Financials

2001 First-Quarter Financial Statements

ENTRUST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

(in thousands, except per share data)
Three Months Ended
March 31

2001
2000
(unaudited)
Revenues:
  License $10,559 $20,889
  Services and maintenance 20,946
 8,173
Total revenues 31,505
 29,062
Cost of revenues:
  License (b) 901 937
  Services and maintenance 13,346
 4,568
Total cost of revenues 14,247
 5,505
Gross profit:
  Licenses 9,658 19,952
  Services and maintenance 7,600
 3,605
Total gross profit 17,258 23,557

Sales and marketing
26,580
12,857
Research and development 9,487 4,993
General and administrative 4,687 2,192
Acquisition related costs:    
  Amortization of purchased product rights 1,377 -
  Amortization of goodwill and other purchased intangibles 28,900
 661
    (53,773) 2,854
Investment income 3,244
 1,886
Income (loss) before income taxes (50,529) 4,740
Provision for income taxes 350
 1,422
Net income (loss) $ (50,879)
 $ 3,318

Weighted average common shares used:
  Basic 62,911 49,250
  Diluted 62,911 57,760

Net income (loss) per share:
  Basic $ (0.81) $ 0.07
  Diluted $ (0.81) $ 0.06

Supplemental Data:
  Net earnings (loss) from operations (a) $ (20,252) $ 3,781
 
Net earnings from operations (loss) per diluted share
$ (0.32)
$ 0.07
 
Weighted average common shares used
62,911
57,760

(a) Net earnings (loss) from operations excludes Acquisition Related Costs, utilizing a 30% effective tax rate on income and a effective tax rate of zero on losses.

(b) Excludes amortization of purchased product rights.

ENTRUST, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)
Mar 31, 2001
 Dec 31, 2000
(unaudited)

ASSETS
Cash and short-term marketable investments $195,551 $227,687
Accounts receivable, net of allowance for doubtful accounts 41,167 46,301
Other current assets 10,616 9,603
Property and equipment, net 27,827 25,168
Purchased product rights, net 17,882 19,259
Other purchased intangibles, net 19,849 22,054
Goodwill, net 338,432 365,127
Other long-term assets, net 21,164
18,907
  Total assets $672,488
 $734,106

LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accruals $27,059 $39,300
Deferred income 20,710 19,466
Due to related party 799 799
Long-term liabilities 399
477
  Total liabilities 48,967 60,042
Shareholders' equity 623,521
674,064
  Total liabilities and shareholders' equity $672,488
 $734,106
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