CyberGuard Growth Boosts Stock

CyberGuard Corp. (Nasdaq: CGFW) has busted out an impressive set of financials today, posting revenues of $47.812 million for fiscal year 2004 - up 45 percent from the $32.98 million reported for 2003. Revenues for the fourth quarter were $14.52 million, up 61 percent on the same period last year (see CyberGuard Announces Q4 Growth).

The net income picture, however, did not look as sunny: On a GAAP basis, net income to shareholders was 6 cents per diluted share, compared to 16 cents per diluted share for fiscal year 2003. On a non-GAAP basis, net income to shareholders was 28 cents per diluted share, compared to 33 cents for the prior financial year.

The market responded positively to CyberGuard's results. The company's stock was up 54 cents (6 percent) to $6.20 in trading today.

As its revenues grow, CyberGuard has been flexing its muscles. Back in April, the Fort Lauderdale, Florida-based firm gobbled up content security vendor Webwasher and, more recently, launched an unsuccessful $300 million bid for Secure Computing Corp. (Nasdaq: SCUR) (see CyberGuard Acquires Webwasher and SCUR Spurns CyberGuard Suitor).

"I continue to believe that [Secure Computing] would have created a lot of value for our customers," said CyberGuard CEO Pat Clawson.Although Clawson did not give any insight into whether he was looking elsewhere for new targets, the executive did confirm that new product announcements are imminent. Tomorrow, he said, CyberGuard will take the wraps off its new SG 710 security appliance, a firewall/VPN intrusion and prevention system aimed at mid-market companies. This will be followed next week by more product and R&D announcements, he promised.

Despite registering a second consecutive year of revenue growth, Clawson admitted that there was still room for improvement at CyberGuard. "There are things that we need to do a better job of; we need to work on improving the depth of our U.S. channel and our branding around the globe."

CyberGuard's rapid expansion has seen the company's sales team grow from 30 to 50 people over the last year, and the firm is also on the lookout for a "heavy process-orientated" COO, according to Clawson.

Clawson also highlighted the fact that the market for security products, such as firewalls, is now maturing: "There will be slower growth in the future," he warned.

James Rogers, Site Editor, Next-gen Data Center Forum0