SCM Microsystems Announces Select Preliminary Fourth Quarter and Fiscal 2004 Results
February 24 2005 - 2:30AM
PR Newswire (US)
SCM Microsystems Announces Select Preliminary Fourth Quarter and
Fiscal 2004 Results FREMONT, Calif., Feb. 24 /PRNewswire-FirstCall/
-- SCM Microsystems, Inc. (Nasdaq: SCMM; Prime Standard: SMY), a
leading provider of solutions that open the Digital World, today
announced select preliminary, unaudited results for its fourth
quarter and fiscal year ended December 31, 2004. These preliminary
results are subject to finalization pending the completion of
management's review of the Company's accounts and the annual audit
of its financial statements by its independent public accounting
firm. The Company expects to report final results for the fourth
quarter and year ended December 31, 2004 with the filing of its
Annual Report on 10-K for the year ended December 31, 2004. Based
upon preliminary, unaudited information, SCM expects to report
revenues from continuing operations of $13.4 million for the fourth
quarter of 2004, above previously communicated guidance of $8
million to $11 million. For the full fiscal year ended December 31,
2004, the Company expects to report revenues from continuing
operations of $49.1 million, compared with revenues of $66.5
million for the fiscal year ended December 31, 2003. The Company
further expects to report gross margin from continuing operations
in the fourth quarter of 2004 of 35%, which includes the write-down
of approximately $1.4 million in inventory, primarily for the
Company's digital TV and smart card reader products. As reported
under U.S. GAAP, operating expenses for continuing operations in
the fourth quarter of 2004 are expected to be in a range of $7.2
million to $7.7 million, including amortization of intangible
assets and restructuring and other charges between $0.1 million and
$0.5 million. Loss from operations for the fourth quarter of 2004
is expected to be between $(2.6) million and $(3.0) million,
including the range of amortization of intangible assets and
restructuring and other charges noted above. This compares with
loss from operations for the fourth quarter of 2003 of $(6.0)
million as reported under U.S. GAAP, including amortization of
intangible assets and restructuring and other charges of $3.2
million. Additional Sales Information By product segment, expected
fourth quarter 2004 revenues include $6.8 million from sales of
smart card readers and other products for PC and network security,
$4.7 million from sales of digital TV security modules for pay-TV
broadcast decryption and $1.9 million from sales of OEM digital
flash media reader technology. Strong seasonal sales of smart card
readers for U.S. government security projects contributed to higher
than usual revenues from this product category in the fourth
quarter. Selected Key Balance Sheet Items at December 31, 2004
Expected key balance sheet items at December 31, 2004 include: *
Cash, cash equivalents and short-term investments of $46.2 million,
compared with $46.8 million held at the end of the previous
quarter; * Accounts receivable of $8.7 million; and * Inventories
of $8.3 million. Management Comments "We are pleased with the
continued progress made in the fourth quarter in reducing our
expense base and the narrowing of our operational loss," said
Robert Schneider, chief executive officer of SCM Microsystems. "We
executed well in a difficult market environment, helping us to
exceed revenue guidance for the quarter." Continued Schneider, "As
we look to 2005, we expect to see new opportunities for secure
access solutions, particularly where smart cards are being deployed
for e-passports, health care and online banking and in expanded
government security programs. We believe SCM's market strength,
technology and expertise position us well to capitalize on these
and other emerging markets as they grow." Guidance For the first
quarter of 2005, management estimates that revenues will be in the
range of $8 million to $11 million, reflecting continued pressure
on sales of digital TV products in Europe and variability in the
timing of anticipated digital security projects. Gross margin is
expected to be between 38% and 41%. Within this range of revenue
and gross margin, SCM expects to record an operating loss in the
first quarter of 2005. Conference Call SCM will hold a conference
call and webcast on February 24, 2005 at 8:30 AM Eastern Time to
discuss the select preliminary, unaudited results of its 2004
fourth quarter and fiscal year. The webcast can be accessed through
the Company's investor relations site at
http://www.scmmicro.com/ir_en/index.html. NOTE: The above
preliminary unaudited financial results for the fourth quarter and
year ended December 31, 2004 reflects continuing operations for the
Company's Security business only, as SCM sold its retail
Dazzle(TM)- branded digital media and video business in July of
2003. SCM's continuing Security business is focused on enabling
secure access to digital content and services through the digital
television and PC platforms. Financial results for the retail
digital media and video business are being treated as discontinued
operations. About SCM Microsystems SCM Microsystems is a leading
supplier of solutions that open the Digital World by enabling
people to securely access digital content and services. The company
develops, markets and sells its smart card reader technology for
network and physical access and conditional access modules for
secure digital TV decryption to OEM customers in the government,
financial, enterprise and broadcasting markets worldwide. Global
headquarters are in Fremont, California, with European headquarters
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
statements, including, for example, statements regarding our select
preliminary, unaudited financial results for the fourth quarter and
year ended December 31, 2004; our expectations for revenue, gross
margin and operating loss for the first quarter of 2005; and our
ability to capitalize on expected new emerging market opportunities
for secure access solutions, are based on management's
expectations, assumptions and beliefs and are subject to risks,
uncertainties and other factors, some of which are unknown to us.
Our expectations, assumptions and beliefs underlying these
statements may not materialize, and actual results may differ
materially from those contemplated herein. Risks, uncertainties and
other factors that we face include, but are not limited to: our
independent public accountants have not completed their audit of
our 2004 operating results and, accordingly, our actual results
could vary, perhaps materially, from the select preliminary,
unaudited results discussed herein; our strategy to grow revenues
by participating in multiple early stage markets may not be
successful; we may be not be able to effectively identify market
opportunities; we may not be able to effectively develop and
introduce new products that satisfy the evolving and increasingly
complex requirements of customers; we may not be able to maintain
or further reduce current expense levels; the markets in which we
participate or target may not grow, converge or standardize at
anticipated rates or at all; we may be unable to compete
successfully in the markets in which we participate or have
targeted; and competitors could take market share from us or create
pricing pressure. For a discussion of further risks, uncertainties
and other factors related to our business and operating results,
please refer to the reports we file with the U.S. Securities and
Exchange Commission, including, without limitation, our Annual
Report on Form 10-K for the year ended December 31, 2003, our
Quarterly Report on Form 10-Q for the quarter ended September 30,
2004 and our Current Reports filed during the recent three month
period. SCM Microsystems is under no obligation to (and expressly
disclaims any such obligation to) update or alter its
forward-looking statements whether as a result of new information,
future events or otherwise. NOTE: All trade names are trademarks or
registered trademarks of their respective holders. DATASOURCE: SCM
Microsystems, Inc. CONTACT: Steve Moore, Chief Financial Officer,
+1-510-360-2300, or , Darby Dye, Investor Relations - US,
+1-510-360-2302, or , or Manfred Mueller, Investor Relations -
Europe, or +49 89 9595 5140, or , all of SCM Microsystems, Inc. Web
site: http://www.scmmicro.com/
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