Exhibit 99.1
LASERCARD CORPORATION REPORTS PROFITABLE RESULTS FOR
FISCAL FOURTH QUARTER AND YEAR ENDED MARCH 31, 2006
--2006 REVENUES INCREASE 40 PERCENT YEAR-TO-YEAR--
MOUNTAIN VIEW, CALIF. - MAY 16, 2006 - LaserCard Corporation (NASDAQ:LCRD), a
leading supplier of secure ID credentials used in biometric identification,
today announced the financial results for its fiscal 2006 fourth quarter and
fiscal year ended March 31, 2006.
Revenues for the fourth quarter of fiscal 2006 were $14.1 million, up from $10.1
million in the prior quarter and up from $5.8 million in the same quarter a year
ago. Net income for the fourth quarter of fiscal 2006 was $1.9 million, or $0.15
per diluted share, compared with net income of $1.2 million or $0.10 per diluted
share in the prior quarter, and a net loss of $3.0 million, or a net loss of
$0.26 per diluted share, in the same quarter a year ago.
For the fiscal year ended March 31, 2006, LaserCard reported revenues of $39.9
million, an increase of 40 percent from prior fiscal year revenues of $28.5
million. The revenue increase is attributed mainly to an increase in optical
memory card unit volume across the U.S. and Italian programs. Net income for
fiscal 2006 was $0.8 million, or $0.07 per diluted share. For fiscal 2005, the
Company reported a net loss of $8.9 million, or a net loss of $0.78 per diluted
share.
Revenue from optical memory cards totaled $28.2 million in fiscal 2006, an
increase of 64% over the $17.4 million for fiscal 2005. Revenue from specialty
cards and printers totaled $10.7 million in fiscal 2006 versus $10.2 million in
fiscal 2005, with the remaining revenues coming from read/write drives. Optical
memory card revenues in fiscal 2006 were from sales of Carta d'Identita
Elettronica (CIE) cards and foreign resident (PSE) cards for the Italian
government's national ID card programs, Laser Visa Border Crossing Cards and
Green Cards for the U.S. Department of Homeland Security, Permanent Resident
Cards for the Canadian government, national ID cards for a Middle Eastern
country, and vehicle registration cards in two Indian states.
FY2006 HIGHLIGHTS
o Achieved profitability in fiscal 2006;
o Achieved 64 percent year-to-year increase in optical card revenues;
o Achieved 56 percent optical memory card gross margin in the fiscal 2006
fourth quarter;
o Maintained flat SG&A expenses while growing revenue 40 percent year to
year;
o Began card shipments for the launch of Italy's new foreign resident
(PSE) card program;
o Shipped initial cards for the full implementation of Italy's national
citizen ID (CIE) card program;
o Awarded $11 million subcontract to supply cards and personalization
equipment and services for a Middle Eastern government's national ID
card program;
o Shipped optical memory cards to Costa Rica for the launch of the
government's new permanent residency program;
o Supplied initial small quantity of cards for secure optical memory-based
driver program in one of South Africa's nine provinces;
o Received follow-on purchase order for Canadian Permanent Resident Cards.
"I am pleased to report that we had a very strong fourth quarter and a
profitable year," said Richard Haddock, CEO of LaserCard Corporation. "We
achieved significant revenue growth, both quarter-to-quarter, and year-to-year,
by executing well on our ongoing programs and making initial card shipments for
Italy's new foreign resident card program."
"During the year, we also continued to diversify our customer base and expand
our product offering. Among these, we were awarded an $11 million subcontract we
expect to fulfill mostly during fiscal 2007 to supply secure ID cards and
personalization equipment and services for the issuance of fully personalized
secure National ID cards for a Middle Eastern government. This marks the first
time we are supplying this innovative package, which we believe will yield
direct benefits to our customer and provide us with a new offering for future
market opportunities," said Haddock.
"In addition to our focus on the implementation of Italy's national citizen ID
card program, the rollout of the Middle Eastern program, and continuation as the
supplier to the U.S. government for its most successful ID card program, our
main focus for fiscal 2007 is the development of new optical memory based-ID
card programs," said Haddock. "To this end, we have significantly strengthened
our international sales efforts with the addition of a number of new senior
sales resources to pursue new opportunities around the world."
"The authorization for full implementation of Italy's national citizen ID card
is awaiting a final ministerial signature and publication in the government's
legislative record, so the exact timing of volume issuance remains uncertain. We
are therefore cautious about providing any projections regarding the next
significant card order for this program," said Haddock. "Approximately $5.5
million of our optical memory card backlog as of March 31, 2006, is shippable in
the fiscal 2007 first quarter."
CASH AND INVESTMENTS
LaserCard Corporation's cash, cash equivalents, short-term investments and
long-term investments were $23.5 million at March 31, 2006, compared with $16.4
million at March 31, 2005.
In the two fiscal years ended March 31, 2006, the Company has received $20.5
million from Global Investments Group (G.I.G.), the Company's second-source
manufacturing licensee for optical memory cards. Payments have been recorded as
long-term liabilities on the balance sheet, including $18.5 million in advance
payments and $2 million in deferred revenue. The Company has purchased $5.9
million of equipment for resale to G.I.G. and it is recorded as a long-term
asset on the balance sheet.
EARNINGS RESULTS CONFERENCE CALL
LaserCard will hold a conference call to discuss the company's fiscal 2006
fourth quarter and year end results today, May 16, 2006, at approximately 2:00
p.m. Pacific Time / 5:00 p.m. Eastern Time. For access to the conference call,
please call 210-234-0013 by 1:50 p.m. Pacific Time. A taped replay of the call
will be available for one week. To access the replay, please call 203-369-1919.
You will need to reference the passcode: LaserCard and the conference leader:
Richard Haddock. To listen to the call via the Internet, please log on to:
www.lasercard.com or www.vcall.com. The Internet Webcast will be archived for
one year.
ABOUT LASERCARD CORPORATION
LaserCard Corporation (WWW.LASERCARD.COM) manufactures and markets LaserCard(R)
optical memory cards with IDLock(TM), chip-ready Optical/Smart(TM) cards and
other advanced-technology secure identification cards. The Company has sold over
35 million secure ID cards to meet the demanding requirements for border
security, immigration and national identification in countries around the world,
including the United States, Canada, and Italy. In addition, the Company
manufactures optical card read/write drives and develops optical card system
software, card-related ID subsystems and peripherals. The Company operates a
wholly owned German subsidiary, Challenge Card Design Plastikkarten GmbH, which
manufactures advanced-technology cards and also markets cards, system solutions,
and card personalization printers under the cards & more brand.
Forward Looking Statement Disclaimer
All statements contained in this news release that are not historical facts are
forward-looking statements which are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. They are not guarantees
of future performance or events. Rather, they are based on current expectations,
estimates, beliefs, assumptions, and goals and objectives and are subject to
uncertainties that are difficult to predict. As a result, our actual results may
differ materially from the statements made. Often such statements can be
identified by their use of words such as may, will, intends, expects, plans,
visualizes, believes, anticipates, and estimates. Forward-looking statements
made in this release include our expectations that we will receive purchase
orders under our $11 million Middle Eastern subcontract which we will fulfill
mostly during fiscal 2007, that Italy's national citizen ID card program will be
implemented as anticipated, that we will continue as the card supplier for US
programs, our focus to develop new optical memory-based ID card programs, our
belief that our supply of personalized cards and personalization equipment and
services will yield direct benefits to our customers and provide us with a new
offering for future market opportunities, our expectation that G.I.G. will take
delivery of the $5.9 million of equipment we purchased for resale to them, and
that new senior sales resources will strengthen our international sales efforts.
These forward-looking statements are based upon our assumptions about and
assessment of the future, which may or may not prove true, and involve a number
of risks and uncertainties including, but not limited to, political issues
delaying temporarily or permanently the Italian government's decision to move
the CIE and PSE programs into the implementation phase, the Italian government
deciding for technical or financial reasons not to proceed with the CIE or PSE
programs or to switch from using our LaserCard optical cards, our encountering
unexpected difficulties in overseeing the personalization and issuance of cards
for the Middle Eastern country program or the government deciding not to
continue the program, the U.S. government not renewing its recently expired
contract with our VAR, card order shipments being delayed or canceled or our
having operational difficulties fulfilling them, G.I.G. being delayed or not
moving forward with its plant, our sales people not being successful in
obtaining new business as well as other risk factors detailed in the Company's
Form 8-K, 10-K, 10-Q, and other filings with the Securities and Exchange
Commission. Due to these and other risks, the Company's future actual results
could differ materially from those discussed above. These forward-looking
statements speak only as to the date of this release, and, except as required by
law, the Company undertakes no obligation to publicly release updates or
revisions to these statements whether as a result of new information, future
events, or otherwise.
LASERCARD CORPORATION AND SUBSIDIARIES
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended Fiscal Year Ended
03/31/06 03/31/05 03/31/06 03/31/05
-------- -------- -------- --------
Revenues $14,087 $ $ 5,779 $ 39,857 $ 28,544
Cost of product sales 7,555 4,952 24,804 22,637
-------- -------- -------- --------
Gross profit 6,532 827 15,053 5,907
-------- -------- -------- --------
Selling, general, and administrative expenses 3,690 2,985 11,949 11,891
Research and engineering expenses 729 789 2,338 3,018
-------- -------- -------- --------
Operating income (loss) 2,113 (2,947) 766 (9,002)
Other income, net 159 91 471 240
-------- -------- -------- --------
Income (loss) before income taxes 2,272 (2,856) 1,237 (8,762)
Income taxes 374 139 443 139
-------- -------- -------- --------
Net income (loss) $ 1,898 $ (2,995) $ 794 $ (8,901)
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Net income (loss) per share:
Basic $ 0.16 $ (0.26) $ 0.07 $ (0.78)
======== ======== ======== ========
Diluted $ 0.15 $ (0.26) $ 0.07 $ (0.78)
======== ======== ======== ========
Weighted-average shares used in
computing net income (loss) per share:
Basic 11,584 11,340 11,415 11,362
Diluted 12,251 11,340 11,587 11,362
LASERCARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
March 31, 2006 and March 31, 2005 (In thousands, except share and per share amounts)
2006 2005
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 2,121 $ 3,965
Short-term investments 21,350 6,150
Accounts receivable, net of allowances of $190 at March 31, 2006
and $56 at March 31, 2005 4,920 1,934
Inventories 8,874 7,909
Deferred contract cost 1,041 --
Prepaid and other current assets 1,268 1,352
-------- --------
Total current assets 39,574 21,310
-------- --------
Property and equipment, at cost 28,478 30,037
Less--accumulated depreciation and amortization (16,172) (17,505)
-------- --------
Property and equipment, net 12,306 12,532
Long-term investments -- 6,300
Equipment held for resale 5,877 4,061
Patents and other intangibles, net 889 923
Goodwill 3,321 3,321
Notes receivable 205 220
Other non-current assets 163 101
-------- --------
Total assets $ 62,335 $ 48,768
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,311 $ 2,105
Accrued liabilities 3,118 2,312
Deferred tax liability 568 641
Advance payments from customers 1,772 1,167
Deferred revenue 459 539
-------- --------
Total current liabilities 9,228 6,764
-------- --------
Advance payments from customers 18,500 13,000
Deferred revenue 2,000 2,000
Deferred rent 590 326
-------- --------
Total liabilities 30,318 22,090
-------- --------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value:
Authorized--2,000,000 shares
Issued--none -- --
Common stock, $.01 par value:
Authorized--30,000,000 shares
Issued and outstanding -- 11,734,255 shares at March 31, 2006
and 11,436,794 shares at March 31, 2005 117 114
Additional paid-in capital 58,255 54,155
Accumulated deficit (26,351) (27,145)
Accumulated other comprehensive income (loss) (4) 209
Treasury stock at cost -- 91,630 shares at March 31, 2005 -- (655)
-------- --------
Total stockholders' equity 32,017 26,678
-------- --------
Total liabilities and stockholders' equity $ 62,335 $ 48,768
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