Fargo Electronics, Inc. Reports First Quarter 2004 Results.Business Editors MINNEAPOLIS--(BUSINESS WIRE)--April 21, 2004 Fargo Fargo, city (1990 pop. 74,111), seat of Cass co., E N.Dak., at the head of navigation on the Red River, opposite Moorhead, Minn.; inc. 1875. A railroad hub and regional financial and medical center, Fargo is also the trade and distribution center of a spring-wheat Electronics, Inc. (Nasdaq:FRGO) today reported net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the first quarter ended March 31, 2004, of $15,554,000 compared with net sales of $15,479,000 in the first quarter of 2003. Net income for the first quarter of 2004 was $1,427,000, or $0.11 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with $1,315,000, or $0.10 per diluted share in the same period last year. 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. for the first quarter was $2,142,000, or 14% of sales, compared to $1,950,000, or 13% of sales, in the first quarter of 2003. Results for the quarter included a $360,000 reduction of cost of sales related to the settlement of prior years' duty drawback DRAWBACK, com. law. An allowance made by the government to merchants on the reexportation of certain imported goods liable to duties, which, in some cases, consists of the whole; in others, of a part of the duties which had been paid upon the importation. claims. At March 31, 2004, the company remained debt-free and held a cash balance of $14.9 million. "We are pleased with our first quarter results," said Gary Gary, city (1990 pop. 116,646), Lake co., NW Ind., a port of entry on Lake Michigan; inc. 1909. Gary was founded by the U.S. Steel Corporation, which purchased the land in 1905 and landscaped it for a city. R. Holland, Fargo's president and chief executive officer. "We continue to strengthen the foundation we have built to take advantage of the global need for secure ID cards. We are currently planning the introduction of several new products in the latter half of this year to further enhance our position as the preferred provider of ID card solutions." "We are also pleased," continued Holland, "that the U.S. Department of Defense has chosen to extend its relationship with Fargo as an ongoing supplier of security card identity systems for the Common Access Card project and has selected the company's High Definition Printing technology as its platform of choice for deployable installations." In addition, Fargo has received five new patents and three notices of allowance of applications from the United States Patent and Trademark office The United States Patent and Trademark Office (PTO or USPTO) is an agency in the United States Department of Commerce that provides patent protection to inventors and businesses for their inventions, and trademark registration for product and intellectual property in the first quarter of 2004. These patents and notices relate to diverse parts of Fargo's business including lamination lamination a laminar structure or arrangement. , inkjet See inkjet printer. card printing, security features and communication between supplies and printers. They reflect Fargo's ongoing commitment to protect its innovations in identification card printing. Fargo also announced its earnings per share estimate for the second quarter of 2004. For the second quarter, the Company presently estimates earnings per diluted share will be in the range of $0.12 to $0.16. For the full year, the Company presently estimates earnings per diluted share will be in the range of $0.60 to $0.70. 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. Statements made in this release concerning the company's expectations about future results or events are "forward-looking statements". Such statements are 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 Reform Act of 1995, and are necessarily subject to risks and uncertainties. Actual results may differ materially from those reflected in these forward-looking statements. These statements are based on current expectations, forecasts and assumptions, and are subject to the risks and uncertainties inherent in general industry and market conditions, general domestic and international economic conditions, and other factors. These risks and uncertainties include: product acceptance and customer demand for Fargo's card personalization Custom tailoring information to the individual. On the Web, personalization means returning a page that has been customized for the user, taking into consideration that person's habits and preferences. systems and proprietary supplies; actions taken and alternative products marketed by Fargo's competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. ; supplier relationships, including reliance on sole and single-source suppliers; manufacturing or design defects that we may discover after shipment; lack of inventories of component parts or finished goods; our focus on the identification card personalization market; continuing technological changes in our industry; our dependence on a distribution network and the reaction of this network to changes in distribution programs; domestic and international regulations and standards; our dependence on international sales; material changes in orders placed by large end users; challenges in effectively managing growth; our dependence on technologies we do not own; complex design and manufacturing delays; protecting and enforcing intellectual property rights; inadequate protection against infringement The encroachment, breach, or violation of a right, law, regulation, or contract. The term is most frequently used in reference to the invasion of rights secured by Copyright, patent, or trademark. claims; adverse economic and business conditions, including conditions resulting from the terrorist attack on the U.S. on September September: see month. 11, 2001 and the resulting hostilities hos·til·i·ty n. pl. hos·til·i·ties 1. The state of being hostile; antagonism or enmity. See Synonyms at enmity. 2. a. A hostile act. b. hostilities Acts of war; overt warfare. and the war with Iraq Iraq or Irak (both: ēräk`, ĭrăk`), officially Republic of Iraq, republic (2005 est. pop. 26,075,000), 167,924 sq mi (434,924 sq km), SW Asia. commenced in March 2003. For more detail, see the Company's 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, 2003. About Fargo Fargo is the world's leader in innovative technologies for desktop plastic card identity systems. Based in Eden Prairie, Minnesota The creator of this article, or someone who has substantially contributed to it, may have a conflict of interest regarding its subject matter. It may require cleanup to comply with Wikipedia's content policies, particularly neutral point of view. , Fargo is the only manufacturer to offer three distinct technologies in printing systems - High Definition Printing(TM) (reverse image), traditional Direct-to-Card printing (dye-sublimation), and CardJet Printing Technology(TM) (inkjet) - to personalize per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. plastic identification cards, complete with digital images and text, lamination, and electronically encoded information. Personalized per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. identification cards provide physical, information, and transaction security for a wide variety of applications including Corporations, National IDs, Drivers' Licenses, Universities, Schools, Government Installations, Transportation, Casinos A list of casinos. Antigua and Barbuda
detention camp, detention home, detention house, house of detention - an institution where juvenile offenders can be held temporarily (usually under the supervision of a juvenile , Associations, Sports Events and Recreation Sites. More than 80,000 Fargo systems have been sold in the U.S. and in over 80 other countries. For more information, visit Fargo's Web site at http://www.fargo.com.
FARGO ELECTRONICS, INC.
CONDENSED BALANCE SHEETS
(In thousands, except per share data)
March 31, December 31,
ASSETS 2004 2003
------------ ------------
(Unaudited)
Current assets:
Cash and cash equivalents $14,903 $13,445
Accounts receivable, net 8,698 7,015
Inventories, net 4,724 4,848
Prepaid expenses 438 233
Deferred income taxes 3,412 3,412
------------ ------------
Total current assets 32,175 28,953
------------ ------------
Equipment and leasehold improvements, net 2,175 2,107
Deferred income taxes 19,096 19,730
Other 12 17
------------ ------------
Total assets $53,458 $50,807
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $5,152 $3,802
Accrued liabilities 2,459 2,765
------------ ------------
Total current liabilities 7,611 6,567
------------ ------------
Commitments and contingencies - -
Stockholders' equity:
Common stock, $.01 par value; 50,000
shares authorized, 12,483 and 12,455
shares issued and outstanding at March
31, 2004, and December 31, 2003,
respectively 125 125
Additional paid-in capital 149,359 149,179
Accumulated deficit (103,637) (105,064)
------------ ------------
Total stockholders' equity 45,847 44,240
------------ ------------
Total liabilities and stockholders'
equity $53,458 $50,807
------------ ------------
FARGO ELECTRONICS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months
Ended March 31,
-----------------
2004 2003
-------- --------
Net sales $15,554 $15,479
Cost of sales 9,033 9,289
-------- --------
Gross profit 6,521 6,190
-------- --------
Operating expenses:
Research and development 1,286 1,231
Selling, general and administrative 3,093 3,009
-------- --------
Total operating expenses 4,379 4,240
-------- --------
Operating income 2,142 1,950
-------- --------
Other income (expense):
Interest expense (5) (15)
Other, net 26 3
-------- --------
Total other income (expense) 21 (12)
-------- --------
Income before provision for income taxes 2,163 1,938
Provision for income taxes 736 623
-------- --------
Net income $1,427 $1,315
-------- --------
Net income per common share:
Basic earnings per share $0.11 $0.11
Diluted earnings per share $0.11 $0.10
Weighted average common shares outstanding:
Basic 12,472 12,369
Diluted 12,836 12,677
FARGO ELECTRONICS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months
Ended March 31,
----------------
2004 2003
-------- -------
Cash flows from operating activities:
Net income $1,427 $1,315
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 242 231
Provision for doubtful accounts 20 -
Loss on disposal of equipment - 14
Deferred income taxes 634 548
Deferred compensation - 7
Tax benefit recognized for stock options 16 -
Changes in operating assets and liabilities
Accounts receivable (1,703) 1,665
Inventories 124 (927)
Prepaid expenses and other assets (200) (144)
Accounts payable 1,288 (302)
Accrued liabilities (306) (829)
-------- -------
Net cash provided by operating activities 1,542 1,578
-------- -------
Cash flows from investing activities:
Purchases of equipment and leasehold improvements (248) (167)
-------- -------
Net cash used in investing activities (248) (167)
-------- -------
Cash flows from financing activities:
Proceeds from issuance of common stock 164 56
-------- -------
Net cash provided by financing activities 164 56
-------- -------
Net increase in cash and cash equivalents 1,458 1,467
Cash and cash equivalents, beginning of period 13,445 2,511
-------- -------
Cash and cash equivalents, end of period $14,903 $3,978
-------- -------
Noncash transaction
Purchase of equipment included in accounts payable $62 -
FARGO ELECTRONICS, INC.
SUPPLEMENTAL SALES INFORMATION
(In thousands)
(Unaudited)
Sales by Product Category
Three Months Ended March 31,
2004 2003
---------------- ---------------
Equipment $5,432 $5,827
Supplies 10,122 9,652
---------------- ---------------
Total Sales $15,554 $15,479
================ ===============
Sales by Geographic Region
Three Months Ended March 31,
2004 2003
---------------- ---------------
U.S. $8,177 $8,229
International 7,377 7,250
---------------- ---------------
Total Sales $15,554 $15,479
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