Select countryLysaker, 22 May 2001
Norman ASA has decided to spin off the security solutions division to its shareholders. Security solutions will require substantial investment in 2001 and 2002 before break-even is expected in 2003.
President and CEO Henning Hansen says that it is right for Norman to focus on those areas of the company that are profitable and where the company is a leading vendor. Concentrating its resources on the virus control and Ibas divisions should allow growth and profitability to increase.
Security Solutions has great potential but requires long term investment in a market that in many ways is not yet mature. The best way to realise this potential is by attracting a partner. The up-side is large and a spin off will allow Norman ASA's shareholders to take part in this future increase in value.
Norman ASA had net revenue of kr 50 million in the 1st quarter 2001. This is 13% more than the same period last year and is similar to 4th quarter 2000, as adjusted for the sale of Ibas repairs business. Virus control and Ibas had net revenue of kr 48.3 million compared to kr 43.2 million in 1st quarter 2000. The EBITDA was kr 7.6 million. Security Solutions had net revenue of kr 1.7 million compared to kr 1.2 million in 1st quarter 2000. The EBITDA was minus kr 12.7 million. - Ibas has had a strong performance with a revenue growth of over 39% compared to the same period last year. Virus control has also had an good development in the 1st quarter, which looks likely to strengthen in the second quarter, says Henning Hansen, the new President and CEO of Norman ASA. Norman Security Solutions has continued its planned investment in building out its distribution channels in the Nordic countries, in Germany and in USA, and in addition has started an active search for an industrial partner that can give the business unit more distribution strength.
Continued growth in Virus Control
Virus control, the core business of Norman, had net revenue of kr 32 million in the 1st quarter 2001, a 2% increase compared with the same period last year. Norman Virus Control version 5 has now been released in all markets, and Norman Virus Control has received the two most recent Virus Bulletin "100% awards" as well as a renewed Check Mark approval - concrete proof as to the high quality of the product. Focusing on the ISP market began to give results in the 1st quarter with agreements signed with several Norwegian based ISP's. This concept, which is unique to Norman, is now being extended to the other Nordic countries and the rest of Europe. - This is a concept that we strongly believe in, says Jan Kristensen, who is responsible for the Norman Virus Control division. - We are still the only vendor to have a good concept for this niche, and believe that our competitors will have difficulties in copying this concept as they, in contrast to Norman, are more strongly involved in the Business to Consumer market and will therefore undermine their own distribution strategy.
The activities undertaken in Denmark and Sweden have also given results with, for example, an ISP agreement with one of Denmark's leading telecom companies. Management is very positive to the future growth prospects in the Swedish and Danish markets. In the 1st quarter 2001, Norman has entered into the following agreements:
- Agreement with NextGenTel to offer Norman Virus Control, Norman Personal Firewall and Norman Privacy to its customers
- Agreement with a Danish telecom company to offer Norman Virus Control, Norman Personal Firewall and Norman Privacy to its customers
Strong growth in Ibas
In the 1st quarter 2001, Ibas had a revenue growth of over 39% compared to the same period last year. This is due to growth within both data recovery and computer forensic. - We are actively going out and marketing computer forensic, and have had a positive development within this business area, says Arve Saghaug, managing director of Ibas. Ibas has been profiled in connection with the case between Accenture and Bekk Consulting. The company currently has the necessary competence and software to deal with computer forensic cases and has recruited people with the necessary competence, including those with police experience.
The secure eraser business has also had a positive development with a revenue growth of over 100% compared to the same period last year. During the period, there have been several large secure eraser cases that continually give revenue.
Norman Security Solutions - strong focus on risk analysis after success in the US
Norman Security Solutions had net revenue of kr 1.7 million in the 1st quarter 2001, compared to kr 1.2 million in the same period last year; a growth of 42%. Security solutions management recognises that work carried out to build up partners will give good opportunities over time. During the quarter, the business unit's strategy of focusing on risk analysis has given results in the form of an agreement with the US company, ICS, to use Norman Risk Check, as well as the first completed Risk Check project in Norway. In May, Norman signed an agreement PricewaterhouseCoopers in the US where PwC will use Norman's technology and products within PKI, access control and Risk Check on customer engagements.
In February, a process was also started to transfer the development currently taking place in Australia to Norman's development department in the Czech Republic. In addition to increasing the effectiveness of the development process, this will also lead to a significant reduction in the development costs for the division from the end of this year.
The division's market focus is in the Nordic countries, Germany and the US. A successful positioning of this in the US market in 4th quarter 2000 and 1st quarter 2001 has led to partnerships with EDS, SRA, ICS and PwC. The objective is now to extend our existing US partnerships into Europe as well as sign up additional partners. The cooperation with Siemens is strategic and we are working to extend this into several new areas.
With its focus on virus control and Ibas, Norman ASA has a good basis for solid growth and profitability within its core business areas. The company will through this and through forging new alliances be well positioned for the future.
Enclosed is a summary of the preliminary financial statements for the 1st quarter 2001.
For further information, please contact Svein Ramsay Goli, Chairman of the Board of Norman ASA (mob + 47 907 56 757) or Henning Hansen, President & CEO of Norman ASA, (tel + 47 67 10 97 17; mob + 47 908 81 192) /www.norman.no
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) | 1Q01 | 1Q00 | 2000 | |
| Net revenues | 49 962 | 54 957 | 200 298 | |
| Cost of materials | 3 793 | 4 781 | 15 019 | |
| Personnel costs | 32 113 | 29 411 | 118 523 | |
| Depreciation/amortisation | 3 515 | 3 744 | 15 607 | |
| Other operating expenses | 18 583 | 16 851 | 65 095 | |
| Bad debt expenses | 1 378 | -957 | -5 | |
| Total operating expenses | 59 382 | 53 830 | 214 239 | |
| Operating result | -9 420 | +1 127 | -13 941 | |
| Net financial items | -209 | 760 | 2 866 | |
| Result before tax | -9 629 | +1 887 | -11 075 | |
| Tax charge/(credit) | 593 | 372 | -15 471 | |
| Minority interest | 216 | 194 | 399 | |
| Result after tax | -10 438 | +1 321 | +3 997 | |
| Result before tax per share | - kr 0,92 | + kr 0,18 | - kr 1,06 |
Proforma consolidated income statement – Norman Group excluding Ibas repairs business
Results for the repairs business of Ibas AS have been consolidated in the Norman Group accounts up to 1st June 2000, the effective date of sale to InfoCare ASA. Comparative figures in the consolidated income statement above have not been restated for this. The table below sets out the proforma figures for the Norman Group excluding the results of the Ibas repairs business.
| (NOK 1 000) | 1Q01 | 1Q00 | 2000 | |
| Net revenues | 49 962 | 44 389 | 180 791 | |
| Cost of materials | 3 793 | 2 132 | 9 781 | |
| Personnel costs | 32 113 | 24 364 | 107 713 | |
| Depreciation/amortisation | 3 515 | 3 068 | 12 771 | |
| Other operating expenses | 18 583 | 14 682 | 64 494 | |
| Bad debt expenses | 1 378 | -957 | -769 | |
| Total operating expenses | 59 382 | 43 289 | 193 990 | |
| Operating result | -9 420 | +1 100 | -13 199 | |
| EBITDA – earnings before interest & tax | -5 905 | +4 168 | -428 |
Norman ASA Income statement analysis by business unit – January - March 2001
The analysis given below is being presented for the first time for this quarter. No comparative figures for 1st quarter 2000 and 2000 are therefore available.
| (NOK'000) | Norman Group | Virus control | Ibas | Security solutions | Corporate |
| Net revenue | 49 962 | 32 252 | 15 967 | 1 743 | - |
| Cost of materials | 3 793 | 2 356 | 1 399 | 39 | - |
| Ibas production costs | 3 878 | - | 3 878 | - | - |
| R&D costs | 11 413 | 6 464 | 308 | 4 641 | - |
| Sales costs | 25 627 | 14 743 | 4 395 | 6 489 | - |
| Marketing costs | 3 378 | 1 741 | 1 060 | 576 | - |
| G&A costs | 6 400 | 1 887 | 2 179 | 1 505 | 829 |
| Loss on receivables | 1 379 | 204 | 0 | 1 175 | - |
| Depreciation | 1 713 | 817 | 697 | 199 | - |
| Amortisation | 1 801 | 948 | 419 | 434 | - |
| Operating expenses | 59 382 | 29 160 | 14 335 | 15 058 | 829 |
| Operating result | -9 420 | +3 092 | +1 632 | -13 315 | -829 |
| EBITDA – earnings before interest & tax | -5 906 | +4 857 | +2 748 | -12 682 | -829 |
Other notes to the consolidated financial statements.
- The quarterly report has been prepared in accordance with the same accounting principles that are set out in the annual report for 2000.
- In the opinion of the company's management and board, there are no other significant note disclosures required in accordance with the draft Norwegian accounting standard for quarterly reports that was issued in autumn 2000
Norman ASA Consolidated balance sheets (only annual figures are subject to statutory audit)
| 31 Mar 01 | 31 Mar 00 | 31 Dec 00 | ||
| Long term assets | ||||
| Intangible assets | 29 706 | 5 885 | 30 001 | |
| Goodwill | 16 742 | 21 141 | 17 656 | |
| Tangible fixed assets | 13 986 | 16 338 | 13 654 | |
| Deferred tax asset | 17 258 | 0 | 17 258 | |
| 77 692 | 43 364 | 78 570 | ||
| Current assets | ||||
| Inventory | 689 | 3 146 | 1 044 | |
| Accounts receivable | 23 042 | 30 673 | 29 322 | |
| Other short term receivables | 7 921 | 6 916 | 6 755 | |
| Shares and other investments | 10 | 10 | 10 | |
| Cash | 44 642 | 77 083 | 50 302 | |
| 76 304 | 117 828 | 87 433 | ||
| Total assets | 153 996 | 161 192 | 166 003 | |
| Equity | ||||
| Share capital | 104 977 | 103 791 | 104 977 | |
| Own shares | -266 | 0 | -266 | |
| Share premium reserve | 21 604 | 19 724 | 21 604 | |
| Other paid in capital | 662 | 0 | 662 | |
| Other equity | -28 271 | -17 951 | -17 295 | |
| Minority interest | 1 481 | 1 242 | 1 265 | |
| 100 187 | 106 806 | 110 947 | ||
| Long term liabilities | ||||
| Pension liabilities | 470 | 1 544 | 1 007 | |
| Bank loan | 3 573 | 6 984 | 4 096 | |
| Deferred income - long term | 2 513 | 3 330 | 2 757 | |
| Deferred tax liability | 3 344 | 48 | 3 428 | |
| 9 900 | 11 906 | 11 288 | ||
| Current liabilities | ||||
| Bank overdraft | 593 | 1 273 | 350 | |
| Accounts payable | 9 025 | 7 801 | 8 855 | |
| Taxes payable | 1 116 | 306 | 538 | |
| Payroll tax, VAT, social tax etc | 10 471 | 11 542 | 12 578 | |
| Deferred income - current | 8 926 | 8 668 | 9 086 | |
| Other current liabilities | 13 778 | 12 890 | 12 361 | |
| 43 909 | 42 480 | 43 768 | ||
| Total liabilities and equity | 153 996 | 161 192 | 166 003 |
Norman ASA Consolidated cashflow statement (only annual figures are subject to statutory audit)
| (Figures in NOK 000) | Group | Group | Group | |
| 1Q01 | 1Q00 | 2000 | ||
| Cashflow from operating activities | ||||
| Result before tax | -9 629 | 1 887 | -11 075 | |
| Depreciation / amortisation | 3 514 | 3 744 | 15 607 | |
| Bad debt expenses | 1 379 | 1 161 | -5 | |
| (Profit)/loss on sale of fixed assets | -17 | -1 | -4 152 | |
| Payment of tax / pensions | -646 | -263 | -1 452 | |
| Other items | -4 | -493 | -1 583 | |
| Changes in assets & liabilities | ||||
| Accounts receivable | 4 912 | -5 162 | -5 956 | |
| Inventory | 355 | -144 | -954 | |
| Other operating assets / liabilities | -2 162 | -3 676 | 34 | |
| Accounts payable | 170 | 698 | 4 263 | |
| Net cashflow from operating activities | -2 128 | -2 249 | -5 273 | |
| Cashflow from investing activities | ||||
| Payments for purchase of long term assets | -2 856 | -3 257 | -32 502 | |
| Receipts from sale of long term assets | 160 | 116 | 8 170 | |
| Payments for shares in subsidiaries | 0 | -3 503 | -4 206 | |
| Receipts from shares & other investments | 0 | 4 333 | 4 333 | |
| Net cashflow from investing activities | -2 696 | -2 311 | -24 205 | |
| Cashflow from financing activities | ||||
| Receipts from share issue after expenses | 0 | 0 | 3 066 | |
| Payments for purchase of own shares | 0 | 0 | -1 370 | |
| Changes in bank overdraft & loans | -280 | -170 | -3 496 | |
| Net cashflow from financing activities | -280 | -170 | -1 800 | |
| Effect of foreign exchange rate changes | -556 | 251 | 18 | |
| Net changes in cash & cash equivalents | -5 660 | -4 479 | -31 260 | |
| Cash & cash equivalents as at 1.01 | 50 302 | 81 562 | 81 562 | |
| Cash & cash equivalents as at 31.12 | 44 642 | 77 083 | 50 302 |
Consolidated statement of equity (only annual figures are subject to statutory audit)
| 31 Mar 01 | 31 Mar 00 | 2000 | ||
| Opening balance | 110 947 | 105 871 | 105 871 | |
| Share issue | - | - | 3 066 | |
| Purchase and sale of own shares | - | - | -1 370 | |
| Result for the period | -10 438 | +1 321 | +3 997 | |
| Foreign exchange adjustment | -538 | 242 | -12 | |
| Minority interest | 216 | -628 | -605 | |
| Closing balance | 100 187 | 106 806 | 110 947 |
Lysaker, 22nd May 2001 The Board of Directors of Norman ASA Svein Ramsay Goli Chairman