SafeNet Reports Fourth Quarter and 2005 Financial Results; Fourth Quarter Revenue Grew 21%; Full Year Revenue Grew 31%; Fourth Quarter Non-GAAP EPS a Record; GAAP EPS Grew 60%; Company Updates Guidance

-- SafeNet's SafeEnterprise(TM) SONET/SDH Encryptors were shown to deliver better performance for high-speed, low-latency applications such as disaster recovery, storage area networks, and metro and campus applications than one of the industry's highest performing IPSec routers. The testing, conducted by Rochester Institute of Technology's Golisano College of Computing and Information Sciences, confirms that SafeNet's network security devices provide high speed encryption without compromising fiber optic speed or performance. Dr. Luther Troell from RIT's Golisano College of Computing and Information Sciences said of the results, "The SafeNet SONET Encryptor outperformed in all areas we tested."

Rights Management

Product Announcements

-- SafeNet launched Sentinel(R) RMS, a comprehensive rights management solution that streamlines the license management process. Sentinel RMS dramatically reduces or eliminates many of the costs normally associated with license management by automating this process and integrating it with back-office systems. Sentinel RMS includes components for design, automated fulfillment, and ongoing management. This product is also the only software licensing solution that provides secure role-based management, allowing software vendors to easily separate the functions of license creation, generation, and delivery. It has been selected by some well-known companies including certain appliance manufacturers that are using RMS to improve their customer service and cost structures by leveraging the efficiencies of the Internet to more quickly and effectively deliver added capabilities to deployed products.

-- SafeNet launched Sentinel Hardware Keys, a software rights management token that protects software vendors from unauthorized use or distribution of their products. Sentinel Hardware Keys are the first and only hardware tokens to incorporate public key cryptography, AES encryption and internal authentication. The result is an ultra-secure hardware token that still offers the highly flexible licensing for which the SafeNet Sentinel product line is known.

-- SafeNet launched Unified Software Protection (USP), the world's first comprehensive solution for protecting software products from unauthorized use and distribution. Leveraging SafeNet's unique portfolio of rights management products and services, USP serves to protect the assets of software vendors throughout the entire product lifecycle - from development, delivery and management to monitoring and mitigation.

-- SafeNet launched DRM Fusion, a 5th generation, interoperable Digital Rights Management (DRM) server-side solution. Fusion implements and extends multiple DRM technologies such as Windows Media DRM 9 and 10 and OMA DRM while providing common integration interfaces. Fusion is a DRM solution for wireless and wireline operators and service providers.

-- SafeNet's DRM Solutions were among the first to demonstrate interoperability with leading device manufacturers at the first Open Mobile Alliance's (OMA) TestFest for DRM V2.0. This important standard is a critical milestone in the adoption of DRM technology as a vehicle to deliver high-value content to consumer electronic devices.

Customer Wins

-- Tally Solutions Pvt. Ltd., India's biggest and most successful business accounting software vendor, selected SafeNet's Sentinel Hardware Keys and RMS for its software security solution.

-- Digital River, Inc., a global leader in e-commerce outsourcing, selected SafeNet's Sentinel RMS as it looks to enhance its digital revenue management platform.

-- Liebherr-Werk Ehingen GmbH, one of the world's leading manufacturers of mobile cranes, has chosen SafeNet Sentinel products to secure its computer-based training modules. By implementing SafeNet's Sentinel Hardware Keys, the company is able to license and deliver critical training content to its customers in a secure, controlled manner.


Product Announcements

-- SafeNet announced its SafeXcel(TM)-5140, -5150, and -5160, the market's first Enterprise Security Processors specifically designed for network equipment manufacturers targeting the fast-growing small and medium-sized enterprise (SME) market. Pre-integrated with SafeNet's QuickSec Unified security software, the Enterprise Security Processors enable OEMs to build complete VPN gateways, broadband access devices and home networking equipment, while significantly reducing time-to-market.

-- SafeNet launched QuickSec IKEv2 and QuickSec for Telecom. The QuickSec products are a key component of SafeNet's fully integrated security systems for VPN, Firewall, and Intrusion Prevention solutions. QuickSec for Telecom is the market's first IPSec network security toolkit to secure third generation (3G) Wireless Networks. QuickSec IKEv2 Toolkit provides OEM developers with a fast, reliable, and secure IPSec authentication solution at a fraction of the cost and time needed for in-house designs.

-- SafeNet launched QuickSec Unified, the market's first integrated security platform for network equipment manufacturers. OEM's can now build complete unified threat management appliances for small to medium enterprises that provide high-performance, real-time protection against network security threats in a single device.

-- SafeNet announced QuickSec Unified Anti-Virus, an advanced anti-virus solution leveraging best-of-breed technology from Kaspersky Lab that enables network equipment manufacturers to add an effective defense against virus threats to their security appliances.

Customer Wins

-- Royal Philips Electronics selected SafeZone Software to provide the security foundation for Philips Trust v2 DRM Solution. In a joint effort with SafeNet's Rights Management division, SafeNet and Philips will deliver an integrated DRM solution to the OEM marketplace, leveraging the Philips Trust v2 DRM Solution and SafeNet's SafeZone Software.

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