Skip to content
AnalystLens

Verisign Annual Report, Year Ended Dec 31, 2003

Filing Date
Filed March 15, 2004
Period End
December 31, 2003
Security
VRSN
In the record · 2016–202610-K1110-Q338-K94

VRSN filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 94 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Oct ’16Oct ’16
  2. FY2018 annual report10-K · Feb ’19Feb ’19
  3. Leadership change8-K · Jun ’21Jun ’21
  4. Leadership change8-K · Nov ’25Nov ’25

01—Abstract

Summary

Summary of the 10-K filed March 15, 2004. Cited figures are marked; the original filing is the authoritative source.

VeriSign, Inc. reported a net loss of $259.9 milliona for 2003 on revenues of $1,054.8 million, compared with a net loss of $4,961.3 million in 2002.

The decline in losses reflects much lower amortization and impairment of goodwill and other intangible assets, which totaled $335.5 millionb in 2003 versus $4,894.7 million in 2002. Revenues fell 14% from 2002, driven mainly by the sale of the Network Solutions domain name registrar business on November 25, 2003 (Network Solutions revenues declined 32%) and a 17% decline in Internet Services Group revenues, partly offset by a 5% increase in Communications Services Group revenues. The company ended 2003 with $723.7 million in cash, cash equivalents and short-term investments, up from $385.5 million, and generated $358.4 million in operating cash flow.

Stockholders' equity was $1,383.7 millionc at year end, and the accumulated deficit stood at approximately $21.7 billion. Management expects 2004 revenues to decline because of the Network Solutions sale, with moderate growth in the Internet Services Group and flat to moderate growth in the Communications Services Group. Subsequent to year end, VeriSign acquired Guardent for approximately $135 million, of which about $65 million was cash.

The filing also details ongoing litigation, including patent suits (NetMoneyIN, IDN Technologies, and Stambler, which was decided in VeriSign's favor at trial), securities class actions, four lawsuits related to the Site Finder service, and a lawsuit VeriSign filed against ICANN on February 26, 2004. Investors should weigh the company's restructuring, the registry agreement terms with ICANN, and the dependence on a relatively small number of products and services.

02—Key points

Key Highlights

  1. Net loss narrowed to $259.9 million in 2003 from $4,961.3 million in 2002, mainly because goodwill and intangible amortization and impairment fell to $335.5 million from $4,894.7 million.
  2. Revenues declined 14% to $1,054.8 million, reflecting the November 25, 2003 sale of Network Solutions (down 32%) and a 17% drop in Internet Services Group revenues, partly offset by a 5% rise in Communications Services Group revenues.
  3. Cash, cash equivalents and short-term investments rose 88% to $723.7 million, and operating cash flow was $358.4 million.
  4. Network Solutions sale: $97.6 million of consideration, including $57.6 million in cash and a $40 million senior subordinated note, with VeriSign retaining a 15% equity stake.
  5. Management expects 2004 revenues to decline by $140 to $160 million due to the Network Solutions sale, with modest growth in the Internet Services Group.
  6. Subsequent event: acquisition of Guardent, a managed security services provider, for approximately $135 million, of which about $65 million was cash.
  7. Litigation exposure includes patent suits (NetMoneyIN, IDN Technologies), securities class actions, four lawsuits over the Site Finder service, and VeriSign's February 2004 lawsuit against ICANN.

03—Questions

Frequently Asked Questions

  1. Why did VeriSign's net loss shrink so much in 2003?

    The net loss was $259.9 million in 2003 versus $4,961.3 million in 2002. The filing attributes the reduction primarily to a decrease in amortization and impairment of acquired goodwill and other intangible assets, which fell to $335.5 million from $4,894.7 million.

  2. What drove the decline in revenues?

    Revenues fell 14% to $1,054.8 million. The filing cites a 32% decline in Network Solutions revenues, following the sale of that business on November 25, 2003, and a 17% decline in Internet Services Group revenues. Communications Services Group revenues rose 5%.

  3. What does management expect for 2004?

    Management expects a decline in overall revenues because of the Network Solutions sale, with moderate growth in Internet Services Group revenues and flat to moderate growth in Communications Services Group revenues. It also expects restructuring charges of approximately $10 to $20 million in the first quarter of 2004.

  4. How is VeriSign's liquidity position?

    At December 31, 2003, cash, cash equivalents and short-term investments totaled $723.7 million, and working capital was $325.2 million. Operating activities provided $358.4 million in 2003, and management believes existing resources are sufficient for at least the next 12 months.

  5. What legal risks does the filing highlight?

    The filing describes patent infringement suits, including NetMoneyIN and IDN Technologies; securities class actions filed in 2002; four lawsuits related to the Site Finder service; and VeriSign's February 26, 2004 lawsuit against ICANN. Management states it believes the allegations in the patent and Site Finder suits are without merit.

04—Continue

← View all 10-K filings