CyberGuard Survives Q1 Hurricanes

Security vendor CyberGuard Corp. (Nasdaq: CGFW) released its results for the first quarter of 2005 today, posting revenues of $15.68 million, up 74 percent on the same period last year, and just above analyst estimates of $15.64 million.

On a pro forma basis, earnings per diluted share were 3 cents, in line with analyst estimates. However, the company felt the financial impact of recent acquisitions such as WebWasher in the results (see CyberGuard Acquires Webwasher).

On a GAAP basis, CyberGuard reported a net loss of $59,000 for the first quarter of 2005, or earnings of 0 cents per diluted share.

Speaking on a conference call earlier today, CyberGuard's CEO Pat Clawson said that the companys revenues were buoyed by a good showing in EMEA and a strong late-quarter performance. This is significant, not only because CyberGuard avoided the dread lumpiness phenomenon, but because of geography: The Boca Raton, Fla.-based company has had to contend with some serious weather recently.

”Be assured that the company performed extremely well despite visits from [hurricanes] Francis and Jeanne in the last six weeks of the quarter,” said Clawson.However, the CEO admitted that there is still room for improvement, namely in the Asia/Pacific region and the company’s OEM business. The coming quarters will see a major focus on these areas, he said.

Clawson also admitted that branding is an issue. “We need to get our name out more widely." As a result, he added, the company is now embarking on a new global marketing program.

But, with the U.S. presidential election a matter of days away, Clawson predicts that the real breakout quarter will not come until March 2005. “The commercial sector gets very weak-kneed when there are all these changes going on. There are geopolitical issues that we can’t avoid now, and it pays to be a little cautious.”

Nonetheless, one exec on today’s call promised that CyberGuard will close “some big deals” this quarter and next, although he wouldn't specify.

In early trading today, CyberGuard shares fell 30 cents (4.82 percent) to $5.92.— James Rogers, Site Editor, Next-Gen Data Center Forum