SurfControl Posts Record Second Quarter Results Driven by Demand for Multi-Layered Internet Threat Protection

SurfControl Posts Record Second Quarter Results Driven by Demand for Multi-Layered Internet Threat Protection

Increasingly Malicious and Criminal Internet Threats, Regulatory Compliance and Spiraling IT Costs Fuel Enterprise Demand for SurfControl's Internet Security Solutions

SCOTTS VALLEY, Calif., Feb. 1 /PRNewswire-FirstCall/ -- SurfControl plc

(LONDON: SRF) , the world leading Internet security company providing enterprise Web and E-mail filtering, today reported financial results for the second fiscal quarter of 2005, ending December 31, 2004.

Revenue for the second fiscal quarter of 2005 increased 17% to $24.7 million from $21.2 million for the second quarter of 2004. Revenues for the half year to December 31, 2004 increased 15% to $47.1 million compared to $40.8 million for the same period last year. Free cash flow remained strong, the Company has no debt, and ended the quarter with $89.9 million in cash. Full details of the second quarter financial results are available on the "Financial Information" page in the Investor section of the Company's Website at http://www.surfcontrol.com/.

"Enterprises recognize that Internet threats can come from any access point or through any connected system, and security solutions must provide a layered defense capable of stopping an evolving mix of threats that may be known or unknown, internal to a company or even targeted specifically at their business. These are the types of Internet threats that SurfControl's products stop," said Steve Purdham, chief executive officer at SurfControl.

Market Drivers

* Unrelenting attacks on corporate e-mail systems: Spam volume is at an
all time high and the threats are becoming increasingly malicious.
Phishing attacks designed to lure users to disclose confidential
information are accelerating, and denial-of-service attacks, dictionary
harvest attacks, and mail floods are more widely used by hackers and
spammers.

* Disappearing Perimeter/P2P Applications: Enterprise perimeters have
disappeared as a result of the proliferation of wireless LANs, wireless
"hot spots," and peer-to-peer applications such as instant messaging
(IM). One in six organizations has successfully had a virus, worm or
other malicious content enter through IM according to Osterman Research.

* New threats drive demand for multi-layered security: IDC estimates the
Secure Content Market will grow to $7.5B by 2008 with the Web and E-mail
filtering segments growing by 23% and 34% CAGR respectively, driven by
emerging threats such as spyware and phishing.

Company Highlights

* Customers: During the quarter, SurfControl added more than 1,100 new
customers, including significant growth in enterprise renewal sales.
Reflecting the company's enterprise growth, new customers included
Premier Medical, Brinks, Inc., Suzuki, China Southern Airlines Co. Ltd,
United Broadcasting Corporation Thailand, Daimler Chrysler, British
Olympic Association, British Nuclear Group, and NSW Attorney Generals
Department.

* Launch of RiskFilter Appliance: SurfControl's market strategy is
focused on delivering new products and platforms that provide layered
content security. This quarter represents the first full quarter in
which RiskFilter has been available and the market reaction has been
positive from both end customers and the reseller channel. A building
pipeline and a demonstrably shorter sales cycle than software indicates
good sequential growth in following quarters. Feedback from customers
and resellers indicates ease-of-deployment, scalability, performance,
value, an expanded range of models and broader availability through a
growing reseller channel as the primary drivers for RiskFilter's early
success.

* Industry Recognition: SurfControl received the 2004 Product Line
Strategy Leadership Award for Total Content Filtering from Frost &
Sullivan, a leading technology research firm. The Company was selected
due to the completeness and robustness of its product and service
offering, recognizing the company's vision for extending its expertise
beyond traditional Web filtering to provide multi-layered content
protection. SurfControl Web Filter was honored in the "Best Web Usage
Monitor" category in Redmond Magazine's 2005 Reader Survey. In
addition, SurfControl E-mail Filter was recognized as a preferred
product in the "Best Secure Messaging Tool or Service" category. Both
SurfControl Web and E-mail Filters are finalists in the Secure Computing
Awards to be announced at the 2005 RSA Conference.

About SurfControl


SurfControl plc, is a world leading Internet security company that stops threats for companies of all sizes. Our enterprise Web and E-mail filtering solutions handle existing and emerging threats by continuous attention to quality and innovation, helping our customers manage threats such as spyware, phishing, spam, gambling and porn in many forms.

SurfControl is the industry's only complete solution to manage Internet threats with high quality multilayered solutions. SurfControl technology protects all points of entry, and every way employees use the Internet for business -- Instant Messaging, Web, e-mail and peer-to-peer, whether in the office or remotely. It also works on the most popular platforms they work on -- Microsoft Exchange and ISA 2004, Juniper, Cisco, CheckPoint, BlueCoat and many more.

The company's products and technology are used by more than 20,000 customers worldwide, including many of the world's largest corporations. SurfControl employs approximately 500 people in offices across the United States, Europe and Asia/Pacific. For further information and news on SurfControl, please visit http://www.surfcontrol.com/.

Caution concerning forward-looking statements: Any statements contained in this announcement that are not historical facts are forward-looking statements. Although the Company believes that its plans, intentions and expectations reflected in such forward-looking statements are reasonable, a number of important factors could cause SurfControl's actual future results to differ materially from those expressed in any such forward-looking statements. The forward-looking statements herein speak only as of today. SurfControl expressly disclaims any obligation or undertaking to update or revise such information.

Any references to pro-forma financial measures must be read in conjunction with the accompanying reconciliation to the nearest UK GAAP measure which can be found on our web site at http://www.surfcontrol.com/company/investors/financial_information.


Source: SurfControl plc

CONTACT: Press: Roger Fortier of McGrath-Power PR, +1-408-727-0351,
rogerf@mcgrathpower.com, for SurfControl plc, or Christina Frey of SurfControl
plc, +1-831-440-2629, christina.frey@surfcontrol.com, or Investor Relations:
Lisa Beatty of SurfControl plc, +1-831-440-2621, lisa.beatty@surfcontrol.com

Web site: http://www.surfcontrol.com/


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