NetScreen: Record Fiscal First Quarter 2004 Financial Results

Rubrik: World-wide News/Products & News

An Increase of 59 Percent Over Revenue of 51.1 Million Dollar in the Same Quarter Last Year

(01.02.04) - NetScreen Technologies, Inc. (Nasdaq: NSCN), has announced financial results for its fiscal first quarter ended December 31, 2003. Revenue in the quarter ended December 31, 2003 was a record 81.0 million Dollar, an increase of 59 percent over revenue of 51.1 million Dollar in the same quarter last year and an increase of 13 percent over revenue of 71.6 Dollar million in the quarter ended September 30, 2003.Net income calculated on the basis of generally accepted accounting principles (GAAP) for the quarter ended December 31, 2003 was 6.4 million Dollar, or 0.07 Dollar per basic and diluted share, compared to a net income of 3.2 million Dollar or 0.04 Dollar per basic and diluted share, in the same quarter last year. GAAP income from operations for the quarter ended December 31, 2003 was 10.9 million Dollar. GAAP net income and GAAP income from operations for the quarter ended December 31, 2003 include a non-cash charge of 7.1 million Dollar for stock-based compensation associated primarily with stock options granted prior to the company's initial public offering and stock options assumed in conjunction with the November 2003 acquisition of Neoteris, Inc. GAAP net income and GAAP income from operations for the quarter ended December 31, 2003 also include a charge of 2.0 million Dollar for amortization of intangible assets associated with the acquisition of Neoteris and the September 2002 acquisition of OneSecure, Inc. GAAP net income in the same quarter last year includes the effect of non-cash charges of 6.1 million Dollar for stock-based compensation associated primarily with stock options granted prior to the company's initial public offering and a charge of approximately 244,000 Dollar for amortization of intangible assets associated with the OneSecure acquisition.

Pro forma net income for the quarter ended December 31, 2003 was 12.9 million Dollar, or 0.15 Dollar per basic and 0.14 Dollar per diluted share, compared to pro forma net income of 10.9 Dollar million, or 0.14 Dollar per basic and 0.13 Dollar per diluted share, in the same quarter last year and pro forma net income of 11.9 million Dollar, or 0.15 Dollar per basic and 0.14 Dollar per diluted share, in the quarter ended September 30, 2003. Pro forma net income and pro forma net income per share information differs from the GAAP results because it excludes the effect of the non-cash stock-based compensation charges and amortization of intangibles charges and the related tax effects.

"The December quarter was very eventful for NetScreen," said Robert Thomas, president and chief executive officer. "We closed the acquisition of Neoteris, the market leader in SSL VPN products, launched three significant new products and had another superbly executed quarter from a financial perspective. We are very pleased with the rapid progress we've made in integrating Neoteris into the NetScreen family. We introduced new products such as the NetScreen-5GT appliance that has embedded antivirus protection provided through our partnership with Trend Micro, Inc., the Deep Inspection firewall, which provides application-level attack prevention and we launched NetScreen-Security Manager 2004, our next generation central management platform. Combined, we believe the acquisition of Neoteris and the new product introductions will be key contributors to our future growth."

Remo Canessa, NetScreen's chief financial officer, stated, "Strong sales in the Americas and Europe in the December quarter led NetScreen to another quarter of record revenues. We were pleased to see pro forma income from operations increase to 20.0 million Dollar, 7 percent over the September quarter despite the incremental operating expenses incurred with Neoteris. NetScreen generated a record 30.3 Dollar million in operating cash flow in the December quarter bringing our cash and short-term investments balance as of December 31, 2003 to $379.2 million."

Recent Company Highlights

· Completed the acquisition of Neoteris, Inc., the market leader in the SSL VPN product category, as well as a leader in the application security gateway market.

· Delivered embedded antivirus functionality on the NetScreen-5GT, the industry's first appliance to tightly integrate best-of-breed firewall, VPN, intrusion prevention and gateway antivirus security functionality in a single platform.

· Expanded the NetScreen-5 series with the NetScreen-5GT Extended, which includes functionality for smaller sites of a large enterprise that require multiple redundancy options and additional network segmentation.

· Received Common Criteria EAL4+ certification for the NetScreen-5200 using NSA developed protection profiles, becoming the first firewall platform to achieve this certification level for the stringent profiles. Common Criteria is a standard that helps government organizations evaluate IT security products more effectively.

· Recognized by market research firm IDC, as the only security appliance vendor among the top 5 to grow worldwide factory revenue market share year-over-year.

· Awarded the 2003 Security Technologies Product of the Year for our Neoteris Secure Access products by industry analyst firm Frost & Sullivan.

· Ranked as a market leader in market research firm META Group's METAspectrum(SM) for enterprise firewalls.

· Won the coveted Editor's Choice Award from CMP Media LLC's Network Computing magazine, for the NetScreen-SA 5000 series SSL VPN appliances.

· Outlook. (ma)

NetScreen Technologies

Kontakt: Jennifer Jennings

Tel. (001-408) 730-6243

E-Mail: jjennings@netscreen.com

Penny Still (Media Relations)

Tel. (0044-1483) 508-416

E-Mail: pstill@netscreen.com

Netscreen Technologies Germany

Tel. (0911) 9269-110, Fax (0911) 9269-310

E-Mail: info@netscreen.com

Web: www.netscreen.com