FOR IMMEDIATE RELEASE
Contact: Antonio L. DeLise
President, Chief Executive Officer &
Chief Financial Officer
PubliCARD, Inc.
(212) 651-3120
PubliCARD, INC. ANNOUNCES THIRD QUARTER RESULTS
NEW YORK - November 10, 2003 - PubliCARD, Inc. (OTC BB: CARD.OB) reported
its financial results for the three and nine months ended September 30, 2003.
Sales for the third quarter of 2003 increased to $1,417,000, compared to
$1,298,000 a year ago driven by a 6% increase from foreign currency changes.
Excluding the impact of foreign currency changes, sales in 2003 increased by 3%.
The Company reported a net loss for the quarter ended September 30, 2003 of
$749,000, or $0.03 per share, compared with a net loss of $2,343,000, or $0.10
per share, a year ago. The results for 2002 include a charge of $2,068,000 to
write-down a minority investment and income from discontinued operations of
$1,066,000. As of September 30, 2003, cash and short-term investments totaled
$1,391,000.
For the nine months ended September 30, 2003, sales increased to $4,023,000
compared to $3,513,000 a year ago driven by an 11% increase from foreign
currency changes. Excluding the impact of foreign currency changes, sales in
2003 increased by 4%. The Company reported a net loss of $678,000, or $.03 per
share, for the nine months ended September 30, 2003 versus a net loss of
$4,839,000, or $.20 per share, in 2002. The 2003 results include a gain of
$1,705,000 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.
In October 2003, the Company announced it had reached a settlement with a
third insurer and sold a parcel of unused land. The Company expects to receive
additional proceeds from these two transactions aggregating approximately
$2,750,000 in cash in the fourth quarter of 2003.
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, and quarterly reports on Form 10-Q for the
quarters ended March 31, 2003, June 30, 2003 and September 30, 2003 as filed
with the SEC.
(table to follow)
PUBLICARD, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(in thousands, except share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------- -----------------
2003 2002 2003 2002
---- ---- ---- ----
Sales $ 1,417 $ 1,298 $ 4,023 $ 3,513
Cost of sales 645 648 1,876 1,804
-------- -------- -------- --------
Gross margin 772 650 2,147 1,709
-------- -------- -------- --------
Operating expenses:
General and administrative 676 811 2,067 2,505
Sales and marketing 415 467 1,420 1,366
Product development 169 145 414 392
Amortization of intangibles 10 144 30 432
-------- -------- -------- --------
1,270 1,567 3,931 4,695
-------- -------- -------- --------
Loss from operations (498) (917) (1,784) (2,986)
-------- -------- -------- --------
Other income (expenses):
Interest income 3 40 10 69
Interest expense (3) (18) (8) (39)
Cost of pensions - non-operating (255) (225) (697) (649)
Insurance recoveries (2) -- 1,705 --
Write-down of minority investment -- (2,068) -- (2,068)
Other income (expenses), net 6 (221) 96 (232)
-------- -------- -------- --------
(251) (2,492) 1,106 (2,919)
-------- -------- -------- --------
Net loss from continuing
operations (749) (3,409) (678) (5,905)
Discontinued operations -- 1,066 -- 1,066
-------- -------- -------- --------
Net loss $ (749) $ (2,343) $ (678) $ (4,839)
======== ======== ======== ========
Basic and diluted earnings (loss)
per common share:
Continuing operations $ (.03) $ (.14) $ (.03) $ (.24)
Discontinued operations -- .04 -- .04
-------- -------- -------- --------
$ (.03) $ (.10) $ (.03) $ (.20)
======== ======== ======== ========
Weighted average common shares
outstanding 24,534,652 24,190,902 24,428,402 24,175,902
See Note 1 below.
PUBLICARD, INC.
AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF
SEPTEMBER 30, 2003 AND DECEMBER 31, 2002
(in thousands, except share data)
September 30, December 31,
2003 2002
------------- ------------
(unaudited)
ASSETS
Current assets:
Cash, including short-term investments of
$1,376 and $1,138 in 2003 and 2002,
respectively $ 1,391 $ 1,290
Trade receivables, less allowance for
doubtful accounts of $107 and $103 in
2003 and 2002, respectively 1,420 853
Inventories 581 885
Prepaid insurance and other 165 375
--------- ---------
Total current assets 3,557 3,403
--------- ---------
Equipment and leasehold improvements, net 215 379
Goodwill and intangibles 832 862
Other assets 3,295 3,295
--------- ---------
$ 7,899 $ 7,939
========= =========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Trade accounts payable and overdraft $ 1,555 $ 1,269
Accrued liabilities 4,360 2,682
--------- ----------
Total current liabilities 5,915 3,951
Other non-current liabilities 3,656 4,990
--------- ----------
Total liabilities 9,571 8,941
--------- ----------
Commitments and contingencies (Note 6)
Shareholders' deficit:
Class A Preferred Stock, Second Series, no
par value: 1,000 shares authorized; 615 and
765 issued and outstanding as of September 30,
2003 and December 31, 2002, respectively 3,075 3,825
Common shares, $0.10 par value: 40,000,000 shares
authorized; 24,565,902 and 24,190,902 shares
issued and outstanding as of September 30, 2003
and December 31, 2002, respectively 2,457 2,419
Additional paid-in capital 107,881 107,169
Accumulated deficit (112,702) (112,024)
Other comprehensive loss (2,383) (2,391)
--------- ---------
Total shareholders' deficit (1,672) (1,002)
--------- ---------
$ 7,899 $ 7,939
========= =========
See Note 1 below.
Note 1--Liquidity and Going Concern Considerations
The condensed 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 and the nine months ended September
30, 2003. 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 $1.4 million at September 30, 2003. The Company also had a working
capital deficit of $2.4 million and an accumulated deficit of $112.7 million at
September 30, 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.
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