Overall revenues for the quarter were up 200% compared to the same quarter in 1999 (from $3.2 million in 1999 to $9.5 million), with an increase in filtering product revenues of 425% ($8.4 million compared to $1.6 million in the second quarter of 1999). These results represent impressive performance over the previous quarter with Internet filtering revenues increasing by 44% over the first quarter from $5.8 million to $8.4 million. Earnings resulting from Internet filtering products account for 89% of overall revenues in comparison to 51% for the same quarter last year. The gross profit margin continued to exceed 90%.
SurfControl’s phenomenal growth both organically and through acquisitions is further attributed to:
Growing awareness in the U.S. and international market for the need to implement sound Internet access policies;
Formation of SurfControl Australia through the acquisition of Emu Tech, Australia’s leading provider of E-mail filtering products and technology, and its primary sales partner Lanvision;
New mandatory Internet filtering legislation for schools and libraries across the US;
Growing global customer base including KPMG, Barclays, Credit Agricole, Petrofina, Raffeisen Bank and NATO;
Expanded reseller network with indirect revenues for filtering products of $2.2 million compared to $1.1 million in the first quarter;
New OEM agreements including partnerships with Comprise Technologies and GTA;
Significant contribution from Europe and ROW, increasing to $1.8 million for the quarter, amounting to 21% of global filtering product revenues; and
Further amalgamation of product sets resulting in a clearly defined group of products addressing all market needs: SuperScout for business, CyberPatrol for home and education and SurfControl SDK for the OEM Market.
Steve Purdham, SurfControl CEO, commented, In this quarter we exceeded our initial expectations with an excellent set of results. We are seeing clear evidence that the demand for Internet filtering products continues to grow at an increasing pace, with the implementation of an Internet access policy in the workplace now accepted as a standard operating procedure. At a time when the technology sector has fallen out of favor with stock markets throughout the world, we are pleased to report that our Company continues to perform extremely well on the ground. With the acquisition of EmU Tech and Lanvision in Australia, we are well positioned to become the leading provider of e-mail and web filtering solutions worldwide.
