<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________TO __________
Commission file number 000-24389
VASCO DATA SECURITY INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 36-4169320
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1901 SOUTH MEYERS ROAD, SUITE 210
OAKBROOK TERRACE, ILLINOIS 60181
(Address of Principal Executive Offices)(Zip Code)
Registrant's telephone number, including area code: (630) 932-8844
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
As of September 30, 2000, 27,736,953 shares of the Company's Common
Stock, $.001 par value per share ("Common Stock"), were outstanding.
<PAGE> 2
VASCO DATA SECURITY INTERNATIONAL, INC.
FORM 10-Q
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE NO.
<S> <C> <C>
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets as of
December 31, 1999 and September 30, 2000 (Unaudited)............................. 3
Consolidated Statements of Operations (Unaudited)
for the three and nine months ended September 30, 1999 and 2000.................. 4
Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
for the three and nine months ended September 30, 1999 and 2000...................5
Consolidated Statements of Cash Flows (Unaudited)
for the nine months ended September 30, 1999 and 2000............................ 6
Notes to Consolidated Financial Statements....................................... 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................................ 7
Item 3. Quantitative and Qualitative Disclosures about Market Risk...................... 11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K................................................ 12
SIGNATURES................................................................................ 13
</TABLE>
------------------------
This report contains the following trademarks of the Company, some of which
are registered: VASCO, AccessKey, VACMan Server and VACMan/CryptaPak,
AuthentiCard and Digipass.
-2-
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
VASCO DATA SECURITY INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, September 30,
1999 2000
---- ----
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 2,576,494 $ 14,987,353
Accounts receivable, net of allowance for doubtful accounts
of $120,216 and $262,951 in 1999 and 2000, respectively 2,871,367 3,079,784
Inventories, net 805,382 800,232
Prepaid expenses 157,620 289,040
Deferred income taxes 83,000 83,000
Other current assets 925,334 530,820
------------ ------------
Total current assets 7,419,197 19,770,229
Property and equipment
Furniture and fixtures 1,246,555 1,342,369
Office equipment 1,013,870 1,272,400
------------ ------------
2,260,425 2,614,769
Accumulated depreciation (1,070,046) (1,224,948)
------------ ------------
1,190,379 1,389,821
Goodwill and other intangibles, net of accumulated amortization of
$3,134,000 and $3,518,243 in 1999 and 2000, respectively 1,989,960 1,452,796
Prepaid royalties and other assets 1,718,493 1,692,593
------------ ------------
TOTAL ASSETS $ 12,318,029 $ 24,305,439
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Current maturities of long-term debt $ 639,322 $ 99,918
Accounts payable 2,020,465 1,280,305
Unearned income 667,501 867,442
Accrued expenses 1,618,739 1,771,340
------------ ------------
Total current liabilities 4,946,027 4,019,005
Long-term debt, including stockholder note of $5,000,000 and $0
in 1999 and 2000, respectively 8,408,862 3,821,611
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.01 par value; 500,000 shares authorized; none
issued and outstanding - -
Common stock, $.001 par value - 75,000,000 shares authorized;
26,462,083 and 27,736,953 shares issued and outstanding in 1999
and 2000, respectively 26,462 27,737
Convertible preferred stock - 6,489,102
Additional paid-in capital 20,702,387 36,569,858
Accumulated deficit (21,873,340) (26,186,946)
Accumulated other comprehensive income-
cumulative translation adjustment 107,631 (434,928)
------------ ------------
Total stockholders' equity (deficit) (1,036,860) 16,464,823
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 12,318,029 $ 24,305,439
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
-3-
<PAGE> 4
VASCO DATA SECURITY INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1999 2000 1999 2000
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues $ 4,895,060 $ 5,669,766 $ 15,047,267 $ 17,746,210
Cost of goods sold 1,896,617 2,314,997 5,593,455 6,551,320
------------ ------------ ------------ ------------
Gross profit 2,998,443 3,354,769 9,453,812 11,194,890
------------ ------------ ------------ ------------
Operating costs:
Sales and marketing (exclusive of 1,175,142 2,493,742 3,975,261 6,701,638
$204,207 for the three and nine months
ended September 30, 2000,
respectively, reported below as
non-cash compensation)
Research and development 870,873 1,074,970 2,589,601 2,972,396
General and administrative (exclusive
of $467,461 for the three and nine
months ended September 30, 2000,
respectively, reported below as
non-cash compensation) 705,125 1,458,845 2,461,307 3,893,991
Non-cash compensation - 671,668 - 671,668
------------ ------------ ------------ ------------
Total operating costs 2,751,140 5,699,225 9,026,169 14,239,693
------------ ------------ ------------ ------------
Operating income (loss) 247,303 (2,344,456) 427,643 (3,044,803)
Interest expense (234,122) (63,000) (658,483) (275,764)
Other income (expense), net 39,019 160,942 (370,968) (919,002)
------------ ------------ ------------ ------------
Income (loss) before income taxes 52,200 (2,246,514) (601,808) (4,239,569)
Provision for income taxes 383,337 55,908 744,380 73,167
------------ ------------ ------------ ------------
Net loss (331,137) (2,302,422) (1,346,188) (4,312,736)
Accretion of warrants - (290,996) - (290,996)
------------ ------------ ------------ ------------
Net loss available to common stockholders $ (331,137) (2,593,418) (1,346,188) (4,603,732)
============ ============ ============ ============
Basic and diluted net loss per common
share $ (0.01) (0.09) (0.06) (0.17)
============ ============ ============ ============
Weighted average common shares
outstanding 26,648,570 27,477,514 22,538,597 27,180,606
============ ============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
-4-
<PAGE> 5
VASCO DATA SECURITY INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended September 30, Nine months ended September 30,
1999 2000 1999 2000
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net loss $ (331,137) $(2,302,422) $(1,346,188) $(4,312,736)
Other comprehensive income (loss)-
cumulative translation adjustment 98,698 (343,083) 198,393 (542,559)
----------- ----------- ----------- -----------
Comprehensive loss $ (232,439) $(2,645,505) $(1,147,795) $(4,855,295)
=========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
-5-
<PAGE> 6
VASCO DATA SECURITY INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine months ended September 30,
1999 2000
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (1,346,188) $ (4,312,736)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 851,710 840,142
Interest paid in shares of common stock 78,750 78,750
(Gain) loss on sale of fixed assets (16,096) 5,688
Non-cash compensation expense - 671,668
Changes in assets and liabilities:
Accounts receivable, net 1,161,600 (208,417)
Inventories, net 464,859 5,150
Other current assets (587,452) 263,094
Accounts payable 133,533 (740,160)
Unearned income (358,732) 199,941
Other accrued expenses (155,956) 152,601
Prepayment of royalties (1,100,000) -
------------ ------------
Net cash used in operating activities (873,972) (3,044,279)
------------ ------------
Cash flows from investing activities:
Acquisition of Secure Ware/DMIC (370,000) -
Other assets - (5,273)
Additions to property and equipment (347,954) (477,802)
------------ ------------
Net cash used in investing activities (717,954) (483,075)
------------ ------------
Cash flows from financing activities:
Proceeds from exercise of stock options/warrants 94,225 1,607,427
Net proceeds from sales of common stock 10,737,332 -
Issuance of convertible preferred stock 15,000,000
Proceeds from issuance of debt - 412,749
Repayment of debt (6,310,018) (539,404)
------------ ------------
Net cash provided by financing activities 4,521,539 16,480,772
------------ ------------
Effect of exchange rate changes on cash 198,393 (542,559)
------------ ------------
Net increase in cash 3,128,006 12,410,859
Cash, beginning of period 1,662,084 2,576,494
------------ ------------
Cash, end of period $ 4,790,090 $ 14,987,353
============ ============
Supplemental disclosure of cash flow information:
Interest paid $ 491,867 $ 188,826
Income taxes paid $ 266,170 $ 19,166
Supplemental disclosure of non-cash investing activities:
Stock issued for acquisition $ 698,300 $ -
Debt converted to preferred stock $ - $ 5,000,000
Accretion of warrants $ - $ 290,996
</TABLE>
See accompanying notes to consolidated financial statements.
-6-
<PAGE> 7
VASCO DATA SECURITY INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements include
the accounts of VASCO Data Security International, Inc. and its subsidiaries
(collectively, the "Company" or "VASCO") and have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission regarding
interim financial reporting. Accordingly, they do not include all of the
information and notes required by generally accepted accounting principles for
complete financial statements and should be read in conjunction with the audited
consolidated financial statements included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1999.
During the fourth quarter of 1999, the Company acquired IntelliSoft
Corp. in a transaction which has been accounted for under the
pooling-of-interests method. Accordingly, the consolidated financial statements
for the three and nine months ended September 30, 1999 have been restated as if
IntelliSoft had been combined for that period.
At the end of August 2000, the Company acquired Invincible Data Systems
(IDS) in a transaction which has been accounted for under the
pooling-of-interests method. A total of 322,565 shares were issued in this
transaction, which is deemed immaterial.
In the opinion of management, the accompanying unaudited consolidated
financial statements have been prepared on the same basis as the audited
consolidated financial statements, and include all adjustments, consisting only
of normal recurring adjustments, necessary for the fair presentation of the
results of the interim periods presented. All significant intercompany accounts
and transactions have been eliminated. The operating results for the interim
periods presented are not necessarily indicative of the results expected for a
full year.
NOTE 2- LONG-TERM DEBT
In April 2000, long-term debt held by a stockholder of the Company in
the amount of $5,000,000 was converted into 416,666 shares of common stock.
NOTE 3- STOCKHOLDERS' EQUITY
During the first quarter of 2000 the Company filed a registration
statement in connection with an offering of its common stock to the public. On
April 13, 2000, the Company terminated this offering due to the volatility of
market conditions. Costs related to this offering of $1,330,662 were written-off
and included in other expense in the consolidated statement of operations.
In July 2000, the Company issued 150,000 shares of preferred stock for
cash of $15,000,000. The preferred stock is convertible into 1,052,632 shares of
common stock at any time over the next 48 months. In conjunction with this
financing, the company issued warrants to purchase 789,474 common shares at $15
per share with an estimated imputed value using the Black-Scholes pricing model
of approximately $4.9 million and warrants to purchase 480,000 shares at $4.25
per share with an estimated imputed value using the Black-Scholes pricing model
of approximately $5.2 million. The warrants issued at $15 per share are
immediately exercisable. The warrants issued at $4.25 are exercisable over 48
months and the related imputed value is being accreted reducing earnings
available to common stockholders. Accretion of $291,000 was recognized in the
third quarter of 2000 as an increase of loss available to common stockholders.
-7-
<PAGE> 8
Non-cash compensation expense of $672,000 was recognized during the
third quarter of 2000. This charge is attributable to stock options issued to
officers of the Company that are located outside the US and whose services are
rendered under consulting agreements If these officers were employees located in
the US, no charge would be required.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
VASCO secures the enterprise from the mainframe to the Internet with
infrastructure solutions that enable and secure e-business and e-commerce,
protect sensitive information, and safeguard the identity of users. The
Company's family of DigipassT, VACMAN(R), and SnareWorksT products offers
end-to-end security through true Single Sign-On, access control and advanced
entitlements, web portal security, strong user authentication, and PKI
enablement, while sharply reducing the time and effort required to deploy and
manage security. VASCO's customers include hundreds of financial institutions,
blue-chip corporations, and government agencies in more than 50 countries, among
them John Hancock, ABN AMRO Bank, Shell, 3M, Ericsson, Rabobank, SEB, First
Union, Liberty Mutual, Cable and Wireless, Nokia, DaimlerChrysler, Volvo,
European Commission, US Coast Guard, University of Groningen, and Duke
University. VASCO's partners include Ubizen, Intel, Computer Associates, Lernout
& Hauspie, Check Point Software Technologies, and Novell.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
This Quarterly Report on Form 10-Q, including the "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
contains "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 concerning, among other things, the
prospects, developments and business strategies for the Company and its
operations, including the development and marketing of certain new products and
the anticipated future growth in certain markets in which the Company currently
markets and sells its products or anticipates selling and marketing its products
in the future. These forward-looking statements (i) are identified by their use
of such terms and phrases as "expected," "expects," "believe," "believes,"
"will," "anticipated," "emerging," "intends," "plans," "could," "may,"
"estimates," "should," "objective," and "goals" and (ii) are subject to risks
and uncertainties and represent the Company's present expectations or beliefs
concerning future events. The Company cautions that the forward-looking
statements are qualified by important factors that could cause actual results to
differ materially from those in the forward-looking statements, including (a)
risks of general market conditions, including demand for the Company's products
and services, competition and price levels and the Company's historical
dependence on relatively few products, certain suppliers and certain key
customers, and (b) risks inherent to the computer and network security industry,
including rapidly changing technology, evolving industry standards, increasing
numbers of patent infringement claims, changes in customer requirements, price
competitive bidding, changing government regulations and potential competition
from more established firms and others. Therefore, results actually achieved may
differ materially from expected results included in, or implied by these
statements.
COMPARISON OF THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30,
2000
The following discussion and analysis should be read in conjunction
with the Company's Consolidated Financial Statements for the three and nine
months ended September 30, 1999 and 2000.
Revenues
Revenues for the three months ended September 30, 2000 were $5,670,000,
an increase of $775,000, or 16%, as compared to the three months ended September
30, 1999. For the nine months ended September 30, 2000,
-8-
<PAGE> 9
revenues increased 18% to $17,746,000 from $15,047,000 in 1999. The decline in
Euro denominated currencies adversely impacted revenues. Using 1999 translation
rates, revenues in the first nine months of 2000 would have been 28% higher over
the same period last year. These increases can be attributed to strong demand in
the market place for the Company's security products.
Cost of Goods Sold
Cost of goods sold for the three months ended September 30, 2000 was
$2,315,000, an increase of $418,000, or 22%, as compared to the three months
ended September 30, 1999. For the nine months ended September 30, 2000, cost of
goods sold increased 17% to $6,551,000 from $5,593,000 in 1999. These increases
are due primarily to increased revenues for the periods.
Gross Profit
The Company's gross profit for the three months ended September 30,
2000 was $3,355,000, an increase of $356,000, or 12%, as compared to the three
months ended September 30, 1999. This represents a gross margin of 59%, as
compared to 61% for the same period of 1999. This decrease can be attributed to
an increase in high volume orders which are sold at a discount versus smaller
volume orders.
For the nine months ended September 30, 2000, gross profit was
$11,195,000, an increase of $1,741,000, or 18%, as compared to 1999. This
represents a gross margin of 63%, equally comparable to the same period in 1999.
Sales and Marketing Expenses
Sales and marketing expenses for the three months ended September 30,
2000 were $2,494,000, an increase of $1,319,000, or 112%, over the three months
ended September 30, 1999. Selling and marketing expenses also increased 69% in
the first nine months of 2000 to $6,702,000 from $3,975,000 in the first nine
months of 1999. This increase is due to increased sales efforts in both Europe
and the United States, including increased travel costs and an increase in
marketing activities. Also, higher recruiting and investor-related expenses
contributed to this variance. Additionally, the Company continues to invest in
its customer support infrastructure, which becomes more and more important as
the client base continues to expand.
Research and Development
Research and development costs for the three months ended September 30,
2000 were $1,075,000, an increase of $204,000, or 23%, as compared to the three
months ended September 30, 1999. Research and development costs increased 15% in
the first nine months of 2000 to $2,972,000 from $2,590,000 in the first nine
months of 1999. The Company continues to expand its research and development
activities to expand its product offerings and product functionality.
General and Administrative Expenses
General and administrative expenses for the three months ended
September 30, 2000 were $1,459,000, an increase of $754,000, or 107%, compared
to the three months ended September 30, 1999. General and administrative
expenses increased 58% in the first nine months of 2000 to $3,894,000 from
$2,461,000 in the first nine months of 1999. The Company's administrative
headcount increased from 10 during the nine months ended September 30, 1999 to
25 for the nine months ended September 30, 2000. These employees were added to
support administrative activities resulting from increased sales growth.
-9-
<PAGE> 10
The Company had non-cash compensation expense of $672,000 for the three
months ended September 30, 2000. This is related to stock options issued to two
officers of the Company who are headquartered in Belgium. For statutory reasons
in Belgium, these full time employees are employed under consulting agreements.
Under a recent accounting interpretation issued by the Financial Accounting
Standards Board (FASB) (FIN No. 44), these options must be treated as options to
non-employees and must be expensed using variable plan accounting over the
vesting period of the options. Variable plan accounting will result in
additional charges to expenses or recoveries of previously expensed amounts
depending on the Company's stock price at the end of each reporting period. The
magnitude of the charges or recoveries cannot be determined currently.
Interest Expense
Interest expense for the three months ended September 30, 2000 was
$63,000, compared to $234,000, a decrease of 73% from the same period of 1999.
Interest expense decreased 58% in the first nine months of 2000 to $276,000 from
$658,000 in the first nine months of 1999. This decrease is due to a reduction
in the debt base, facilitated by a private placement that occurred in April of
1999 and the conversion of $5,000,000 of debt to common stock which occurred in
April of 2000.
Other Income (Expense), net
Other income, net for the three months ended September 30, 2000 was
$161,000, compared to $39,000 for the same period of 1999. Other expense, net
for the nine-month period ended September 30, 2000 was ($919,000) compared to
($371,000) for the same period of 1999. The increase is due primarily to the
write-off of costs of $1,331,000 related to a public offering, which was
terminated during April of 2000 partially offset by a foreign currency gain.
Income Taxes
Income tax expense of $56,000 for the three months ended September 30,
2000 and $73,000 for the nine months ended September 30, 2000 relates to foreign
operations. This compares with income tax expense of $383,000 for the
three-month period ended September 30, 1999 and $744,000 for the nine-month
period ended September 30, 2000. The reduction in income tax expense is a result
of income tax planning strategies implemented by the Company during the fourth
quarter of 1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and cash equivalents were $14,987,000 at September
30, 2000, which is an increase of approximately $12,411,000 from $2,576,000 at
December 31, 1999. As of September 30, 2000, the Company had working capital of
$15,751,000.
At September 30, 2000 the Company had lines of credit from European
banks totaling approximately $3,700,000 of which approximately $1,700,000 was
unused.
Capital expenditures during the first nine months of 2000 were $478,000
and consisted primarily of computer equipment and office furniture and fixtures.
During April 2000, a convertible note in the amount of $5,000,000 was
converted into 416,666 shares of the Company's common stock.
-10-
<PAGE> 11
In July 2000, the Company issued 150,000 shares of preferred stock for
cash of $15,000,000. The preferred stock is convertible into 1,052,632 shares of
common stock at any time over the next 48 months. In conjunction with this
financing, warrants to purchase 789,474 common shares at $15 per share and
warrants to purchase 480,000 shares at $4.25 per share over the next 48 months
were also issued.
The Company generated a loss before taxes, interest, depreciation and
amortization, and offering costs of $1,839,000 for the three months ended
September 30, 2000 and $1,936,000 for the nine-month period ended September 30,
2000. The Company believes that its current cash balances, anticipated cash
generated from operations, and amounts available under its credit lines, will be
sufficient to meet its anticipated cash needs through the next twelve months.
The Company intends to seek acquisitions of businesses, products and
technologies that are complementary or additive to those of the Company. While
from time to time the Company engages in discussions with respect to potential
acquisitions, there can be no assurance that any such acquisitions will be made.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Financial Accounting Standards Board Interpretation No. 44 (FIN No.
44), "Accounting for Certain Transactions Involving Stock Compensation," an
interpretation of Accounting Principles Board Opinion No. 25, is effective for
financial statements beginning after July 1, 2000. The Company has evaluated the
impact of this pronouncement on its financial statements and has recorded a
charge as part of its operating expenses as "Non-cash compensation". The Company
has determined that options granted to two full-time executive officers are
deemed non-employees under FIN No. 44 because their services are rendered under
consulting agreements. This resulted in compensation expense charges of $672,000
in the third quarter of 2000. These options were accounted for using variable
plan accounting and the amounts of future compensation expense will be
determined based upon the Company's stock price at each reporting date.
During 1998, the FASB issued Statement of Financial Accounting
Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities, which is effective for all fiscal years beginning after September
15, 2000. SFAS No. 133 establishes a comprehensive standard for the recognition
and measurement of derivative instruments and hedging activities. The Company
does not expect the adoption of the new standard to have a material impact on
consolidated financial position, liquidity, or results of operations.
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin (SAB) No. 101, Revenue Recognition in Financial Statements,
as amended, which is effective no later than the fourth fiscal quarter of fiscal
2000. The Company does not expect the adoption of this accounting pronouncement
to have a significant impact on its results of operations, financial position or
cash flows.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in the Company's market risk during
the nine-month period ended September 30, 2000. For additional information,
refer to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS, None.
ITEM 2. CHANGES IN SECURITIES. None.
-11-
<PAGE> 12
ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS. None.
ITEM 5. OTHER INFORMATION. None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) The following exhibits are filed with this Form 10-Q or
incorporated by reference as set forth below:
Exhibit
Number Description
------ -----------
27 Financial Data Schedule.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed by the Registrant during
the quarter ended September 30, 2000.
-12-
<PAGE> 13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized, on November 13, 2000.
VASCO Data Security International, Inc.
/s/ Mario R. Houthooft
------------------------------------------
Mario R. Houthooft
Chief Executive Officer and President
/s/ Dennis D. Wilson
------------------------------------------
Dennis D. Wilson
Vice President and Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
EXHIBIT INDEX
-------------
Exhibit
Number Description
------ -----------
27 Financial Data Schedule.
-13-
