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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): April 21, 1998
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Security Dynamics Technologies, Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-25120 04-2916506
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(Commission File Number) (I.R.S. Employer Identification No.)
20 Crosby Drive
Bedford, Massachusetts 01730
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(Address of Principal Executive Offices) (Zip Code)
(781) 687-7000
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
On April 21, 1998, Security Dynamics Technologies, Inc. (the "Company")
reported financial results for the first quarter of 1998. Revenue for the first
quarter increased 37% to $40.2 million, from $29.3 million for the first quarter
of 1997. Before non-recurring items, earnings for the quarter were $5.7 million
($0.14 per share on a diluted basis), compared to $4.9 million ($0.12 per share
on a diluted basis) for the same period in 1997. The reported net income for the
first quarter of 1998 was $3.0 million ($0.07 per share on a diluted basis),
which included non-recurring expenses of $2.8 million ($2.7 million after taxes)
from merger acquisition costs and purchased technology.
The full text of the Company's press release is filed as Exhibit 99 to
this Current Report on Form 8-K and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) EXHIBITS.
Exhibit No. Description
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99 Press Release
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: April 22, 1998 SECURITY DYNAMICS TECHNOLOGIES, INC.
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(Registrant)
By: /s/ Marian G. O'Leary
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Marian G. O'Leary
Senior Vice President, Finance
Chief Financial Officer and Treasurer
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EXHIBIT INDEX
Exhibit No. Description
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99 Press Release
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EXHIBIT 99
Security Dynamics Reports First Quarter Results; First Quarter Net
Income Up 17% and Revenue Up 37%
BEDFORD, Mass., April 21 -- Security Dynamics Technologies, Inc. (Nasdaq: SDTI
news) today reported financial results for the first quarter of 1998. Revenue
for the first quarter increased 37% to $40.2 million, from $29.3 million for the
first quarter of 1997. Before non-recurring items, earnings for the quarter were
$5.7 million ($0.14 per share on a diluted basis), compared to $4.9 million
($0.12 per share on a diluted basis) for the same period in 1997.
The reported net income for the first quarter of 1998 was $3.0 million ($0.07
per share on a diluted basis), which included non-recurring expenses of $2.8
million ($2.7 million after taxes) from merger acquisition costs and purchased
technology.
Charles R. Stuckey, Jr., chairman, president, and CEO of Security Dynamics,
commented, "While we are not pleased with these results, we nonetheless remain
confident in our long-term market opportunity, and current and long-term product
strategies. Clearly, we have work to do, but we possess the management team,
technologies and product strategies to get the job done."
About Security Dynamics
Security Dynamics Technologies, Inc. (Nasdaq: SDTI - news) is a leading provider
of enterprise network and data security solutions that help companies conduct
business securely, protect corporate information assets and facilitate
business-to-business electronic commerce. With more than 2.5 million users of
its SecurID(R) authentication technology, Security Dynamics is the world leader
in two-factor user identification and authentication. RSA Data Security, Inc., a
wholly owned subsidiary of Security Dynamics, is a leading supplier of software
components that secure electronic data, with more than 300 million of copies of
RSA encryption and authentication software and technologies installed worldwide.
RSA technologies are part of existing and proposed standards for the Internet
and World Wide Web, ISO, ITU-T, ANSI, IEEE, and business, financial and
electronic commerce networks around the globe. Security Dynamics and RSA can be
found on the World Wide Web at http://www.securitydynamics.com and
http://www.rsa.com, respectively.
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Condensed Consolidated Statements of Operations
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1998 1997(A)
<S> <C> <C>
Revenue $40,246 $29,319
Gross profit 31,629 22,863
Operating expenses:
Research and development 7,113 3,948
Marketing and selling 13,480 8,869
General and administrative 4,718 3,589
Purchased technology 210 --
Merger expenses 2,600 --
Total operating expenses 28,121 16,406
Income from operations 3,508 6,457
Interest and other income 2,658 1,275
Provision for income taxes 3,202 2,863
Net income $ 2,964 $ 4,869
Net income per share - basic $ 0.07 $ 0.13
Net income per share - diluted $ 0.07 $ 0.12
Shares used in per share
calculation - basic 40,666 38,480
Shares used in per share
calculation - diluted 42,152 40,083
Condensed Consolidated Balance Sheets
(In thousands)
<CAPTION>
March 31, December 31,
1998 1997(A)
<S> <C> <C>
Cash and marketable securities $165,142 $164,659
Accounts receivable 25,215 27,551
Total assets 233,579 233,975
Stockholders' equity $205,344 $200,653
</TABLE>
NOTE(A): Restated to reflect the acquisition of Intrusion Detection, Inc. in
March 1998, which has been accounted for as a pooling of interests.
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The following table sets forth pro forma unaudited supplemental results
of operations of the Company for each of the quarters in the year ended December
31, 1997, the year ended December 31, 1997 and the quarter ended March 31, 1998.
This information reflects the Company's acquisition of Intrusion Detection Inc.
in March 1998 and excludes certain non-recurring items. The following operating
results are not necessarily indicative of future results of operations.
Condensed Consolidated Statements of Operations
Excluding non-recurring items
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three
Three Months Ended Months
---------------------------------------------- Year Ended
31-Mar 30-Jun 30-Sep 31-Dec Ended 31-Mar
1997 1997 1997 1997 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Revenue $29,319 $34,255 $35,928 $41,129 $140,631 $40,246
Gross Profit 22,863 27,468 29,034 32,562 111,927 31,629
Recurring Operating Expenses:
Research and development 3,948 4,998 5,753 6,270 20,969 7,113
Marketing and selling 8,869 10,301 10,593 12,162 41,925 13,480
General and administrative 3,589 4,619 4,434 4,535 17,177 4,718
Total recurring operating
expenses 16,406 19,918 20,780 22,967 80,071 25,311
Operating income on ordinary
activities 6,457 7,550 8,254 9,595 31,856 6,318
Interest income and other 1,275 1,458 1,272 1,806 5,811 2,658
Provision for income taxes 2,863 3,302 3,620 4,267 14,052 3,280
Net income on ordinary
activities $ 4,869 $ 5,706 $ 5,906 $ 7,134 $ 23,615 $ 5,696
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Net income per share on
ordinary activities
- basic $ 0.13 $ 0.15 $ 0.15 $ 0.18 $ 0.61 $ 0.14
Net income per share on
ordinary activities
- diluted $ 0.12 $ 0.14 $ 0.15 $ 0.17 $ 0.58 $ 0.14
Shares used in per share
calculation
- basic 38,480 38,656 38,629 40,016 38,956 40,666
Shares used in per share
calculation
- diluted 40,083 40,311 40,448 41,667 40,648 42,152
</TABLE>
