NPLA Inplay Technologies (MM)

PHOENIX, Nov. 13 /PRNewswire-FirstCall/ -- InPlay Technologies (NASDAQ:NPLA) today announced financial results for the third quarter ended September 30, 2006. Total revenue for the third quarter of 2006 was $3.09 million, up 21 percent from $2.55 million in the second quarter of 2006. Third quarter 2006 revenue includes $2.89 million from FinePoint operations and $204,000 from Duraswitch operations, increases of 22 percent and 13 percent, respectively, compared with the immediately preceding quarter. Net loss for the third quarter of 2006 was $257,000, or $0.02 per share, compared with net loss of $684,000, or $0.06 per share, for the second 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 September 30, 2006 was 26 percent, consisting of 23 percent gross margin for FinePoint and 65 percent gross margin for Duraswitch. Consolidated gross margin for the prior quarter ended June 30, 2006 was 14 percent, consisting of 11 percent gross margin for FinePoint and 59 percent gross margin for Duraswitch. InPlay expects that gross profit will continue to fluctuate quarter to quarter. Bob Brilon, InPlay Technologies' Chief Executive Officer, stated, "The third quarter revenue was exceptionally strong and marked our highest quarterly activity so far based on continued strong sequential growth within both of our divisions. As anticipated, gross margins for our FinePoint operations improved from the previous quarter, resulting in a higher gross profit and lower net loss." "At the beginning of the year our projections for FinePoint sales were between $5-10 million for fiscal 2006. We have achieved $6.8 million in FinePoint revenue through the third quarter, putting us in position to reach the upper end of our goal. Specifically, we anticipate fourth quarter revenue to be in the range of $1.5-2.5 million. We expect actual results to be largely dependent on retail order patterns for our primary customer, subject to the widely reported industry-wide component constraints and possible inventory adjustments of non-Vista PC products during the fourth quarter," concluded Mr. Brilon. 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 800-366-3908 at least ten minutes prior to the call. To participate on the live call from outside the U.S., dial 303-262-2137. 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 11075591#. 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 expectations for gross margin for FinePoint operations, ability to achieve revenue targets from our customers, our estimations for revenue for fiscal 2006 and our beliefs regarding factors that affect our industry and the impact on our business. 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 Nine Months Ended September 30, September 30, 2006 2005 2006 2005 NET REVENUE: FinePoint $2,885,685 $574,384 $6,821,748 $574,384 Duraswitch: Related party - Delphi -- 102,345 -- 2,306,933 Non-related parties 203,631 142,443 536,713 381,048 Total net revenue 3,089,316 819,172 7,358,461 3,262,365 COST OF GOODS SOLD: FinePoint 2,212,391 463,559 5,512,698 463,559 Duraswitch 71,758 73,224 207,606 182,078 Total cost of goods sold 2,284,149 536,783 5,720,304 645,637 Gross profit 805,167 282,389 1,638,157 2,616,728 OPERATING EXPENSES: Selling, general and administrative 745,038 541,284 2,205,306 1,707,199 Research, development and commercial application engineering 340,878 168,838 978,056 404,608 Total operating expenses 1,085,916 710,122 3,183,362 2,111,807 INCOME (LOSS) FROM OPERATIONS (280,749) (427,733) (1,545,205) 504,921 OTHER INCOME - Net 23,417 16,943 71,836 44,707 NET INCOME (LOSS) $(257,332) $(410,790) $(1,473,369) $549,628 NET INCOME (LOSS) PER COMMON SHARE BASIC AND DILUTED $(0.02) $(0.04) $(0.13) $0.06 WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC 11,498,496 9,799,764 11,490,697 9,677,048 DILUTED 11,498,496 9,799,764 11,490,697 9,739,334 INPLAY TECHNOLOGIES, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) September 30, December 31, 2006 2005 ASSETS CURRENT ASSETS: Cash and cash equivalents $1,743,757 $4,022,734 Restricted short-term investment 400,000 400,000 Accounts receivable 998,802 1,460,169 Inventory 2,195,052 1,311,077 Prepaid expenses and other current assets 110,691 87,071 Total current assets 5,448,302 7,281,051 PROPERTY AND EQUIPMENT - Net 591,070 557,145 GOODWILL 1,321,240 1,321,240 PATENTS - Net 1,337,845 1,389,153 OTHER ASSETS 19,299 19,299 TOTAL ASSETS $8,717,756 $10,567,888 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $1,380,336 $1,496,780 Accrued salaries and benefits 326,955 510,794 Other accrued expenses and other current liabilities 672,741 539,786 Deferred revenue - other 25,526 82,879 Current portion notes payable and capital leases 2,600 165,914 Total current liabilities 2,408,158 2,796,153 LONG-TERM LIABILITIES: Other non-current liabilities 4,499 11,465 Total liabilities 2,412,657 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, 11,500,591 and 11,481,512 shares issued and outstanding in 2006 and 2005, respectively 11,500 11,482 Additional paid-in capital 31,391,472 31,373,292 Accumulated deficit (25,097,873) (23,624,504) Total stockholders' equity 6,305,099 7,760,270 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $8,717,756 $10,567,888 DATASOURCE: InPlay Technologies, Inc. CONTACT: Heather Beshears, Vice President, Corporate Communications, InPlay Technologies, Inc., +1-480-586-3357, Web site: http://www.inplaytechnologies.com/

Copyright