PubliCARD, Inc. Announces Third Quarter Results NEW YORK, Nov. 10
/PRNewswire-FirstCall/ -- PubliCARD, Inc. (BULLETIN BOARD: CARD.OB)
reported its financial results for the three and nine months ended
September 30, 2003. Sales for the third quarter of 2003 increased
to $1,417,000, compared to $1,298,000 a year ago driven by a 6%
increase from foreign currency changes. Excluding the impact of
foreign currency changes, sales in 2003 increased by 3%. The
Company reported a net loss for the quarter ended September 30,
2003 of $749,000, or $0.03 per share, compared with a net loss of
$2,343,000, or $0.10 per share, a year ago. The results for 2002
include a charge of $2,068,000 to write-down a minority investment
and income from discontinued operations of $1,066,000. As of
September 30, 2003, cash and short-term investments totaled
$1,391,000. For the nine months ended September 30, 2003, sales
increased to $4,023,000 compared to $3,513,000 a year ago driven by
an 11% increase from foreign currency changes. Excluding the impact
of foreign currency changes, sales in 2003 increased by 4%. The
Company reported a net loss of $678,000, or $.03 per share, for the
nine months ended September 30, 2003 versus a net loss of
$4,839,000, or $.20 per share, in 2002. The 2003 results include a
gain of $1,705,000 relating to two 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. In October 2003, the Company announced
it had reached a settlement with a third insurer and sold a parcel
of unused land. The Company expects to receive additional proceeds
from these two transactions aggregating approximately $2,750,000 in
cash in the fourth quarter of 2003. 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 http://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. PUBLICARD, INC. AND SUBSIDIARY COMPANIES CONSOLIDATED
STATEMENTS OF OPERATIONS FOR THREE AND NINE MONTHS ENDED SEPTEMBER
30, 2003 AND 2002 (in thousands, except share data) (unaudited)
Three Months Ended Nine Months Ended September 30, September 30,
2003 2002 2003 2002 Sales $ 1,417 $ 1,298 $ 4,023 $ 3,513 Cost of
sales 645 648 1,876 1,804 Gross margin 772 650 2,147 1,709
Operating expenses: General and administrative 676 811 2,067 2,505
Sales and marketing 415 467 1,420 1,366 Product development 169 145
414 392 Amortization of intangibles 10 144 30 432 1,270 1,567 3,931
4,695 Loss from operations (498) (917) (1,784) (2,986) Other income
(expenses): Interest income 3 40 10 69 Interest expense (3) (18)
(8) (39) Cost of pensions - non-operating (255) (225) (697) (649)
Insurance recoveries (2) -- 1,705 -- Write-down of minority
investment -- (2,068) -- (2,068) Other income (expenses), net 6
(221) 96 (232) (251) (2,492) 1,106 (2,919) Net loss from continuing
operations (749) (3,409) (678) (5,905) Discontinued operations --
1,066 -- 1,066 Net loss $ (749) $(2,343) $ (678) $(4,839) Basic and
diluted earnings (loss) per common share: Continuing operations
$(.03) $(.14) $ (.03) $ (.24) Discontinued operations -- .04 -- .04
$(.03) $(.10) $ (.03) $ (.20) Weighted average common shares
outstanding 24,534,652 24,190,902 24,428,402 24,175,902 See Note 1
below. PUBLICARD, INC. AND SUBSIDIARY COMPANIES CONDENSED
CONSOLIDATED BALANCESHEETSASOF SEPTEMBER 30, 2003 AND
DECEMBER31,2002 (in thousands, except share data) September
December 30, 31, 2003 2002 (unaudited) ASSETS Current assets: Cash,
including short-term investments of $1,376 and $1,138 in 2003 and
2002, respectively $ 1,391 $ 1,290 Trade receivables, less
allowance for doubtful accounts of $107 and $103 in 2003 and 2002,
respectively 1,420 853 Inventories 581 885 Prepaid insurance and
other 165 375 Total current assets 3,557 3,403 Equipment and
leasehold improvements, net 215 379 Goodwill and intangibles 832
862 Other assets 3,295 3,295 $ 7,899 $ 7,939 LIABILITIES AND
SHAREHOLDERS' DEFICIT Current liabilities: Trade accounts payable
and overdraft $ 1,555 $ 1,269 Accrued liabilities 4,360 2,682 Total
current liabilities 5,915 3,951 Other non-current liabilities 3,656
4,990 Total liabilities 9,571 8,941 Commitments and contingencies
(Note 6) Shareholders' deficit: Class A Preferred Stock, Second
Series, no par value: 1,000 shares authorized; 615 and 765 issued
and outstanding as of September 30, 2003 and December 31, 2002,
respectively 3,075 3,825 Common shares, $0.10 par value: 40,000,000
shares authorized; 24,565,902 and 24,190,902 shares issued and
outstanding as of September 30, 2003 and December 31, 2002,
respectively 2,457 2,419 Additional paid-in capital 107,881 107,169
Accumulated deficit (112,702) (112,024) Other comprehensive loss
(2,383) (2,391) Total shareholders' deficit (1,672) (1,002) $ 7,899
$ 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 the years 2002, 2001 and 2000 and the nine months ended
September 30, 2003. 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 $1.4 million at
September 30, 2003. The Company also had a working capital deficit
of $2.4 million and an accumulated deficit of $112.7 million at
September 30, 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
funding requirements for 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, 2003. However, additional capital will be necessary in
order to operate beyond December 2003 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 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, 2002 contained an emphasis
paragraph concerning substantial doubt about the Company's ability
to continue as a going concern. DATASOURCE: PubliCARD, Inc.
CONTACT: Antonio L. DeLise, President, Chief Executive Officer
& Chief Financial Officer of PubliCARD, Inc., +1-212-651-3120
Web site: http://www.publicard.com/
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