<SEC-DOCUMENT>0001193125-13-404720.txt : 20131021
<SEC-HEADER>0001193125-13-404720.hdr.sgml : 20131021
<ACCEPTANCE-DATETIME>20131021082900
ACCESSION NUMBER:		0001193125-13-404720
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20131015
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20131021
DATE AS OF CHANGE:		20131021

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			VASCO DATA SECURITY INTERNATIONAL INC
		CENTRAL INDEX KEY:			0001044777
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373]
		IRS NUMBER:				364169320
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-24389
		FILM NUMBER:		131160523

	BUSINESS ADDRESS:	
		STREET 1:		1901 SOUTH MYERS ROAD
		STREET 2:		SUITE 210
		CITY:			OAKBROOK TERRACE
		STATE:			IL
		ZIP:			60181
		BUSINESS PHONE:		6309328844

	MAIL ADDRESS:	
		STREET 1:		1919 S HIGHLAND AVE
		STREET 2:		STE 118 C
		CITY:			LOMBARD
		STATE:			IL
		ZIP:			60148
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>d614697d8k.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML><HEAD>
<TITLE>Form 8-K</TITLE>
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 <P STYLE="line-height:1.0pt;margin-top:0pt;margin-bottom:0pt;border-bottom:1px solid #000000">&nbsp;</P>
<P STYLE="line-height:3.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1px solid #000000">&nbsp;</P> <P STYLE="margin-top:4pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>SECURITIES AND EXCHANGE COMMISSION
</B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>WASHINGTON, D.C. 20549 </B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center>
<P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>FORM 8-K
</B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center> <P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>CURRENT REPORT </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>PURSUANT
TO SECTION 13 OR 15(d) </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>OF THE SECURITIES EXCHANGE ACT OF 1934 </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>Date of Report (Date of earliest event reported): October&nbsp;15, 2013 </B></P>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center> <P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:24pt; font-family:Times New Roman" ALIGN="center"><B>VASCO Data Security International, Inc. </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>(Exact name of registrant as specified in charter) </B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center>
<P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top" ALIGN="center"><B>Delaware</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"><B>000-24389</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"><B>36-4169320</B></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:8pt">
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>(State or other jurisdiction</B></P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>of incorporation)</B></P></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>(Commission</B></P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>File Number)</B></P></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>(IRS Employer</B></P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>Identification No.)</B></P></TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>1901 South Meyers Road, Suite 210 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Oakbrook Terrace, Illinois 60181 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>(Address of principal executive offices) (Zip Code) </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Registrant&#146;s telephone number, including area code: (630) 932-8844 </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>N/A </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>(Former name or
former address, if changed since last report) </B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center>
<P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): </P>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD>
<TD ALIGN="left" VALIGN="top">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD>
<TD ALIGN="left" VALIGN="top">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD>
<TD ALIGN="left" VALIGN="top">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD>
<TD ALIGN="left" VALIGN="top">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) </TD></TR></TABLE> <P STYLE="font-size:10pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<P STYLE="line-height:1.0pt;margin-top:0pt;margin-bottom:0pt;border-bottom:1px solid #000000">&nbsp;</P> <P STYLE="line-height:3.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1px solid #000000">&nbsp;</P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>ITEM&nbsp;2.02 Results of Operations and Financial Condition </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The information contained in this Form 8-K shall not be deemed &#147;filed&#148; for purposes of Section&nbsp;18 of the Securities Exchange Act of 1934, as
amended (the &#147;Exchange Act&#148;), or otherwise subject to the liabilities of that section, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by
specific reference in such a filing. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">On October&nbsp;15, 2013, VASCO Data Security International, Inc. (VASCO) issued a press release providing a
preliminary estimate of revenues for the third quarter of 2013 and updated full-year 2013 guidance. The full text of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">On October&nbsp;16, 2012, VASCO held a conference call with investors to discuss VASCO&#146;s preliminary estimate of revenues for the third quarter of 2013
and updated full-year 2013 guidance. A prepared script of the conference call is furnished as Exhibit 99.2 to this Current Report on Form 8-K. A transcript of the conference call is furnished as Exhibit 99.3 to this Current Report on Form 8-K. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>ITEM&nbsp;9.01 Exhibits </B></P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">(d)</TD>
<TD ALIGN="left" VALIGN="top">Exhibits. The following Exhibits are furnished herewith: </TD></TR></TABLE> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="bottom">Exhibit</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:8pt">
<TD VALIGN="bottom" NOWRAP> <P STYLE="border-bottom:1.00pt solid #000000; width:26.20pt; font-size:8pt; font-family:Times New Roman">Number</P></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-bottom:1.00pt solid #000000"> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:8pt; font-family:Times New Roman">Description</P></TD></TR>


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<TD VALIGN="top" NOWRAP>99.1</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top">Press release, dated October 16, 2013.</TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top" NOWRAP>99.2</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top">Prepared script of October 16, 2013 Investor Conference Call.</TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top" NOWRAP>99.3</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top">Transcript of October 16, 2013 Investor Conference Call.</TD></TR>
</TABLE>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>SIGNATURE </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized. </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top">Date: October&nbsp;21, 2013</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" COLSPAN="5">VASCO Data Security International, Inc.</TD></TR>
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<TD VALIGN="top"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">/s/ Clifford K. Bown</P></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:8pt">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top"></TD>
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<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-size:10pt">Clifford K. Bown</FONT></TD></TR>
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<TD VALIGN="top" COLSPAN="3">Chief Financial Officer</TD></TR>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>EXHIBIT INDEX </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The following Exhibits are furnished herewith: </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="bottom" NOWRAP> <P STYLE="border-bottom:1.00pt solid #000000; width:37.30pt; font-size:8pt; font-family:Times New Roman">Exhibit&nbsp;No.</P></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-bottom:1.00pt solid #000000"> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:8pt; font-family:Times New Roman">Description</P></TD></TR>


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<TD VALIGN="top" NOWRAP>99.1</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top">Press release, dated October&nbsp;16, 2013.</TD></TR>
<TR>
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<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top" NOWRAP>99.2</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top">Prepared script of October&nbsp;16, 2013 Investor Conference Call.</TD></TR>
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<TD HEIGHT="8" COLSPAN="2"></TD></TR>
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<TD VALIGN="top" NOWRAP>99.3</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top">Transcript of October&nbsp;16, 2013 Investor Conference Call.</TD></TR>
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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>d614697dex991.htm
<DESCRIPTION>EX-99.1
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Exhibit 99-1 </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>VASCO PROVIDES A PRELIMINARY ESTIMATE OF REVENUE for Q3 2013 &#150; REDUCES GUIDANCE FOR FULL-YEAR 2013. VASCO Announces Conference Call Scheduled for
October&nbsp;16, 2013 at 9 am EDT </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">OAKBROOK TERRACE, IL, and ZURICH, Switzerland, October&nbsp;16, 2013&#151;VASCO Data Security International, Inc.
(Nasdaq: VDSI) (www.vasco.com), today provided a preliminary estimate of revenues for the third quarter of 2013 and updated its full-year 2013 guidance. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The company expects revenue for Q3 2013 to be approximately $39 million, subject to completion of its normal quarterly review processes. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">VASCO reduces its guidance for the full year 2013. The company expects: </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">Revenue for full year 2013 to be in the range of $150 million to $155 million, and </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
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<TD ALIGN="left" VALIGN="top">Operating income as a percentage of revenue, excluding the amortization of purchased intangible assets, for full-year 2013 is projected to be in the range of 8% to 10%. </TD></TR></TABLE>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">&#147;Lower than expected performance in the Enterprise and Application Security market in the third quarter and an expected continuation of that trend in the
fourth quarter is the primary reason that VASCO is reducing its revenue and operating margin guidance for full year 2013.&#148; said T. Kendall Hunt, VASCO&#146;s Chairman&nbsp;&amp; CEO. &#147;We are disappointed that our increased investments in
the Enterprise and Application Security market have not yielded the expected return. Going forward, we will focus more directly on the solid base of business we have in that market and take the necessary actions to ensure that our costs for the
business are appropriate for the revenues and gross margins the business generates. A lessor contributing factor to the shortfall to previous guidance is that some of the banking RFP&#146;s that we are tracking were delayed one or more quarters with
shipments beginning in 2014 rather than 2013. Even at the lower revenue levels, we expect that we will continue to be profitable in 2013.&#148; </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">More
detailed information about the third quarter 2013 results and the full year 2013 guidance will be discussed during a conference call at 9 am EDT. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dial-in
info: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">U.S./Canada: 1-800-618-4714 </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">International:
+1-303-223-4380 </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">And mention VASCO to be connected to the Conference Call. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The Conference Call is also available in listen-only mode on <U>www.vasco.com</U>. Please log on 15 minutes before the start of the Conference Call in order
to download and install any necessary software. The recorded version of the Conference Call will be available on the VASCO website 24 hours a day for at least 60 days. </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>About VASCO: </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">VASCO is a leading supplier of strong authentication and e-signature solutions and services specializing in Internet Security applications and
transactions.&nbsp;VASCO has positioned itself as global software company for Internet Security serving a customer base of approximately 10,000 companies in more than 100 countries, including approximately 1,700 international financial institutions.
VASCO&#146;s prime markets are the financial sector, enterprise security, e-commerce and e-government. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Forward Looking Statements: </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">This press release contains forward-looking statements within the meaning of Section&nbsp;21E of the Securities Exchange Act of 1934 and Section&nbsp;27A of
the Securities Act of 1933. These forward-looking statements (1)&nbsp;are identified by use of terms and phrases such as &#147;expect&#148;, &#147;believe&#148;, &#147;will&#148;, &#147;anticipate&#148;, &#147;emerging&#148;, &#147;intend&#148;,
&#147;plan&#148;, &#147;could&#148;, &#147;may&#148;, &#147;estimate&#148;, &#147;should&#148;, &#147;objective&#148;, &#147;goal&#148;, &#147;possible&#148;, &#147;potential&#148;, &#147;projected&#148; and similar words and expressions, but such
words and phrases are not the exclusive means of identifying them, and (2)&nbsp;are subject to risks and uncertainties and represent our present expectations or beliefs concerning future events. VASCO cautions that the forward-looking statements are
qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those contemplated above include, among others, our
ability to integrate and effectively sell Cronto&#146;s technology, our ability to recover amounts held in escrow related to our acquisition of DigiNotar and unanticipated costs associated with DigiNotar&#146;s bankruptcy or potential claims that
may arise in connection with the hacking incidents at DigiNotar. Additional risks, uncertainties and other factors have been described in our Annual Report on Form 10-K for the year ended December&nbsp;31, 2012 and include, but are not limited to,
(a)&nbsp;risks of general market conditions, including currency fluctuations and the uncertainties resulting from turmoil in world economic and financial markets, (b)&nbsp;risks inherent to the computer and network security industry, including
rapidly changing technology, evolving industry standards, increasingly sophisticated hacking attempts, increasing numbers of patent infringement claims, changes in customer requirements, price competitive bidding, and changing government
regulations, and (c)&nbsp;risks specific to VASCO, including, demand for our products and services, competition from more established firms and others, pressures on price levels and our historical dependence on relatively few products, certain
suppliers and certain key customers. Thus, the results that we actually achieve may differ materially from any anticipated results included in, or implied by these statements. Except for our ongoing obligations to disclose material information as
required by the U.S. federal securities laws, we do not have any obligations or intention to release publicly any revisions to any forward-looking statements to reflect events or circumstances in the future or to reflect the occurrence of
unanticipated events. </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">This&nbsp;document&nbsp;may contain trademarks of VASCO Data Security International, Inc. and its subsidiaries,
including VASCO, CertiID, DIGIPASS, VACMAN, aXsGUARD IDENTIKEY, the VASCO &#147;V&#148; design, and the dP+ design. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">For more information contact: </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Jochem Binst, +32 2 609 97 00, jbinst@vasco.com </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Exhibit 99.2 </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">VASCO Data Security International, Inc. </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">Q3 2013 Revenue Estimate and </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">Full-Year 2013 Guidance Update </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">Prepared Remarks </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">October&nbsp;16,
2013 </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Comments by T. Kendall Hunt: </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Before we begin
the conference call, I would like to brief all of you on &#147;Forward Looking Statements.&#148; </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Forward Looking Statements </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>STATEMENTS MADE IN THIS CONFERENCE CALL THAT RELATE TO FUTURE PLANS, EVENTS OR PERFORMANCES ARE FORWARD-LOOKING STATEMENTS. ANY STATEMENT CONTAINING WORDS
SUCH AS &#147;BELIEVES,&#148; &#147;ANTICIPATES,&#148; &#147;PLANS,&#148; &#147;EXPECTS,&#148; &#147;PROJECTS&#148; AND SIMILAR WORDS, IS FORWARD-LOOKING, AND THESE STATEMENTS INVOLVE RISKS AND UNCERTAINTIES AND ARE BASED ON CURRENT EXPECTATIONS.
CONSEQUENTLY, ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THE EXPECTATIONS EXPRESSED IN THESE FORWARD-LOOKING STATEMENTS. I DIRECT YOUR ATTENTION TO THE COMPANY&#146;S FILINGS WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION FOR A DISCUSSION OF SUCH
RISKS AND UNCERTAINTIES IN THIS REGARD. </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Good morning everyone. Earlier today, we issued a press release stating that we expect revenues for the third
quarter of 2013 to be approximately $39 million and that we also expect to fall short of our previously published guidance for full year 2013 revenue and operating income as a percent of revenue. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Our current revenue estimate for Q3 2013 of $39 million is approximately 7% higher than our revenues for Q3 2012. The estimate of revenue for the quarter is
subject to completion of our normal quarterly review processes, which we expect to complete on or around October&nbsp;24, 2013. We currently believe that our revenue for full-year 2013 will be in a range of $150 million to $155 million, down from
previous guidance of $162 to $167 million. We also believe that our operating income, excluding amortization of acquisition-related intangible assets, will be in the range of 8% to 10% of revenue, down from our previous guidance of 12% to 14% of
revenue. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Lower than expected performance in the Enterprise and Application Security market in the third quarter and an expected continuation of that
trend in the fourth quarter are the primary reasons that VASCO is reducing its revenue and operating margin guidance for full year 2013. We are disappointed that our increased investments in the Enterprise and Application Security market have not
yielded the expected return. Going forward, we will focus more directly on the solid base of business we have in that market and take the necessary actions to ensure that our costs for the business are appropriate for the revenues and gross margins
the business generates. Also, </P>

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many of the banking RFPs that we were tracking were delayed by one or more quarters. This means that much of the banking revenues have moved into 2014. Even at the lower revenue levels, we expect
that we will continue to be profitable. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">At this time, I would like to open the call to your questions, operator. </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>E<SMALL>XHIBIT</SMALL> 99-3 </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">VASCO Data Security International, Inc. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">VASCO Data Security
International Guidance Update Conference Call </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Edited Transcript </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>O<SMALL>CTOBER</SMALL>&nbsp;16, 2013 </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>CORPORATE
PARTICIPANTS </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Ken Hunt </B><I>VASCO Data Security International</I><B> </B><I>- Chairman&nbsp;&amp; CEO</I><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Cliff Bown </B><I>VASCO Data Security International - EVP, CFO&nbsp;&amp; Secretary</I><B> </B></P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>CONFERENCE CALL PARTICIPANTS </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Joe Maxa
</B><I>Dougherty&nbsp;&amp; Company - Analyst</I><B> </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Fred Ziegel </B><I>Topeka Capital Markets - Analyst</I><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Elizabeth Colley </B><I>Needham&nbsp;&amp; Company - Analyst</I><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Jim Moore </B><I>FBR Capital Markets - Analyst</I><B> </B></P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>PRESENTATION </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Operator </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Ladies and gentlemen, thank you for standing by and welcome to the VASCO Data Security investor conference call. During the presentation all participants will
be in a listen-only mode. Afterwards we will conduct a question-and-answer session. (Operator Instructions). </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">I would now like to turn the conference over
to Mr.&nbsp;Ken Hunt, Chairman, Founder and CEO. Please go ahead, sir. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Ken Hunt </B><B><I>- VASCO Data Security International - Chairman&nbsp;&amp;
CEO</I></B><B> </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Thank you, operator. Good morning, everybody. Before we begin the conference call, I would like to brief all of you on forward-looking
statements. Statements made in this conference call that relate to future plans, events or performances are forward-looking statements. Any statement containing words such as beliefs, anticipates, plans, expects, projects and similar words is
forward-looking, and these statements involve risk and uncertainties and are based on current expectations. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Consequently, actual results could differ
materially from the expectations expressed in these forward-looking statements. I direct your attention to the Company&#146;s filings with the US Securities and Exchange Commission for a discussion of such risks and uncertainties in this regard.
</P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Good morning, everyone. Earlier today we issued a press release stating that we expect revenues for the third quarter of 2013 to be approximately $39
million, and that we also expect to fall short of our previously published guidance for full-year 2013 revenue and operating income as a percent of revenue. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Our current revenue estimate for Q3 2013 of $39 million is approximately 7% higher than our revenues for Q3 2012. The estimate for revenue for the quarter is
subject to completion of our normal quarterly review processes, which we expect to complete on or about October&nbsp;14, 2013. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We currently believe that
our revenue for full-year 2013 will be in a range of $150 million to $155 million, down from our previous guidance of $162 million to $167 million. We also believe that our operating income excluding amortization of acquisition-related intangible
assets will be in the range of 8% to 10% of revenue, down from our previous guidance of 12% to 14% of revenue. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Lower than expected performance in the
enterprise and application security market in the third quarter and an expected continuation of that trend in the fourth quarter are the primary reasons that VASCO is reducing its revenue and operating margin guidance for the full-year 2013. </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We are disappointed that our increased investments in the Enterprise and Application Security market have not
yielded the expected return. Going forward, we will focus more directly on the solid base of business we have in that market and take the necessary actions to ensure that our costs for the business are appropriate for the revenues and gross margins
the business generates. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Also, many of the banking RFPs that we were tracking were delayed by one or more quarters. This means that much of the banking
revenues have moved into 2014. Even at the lower revenue levels, we expect that we will continue to be profitable. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">At this time I would like to open the
call for your questions. Operator? </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>QUESTION AND ANSWER </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Operator </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">(Operator Instructions) Joe Maxa,
Dougherty&nbsp;&amp; Company. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Joe Maxa </B><B><I>- Dougherty&nbsp;&amp; Company - Analyst</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Hi, Ken. Thanks. So the Enterprise and Application Security segment, you were looking for significantly higher revenues of course. But I am wondering of the
decline in guidance, how should we balance that between the two segments; what are you seeing? </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Ken Hunt </B><B><I>- </I></B><I></I><B><I>VASCO Data
Security International - Chairman&nbsp;&amp; CEO</I></B><I></I><B><I></I></B><B> </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Most of the miss year-to-date and the anticipated revenue production
against guidance is right there with Application Security and Enterprise. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Joe Maxa </B><B><I>- Dougherty&nbsp;&amp; Company - Analyst</I></B><B>
</B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">So that indicates either that you were expecting a significant increase in the second half in this segment or you have seen a big decline from the
first half. How should we be looking at that piece? </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Cliff Bown </B><B><I>- VASCO Data Security International - EVP, CFO&nbsp;&amp;
Secretary</I></B><B> </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Joe, it is Cliff. I think the answer to that question is Enterprise has been disappointing all year long, so it has been
building. The first-quarter Enterprise was about 21% lower than same period last year; second quarter was 18% lower. Third quarter it may be closer to breakeven, but the results from the Enterprise business have lagged behind our expectations all
year. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">With the results we are seeing for the third quarter and now projecting into the fourth, that is really the heart of the issue. So we have
concluded that those strategies are not effective. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Joe Maxa </B><B><I>- Dougherty&nbsp;&amp; Company - Analyst</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">So that would suggest &#151; sorry, go ahead. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Cliff Bown
</B><B><I>- VASCO Data Security International - EVP, CFO&nbsp;&amp; Secretary</I></B><B> </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As Ken said in his prepared remarks, there have been some
RFPs that haven&#146;t come through in the timeframe that we thought, and those are pushing into 2014. But those are not as significant in terms of our full-year guidance as the shortfall in Enterprise. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Ken Hunt </B><B><I>- VASCO Data Security International - Chairman&nbsp;&amp; CEO</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">And those are banking RFPs, not Application or Enterprise. </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Joe Maxa </B><B><I>- Dougherty&nbsp;&amp; Company - Analyst</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Right, so I just wanted to verify. So it looks like you were expecting to have a significant growth from the first half in the Enterprise and Application
Security segment in the second half, and that did not materialize? </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Ken Hunt </B><B><I>- VASCO Data Security International - Chairman&nbsp;&amp;
CEO</I></B><B> </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Yes, we have been trying to communicate that we have not been performing because we didn&#146;t have headcount, because the people that
we had had moved over from the channel business and we were training them. And that is exactly what we thought was the case. As it&#146;s turned out, we are still not getting the results that we anticipated. So all we can do now is to adjust the
expenses for that business and try to get to breakeven or a small profit, and then circle our wagons and figure out a better approach to make that part of our market back into a growth mode. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Cliff Bown </B><B><I>- VASCO Data Security International - EVP, CFO&nbsp;&amp; Secretary</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Joe, if I could, I want to address the nuance of your question. You&#146;ve asked it twice now in terms of the second half of Enterprise Security being a lot
stronger than the first half. The answer that I really want to make sure is out there is it was a shortfall throughout the year. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">When we updated our
guidance at the end of the second quarter and reaffirmed that we thought we were on track with the numbers, we believed that there would be some opportunities in Banking above our original guidance that would offset some of our shortfall in
Enterprise Security. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">So when you asked the question and stated a couple of times we expected Enterprise Security in the second half to be a lot stronger
than the first half, in part that is true, but we weren&#146;t expecting the growth in the second half of Enterprise Security to make up for the cumulative shortfall in Enterprise Security to guidance. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We expected some new Banking orders, some related to the Cronto acquisition, etc., to make up for that shortfall in the first half of Enterprise Security.
</P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Joe Maxa </B><B><I>- Dougherty&nbsp;&amp; Company - Analyst</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Thanks, Cliff. That cleared that up quite a bit. I do have other questions, but I will jump back in the queue. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Operator </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">(Operator Instructions) Daniel Ives, FBR
Capital Markets. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Jim Moore </B><B><I>- FBR Capital Markets - Analyst</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">This is Jim for Dan. Just to drill down a little more I guess into the Enterprise, I was just wondering is there any change in behavior there that has changed
your expectations over the near-term and I guess what you have seen over the first part of the year? </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Ken Hunt </B><B><I>- VASCO Data Security
International - Chairman&nbsp;&amp; CEO</I></B><B> </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">You mean as far as the market behavior is concerned? </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Jim Moore </B><B><I>- FBR Capital Markets - Analyst</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Yes, exactly. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Ken Hunt </B><B><I>- VASCO Data Security
International - Chairman&nbsp;&amp; CEO</I></B><B> </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Well, Europe has been a challenge now for a couple of years in terms of business, and Enterprise
and Application Security has been impacted. We have expected to see a turnaround there, but I read the newspaper like others and we are not the only one that is having some challenges in Europe. </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">So our attitude is it is a good business. We have always said that it complements our high volume, lower gross
margin Banking business by being lower volume deals, smaller deals with much higher gross margin. So it is a healthy business for us to be in, but we are not getting the growth that we anticipated, so we are adjusting our expenses to make it more in
line with the opportunities that we are realizing. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Cliff Bown </B><B><I>- VASCO Data Security International - EVP, CFO&nbsp;&amp; Secretary</I></B><B>
</B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Jim, it is Cliff again. If I could add, in the caption of Enterprise and Application Security we really have Enterprise, which we equate to
corporations, and Application Security to be new other vertical online markets. So banking is a financial application vertical market. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We were expecting
to find more of those in the enterprise and online security area, particularly the online market piece. So we had the direct touch salesforce to address that, and it&#146;s in that area, to a large degree, that we are falling short. We haven&#146;t
been able to find those other vertical markets, and that is more of the issue than whether there has been a change in market conditions. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Jim Moore
</B><B><I>- FBR Capital Markets - Analyst</I></B><B> </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Okay, great. Just respect to Cronto, could you maybe just talk a little bit about how that has
been going with the integration, just contributions for the business so far? </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Ken Hunt </B><B><I>- VASCO Data Security International -
Chairman&nbsp;&amp; CEO</I></B><B> </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Well, with any acquisition there is a transition period, HR, issues like that, and we have assigned one of our
executives for managing that transition. We have already enlisted the help of one of the former partners, owners of the business, to help us follow through with some of these banking opportunities that Cliff mentioned before. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">That is going extremely well, and opportunities are being brought along &#151; if not closed, brought along certainly &#151; because it is a new technology
and there is nobody better to explain it than this senior executive from Cronto. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As far as the integration of the platform itself, that is something that
we are integrating into our main platform VACMAN Controller, IDENTIKEY server, so that it works seamlessly. That will certainly be completed before the end of the year. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Jim Moore </B><B><I>- FBR Capital Markets - Analyst</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Okay. Thanks, guys. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Operator </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Fred Ziegel, Topeka Capital Markets. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Fred Ziegel </B><B><I>-
Topeka Capital Markets - Analyst</I></B><B> </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Good morning, everybody. So would you assign the bigger issue to the Enterprise and Application Security
market in a macro sense, or is it more a function of kind of where you are internally with your salesforce education; how would you tend to weight those two? </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Ken Hunt </B><B><I>- VASCO Data Security International - Chairman&nbsp;&amp; CEO</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Macro, you are talking about the opportunity and the condition in the market versus how we are executing as a sales team? </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Fred Ziegel </B><B><I>- Topeka Capital Markets - Analyst</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Correct. </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Ken Hunt </B><B><I>- VASCO Data Security International - Chairman&nbsp;&amp; CEO</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Well, I think it is a little of both. I hate to take the easy route here, but I think it is a little of both. The business isn&#146;t quite as robust as we
would like it to be. And as far as the sales organization responsible for channel sales and what Cliff mentioned before, our direct touch, our direct sales to both larger enterprises and application security, we do have a new executive on board.
</P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">He is our Senior VP of Sales. He comes to the Company with an outstanding background. He is very analytical, very methodical, and he has already injected
himself into this issue. He has analyzed it and is making some changes to improve things. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Fred Ziegel </B><B><I>- Topeka Capital Markets -
Analyst</I></B><B> </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Okay. So when you talk about aligning expenses to reduce revenue, are we thinking headcount reductions; are we thinking about
programs; maybe MYDIGIPASS, some of those investments that get scale backed? How should we think about that? </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Ken Hunt </B><B><I>- VASCO Data Security
International - Chairman&nbsp;&amp; CEO</I></B><B> </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Well, we are mainly talking here as it relates to Enterprise and Application Security where we are
talking about reducing the headcount in that group to a level that is appropriate for the opportunity that we see. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Fred Ziegel </B><B><I>- Topeka
Capital Markets - Analyst</I></B><B> </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Okay, all right. Thanks. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Ken Hunt </B><B><I>- VASCO Data Security International - Chairman&nbsp;&amp; CEO</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As far as your other question, I guess was, are we reducing expenses as it relates to MYDIGIPASS.COM. Certainly we are examining whether or not our R&amp;D is
appropriate, R&amp;D expenses is appropriate for all aspects of the business, and so we are evaluating that. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Fred Ziegel </B><B><I>- Topeka Capital
Markets - Analyst</I></B><B> </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Okay. Fair enough. Thanks. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Operator </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Elizabeth Colley, Needham. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Elizabeth Colley </B><B><I>- Needham&nbsp;&amp; Company - Analyst</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">You guys mentioned that the Enterprise business hasn&#146;t been performing as well as you expected in the second half, and that the Banking deals are being
pushed out. So do you see the Banking business is sort of being impacted more than you were expecting in the second half of the year, similarly to the Enterprise business? </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Ken Hunt </B><B><I>- VASCO Data Security International - Chairman&nbsp;&amp; CEO</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Well, first of all, Cliff, a few minutes ago did indicate that we have been lagging against our plan for Enterprise and Application Security all year long. So
it is not just the last six months; it has been an issue that we have been trying to deal with all year long. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In terms of Banking expectations, it is
going to be similar to what we produced last year. If you had to ask me a number for what opportunities in Banking have slipped into 2014, it is something around $5 million. So we had expected to have that offset our reduced results in Enterprise
and Application Security, and it looks like that is going to occur next year. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We haven&#146;t lost any business, but as we&#146;ve talked about before,
the transactional nature of Banking is getting more complex, not less complex. So it takes longer to negotiate a contract, and that means that some deals don&#146;t happen in the quarter in which we originally thought going into 2013. </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Elizabeth Colley - </B><B><I>Needham&nbsp;&amp; Company - Analyst</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Okay. So it sounds like you do see the Banking as like relatively healthier than the Enterprise business. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Ken Hunt - </B><B><I>VASCO Data Security International - Chairman&nbsp;&amp; CEO</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">No doubt about that, no doubt about that. And we feel because Cronto has come on board with us and they have a very unique compelling solution, we think we are
in a better situation than we were coming into 2013. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Elizabeth Colley </B><B><I>- Needham&nbsp;&amp; Company - Analyst</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Okay, thank you. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Operator </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">(Operator Instructions) Joe Maxa, Dougherty&nbsp;&amp; Company. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Joe Maxa </B><B><I>- Dougherty&nbsp;&amp; Company - Analyst</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Thanks. On the Banking side, I mean last quarter we talked about a number of these large RFPs out there. Just wondering if the environment has changed at all;
you still see the same opportunities, just a couple got pushed out. Is it growing, is it slowing? Just a little bit of color on that environment, please. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Ken Hunt </B><B><I>- VASCO Data Security International - Chairman&nbsp;&amp; CEO</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Yes, I don&#146;t think there is any doubt the Banking business is healthy for VASCO. We&#146;re still very competitive when it comes to these RFPs. We
don&#146;t win every single one, but I am very proud to say that there have been a couple of larger competitive wins in the Banking area, and we haven&#146;t lost any deals that were current VASCO customers. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Certainly if we are trying to compete with an opportunity that is currently using another vendor&#146;s products, that is a little more difficult and we
don&#146;t win all of those. But I would say, easily and confidently say, that the Banking business is very healthy and very robust. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Joe Maxa -
</B><B><I>Dougherty&nbsp;&amp; Company - Analyst</I></B><B> </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Okay, that is good. Thank you. And then also as we think about 2014 or perhaps even fourth
quarter, how should we think about margins? Apparently, the Banking business with the lower margins is growing faster than the Enterprise and Application Security. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">So what kind of range should we think about on the gross margin line going forward versus where it has been these last couple years? </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Ken Hunt </B><B><I>- VASCO Data Security International - Chairman&nbsp;&amp; CEO</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Well, a lot of that will have to do with our success in our cloud services business. That is going to be very high margins. And we also with the smaller
volumes of Enterprise, those will be higher margins relatively speaking. But in terms of projection, I will leave that to Cliff. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Cliff Bown -
</B><B><I>VASCO Data Security International - EVP, CFO&nbsp;&amp; Secretary</I></B><B> </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Joe, as it relates to Q4, which is obviously something that we
have got better visibility on than we do 2014, but I would expect gross margins to go down a bit. As you know, looking at Q1, Q2, we were in the 64%, 65% range. I think you could anticipate a decline in the margins to be a little bit lower, but
still above the 60% range. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">For 2014, it is really a bit too early to tell what the mix will be of the DIGIPASS As A Service, Enterprise Security and
Banking transactions in that time period. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Joe Maxa </B><B><I>- Dougherty&nbsp;&amp; Company - Analyst</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">And as far as the cloud security, I mean how are you seeing that traction? I know it has been nonmaterial for this year, but any sense on how that may look
based on what you have signed up so far for 2014? </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Ken Hunt </B><B><I>- VASCO Data Security International - Chairman&nbsp;&amp; CEO</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We are still working on it. We will have a much better view of it when we report results in February of next year. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Joe Maxa </B><B><I>- Dougherty&nbsp;&amp; Company - Analyst</I></B><B> </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">All right, thank you. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Operator </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We currently have no further questions on the phone line. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Ken Hunt </B><B><I>- VASCO Data Security International - Chairman&nbsp;&amp; CEO</I></B><B> </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Then I will end the call with my thanks for your participation, and have a good day. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Operator </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Ladies and gentlemen, that does conclude the
call for today. We thank you for your participation and ask you to please disconnect your lines. </P>
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