Fargo Electronics, Inc. Reports Strong Fourth Quarter And 2002 Results.Business Editors/High-Tech Writers MINNEAPOLIS--(BUSINESS WIRE)--Feb. 18, 2003 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 fourth quarter ended December December: see month. 31, 2002, of $18,455,000, compared with sales of $15,363,000 in the fourth quarter of 2001, an increase of 20 percent. Net income for the fourth quarter of 2002 was $2,394,000, or 19 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. (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. ) compared with $1,022,000, or eight cents per share (diluted) in the same period last year.
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Fargo Electronics, Inc. Quarter Ended Year Ended
(In thousands, except per share Dec. 31, Dec. 31, Dec. 31, Dec. 31,
data) 2002 2001 2002 2001
-------- -------- -------- --------
Net sales $18,455 $15,363 $66,035 $60,963
Operating income 3,536 1,678 10,368 7,638
Net income 2,394 1,022 6,736 4,076
Diluted net income per common share $0.19 $0.08 $0.55 $0.34
Weighted average common shares
outstanding - diluted 12,703 12,034 12,331 11,958
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For the full fiscal year, net sales were $66,035,000, an increase of eight percent over the $60,963,000 reported for 2001. Net income for the year was $6,736,000, or 55 cents per share (diluted), compared with $4,076,000, or 34 cents per share (diluted) in 2001. "The increase in revenue in the fourth quarter over the prior year was mainly driven by business from previously announced projects. Project revenue continues to be an important part of our business and by its nature results in fluctuations in individual quarters since the timing of these projects may change," 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 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. . 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 fourth quarter was $3,536,000, or 19.2 percent of revenues, compared with $1,678,000, or 10.9 percent of revenues. For the full year, operating income was $10,368,000, or 15.7 percent of revenues, compared with $7,638,000, or 12.5 percent of revenues in 2001. These results include expenses relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the proposed acquisition of Fargo by another company, which was terminated ter·mi·nate v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: in March 2002. These expenses amounted to $552,000 in fiscal 2002 and $1,434,000 in fiscal 2001, of which $478,000 occurred in the fourth quarter of 2001. There were no such expenses in the fourth quarter of 2002. "Innovative new products and continued strong support from our distribution partners resulted in Fargo achieving a solid year in 2002," said Holland. "We believe that our three technology platforms, direct to card, high definition printing and our new inkjet See inkjet printer. product, which we anticipate beginning to ship this quarter, make us the best choice for end users who need ID security solutions. We plan on continuing our focus on being the best at building innovative ID 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." In 2002, Fargo: -- Introduced seven new card personalization systems. -- Announced strategic alliances with Hewlett-Packard, PPG Industries, and Sony Chemicals. -- Added new product distribution partners, both in the U.S. and internationally. -- Won a series of significant major security projects for identification credentials, both in the U.S. and internationally. -- Added nine new members to the Fargo Technology Alliance (FTA), a global technology group that promotes effective, advanced smart card solutions. A total of 29 FTA members work with Fargo's resellers on smart card projects around the world. -- Continued to demonstrate its innovative, industry-leading product development, and was awarded 13 new U.S. Patents and two international patents. Fargo now holds 39 U.S. patents and has over 80 patent applications pending. "Achieving debt-free status by the end of 2002 was a significant accomplishment for Fargo," Holland said. "We strengthened our balance sheet, with strong cash flow available to pay off $14,000,000 of bank debt during the year. We recently concluded an extension of our $5,000,000 revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility, which will now mature in three years, and currently do not have any indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. on that credit facility. 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. on December 31, 2002 was $36,313,000, up 42 percent over 2001. "Some of the factors that will drive Fargo's future success are increased demands for improved physical security and access measures, the need for higher levels of protection for every organization's networks and data, and additional governmental spending for Homeland and global national ID security projects," Holland concluded. Fargo also announced its earnings per share estimate for the first quarter and 2003. For the first quarter, the Company estimates earnings per share will be in the range of eight to 12 cents per share. For the full year, the Company estimates revenue growth in the range of five to 15 percent, with earnings per share in the range of 62 to 74 cents per share. 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, including without limitation the statements regarding the company's financial estimates for 2003, 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 systems and proprietary supplies; actions taken and alternative products marketed by Fargo's competitors; supplier relationships, including reliance on sole and single-source suppliers; 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; domestic and international regulations and standards; our dependence on international sales; material changes in orders placed by end users; the speed of multiple system installations 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. . 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 Dec. 31, 2001, and Form 10-Q Form 10-Q See 10-Q. for the quarters ended March 31, 2002, June June: see month. 30, 2002, and Sept. 30, 2002. Fargo anticipates filing SEC Form 10-K for the year ended December 31, 2002 by March 31, 2003. About Fargo Fargo Electronics, Inc. (Nasdaq:FRGO) is the world's leader in innovative technologies for desktop plastic card personalization 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(TM) technology (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 lamination a laminar structure or arrangement. , 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 70,000 Fargo systems have been sold in the U.S. and over 80 other countries. For more information, visit Fargo's Web site at http://www.fargo.com.
Fargo Electronics, Inc.
Condensed Statement of Operations
(In thousands, except per share data)
Three Months Twelve Months
Ended Ended
December 31, December 31,
2002 2001 2002 2001
----------------- -----------------
Net sales $18,455 $15,363 $66,035 $60,963
Cost of sales 11,077 9,676 39,199 37,497
-------- -------- -------- --------
Gross profit 7,378 5,687 26,836 23,466
-------- -------- -------- --------
Operating expenses:
Research and development 1,028 1,081 4,529 4,053
Selling, general and
administrative 2,814 2,450 11,387 10,341
Terminated acquisition costs - 478 552 1,434
-------- -------- -------- --------
Total operating expenses 3,842 4,009 16,468 15,828
-------- -------- -------- --------
Operating income 3,536 1,678 10,368 7,638
-------- -------- -------- --------
Other income (expense):
Interest expense (148) (192) (554) (1,379)
Other, net 143 9 187 46
-------- -------- -------- --------
Total other expense (5) (183) (367) (1,333)
-------- -------- -------- --------
Income before provision for income
taxes 3,531 1,495 10,001 6,305
Provision for income taxes 1,137 473 3,265 2,229
-------- -------- -------- --------
Net income $2,394 $1,022 $6,736 $4,076
Net income per common share:
Basic earnings per share $0.19 $0.09 $0.56 $0.35
Diluted earnings per share $0.19 $0.08 $0.55 $0.34
Weighted average common shares
outstanding:
Basic 12,344 11,775 12,048 11,760
Diluted 12,703 12,034 12,331 11,958
Fargo Electronics, Inc.
Condensed Balance Sheets
(In thousands, except per share data)
Dec. 31, Dec. 31,
ASSETS 2002 2001
--------- ---------
Current assets:
Cash and cash equivalents $2,511 $3,586
Accounts receivable, net 9,142 7,713
Inventories 5,321 5,244
Prepaid expenses 252 177
Deferred income taxes 3,178 3,045
--------- ---------
Total current assets 20,404 19,765
--------- ---------
Equipment and leasehold improvements, net 1,494 1,367
Deferred income taxes 22,068 24,994
Other 43 87
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Total assets $44,009 $46,213
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of notes payable, bank $- $4,000
Accounts payable 5,109 4,315
Accrued liabilities 2,587 2,260
--------- ---------
Total current liabilities 7,696 10,575
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Notes payable, bank, less current - 10,000
Commitments
Stockholders' equity:
Common stock, $.01 par value; 50,000 shares
authorized, 12,351 and 11,781 shares issued and
outstanding at December 31, 2002 and 2001,
respectively 124 118
Additional paid-in capital 148,509 145,229
Accumulated deficit (112,304) (119,040)
Deferred compensation (16) (44)
Stock subscription receivable - (625)
--------- ---------
Total stockholders' equity 36,313 25,638
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Total liabilities and stockholders' equity $44,009 $46,213
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