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  • Websense Delivers Strong Finish to Record Revenue Year

Websense Delivers Strong Finish to Record Revenue Year

* Billings total $105.9 million for Q4 and $343.4 million for 2008;
* GAAP revenue at record levels of $79.3 million for Q4 and $295.9 million for 2008;
* Cash flow from operations of $24.1 million for Q4 and $67.4 million for 2008, including non-recurring cash expenses

Issued by Websense
San Diego, CA, 26 Jan 2009

(MARKET WIRE via COMTEX News Network) -- Websense, Inc. (NASDAQ: WBSN) today announced financial results for the fourth quarter and year ended December 31, 2008.

Fourth Quarter 2008: Fourth quarter revenue, calculated in accordance with GAAP, increased to $79.3 million from $61.0 million in the fourth quarter of 2007. The increase was a result of the addition of new, renewed and upgraded subscriptions, including the addition of approximately $16.2 million from new or renewal subscriptions from SurfControl products.

The company posted a GAAP net loss of $11.9 million, or 27 cents per share, for the fourth quarter of 2008. This compares to a GAAP net loss of $27.0 million, or 59 cents per share, for the fourth quarter of 2007.

Fourth quarter 2008 GAAP operating results reflected the write-down of the majority of SurfControl's deferred revenue to fair value as of the acquisition close date of October 3, 2007, which had the effect of reducing revenue that would have otherwise been recognisable in the quarter by approximately $6.8 million. Quarterly GAAP operating income also included certain cash and non-cash operating expenses totaling $18.2 million that were excluded from the company's non-GAAP results.

For the fourth quarter 2008, operating cash flow for the quarter was approximately $24.1 million, including approximately $3.0 million in cash payments for acquisition-related costs, compared to $16.0 million in the fourth quarter of 2007.

Fiscal Year 2008: For the fiscal year, GAAP revenue was $295.9 million, including approximately $74.4 million from new or renewal subscriptions from SurfControl products, compared with $211.7 million in 2007, including $8.7 million from SurfControl products. For 2008, the write-down of the majority of SurfControl's deferred revenue to fair value as of the acquisition close had the effect of reducing revenue that would have otherwise been recognisable by approximately $51.7 million.

The company posted a GAAP net loss of $29.9 million, or 66 cents per share, for the year. This compares to a GAAP net loss of $14.6 million, or 32 cents per share, for the 2007 fiscal year.

For the fiscal year 2008, GAAP cash flow from operations was approximately $67.4 million, and included approximately $18 million in cash payments for acquisition related costs, compared to $53.6 million in the fiscal year 2007.

"Our performance this quarter demonstrates that our strategy is working. When we announced the close of the SurfControl acquisition, we made significant commitments for earnings growth, cash flow and customer retention. I am proud to say that we exceeded every one of these commitments," said Gene Hodges, Websense CEO. "Our 2008 non-GAAP earnings were up 45% from 2007, and our cash flow from operations, excluding cash payments for acquisition related costs, was significantly higher than our most recent guidance of $75 million. This performance reflects broad and sustained execution across multiple functional areas, and few companies have been able to deliver this level of performance in the quarters immediately following an acquisition. Our success was due to the strength and discipline of our management team and the unwavering commitment of our employees."

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Websense, Inc.

Websense, Inc. (NASDAQ: WBSN), a global leader in integrated Web security, messaging security and data protection technologies, provides Essential Information Protection(TM) for more than 43 million employees at more than 50,000 organisations worldwide. Distributed through its global network of channel partners, Websense software and hosted security solutions help organisations block malicious code, prevent the loss of confidential information and enforce Internet use and security policies. For more information, visit www.websense.com. Websense is a registered trademark of Websense, Inc. in the United States and certain international markets. Websense has numerous other registered and unregistered trademarks in the United States and internationally. All other trademarks are the property of their respective owner.