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CyberGuard Corporation (CFW) |
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CEOCFO Current
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This is a printer friendly page! As commercial enterprises and
governments worldwide rethink security goals and strategies, CyberGuard is poised to take
advantage of this growing market by offering the most secure firewall/VPN available Bio of CFO: Mike Matte joined CyberGuard
in February 2001 as chief financial officer. Having held CFO positions in both publicly
traded and privately held companies, Mr. Matte had served most recently as CFO of Amerijet
International in Fort Lauderdale, a privately held international air cargo company. At
Amerijet, Mr. Matte was responsible for overseeing financial operations in 29 countries.
Prior to his tenure at Amerijet, Mr. Matte was CFO of Intime Systems International, a
publicly-traded West Palm Beach based company that developed proprietary software and
provided systems integration services to Fortune 1000 companies. At Intime, Mr. Matte
worked closely with the Wall Street investment community and was responsible for all SEC
and internal financial reporting. Before joining Intime, Mr. Matte
was CFO and vice president, finance, of Torwest, Inc., the US holding company for a $13
billion Canadian diversified conglomerate. A certified public accountant, Matte began his
career at Price Waterhouse Coopers, a Big Five international accounting and consulting
firm. He worked at PWC for 11 years, first as audit manager in Tampa, Fla., and
Nassau, Bahamas, and later as senior manager of the West Palm Beach office. CyberGuard Corporation (AMEX: CFW) is a leading provider of network security solutions to Global 2000 companies and governments worldwide. CyberGuard's award winning, industrial-strength firewall and security products protect the integrity of data and applications from hackers and digital thieves. The company designs products and services that prevent unauthorized Internet and network access while enabling corporations and government organizations to benefit from Internet, intranet and extranet applications, such as electronic commerce. The company has world headquarters in Fort Lauderdale, Florida, and branch offices worldwide. A spin-off of Harris Corporation, in June 1996, the
company changed its name to CyberGuard Corporation to reflect a business focus on trusted
computer systems and information security. The company has one subsidiary, CyberGuard
Europe, Ltd., and a recently acquired NetOctave division that specializes in hardware
acceleration. The entities share a commitment to providing network security products that
deliver the highest levels of security, performance and manageability. CyberGuard’s
firewall technology has earned all the industry's major awards and certifications
including the world's most rigorous IT security evaluation – the international Common
Criteria Evaluation Assurance Level 4+. CyberGuard’s firewall/VPN appliances – the
SL, KS, FS and LX series – are built to meet business needs ranging from
small businesses to large geographically distributed enterprises. Not only do the products
provide the highest security, they also offer high-performance, reliability,
manageability, robust features and functions, and an award-winning, intuitive GUI.
In addition to a track record of no vulnerabilities according to numerous independent
authorities, CyberGuard has some of the most satisfied customers. In a survey of more than
2,000 Information Security magazine readers, CyberGuard’s products got the highest
overall rating (4.1), the highest rating among government users (4.4) and the only perfect
score (5.0) among users in companies with more than 50,000 employees. CEOCFOinterviews: Mr.
Matte, please tell us about CyberGuard and the services you provide? Mr. Matte: “CyberGuard is a firewall/VPN (virtual private network) provider to the enterprise market. We develop and sell network security products – or appliances – and services to Global 2000 companies and governments worldwide. The most important thing about CyberGuard products is our ability to provide high security and performance. Cyber Guard provides an appliance firewall, with an integrated VPN. We deliver perimeter security as well as security for internal networks.” CEOCFOinterviews: What is it that your software does that makes it secure? Mr. Matte: “We have a hardened operating system and we offer multilevel security. We also provide an application proxy in our firewall, which is the most secure form of firewall because it inspects all seven layers of the information coming through. What we really offer is a hybrid firewall/VPN appliance that can do both types of data inspection: packet filtering as well as application proxy firewalling. This is not true of firewalls currently offered by most of our competitors.” CEOCFOinterviews: Who are your primary customers, what industries and areas? Mr. Matte: “We focus on several verticals. The financial sector is obviously one of our major verticals. The telecom industry is another major area, although not as much today as in the past, and also government – worldwide. We sell our products based on three factors: security, performance and ease of use. Our overall focus is on the Global 2000 customers.” CEOCFOinterviews: Why are they choosing you? Mr. Matte: “We have one of the most secure products around today. Another distinguishing factor about CyberGuard is the service we provide. We are a solution provider to our customers. We go into customer locations and help them solve other problems that they may have in their network, whether it is routing, switching or other complex issues. We want to make sure that they have the optimal network setup so their firewall and networks are working in an optimal fashion to protect their critical information.” CEOCFOinterviews: What is the revenue model? How do you market your product? Mr. Matte: “We sell an appliance and we also sell a maintenance contract with that appliance. The maintenance contracts start at 30 percent of the list price of the product. However, there are different levels of maintenance that can be purchased. We have a network of channel partners that we use to introduce our products to their customers. We market in trade publications and trade shows. Word of mouth – through satisfied customers that we currently have on our installed base – is also very important to us. ” CEOCFOinterviews: Would a customer typically have more than one firewall? Mr. Matte: “Typically, you will see that there are multiple firewall vendors involved in many organizations, especially at the enterprise level. They have something that we call defense in depth, where you may have one firewall vendor on the perimeter of the organization and another firewall vendor internal to the organization between departments. Some organizations may have branch offices; you may use a different vendor for a branch office or a home office. It is not unusual to see multiple firewalls in an enterprise type of setting.” CEOCFOinterviews: Will you tell us about the NetOctave acquisition? Mr. Matte: “NetOctave is a company we worked with in the past. They have the fastest accelerator card on the market today. We acquired a group of very talented engineers that we think can help us take our product to another level. One of the things we are working on with NetOctave on is an SSL (secure sockets layer) VPN, because it is very easy to deploy. Right now our VPN is an IPsec (Internet protocol security) VPN. We think the market is going to be moving in the future toward the SSL type of VPN because they are the easiest to deploy in a large enterprise type market.” CEOCFOinterviews: Do you see additional acquisitions? Mr. Matte: “We will always be looking for the right acquisitions that fit our organization’s long term objectives. With the turmoil that is going on in the market there are many companies that have significant investments and simply cannot make it in today’s economic environment. There is not a lot of money flowing from the venture markets. If the right opportunity comes along, we will certainly look at it.” CEOCFOinterviews: You have been doing well when most have not. What are doing right and how do you continue? Mr. Matte: “One of the things we saw when we came in here was that CyberGuard had a great product but it was primarily an engineering company. It was a turn-around situation for us. The company was spending more money than it was making and that had to change. One of the first things we did was cut back on a lot of the non-essential costs that were being incurred. We got our sales organization lined up and attacked markets that were growing despite the economy – foreign and U.S. markets and the U.S. government. We have been very successful with that approach. We expect as those markets continue to grow, we will continue to grow as well.” CEOCFOinterviews: Are there geographic areas where you would like to establish a bigger presence? Mr. Matte: “Right now our revenue break out is about 46 percent North America, 34 percent EMEA and 20 percent Asia PacRim. We are adding physical presence in two of the largest economies; Japan and Germany. We hope to see some results from that within the near future.” CEOCFOinterviews: Will you tell us about the financial condition of the company? Mr. Matte: “The financial condition of the company today is very strong. We have generated positive cash flow from the first quarter of 2001, with the exception of one quarter. We have virtually no debt and we continue to be cash flow positive.” CEOCFOiterviews: What is your client retention rate? Mr. Matte: “I can tell you that our renewal rate for our maintenance for our existing and installed clients is very high - in the 80-90 percent range.” CEOCFOinterviews: Do you feel the increase in people’s concern for security has helped CyberGuard off-set the general economic down-turn? Mr. Matte: “I think people are much more conscious about network security today. All the events that are happening worldwide have caused a lot of people to re-think their security goals and strategies. Before, not many organizations had security departments. Now you have network security departments within many organizations. I think the focus has increased a lot over the last two or three years.” CEOCFOinterviews: How much effort does CyberGuard put into refining your products and upgrading; what is the R&D situation? Mr. Matte: “Historically, we spend between 17 and 20 percent of revenues for R&D. That includes enhancements to our products and added feature-functions. We are always responding to customer needs and requests for new features in our products. It is something that we have to do and will continue to do to make and keep our product competitive.” CEOCFOinterviews: What should shareholders and potential investors know that perhaps they don’t realize when they first look at CyberGuard? Mr. Matte: “CyberGuard, in our opinion, has one of the most secure products in the market. One of the things we struggle with on a daily basis is lack of recognition. As a small company, we do not get some of the press or the visibility that some of the larger players in the space have today. I think shareholders and potential investors can be assured that we have a management team here that is focused and efficient and we are working with a product we think is one of the best on the market.”
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