American Bank Note Holographics, Inc. Reports Year-End Results; Stockholders' Equity Increases to $24 Million and Operating Improvements Achieved.Business Editors NEW YORK--(BUSINESS WIRE)--April 2, 2001 American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Bank Note Holographics, Inc. ("ABNH ABNH American Bank Note Holographics, Inc ", OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). BB: ABHH), a world leader in the design, production and marketing of holograms used primarily for security applications such as authentication (1) Verifying the integrity of a transmitted message. See message integrity, e-mail authentication and MAC. (2) Verifying the identity of a user logging into a network. of transaction cards, valuable documents and consumer and industrial products, today announced operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $0.5 million for the year ended December December: see month. 31, 2000, compared with an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $0.6 million for the previous year. In announcing its annual results, the Company also noted the significant improvements in its financial condition from December 31, 1999 through December 31, 2000. The Company now has no debt, and cash and cash equivalents have increased from $0.3 million to $7.9 million during this period. Working capital has increased by 400 percent from $2.1 million to $10.4 million. Stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. has increased from $13.5 million to $24.0 million. Total revenue for the year ended December 31, 2000 was $19.5 million, compared with $21.7 million for the same period in 1999. The decline in revenue reflects the effect of high inventory levels at credit card customers at the end of 1999 that reduced purchases in 2000 and the repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. of the business to focus on strategic, higher margin growth markets. For the year, the Company reported a net loss of $1.9 million or $(0.12) per share, compared with a net loss of $1.1 million or $(0.08) per share for 1999. The loss in 2000 resulted from the one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge of $3.5 million attributable to the final settlement of the shareholder litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. which was approved by the Court in December 2000. The Company said that gross margin increased to 53.4 percent in 2000 from 46.9 percent in 1999 and that selling and administrative expenses decreased to $8.1 million in 2000, from $9.8 million in 1999. Research and development expenses increased from $0.3 million in 1999 to $0.9 million in 2000. In announcing the results, Kenneth Traub, President and Chief Executive Officer of ABNH, said, "We are pleased that we were able to successfully execute the turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. and repositioning of ABNH during 2000. We have resolved extensive problems that we inherited inherited received by inheritance. inherited achondroplastic dwarfism see achondroplastic dwarfism. inherited combined immunodeficiency see combined immune deficiency syndrome (disease). from the former management, substantially improved the Company's financial condition and repositioned the Company as a world leader in holographic See holographic storage. security. Following Crane & Company's investment in 2000, we have been investing in developing and marketing new and better products to meet the growing needs of our markets, and building the infrastructure to support our growth." Mr. Traub continued, "The need for effective security solutions to protect products and documents of value has never been greater. The widespread availability of technologies like digital imaging, scanning and color copying in the hands of criminals has increased the risk of counterfeiting counterfeiting, manufacturing spurious coins, paper money, or evidences of governmental obligation (e.g., bonds) in the semblance of the true. There must be sufficient resemblance to the genuine article to deceive a person using ordinary caution. , tampering tampering The adulteration of a thing. See Drug tampering. and diversion A turning aside or altering of the natural course or route of a thing. The term is chiefly applied to the unauthorized change or alteration of a water course to the prejudice of a lower riparian, or to the unauthorized use of funds. in numerous industries worldwide. As a leader in the holographic security market we are well-positioned to serve this rapidly growing worldwide demand." Year 2000 Highlights: The year 2000 was an eventful e·vent·ful adj. 1. Full of events: an eventful week. 2. Important; momentous: an eventful decision. year for American Bank Note Holographics, with the following highlights: -- A strategic relationship with Crane & Co., which includes a $9.3 million equity investment made in American Bank Note Holographics and collaboration with a world leader in the currency paper market. -- Final settlement of shareholder litigation approved by the Court. -- Developed and launched several new products, together with our partners, to address emerging needs in our target markets, including: - Holographic threads - using our proprietary casting process, we produce very bright and durable holographic security threads for currency, checks and other documents. - HoloMag(TM) - our patented product for combining holograms with the magnetic stripe on a credit card to increase security and combat the problem of card skimming. - HoloMold(TM) - Our patented technique for incorporating a hologram directly into an injection molded plastic product to enhance security and design. - HoloSeal(TM) - Our patent pending tamper apparent seal for packages and containers. - HoloCap(TM) - Our patent pending holographic induction cap seal. About American Bank Note Holographics American Bank Note Holographics is a world leader in the origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real , production and marketing of mass-produced holograms. The company's products are used primarily for security applications such as counterfeiting protection and authentication of transaction cards, identification cards, documents of value, and consumer and industrial products, as well as for packaging and design applications. ABNH is headquartered in Elmsford, NY. Additional information can be obtained at www.abnh.com. Securities Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. All statements contained herein, as well as oral statements that may be made by ABNH or by officers, directors or employees of ABNH acting on ABNH's behalf, that are not statements of historical fact, constitute "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " and are made pursuant to the Safe-Harbor provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, that could cause the actual results of ABNH to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties are more fully discussed in ABNH's filings with the Securities and Exchange Commission, including ABNH's most recent Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . ABNH is not obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. to revise or update any forward-looking statements in order to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or that may arise after the date of this release. This press release is available on the KCSA KCSA Krannert Center Student Association KCSA Kentucky Crushed Stone Association (Frankfort, KY) KCSA Kyiv City State Administration KCSA Kalamazoo Christian School Association KCSA Kentucky-Canadian Studies Association Public Relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most Worldwide Web site at www.kcsa.com
AMERICAN BANK NOTE HOLOGRAPHICS, INC.
BALANCE SHEETS
DECEMBER 31, 2000 AND 1999
(In Thousands, Except Share Data)
2000 1999
---- ----
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 7,926 $ 266
Accounts receivable, net of allowance for
doubtful accounts of $75 and $390 3,000 3,224
Inventories, net of allowances of
$678 and $2,806 3,015 2,915
Deferred income taxes 1,191 2,143
Prepaid expenses and other 391 282
-------- --------
Total current assets 15,523 8,830
MACHINERY, EQUIPMENT AND LEASEHOLD
IMPROVEMENTS--Net of accumulated depreciation
and amortization of $7,709 and $7,115 5,117 5,195
DEFERRED INCOME TAXES 727 --
OTHER ASSETS 14 303
GOODWILL - Net of accumulated amortization
of $2,608 and $2,264 7,753 8,097
-------- --------
TOTAL ASSETS $ 29,134 $ 22,425
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 2,298 $ 2,494
Accrued expenses 2,687 3,266
Customer advances 161 607
Revolving credit -- 74
Current portion of notes payable -- 138
Current portion of long-term debt -- 200
-------- --------
Total current liabilities 5,146 6,779
LONG-TERM DEBT -- 800
OTHER LONG-TERM LIABILITIES -- 56
DEFERRED INCOME TAXES -- 1,335
-------- --------
Total liabilities 5,146 8,970
-------- --------
COMMITMENTS AND CONTINGENCIES (Note 11)
STOCKHOLDERS' EQUITY:
Preferred Stock, authorized, 5,000,000
shares; no shares issued or outstanding -- --
Common Stock, par value $.01 per share,
authorized, 30,000,000 shares; issued
and outstanding, 18,483,720 shares
and 13,636,000 shares 185 136
Additional paid-in capital 23,994 11,627
Retained (deficit) earnings (191) 1,692
-------- --------
Total stockholders' equity 23,988 13,455
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 29,134 $ 22,425
======== ========
AMERICAN BANK NOTE HOLOGRAPHICS, INC.
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
(In Thousands, Except Per Share Data)
2000 1999 1998
---- ---- ----
REVENUE:
Sales $ 19,029 $ 21,194 $ 29,203
Royalty income 444 535 554
-------- -------- --------
Total revenue 19,473 21,729 29,757
-------- -------- --------
COSTS AND EXPENSES:
Cost of goods sold 8,876 11,247 18,727
Selling and administrative 8,085 9,803 6,825
Research and development 928 261 337
Depreciation and amortization 1,076 1,026 1,080
-------- -------- --------
Total costs and expenses 18,965 22,337 26,969
-------- -------- --------
Operating income (loss) 508 (608) 2,788
-------- -------- --------
OTHER INCOME (EXPENSE):
Interest income 229 31 183
Other income -- 24 --
Interest expense (741) (1,016) (583)
Settlement with Former Parent (Note 7) 519 -- --
Settlement of shareholder
litigation (Note 11) (3,508) -- --
-------- -------- --------
Total other income (expense) (3,501) (961) (400)
-------- -------- --------
(LOSS) INCOME BEFORE PROVISION FOR
(BENEFIT FROM) INCOME TAXES (2,993) (1,569) 2,388
PROVISION FOR (BENEFIT FROM)
INCOME TAXES (1,110) (494) 1,269
-------- -------- --------
NET (LOSS) INCOME $ (1,883) $ (1,075) $ 1,119
======== ======== ========
NET (LOSS) INCOME PER SHARE:
Basic and diluted $ (0.12) $ (0.08) $ 0.08
======== ======== ========
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