Entrust Targets Breakeven for Year End 2003

Company announces restructuring and special charges to complete business transformation

27 May 2003

DALLAS - Entrust, Inc. [Nasdaq: ENTU], a world leader in securing digital identities and information, today announced an action plan aimed at lowering costs and better aligning its resources to customer needs. The plan allows Entrust to have tighter integration between customer touch functions, which better positions the company to take advantage of the market opportunities for the new products and solutions they are introducing this quarter. The restructuring plan includes:

Elimination of positions through layoffs and attrition to lower operating costs;
Reorganizing customer touch positions to increase customer focus;
Closing under-utilized office capacity and reassessing the value of related assets;
Re-assessing the market sublet rate for previously closed facilities; and
A non-cash charge related to the impairment of an equity investment made three years ago in Brazil.

"The restructuring plans announced today completes our business transformation started two years ago," said Bill Conner, chairman, president and chief executive officer of Entrust. "Having completed our largest number of new product introductions in the company's history, we are now targeting breakeven by year end 2003 while maintaining our strong balance sheet."

Restructuring Costs:

The company estimates that it will be taking charges of approximately $22 million in 2003, of which approximately $18 million will be in the second quarter and the remaining $4 million will be recorded by year end.

The total cash impact of the restructuring will be approximately $17 million with $6 million in the second quarter of 2003 and $5 million for the remainder of 2003. The residual $6 million of cash impact will be spread over the subsequent eight years.

The larger components of the restructuring include charges for severance and related workforce reduction, closing excess facilities, adjustments of projected future lease obligations for previously abandoned facilities, strategic investments and other intangibles. The company will provide more detail on these actions on its Q2 financial results conference call, which will take place at the end of July. This plan is anticipated to generate operating expense reductions of approximately $5 million per quarter or $20 million annually.

"These actions are the right financial moves for improving Entrust's business model," said David Wagner, chief financial officer for Entrust. "We will come out of this quarter with a business model that has less risk in our top line performance, a lower breakeven point and a lower cash burn rate. I am confident that today's actions will make us a more nimble company that is better positioned to deliver value to our customers and shareholders."

Financial Outlook:

Entrust is making no change to its previous revenue guidance of a range of $22 million to $26 million for the second quarter of 2003. The company is currently targeting a GAAP net loss of between $22 million and $25 million or $.36 to $.40 per share. This is up from the previous guidance of a net loss of between $.04 and $.08 per share. The revised net loss target includes the impact of the restructuring plan charges of approximately $.29 per share and includes an increase in the second quarter operating expenses to $29 million, or $.02 per share, due to the impact of the exchange rate between the Canadian and US dollar. The company is also targeting a cash and marketable securities balance of approximately $113 million at the end of the second quarter.

The company is targeting breakeven by year-end 2003. Entrust is targeting to end 2003 with a cash and marketable investments position of greater than $100 million.

Mr. Conner and Mr. Wagner will hold a conference call this morning to further discuss these strategic initiatives. The call will begin at 8:30 a.m. EDT on Tuesday, May 27, 2003.

The conference call is available by dialing 1-800-814-4860. Conference audio will also be available live via Web cast at a direct link at http://webevents.broadcast.com/cnw/entrust20030527 or through http://www.entrust.com/investor/calendar.htm. Please log on about 15 minutes prior to the call in order to register, download and install any necessary audio software. The Web cast will be accessible for 90 days at the above Internet addresses.

For those unable to attend the live teleconference call, an audio replay will be available beginning at 10:30 a.m. ET, Tuesday, May 27, through Tuesday, July 22, at 11:59 p.m. ET. The North American replay number is 877-289-8525 and the International replay number is 416-640-1917. Both numbers have a passcode of 21003165#.

This press release contains forward-looking statements relating to Entrust's projected revenue, net loss and net loss per share for the second quarter of 2003, total projected quarterly cost savings associated with operating the business, costs associated with the restructuring of the business and closing excess facilities, Entrust's projected cash and marketable investments at the end of the second quarter and at December 31, 2003, non-cash charges associated with the impairment of an investment in Brazil and Entrust's expected product introductions and related developments in connection with its strategic transformation, and such statements involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are unforeseen operating expenses, issues associated with revenue recognition, competitive pressures, lack of technology spending in general and the risk factors detailed from time to time in Entrust's periodic reports and registration statements filed with the Securities and Exchange Commission, including without limitation Entrust's Annual Report on Form 10-K for the fiscal year ended December 31, 2002. While Entrust may elect to update forward-looking statements in the future, Entrust specifically disclaims any obligation to do so, even if its estimates change.

Entrust is a registered trademark of Entrust, Inc. in the United States and certain other countries. Entrust is a registered trademark of Entrust Limited in Canada. All other Entrust product names and service names are trademarks or registered trademarks of Entrust, Inc or Entrust Limited. All other company and product names are trademarks or registered trademarks of their respective owners.