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VASCO Data Security International Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 6, 2010 03:30PM
VASCO Data Security International Inc. (VDSI) filed Quarterly Report for the period ended 2010-06-30. Vasco Data Security International Inc. has a market cap of $235.6 million; its shares were traded at around $6.26 with a P/E ratio of 27.2 and P/S ratio of 2.4. Vasco Data Security International Inc. had an annual average earning growth of 22.1% over the past 5 years.VDSI is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
The U.S. Dollar strengthened by approximately 4% against the Euro for the quarter ended June 30, 2010 and weakened approximately 1% against the Euro for the six months ended June 30, 2010 as compared to the same periods in 2009. The U.S. Dollar weakened 19% and 23% against the Australian Dollar for the quarter and six months ended June 30, 2010, respectively, as compared to the same periods in 2009. We estimate that the changes in the exchange rate of the U.S. Dollar to these two currencies in 2010 compared to 2009 resulted in a decrease in revenue and operating expenses of approximately $365 and $332, respectively, for the quarter ended June 30, 2010 and an increase in revenue and operating expenses of approximately $459 and $488, respectively for the six months ended June 30, 2010 compared to the same periods in 2009.
The financial position and results of operations of most of our foreign subsidiaries, with the exception of our subsidiaries in Switzerland and Singapore (in which the functional currency is the U.S. Dollar), are generally measured using the local currency as the functional currency. Accordingly, assets and liabilities are translated into U.S. Dollars using current exchange rates as of the balance sheet date. Translation adjustments arising from differences in exchange rates are included as a separate component of stockholders equity. Revenue and expenses are translated at average exchange rates prevailing during the period. Gains and losses resulting from foreign currency transactions are included in the consolidated statements of operations in other non-operating income (expense). Foreign exchange transaction losses aggregating $118 and $267 in the second quarter and first six months of 2010, respectively, compared to gains aggregating $856 and $335 in the second quarter and first six months of 2009.
Total revenue for the six months ended June 30, 2010 increased $1,023, or 2%, from the first six months of 2009. Including the impact of changes in currency exchange rates, the increase was primarily attributable to a 6% increase in revenues from the enterprise and application security market and a 1% increase in revenues from the banking market. As noted above, for the six months ended June 30, 2010, we estimate that the weakening of the U.S. Dollar as compared to the Euro resulted in an increase in revenue of $459.
Revenue for the first six months of 2010 from the banking market increased $218, or 1%, compared to the first six months of 2009 and revenue from the enterprise and application security market increased $805 or 6% in the same period. The increase in banking revenue for the first six months of 2010 was primarily attributable to the change in currency exchange rates. The increase in enterprise and application security revenue for the first six months of 2010 was primarily attributable to an increase in non-hardware revenue and the change in currency exchange rates.
Consolidated gross profit for the quarter ended June 30, 2010 was $17,436, an increase of $724, or 4%, from the quarter ended June 30, 2009. Gross profit as a percentage of revenue (gross profit margin) was 70.5% for the quarter ended June 30, 2010, as compared to 68.3% for the quarter ended June 30, 2009. The increase in gross profit as a percentage of revenue for th
Stocks Discussed: VDSI,