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| [February 02, 2010] |
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LaserCard Corporation Reports Financial Results for FY10 Third Quarter
MOUNTAIN VIEW, Calif. --(Business Wire)--
LaserCard Corporation (NASDAQ:LCRD), a leading provider of secure ID solutions, today announced the financial results for its fiscal 2010 third quarter ended December 31, 2009.
Revenues for the third quarter of fiscal 2010 were $12.4 million, compared with $15.7 million in the prior quarter and $10.9 million in the same quarter a year ago. Net income for the third quarter of fiscal 2010 was $1.3 million, or $0.11 per diluted share, compared with net income of $1.8 million, or $0.15 per diluted share, in the prior quarter, and net loss of $849,000, or ($0.07) per diluted share, in the same quarter a year ago.
LaserCard® optical memory card revenues for the quarter were $9.1 million compared with $6.0 million in the third quarter of fiscal 2009. Revenues from specialty cards and printers totaled $3.3 million compared with $4.3 million from the same quarter a year ago. Drives, systems and services segment revenue for the quarter was $0.1 million, compared with $0.7 million from the same quarter a year ago.
Cash
Cash, cash equivalents, and investments less debt associated with auction rate securities were $33.8 million at December 31, 2009 compared with $20.6 million at March 31, 2009.
Non-GAAP Results
The non-GAAP net income for the third quarter of fiscal 2010 was $1.8 million, or $0.15 per diluted share, compared to non-GAAP net income of $1.9 million, or $0.15 per diluted share, in the prior quarter, and a non-GAAP net loss of approximately $25,000, or $0.00 per diluted share, in the same quarter a year ago.
Non-GAAP net income and net income per diluted share exclude expenses related to ASC (News - Alert) 718 (formerly SFAS123R) stock-based compensation, the unrealized income relating to the fair value adjustment of auction rate securities and our UBS put option agreement, and exclude the gain related to the termination of a contract.
"We have achieved strong operating results over the past four quarters," said Robert DeVincenzi, President and CEO of LaserCard. "Our performance continues to benefit from our previously implemented expense reduction and resource reallocation program and the ongoing contributions from our core customer programs. Our program revenue and financial results will continue to be subject to fluctuations on a quarterly basis."
Earnings Results Conference Call
LaserCard will hold a conference call to discuss its fiscal 2010 third quarter results today, February 2, 2010, at approximately 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time. For access to the conference call, please call 773-799-3302 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 203-369-0057. You will need to reference the passcode "LaserCard" and the conference leader "Robert DeVincenzi." To listen to the call via the Internet, please log on to: www.lasercard.com or www.investorcalendar.com. The Internet Webcast will be archived for one year. A copy of this press release will be furnished to the Securities and Exchange Commission on a Form 8-K and be posted to our web site prior to the conference call.
About LaserCard Corporation
LaserCard Corporation, together with its subsidiaries, is a leading provider of secure ID solutions to governments and commercial clients worldwide. It develops, manufactures, and integrates LaserCard® optical memory cards, multi-technology cards, encoders, peripherals, smart and specialty cards, biometrics, and modular software. The Company's cards and systems are used in various applications, including citizen identification, border security, government service delivery, and facility access.
For more information, please go to www.lasercard.com.
Forward Looking Statement Disclaimer
All statements contained in this press release that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are not historical facts or guarantees of future performance or events. Rather, they are based on current expectations, estimates, beliefs, assumptions, 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 the use of words such as may, will, intends, plans, believes, anticipates, visualizes, expects, and estimates. Examples of forward-looking statements in this release include our belief that quarterly results will fluctuate. This and other forward-looking statements in this press release 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 whether projected orders or scheduled delivery dates are rescheduled or canceled in whole or in part, that the complex nature of the secure ID business will continue to subject our results to fluctuations on a quarterly basis, and whether our other customers continue orders as currently expected as well as the other risk factors detailed in the Company's Forms 10-K and 10-Q filings with the Securities and Exchange Commission under the caption "Risk Factors" and elsewhere in such reports. Due to these and other risks, future actual results could differ materially from the Company's expectations. 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.
About Non-GAAP Financial Measures
To supplement our consolidated financial statements, which statements are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: non-GAAP net income and non-GAAP EPS. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned "Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures" included at the end of this release.
We use these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenses and expenditures that may not be indicative of our "recurring core business operating results," meaning our operating performance excluding not only non-cash charges, such as stock-based compensation, but also discrete cash charges or gains that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to our historical performance as well as comparisons to our competitors' results. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business. These non-GAAP financial measures may be different than those used by other companies, including our competitors.
Non-GAAP net income and EPS. We define non-GAAP net income as net income plus stock-based compensation, and unrealized fair-value adjustments less the related tax effects of such items plus other nonrecurring gains or losses. We define non-GAAP EPS as non-GAAP net income divided by the weighted average outstanding shares, on a fully-diluted basis. We consider these non-GAAP financial measures to be a useful metric for management and investors. However, in order to provide a complete picture of our recurring core business operating results, we exclude from non-GAAP net income and non-GAAP EPS the tax effects associated with stock-based compensation and the impairment charges. Without excluding these tax effects, investors would only see the gross effect that excluding these expenses had on our operating results. There are a number of limitations related to the use of non-GAAP net income versus net income calculated in accordance with GAAP. First, non-GAAP net income excludes some recurring costs, namely stock-based compensation. Stock-based compensation has been and will continue to be for the foreseeable future a significant recurring expense in our business. Second, stock-based compensation is an important part of our employees' compensation and impacts their performance. Third, the components of the costs that we exclude in our calculation of non-GAAP operating income may differ from the components that our peer companies exclude when they report their results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net income and non-GAAP EPS and evaluating non-GAAP net income and non-GAAP EPS together with net income and EPS calculated in accordance with GAAP.
The accompanying tables have more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures.
LASERCARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended
Nine Months Ended
December 31,
December 31,
2009
2008
2009
2008
Revenues
$
12,409
$
10,906
$
44,433
$
35,095
Cost of sales
6,827
7,314
25,459
23,471
Gross profit
5,582
3,592
18,974
11,624
Operating expenses:
Selling, general, and administrative expenses
4,087
3,950
12,439
11,437
Research and development expenses
214
286
881
1,974
Total operating expenses
4,301
4,236
13,320
13,411
Operating income (loss)
1,281
(644
)
5,654
(1,787
)
Other income (expense), net
(13
)
(219
)
687
(94
)
Income (loss) before income taxes
1,268
(863
)
6,341
(1,881
)
Provision (benefit) for income tax
(81
)
(14
)
1,202
3
Net income (loss)
$
1,349
$
(849
)
$
5,139
$
(1,884
)
Net income (loss) per share:
Basic
$
0.11
$
(0.07
)
$
0.42
$
(0.16
)
Diluted
$
0.11
$
(0.07
)
$
0.42
$
(0.16
)
Weighted-average shares of common stock used in computing net income (loss) per share:
Basic
12,234
12,085
12,143
12,035
Diluted
12,284
12,085
12,197
12,035
LASERCARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands)
December 31,
March 31,
2009
2009*
ASSETS
Current assets:
Cash and cash equivalents
$
29,756
$
15,912
Short-term investments
12,450
174
Accounts receivable, net of allowance of $121 at December 31, 2009 and $59 at March 31, 2009
2,962
10,217
Inventories, net of reserves of $2,086 at December 31, 2009 and $863 at March 31, 2009
13,110
14,232
Deferred contract costs
252
345
Prepaid and other current assets
829
934
Total current assets
59,359
41,814
Property and equipment, net of accumulated depreciation of $23,395 at December 31, 2009 and $21,555 at March 31, 2009
9,880
10,872
Equipment held for resale
7,154
7,062
Long-term investments
-
13,239
Patents and other intangibles, net
328
400
Notes receivable
244
227
Deferred contract costs
79
568
Other non-current assets
49
108
Total assets
$
77,093
$
74,290
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
1,840
$
1,698
Accrued liabilities
4,799
3,397
Deferred income tax liability
190
234
Advance payments from customers
4,254
7,958
Short-term debt
8,429
8,681
Deferred revenue
534
589
Deferred rent
261
257
Capital lease obligation
77
72
Total current liabilities
20,384
22,886
Capital lease obligation, net of current portion
101
166
Advance payments from customers, net of current portion
24,506
26,122
Deferred revenue, net of current portion
3,306
3,788
Deferred rent, net of current portion
1,026
1,203
Income tax payable
277
277
Total liabilities
49,600
54,442
Stockholders' equity:
Common stock
122
121
Additional paid-in capital
68,869
66,422
Accumulated deficit
(41,668
)
(46,807
)
Accumulated other comprehensive income
170
112
Total stockholders' equity
27,493
19,848
Total liabilities and stockholders' equity
$
77,093
$
74,290
*Amounts derived from audited consolidated financial statements
LASERCARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
Nine Months Ended
December 31,
2009
2008
Cash flows from operating activities:
Net income (loss)
$
5,139
$
(1,884
)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization
2,006
2,160
Equipment write-off reserve
29
296
Provision (benefit) for doubtful accounts receivable
58
(2
)
Reserve for excess and obsolete inventory
1,217
66
Provision (benefit) for warranty reserve
(14
)
51
Decrease in deferred income tax assets
-
65
Stock-based compensation
1,684
1,751
Put option, (gain)/loss on fair value
79
(1,227
)
Mark to market, trading (gain)/loss
(340
)
1,431
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable
7,302
(3,424
)
Decrease (increase) in inventories
48
(2,747
)
Decrease in deferred contract costs
596
328
Decrease in other current assets
310
32
Increase in equipment held for resale
(93
)
(517
)
Decrease in other non-current assets
60
168
Increase (decrease) in accounts payable and accrued liabilities
1,438
(379
)
Decrease in deferred income tax
(61
)
(82
)
Increase (decrease) in deferred revenue
(549
)
269
Increase (decrease) in deferred rent
(172
)
221
Increase (decrease) in advance payments from customers
(5,470
)
5,585
Net cash provided by operating activities
13,267
2,161
Cash flows from investing activities:
Purchases of property and equipment
(861
)
(2,366
)
Acquisition of patents and other intangibles
(10
)
(119
)
Net cash used in investing activities
(871
)
(2,485
)
Cash flows from financing activities:
Proceeds from sale of common stock through stock plans
229
138
Tax benefit on carryforward of gain from exercise of common stock options
634
-
Employee's taxes withheld and paid for restricted stock
(99
)
-
Net borrowing on revolving credit agreement
797
3,000
Principal payments on capital lease obligation
(53
)
(36
)
Net cash provided by financing activities
1,508
3,102
Effect of exchange rate changes on cash and cash equivalents
(60
)
240
Net increase in cash and cash equivalents
13,844
3,018
Cash and cash equivalents:
Beginning of period
$
15,912
$
5,583
End of period
$
29,756
$
8,601
Supplemental disclosures - cash payments for:
Income taxes
$
250
$
-
Interest
$
137
$
93
Supplemental schedule of non-cash investing activities:
Equipment acquired under capital lease
$
-
$
198
Unrealized (gain)/loss in fair value of investments
$
(261
)
$
205
LASERCARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2009
2008
2009
2008
Non-GAAP Net income (loss):
GAAP net income (loss)
$
1,349
$
(849
)
$
5,139
$
(1,884
)
Stock-based compensation
553
620
1,684
1,675
Loss (Gains) on fair value of investment
(147
)
1,431
(340
)
1,431
Loss related to the Put-Right option
147
(1,227
)
79
(1,227
)
Contract Termination
-
-
(495
)
-
Income tax effect of non-GAAP adjustments
(89
)
-
(149
)
-
Non-GAAP Net Income/(loss)
$
1,813
$
(25
)
$
5,918
$
(5
)
Non-GAAP EPS:
Net income (loss) per share:
Basic
$
0.15
$
0.00
$
0.49
$
0.00
Diluted
$
0.15
$
0.00
$
0.49
$
0.00
Weighted-average shares of common stock used in computing net loss per share:
Basic
12,234
12,085
12,143
12,035
Diluted
12,284
12,085
12,197
12,035
As reported GAAP:
Net income (loss) per share:
Basic
$
0.11
$
(0.07
)
$
0.42
$
(0.16
)
Diluted
$
0.11
$
(0.07
)
$
0.42
$
(0.16
)
Weighted-average shares of common stock used in computing net loss per share:
Basic
12,234
12,085
12,143
12,035
Diluted
12,284
12,085
12,197
12,035
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