Troubled internet security company V-One Corp took a further turn for the worse yesterday as it missed an earnings warning it produced only nine days earlier and as a result fired some of its workforce. The Rockville, Maryland-based company predicted last week net losses of about $2.1m, or $0.16 per share, but it came in yesterday with losses slightly worse than that for the second quarter of $2.3m, or $0.18 before a $800,000 restructuring charge, or $3.1m, or 40.25 after the charge. The hit was for the cost of laying off 20 people, leaving 86 employees and for writing off certain marketing expenses. Revenues in the quarter were up 57.6% to $2.1m, which is actually quite a modest rise for a company this size, from $1.3m in the same quarter last year. The company blamed the shortfall on a slower-than expected ramp- up in the internet security market. The company says it will now concentrate on channel sales, which made up some 56% of its revenues in the quarter, so presumably it is the direct sales team that is getting the pink slips. Sales and marketing expenses in the quarter were a hefty $2.3m – more than revenues. V-One reckons that following the lay-offs and realignments, it will break even in the second half, especially as it has orders worth between $750,000 and $3m revenues for the third quarter, which is quite a spread. Its main product is SmartGate smart card authentication system, which accounted for 75% of revenues. V- One, as befits a security company, is particularly unwilling to talk about what it does. It canceled previously arranged meetings with us at the time of its initial public offering, which was marked down at the last minute with no reasons given, and getting information out of the company yesterday was like pulling teeth. After an initial spurt following the offering, the shares have headed for the basement. Net losses for the six months were $4.0m after the same charge, down from $4.4m last time, on revenues that were up 91.4% at $4.5m.
