VASCO: Losses from DigiNotar Bankruptcy Under $5 Million

VASCO Data Security, parent of recently “hacked out of business” Certificate Authority (CA), DigiNotar, has shared additional information on the expected losses surrounding the recent cyber attack that forced the company into bankruptcy. Today VASCO said that the losses it expects to record related to the bankruptcy and related events will range from approximately $3.3 million to $4.8 million. These estimates, however, don’t include other potential claims that could be taken against the company.

DigiNotar filed a voluntary bankruptcy petition on Monday, September 19, 2011 and was declared bankrupt by a Dutch Court on September 20th.

The bankruptcy announcement was not surprising, as the company halted sales of its digital certificates following the incident, and the challenges associated with getting back in business and trusted with major software and service providers would be significant. The revenue generated for VASCO, who acquired DigiNotar for $12.9 million in January 2011, was minimal. DigiNotar in the first six months of 2011 generated less than 100,000 Euro in revenue from its SSL and EVSSL business.

“We expect to record the costs and a recovery related to the DigiNotar events beginning in the third quarter of 2011,” said T. Kendall Hunt, VASCO’s Chairman and CEO. “Additional costs or recoveries may be recorded in future periods as more information becomes available. We also expect to report the foregoing costs and recovery, together with the results of operation of DigiNotar through the date of its filing for bankruptcy, as a discontinued operation.”

The company said that more information regarding VASCO’s estimates of the costs and recovery it expects to incur in connection with the DigiNotar events is contained in an amendment to Form 8-K that will be filed by VASCO with the Securities and Exchange Commission later today.