Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact: Antonio L. DeLise
President, Chief Executive Officer
& Chief Financial Officer
PubliCARD, Inc.
(212) 651-3120
PubliCARD, INC. ANNOUNCES FIRST QUARTER RESULTS
NEW YORK - May 15, 2003 - PubliCARD, Inc. (OTC BB: CARD.OB) reported its
financial results for quarter ended March 31, 2003.
Sales for the first quarter of 2003 were $1,413,000, compared to
$1,199,000 a year ago. The improvement in sales resulted primarily from revenues
realized on several one-time custom development projects in the first quarter of
2003. The Company reported net income for the quarter ended March 31, 2003 of
$1,000,000, or $0.04 per share, compared with a net loss of $1,269,000, or $0.05
per share, a year ago. The first quarter 2003 results include a gain of
$1,707,000 relating to two separate settlements with various historical insurers
that resolve certain claims (including certain future claims) under policies of
insurance issued to the Company by those insurers.
As of March 31, 2003, cash and short-term investments totaled $1,622,000.
In April 2003, the Company received $682,000 relating to the previously
mentioned insurance settlements.
About PubliCARD, Inc.
Headquartered in New York, NY, PubliCARD, through its Infineer Ltd.
subsidiary, designs smart card solutions for educational and corporate sites.
The Company's future plans revolve around a potential acquisition strategy that
would focus on businesses in areas outside the high technology sector while
continuing to support the expansion of the Infineer business. However, the
Company will not be able to implement such plans unless it is successful in
obtaining additional funding, as to which no assurance can be given. More
information about PubliCARD can be found on its web site www.publicard.com.
Special Note Regarding Forward-Looking Statements: Certain statements
contained in this press release may constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995 that involve
risks and uncertainties that could cause actual results to differ materially
from those expressed or implied in the applicable statements. Such factors
include general economic and business conditions, the ability to fund operations
and need to raise capital, the ability to identify and consummate acquisitions
and strategic alliances, business and product development, time to market, the
loss of market share, ability to attract and retain employees, development of
competitive products by others, ability to protect our intellectual property,
impact of pending litigation, continued listing and liquidity of our common
shares, market makers choosing not to make a market for our common shares on the
OTC Bulletin Board and other factors over which PubliCARD has no control. For
more information on the potential factors which could affect financial results,
refer to the Company's most recent Annual Report on Form 10-K for the year ended
December 31, 2002, as amended, as filed with the SEC.
(TABLE TO FOLLOW)
PUBLICARD, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(in thousands except share data)
(unaudited)
2003 2002
---- ----
Net sales $ 1,413 $ 1,199
Cost of sales 619 636
------------ ------------
Gross margin 794 563
------------ ------------
Operating expenses:
General and administrative 704 933
Sales and marketing 482 427
Product development 89 119
Amortization of intangibles 10 144
------------ ------------
1,285 1,623
------------ ------------
Loss from operations (491) (1,060)
------------ ------------
Other income (expenses):
Interest income 3 14
Interest expense (3) (15)
Cost of pensions -- non-operating (217) (206)
Gain on insurance recoveries 1,707 --
Other income (expenses), net 1 (2)
------------ ------------
1,491 (209)
------------ ------------
Net income (loss) $ 1,000 $ (1,269)
============ ============
Basic and diluted income (loss) per common share $ .04 $ (.05)
============ ============
Weighted average shares outstanding:
Basic 24,315,902 24,153,402
============ ============
Diluted 26,103,402 24,153,402
============ ============
See Note 1 below.
PUBLICARD, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS AS OF
MARCH 31, 2003 AND DECEMBER 31, 2002
(in thousands except share data)
March 31, December 31,
2003 2002
--------- ---------
(unaudited)
ASSETS
Current assets:
Cash, including short-term investments of $1,653 and $1,138 in 2003 and 2002, respectively $ 1,622 $ 1,290
Trade receivables, less allowance for doubtful accounts of $92 and $103 in 2003 and
2002, respectively 1,205 853
Inventories 825 885
Insurance recovery receivable 682 --
Prepaid insurance and other 375 375
--------- ---------
Total current assets 4,709 3,403
--------- ---------
Equipment and leasehold improvements, net 339 379
Goodwill and intangibles 852 862
Other assets 3,295 3,295
--------- ---------
$ 9,195 $ 7,939
========= =========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Trade accounts payable and overdraft $ 1,218 $ 1,269
Accrued liabilities 2,840 2,682
--------- ---------
Total current liabilities 4,058 3,951
Other non-current liabilities 5,140 4,990
--------- ---------
Total liabilities 9,198 8,941
--------- ---------
Commitments and contingencies
Shareholders' deficit:
Class A Preferred Stock, Second Series, no par value: 1,000 shares authorized; 665 and 765
issued and outstanding as of March 31, 2003 and December 31, 2002, respectively 3,325 3,825
Common shares, $0.10 par value: 40,000,000 shares authorized; 24,440,902 and
24,190,902 shares issued and outstanding as of March 31, 2003 and December 31, 2,444 2,419
2002, respectively
Additional paid-in capital 107,644 107,169
Accumulated deficit (111,024) (112,024)
Other comprehensive loss (2,392) (2,391)
--------- ---------
Total shareholders' deficit (3) (1,002)
--------- ---------
$ 9,195 $ 7,939
========= =========
See Note 1 below.
Note 1--Liquidity and Going Concern Considerations
The consolidated statements of operations and balance sheets presented
above contemplate the realization of assets and the satisfaction of liabilities
in the normal course of business. The Company has incurred operating losses, a
substantial decline in working capital and negative cash flow from operations
for the years 2002, 2001 and 2000. The Company has also experienced a
substantial reduction in its cash and short term investments, which declined
from $17.0 million at December 31, 2000, to $4.5 million at December 31, 2001,
to $1.3 million at December 31, 2002 and to $1.6 million at March 31, 2003. The
Company also had working capital of $651,000 and an accumulated deficit of
$111.0 million at March 31, 2003.
If the distress termination of the Company's defined benefit pension plan
for which the Company has applied is completed, for which no assurance can be
given, the Company's 2003 funding requirements for the plan could be eliminated,
in which case management believes that existing cash and short term investments
may be sufficient to meet the Company's operating and capital requirements at
the currently anticipated levels through December 31, 2003. However, additional
capital will be necessary in order to operate beyond December 2003 and to fund
the current business plan and other obligations. While the Company is actively
considering various funding alternatives, the Company has not secured or entered
into any arrangements to obtain additional funds. There can be no assurance that
the Company will eliminate the 2003 funding requirements for the defined benefit
pension plan or be able to obtain additional funding on acceptable terms or at
all. If the Company cannot raise additional capital to continue its present
level of operations it may not be able to meet its obligations, take advantage
of future acquisition opportunities or further develop or enhance its product
offering, any of which could have a material adverse effect on its business and
results of operations and could lead the Company to seek bankruptcy protection.
These conditions raise substantial doubt about the Company's ability to continue
as a going concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty. The
independent auditors' report on the Company's Consolidated Financial Statements
for the year ended December 31, 2002 contained an emphasis paragraph concerning
substantial doubt about the Company's ability to continue as a going concern.