PRNewswire-FirstCall
DALLAS
(NASDAQ:ENTU)
Apr 22, 2008

DALLAS, April 22 /PRNewswire-FirstCall/ -- Entrust, Inc. (NASDAQ: ENTU), a world leader in securing digital identities and information, today announced financial results for its fiscal quarter ended March 31, 2008.

"I am pleased with our Q1 performance toward meeting our first half financial and operating commitments," said Bill Conner, Entrust chairman, president and chief executive officer. "Specifically, we grew product revenue five percent year-over-year, increased product transactions by 20 percent over last year, increased revenue from transactions under $500 thousand by 13 percent and increased deferred revenue by $1.0 million from the fourth quarter. Equally important was a $.02/share increase in profitability from a year ago and a positive cash flow from operations of $3.9 million in the quarter before the net change in restructuring accruals."

Revenue for the first quarter was $25.8 million, an increase of 5% from $24.6 million in Q1, 2007. Revenue in the first quarter was driven by product revenue transactions under $500 thousand, which accounted for 90% of product revenue. We also had one deal value of approximately $1.5 million, including software, service and 3rd party hardware for a global government. Deferred revenue increased in the quarter to approximately $28.9 million, an increase of approximately $1.0 million, from $27.9 million at year-end 2007.

Conner added, "In the quarter we continued to make solid progress in many key areas including lowering our reliance on large deals and increasing our revenue from subscription based offerings. We also made significant progress with customers, specifically in Risk Based Authentication and Global Governments, where in the quarter we delivered for two top global financial institutions and a large government e-borders project in Europe. We also achieved record bookings in our SSL certificate business and Entrust Managed Services business added two Fortune 200 U.S. companies to the Entrust Managed Service and as a result achieved over $1.0 million in bookings. These achievements coupled with our overall sales funnel and financial management position us well to achieve our first half and full year 2008 operating and financial goals."

Entrust recorded a Q1, 2008 net loss, calculated in accordance with GAAP, of $1.2 million, or $0.02 per share, compared to Q1, 2007 net loss of $2.4 million, or $0.04 per share. On a non-GAAP basis the company recorded a profit of $344 thousand, or $0.01 per share, compared to Q1, 2007 loss of $837 thousand, or $0.01 per share. The non-GAAP figures exclude amortization of purchased intangibles and stock-option based compensation expense. See the financial table below reconciling these non-GAAP figures to GAAP.

The company ended Q1, 2008 with approximately $22.8 million in cash and cash equivalents and no debt.

Financial Outlook:

Entrust reiterated its previous guidance provided on the first half and full year 2008. Entrust is targeting first half 2008 revenue of between $50.0 million and $53.0 million. For the full year 2008, Entrust is targeting total revenue of between $106.0 million to $110.0 million. Entrust is targeting a net loss in accordance with GAAP of $0.01 per share for the first half of 2008. On a non-GAAP basis the company is targeting a profit of $0.03 per share for the first half of 2008. For the full year 2008, Entrust is targeting a net income in accordance with GAAP of approximately $0.02 per share. On a non-GAAP basis the company is targeting a full year profit of $0.10 per share. The company's Q2, 2008, total expenses on a non-GAAP basis are expected to be approximately $25.0 million. The Company expects to be cash flow positive from operations before adjustments to exclude the effects of the net change in accrued restructuring charges for the full year by over $10.0 million. See the financial table below reconciling the non-GAAP figures to GAAP.

  Q1 Business and Financial Metrics:
  -- Revenue of $25.8 million consisted of 37% product revenue
     ($9.6 million) and 63% services and maintenance revenue
     ($16.2 million). The top five product transactions accounted for 11% of
     Q1, 2008 revenues. There were no product transactions over $1 million
     in Q1, 2008.
  -- Revenue from subscription based product and services accounted for 51%
     of total revenue for Q1, 2008 an increase of 15% from Q1, 2007.
  -- Revenue from transactions under $500 thousand increased 13% from Q1,
     2007, continuing to drive the company's strategy to be less reliant on
     large deals. Transactions under $500 thousand accounted for 90% of
     product revenue in Q1, 2008.
  -- Emerging growth products (Entrust IdentityGuard, Boundary Messaging and
     Fraud Detection) accounted for $2.6 million, or 27% of product revenue,
     up 13% from $2.3 million in Q1, 2007.  Entrust IdentityGuard achieved
     its highest quarterly revenue and number of transactions, which
     increased to 56 this quarter, up from 34 in Q1, 2007.
  -- Public Key Infrastructure (PKI) products accounted for $6.8 million, or
     70% of product revenue, up 6% from $6.4 million in Q1, 2007. Entrust
     certificate services (SSL certificates) increased 41% year-over-year
     and accounted for $2.2 million of PKI product revenue in Q1, 2008.
  -- Product revenue for the quarter was 53% Extended Government and 47%
     Extended Enterprise. The financial services vertical continued to be
     strong, increasing 84% over Q1, 2007 and accounted for approximately
     34% of product revenue in Q1, 2008.
  -- The average purchase size in the first quarter was $50,000, a decrease
     from $61,000 in Q1, 2007. Total transactions in Q1, 2008 reached 136,
     which is up from 113 in Q1, 2007.  Forty-two transactions or 31% of the
     total transactions were from new customers.
  -- Deferred revenue of $28.9 million increased $1.0 million from Q4, 2007.
  -- Cash flow from operations was positive $3.9 million for Q1, 2008 before
     the net change in restructuring.


  Technology and Industry Highlights:
  -- Entrust announced the launch of the most advanced iteration of PKI to
     date in Entrust Authority 8.0 -- the benchmark for digital identity and
     information security. A key component of a layered security approach,
     the latest release of Entrust Authority offers a unique, integrated
     platform for the widely used X.509 standard PKI digital certificates,
     as well as the specialized certificate types and capabilities required
     for new global ePassport initiatives.
  -- Entrust offers integrated secure delivery using the Adobe® portable
     document format (PDF) -- in addition to Web and standards-based
     delivery -- via the Entrust Entelligence Messaging Server. Already
     supporting OpenPGP, S/MIME and Webmail Pull and Web Mail push delivery
     methods, Entrust Entelligence Messaging Server's new secure PDF
     delivery capability provides end-users with easy-to-understand secure
     communication with financial institutions, enterprises, vendors and
     partners. A fully integrated feature, reading encrypted messages now
     only requires a PDF reader, which comes standard on the majority of
     today's personal computers and laptops. Encryption is achieved through
     strong password-based encryption standards. Users can receive encrypted
     messages complete with subject line, body and, unique to the Entrust
     Entelligence Messaging Server, can reply to their secure message with
     an encrypted message.
  -- Entrust added critical administrator authentication support for Windows
     and Unix to its versatile authentication platform, Entrust
     IdentityGuard. Built on standards like Web services and Radius, Entrust
     IdentityGuard easily fits into an organization to protect critical
     enterprise assets. This includes the ability to protect remote access
     applications (e.g., IP-Sec and SSL VPN, Citrix); Web applications,
     including Microsoft Outlook® Web Access; and Microsoft Windows
     desktops. New to the product, Entrust IdentityGuard also now can
     strongly authenticate administrators accessing Microsoft Windows
     servers, both locally and remotely. Entrust IdentityGuard also
     introduced support for protecting administrator access to Unix servers,
     giving deploying organizations the ability to protect users and servers
     across a heterogeneous environment.
  -- Banking and Business Solutions (BBS) selected Entrust Authority
     Security Manager as their complete managed PKI services solution. As
     one of the largest PKI service environments in Europe, BBS brings to
     market more than three decades of experience in delivering world-class
     financial infrastructures, including the Norwegian BankID solution,
     which won the eema Excellence Award in Europe for Securing e-Business.
     BBS' security service portfolio comprises eID infrastructures and
     value-added services as multi-ID authentication and signing solutions,
     long-term archive capabilities, mobile signature services, Det norske
     Veritas Validation Service and One-Time-Code-based services.
  -- Virtual Documents Propriety Limited selected the Entrust IdentityGuard
     versatile authentication platform to help enable the growth of their
     online business model and promote operational efficiency. The solution
     provides the South African-based organization with strong
     authentication for customer access to its online information
     repository, branded "LOC Your DOC™". Entrust IdentityGuard enables
     Virtual Documents customers to verify their identities via strong
     authentication for access to "LOC Your DOC™" system. Facilitated by
     Entrust's reseller L@Wtrust, Virtual Documents purchased a Entrust
     IdentityGuard licenses for 10,000 users, as well as 1,000 Entrust
     IdentityGuard one-time-passcode (OTP) hardware tokens.
  -- Germany-based Universa, the country's oldest private health insurance
     organization, sought a trusted method to enable secure enterprise
     access and communication via a multifactor authentication solution. In
     the end, Universa selected Entrust, Inc. and the Entrust IdentityGuard
     versatile authentication platform to foster efficiency and productivity
     between internal assets, workstations, applications and their remote
     workforce. Facilitated by trusted partner CyProtect, Universa selected
     Entrust IdentityGuard for multifactor authentication via
     one-time-passcode (OTP) hardware tokens, as well as software for secure
     remote access to enterprise resources and Microsoft Outlook Web Access
     (OWA).

Entrust will host a live teleconference and Webcast on Tuesday, April 22, 2008 at 5:00 p.m. (Eastern), featuring Chairman, President and CEO Bill Conner and Chief Financial Officer David Wagner to discuss the company's fiscal first quarter results and 2008 outlook. The conference call audio will be available live via dial-in at 1-800-732-6179 and via the Internet at http://phx.corporate-ir.net/playerlink.zhtml?c=73119&s=wm&e=1816204. Please log on approximately 15 minutes before the Webcast begins in order to register and to download and install any necessary audio software. An archive of the Webcast will be available for 90 days at the above Internet address. For those unable to attend the live conference call, an audio replay will be available beginning at 7:00 p.m. EDT, Tuesday, April 22, 2008 through Tuesday, April 29, 2008 at 11:59 p.m. EDT. The replay number is 1- 877-289-8525 and the pass code is 21268114#.

Use of Non-GAAP Financial Measures

To supplement the financial results that are prepared and presented in accordance with accounting principles generally accepted in the United States, Entrust's management prepares and uses non-GAAP financial measures for many of its internal financial, operating and planning reports. The company's management believes that by excluding charges such as the purchased intangibles amortization in cost of goods sold, the amortization of purchased intangible assets in operating expenses, stock compensation expense, restructuring charges and write down of strategic investments from its GAAP-based results, these non-GAAP financial measures are more likely to facilitate investors' understanding of the company's ongoing business operating results. These non-GAAP financial measures also facilitate comparisons to the operating results of the company's competitors and provide investors with greater transparency with respect to the supplemental information used by management in its operational and financial decision making.

The non-GAAP measures are included to provide investors with supplemental information to facilitate their understanding of Entrust's operating results and future prospects. Management uses these non-GAAP measures to assess its success in reducing the company's cost structure, to measure its ongoing cash operating costs, and to establish budgets and operational goals. The presentation of this additional information should not be considered in isolation or as a substitute for financial and operating results prepared in accordance with accounting principles generally accepted in the United States, as non-GAAP measures are susceptible to varying calculations and they may not be comparable, as presented, to other similarly titled measures of other companies.

This press release contains forward-looking statements relating to Entrust's projected revenue, net income and net loss per share, non-GAAP income per share and cash flow from operations for the first half and full year 2008 and the company's planned second quarter non-GAAP total expenses. Such statements are based upon preliminary estimates which 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 ,inaccuracy in preliminary estimates issues associated with revenue recognition, issues raised in connection with the internal review of quarterly financial results, 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, 2007. 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.

About Entrust

Entrust (NASDAQ: ENTU) secures digital identities and information for consumers, enterprises and governments in 1,700 organizations spanning 60 countries. Leveraging a layered security approach to address growing risks, Entrust solutions help secure the most common digital identity and information protection pain points in an organization. These include SSL, authentication, fraud detection, shared data protection and e-mail security. For information, call 888-690-2424, e-mail entrust@entrust.com or visit http://www.entrust.com/.

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

                                ENTRUST, INC.
          UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share data)

                                                     Three Months Ended
                                                        March 31st,
                                                   2008              2007

  Revenues:
        Product                                   $9,630            $9,144
        Services and maintenance                  16,208            15,419
  Total revenues                                  25,838            24,563

  Cost of revenues:
        Product                                    2,362             1,808
        Services and maintenance                   7,855             7,448
        Amortization of purchased
         product rights                              345               332
  Total cost of revenues                          10,562             9,588

  Total gross profit                              15,276            14,975

  Operating expenses:
        Sales and marketing                        8,703             9,093
        Research and development                   4,742             5,349
        General and administrative                 3,116             3,260
  Total operating expenses                        16,561            17,702

  Loss from operations                            (1,285)           (2,727)

  Other income (expense):
        Interest income                              131               180
        Foreign exchange gain                         20               247
        Gain on sale of long-term
         strategic investments                        18               -
        Loss from equity investments                 -                 (77)
  Total other income (expense)                       169               350

  Loss before income taxes                        (1,116)           (2,377)

  Provision for income taxes                          64                52

  Net loss                                       $(1,180)          $(2,429)

  Weighted average common shares used
        Basic                                     61,165            60,387
        Diluted                                   61,165            60,387

  Net loss per share
        Basic                                     ($0.02)           ($0.04)
        Diluted                                   ($0.02)           ($0.04)




                                ENTRUST, INC.
               UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                                (in thousands)

                                                March 31,       December 31,
                                                   2008               2007
  ASSETS

    Cash and marketable investments              $22,822            $20,485
    Accounts receivable, net of
     allowance for doubtful accounts              19,212             20,773
    Other current assets                           3,375              4,079
    Property and equipment, net                    1,313              1,490
    Purchased product rights and other
     purchased intangible assets, net             10,938             11,543
    Goodwill                                      60,214             60,214
    Long-term strategic and equity
     investments                                      91                 91
    Other long-term assets, net                    3,655              3,479

       Total assets                             $121,620           $122,154


  LIABILITIES AND SHAREHOLDERS' EQUITY

    Accounts payable and accruals                $15,451            $16,330
    Accrued restructuring charges                 17,862             19,266
    Deferred revenue                              28,898             27,894
    Long-term liabilities                            778                218

       Total liabilities                          62,989             63,708

    Shareholders' equity                          58,631             58,446

       Total liabilities and
        shareholders' equity                    $121,620           $122,154



  The following supplemental tables provide non-GAAP financial measures used
  by the company's management to evaluate operational results.  The company
  believes this information may be useful to investors.   In addition to
  disclosing financial results calculated in accordance with U.S. generally
  accepted accounting principles (GAAP), the company's earnings release
  contains non-GAAP financial measures that exclude the income statement
  effects of share-based compensation, amortization of purchase product
  rights and other purchased intangibles, and non recurring restructuring
  and impairment charges. The non-GAAP financial measures disclosed by the
  company should not be considered a substitute for, or superior to,
  financial measures calculated in accordance with GAAP, and the financial
  results calculated in accordance with GAAP and reconciliations to those
  financial statements should be carefully evaluated. The non-GAAP financial
  measures used by the company may be calculated differently from, and
  therefore may not be comparable to, similarly titled measures used by
  other companies.

  Set forth below are reconciliations of the non-GAAP financial measures to
  the most directly comparable GAAP financial measures.

  For additional information regarding these non-GAAP financial measures,
  see the Form 8-K dated April 22, 2008 that Entrust has filed with the
  Securities and Exchange Commission.



                                ENTRUST, INC.
                                SUPPLEMENTAL
                RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES
                    (in thousands, except per share data)

                                                      Three Months Ended
                                                          March 31st,
                                                     2008            2007

  Reconciliation of net loss per GAAP to Non-GAAP
   income (loss):
  GAAP net loss                                    $(1,180)        $(2,429)
        Adjustments for share-based compensation
         expense:
          Cost of revenues                              91              67
          Sales and marketing                          318             289
          Research and development                     122             197
          General and administrative                   399             441
        Amortization of other purchased intangibles:
          Cost of revenues                              38              38
          Sales and marketing                          211             228
        Amortization of purchased product rights       345             332

  Non-GAAP income (loss)                              $344           $(837)


  Reconciliation of net loss per diluted share
   according to GAAP to Non-GAAP income (loss)
   per diluted share:

  GAAP net loss per diluted share                   ($0.02)         ($0.04)

        Adjustments for share-based compensation
         expense                                      0.02            0.02
        Amortization of other purchased intangibles      -               -
        Amortization of purchased product rights      0.01            0.01
                                                      0.03            0.03

  Non-GAAP income (loss) per diluted share           $0.01          ($0.01)

  Weighted average common shares used               61,165          60,387


  Reconciliation of net cash flow from operating
   activities per GAAP to Non-GAAP cash flow from
   operations before the net change in
   restructuring accruals:

  GAAP net cash flow from operating activities      $2,488         $(2,544)
        Adjustments to exclude the effects of:
          Net change in accrued restructuring
           charges                                   1,404           1,238

  Non-GAAP cash flow from operations before the
   net change in restructuring accruals             $3,892         $(1,306)




                                 Forward Looking Guidance
                                 Earnings Per Share Range

                                                First Half         Full Year
                                                    2008              2008
         U.S. GAAP measure                        ($0.02)            $0.01

         Adjustments to exclude the effects of
          amortization of purchased intangible
          assets                                   $0.02             $0.03

         Adjustments to exclude the effects of
          expenses related to stock-based
          compensation                             $0.03             $0.06

         Non-GAAP figures                          $0.03             $0.10


                         Forward Looking Guidance
                          Total Quarterly Costs
                                              (in millions)
                                                 Q1 2008
         U.S. GAAP measure                         $26.5

         Adjustments to exclude the effects of
          amortization of purchased intangible
          assets                                    $0.6

         Adjustments to exclude the effects of
          expenses related to stock-based
          compensation                              $0.9

         Non-GAAP figures                          $25.0


                         Forward Looking Guidance
                   Cash Flow from Operating Activities
                                                               (in millions)
                                                                   Full Year
                                                                      2008
         U.S. GAAP measure                                            $4.6

         Adjustments to exclude the effects of the
          net change in accrued restructuring charges                 $5.4

         Non-GAAP figures                                            $10.0

SOURCE: Entrust, Inc.

CONTACT: Investors, David Rockvam, Investor Relations, +1-972-713-5824
david.rockvam@entrust.com, or Media, Michelle Metzger, Media Relations,
+1-972-713-5866, michelle.metzger@entrust.com, both of Entrust, Inc.

Web site: http://www.entrust.com/