CipherTrust Closes Record Q4 and 2004, Further Cementing Company's Position as Clear E-Mail Security Leader

Business Wire, Feb 17, 2005

ATLANTA -- Tenth Consecutive Profitable Quarter, Channel Growth, International Expansion and Product Innovation Hallmarks of 2004

CipherTrust, Inc., the leader in messaging security, today announced that 2004 marked another banner year for the Company, which recently completed another record quarter of e-mail security appliance sales and marked its tenth consecutive quarter of profitability.

"The last several years have been incredible for CipherTrust, and 2004 was the best yet," said CipherTrust President and CEO Steve Raber. "Being recognized as the industry leader by the media and analyst firms is very rewarding, but ultimately it's our customers, partners, and employees that have made us the leader in the e-mail security market. We are excited about what 2005 will bring, as we continue to increase our market penetration across the globe."

The Undisputed E-Mail Security Leader

CipherTrust once again led the industry in the key metrics of customer acquisition, retention and appliance revenue in 2004. Adding 400 new customers worldwide, expanding business with another 500 existing customers and maintaining maintenance renewals in excess of 99% for independent companies, CipherTrust continues to drive the industry in acquiring and maintaining enterprise customers. As opposed to 2002 and 2003, when the majority of growth was driven by first time e-mail security deployments, 2004 was primarily driven by the replacement of less capable e-mail security products and new projects in encryption and compliance.

Continuing its streak of success among industry analysts throughout the year, in December 2004 CipherTrust was ranked as one of the industry's leading solution providers in META Group's E-mail Hygiene Vendor Comparison report, in which 12 e-mail hygiene vendors were evaluated. Maintaining its strong leadership position, CipherTrust consistently received high marks across the specific evaluation criteria within the areas of Corporate Specifics, Product Functionality and Platform Specifics. META's honor completes the "triple crown" of analyst recognition after already being named the Secure Content Management Appliance market share leader by IDC and being placed in the leader quadrant in Gartner Group's Enterprise Anti-Spam Magic Quadrant. CipherTrust is the only vendor to be recognized as the leader by all three analyst firms.

The success was not limited to analysts. In a review that took place in December 2004, PC Magazine once again named CipherTrust "Editors' Choice" for e-mail security appliances, beating competitors such as IronPort, Borderware, ProofPoint, and Barracuda. This continues IronMail's winning streak in high profile product reviews, achieving stellar results in reviews by eWeek, CRN, FCW, and SC Magazine.

Champion of the Channel

CipherTrust's significant investment in establishing and growing a world class channel program paid huge dividends in 2004, as CipherTrust increased its sales through the channel at an over 25% quarterly sequential growth rate and the mix of total sales from the channel grew by nearly 50%. This increasing channel activity culminated in the announcement during the fourth quarter of its intention to fulfill 100 percent of its sales through its broad network of channel integrators and resellers. The addition of top tier partners such as Akibia, Software Medium, SiegeWorks and Calence during the quarter provided further evidence of the escalating strength of the CipherTrust channel program. The Company also held its first Partner Conference in November 2004, which provided an opportunity for its leading reseller partners to share ideas and strategies, as well as meet with CipherTrust management and hear the latest on the Company's distribution strategy.

CipherTrust World Tour

To meet strong demand from the international market, CipherTrust continued to make significant investments globally, naming new international leadership during 2004. CipherTrust's Europe, Middle East and Africa (EMEA) operations, encompassing seven offices, are now being led by the former head of Sophos' UK operations, David Stanley. Other bold moves to extend its global reach included unveiling its Latin America operations and business unit, as well as its expansion into the Asia-Pacific region. Former Netscreen executive Hansen Chang will lead sales and operations in Asia Pacific from the Company's Hong Kong headquarters, while Internet Security Systems veteran Luis Quinones will run CipherTrust's Latin America division.

Continued Product Innovation

In the fourth quarter of 2004 CipherTrust introduced the world to Connection Control, a groundbreaking new component of IronMail, which dramatically improves the award-winning product's e-mail processing capabilities, resulting in an even higher return on investment for customers. Connection Control dynamically rejects upwards of 50 percent of connection attempts from known spammers, and can even cost spammers time and money by making it significantly more expensive for them to deliver unsolicited e-mail.