Norman ASA, the Norwegian data security company, continued in third quarter the execution of the strategic priorities for 2006. While doing so, the company upheld its steady growth rate and solid profitability with a 12 per cent increase in profit for the first nine months.

Norman’s net revenues for the third quarter increased by 9 per cent to NOK 60.8 million, compared to NOK 55.8 million in the same period last year. Norman ended the quarter with an EBITDA of NOK 11.0 million (2005: NOK 12.2 million), corresponding to an EBITDA margin of 18 per cent.

Accumulated for the first nine months of the year, Norman posted net revenues of NOK 187.3 million, an 11 per cent increase over last year’s revenue. Profit margins for the first nine months were the same as the year before, with an EBITDA margin of 16 per cent. This resulted in a pre tax profit after nine months of NOK 28.0 million, up 10 per cent from the same period last year.

The accumulated numbers illustrate that Norman has succeeded in executing the processes related to the strategic priorities for 2006 and at the same time maintained its growth and profitability.

The strategic priorities for 2006 are as follows: 

• Norway: Consolidate and create a basis for renewed growth in its home market. 
• Products: More powerful and targeted R&D. 
• OEM: Further expansion of OEM activities; technology licensing and new products.

Following several quarters with a decline in home market revenue, the negative trend has been turned. The sales organization in Norway is reorganized and has been set out to create new growth in Norway.

The R&D efforts have been increased in 2006, with a series of new products and applications already introduced or being prepared for launch. The introduction of a CTO position (Chief Technology Officer) will further strengthen management and the organization of the company’s R&D activities going forward. Are Føllesdal Tjønn will assume this position 1 November 2006.

Norman’s business model has been expanded over the last quarter. In addition to supplying virus protection to European SMEs, Norman’s core business also encompasses OEM sales (technology licensing) and a number of new SandBox products. SandBox has proven to be a highly efficient analysis tool that opens exciting growth opportunities for Norman as it can be sold stand-alone separate from the company’s traditional antivirus product. The new SandBox products have been tested by 10 test customers and the feedback is excellent. In order to further develop the relationships with customers in this segment and to further develop the OEM market, Norman opened a California branch in the third quarter.

Norman’s financial position continues to be strong. The company has no interest bearing debt and enjoys a positive cash flow. During the first nine months of 2006, Norman generated NOK 26.2 million in cash from its operations (NOK 10.5 million in the same period in 2005). In the same period the company purchased own shares amounting to NOK 40 million. Total cash at the end of September 2006 was NOK 67.8 million.

The company had 190 employees at the end of September 2006.

Norman expects a continuing growth and good profitability also in the remaining months of 2006, benefiting from the changes and investments made throughout the year. The company still sees considerable potential within its traditional area, virus protection. In addition, Norman is very excited about the OEM initiatives and the new SandBox products which are expected to contribute even further to the company’s growth and profitability.

Enclosed is a summary of the interim financial statements for the third quarter 2006.

For further information, please contact Chairman of the board Svein Ramsay Goli (+47 9075 6757) or CEO Trygve Aasland (+ 47 6710 9717 or +47 4153 9717).