PHOENIX, Aug. 10 /PRNewswire-FirstCall/ -- InPlay Technologies
(NASDAQ:NPLA) today announced financial results for the second
quarter ended June 30, 2006. Total revenue for the second quarter
of 2006 was $2.55 million, up 48 percent from $1.72 million in the
first quarter of 2006. Second quarter 2006 revenue includes $2.37
million from FinePoint operations and $180,000 from Duraswitch
operations, increases of 51 percent and 18 percent, respectively,
compared with the immediately preceding quarter. Net loss for the
second quarter of 2006 was $684,000, or $0.06 per share, compared
with net loss of $532,000, or $0.05 per share, for the first
quarter of 2006. The company believes that a sequential comparison
is more meaningful to investors than a year-over-year comparison.
Consolidated gross margin for the three-month period ended June 30,
2006 was 14 percent, including 11 percent for FinePoint and 59
percent for Duraswitch. InPlay expects that gross profit will
continue to fluctuate quarter to quarter. Bob Brilon, InPlay
Technologies' Chief Executive Officer, stated, "Both of our
business lines delivered strong sequential revenue growth in the
second quarter and we are pleased with the continued sales momentum
for FinePoint. The decrease in gross margins for this segment
reflects short-term challenges associated with an accelerated
demand ramp from our key customer during the period. However, we
expect margins to rebound in the third quarter as we have addressed
these issues and are also proactively working to ensure our ongoing
ability to seamlessly ramp with current and new customers." "For
the first half of the year, FinePoint sales for our first major OEM
customer totaled $3.7 million, reflecting strong demand for their
convertible notebook product line. Based on this performance, we
believe we are on track to achieve the upper end of the $5-10
million revenue range we predicted for this project for fiscal
2006," concluded Mr. Brilon. InPlay Technologies reported cash of
$1.62 million and $0.4 million of restricted short term investments
at June 30, 2006. The company has no debt. Conference Call InPlay
Technologies will host a conference call today at 5:00 p.m. Eastern
Time. To participate on the live call, analysts and investors
should dial 800-240-4186 at least ten minutes prior to the call. To
participate on the live call from outside the U.S., dial
303-262-2050. InPlay Technologies will also offer a live and
archived webcast of the conference call, accessible from the
"Investor" section of the company's Web site
(http://www.inplaytechnologies.com/). A telephonic replay of the
conference call will also be available for 48 hours by dialing
800-405-2236 and entering passcode 11065239#. About InPlay
Technologies InPlay Technologies markets and licenses proprietary
emerging technologies through two divisions: FinePoint and
Duraswitch. FinePoint Innovations is a developer of pen computing
products for tablet PCs and computer peripherals. FinePoint's
digital solution is the computing pen and digitizer for a major
computer OEM's award-winning line of convertible notebooks. The
company was founded to commercialize its internally developed
Duraswitch electronic switch technologies and has executed license
agreements with switch manufacturers and OEMs worldwide. Today,
Duraswitch patented technologies are in the controls of a wide
range of commercial and industrial applications. InPlay
Technologies is focused on further commercialization of these
technologies and leveraging its licensing model with additional,
innovative technologies. Visit http://www.inplaytechnologies.com/
for more information. This news release contains certain
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, as amended. These forward-looking statements
include statements regarding our predictions for revenue ranges and
timing of revenue from FinePoint customers, potential production
from new customers and our estimations for gross margins. Risks and
uncertainties that could cause results to differ materially from
those projected include changes in orders or timing from our OEM
customers, general changes in demand in the personal computing
industry, pricing pressures, component shortages or other
unforeseen difficulties related to manufacturing our technologies
and other uncertainties described from time to time in our
documents filed with the Securities and Exchange Commission,
including our Annual Report on Form 10-KSB for the year ended
December 31, 2005 as filed with the Securities and Exchange
Commission on March 17, 2006. These forward-looking statements
represent our beliefs as of the date of this press release and we
disclaim any intent or obligation to update these forward-looking
statements. INPLAY TECHNOLOGIES, INC CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited) Three Months Ended June 30, Six Months Ended
June 30, 2006 2005 2006 2005 NET REVENUE: FinePoint $2,370,694 $--
$3,936,063 $-- Duraswitch: Related party - Delphi -- 2,102,243 --
2,204,588 Non-related parties 180,456 134,301 333,082 238,605 Total
net revenue 2,551,150 2,236,544 4,269,145 2,443,193 COST OF GOODS
SOLD: FinePoint 2,110,291 -- 3,300,307 -- Duraswitch 74,080 63,157
135,848 108,854 Total cost of goods sold 2,184,371 63,157 3,436,155
108,854 Gross profit 366,779 2,173,387 832,990 2,334,339 OPERATING
EXPENSES: Selling, general and administrative 743,490 703,584
1,460,268 1,165,915 Research, development and commerical
application engineering 325,279 111,271 637,178 235,770 Total
operating expenses 1,068,769 814,855 2,097,446 1,401,685 INCOME
(LOSS) FROM OPERATIONS (701,990) 1,358,532 (1,264,456) 932,654
OTHER INCOME - Net 18,344 13,661 48,419 27,764 NET INCOME (LOSS)
$(683,646) $1,372,193 $(1,216,037) $960,418 NET INCOME (LOSS) PER
COMMON SHARE BASIC AND DILUTED $(0.06) $0.14 $(0.11) $0.10 WEIGHTED
AVERAGE SHARES OUTSTANDING, BASIC 11,491,896 9,614,673 11,486,733
9,614,673 DILUTED 11,491,896 9,665,367 11,486,733 9,684,120 INPLAY
TECHNOLOGIES, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) June 30,
2006 December 31, 2005 ASSETS CURRENT ASSETS: Cash and cash
equivalents $1,624,029 $4,022,734 Restricted short-term investment
400,000 400,000 Accounts receivable 1,655,698 1,460,169 Inventory
1,785,698 1,311,077 Prepaid expenses and other current assets
88,436 87,071 Total current assets 5,553,861 7,281,051 PROPERTY AND
EQUIPMENT - Net 631,534 557,145 GOODWILL 1,321,240 1,321,240
PATENTS - Net 1,346,969 1,389,153 OTHER ASSETS 19,299 19,299 TOTAL
ASSETS $8,872,903 $10,567,888 LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES: Accounts payable $1,664,158 $1,496,780 Accrued
salaries and benefits 280,736 510,794 Other accrued expenses and
other current liabilities 326,221 539,786 Deferred revenue - other
34,370 82,879 Current portion notes payable and capital leases
4,014 165,914 Total current liabilities 2,309,499 2,796,153
LONG-TERM LIABILITIES: Other non-current liabilities 6,816 11,465
Total liabilities 2,316,315 2,807,618 COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY: Preferred stock, no par value, 10,000,000
shares authorized, no shares issued and outstanding in 2006 and
2005 -- -- Common stock, $.001 par value, 40,000,000 shares
authorized in 2006 and 2005, 11,498,473 and 11,481,512 shares
issued and outstanding in 2006 and 2005, respectively 11,499 11,482
Additional paid-in capital 31,385,630 31,373,292 Accumulated
deficit (24,840,541) (23,624,504) Total stockholders' equity
6,556,588 7,760,270 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$8,872,903 $10,567,888 DATASOURCE: InPlay Technologies CONTACT:
Heather Beshears, Vice President, Corporate Communications of
InPlay Technologies, Inc., +1-480-586-3357, Web site:
http://www.inplaytechnologies.com/
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