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 SECOND QUARTER RESULTS
NEW YORK - AUGUST 13, 2004 - PubliCARD, Inc. (OTC BB: CARD.OB) reported
its financial results for the three and six months ended June 30, 2004.
Sales for the second quarter of 2004 declined to $1,028,000, compared
to $1,193,000 a year ago. The decrease in revenues was mainly attributable to a
$215,000 decline in sales to distribution partners located in the United States.
The Company reported a net loss for the quarter ended June 30, 2004 of $783,000,
or $0.03 per share, compared with a net loss of $929,000, or $0.04 per share, a
year ago. As of June 30, 2004, cash and short-term investments totaled
$2,794,000.
For the six months ended June 30, 2004, sales were $1,856,000 compared
to $2,606,000 a year ago. As a result of several customer implementation and
procurement delays, direct sales in the United Kingdom declined by over $300,000
versus the prior year. Also, sales to distribution partners located in the U.S.
declined by $383,000 in 2004 as compared to 2003. The 2003 U.S. figures
benefited from the final sales associated with a magnetic stripe product that
was discontinued in 2003. The Company reported a net loss of $1,286,000, or $.05
per share for the six months ended June 30, 2004 versus net income of $71,000 in
2003. The 2004 and 2003 results include gains of $477,000 and $1,707,000,
respectively, relating to settlements with various historical insurers that
resolve certain claims (including certain future claims) under policies of
insurance issued to the Company by those insurers.
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 and resolving an underfunded pension situation, 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, and quarterly reports on Form 10-Q for the quarters ended March 31, 2004
and June 30, 2004, as filed with the SEC.
(table to follow)
PUBLICARD, INC.
AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(in thousands, except share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ----------------------------
2004 2003 2004 2003
------------ ------------ ------------ ------------
Revenues $ 1,028 $ 1,193 $ 1,856 $ 2,606
Cost of revenues 480 612 886 1,231
------------ ------------ ------------ ------------
Gross margin 548 581 970 1,375
------------ ------------ ------------ ------------
Operating expenses:
General and administrative 609 687 1,272 1,391
Sales and marketing 406 523 825 1,005
Product development 171 156 349 245
Amortization of intangibles 10 10 20 20
------------ ------------ ------------ ------------
1,196 1,376 2,466 2,661
------------ ------------ ------------ ------------
Loss from operations (648) (795) (1,496) (1,286)
------------ ------------ ------------ ------------
Other income (expenses):
Interest income 6 4 12 7
Interest expense (6) (2) (10) (5)
Cost of pensions - non-operating (130) (225) (264) (442)
Gain on insurance recoveries -- -- 477 1,707
Other income (expenses), net (5) 89 (5) 90
------------ ------------ ------------ ------------
(135) (134) 210 1,357
------------ ------------ ------------ ------------
Net (loss) income $ (783) $ (929) $ (1,286) $ 71
============ ============ ============ ============
Basic and diluted (loss) earnings per
common share $ (.03) $ (.04) $ (.05) $ --
============ ============ ============ ============
Weighted average common shares outstanding
Basic 24,690,902 24,440,902 24,690,902 24,369,473
============ ============ ============ ============
Diluted 24,690,902 26,103,402 24,690,902 26,103,402
============ ============ ============ ============
See Note 1 below.
PUBLICARD, INC.
AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF
JUNE 30, 2004 AND DECEMBER 31, 2003
(in thousands, except share data)
June 30, December 31,
2004 2003
--------- ---------
(unaudited)
ASSETS
Current assets:
Cash, including short-term investments of $2,606
and $3,501 in 2004 and 2003, respectively $ 2,794 $ 3,580
Trade receivables, less allowance for doubtful
accounts of $89 and $115 in 2004 and 2003,
respectively 1,031 1,133
Inventories 657 635
Prepaid insurance and other 461 440
--------- ---------
Total current assets 4,943 5,788
--------- ---------
Equipment and leasehold improvements, net 162 191
Goodwill and intangibles 802 822
Other assets 498 598
--------- ---------
$ 6,405 $ 7,399
========= =========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Trade accounts payable and overdraft $ 1,571 $ 1,569
Accrued liabilities 6,303 5,206
--------- ---------
Total current liabilities 7,874 6,775
Other non-current liabilities 2,747 3,552
--------- ---------
Total liabilities 10,621 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
June 30, 2004 and December 31, 2003 2,825 2,825
Common shares, $0.10 par value: 40,000,000
shares authorized; 24,690,902 shares
issued and outstanding as of June 30,
2004 and December 31, 2003 2,469 2,469
Additional paid-in capital 108,119 108,119
Accumulated deficit (114,903) (113,617)
Other comprehensive loss (2,726) (2,724)
--------- ---------
Total shareholders' deficit (4,216) (2,928)
--------- ---------
$ 6,405 $ 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 $2.8 million at June 30, 2004. The Company also
had a working capital deficit of $2.9 million and an accumulated deficit of
$114.9 million at June 30, 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 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 is not likely
to be able to meet its obligations, take advantage of future acquisition
opportunities or further develop or enhance its product offering, any of which
would have a material adverse effect on its business and results of operations
and is likely to 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.