Checkmate Reports First Quarter 1998 Results.ROSWELL, Ga.--(BUSINESS WIRE)--April 30, 1998--Checkmate Electronics, Inc. (Nasdaq-NMS Symbol: CMEL CMEL Center for Management and Executive Leadership (FAA) CMEL Comprehensive Monitoring Evaluation Log CMEL Centre for Medicine Ethics and Law CMEL Classical Motional Electric Law CMEL Compliance Monitoring and Enforcement Logs ) today reported its results for the first quarter ended March 31, 1998. Net revenues were $9,641,000, up 1.4 percent from the $9,506,000 reported in the first quarter of 1997. Net income was $416,000, down 37.1 percent from $661,000 in 1997. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the quarter was $0.08, as compared to the $0.12 achieved in the first quarter of 1997. "The first quarter of 1998 marks the third quarter in a row with year over year revenue increases," stated Gregory A. Lewis, Checkmate's President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . Lewis continued, "Checkmate checkmate end of game in chess: folk-etymology of Shah-mat, ‘the Shah is dead.’ [Br. Folklore: Espy, 217] See : End continues to improve its operating results, generating the best gross margin quarter in over a year. Since the second quarter in 1997 we have shown successive increases in our earnings per share. We have grown from $0.03 in the third quarter of 1997, to $0.04 in the fourth quarter of 1997 and now to $0.08 in the current quarter. By making improvements in our sales tactics, we have improved the mix of higher margin products, and reduced our dependence on a limited number of high volume accounts." On January 16, 1998, Checkmate announced that the Company entered into a definitive agreement with International Verifact Inc. (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). : IVI IVI Intelligent Vehicle Initiative IVI International Vaccine Institute IVI Interchangeable Virtual Instrument IVI Intravenous Infusion IVI Interactive Video Instruction IVI Intra Venous Injection IVI Institute for Vision Improvement IVI Interactive Video Initiative : NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on NMS See NetWare Management System. :IVIAF) to combine the two companies. The combined market cap of IVI and Checkmate approximates $100,000,000. Closing of the transaction is expected to occur in June 1998, subject to further due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. , reviews, shareholder approvals, Ontario Court approval and customary closing conditions. The combined company will be the third largest in the electronic payment solutions industry in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . Lewis noted, "Checkmate has improved its financial position and earnings per share in each of the last three quarters, allowing us to enter into this merger with IVI as a strong partner with positive momentum. I believe that the synergies provided by the combination of these two companies will help us to continue to increase revenues and profitability. The combined company will have a broader product offering and greater financial, operating and marketing resources with which to compete." Checkmate is a leader in 'customer interaction at the point-of-sale.' Checkmate's customer-activated payment terminals and software solutions provide an enhanced check-out experience for customers at an excellent investment cost for merchants. Covering all payment types, Checkmate offers solutions for credit, debit, EBT EBT See: Earnings Before Taxes , check, and Smart Card transaction processing together with electronic advertising, electronic couponing cou·pon·ing n. The sending out or turning in of coupons, especially the regular redemption of a manufacturer's coupon for cash. and loyalty programs. Checkmate conducts all its operations in the US with manufacturing based in Rosewell, Ga. This press release contains forward-looking statements subject to the 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. created by 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. Management cautions that these statements represent projections and estimates of future performance and involve certain risks and uncertainties. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors. These include, without limitation, the Company's heavy reliance on check readers in its product mix; the Company's dependence on its limited suppliers and manufacturers of component parts of its products; rapid and significant technological developments that could delay the introduction of improvements in existing products or of new products; the Company's dependence on its proprietary technologies (which may be independently developed by competitors); the Company's dependence on a small number of large retail customers; the potential fluctuation in financial results as a result of the Company's inability to make sales to large customers as well as the volume and timing of bookings received during a quarter and variations in sales mix sales mix See product mix. ; competition from existing companies as well as new market entrants; dependence on key personnel; successful completion of the IVI transaction, integration of the companies, and other risk factors discussed from time to time in Checkmate's SEC filings and other announcements. -0-
Checkmate Electronics, Inc.
CONDENSED BALANCE SHEETS
(In thousands)
March 31, December 31,
ASSETS 1998 1997
----------- -----------
Current assets:
Cash and cash equivalents $ 3,163 $ 269
Investments 3,560 3,572
Accounts receivable, net 10,688 11,048
Inventories 11,213 11,271
Other current assets 2,498 1,934
----------- -----------
Total current assets 31,122 28,094
Property and equipment, net 5,925 5,919
Other assets 3,611 3,238
=========== ===========
Total assets $ 40,658 $ 37,251
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,828 $ 2,372
Accrued liabilities 2,897 1,725
Deferred revenue 1,589 1,188
Current portion of long-term
obligations 162 162
----------- -----------
Total current liabilities 8,476 5,447
Long-term obligations, less current portion 2 41
Deferred income taxes 1,924 1,924
Shareholders' equity 30,256 29,839
=========== ===========
Total liabilities and shareholders' equity $ 40,658 $ 37,251
=========== ===========
Checkmate Electronics, Inc. CONDENSED con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. STATEMENTS OF OPERATIONS (In thousands, except per share data) Three months ended March 31, 1998 1997 (Unaudited) (Unaudited) Net revenues $ 9,641 $9,506 Cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold 5,584 5,513 --------- --------- Gross profit 4,057 3,993 Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. : Selling, general and administrative 2,829 2,675 Research and development 355 234 Depreciation and amortization 270 168 --------- --------- Total operating expenses 3,454 3,077 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. 603 916 Interest income, net 47 85 --------- --------- Income before income taxes 650 1,001 Provision for income taxes 234 340 --------- --------- Net income $ 416 $ 661 ========= ========= Basic earnings per share $ 0.08 $ 0.13 Weighted average basic shares outstanding 5,417 5,258 ========= ========= Diluted earnings per share $0.08 $0.12 Weighted average diluted shares outstanding 5,448 5,697 CONTACT: John J. Neubert CFO/Senior Vice President Checkmate Electronics, Inc. (770) 594-6000 |
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