Revenue from continuing operations for the fourth quarter and full-year 2014 was $62.4 million and $201.5 million, respectively, an increase of 44% compared to the fourth quarter 2013 and an increase of 30% compared to full-year 2013. Operating income from continuing operations for the fourth quarter and full-year 2014 was $12.7 million and $38.1 million, respectively, an increase of 218% compared to the fourth quarter of 2013 and an increase of 178% compared to the full-year 2013.
VASCO Data Security International, Inc. (NASDAQ: VDSI), today reported financial results for the fourth quarter and full-year ended December 31, 2014.
Revenue from continuing operations for the fourth quarter of 2014 increased 44% to $62.4 million from $43.3 million in 2013 and, for the full-year 2014, increased 30% to $201.5 million from $155.0 million in 2013.
Net income from continuing operations for the fourth quarter of 2014 was $11.0 million, or $0.28 per fully diluted share, an increase of $7.7 million, or 233%, from $3.3 million, or $0.09 per fully diluted share, for the fourth quarter of 2013. Net income from continuing operations for the full-year 2014 was $32.6 million, or $0.83 per fully diluted share, an increase of $21.6 million, or 196%, from $11.0 million, or $0.28 per fully diluted share for the full-year 2013.
Net income, which includes the impact of our discontinued operations, was $11.9 million, or $0.30 per diluted share and $33.5 million, or $0.85 per diluted share for the fourth quarter and full-year 2014, respectively. Net income for the fourth quarter and full-year 2013 was $3.2 million, or $0.08 per diluted share and $11.1 million, or $0.28 per diluted share, respectively.
Financial Highlights:
Gross profit from continuing operations was $35.4 million or 57% of revenue for the fourth quarter of 2014 and $127.8 million or 63% of revenue for the full-year 2014. Gross profit was $27.8 million and $99.9 million for the fourth quarter and full-year 2013, respectively, which was 64% of revenue for both the fourth quarter and full-year 2013.
Operating expenses from continuing operations for the fourth quarter and full-year 2014 were $22.6 million and $89.7 million, respectively, a decrease of 5% from $23.8 million reported for the fourth quarter 2013 and an increase of 4% from $86.2 million reported for the full-year 2013.
Operating income from continuing operations for the fourth quarter and full-year 2014 was $12.7 million and $38.1 million, respectively, an increase of $8.7 million, or 218%, from $4.0 million reported for the fourth quarter of 2013 and an increase of $24.4 million, or 178%, from the $13.7 million reported for the full-year 2013. Operating income as a percentage of revenue was 20% and 19% for the fourth quarter and full-year 2014, respectively, compared to 9% for both the fourth quarter and full-year 2013.
Earnings before interest, taxes, depreciation and amortization from continuing operations was $14.2 million and $44.0 million for the fourth quarter and for the full-year 2014, respectively, an increase of 149% from $5.7 million reported for the fourth quarter of 2013 and an increase of 132% from $19.0 million reported for the full-year 2013.
Net cash balances, total cash and cash equivalents less bank borrowings, at December 31, 2014 totaled $137.4 million compared to $125.9 million and $98.6 million at September 30, 2014 and December 31, 2013, respectively.
Operational and Other Highlights:
VASCO launched two new DIGIPASS® Authenticators with Bluetooth capabilities. The DIGIPASS 875 is a smart card reader solution, and the DIGIPASS GO215 is a compact, one-button device offering powerful, portable and flexible two-factor authentication and digital signing.
VASCO announced the release of the latest version of DIGIPASS for Apps and DIGIPASS for Mobile application security suite. The enhanced solutions bring risk scoring and secure application-to-application communications to safeguard mobile applications and transactions from the latest attacks.
The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) implemented VASCO's two-factor authentication solutions to protect retail banking customers accessing the bank's online banking services.
Guidance for full-year 2015:
VASCO is providing guidance for the full-year 2015 as follows:
Revenue is expected to be in the range of $220 million to $230 million, and
Operating income as a percentage of revenue, excluding the amortization of purchased intangible assets, is projected to be in the range of 17% to 20%.
"Revenues for the fourth quarter and full-year 2014 were the best in the Company's history," stated T. Kendall Hunt, Chairman & CEO. "The results for 2014 reflected not only the markets' increased awareness of the need for our technology to safeguard their applications from the increased sophistication of hackers, but also the markets' recognition of the quality of our products and our reputation as a market leader in strong authentication. To maintain our market leadership position, we continued to strengthen our product line throughout 2014 for both our traditional markets as well as for markets that we believe will provide strong growth in the future. In 2014 our product enhancements included, but were not limited to, the integration of Cronto technology into our VACMAN Controller platform, the addition of Bluetooth capability to our one-button and card reader products, the enhancement of DIGIPASS for Apps and DIGIPASS for Mobile, which are products targeted at the mobile application market, our investment in the risk-based authentication business with the acquisition of Risk IDS and our continued investment in our cloud-based authentication services."
"We were very pleased with our operating performance in 2014," said Jan Valcke, VASCO's President and COO. "The results for the full-year 2014 reflected a 33% increase in revenues from the Banking market and an 18% increase in revenues from the Enterprise and Application Security market. The growth in revenues in the Banking market came from both our existing customers as well as the addition of significant new customers. The increase in revenues from existing customers reflected the sustainable, repeatable nature of revenues in our business model as existing customers replaced products they had purchased in prior years with current models of our traditional products as well as products with our new technology, such as our CrontoSign technology which displays a color cryptographic matrix to enable visual transaction signing. The results in 2014 also highlighted the leverage we have in our operating model as operating income as a percentage of revenue increased to 19% of revenue for the full-year 2014 compared to 9% of revenue for the full-year 2013."
Cliff Bown, Executive Vice President and CFO added, "Our balance sheet continued to strengthen as a result of our operating performance in 2014. At December 31, 2014, our net cash balances were $137.4 million, an increase of $38.8 million, or 39% from December 31, 2013. Similarly, at December 31, 2014 our working capital was $161.0 million, an increase of $36.5 million, or 29% from December 31, 2013. The increase in both cash and working capital resulted from our strong operating performance in 2014."
