ISMANING, Germany, Aug. 12 /PRNewswire-FirstCall/ -- SCM
Microsystems, Inc.
(NASDAQ:SCMMNASDAQ:PrimeNASDAQ:Standard:NASDAQ:SMY), a leading
provider of solutions that open the Digital World, today announced
results for the second quarter ended June 30, 2008. Revenues from
continuing operations in the second quarter of 2008 were $6.5
million, up 40% from revenues of $4.6 million in the second quarter
of 2007. Revenues for the first six months of 2008 were $13.0
million, down slightly from revenues of $13.1 million for the first
six months of 2007. By product segment, second quarter 2008
revenues included $4.9 million from sales of smart card readers and
other products for secure network and physical access, compared
with sales of $3.9 million in the second quarter of 2007; and $1.6
million from sales of original equipment manufacturer (OEM) digital
media reader technology, compared with sales of $0.8 million in the
second quarter of 2007. In the second quarter of 2008, sales of the
Company's smart card reader products continued to be impacted by
weak demand from U.S. government-based smart card authentication
programs. Additionally, demand continued to shift away from
external reader devices towards readers embedded within laptops and
keyboards. Lower U.S. sales of SCM's smart card readers were offset
by higher sales in Asia of interface chips for embedded readers, as
well as strong sales in Europe of smart card readers, which were
balanced across the enterprise, government and small business
markets and distributed among several countries. Sales of
CHIPDRIVE(R) business productivity solutions were once again strong
in the quarter, and SCM's new contactless readers comprised a
significant proportion of smart card reader sales. "There were many
signs in the second quarter that our strategy to diversify and
expand our customer base is beginning to yield good results," said
Felix Marx, chief executive officer of SCM Microsystems. "Increases
in both sales levels and the number of customers in Europe indicate
the success of our efforts to expand sales of our CHIPDRIVE
productivity solutions into new geographic markets, and the
effectiveness of market development activities in the enterprise
and e-government sectors." Gross margin in the second quarter of
2008 was 43%, compared with gross margin of 29% in the second
quarter of 2007. The increase in gross margin compared with the
prior year primarily reflects higher revenue levels in the 2008
period, a more favorable mix of higher margin products, including
CHIPDRIVE solutions, and product cost reductions. Operating
expenses in the second quarter of 2008, as reported in accordance
with GAAP, were $5.1 million, including $0.2 million in severance
costs, compared with $5.4 million in the second quarter of 2007,
which included amortization of intangibles of $0.1 million and
severance and other costs of $1.4 million related to the
resignation of the Company's former CEO in June 2007. Higher base
operating expenses in the second quarter of 2008 primarily reflect
the recent investment in new sales resources in Latin America,
Asia, Europe and the U.S. to support the Company's strategy to
diversify and expand its sales base, as well as increased spending
on new product development. Operating loss for the second quarter
of 2008, as reported in accordance with GAAP, was $(2.3) million,
compared with operating loss of $(4.1) million in the year ago
quarter. Earnings before interest, taxes, depreciation and
amortization (EBITDA) in the second quarter of 2008 was $(2.1)
million, compared with EBITDA of $(3.9) million in the second
quarter of 2007. (See reconciliation of EBITDA to GAAP accounting
contained within this press release.) As reported in accordance
with GAAP, loss from continuing operations in the second quarter of
2008 was $(2.0) million, or $(0.13) per share, compared with loss
from continuing operations of $(3.7) million, or $(0.23) per share,
in the second quarter of 2007. Cash, cash equivalents and
short-term investments at June 30, 2008 were $28.0 million,
compared with $28.7 million at March 31, 2008. Strategic Update "In
May, we announced our strategy to target the worldwide financial
services and enterprise markets with new contactless reader
products," said Marx. "Contactless technology is changing the way
people travel, work, and perform everyday transactions such as
purchasing goods and services. SCM has a unique opportunity to
establish itself as a significant provider of contactless devices
for emerging applications, with our strong background in security,
a talented and experienced team and an innovative vision. We have
already delivered our first contactless reader, which in only one
quarter has begun to generate significant sales. We are encouraged
by our progress and remain focused on developing additional
contactless solutions and building the sales and marketing
capabilities to generate high margin, sustainable growth." Guidance
for 2008 For the second half of 2008, the Company expects to
achieve revenue growth between 10% and 27% compared to the second
half of 2007. Taken together with sales for the first half of 2008,
the Company therefore expects to achieve revenue growth of 5% to
15% for the year as a whole, which would result in total revenues
of $32 million to $35 million for the full year. In May 2008, the
Company previously announced expected revenue growth of 25-35% and
revenue of $38 million to $40 million for the year as a whole. The
decrease in expected revenue compared with the guidance given in
May is primarily due to weaker demand and the faster than expected
shift to embedded smart card readers in the U.S. government market.
The Company's projections of revenue growth are based on the
release of new products currently being prepared for release, under
development or recently released, which are forecast to begin
generating increased sales in the second half of 2008. The Company
further expects base operating expenses of approximately $20
million to $21 million in 2008, including anticipated further
investments in sales and marketing resources and in new product
development to address growth initiatives. Within these ranges, the
Company currently expects to record operating and net loss from
continuing operations for the full year, rather than the announced
expectation in May 2008 to record operating and net profit for the
full year. Additional Information SCM does not plan to hold a
conference call or webcast to discuss the results of its 2008
second quarter. For more information on SCM's second quarter
results, please see the Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 2008, filed with the U.S. Securities and
Exchange Commission. About SCM Microsystems SCM Microsystems is a
leading provider of solutions that open the Digital World by
enabling people to conveniently access digital content and
services. The company develops, markets and sells the industry's
broadest range of smart card reader technology for secure PC,
network and physical access and digital media readers for transfer
of digital content to OEM customers in the government, financial,
enterprise, consumer electronics and photographic equipment markets
worldwide. Global headquarters are in Ismaning, Germany. For
additional information, visit the SCM Microsystems web site at
http://www.scmmicro.com/. NOTE: This press release contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These include, without
limitation, our statements contained above regarding our
expectations for the Company's second half and full fiscal year
2008, including specifically our statements regarding our
expectations that we will achieve revenue growth of 10% to 27% in
the second half of 2008 and revenue growth of 5% to 15% in the full
year 2008 compared to prior year levels, based on sales of new
contactless smart card reader products in the second half of 2008;
that base operating expenses will be between $20 million and $21
million in 2008; and that we will record operating and net loss for
the full year 2008. These statements are subject to risks and
uncertainties which may cause actual results to differ materially
from those contemplated herein. Our financial results may not meet
expectations. Some of the risks and uncertainties that could cause
our actual business and operating results to differ include, but
are not limited to, our ability to grow revenues based on a
strategy of expanding our sales into new geographic markets and on
diversifying and growing our customer base; our ability to
successfully develop and introduce new products, particularly
contactless reader products, that satisfy the evolving and
increasingly complex requirements of customers; sales of smart card
readers to the U.S. government market may decline faster than
currently expected; sales to a relatively small number of customers
historically have accounted for a significant percentage of our
revenues; the markets in which we participate or target may not
grow, converge or standardize at anticipated rates or at all,
including the government, financial and enterprise security markets
that we are targeting; we may not successfully compete in the
markets in which we participate or target; competitors could take
market share or create pricing pressure; and our operating expenses
may not be at levels that support profitability. For a discussion
of further risks and uncertainties related to our business, please
refer to our public company reports, including our Annual Report on
Form 10-K for the year ended December 31, 2007 and subsequent
reports, filed with the U.S. Securities and Exchange Commission
Note: CHIPDRIVE is a registered trademark of SCM Microsystems, Inc.
All trade names are trademarks or registered trademarks of their
respective holders. - FINANCIALS FOLLOW - SCM MICROSYSTEMS, INC.
Condensed Consolidated Statements of Operations (in thousands,
except per share data) (unaudited) Three months ended Six months
ended June 30, June 30, 2008 2007 2008 2007 Revenues $6,520 $4,647
$12,984 $13,104 Cost of revenues 3,697 3,314 7,478 8,031 Gross
profit 2,823 1,333 5,506 5,073 Operating expenses: Research and
development 1,043 792 2,078 1,512 Sales and marketing 2,569 1,618
4,730 3,177 General and administrative 1,518 2,879 3,021 4,279
Amortization of intangible assets 0 97 0 272 Total operating
expenses 5,130 5,386 9,829 9,240 Loss from operations (2,307)
(4,053) (4,323) (4,167) Interest and other income, net 330 412 824
720 Loss from continuing operations before income taxes (1,977)
(3,641) (3,499) (3,447) Provision for income taxes (1) (32) (48)
(92) Loss from continuing operations (1,978) (3,673) (3,547)
(3,539) Income (loss) from discontinued operations (26) (102) (151)
(119) Gain on sale of discontinued operations 496 1,530 509 1,553
Net income (loss) $(1,508) $(2,245) $(3,189) $(2,105) Loss per
share from continuing operations: Basic and diluted $(0.13) $(0.23)
$(0.22) $(0.23) Gain (loss) per share from discontinued operations:
Basic and Diluted $0.03 $0.09 $ 0.02 $ 0.09 Net income (loss) per
share: Basic and Diluted $ (0.10) $ (0.14) $ (0.20) $ (0.14) Shares
used in computing loss per share: Basic and Diluted 15,744 15,730
15,742 15,715 SCM MICROSYSTEMS, INC. Reconciliation of EBITDA
Calculation to GAAP Accounting (in thousands) (unaudited) Three
Months Ended Six Months Ended June 30, June 30, 2008 2007 2008 2007
EBITDA $(2,080) $(3,882) $(3,816) $(3,842) Interest income 174 413
469 811 Provision for income taxes (1) (32) (48) (92) Depreciation
and amortization (71) (172) (152) (416) Net loss from continuing
operations $(1,978) $(3,673) $(3,547) $(3,539) We conduct a
significant amount of our business in Europe, we are dually traded
on the U.S. Nasdaq Global Market and the Prime Standard of the
Frankfurt exchange and the majority of our investors are
German-based. In addition, our corporate headquarters are in
Germany. Based on these factors, we have determined that EBITDA, as
defined above, is a relevant measure of performance for the
Company, as it is a metric commonly used among companies doing
business in Europe and is therefore a helpful tool for
communicating our performance to our investors and analysts and for
comparisons to other companies in Europe and within our industry.
EBITDA should be considered in addition to, but not as a substitute
for, other measures of financial performance reported in accordance
with accounting principles generally accepted in the United States
("GAAP"). While we believe that EBITDA is useful within the context
described above, it is in fact incomplete and not a measure that
should be used to evaluate the full performance of the Company or
its prospects. Such evaluation needs to consider all of the
complexities associated with our business including, but not
limited to, how past actions are affecting current results and how
they may affect future results, how we have chosen to finance the
business and how regulations and the other aforementioned items
affect the final amounts that are or will be available to
shareholders as a return on their investment. Net income determined
in accordance with GAAP is the most complete measure available
today to evaluate all elements of our performance. Similarly, our
Consolidated Statement of Cash Flows, as presented in our most
recent filings with the Securities and Exchange Commission, provide
the full accounting for how we have decided to use resources
provided to us from our customers, lenders and shareholders. SCM
MICROSYSTEMS, INC. Condensed Consolidated Balance Sheets (in
thousands) (unaudited) June 30, December 31, ASSETS 2008 2007
Current assets: Cash, cash equivalents and short-term investments $
27,991 $ 32,444 Accounts receivable, net 7,228 8,638 Inventories
4,108 2,738 Other current assets 1,483 1,455 Total current assets
40,810 45,275 Property, equipment and other assets, net 3,315 3,289
Total assets $ 44,125 $ 48,564 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Accounts payable $2,733 $3,063 Accrued
expenses and other current liabilities 7,336 8,185 Total current
liabilities 10,069 11,248 Long-term income taxes payable 133 200
Deferred tax liability 81 77 Stockholders' equity 33,842 37,039
Total liabilities and stockholders' equity $ 44,125 $ 48,564
DATASOURCE: SCM Microsystems, Inc. CONTACT: Stephan Rohaly, Chief
Financial Officer, +49 89 95 95 5101, , or Darby Dye, Investor
Relations-US, +1-510-249-4883, , both of SCM Microsystems, Inc. Web
site: http://www.scmmicro.com/
Copyright
Scm Microsystems (MM) (NASDAQ:SCMM)
Historical Stock Chart
From Jun 2024 to Jul 2024
Scm Microsystems (MM) (NASDAQ:SCMM)
Historical Stock Chart
From Jul 2023 to Jul 2024