VeriSign, Inc.
Feb 2, 2010
PDF
Add to Briefcase

VeriSign Reports Fourth Quarter and 2009 Results

Achieves 8% Annual Core Revenue Growth

MOUNTAIN VIEW, CA, Feb 02, 2010 (MARKETWIRE via COMTEX News Network) -- VeriSign, Inc. (NASDAQ: VRSN), the leading provider of trusted Internet infrastructure services, today reported financial results for the fourth quarter of 2009 and year ended December 31, 2009.

Fourth Quarter GAAP Financial Results

VeriSign reported revenue of $263 million from continuing operations for the fourth quarter of 2009, compared to $249 million in the same quarter in 2008. VeriSign reported net income attributable to VeriSign, Inc. and subsidiaries of $92 million and earnings per share attributable to VeriSign, Inc. and subsidiaries of $0.48 on a diluted basis for the fourth quarter of 2009, compared to net loss attributable to VeriSign, Inc. and subsidiaries of $(96) million and net loss per share attributable to VeriSign, Inc. and subsidiaries of $(0.50) on a diluted basis in the same quarter in 2008. The operating margin for the fourth quarter of 2009, which includes a $4 million out of period VeriSign Japan related depreciation adjustment, was 31.4% compared to (2.0)% in the same quarter in 2008.

VeriSign reported segment revenue for Internet Infrastructure and Identity Services ("3IS"), or the "core" businesses of Naming Services and Authentication Services, of $262 million for the fourth quarter of 2009, up 2% from the prior quarter and up 5% from the same quarter in 2008.

Fourth Quarter Non-GAAP Financial Results

For its core businesses, VeriSign reported net income attributable to VeriSign, Inc. and subsidiaries of $59 million and earnings per share attributable to VeriSign, Inc. and subsidiaries of $0.31 on a diluted basis for the fourth quarter of 2009, compared to net income attributable to VeriSign, Inc. and subsidiaries of $54 million and earnings per share attributable to VeriSign, Inc. and subsidiaries of $0.28 on a diluted basis in the same quarter in 2008. The operating margin for the fourth quarter of 2009, which includes a $4 million out of period VeriSign Japan related depreciation adjustment, was 36.8% compared to 33.7% in the same quarter in 2008. A table reconciling the GAAP to the non-GAAP results (which excludes items described below) is appended to this release.

"We had a good year in 2009 in which we delivered solid top line revenue growth while increasing the operating leverage in our core businesses and completing the divestitures of our non-core businesses," said Mark McLaughlin, president and chief executive officer of VeriSign. "I believe we're well positioned for 2010 and beyond."

2009 GAAP Financial Results

For the year ended December 31, 2009, VeriSign reported revenue of $1.031 billion from continuing operations, compared to $965 million in 2008. VeriSign reported net income attributable to VeriSign, Inc. and subsidiaries of $246 million and earnings per share attributable to VeriSign, Inc. and subsidiaries of $1.28 on a diluted basis, compared to net loss attributable to VeriSign, Inc. and subsidiaries of $(374) million and net loss per share attributable to VeriSign, Inc. and subsidiaries of $(1.87) on a diluted basis in 2008. The operating margin for 2009 was 30.4% compared to 6.6% in 2008.

VeriSign reported segment revenue for 3IS of $1.026 billion, up 8% year-over-year.

2009 Non-GAAP Financial Results

For its core businesses, VeriSign reported net income attributable to VeriSign, Inc. and subsidiaries of $247 million and earnings per share attributable to VeriSign, Inc. and subsidiaries of $1.28 on a diluted basis, compared to net income attributable to VeriSign, Inc. and subsidiaries of $201 million and earnings per share attributable to VeriSign, Inc. and subsidiaries of $1.00 on a diluted basis in 2008. The operating margin for 2009 was 37.7% compared to 33.5% in 2008. A table reconciling the GAAP to the non-GAAP results (which excludes items described below) is appended to this release.

"In 2009, VeriSign increased revenue, improved productivity and maintained a healthy balance sheet," said Brian Robins, chief financial officer of VeriSign. "In 2010, we will remain focused on our two key long-term financial priorities: growth and increased operating leverage."

Business and Corporate Highlights

-- VeriSign Naming Services ended the quarter with approximately 96.7
   million active domain names in the adjusted zone for .com and .net,
   representing a 7% increase year-over-year.
-- On December 17, 2009, VeriSign announced that as of July 1, 2010, the
   registry fee for .com domain names will increase from $6.86 to $7.34
   and that the registry fee for .net domain names will increase from
   $4.23 to $4.65.
-- VeriSign reports average daily query load of 52 billion in the quarter,
   compared to 54 billion in the prior quarter and 35 billion in the same
   quarter in 2008.
-- During the quarter, VeriSign announced its strategic approach for
   working with the Internet community to deploy DNS Security Extensions
   (DNSSEC) in the .com and .net Top Level Domain Names (TLDs), thereby
   helping to protect the Internet's Domain Name System (DNS) from "man in
   the middle" and cache poisoning attacks.
-- VeriSign Business Authentication Services ended the quarter with 1.22
   million SSL certificates in the installed base, an increase of 9% over
   the same quarter last year.
-- VeriSign completed the divestiture of 14 non-core businesses, in
   addition to the sale of the remaining interest in the Jamba joint
   venture, raising proceeds in excess of $765 million.
-- In November 2009, the company closed the sale of MDG Services, a
   carve-out of the former Messaging business and the final non-core
   business to be divested.  Earlier in the quarter, VeriSign also
   completed the sales of Global Security Consulting and Messaging and
   Mobile Media Services.
-- During the quarter, the company decided to wind down its Content Portal
   Services (CPS) business, and accordingly reclassified CPS's results into
   continuing operations for all periods presented.  The Pre-Pay Billing
   and Payment Services business was fully wound down in October 2009, and
   its results of operations were reclassified into discontinued operations
   for all periods presented.

Financial Highlights

-- Naming Services delivered $159 million of revenue in the fourth quarter
   of 2009, up 9% from the same quarter in 2008.  Authentication Services
   delivered revenue of $103 million in the fourth quarter of 2009, up 1%
   from the same quarter in 2008.
-- General and administrative expenses increased in the fourth quarter
   primarily due to a $4 million out of period depreciation adjustment
   correcting for certain assets held at VeriSign Japan that were
   depreciated over a period longer than their useful lives.
-- In the fourth quarter, VeriSign repurchased approximately 9 million
   shares of its common stock for a cost of $208 million.  For the full
   year, VeriSign repurchased approximately 11 million shares for an
   aggregate cost of $253 million.
-- VeriSign ended the fourth quarter with Cash, Cash Equivalents and
   Restricted Cash of $1.48 billion, an increase of $45 million from the
   prior quarter and $688 million from the end of 2008.
-- Cash flow from operations, on a consolidated basis, was approximately
   $173 million for the fourth quarter and approximately $395 million for
   the full year, after giving effect to a classification of $26 million of
   year-to-date excess tax benefits associated with stock-based
   compensation as financing cash flows.
-- Deferred revenue on December 31, 2009 totaled $888 million for
   continuing operations, an increase of $7 million from the prior quarter
   and $43 million from the end of 2008.
-- During the fourth quarter, VeriSign completed the purchase of its
   previously-leased Dulles, Virginia office and data center property for
   approximately $26 million.
-- Capital expenditures, on a consolidated basis, were approximately $51
   million for the fourth quarter and $117 million for the full year.

Non-GAAP Items

Non-GAAP financial results exclude the following items that are included under GAAP: discontinued operations, non-core businesses in continuing operations, stock-based compensation, amortization of other intangible assets, impairments of goodwill and other intangible assets, restructuring costs and non-cash interest expense. Non-GAAP financial information is also adjusted for a 30% tax rate which differs from the GAAP tax rate. A table reconciling the GAAP to non-GAAP net income is appended to this release. All non-GAAP figures for each period presented herein have been conformed to exclude the foregoing items under GAAP. Prior disclosures of non-GAAP figures may not exclude these same items and as such should not be used for comparison purposes.

Today's Conference Call

VeriSign will host a live teleconference call today at 2:00 p.m. (PST) to review the fourth quarter and fiscal year results. The call will be accessible by direct dial at (888) 676-VRSN (US) or (913) 312-0724 (international). A listen-only live web cast and accompanying slide presentation of the earnings conference call will also be available at http://investor.verisign.com. A replay of this call will be available at (888) 203-1112 or (719) 457-0820 (passcode: 7324216) beginning at 5:00 p.m. (PST) on February 2 and will run through February 9. This press release and the financial information discussed on today's conference call are available on the Investor Relations section of the VeriSign website at http://investor.verisign.com.

About VeriSign

VeriSign, Inc. (NASDAQ: VRSN) is the trusted provider of Internet infrastructure services for the networked world. Billions of times each day, VeriSign helps companies and consumers all over the world engage in communications and commerce with confidence. Additional news and information about the company is available at www.verisign.com.

VRSNF

Statements in this announcement other than historical data and information constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. These statements involve risks and uncertainties that could cause VeriSign's actual results to differ materially from those stated or implied by such forward-looking statements. The potential risks and uncertainties include, among others, the uncertainty of future revenue and profitability and potential fluctuations in quarterly operating results due to such factors as increasing competition and pricing pressure from competing services offered at prices below our prices, the current global economic downturn, market acceptance of our existing services, the inability of VeriSign to successfully develop and market new services, the uncertainty of whether new services as provided by VeriSign will achieve market acceptance or result in any revenues and the uncertainty of the expense and duration of transition services and requests for indemnification relating to completed divestitures. More information about potential factors that could affect the company's business and financial results is included in VeriSign's filings with the Securities and Exchange Commission, including in the Company's Annual Report on Form 10-K for the year ended December 31, 2008, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. VeriSign undertakes no obligation to update any of the forward-looking statements after the date of this press release.

                    VERISIGN, INC. AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS
          (In thousands, except share and per share data)
                             (Unaudited)
                                                  December 31, December 31,
                                                      2009        2008
                                                  -----------  -----------
                                                               As Adjusted
                                ASSETS                             (1)
Current assets:
  Cash and cash equivalents                       $ 1,477,166  $   789,068
  Accounts receivable, net of allowance for
   doubtful accounts of $490 at December 31,
   2009 and $1,208 at December 31, 2008                63,133       83,749
  Prepaid expenses and other current assets           167,716      268,178
  Assets held for sale                                  1,043      483,840
                                                  -----------  -----------
     Total current assets                           1,709,058    1,624,835
                                                  -----------  -----------
Property and equipment, net                           403,821      385,498
Goodwill                                              289,980      283,109
Other intangible assets, net                           22,420       35,312
Other assets                                           44,865       38,118
                                                  -----------  -----------
     Total long-term assets                           761,086      742,037
                                                  -----------  -----------
     Total assets                                 $ 2,470,144  $ 2,366,872
                                                  ===========  ===========
                     LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable and accrued liabilities        $   234,727  $   263,535
  Accrued restructuring costs                           6,605       28,920
  Deferred revenues                                   653,702      629,800
  Other current liabilities                             2,635        5,463
  Liabilities related to assets held for sale               -       49,160
                                                  -----------  -----------
     Total current liabilities                        897,669      976,878
                                                  -----------  -----------
Long-term deferred revenues                           234,539      215,281
Long-term accrued restructuring costs                   3,204        3,037
Convertible debentures, including contingent
 interest derivative                                  574,378      568,712
Other long-term liabilities                           161,690       84,543
                                                  -----------  -----------
     Total long-term liabilities                      973,811      871,573
                                                  -----------  -----------
     Total liabilities                              1,871,480    1,848,451
                                                  -----------  -----------
Commitments and contingencies
Stockholders' equity:
  VeriSign, Inc. and subsidiaries stockholders'
   equity:
     Preferred stock -- par value $.001 per share;
      Authorized shares: 5,000,000;
      Issued and outstanding shares: none                   -            -
     Common stock -- par value $.001 per share;
      Authorized shares: 1,000,000,000;
      Issued and outstanding shares: 183,299,463
      excluding 124,434,684 held in treasury, at
      December 31, 2009; and 191,547,795 excluding
      112,717,587 held in treasury, at
      December 31, 2008                                   308          304
     Additional paid-in capital                    21,736,209   21,891,786
     Accumulated deficit                          (21,194,435) (21,439,988)
     Accumulated other comprehensive income             7,659       17,111
                                                  -----------  -----------
     Total VeriSign, Inc. and subsidiaries
      stockholders' equity                            549,741      469,213
Noncontrolling interest in subsidiary                  48,923       49,208
                                                  -----------  -----------
     Total stockholders' equity                       598,664      518,421
                                                  -----------  -----------
     Total liabilities and stockholders' equity   $ 2,470,144  $ 2,366,872
                                                  ===========  ===========
(1) As adjusted balances were derived from the audited consolidated
    financial statements of the Company included in its fiscal 2008 Annual
    Report on Form 10-K, adjusted for the following: Retroactive adoption
    of FASB Staff Position ("FSP") No. Accounting Principles Board ("APB")
    14-1 ("FSP APB 14-1"), "Accounting for Convertible Debt Instruments
    That May be Settled in Cash upon Conversion (Including Partial Cash
    Settlement)," codified into FASB Accounting Standards Codification
    ("ASC") Subtopic 470-20, Debt with Conversion and Other Options,
    ("ASC 470-20"), and Statement of Financial Accounting Standard ("SFAS")
    No. 160 ("SFAS 160"), "Noncontrolling Interests in Consolidated
    Financial Statements, an amendment of Accounting Research Bulletin
    No. 51," codified into FASB ASC Topic 810, Consolidation, ("ASC 810"),
    effective January 1, 2009.
                      VERISIGN, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                   (In thousands, except per share data)
                                (Unaudited)
                           Three Months Ended            Year Ended
                              December 31,              December 31,
                        ------------------------  ------------------------
                            2009         2008         2009         2008
                        -----------  -----------  -----------  -----------
                                     As Adjusted               As Adjusted
                                         (1)                       (1)
Revenues                $   262,660  $   248,762  $ 1,030,619  $   964,748
                        -----------  -----------  -----------  -----------
Costs and expenses:
  Cost of revenues           57,553       60,927      233,040      231,406
  Sales and marketing        48,190       38,205      177,029      172,206
  Research and
   development               24,660       21,606       96,416       88,948
  General and
   administrative            46,661       53,319      181,992      201,016
  Restructuring,
   impairments and
   other charges                244       77,256       16,216      196,419
  Amortization of other
   intangible assets          2,805        2,540       12,199       11,155
                        -----------  -----------  -----------  -----------
    Total costs and
     expenses               180,113      253,853      716,892      901,150
                        -----------  -----------  -----------  -----------
Operating income (loss)      82,547       (5,091)     313,727       63,598
  Other (loss) income,
   net                       (8,980)      71,337      (32,437)      48,809
                        -----------  -----------  -----------  -----------
Income from continuing
 operations before
 income taxes and loss
 from unconsolidated
 entities                    73,567       66,246      281,290      112,407
                        -----------  -----------  -----------  -----------
Income tax expense           (9,972)     (30,208)     (80,105)     (39,197)
Loss from
 unconsolidated
 entities, net of tax             -         (769)           -       (3,868)
                        -----------  -----------  -----------  -----------
Income from continuing
 operations, net of tax      63,595       35,269      201,185       69,342
Income (loss) from
 discontinued
 operations, net of tax      29,758     (149,910)      48,054     (459,602)
                        -----------  -----------  -----------  -----------
Net income (loss)            93,353     (114,641)     249,239     (390,260)
Less: Net (income) loss
 attributable to
 noncontrolling
 interest in
 subsidiary                  (1,305)      18,719       (3,686)      16,009
                        -----------  -----------  -----------  -----------
Net income (loss)
 attributable to
 VeriSign, Inc. and
 subsidiaries common
 stockholders           $    92,048  $   (95,922) $   245,553  $  (374,251)
                        ===========  ===========  ===========  ===========
Basic income (loss) per
 share attributable to
 VeriSign, Inc. and
 subsidiaries common
 stockholders from:
  Continuing operations $      0.33  $      0.28  $      1.03  $      0.43
  Discontinued
   operations                  0.16        (0.78)        0.25        (2.33)
                        -----------  -----------  -----------  -----------
  Net income (loss)     $      0.49  $     (0.50) $      1.28  $     (1.90)
                        ===========  ===========  ===========  ===========
Diluted income (loss)
 per share attributable
 to VeriSign, Inc. and
 subsidiaries common
 stockholders from:
  Continuing operations $      0.33  $      0.28  $      1.03  $      0.43
  Discontinued
   operations                  0.15        (0.78)        0.25        (2.30)
                        -----------  -----------  -----------  -----------
  Net income (loss)     $      0.48  $     (0.50) $      1.28  $     (1.87)
                        ===========  ===========  ===========  ===========
Shares used to compute
 net income (loss) per
 share attributable to
 VeriSign, Inc. and
 subsidiaries common
 stockholders:
  Basic                     189,724      192,969      191,821      197,201
                        ===========  ===========  ===========  ===========
  Diluted                   190,617      193,587      192,575      200,602
                        ===========  ===========  ===========  ===========
Amounts attributable to
 VeriSign, Inc. and
 subsidiaries common
 stockholders:
  Income from continuing
   operations,
   net of tax           $    62,290  $    53,988  $   197,499  $    85,351
  Income (loss) from
   discontinued
   operations,
   net of tax                29,758     (149,910)      48,054     (459,602)
                        -----------  -----------  -----------  -----------
  Net income (loss)
   attributable to
   VeriSign, Inc. and
   subsidiaries common
   stockholders         $    92,048  $   (95,922) $   245,553  $  (374,251)
                        ===========  ===========  ===========  ===========
(1) As adjusted amounts were derived from the audited consolidated
    financial statements of the Company included in its fiscal 2008 Annual
    Report on Form 10-K, adjusted for the following:
    a. Retroactive adoption of ASC 470-20 and ASC 810, effective
       January 1, 2009.
    b. Reclassification of the results of operations of the iDefense and
       CPS businesses from discontinued operations to continuing
       operations, and reclassification of the results of operations of the
       Pre-pay business from continuing operations to discontinued
       operations.
                        VERISIGN, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (In thousands)
                                  (Unaudited)
                                                  Year Ended December 31,
                                                  ------------------------
                                                      2009         2008
                                                  -----------  -----------
                                                               As Adjusted
                                                                   (1)
Cash flows from operating activities:
  Net income (loss)                               $   249,239  $  (390,260)
  Adjustments to reconcile net income (loss) to
   net cash provided by operating activities:
      (Gain) loss on divestiture of businesses
       and estimated losses on assets held for
       sale, net of tax                               (28,320)     349,957
      Depreciation of property and equipment           74,067      102,915
      Amortization of other intangible assets          12,199       25,663
      Stock-based compensation                         51,166       90,066
      Impairment of goodwill                                -      123,412
      Loss on sale and impairment of other
       long-lived assets                               12,481       92,182
      Excess tax benefit associated with
       stock-based compensation                       (25,880)     (41,547)
      Other, net                                       (3,567)       5,274
  Changes in operating assets and liabilities,
   excluding the effects of acquisitions and
   divestitures:
      Accounts receivable                              25,798       54,048
      Prepaid expenses and other assets               (47,418)     (10,384)
      Accounts payable and accrued liabilities         56,671      (40,800)
      Accrued restructuring costs                     (22,126)      27,606
      Deferred revenues                                40,881       95,902
                                                  -----------  -----------
        Net cash provided by operating activities     395,191      484,034
                                                  -----------  -----------
Cash flows from investing activities:
  Proceeds from maturities and sales of
   investments                                        129,479       99,635
  Reclassification of cash equivalents to other
   current assets                                           -     (248,541)
  Purchases of property and equipment                (116,876)    (120,990)
  Proceeds from sale of property and equipment          6,064       48,843
  Proceeds received from divestiture of
   businesses, net of cash contributed                469,380      274,295
  Investments in unconsolidated entities                    -      (15,679)
  Cash received from trust, previously restricted           -       45,000
  Other investing activities                           (3,592)      (5,799)
                                                  -----------  -----------
        Net cash provided by investing activities     484,455       76,764
                                                  -----------  -----------
Cash flows from financing activities:
  Proceeds from issuance of common stock from
   option exercises and employee stock purchase
   plans                                               36,204      122,427
  Repurchases of common stock                        (260,571)  (1,327,378)
  Proceeds received from borrowings                     3,205      200,000
  Repayment of short-term debt                         (1,134)    (200,000)
  Excess tax benefit associated with stock-based
   compensation                                        25,880       41,547
  Other financing activities                           (1,578)        (623)
                                                  -----------  -----------
        Net cash (used in) provided by financing
         activities                                  (197,994)  (1,164,027)
                                                  -----------  -----------
Effect of exchange rate changes on cash and cash
 equivalents                                            6,446       15,575
                                                  -----------  -----------
Net increase (decrease) in cash and cash
 equivalents                                          688,098     (587,654)
Cash and cash equivalents at beginning of year        789,068    1,376,722
                                                  -----------  -----------
Cash and cash equivalents at end of year          $ 1,477,166  $   789,068
                                                  ===========  ===========
Supplemental cash flow disclosures:
  Cash paid for interest, net of capitalized
   interest                                       $    39,256  $    35,677
                                                  ===========  ===========
  Cash paid for income taxes, net of refunds
   received                                       $    21,881  $    14,712
                                                  ===========  ===========
  Receivable from purchasers of divested
   businesses                                     $    15,780  $    13,822
                                                  ===========  ===========
(1) As adjusted amounts were derived from the audited consolidated
    financial statements of the Company included in its fiscal 2008 Annual
    Report on Form 10-K, adjusted for the retroactive adoption of
    ASC 470-20 and ASC 810, effective January 1, 2009.
                         VERISIGN, INC. AND SUBSIDIARIES
                     STATEMENTS OF OPERATIONS RECONCILIATION
                      (In thousands, except per share data)
                                     (Unaudited)
                           Three Months Ended            Year Ended
                            December 31, 2009         December 31, 2009
                        ------------------------  -------------------------
                                     Net Income                Net Income
                                       (loss)                    (loss)
                                   attributable              attributable
                        Operating  to VeriSign,              to VeriSign,
                          Income     Inc. and     Operating    Inc. and
                          (loss)   Subsidiaries     Income   Subsidiaries
                        ---------  -------------  ---------- -------------
GAAP as reported        $  82,547  $      92,048  $  313,727 $     245,553
   Discontinued
    operations                           (29,758)                  (48,054)
   Non-core businesses
    in continuing
    operations (1)         (1,169)        (2,364)        948        (2,057)
   Adjustments:
    Stock-based
     compensation          10,136         10,136      42,740        42,740
    Amortization of
     other intangible
     assets                 2,805          2,805      12,199        12,199
    Impairment of other
     intangible asset           -              -       9,684         9,684
    Restructuring costs     1,850          1,850       7,249         7,249
    Non-cash interest
     expense                               1,718                     6,726
   Tax adjustment (2)                    (17,097)                  (27,263)
                        ---------  -------------  ---------- -------------
Non-GAAP as adjusted    $  96,169  $      59,338  $  386,547 $     246,777
                        =========  =============  ========== =============
Diluted shares                           190,617                   192,575
Per diluted share,
 non-GAAP as adjusted              $        0.31             $        1.28
                                   =============             =============
(1) As of December 31, 2009, the Company's business consists of the
following reportable segments: (a) 3IS and (b) Other Services. 3IS consists
of core operations of Naming Services and Authentication Services.
Authentication Services is comprised of Business Authentication Services
and User Authentication Services. Other Services consists of non-core
businesses in continuing operations.
(2) Non-GAAP tax is calculated as 30% of income from continuing operations,
excluding noncontrolling interest in subsidiary, which is presented
net of tax on the Statement of Operations.
(3) As adjusted amount was derived from the audited consolidated financial
statements of the Company included in its fiscal 2008 Annual Report on
Form 10-K, adjusted for reclassification of the results of operations
of the iDefense business from discontinued operations to continuing
operations.
VeriSign provides quarterly and annual financial statements that are
prepared in accordance with generally accepted accounting principles
(GAAP). Along with this information, we typically disclose and discuss
certain non-GAAP financial information in our quarterly and annual earnings
release, on investor conference calls and during investor conferences and
related events.  This non-GAAP financial information does not include the
following types of financial measures that are included in GAAP:
discontinued operations, non-core businesses in continuing operations,
stock-based compensation, amortization of other intangible assets,
impairments of goodwill and other intangible assets, restructuring costs
and non-cash interest expense.  Non-GAAP financial information is also
adjusted for a 30% tax rate which differs from the GAAP tax rate.
Management believes that this non-GAAP financial data supplements our
GAAP financial data by providing investors with additional information
that allows them to have a clearer picture of the company's core
operations. The presentation of this additional information is not meant
to be considered in isolation nor as a substitute for results prepared
in accordance with GAAP. We believe that the non-GAAP information enhances
the investors' overall understanding of our financial performance and the
comparability of the company's operating results from period to period.
Above, we have provided a reconciliation of the non-GAAP financial
information that we provide each quarter with the comparable financial
information reported in accordance with GAAP for the given period.
SUPPLEMENTAL FINANCIAL INFORMATION
                             Three months ended                 Year ended
              ------------------------------------------------- -----------
              December  September                     December   December
                31,       30,     June 30,  March 31,   31,         31,
                2009      2009      2009      2009      2008       2009
              --------- --------- --------- --------- --------- -----------
                                                         As
                                                     Adjusted (3)
Revenues from
 core
 operations
 (1)          $ 261,643 $ 256,908 $ 255,248 $ 252,212 $ 248,123 $ 1,026,011
              ========= ========= ========= ========= ========= ===========
                      VERISIGN, INC. AND SUBSIDIARIES
                  STATEMENTS OF OPERATIONS RECONCILIATION
                   (In thousands, except per share data)
                                (Unaudited)
                           Three Months Ended            Year Ended
                            December 31, 2008         December 31, 2008
                        ------------------------  -------------------------
                                     Net Income                Net Income
                                       (loss)                    (loss)
                                    attributable              attributable
                        Operating   to VeriSign,              to VeriSign,
                          Income      Inc. and    Operating     Inc. and
                          (loss)    Subsidiaries    Income    Subsidiaries
                        ----------  ------------  ----------- ------------
GAAP, as adjusted (1)   $   (5,091) $    (95,922) $    63,598 $   (374,251)
   Discontinued
    operations, as
    adjusted (2)                         149,910                   459,602
   Non-core businesses
    in continuing
    operations, as
    adjusted (3)            (5,366)      (83,547)      11,966      (60,835)
   Adjustments:
    Stock-based
     compensation            9,759         9,759       48,978       48,978
    Amortization of
     other intangible
     assets                  2,540         2,540       10,216       10,216
    Impairments of
     goodwill and other
     intangible assets      77,619        58,610       77,619       58,610
    Restructuring costs      4,183         4,183      105,226      105,226
    Non-cash interest
     expense                               1,609                     5,404
   Tax adjustment (4)                      7,217                   (52,175)
                        ----------  ------------  ----------- ------------
   Non-GAAP, as
    adjusted            $   83,644  $     54,359  $   317,603 $    200,775
                        ==========  ============  =========== ============
Diluted shares                           193,587                   200,602
Per diluted share,
 non-GAAP, as adjusted              $       0.28              $       1.00
                                    ============              ============
(1) As adjusted amounts were derived from the audited consolidated
    financial statements of the Company included in its fiscal 2008 Annual
    Report on Form 10-K, adjusted for the following:
(a) Retroactive adoption of ASC 470-20 and ASC 810, effective
    January 1, 2009.
(b) Reclassification of the results of operations of the iDefense and CPS
    businesses from discontinued operations to continuing operations, and
    reclassification of the results of operations of the Pre-pay business
    from continuing operations to discontinued operations.
(2) As adjusted amounts were derived from the audited consolidated
    financial statements of the Company included in its fiscal 2008
    Annual Report on Form 10-K, adjusted for reclassification of the
    results of operations of the iDefense and CPS businesses from
    discontinued operations to continuing operations, and
    reclassification of the results of operations of the Pre-pay
    business from continuing operations to discontinued operations.
(3) As of December 31, 2008, the Company's business consists of the
    following reportable segments: (a) 3IS and (b) Other Services. 3IS
    consists of core operations of Naming Services and Authentication
    Services. Authentication Services is comprised of Business
    Authentication Services and User Authentication Services. Other
    Services consists of non-core businesses in continuing operations.
(4) Non-GAAP tax is calculated as 30% of income from continuing operations,
    excluding noncontrolling interest in subsidiary, which is presented net
    of tax on the Statement of Operations.
(5) As adjusted amounts were derived from the audited consolidated
    financial statements of the Company included in its fiscal 2008
    Annual Report on Form 10-K, adjusted for the reclassification of the
    results of operations of the iDefense business from discontinued
    operations to continuing operations.
VeriSign provides quarterly and annual financial statements that are
prepared in accordance with generally accepted accounting principles
(GAAP). Along with this information, we typically disclose and discuss
certain non-GAAP financial information in our quarterly and annual earnings
release, on investor conference calls and during investor conferences and
related events. This non-GAAP financial information does not include the
following types of financial measures that are included in
GAAP: discontinued operations, non-core businesses in continuing
operations, stock-based compensation, amortization of other intangible
assets, impairments of goodwill and other intangible assets, restructuring
costs and non-cash interest expense.  Non-GAAP financial information is
also adjusted for a 30% tax rate which differs from the GAAP tax rate. All
non-GAAP figures for each period presented herein have been conformed to
exclude the foregoing items under GAAP.  Prior disclosures of non-GAAP
figures may not exclude these same items, and as such should not be used
for comparison purposes.
Management believes that this non-GAAP financial data supplements our
GAAP financial data by providing investors with additional information
that allows them to have a clearer picture of the company's core
operations. The presentation of this additional information is not meant
to be considered in isolation nor as a substitute for results prepared in
accordance with GAAP. We believe that the non-GAAP information enhances the
investors' overall understanding of our financial performance and the
comparability of the company's operating results from period to period.
Above, we have provided a reconciliation of the non-GAAP financial
information that we provide each quarter with the comparable financial
information reported in accordance with GAAP for the given period.
SUPPLEMENTAL FINANCIAL INFORMATION
                                                                    Year
                               Three months ended                   ended
                ------------------------------------------------- ---------
                December  September                     December  December
                  31,        30,    June 30,  March 31,   31,       31,
                  2008      2008      2008      2008      2007      2008
                --------- --------- --------- --------- --------- ---------
                   As        As        As        As        As        As
                Adjusted  Adjusted  Adjusted  Adjusted  Adjusted  Adjusted
                  (5)       (5)       (5)       (5)       (5)       (5)
Revenues from
 core
 operations (3) $ 248,123 $ 241,322 $ 234,448 $ 223,846 $ 213,555 $ 947,739
                ========= ========= ========= ========= ========= =========

Contacts

Investor Relations:
Nancy Fazioli
ir@verisign.com
650-426-5146

Media Relations:
Brad Williams
brwilliams@verisign.com
650-426-5298


SOURCE: VeriSign, Inc.

mailto:ir@verisign.com
mailto:brwilliams@verisign.com

Copyright 2010 Marketwire, Inc., All rights reserved.

News Provided by COMTEX