MOUNTAIN VIEW, Calif. -- VeriSign, Inc. (Nasdaq: VRSN - News), the leading provider of critical infrastructure services for the Internet and telecommunications networks, today reported its results for the fourth quarter and fiscal year ended December 31, 2003.

Q4 2003 Financial Results

VeriSign reported revenue of $252 million for the fourth quarter of 2003. The results for the fourth quarter reflect the sale of the Network Solutions business, which closed on November 25, 2003, and therefore include only 56 days of Network Solutions' fourth quarter activity.

On a pro forma basis, VeriSign reported net income of $44 million or $0.18 per fully diluted share for the fourth quarter. These pro forma results exclude the following items, which are included under generally accepted accounting principles ("GAAP"): amortization of other intangible assets, restructuring and other charges, non-cash stock-based compensation charges related to acquisitions and the gain from the sale of the Network Solutions business. VeriSign's fourth quarter results were not fully taxed. On an after-tax basis, using a 30% effective tax rate on pro forma pre-tax income of $58 million, pro forma earnings per share for the fourth quarter was $0.17 per fully-diluted share. A table reconciling the pro forma to GAAP numbers reported above is appended to this release.

On a GAAP basis, VeriSign reported a net loss of $22 million for the fourth quarter. The GAAP loss for the fourth quarter was primarily attributable to a restructuring charge of $43 million, the majority of which was related to the sale of the Network Solutions business. The restructuring charge consisted of employee severance, facilities abandonment, contract terminations and asset dispositions.

"Our continued focus on becoming the critical infrastructure provider for the Internet and Telecommunications networks produced a solid finish to 2003," said Stratton Sclavos, Chairman and CEO of VeriSign. "We are pleased that we were able to meet our operating and financial goals for the fourth quarter as we further solidified our position as a leader in managed security, directory and communication services."

Fiscal 2003 Financial Results

For the year ended December 31, 2003, VeriSign reported revenue of $1.1 billion. On a pro forma basis, net income was $181 million or $0.75 per fully diluted share. The pro forma year-end results exclude the following items, which are included under GAAP: amortization and write-down of goodwill and other intangible assets, the gain on and write-down of certain investments, restructuring and other charges, non-cash stock-based compensation charges related to acquisitions and the gain from the sale of the Network Solutions business. VeriSign's fiscal 2003 results were not fully taxed. On an after-tax basis, using a 30% effective tax rate on pro forma pre-tax income of $204 million, pro forma earnings per share for the full year 2003 was $0.59 per fully diluted share. A table reconciling the pro forma to GAAP numbers reported above is appended to this release.

On a GAAP basis, the net loss for the year was $250 million. The GAAP loss for the year 2003 is primarily attributable to a charge of $336 million for the amortization and write-down of goodwill and other intangible assets.

"Our fourth quarter results helped cap off a year in which we consistently demonstrated the benefits of our strong business model and operational rigor, as evidenced by our 2003 operating cash flow of $358 million, a 49% increase over 2002," said Dana Evan, Chief Financial Officer of VeriSign. "Throughout the year, we increased operating margins, improved productivity and efficiency and drove dramatic improvement in our balance sheet."

Notable business developments during the fourth quarter included a definitive agreement to acquire Guardent, which will bring together two of the leading providers of Managed Security Services (MSS), the sale of VeriSign's Network Solutions domain name registrar business to Pivotal Private Equity, and the successful initial public offering (IPO) of VeriSign's Japanese Subsidiary, VeriSign Japan K.K. Also during the quarter, VeriSign's Payments business purchased the electronic payment assets of CelNX to be used in the telecommunications market.

In addition to the in-quarter highlights listed above, VeriSign also recently announced that it has been selected by EPCglobal, a not-for-profit standards organization, to operate the Object Naming Service (ONS) as the root directory for the EPCglobal Network. The company does not expect this contract to materially impact its 2004 financial results.

VeriSign Inc.