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VASCO Data Security International Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 6, 2011 03:20PM
VASCO Data Security International Inc. (VDSI) filed Quarterly Report for the period ended 2011-03-31. Vasco Data Security International Inc. has a market cap of $415.1 million; its shares were traded at around $11 with a P/E ratio of 34.4 and P/S ratio of 3.9.
Highlight of Business Operations:
Operating expenses associated with the acquisition of DigiNotar were approximately $1,550 for the first quarter of 2011 and included $992 of expenses related to operations and $558 related to the amortization of purchased intangible assets.
Consolidated net interest income was $112 in the first quarter of 2011 as compared to $71 in the first quarter of 2010. The increase in interest income reflects slightly higher interest rates paid on higher average cash balances. Our average cash balance in the first quarter of 2011 of $83,122 was $12,411, or 18%, higher than in the first quarter of 2010.
Other income (expense) primarily includes exchange gains (losses) on transactions that are denominated in currencies other than our subsidiaries functional currencies, subsidies received from foreign governments in support of our export business in those countries and other miscellaneous non-operational expenses. Other income for the first quarter of 2011 was $291 and compares to $60 for the first quarter of 2010. The increase in other income primarily reflects lower exchange losses ($29 gain in the first quarter of 2011 compared to $148 loss in the first quarter of 2010).
At December 31, 2010, we had U.S. net operating loss (NOL) carryforwards of $21,247. Of this amount, $14,727 would result in a benefit to earnings. The remainder represents tax deductions for employee stock option gains the benefit for which would be credited to paid-in capital. The U.S. loss carryforwards expire in varying amounts beginning in 2020 and continuing through 2029. In addition, if certain substantial changes in the companys ownership were deemed to have occurred, there would be an annual limitation on the amount of the U.S. carryforwards that could be utilized. At December 31, 2010, we also had foreign NOL carryforwards of $4,834. The foreign NOL carryforwards have no expiration dates. A valuation reserve has been provided for the U.S. and certain foreign operating loss carryforwards to offset the future benefits because we have not determined that their realization is more likely than not.
At March 31, 2011, we had working capital of $90,823, a decrease of $6,066, or 6%, from $96,889 reported at December 31, 2010. The decrease in working capital was primarily related to the acquisition of DigiNotar.
EBITDA from continuing operations for the three months ended March 31, 2011 and 2010 was $4,480 and $1,516, respectively, an increase of $2,964, or 196%, from the same period of the prior year. A reconciliation of EBITDA to net income for the three months ended March 31, 2011, and 2010 follows:
Stocks Discussed: VDSI,