Aladdin Knowledge Systems (Nasdaq: ALDN; TASE: ALDN) today announced financial results for the first quarter of fiscal year 2005 ended March 31, 2005.
Net profit for the first quarter of 2005 was $1.23 million, or $0.10 per basic share and $0.09 per diluted share, compared with net profit for the first quarter of 2004 of $1.75 million, or $0.15 per basic and $0.14 per diluted share.
The net profit for the first quarter of 2005 was impacted by a $2 million one-time charge recorded by the company to settle a patent lawsuit. The lawsuit was originally brought by Andrew Pickholtz against Aladdin and its US subsidiary, alleging that Aladdin's discontinued MicroGuard product and other software DRM products infringed on an expired patent.
The settlement cost was reflected as a one time charge. The one- time charge reduced net income per basic and diluted share by $0.15 and $0.14, respectively. In addition, operating expenses during the first quarter of 2005 included legal expenses, related to the lawsuit, of $730,000. Aladdin stated that there will be no ongoing license or other fees payable by it in connection with the settlement.
Revenues for the first quarter of 2005 increased 20.5% to $20.34 million from $16.88 million for the same period in 2004.
Software digital rights management (DRM) revenues for the first quarter increased 12.6% to $14.39 million from $12.79 million in the same period in 2004. Enterprise security revenues for the first quarter of 2005 increased 45.3% to $5.94 million from $4.09 million in the same period in 2004.
Cash, cash equivalents and marketable securities totaled $70.57 million at March 31, 2005, up $44.66 million from $25.91 million reported at the end of 2004. The increase was mainly due to the receipt of $39.12 million in net proceeds after deducting underwriting discounts and offering expenses, following the successful completion of the company's offering of ordinary shares which closed on March 30, 2005 and positive cash flow from operations during the first fiscal quarter 2005 of $4.67 million.
Aladdin chairman and CEO Yanki Margalit said, "During the quarter we successfully completed our secondary offering, raising funds to further expand our core business segments. We continue to invest in leading edge security technologies and new product development to fuel our organic growth initiatives as well as strengthen our relationships with major business technology and OEM partners. With ample capital and no outstanding debt, Aladdin is well positioned to leverage strategic opportunities in the IT security market worldwide".
Published by Globes [online], Israel business news - www.globes.co.il - on Thursday, April 21, 2005