This is an all-time high for revenue recorded in a second quarter by VASCO. Revenue for the quarter was adversely affected by approximately $600,000 as a result of the continued weakness of the Euro and currencies pegged to it.

The Company reported a net loss for the quarter of $1,523,174, or $.06 per share, compared with a net loss of $1,250,068, or $.05 per share in the second quarter of 2000. Revenue for the six months ended June 30, 2001 was $15,907,602, a 32% increase over revenues of $12,056,127 reported in the same period last year. The Company reported a net loss of $2,561,748, or $.11 per share for the first half of 2001, compared with a net loss of $2,064,786, or $.08 per share for the first half of 2000.

Loss before interest, taxes, depreciation and amortization was $908,066 for the second quarter of 2001, compared with $933,331 for the second quarter of 2000. For the first half of 2001, loss before interest, taxes, depreciation and amortization was $1,296,521, compared with $1,310,034 for the first six months of the prior year.

In a quarter when many companies in our sector are reporting extremely weak top-line growth, we are pleased to report revenues in line with the guidance we gave earlier in the year, stated VASCO CEO Mario Houthooft. Our 24% year-over-year revenue growth is in spite of the current weakness in the Euro.

Our sales volume growth was much higher than the dollar growth indicates. Using Euro translation rates in effect in the first quarter would have resulted in growth of over 30% for the second quarter compared with the prior year.

During the first half of 2001 we added nearly one million new users of our Digipass strong authentication and digital signature platforms to our install base, bringing us to almost six million users worldwide. Our quarter was quite successful with the announcement of new customers, new VACMAN server products, new Digipass trusted user platforms, and the opening of our sales office in London. Our complete line of fully interoperable security software and hardware products for the corporate and government markets is today an engine driving us steadily toward profitability

SOURCE: COMPANY PRESS RELEASE