For the three months to March 31, the company reported a net income of $473,000, compared to a loss of $2.1m last year, on revenue that was up 28% at $16.7m.
Earnings per share at the pro forma level missed the analyst consensus estimate by a penny, coming in at $0.05 per share, which was within the range of guidance.
The miss was entirely due to problems with OEM partners in the SG Series of small office firewalls, the old SnapGear business.
Chief executive Pat Clawson said: This really centered on one issue, the collapse of two of our OEMs, this cost us about half of a million dollars in the quarter.
Clawson said that one is going out of business, one is in financial straits, and that both collapses… came suddenly and with no advance warning.
Without this problem, the company would have made about $17.2m in revenue, which would have translated to an extra $0.02 at the bottom line, executives said.
Clawson said that both OEMs have been replaced with more stable companies, but that it will take a few quarters for them to ramp up to the same levels.
The firewall business was up 22% on last year, and non-OEM SG Series sales were up, he said. Sales to US enterprises were also encouraging, he said.
We fully expect the strength from other products to offset the temporary decline on the SG side, Clawson told analysts.
Revenues for the current quarter will be $16.7m to $17.2m, and non-GAAP earnings per share will be between $0.03 and $0.05, the company predicted.
