RSA Announces Earnings

BEDFORD, Mass. -- RSA Security Inc. (NASDAQ:RSAS) today reported financial results for the second quarter ended June 30, 2006.

Revenue for the second quarter of 2006 increased 23% to $94.4 million from$76.5 million for the second quarter of 2005. Net income in accordance withGenerally Accepted Accounting Principles (GAAP) for the second quarter of2006 was $2.8 million, or $0.04 per diluted share. Net income for the secondquarter of 2006, adjusted to exclude stock-based compensation charges,restructuring charges related to the Company's restructuring of itsengineering resources, transaction fees associated with EMC's proposedacquisition of RSA Security and amortization of intangible assets associatedwith RSA Security's acquisition of Cyota and PassMark Security ("AdjustedNet Income"), was $10.6 million, or $0.14 per diluted share (refer to the"Use of Non-GAAP Financial Measures" section and accompanying financialtables for reconciliations of GAAP to non-GAAP financial information). GAAPnet income for the second quarter of 2005 was $8.5 million, or $0.12 perdiluted share. The Company did not report non-GAAP net income for the secondquarter of 2005.

"RSA Security had another outstanding quarter with both record revenue andorders, a clear indication that spending on key identity-centric securityinitiatives and encryption continues to be a top priority," said ArtCoviello, RSA Security president and chief executive officer. "We continueto be successful at growing all areas of our business, and we are excitedabout the market potential of all of our solutions.

"Further, we are extremely excited about the definitive agreement to beacquired by EMC that we announced on June 29. Together RSA Security and EMCcan accelerate the much needed integration of critical security measuresinto the information infrastructure."

RSA Security Inc. (Nasdaq: EMC)