Up für ALADDIN KNOWLEDGE Sys WKN 888110

Aladdin Knowledge Systems Company

Overview           ---    About the Company      

Aladdin is dedicated to being the leading provider of security services and solutions used to protect digital assets, enable secure business, and maximize the benefits from creating, selling, distributing and using digital content.      

Since its founding in 1985, Aladdin has grown to the leadership position in the Software Digital Rights Management (DRM) and Enterprise Security fields.

With proven technology, a history of steady growth, successful mergers and acquisitions, Aladdin has proven to be an invaluable partner to software developers and Internet security professionals.

    Aladdin Knowledge Systems has spent over two decades providing the most innovative and secure solutions.

Its reputation is built upon a comprehensive line of products satisfying the security needs of organizations operating in a world where fast and secure information accessibility is a necessity.

These products include HASP®, the leading Software Rights Management products;   eTokenTM, the next generation authentication key;   and eSafe®, integrated content security solutions.      

Aladdin has fourteen offices throughout the world and an ever-expanding global network of resellers and distributors that support customers in numerous countries. Aladdin provides solutions to thousands of organizations, from Fortune 100 corporations and governments, to major financial and educational institutions.  

   Excluding stock-based compensation expenses, the Company reported non-GAAP net income for the second quarter of 2008 of $0.5 million, or $0.04 per basic share and diluted share, compared to second quarter of 2007 non-GAAP net income of $4.6 million or $0.32 per basic share and $0.31 per diluted share. Refer to the "Use of Non-GAAP Measures" section and accompanying financial table for a reconciliation of GAAP financial information to non-GAAP.

   Cash, cash equivalents and marketable securities totaled $94.5 million at June 30, 2008. The Company generated cash flow from operations of $0.6 million during the second quarter of 2008.

   Yanki Margalit, Chairman and CEO of Aladdin Knowledge Systems, said, "Our second quarter 2008 revenue and earnings per share results were in line with our preliminary results announced on July 2, 2008. With a goal of improving long-term performance, we are increasing our investment in customer focused research and development as well as marketing resources in order to drive organic growth while also seeking additional complementary acquisition opportunities. I believe these investments in our core business will strengthen our portfolio of IT security offerings and increase our global brand recognition."

   Financial and Operating Highlights

       * Quarterly revenues of $26.4 million, an increase of four percent year-over-year.
       * Announced a definitive agreement to acquire Italian-based Eutronsec, S.p.A. for approximately €10.0 million in cash, including acquisition-related expenses. The closing of the transaction is subject to customary closing conditions and is expected to be consummated by September 2008.
       * Established a new office in Portugal as part of Aladdin Europe. Located near Lisbon, the Portuguese office, Aladdin Europe, Lda., is set to strengthen its HASP software DRM business in Portugal through the acquisition of long-time partner and distributor, Futurmática.

   Quarterly Product Highlights

       * Released Aladdin eToken NG-FLASH 72K, which combines the features of a USB encrypted flash drive and an open Java Card technology with an advanced smartcard.
       * Aladdin HASP SRM won "Most Innovative Software for the Software Industry" at the Computer Technology Industry Association (CompTIA) 2008 SoftwareCEO Software Innovation Awards.
       * Aladdin HASP SRM won a 2008 Codie Award in the "Best Digital Rights Management Solution" category from the Software and Information Industry Association (SIIA).
       * Released Aladdin eSafe v6.2 Proxy, offering organizations more options in control and flexibility for secure Web gateway deployment.
       * Announced Linux support for Aladdin HASP SRM, the first fully-integrated software- and hardware-based copy protection and licensing solution.

   For further information on product highlights, refer to the press room on the Company's Web site at www.aladdin.com/about/press/corporate.aspx.

   Future Business Outlook

   Based on current business conditions and expectations, Aladdin management is reiterating the recently updated 2008 top line revenue target range issued on July 2, 2008 of between $112.0 million and $120.0 million for fiscal year 2008 as compared to the $105.9 million in revenues reported for fiscal year 2007.

   The Company is also reiterating its recently updated fiscal year 2008 GAAP diluted earnings per share guidance range of between $0.36 to $0.44. These figures do not include amortization and reorganization charges related to the acquisition of Eutronsec, as they are not yet determinable. The Company reported GAAP diluted earnings per share of $1.02 for fiscal year 2007.

   Fiscal year 2008 non-GAAP diluted earnings per share are expected to be in the range of $0.48 to $0.56. Non-GAAP earnings per share guidance excludes the projected impact of stock-based compensation expenses and anticipated one-time expenses related to the Company's recent and announced acquisitions. The Company reported non-GAAP earnings per diluted share of $1.20 for fiscal year 2007, which excluded stock-based compensation expense and the impact of the $2.0 million non-recurring up-front cost associated with production of video-based training.

   The Company undertakes no obligation to update its estimates.

   Use of Non-GAAP Measures

   This press release provides financial measures for net income, basic and diluted earnings per share that exclude stock-based compensation expense and anticipated one-time mergers and acquisition related expenses which are not calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP). Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding the Company's performance that enhances management's and investors' ability to evaluate the Company's net income and earnings per share as well as to compare it with historical net income and earnings per share.

"Achieving Premium Anti-Spam Certification reinforces that Aladdin eSafe provides comprehensive gateway security for organizations.”         "In today's fast-paced corporate environment, spam threatens not only productivity, but the safety of an organization's network,” said Tsion Gonen, vice president of the Aladdin eSafe Business Unit at Aladdin Knowledge Systems.

"Achieving Checkmark's Premium Anti-Spam Certification provides independent verification of eSafe's ability to deliver best-of-breed Web and email security solutions that protect organizations against constantly evolving malware threats."      

Additional Checkmark Certifications for eSafe include Premium URL Filtering, Anti-Trojan, Anti-Spyware Gateway and Anti-Virus Gateway.  

To download the full West Coast Labs eSafe Report, visit

www.aladdin.com/pdf/esafe/Westcoast-SoftScan-3-30.pdf.

"Aladdin's commitment to supporting all major development environments and operating systems is clearly displayed in the newest version of HASP SRM,"  said Laila Arad-Allan, vice president of software digital rights management at Aladdin Knowledge Systems. "Java applications are frequently used in mobile phones, smart card devices, and embedded software development for medical machinery, parking pay stations, Web cameras and games. The widespread use of Java poses an increased risk to these segments, making intellectual property protection an absolute necessity wherever Java applications are included."

Increased Security     HASP SRM v 3.50 provides software developers with enhanced security, adding clone detection to software-based licenses to preserve revenue through detection of fraudulent software licenses. Once detected, software publishers can choose to cease functionality of the duplicate software license until the user contacts the software publisher to validate the license.      Enhanced Convenience and Ease-of-Use Features     New features and granular, role-based tools provide enhanced visibility, allowing software publishers to make informed decisions quickly and easily, and improve productivity by giving more independence to order entry and fulfillment roles:

* Improved Key Memory Management: Enhanced key memory management tools enable order entry representatives to use pre-defined default memory values or overwrite new information to the key memory when the order is placed with no fear of impacting the key's functionality.

* Business Studio™ GUI Enhancements: In response to customer requests, the Business Studio interface has been updated to include a number of new ease-of-use functions including the ability to multi-select from a list, search directly from the "Customer Name" field in the order form without the need to open a new search, new easy-to-find buttons that replace drop-down menus, and the ability to copy & paste product keys for use in emails, on labels, etc.

* Update Handling Improvements: Additional user-requested functionality has been added to the Business Studio API that enables order fulfillment staff to streamline simple updates to software in the field; including the ability to wipe licenses clean before installing a license update.

Pricing and Availability

Aladdin HASP SRM v 3.50 is available now and can be purchased through the worldwide network of Aladdin offices and authorized HASP distributors. The HASP SRM Developer Kit is available for download at no charge. Pricing for hardware- and software-based Protection Keys and product activations varies based on type and quantities selected. Current HASP SRM customers can upgrade at no charge by downloading the update from the Aladdin Web site at  

www.aladdin.com/support/hasp-srm/hasp_srm_v3_50.aspx.

The HASP SRM Java Envelope is available for download at www.aladdin.com/support/hasp-srm/vendor.aspx.      

About Aladdin HASP SRM

Aladdin HASP SRM is the #1 choice of software publishers worldwide, boosting business growth and profitability through strong software copy protection, unmatched intellectual property protection, and secure licensing and product activation.

Fully aligned with the software product lifecycle, award-winning HASP SRM features easy-to-use role-based tools for developers, product managers, order processing, and production.

Visit  www.Aladdin.com/HASP.

Aladdin Knowledge Systems (NASDAQ: ALDN) is an information security leader with offices in 12 countries, a worldwide network of channel partners, and numerous awards for innovation. Aladdin eToken is the world's #1 USB-based authentication solution, offering identity and access management tools that protect sensitive data. Aladdin HASP SRM boosts growth for software developers and publishers through strong anti-piracy protection, IP protection, and secure licensing and product activation. Aladdin eSafe delivers real-time intelligent Web gateway security that helps protect data and networks, improve productivity, and enable compliance. Visit www.Aladdin.com.

Safe Harbor Statement

Certain information presented herein constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include general economic and business conditions, risks relating to our recent acquisition of Athena Smartcards and the pending acquisitions of SafeWord and Eutronsec, including the failure to realize expected synergies, failure to effectively integrate these businesses into our business and increasing unexpected liabilities, the loss of market share, changes in the level of business or anticipated business from a large customer or customers, failure to achieve anticipated customer orders, changes in the competitive landscape and other factors over which the company has little or no control. For more information, please refer to the Company's filings with the Securities and Exchange Commission, which are available on the Commission's website at www.sec.gov.

©2008 Aladdin Knowledge Systems, Ltd. All rights reserved. HASP, eToken, eSafe, Aladdin Knowledge Systems and the Aladdin logo are trademarks or registered trademarks of Aladdin Knowledge Systems, Ltd.

"Increased end-user awareness and ongoing advances in technology are helping shape better products and services," said Rake Narang, editor-in-chief, Network Products Guide. "Aladdin eToken is bringing improvements in strong, two-factor authentication using smartcard technology and encrypted flash memory for secure storage of data and certificates. Aladdin eSafe is advancing Web filtering with its real-time, multi-layered inspection of Web traffic that goes beyond 'good' and 'bad' sites to identify zero-day attacks."

 "These awards recognize the best technology products and Aladdin is honored that eSafe and eToken have each gained the Network Products Guide Reader Trust," said David Collins, vice president of sales for enterprise security at Aladdin North America. "We are committed to aiding our channel partners by providing them with the very best security products."

About Network Products Guide Awards  Network Products Guide, published from the heart of Silicon Valley, is a leading provider of products, technologies and vendor related research and analysis. The guide provides a wealth of information and tools including the best products and services, roadmaps, industry directions, technology advancements and independent product evaluations that facilitate in making the most pertinent technology decisions impacting business and personal goals. The guide follows conscientious research methodologies developed and enhanced by industry experts. To learn more, visit www.networkproductsguide.com.

About Aladdin eSafe

Aladdin eSafe delivers real-time intelligent Web gateway security solutions that help organizations protect data and networks, improve productivity, and enable compliance. Recognized as an industry innovator, Aladdin is positioned as a Visionary in Gartner's Magic Quadrant, and millions of users depend on eSafe to protect against the latest Internet threats.

Visit www.Aladdin.com/eSafe.

About Aladdin eToken  

Aladdin eToken is the world leader for USB-based authentication solutions. eToken provides strong user authentication and cost-effective password management solutions, enabling secure network access, improved data security through enhanced encryption and digital signing, as well as compliance with a wide range of regulatory requirements worldwide.

Visit www.Aladdin.com/eToken.

About Aladdin

Aladdin Knowledge Systems (NASDAQ: ALDN) is an information security leader with offices in 12 countries, a worldwide network of channel partners, and numerous awards for innovation.

Aladdin eToken is the world's #1 USB-based authentication solution, offering identity and access management tools that protect sensitive data. Aladdin HASP SRM boosts growth for software developers and publishers through strong anti-piracy protection, IP protection, and secure licensing and product activation. Aladdin eSafe delivers real-time intelligent Web gateway security that helps protect data and networks, improve productivity, and enable compliance.

Visit www.Aladdin.com.

©2008 Aladdin Knowledge Systems, Ltd. All rights reserved. eSafe, eToken, Aladdin Knowledge Systems and the Aladdin logo are trademarks or registered trademarks of Aladdin Knowledge Systems, Ltd.

All other product and brand names mentioned in this document are trademarks or registered trademarks of their respective owners.

Press Contact:

Matthew Zintel Zintel Public Relations matthew.zintel@zintelpr.com 310.574.8888

Investor Relations Contact: Debbie Kaye Corporate Communications Manager debbie.kaye@aladdin.com 646.468.0481

 

Aladdin has met and will continue to meet its obligations to provide Vector with a shareholder list that reflects the most up to date publicly available information. To the extent that large shareholders materially change their holdings, they, not the Company, are obligated under SEC rules to update their holdings, through Schedule 13-F, 13-G and 13-D filings, all of which are publicly available. The list provided to Vector is the same list the Company received from its transfer agent. The further information Vector has requested regarding non-objecting beneficial owners and DTC participants are considered non-public information. Providing such any material non-public information to a single shareholder, especially one who is also a direct competitor of our Company through its wholly owned subsidiary, SafeNet Inc., would not provide "a level playing field" and is not in the best interests of all shareholders.

In its response to Vector's unsolicited proposal and the proxy contest Vector has initiated, the Company is well-advised by experts in law, finance, proxy solicitation and communications. Vector has asserted that hiring a proxy solicitation firm is a violation of Israeli law, yet their lawyer has not provided a single citation either to a law or court ruling to justify this baseless claim. The assistance of a proxy solicitation firm is vital in order for the Company to fulfill its fiduciary duties to communicate with shareholders and to compile a timely and accurate register of shareholders. It is ironic that Vector claims that the Company falls short in a duty to keep track of its shareholder base, yet makes baseless complaints that hiring an expert to assist it is illegal.

Aladdin fully intends to continue to meet its legal obligations while protecting its shareholders' interests.