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 14, 2004 - PubliCARD, Inc. (OTC BB: CARD.OB) reported its
financial results for the quarter ended March 31, 2004.
Sales for the first quarter of 2004 declined to $828,000, compared to
$1,413,000 a year ago. The Company experienced substantially reduced volume in
its direct sales channel in the United Kingdom as well as a decline in revenues
through its U.S. distribution partners. The Company reported a net loss for the
quarter ended March 31, 2004 of $503,000, or $0.02 per share, compared with net
income of $1,000,000, or $0.04 per share, a year ago. The 2004 and 2003 results
include gains of $477,000 and $1,707,000, respectively, relating to various
insurance settlements.
As of March 31, 2004, cash and short-term investments totaled $2,871,000.
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 received net proceeds of approximately $477,000 in May
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, 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,
2003, as filed with the SEC.
(table to follow)
PUBLICARD, INC.
AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THREE MONTHS ENDED MARCH 31, 2004 AND 2003
(in thousands, except share data)
(unaudited)
2004 2003
---- ----
Revenues $ 828 $ 1,413
Cost of sales 406 619
Gross margin 422 794
---------- ----------
Operating expenses:
General and administrative 663 704
Sales and marketing 419 482
Product development 178 89
Amortization of intangibles 10 10
---------- ----------
1,270 1,285
---------- ----------
Loss from operations (848) (491)
---------- ----------
Other income (expenses):
Interest income 6 3
Interest expense (4) (3)
Cost of pensions - non-operating (134) (217)
Gain on insurance recoveries 477 1,707
Other income (expenses), net - 1
---------- ----------
345 1,491
---------- ----------
Net (loss) income $ (503) $ 1,000
========== ==========
Basic and diluted (loss) earnings per common share $ (.02) $ .04
========== ==========
Weighted average shares outstanding:
Basic 24,690,902 24,315,902
========== ==========
Diluted 24,690,902 26,103,402
========== ==========
See Note 1 below.
PUBLICARD, INC.
AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF
March 31, 2004 AND DECEMBER 31, 2003
(in thousands, except share data)
March 31, December 31,
2004 2003
---------- ------------
(unaudited)
ASSETS
Current assets:
Cash, including short-term investments of $2,836 and $3,501 in 2004
and 2003, respectively $ 2,871 $ 3,580
Trade receivables, less allowance for doubtful accounts of $89 and $115
in 2004 and 2003, respectively 967 1,133
Inventories 659 635
Prepaid insurance and other 1,096 440
--------- --------
Total current assets 5,593 5,788
--------- --------
Equipment and leasehold improvements, net 159 191
Goodwill and intangibles 812 822
Other assets 548 598
--------- --------
$ 7,112 $ 7,399
========= ========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Trade accounts payable and overdraft $ 1,472 $ 1,569
Accrued liabilities 5,923 5,206
--------- --------
Total current liabilities 7,395 6,775
Other non-current liabilities 3,150 3,552
--------- --------
Total liabilities 10,545 10,327
--------- --------
Commitments and contingencies
Shareholders' deficit:
Class A Preferred Stock, Second Series, no par value: 1,000 shares authorized;
565 shares issued and outstanding as of March 31, 2004 and December 31, 2,825 2,825
2003
Common shares, $0.10 par value: 40,000,000 shares authorized; 24,690,902
shares issued and outstanding as of March 31, 2004 and December 31, 2003 2,469 2,469
Additional paid-in capital 108,119 108,119
Accumulated deficit (114,120) (113,617)
Other comprehensive loss (2,726) (2,724)
--------- --------
Total shareholders' deficit (3,433) (2,928)
--------- --------
$ 7,112 $ 7,399
========= ========
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 $2.9 million at March 31, 2004. The Company also
had a working capital deficit of $1.8 million and an accumulated deficit of
$114.1 million at March 31, 2004.
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.