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VASCO Data Security International Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 5, 2011 10:48AM
VASCO Data Security International Inc. (VDSI) filed Quarterly Report for the period ended 2011-06-30. Vasco Data Security International Inc. has a market cap of $323.4 million; its shares were traded at around $8.57 with a P/E ratio of 23.8 and P/S ratio of 3.
Highlight of Business Operations:
The U.S. Dollar weakened by approximately 10% against the Euro for the quarter ended June 30, 2011 and weakened approximately 4% against the Euro for the six months ended June 30, 2011 as compared to the same periods in 2010. The U.S. Dollar weakened 16% and 14% against the Australian Dollar for the quarter and six months ended June 30, 2011, respectively, as compared to the same periods in 2010. We estimate that the changes in the exchange rate of the U.S. Dollar to these two currencies in 2011 compared to 2010 resulted in an increase in revenue and operating expenses of approximately $2,345 and $1,675, respectively, for the quarter ended June 30, 2011 and an increase in revenue and operating expenses of approximately $2,301 and $1,406, respectively, for the six months ended June 30, 2011 compared to the same periods in 2010.
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 gains aggregating $30 and $58 in the second quarter and first six months of 2011, respectively, compare to losses aggregating of $118 and $267, respectively, in the second quarter and first six months of 2010.
Total revenue for the six months ended June 30, 2011 increased $30,683, or 63%, from the first six months of 2010. Including the impact of changes in currency exchange rates, the increase was primarily attributable to a 92% increase in revenues from the banking market partially offset by a 6% decline from the enterprise and application security market. As noted above, for the six months ended June 30, 2011, we estimate that the weakening of the U.S. Dollar as compared to the Euro resulted in an increase in revenue of $2,301.
Revenue for the first six months of 2011 from the banking market increased $31,482, or 92%, compared to the first six months of 2010 while revenue for the enterprise and application security market decreased $799 or 6% in the same period. The changes in results from the two markets primarily reflect the same issues as noted above relative to the comparison of the second quarter of 2011 to the second quarter of 2010.
Stocks Discussed: VDSI,