American Bank Note Holographics Reports First Quarter 2006 Financial Results.ROBBINSVILLE, N.J. -- 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 " or the "Company") (OTC Bulletin Board OTC Bulletin Board An electronic quotation listing of the bid and asked prices of OTC stocks that do not meet the requirements to be listed on the NASDAQ stock-listing system. : ABHH) 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 holograms for security applications, today announced financial results for the first quarter ended March 31, 2006. Sales in the first quarter of 2006 totaled $10.0 million, compared with $6.4 million in the first quarter of 2005, an increase of $3.6 million or 56%. The increase was principally the result of higher sales of the Company's HoloMag(TM) product and to a lesser extent expansion of other programs in the transaction card, identity document and product 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. markets. The Company reported net income of $1.0 million or $0.06 per share in the first quarter of 2006 compared to net income of $0.6 million or $0.03 per share in the first quarter of 2005. The 72% increase in net income principally resulted from the increased sales volume partially offset by costs and expenses incurred relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Visa's decision to discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: the use of the current version of HoloMag as previously reported. The Company adopted Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). Statement No. 123(R) effective January January: see month. 1, 2006, using the modified-prospective transition method described in the Statement. Under this method, the Company is required to recognize compensation expense for all awards granted after the adoption and for the unvested portion of previously granted options that remain outstanding as of the adoption date. Accordingly, we recorded compensation expense in the period ended March 31, 2006 of $233,000 pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta ($140,000 after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. ). Kenneth H. Traub, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of ABNH, commented, "In the first quarter of 2006, we continued to experience significant growth in sales and profits as a result of expansion of the HoloMag and other document security programs. Naturally, our business was significantly impacted by Visa's decision to discontinue the use of the current version of HoloMag and we expect our total sales to decline in the second quarter as a result. We have increased production of the Visa Dove and Visa Mini Dove hologram See holographic storage. that is now being specified spec·i·fy tr.v. spec·i·fied, spec·i·fy·ing, spec·i·fies 1. To state explicitly or in detail: specified the amount needed. 2. To include in a specification. 3. on Visa branded cards, and we are working with Visa's authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: card manufacturers on the transition to these products. We also continue to supply HoloMag as well as other products to the other major transaction card brands. We believe the market for innovative security products to protect transaction cards, identity documents and branded consumer products will continue to grow and ABNH is well-positioned to address this need." Mark J. Bonney Bon·ney , William H. Known as Bil·ly the Kid 1859-1881. American outlaw who murdered 21 men and was shot dead by Sheriff Pat Garrett (1850-1908). Noun 1. , Executive Vice President and CFO See Chief Financial Officer. of the Company stated "Following the significant investments we made over the past year in the facilities consolidation, plant improvements and the HoloMag program, the Company's financial condition remains strong with cash and cash equivalents of over $13 million and no debt." About American Bank Note Holographics, Inc. American Bank Note Holographics is a world leader in the origination, production, and marketing of holograms. The Company's products are used primarily for security applications such as 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. protection of transaction cards, identity documents, documents of value, pharmaceuticals and other consumer and industrial products. The Company's headquarters is in Robbinsville, NJ. For more information, visit www.abnh.com. ABNH Forward-Looking Statement 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. Certain statements contained in this release, including without limitation, statements containing the words "believes," "intends," "expects," "anticipates," and words of similar import, constitute "forward-looking statements" within the meaning 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 are based on current management expectations. Numerous factors, including those disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). herein, those related to transaction card industry trends and those detailed in our filings with the Securities and Exchange Commission (as set forth under the heading "Risk Factors" in our 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. for the year ended December December: see month. 31, 2005), may cause results to differ materially from those anticipated in the forward-looking statements. Many of the factors that will determine our future results are beyond our capability to control or predict. These statements are subject to risks and uncertainties and therefore actual results may differ materially. Readers should not place undue reliance on such forward-looking statements which reflect management's view only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise. This release and prior releases are available on the ABNH website at www.abnh.com.
AMERICAN BANK NOTE HOLOGRAPHICS, INC.
BALANCE SHEETS - UNAUDITED
(In thousands, except share data)
March 31, December 31,
2006 2005
------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 13,298 $ 9,114
Accounts receivable, net of allowance
for doubtful accounts of $500 and $500 5,191 6,019
Inventories, net 3,081 2,940
Deferred income taxes, net 2,936 2,968
Prepaid expenses and other 257 331
Income tax receivable -- 401
------------ ------------
Total current assets 24,763 21,773
MACHINERY, EQUIPMENT AND LEASEHOLD
IMPROVEMENTS--Net of accumulated
depreciation and amortization of $9,031
and $8,852 6,750 7,224
DEFERRED INCOME TAXES, NET 196 411
OTHER ASSETS 72 76
------------ ------------
TOTAL ASSETS $ 31,781 $ 29,484
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILTIES:
Accounts payable $ 5,074 $ 3,820
Accrued expenses 3,421 3,834
Customer advances 547 204
Income taxes payable 280 359
------------ ------------
Total current liabilities 9,322 8,217
LONG-TERM LIABILTIES 1,760 1,957
------------ ------------
Total liabilities 11,082 10,174
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDRS' EQUITY:
Preferred stock, authorized 5,000,000
shares; no shares issued or outstanding -- --
Common stock, par value $.01 per share,
authorized 40,000,000 shares; issued
and outstanding 18,888,144 shares and
18,715,469 shares 189 187
Additional paid-in capital 24,970 24,729
Unearned compensation on restricted
stock -- (96)
Accumulated deficit (4,460) (5,510)
------------ ------------
Total Stockholders' Equity 20,699 19,310
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 31,781 $ 29,484
============ ============
AMERICAN BANK NOTE HOLOGRAPHICS, INC.
STATEMENTS OF OPERATIONS - UNAUDITED
(In thousands, except per share data)
Three Months Ended
March 31,
-------------------------
2006 2005
------------ ------------
REVENUE:
Sales $ 9,988 $ 6,400
Royalty income -- 10
------------ ------------
Total revenue 9,988 6,410
COSTS AND EXPENSES:
Cost of goods sold, excluding
depreciation and amortization 4,836 2,799
Selling and administrative 2,765 1,918
Research and development 457 273
Depreciation and amortization 227 351
Facility consolidation 40 107
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Total costs and expenses 8,325 5,448
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Operating income 1,663 962
OTHER INCOME:
Interest 87 54
------------ ------------
INCOME BEFORE PROVISION FOR INCOME TAXES
1,750 1,016
PROVISION FOR INCOME TAXES 700 406
------------ ------------
NET INCOME $ 1,050 $ 610
============ ============
NET INCOME PER SHARE:
Basic $ 0.06 $ 0.03
============ ============
Diluted $ 0.05 $ 0.03
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WEIGHTED AVERAGE NUMBER OF SHARES:
Basic 18,829 18,518
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Diluted 19,913 19,110
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