Norman ASA, the data security company, recorded net revenues of 188.9 million for the first three quarters of 2007, an increase of 1% over the same period last year. Year to date EBITDA ended at NOK 17.2 million giving an EBITDA margin of 9%. The company is currently in a transition period, where a repositioning of the business model is being implemented and the next generation of Norman’s core product is being developed and released.

Norman posted net revenue of NOK 58.7 million in the third quarter, slightly below last year’s third quarter net revenues. The decrease is mainly due to the negative currency effect towards all currencies the company is exposed to. In addition, like in previous quarters of this year, the sale of third party products was reduced. This is part of the planned change in business model and strategy to increase gross margin and resulted in a gross margin of 85.5% for the last two quarters. The EBITDA result was NOK 8.3 million, corresponding to an EBITDA margin of 14%. In the third quarter the company continued to increase its investment in R&D and marketing activities as planned.

The third quarter figures reflect the fact that Norman currently is in the process of implementing its new business model, with the aim of increasing targeted spending on R&D, having a more focused sales effort, broadening the product range as well as customer segments, and expanding distribution channels. The quarter was also marked by extensive preparations for the upcoming launch of the next generation of Norman’s core product: the Norman Security Suite, which the company already pre-launched in a re-branded version in Denmark.

Norman’s new product portfolio for advanced malware analysis based on the Norman SandBox technology is proving very successful. These highly sophisticated products are currently sold to global IT and telecom providers, large financial institutions and other large organizations exposed to targeted criminal attacks. The company has also several national security agencies, armed forces and police authorities on its customer list. Norman is very pleased to see that such high profile customers are testing and buying these products. The market for the Analyzer products is particularly attractive in North America, where the high growth rate continued in the third quarter. The first contracts in this segment came up for renewal in this quarter and all customers renewed, extended and expanded their collaboration with Norman.

OEM agreements, whereby companies enter into license agreements to benefit from Norman’s unique SandBox technology, also showed continued strong growth over the last quarters.

Norman has two main focus areas for the current year: 

• Deliver results from the R&D re-focusing started in 2006 by rolling out new products. 
• Improve the operational efficiency with Norman’s business areas now being more clearly defined.

Norman’s development in the first nine months of 2007 followed the direction set out in these priorities. Several new products were launched and additional new products will be introduced in the fourth quarter.

In order to step up Norman’s R&D efforts even further, the company has established an offshore development facility in India. The Indian facility will complement and collaborate closely with Norman’s R&D department in Norway.
Norman’s financial position remains strong. The company has no interest bearing debt. Total cash at the end of the third quarter was NOK 65 million. The company had 179 employees at the end of the third quarter (190 at the end of the third quarter last year).

Norman expects to gain momentum, given the ongoing repositioning of its business model and the effect of the launch of the new core product Norman Security Suite. The company will continue to invest in product development and marketing both in its traditional products areas and its new areas of growth.

Enclosed is a summary of the interim financial statements for the third quarter 2007.

For further information, please contact: 

• Chairman of the board Svein Ramsay Goli (+47 9075 6757)
• CEO Trygve Aasland (+47 4153 9717)
• CFO Simen Nyberg-Hansen (+47 9820 6355)