VeriSign, Inc. (NASDAQ:VRSN), the leading provider of digital trust services, today reported its results for the fourth quarter and year ended December 31, 2002.

VeriSign reported revenue of $275 million for the fourth quarter. On a pro forma basis, operating income for the fourth quarter was $47 million and pro forma net income was $42 million or $0.18 per fully diluted share. Pro forma results exclude the following items, which are included under Generally Accepted Accounting Principles ("GAAP"), of amortization and write-down of goodwill and intangible assets, the net gain on the sale of investments, as well as the write-down of certain investments, restructuring and other charges and non-cash stock-based compensation charges related to acquisitions. VeriSign's fourth quarter results were not fully taxed. On a fully taxed basis, applying a 30% tax rate (consistent with financial analyst projections) to pro forma pre-tax income of $48 million, pro forma earnings per share for the fourth quarter was $0.14 per fully diluted share.

VeriSign also reported revenue of $1.2 billion for its fiscal year ended December 31, 2002. On the same pro forma basis described above, operating income for 2002 was $201 million and pro forma net income was $204 million or $0.85 per fully diluted share. The pro forma year-end results exclude items (which are included under GAAP) of amortization and write-down of goodwill and intangible assets, the net gain on the sale of investments, as well as the write-down of certain investments, restructuring and other charges and non-cash stock-based compensation charges related to acquisitions. VeriSign's 2002 results were not fully taxed. On a fully taxed basis however, applying a 30% tax rate (consistent with financial analyst projections) to pro forma pre-tax income of $214 million, pro forma earnings per share for fiscal 2002 was $0.62 per fully diluted share.

"VeriSign saw continued improvement in both our external markets and internal operations in the fourth quarter," said Stratton Sclavos, Chairman and CEO of VeriSign. "As a result, we believe we are well-positioned to capitalize on opportunities in the security, telecom and registry services areas as they emerge in 2003."

On a GAAP basis, VeriSign reported a net loss of $39 million for the fourth quarter and a net loss of $5.0 billion for the year ended December 31, 2002. The GAAP loss for the fourth quarter is primarily attributable to a charge of $67 million for the amortization and write-down of goodwill and intangibles and $15 million in charges related to the company's on-going efforts of the corporate restructuring announced in April 2002. The GAAP loss for the full year 2002 is similarly due to a $4.9 billion charge for the amortization and write-down of goodwill and intangibles, as well as a write-down of approximately $171 million on its investment portfolio and $89 million in charges related to the company's corporate restructuring and other efforts mentioned above.

"In the midst of a difficult IT spending environment, VeriSign generated revenues in 2002 in excess of $1.2 billion, pro forma operating income of $201 million and cash flow from operations of more than $230 million," said Dana Evan, Chief Financial Officer of VeriSign. "Most importantly, VeriSign enters 2003 well-positioned with a strong balance sheet and financial position including more than $400 million in cash and short-term investments."

Notable business developments during the fourth quarter included the announcement of the general availability of VeriSign's Consumer Identity Verification Service, VeriSign's Trusted Content Delivery Service for software providers and the adoption by leading web hosting companies of VeriSign's authentication services. VeriSign Telecommunication Services launched its integrated billing and customer care system for GSM networks and announced new carrier contracts for expanded telecommunications services with leading providers such as MetroPCS and Douglas Telecommunications. Also during the quarter, VeriSign announced an agreement with America Online to provide business e-mail, web sites and domain names to AOL's small business customers.

Effective January 15, 2003, VeriSign realigned the business segments under which it will report. The new business segments for 2003 reporting purposes will be the Internet Services Group, the Telecommunication Services Group and Network Solutions. As part of this realignment, the Company announced that it has re-launched the Network Solutions brand through which it will market its domain name registration, Web site and e-mail services as this brand has been inextricably linked since its inception to domain names and has strong market recognition.

Significant developments during the previous quarters in 2002 included several key announcements regarding VeriSign's partnerships with such leading technology players such as IBM and Intel. In its relationship with IBM, VeriSign and IBM announced the first set of jointly developed security services and solutions from a global alliance the two companies forged earlier in the year. In addition, VeriSign and Intel announced a deal to strengthen the security for next generation wireless notebook computers whereby VeriSign will optimize its digital certificates and Personal Trust Agent for native integration into Intel's future mobile computing platform known as Centrino.