SOURCE: Websense, Inc.

Websense, Inc.

October 29, 2009 08:39 ET

Websense Completes Financial Restatement Relating to Revision of OEM Revenue Recognition Policy and Miscalculation of Tax Provisions

SAN DIEGO, CA--(Marketwire - October 29, 2009) - Websense (NASDAQ: WBSN) today announced that it has filed with the Securities and Exchange Commission amendments to its Annual Report on Form 10-K for the year ended December 31, 2008 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2009 and June 30, 2009. Amendment No. 1 on Form 10-K/A for the year ended December 31, 2008 restates consolidated financial information for the years ended December 31, 2008 and December 31, 2007, as well as quarterly results for those years.

The restatements relate to an error in the method of recognizing royalty revenue related to contracts with original equipment manufacturer (OEM) customers (and its associated impact on the tax provision), and an error in the computation of the income tax provision for the fiscal year ended December 31, 2008 that overstated the company's estimate of taxable income for the purposes of the provision. Additionally, the restated consolidated financial statements include other adjustments that were identified but not previously recorded as they were determined not to be material, either individually or in the aggregate.

The following table summarizes the quarterly impact of the adjustments to the company's reported net income and loss (unaudited, in thousands).

           Previously       OEM
Fiscal       reported    Revenue-                               Net income
 Quarter   net income     timing     Income tax      Other      (loss) as
 Ended       (loss)     Adjustments  adjustments  adjustments    restated
           -----------  -----------  -----------  -----------  -----------
June 30,
 2007      $     2,129           --  $      (828) $       (25) $     1,276
September
 30, 2007        6,395           --         (103)          59        6,351
December
 31, 2007      (26,956)      (1,283)         325          (61)     (27,975)
March 31,
 2008           (6,237)      (1,939)       1,463           12       (6,701)
June 30,
 2008           (8,194)      (2,696)       1,602         (323)      (9,611)
September
 30, 2008       (3,497)      (1,779)         573         (110)      (4,813)
December
 31, 2008      (11,943)      (1,266)       7,760         (205)      (5,654)

 March 31,
 2009           (4,295)      (3,371)       6,844         (265)      (1,087)

 June 30,
 2009            3,121       (1,585)       1,448          351        3,335

Complete restated GAAP and non-GAAP results, as well as a reconciliation of GAAP to non-GAAP results, are available for each quarter on the company's website at investor.websense.com.

Third Quarter 2009 Financial Results and Conference Call

Websense plans to release results for the third quarter ended September 30, 2009 on Thursday, October 29, at approximately 5:30 a.m. Pacific time. Management will host a conference call and simultaneous webcast to discuss the final results at 6:00 a.m. Pacific time. To participate in the conference call, investors should dial 888-503-8171 (domestic) or 719-457-2626 (international) ten minutes prior to the scheduled start of the call. A simultaneous audio-only webcast of the call may be accessed on the Internet at www.websense.com/investors.

An archive of the webcast will be available on the company's Web site through December 31, 2009, and a taped replay of the call will be available for one week at 719-457-0820 or 888-203-1112, passcode 8405935.

About Websense, Inc.

Websense, Inc. (NASDAQ: WBSN), a global leader in integrated Web, data and email security solutions, provides Essential Information Protection™ for more than 40,000 customers worldwide, including 80 percent of the top 100 global companies. Distributed through its global network of channel partners, Websense software and hosted security solutions help organizations block malicious code, prevent the loss of confidential information and enforce Internet use and security policies. For more information, visit www.websense.com.

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