VASCO's CEO Discusses Q2 2012 Results - Earnings Call Transcript

At this time I will turn the call back over to Ken.

Kendall Hunt

Thank you Jochem.

Today, we are going to review the results for second quarter of 2012. As always, we will host a question-and-answer session after the conclusion of management's prepared remarks. If possible, I would like to budget one hour total for this conference call. If you can limit your questions to one or two, it would be appreciated.

Overall, we are very satisfied with our Q2 performance. Q2 revenues were $46.6 million, an increase of approximately 11% compared to the second quarter of 2011. Q2 2012 was our 38th consecutive positive quarter in terms of operating income.

Our gross profit for the quarter was approximately 63% of revenue, an improvement of 2 percentage points over the second quarter of 2011. Our operating income continuing operations was approximately 19% of revenue per quarter, an improvement of almost 10 percentage points over the second quarter of 2011.

At June 30, 2012 out net cash balance was $85.1 million, an increase of $648,000 over our balance at December 31, 2011. And we had a $118 million in working capital. The strong cash position and strong balance sheet is an important tool to support VASCO’s future growth. As I mentioned during previous calls, we have two important priorities in 2012. 1) To fortify and enhance the strong position in our core business. 2) To develop our services business.

The result of our core business continues to be very positive. We have demonstrated with our performance in Q2 that somewhat lower results in Q1 2002 were temporary caused by the historical lumpiness of our banking business and manufacturing weakness due to the Chinese New Year, which reduced our available manufacturing days for the quarter.

Our enterprise and applications security business continues to show steady growth. Thanks to previous years investments and people and products. We have not seen any slowing down of our core business. To the contrary, our cumulative order intake through the first six months of 2012 has been substantially stronger than the same period last year. And in fact the strongest first six months in the company’s history.

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