of expenses related to stock-based compensation	$1.1
Non-GAAP figures	$23.8

Contact Us

Get Our Quote

NASDAQ

SEC Filings

Search Archives

Tools

Get Adobe Acrobat Reader