Fargo Electronics Extends Business With Department of Defense.

Business Editors/High-Tech Writers

MINNEAPOLIS--(BUSINESS WIRE)--March 31, 2004

Fargo Electronics, Inc. (Nasdaq:FRGO) today announced that it had been confirmed as an ongoing supplier of card identity systems for the U.S. Department of Defense (DoD) "Common Access Card" Project. The DoD has informed Fargo that it has selected the company's High Definition Printing(TM) (HDP(R)) as its platform of choice for deployable installations including shipboard, guard reserve and other mobile platforms. The DoD has advised Fargo that it has chosen a competing manufacturer for land bases.

Fargo expects to receive an initial order for 125 of its HDP systems for shipment in the second quarter of 2004 from Telos Corporation, a systems integrator on the project. The DoD and Telos have indicated that the total project will likely include several hundred more Fargo units than this initial order. Although the precise number and timing are unclear, all systems for this project are currently expected to ship in 2004.

"We are pleased that the DoD has chosen to extend its relationship with Fargo," said Gary R. Holland, Fargo's president and chief executive officer. "Should the DoD deploy the number of HDP systems that has been indicated, this will be the largest installation of HDP printers worldwide."

"We're confident," continued Holland, "that both the strength of our patented technology and our track record of serving the DoD keep us well-positioned to build on this relationship. In addition, we will be providing proprietary supplies, including ribbons and overlaminate materials, for the cards produced on Fargo systems."

The common access card, which the DoD began to issue in October 2000, has become the standard identification card for approximately 4,000,000 active duty uniformed service personnel, selected reserves, DoD civilians and eligible contractor personnel. The card contains credentials to authenticate personal identity and is based on "smart card" technology, which stores and processes information on an integrated microprocessor chip contained on the card itself.

Forward-looking Statements 

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 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; 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 claims; adverse economic and business conditions, including conditions resulting from the terrorist attack on the U.S. on September 11, 2001, and the resulting hostilities and the war with Iraq commenced in March 2003. For more detail, see the Company's Annual Report on Form 10-K for the year ended December 31, 2003.

About Fargo

Fargo is the world's leader in innovative technologies for desktop plastic card personalization systems. Based in Eden Prairie, Minnesota, 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 plastic identification cards, complete with digital images and text, lamination, and electronically encoded information.

Personalized 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, Healthcare Facilities, E-commerce, Retail Stores, Correctional Institutions, 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.