Pro forma net income for the first quarter, which excludes acquisition related charges and stock based compensation expense, increased 44% to $5.2 million, or $0.08 per diluted share, compared to pro forma net income of $3.6 million, or $0.07 per diluted share in the same period a year ago. The net loss, including acquisition related charges and stock based compensation expense, for the first quarter of 2001 was $5.5 million, or $(0.09) per share, compared to net income of $1.8 million during the same period of the previous year.

Revenues increased by 16% on a sequential basis over the $21.2 million reported in the fourth quarter of 2000 and pro forma net income increased 19% from the $4.3 million, or $0.07 per diluted share, reported in the fourth quarter of 2000.

We are very encouraged by our strong results in the first quarter of 2001, said Sreekanth Ravi, President and CEO of SonicWALL. We expanded our market share for our access security products in terms of both revenues and units, with our installed base of appliances growing to over 140,000 units worldwide. We have also seen strong progress in sales of our SSL products, with successful deployments into several large enterprise accounts, including among others Chase Mellon Bank, Verizon and EMC. These accomplishments underscore our strategy of expanding and diversifying our industry-leading product portfolio, our addressable markets and our sales channels.

We are pleased with several developments during the quarter, said Michael Sheridan, COO and interim CFO of SonicWALL. In the fourth quarter of 2000, we entered the transaction security market through our acquisition of Phobos Corporation, and in the quarter just ended we enhanced our ability to succeed in this new marketplace through the acquisition of Ignyte Technology. Ignyte allows us to offer 24×7 technical support via its fully operational Network Operations Center as well as professional services to the large enterprise customer. We have also continued to make significant gains in our access security business. In addition to strong growth in our worldwide installed base, we experienced a 240% growth over last year in our upgrades and services revenues, which grew to 19% of total revenues for the quarter.

SOURCE: COMPANY PRESS RELEASE