Corporate Presentation

Transcription

1 April 2008 Corporate Presentation 2008 Aladdin Knowledge Systems, Ltd.

2 Safe Harbor Statement Except for statements of historical fact, the information presented herein constitutes forwardlooking statements within the meaning of and subject to the safe harbor created by the Private Securities Litigation Reform Act of In some cases, you can identify forward-looking statements by terminology such as "expect," "estimate," "anticipate," "intend," "predict," "believe," and similar expressions and variations thereof. Such forward-looking statements include statements regarding the intent, belief, current expectations or projections about future events of Aladdin Knowledge Systems Ltd. Readers are cautioned that these forward looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Aladdin Knowledge Systems Ltd. to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include without limitation, general economic and business conditions, the loss of market share, changes in the competitive landscape, failure to keep up with technological advances and other factors over which Aladdin Knowledge Systems Ltd. has little or no control. Aladdin Knowledge Systems Ltd. undertakes no obligation to revise or update these forward-looking statements to reflect events or circumstances after the date hereof.

3 Aladdin Snapshot Founded: 1985, publicly traded since 1993 Headquarters: Global Presence: Tel Aviv, Israel USA, UK, Germany, France, The Netherlands, India, Spain, Italy, Japan and China Employees Worldwide: 468 Strong Financial Momentum: Q1/08 revenues: $30.0M Q1/08 profits: $2.5M (Non-GAAP) 2007 revenues: $105.9M 2007 profits: $17.6M (Non-GAAP) World Renowned Products: Global leader in Software DRM (Digital Rights Management), fast growth, innovative Enterprise Security products

4 Aladdin: Securing the Global Village Our Mission To create value by enabling the secure use and distribution of digital content Our Vision To be the leading provider of innovative security solutions to protect digital assets and enable secure business

5 Aladdin Product Lines TARGET MARKET DRM Software Rights Management copy protection, IP protection and secure licensing solution for software vendors Software Publishers and System Vendors ENTERPRISE SECURITY Solutions for authentication and password/digital identity management Web gateway content security and proactive security Enterprise Education Banking Pharmacy Government Enterprise and ISP s

6 Q Earnings Results Revenue: $30 million + 19% SW DRM Revenue: $19m + 12% Enterprise Security Revenue: $11m + 32% Operating Income: *$2.2 million Net Income: *$4 million Earnings Per Share: *$0.29 Cash: **$95 million + 20% AUTOMOTIVE BANKING B-TO-B C-TO-C ENTERPRISE SECURITY EDUCATION E-COMMERCE GOVERNMENT GAMING HEALTHCARE MANUFACTURING PUBLISHING LAW ENFORCEMENT SPORTS * Non-GAAP

7 Aladdin Growth Strategy SRM for Licensing China Education India Banking Compliance-driven Emerging Markets FORTUNE 100s xsps For xsps GEOGRAPHIES SEGMENTS PRODUCTS

8 Geographies in India New Subsidiary with Sales and R&D facilities CIITE, large etoken and esafe deal with IT university students Certificate Authorities (CA s) China New office in Shanghai Wicresoft: A significant distribution agreement with joint Government/Microsoft venture Emerging Territories Latin America Current Territories Continued Growth in Europe Improving Sales in USA and Japan

9 Annual Revenues are Growing

10 Quarterly Revenues are Growing 20.3

11 Diversified Revenue Streams Business Segments: Geographical Segments: 37% 63% North America: 19% Europe: 63% ROW: 18%

12 Growth in Profitability Net Income (non-gaap)

13 Growth in Profitability

14 Consistent Margins

15 Healthy Balance Sheet US $mm 12/31/ /31/2007 3/31/2008 Cash and Cash Equivalents 39, ,044 Marketable Securities 51,147 13,127 8,981 Held for Sale Investment 4,423 2,336 Trade Receivables 16,427 16,918 17,975 Other Account Receivables 5,779 7,061 6,727 Inventories 7,299 8,763 11,351 Severance Pay Fund 3,153 3,853 4,556 Fixed Assets, Net 5,695 6,501 7,240 Other Long Term Assets, Net 19,290 12,195 20,133 TOTAL ASSETS 148, , ,343 Trade Payables 5,794 8,236 9,636 Deferred Revenues 5,399 6,635 6,738 Other Current Liabilities 8,618 8,583 10,104 Accrued Severance Pay 3,921 4,802 6,027 Other Long Term Liabilities 2,143 2,564 3,358 Non-controlling interest 6,039 Shareholders' Equity 122, , ,441 TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 148, , ,343

16 Strong Cash Flow From Operations

17 2008 Guidance Revenues $123 million to $130 million Compared to: $105.9 million in fiscal year 2007 EPS GAAP: $1.08 to $1.18 Compared to: $1.02 in fiscal year 2007 Non-GAAP: $1.20 to $1.30 Compared to: $1.20 in fiscal year 2007 Lowered EPS guidance is a result of: Strong Israeli shekel Consolidation of Athena Smartcards

18 Software Digital Rights Management

19 HASP SRM Software Rights Management Enables business growth by delivering: Strong copy protection Robust protection for Intellectual Property Secure and flexible licensing Industry s first fully integrated Software DRM solution

20 Software DRM Market Growth Software Digital Rights Management Market: Revenue Forecasts (World), Compound Annual Growth Rate ( ): 12.1% % Revenue Growth Rate (%) Note: All figures are rounded; the base year is Source: Frost & Sullivan

21 Software DRM Competitive Positioning Software Digital Rights Management Market: Competitive Landscape (World), 2006 High Aladdin Ability to Deliver DRM Solutions Macrovision SafeNet Wibu Low Low Market Penetration High Niche Player Emerging/Receding Player Contenders Challenger Market Leader Source: Frost & Sullivan

22 SW DRM Growth Potential with HASP SRM Existing HASP customers using SW-based solutions (All-in-one) Competitive dongle users using SW-based solutions (All-in-one) Vendors using commercial SW-based solutions (HASP SL) Vendors using home-grown solutions (HASP SL) Vendors not protecting (ease of implementation) Additional growth potential High-end consumer applications Not Protecting or Licensing Limited size enterprise applications System vendors (applications embedded in hardware) Existing HASP/Hardlock customers Competitor Customers Using Homegrown Solutions

23 Your Key to esecurity

24 The etoken Product Offering Focusing on Enterprise Solutions Secure network access Data security Password management VPN Secure Net logon SSV VPN Dig Sig File encryption Enterprise SSO Boot Protection Disk encryption PKI Client OTP Authentication Single Sign On Secure Network Logon SDK Token Management System All devices can include RFID

25 Authentication Market Key Growth Drivers Business enablement Strong authentication is increasingly regarded as a must Regulatory compliance HIPAA, SOX, Basel II, and more Increasingly mobile workforce Digital signature usage and laws European Dig Sig laws, MCA 21 in India, SAFE Expanding global market BRIC Reduction of password-related costs

26 Authentication Market Growth Total USB + OTP market in $1.5 B $522 M $76 M Source: Frost & Sullivan, World USB and One Time Password Authentication Markets, 2007

27 etoken Market Success Key Verticals LAW ENFORCEMENT BANKING ENTERPRISE EDUCATION

28 Extreme Capacity. Maximum Security

29 Demand for Secure Web Gateways The market is demanding a secure- Web gateway (SWG) solution that provides not only traditional URLfiltering but also malicious software (malware) filtering, as well as application control for Web applications such as instant messaging (IM). Peter Firstbrook Publication: 20 March 2007 ID Number: G Secure Web Gateway: Malware filtering in the Web gateway will increase from a penetration level of 10% to 15% of enterprises in 2006 to 70% of enterprises by 2011 Publication: 20 March 2007 ID Number: G

30 Securing The Enterprise Perimeter Web Surfing Content Security Anti-spyware Web Content Inspection URL Filtering Phishing prevention IM, P2P, tunneling, etc. Network Security Firewall VPN IDS/IPS Firewall takes care of Network Security Anti-spam Phishing prevention antivirus security esafe takes care of Messaging and Web security Management & Reporting

31 esafe Real Time Content Security Real Time Security Analyze and correlate in real time multiple attack vectors to identify & control malicious content in web, mail and internet applications Industry Leading Performance & Scalability The only deep web inspection technology to scale to service provider capacities.

32 Aladdin esafe is a leading visionary in Gartner Magic Quadrant

33 esafe Market Success Key Verticals SERVICE PROVIDERS FINANCIAL EDUCATION ENTERPRISE

34 xsp Segment Solution Pioneer Product & Technology Delivery models and business models Service providers acceptance Unique Technology & Product Offering Security Scalability Transparency - SOA Successful SMB and Consumer focused launches Continuous product and offering innovation Platform partnerships (Cisco; IBM; Allot; Comverse) Aladdin strategically positioned to take a leadership role

35 Securing the Global Village