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Fortinet releases 2nd quarter business highlights

Fortinet : 19 September, 2008  (Company News)
Key appointments, products milestones and strong sales in key markets leads to successful second quarter for Fortinet
Fortinet has announced key sales, product, market and operational milestones that contributed to the company's positive results for the first half of 2008, including achieving non-GAAP operating profitability for the first time in the second quarter of 2008. Additionally, Fortinet announced two recent additions to its Board of Directors - the appointments of Greg Myers, former vice president of finance and chief financial officer of Symantec Corp., and Hong Lu, chairman of UTStarcom.

Greg Myers and Hong Lu bring to Fortinet proven track records and numerous decades of combined experience. A seasoned financial executive well-versed in the security business, Greg Myers served as vice president of finance and chief financial officer of Symantec, a provider of Internet security technology, from 1999 to 2005, and held various other senior finance positions at the company from 1993-1999. In addition, Mr. Myers currently serves on the Board of Altera and has previously served on the Boards of Packeteer until its sale to Blue Coat Systems; Maxtor until its sale to Seagate Technology; Inktomi until its sale to Yahoo; and privately held Webroot. Mr Myers received a BSc from California State University at Hayward and a MBA from the University of Santa Clara.

An acclaimed telecommunications visionary and entrepreneur, Hong Lu served as president and CEO of UTStarcom, a leading provider of IP-based networking and telecommunications equipment solutions, from 1991-2008, and currently serves as executive chairman of the board. Prior to this, he founded Unitech Telecom which later merged with Starcom Networks to form UTStarcom. Mr Lu was also president and CEO of Kyocera Unison, a majority-owned subsidiary of Kyocera International from 1983 until its merger with Kyocera in 1986. Additionally, he held CEO and COO roles at Unison World, a software development company. Mr. Lu received a BSc in Civil Engineering from the University of California, Berkeley.

During 2007, Fortinet achieved $193 million in billings (net amounts invoiced to our customers) and $155 million in revenues for its network security products and services. During the first half of 2008, the company grew billings 32 percent to $120 million and grew revenues 34 percent to $98 million, compared to $73 million the first half of 2007. Sales of its enterprise and high-end security appliances constituted the fastest-growing segments of its business. Additionally, Fortinet grew deferred revenues in the first half of 2008 by 38 percent year over year -- contributing $15 million in cash and ending the period with $105M in total cash and cash equivalents and investments. The company also achieved non-GAAP operating profitability in 2Q08 and has been cash flow positive each year since 2005. To date, Fortinet has shipped more than 350,000 of its multi-threat security appliances to enterprises and service providers of all sizes around the world.

"The world's largest companies are entrusting their IT security to Fortinet based on the unique value we bring - a highly flexible, fast and secure platform to address the myriad of data and network security requirements," said Ken Xie, founder, president and CEO of Fortinet. "Increased market recognition, global large customer adoption, and solid business execution are driving Fortinet's growth, which is outpacing the market. Additionally, our strong cash position and revenues - well-balanced across products and services, geographies and market segments - provide a solid foundation for continued growth and market opportunities."

Fortinet's first half 2008 revenues were driven by notable wins in the telecommunications, managed security service provider, enterprise, government and financial services sectors. Referenceable customer wins during the period included Verizon Communications, Belgacom, Toshiba-Sony Semiconductor, VMware, Cathay United Bank, Chunghwa Telecom and Samsung Tesco. Strengthening its footprint among the world's largest customers, Fortinet also won competitive deals with the following customers:.

* Global 10 company for PCI compliancy.
* Global 25 company for a large firewall deployment.
* Global 50 telecom provider for a data centre security project.
* Global 100 financial company to secure its investment banking network.
* Global 100 mobile operator to secure its internal network.
* Global 100 company to provide VoIP security and wireless VPNs.

In addition, Fortinet closed a number of deals in excess of $1 million during the first half of 2008, including a sale to a Global 30 telecommunications carrier for a managed security services offering, a Global 200 telecommunications carrier, a large Spanish healthcare provider, and the US Federal government.

Fortinet expanded its business with the successful completion of a technology asset acquisition from IPLocks, a leader in database security and compliance solutions. The acquisition of IPLocks' vulnerability assessment tool, as well as a broad license to IPLocks' database monitoring and auditing tools, extends Fortinet's network security portfolio to the database application level.

The company also maintained its leadership position in the worldwide UTM market for the 10th consecutive quarter, according to analyst firm IDC. Data from the September 2008 IDC Worldwide Quarterly Security Appliance Tracker confirmed Fortinet as the overall leader in UTM factory revenue for first half 2008, ahead of Check Point, Cisco, Juniper and SonicWALL, as well as the leader in worldwide factory revenue and unit shipments in both the high-end ($50K-$99K) and enterprise ($25K-$49.9K) UTM price band segments for the same time period. This data supports Fortinet's growing position among enterprises and service provider customers.

Other Fortinet business highlights during the first half of 2008 include:.

New Patent Awards: The United States Patent and Trademark Office awarded Fortinet four additional patents for network virtualization and security related inventions. These new patents strengthen Fortinet's growing intellectual property portfolio, bringing the company's total awarded patents to 18, with more than 80 patents pending and in process.

ISO 9001:2000 Certification: Fortinet was certified for the ISO 9001:2000 Quality Management Systems standard for its Burnaby and Ottawa, Canada locations, which represent key research and development centres for the company for activities such as hardware and software design and development, the FortiGuard® Network services, technical documentation and manufacturing operations.

Anti-Spam Certification: Fortinet was among first to receive ICSA Anti-spam certification for its FortiMail-4000A secure messaging appliance.

FIPS Security Certification: Fortinet's FortiClient PC Endpoint security software earned the coveted Federal Information Processing Standards (FIPS) 140-2 levels 1 and 2 certifications from the National Institute of Standards and Technology (NIST).
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