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 FOURTH QUARTER AND FISCAL YEAR 2003 RESULTS
NEW YORK - March 26, 2004 - PubliCARD, Inc. (OTC BB: CARD.OB) reported its
financial results for the fourth quarter and year ended December 31, 2003.
Sales for the fourth quarter of 2003 declined to $758,000, compared to
$1,092,000 a year ago. The Company experienced substantially reduced volume
through its United States distribution partners as well as a decline in direct
sales in the United Kingdom. The Company reported a net loss for the quarter
ended December 31, 2003 of $915,000, or $0.04 per share, compared with a net
loss of $2,354,000, or $0.10 per share, a year ago. The 2003 results include a
gain of $2,885,000 relating to an insurance settlement and a charge of
$3,000,000 to write-down the investment in a minority-owned company. The fourth
quarter 2002 results include a charge of $1,365,000 to recognize the impairment
of goodwill and certain intangibles associated with the Company's remaining
smart card solutions business. As of December 31, 2003, cash and short-term
investments totaled $3,580,000.
For the year ended December 31, 2003, sales increased to $4,781,000
compared to $4,605,000 a year ago driven by a 6% increase from foreign currency
changes. Excluding the impact of foreign currency changes, sales in 2003
decreased by 2%. The Company reported a net loss from continuing operations of
$1,593,000, or $.07 per share, for 2003 versus a net loss of $8,259,000, or $.34
per share, in 2002. In addition to the minority-owned investment charge, the
2003 results include a total gain of $4,590,000 relating to three 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. The 2002 results include the goodwill and intangible
impairment loss referenced above and a charge of $2,068,000 to write-down a
minority investment.
In February 2004, the Company entered into a binding agreement to assign
to a third party certain insurance claims against a group of historic insurers.
The claims involve several historic general liability policies of insurance
issued to the Company. After allowance for associated expenses and offsetting
adjustments, the Company expects to receive net proceeds of approximately
$475,000 by mid-April 2004.
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 TWELVE MONTHS ENDED DECEMBER 31, 2003 AND 2002
(in thousands, except share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------------- ----------------------------
(unaudited)
2003 2002 2003 2002
------------ ------------ ------------ ------------
Net sales $ 758 $ 1,092 $ 4,781 $ 4,605
Cost of sales 440 651 2,316 2,455
------------ ------------ ------------ ------------
Gross margin 318 441 2,465 2,150
------------ ------------ ------------ ------------
Operating expenses:
General and administrative 641 730 2,708 3,235
Sales and marketing 424 511 1,844 1,877
Product development 170 213 584 605
Amortization of goodwill and
intangibles 10 144 40 576
Impairment of goodwill and
intangibles -- 1,365 -- 1,365
------------ ------------ ------------ ------------
1,245 2,963 5,176 7,658
------------ ------------ ------------ ------------
Loss from operations (927) (2,522) (2,711) (5,508)
------------ ------------ ------------ ------------
Other income (expenses):
Interest income 5 2 15 71
Interest expense (4) -- (12) (39)
Cost of pensions - nonoperating (206) (146) (903) (795)
Write-down of minority investment (3,000) -- (3,000) (2,068)
Gain on insurance recoveries 2,885 -- 4,590 --
Other income 332 312 428 80
------------ ------------ ------------ ------------
12 168 1,118 (2,751)
------------ ------------ ------------ ------------
Net loss from continuing operations (915) (2,354) (1,593) (8,259)
Discontinued operations -- -- -- 1,066
------------ ------------ ------------ ------------
Net loss $ (915) $ (2,354) $ (1,593) $ (7,193)
============ ============ ============ ============
Basic and diluted earnings (loss) per common share:
Continuing operations $ (.04) $ (.10) $ (.07) $ (.34)
Discontinued operations -- -- -- .04
------------ ------------ ------------ ------------
$ (.04) $ (.10) $ (.07) $ (.30)
============ ============ ============ ============
Weighted average common shares outstanding 24,597,152 24,190,902 24,469,748 24,179,364
============ ============ ============ ============
See Note 1 below.
PUBLICARD, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2003 AND 2002
2003 2002
---- -----
(in thousands, except share data)
ASSETS
Current assets:
Cash, including short-term investments of $3,501 and $1,138 in 2003
and 2002, respectively $ 3,580 $ 1,290
Trade receivables, less allowance for doubtful accounts of $115 and $103 in
2003 and 2002, respectively 1,133 853
Inventories 635 885
Prepaid insurance and other 440 375
---------- ---------
Total current assets 5,788 3,403
Equipment and leasehold improvements, net 191 379
Goodwill and intangibles 822 862
Other assets 598 3,295
---------- ---------
$ 7,399 $ 7,939
========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Trade accounts payable and overdraft $ 1,569 $ 1,269
Accrued liabilities 5,206 2,682
---------- ---------
Total current liabilities 6,775 3,951
Other non-current liabilities 3,552 4,990
---------- ---------
Total liabilities 10,327 8,941
---------- ---------
Commitments and contingencies
Shareholders' equity (deficit):
Class A Preferred Stock, Second Series, no par value: 1,000 shares authorized;
565 and 765 issued and outstanding as of December 31, 2003 and 2002,
respectively 2,825 3,825
Common shares, $0.10 par value: 40,000,000 shares authorized; 24,690,902 and
24,190,902 shares issued and outstanding as of December 31, 2003 and 2002,
respectively 2,469 2,419
Additional paid-in capital 108,119 107,169
Accumulated deficit (113,617) (112,024)
Other comprehensive loss (2,724) (2,391)
---------- ---------
Total shareholders' equity (deficit) (2,928) (1,002)
---------- ---------
$ 7,399 $ 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 a number of years. 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 $3.6 million at December 31, 2003. The Company
also had a working capital deficit of $1.0 million and an accumulated deficit of
$113.6 million at December 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 and 2004 funding requirements to 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, 2004.
However, additional capital will be necessary in order to operate beyond
December 2004 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 or 2004
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,
2003 contained an emphasis paragraph concerning substantial doubt about the
Company's ability to continue as a going concern.