Select countryLysaker, 8 February 2001
–Norman ASA had net revenues of kr 200 million in 2000. This was 12% more than last year, as adjusted for the Ibas repairs business which was sold in the year. The company has carried out the split into divisions which was announced in October.
The EBITDA result was breakeven for year 2000 and reflects the company's strategy for 2000 of investing profits from the Virus Control and Data Recovery business units into Security Solutions, where a high future growth is anticipated. The operating loss for 2000 was kr 13.9 million compared to an operating loss of kr 6.0 million in 1999. The pre-tax loss was kr 11.1 million compared to a pre-tax profit of kr 0.3 million in 1999. The result after tax was kr 4 mill.
- The fourth quarter ended very well, says President and CEO Bjørn Fosli. -We are very satisfied that December was the best month ever for Norman, especially as sales in December 1999 were also very high on account of the year 2000 effect. -The positive trend for Norman has also continued into January 2001.
The renewals revenue base for Norman Virus Control at the start of 2001 was kr 70 million, a strong increase from kr 38 million at the start of 2000.
Normans US subsidiary had a very positive development through 2000, growing more than 100% to a revenue of kr 15 million with a positive cash flow.
The planned focus on Norman Security Solutions, with among other things the acquisition of the PKI-product rights and development team in the Czech Republic, is a long term investment in a market which is growing very strongly and which has resulted in an increase in the group's cost base as compared to previous periods.
Virus Control developing positively
The core business of Norman, Virus Control, had a revenue growth of 16% in 2000. A delay in the launch of Norman Virus Control 5.0 to 1stDecember resulted in a growth rate that was lower than expected. Following the launch however, the level of incoming orders has increased throughout the group and December 2000 was all time high. This is especially positive given the high demand for virus control software in December 1999.
In November, an agreement was signed with Network Technical AB, Sweden's largest pc-producer, to deliver Norman Virus Control with all of the company's home-pc's. This agreement is considered to be a breakthrough for Norman's activities in Sweden, and in addition to revenue will give Norman good exposure in the Swedish market.
Norman Personal Firewall, which was also launched in December 2000, has been extremely well received in the market and together with Norman Privacy means that Norman now, with the most up to date products in the market, has a very competitive solution to offer within the field of Internet protection in 2001.
Norman Security Solutions positioning itself for growth in an exciting market – continuing investments planned for 2001
Norman Security Solutions had net revenues of kr 2.6 million in the fourth quarter, compared to kr 3.5 million in the first three quarters combined. A framework agreement worth kr 30 million over 3 years was signed in October with the Korean company, FireTek. The agreement covers all of Norman's products, but mainly Norman Access Control, and gives FireTek exclusivity in the Korean, Japanese and Chinese markets for the period of the contract.
From January 2001, Norman Security Solutions has been established as a separate company with a separate management team, and is experiencing a strong increasing interest for its products. The new strategy for the company, where customers are being offered a risk analysis prior to being offered products, makes Norman Security Solutions unique in its field. The company has established a partner network comprising companies such as EDS and PwC in the US and Siemens in Germany. Even though an operating loss is also expected for this business unit in 2001 on account of investment in building distribution channel, Norman is now well positioned for growth within this field. The order reserve at the start of 2001 is also satisfying.
Ibas with a good operating result – merger process with Vogon on course
Ibas had a very good operating result for the year, with an EBITDA margin of 28%. This despite a somewhat weaker operating result than expected in the fourth quarter as a result of costs related to the restructuring of its activities in England in advance of the planned merger with the British-based Vogon.
Ibas has in 2000 started an activity within the area of Computer Forensics. Computer Forensics is an area of strong growth as electronic traces are central in an increasing number of conflicts. Ibas will assist the police, crime authorities, public and private companies to find and document electronic evidence in connection with investigations and trials. Ibas has already in the autumn of 2000 completed several successful projects within this area.
In connection with the official report following the tragic Sleipner-accident Ibas has received very honorable mention from the commission investigating the accident for its endeavors to recover data from the central navigation equipment on board the ship. Even though the equipment had been submerged in salt water for more than 6 months and was heavily damaged from the crash, Ibas succeeded in recovering most of the data from the equipment. It is hardly likely that any other company, within or outside Norway, has a technology to do the same.
The merger process with Vogon is progressing as planned and is expected to be finalised in the first quarter 2001. After the merger, the company will be the largest in Europe within the fields of Data Recovery and Computer Forensics and will have a healthy market share in the most important European markets.
The positive closure of 2000 continuing into 2001
December was the best month in the company's history. The company has continued this positive trend into 2001 and the management of all three divisions are confident of achieving the revenue growth and result targets that were previously presented in connection with the third quarter press conference. The board and management of Norman has a growth target of 25% with a positive operating result for 2001.
Norman ASA is a leading company within the field of data security, and has products and services for virus control, access control, encryption, network security, secure data erasure and data recovery. There are currently more than 12 million users of Norman's products worldwide. Norman has approximately 220 employees and is represented by subsidiaries and strategic alliances in USA, Europe, Asia and Australia. The company is headquarted at Lysaker outside Oslo, Norway.
Norman ASA Consolidated income statements (only annual figures are subject to statutory audit)
| (NOK 1 000) | 4Q00 | 4Q99 | 4Q98 | 2000 | 1999 | 1998 | |
| (note 2) | unaudited | audited | audited | ||||
| Net revenues | 50 374 | 59 620 | 40 804 | 200 298 | 199 448 | 151 638 | |
| Cost of materials | 1 932 | 4 473 | 6 192 | 15 019 | 16 612 | 17 382 | |
| Personnel costs | 31 419 | 31 521 | 29 429 | 118 523 | 103 510 | 90 307 | |
| Depreciation/amortisation | 4 361 | 3 436 | 7 484 | 15 607 | 14 093 | 17 943 | |
| Other operating expenses | 19 713 | 17 643 | 19 551 | 65 026 | 67 943 | 65 408 | |
| Bad debt expenses | 596 | 21 | 4 085 | -5 | 4 123 | 4 498 | |
| Restructuring costs | - | - | 21 835 | 69 | -809 | 21 835 | |
| Total operating expenses | 58 021 | 57 094 | 88 576 | 214 239 | 205 472 | 217 373 | |
| Operating result | -7 647 | +2 526 | -47 772 | -13 941 | -6 024 | -65 735 | |
| Result from affiliates | 280 | -10 | -78 | 449 | -42 | -4 951 | |
| Net financial items | 623 | 1 205 | 2 745 | 2 417 | 6 362 | 4 178 | |
| Result before tax | -6 744 | +3 721 | -45 105 | -11 075 | +296 | -66 508 | |
| Tax (credit)/charge (note 3) | -15 471 | 1 106 | -87 | ||||
| Minority interest | 399 | 615 | -479 | ||||
| Result after tax | +3 997 | -1 425 | -65 942 | ||||
| Result before tax per share | - kr 0,65 | + kr 0,37 | - kr 4,56 | - kr 1,06 | + kr 0,03 | - kr 7,06 |
Norman ASA Proforma consolidated income statements ex. Ibas' repair business
| (NOK 1 000) | 4Q00 | 4Q99 | 2000 | 1999 | |
| (note 2) | unaudited | audited | |||
| Net revenues | 50 067 | 49 120 | 180 791 | 161 023 | |
| Cost of materials | 1 304 | 1 498 | 8 867 | 5 760 | |
| Personnel costs | 30 978 | 26 469 | 109 310 | 85 125 | |
| Depreciation/amortisation | 4 162 | 3 095 | 14 797 | 12 721 | |
| Other operating expenses | 19 353 | 14 921 | 58 660 | 57 160 | |
| Bad debt expenses | 213 | -83 | -415 | 3 963 | |
| Restructuring costs | 69 | -809 | |||
| Total operating expenses | 56 010 | 45 900 | 191 288 | 163 920 | |
| Operating result | -5 943 | 3 220 | -10 497 | -2 897 | |
| Result from affiliates | 280 | -10 | 449 | -42 | |
| Net financial items | 623 | 1 205 | 2 417 | 6 362 | |
| Result before tax | -5 040 | 4 415 | -7 631 | 3423 | |
| Tax (credit)/charge (note 3) | -15 471 | 1 106 | |||
| Minority interest | 399 | 615 | |||
| Result after tax | 7 441 | 1 702 | |||
| Result before tax per share | - kr 0,49 | + kr 0,44 | - kr 0,73 | + kr 0,35 |
Analysis of revenue and operating margin by product group – January to December 2000
| (NOK 1 000) | Virus control | Security solutions | Data recovery | Secure eraser | Other (incl repairs sold Jun00) | Total | |||||
| Net revenues | 122 585 | 6 136 | 47 469 | 2 772 | 21 336 | 200 298 | |||||
| EBITDA – earnings before interest, tax, dep'n, amortis'n | +20 741 | -27 355 | +13 347 | -7 452 | - 66 | -785 | |||||
| 17% | 28% | ||||||||||
| Dep'n, amortis'n & one-off items | -13 156 | ||||||||||
| Operating result | -13 941 |
Analysis of research & development costs included in total operating expenses
| (NOK 1 000) | 4Q00 | 4Q99 | 4Q98 | 2000 | 1999 | 1998 | |
| unaudited | audited | audited | |||||
| R&D costs | 11 747 | 8 034 | 6 747 | 39 202 | 28 778 | 22 951 | |
| Total operating expenses | 58 021 | 57 094 | 88 576 | 214 239 | 205 472 | 217 373 |
Analysis of net financial items
| (NOK 1 000) | 4Q00 | 4Q99 | 4Q98 | 2000 | 1999 | 1998 | |
| unaudited | audited | audited | |||||
| Sale of investments | - | 1 595 | 517 | - | 4 088 | 5 834 | |
| Other financial income | 788 | 650 | 2 430 | 3 360 | 3 882 | 1 856 | |
| Other financial expenses | 165 | 1 040 | 202 | 943 | 1 608 | 3 512 | |
| Net financial items | 623 | 1 205 | 2 745 | 2 417 | 6 362 | 4 178 |
Norman ASA Consolidated balance sheets (only annual figures are subject to statutory audit)
| (Figures in NOK 000) | 31 Dec 00 | 31 Dec 99 | |
| unaudited | audited | ||
| Long term assets | |||
| Intangible assets (note 4) | 30 001 | 3 569 | |
| Goodwill | 17 656 | 20 461 | |
| Tangible fixed assets | 13 655 | 17 168 | |
| Shares in affiliates | - | 69 | |
| Deferred tax asset | 13 830 | - | |
| 75 142 | 41 267 | ||
| Current assets | |||
| Inventory | 1 044 | 3 002 | |
| Accounts receivable | 29 322 | 26 672 | |
| Other short term receivables | 6 765 | 10 369 | |
| Cash | 50 302 | 81 562 | |
| 87 433 | 121 605 | ||
| Total assets | 162 575 | 162 872 | |
| Equity | |||
| Share capital | 104 977 | 103 791 | |
| Less: own shares | -266 | - | |
| Share premium reserve | 21 604 | 19 724 | |
| Other equity | -16 633 | -19 514 | |
| Minority interest | 1 265 | 1 870 | |
| 110 947 | 105 871 | ||
| Long term liabilities | |||
| Pension liabilities | 1 007 | 1 544 | |
| Bank loan | 4 096 | 6 963 | |
| Deferred income - long term | 2 757 | 3 370 | |
| Other long term liabilities | - | 48 | |
| 7 860 | 11 925 | ||
| Current liabilities | |||
| Bank overdraft | 350 | 1 456 | |
| Accounts payable | 8 855 | 7 103 | |
| Taxes payable | 538 | 197 | |
| Payroll tax, VAT, social tax etc | 12 578 | 13 776 | |
| Deferred income - current | 9 086 | 10 688 | |
| Other current liabilities | 12 361 | 11 856 | |
| 43 768 | 45 076 | ||
| Total liabilities and equity | 162 575 | 162 872 |
Notes to the consolidated financial statements
- Figures for 1998 have been restated and reclassified in accordance with the new Norwegian Accounting Law effective from 1st January 1999. There were no material adjustments arising from the implementation.
- Results for the repairs business of Ibas AS have been consolidated up to 1st June 2000, the effective date of sale to InfoCare ASA. Comparative figures have not been restated for this.
- In 4Q00, the deferred tax asset relating to tax losses carried forward by the parent company was recognised in the accounts. This is treated as a change of estimate and is in accordance with generally accepted accounting practice.
- The intangible product rights acquired from AEC Ltd represents a strategic investment that will expand the functionality of Norman's existing security solution product range to incorporate public key infrastructure and digital signature technology. Accordingly, the product rights are deemed to provide significant future value over the long term and is therefore being amortised over a period of 15 years.