PubliCARD, Inc. reported its financial results for the three and nine months ended September 30, 2001. Revenues for the third quarter of 2001 were $1,575,000, comparable to $1,573,000 a year ago. The net loss from continuing operations for the quarter, excluding a repositioning charge of $1,232,000, was $1,567,000, or $0.06 per share, compared with $5,172,000, or $0.22 per share, a year ago. The decline in the net loss is attributable primarily to work force reductions and other cost containment measures associated with the Company’s July 2001 strategic repositioning action. Operating expenses are expected to decrease further as the benefits of the repositioning program and other cost containment measures materialize.
For the nine months ended September 30, 2001, revenues increased to $4,434,000, from $4,215,000 a year ago. The net loss from continuing operations for the nine months ended September 30, 2001, excluding a repositioning charge of $7,317,000, was $8,501,000, or $0.35 per share, compared with $15,432,000, or $0.67 per share, a year ago. Also during the nine months ended September 30, 2001 and 2000, the Company revised its estimates of expenses associated with previously discontinued operations and reversed reserves amounting to $2,350,000, or $0.10 per share, in 2001 and $4,275,000, or $.19 per share, in 2000, respectively. As of September 30, 2001, cash and short-term investments totaled $6,047,000, exclusive of approximately $2,200,000 of escrow deposits established in connection with prior dispositions.
In July 2001, after evaluating the timing of potential future revenues, PubliCARD’s Board decided to shift the Company’s strategic focus and reposition its smart card reader and chip business. In connection with this shift in strategic focus, the Company recorded a charge aggregating $7,317,000 in the second and third quarters of 2001. The charge consisted of write-offs of goodwill and fixed assets, a write-down of inventory to its net realizable value, and severance and other costs principally related to the termination of 36 employees.
In early October 2001, PubliCARD announced the formation of a new minority-owned affiliate, MAKO Technologies LLC, to market and develop its smart card reader and chip technologies, which represented 23% of consolidated revenues for the first nine months of 2001. This decision substantially eliminates the cash funding requirements for the smart card reader and chip business while retaining an upside potential in the form of royalties over the next two years and a 46% ownership interest in MAKO.
PubliCARD will continue to develop and market its smart card platform solutions for educational and corporate sites through its U.K. based subsidiary, Infineer Ltd., which represented 77% of consolidated revenues for the first nine months of 2001. PubliCARD’s future plans revolve around an acquisition strategy focused on businesses in areas outside the high technology sector while continuing to support the expansion of the Infineer Ltd. business.
About PubliCARD, Inc.
Headquartered in New York, NY, PubliCARD today is a smart card technology company providing infrastructure products and solutions to facilitate secure access and transactions. Through its’ Infineer Ltd. subsidiary, the Company designs smart card platform solutions for educational and corporate sites. The Company also licenses industry compliant smart card reader solutions and application specific integrated circuits to MAKO Technologies LLC, a PubliCARD affiliate. More information about PubliCARD’s 3Q/01 results visit CardData ([www.carddata.com]).