Fargo Electronics Sets Revenue Record of $16, 957,000 In Second Quarter, Earns 11 Cents Per Share.Business Editors EDEN PRAIRIE Eden Prairie A city of eastern Minnesota, a residential suburb of Minneapolis. Population: 57,300. , Minn.--(BUSINESS WIRE)--July 24, 2001 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 record 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 second quarter ended June June: see month. 30, 2001 of $16,957,000, compared with sales of $13,599,000 in the second quarter of 2000. On a 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. basis, net income per common share was 11 cents in the second quarter of 2001, compared with five cents per common share in the same period last year. For the six months ended June 30, 2001, net sales were $30,129,000, compared with $27,830,000 for the first six months of 2000. Net income per common share (diluted) was 13 cents in the first half of 2001, compared with 11 cents per common share (diluted) in the same period a year earlier.
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Fargo Electronics, Inc. Second Quarter Six Months
Ended Ended
(In thousands, except per share June 30, June 30, June 30, June 30,
amounts) 2001 2000 2001 2000
------- ------- ------- --------
Net sales $16,957 $13,599 $30,129 $27,830
Operating income 2,382 1,504 3,382 4,288
Net income available to common
stockholders 1,287 598 1,599 1,148
Diluted net income per common share $ 0.11 $ 0.05 $ 0.13 $ 0.11
Weighted average common shares
outstanding - diluted 11,892 11,908 11,880 10,805
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"We are pleased with our performance, which represents a new quarterly sales record for Fargo," 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, 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. . "During the quarter, Fargo completed shipment of the 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 for the U.S. Department of Defense (DoD) "Common Access" Identification Card Project. Revenues from this project were in excess of $2,000,000 in the second quarter. We also resumed shipment of our DTC DTC See: Depository Transfer Check DTC See: Depository Trust Company DTC See Depository Trust Company (DTC). 500 series in quantity, as Fargo made good progress working through our product transition period, which we see coming to an end later this year." Holland noted that other highlights of the Second Quarter included: -- Successful promotion of the DTC500 at a major trade show in May. -- Formation of the Fargo Technology Alliance in May, which will further enhance Fargo's smart card strategy and help promote effective, advanced e-card solutions on a global basis. -- Completion of an amendment to its credit facility in April with two Chicago-based banks: LaSalle Bank, an operating unit of ABN Amro Inc. (NYSE:ABN) and Harris Bank, an operating unit of the Bank of Montreal. Holland noted that Fargo reduced its outstanding debt by $3,400,000 in the quarter. "Looking ahead, the current economic environment creates considerable uncertainty in our markets. We presently anticipate, however, that earnings for the third quarter of fiscal 2001 will be in the range of $0.08 to $0.13 per common share," Holland concluded. 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 printing systems create 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. plastic identification cards complete with digital images and text, lamination lamination a laminar structure or arrangement. , and electronically encoded information. Personalized identification cards provide physical, information and transaction security for a wide variety of applications including retail stores, e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. , government installations, schools, sports and recreation facilities, clubs and associations, and correctional cor·rec·tion n. 1. The act or process of correcting. 2. Something offered or substituted for a mistake or fault: made corrections in the report. 3. a. facilities. More than 50,000 Fargo systems are currently installed throughout the U.S. and in over 100 other countries. For more information, visit Fargo's Web site at www.fargo.com. 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 risks 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 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; and domestic and international regulations and standards. Adverse economic conditions may effect the Company's ability to meet earnings expectations. 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, 2000, and 10-Q for the quarter ended March 31, 2001.
Fargo Electronics, Inc.
Condensed Statement of Operations
(In thousands, except per share amounts)
Three Months Six Months
Ended June 30, Ended June 30,
2001 2000 2001 2000
----------------- -----------------
Net sales (Note 1) $ 16,957 $ 13,599 $ 30,129 $ 27,830
Cost of sales 10,663 8,305 18,910 16,381
-------- -------- -------- --------
Gross profit 6,294 5,294 11,219 11,449
-------- -------- -------- --------
Operating expenses:
Research and development 979 1,240 2,011 2,413
Selling, general and
administrative (Note 1) 2,933 2,550 5,826 4,748
-------- -------- -------- --------
Total operating expenses 3,912 3,790 7,837 7,161
-------- -------- -------- --------
Operating income 2,382 1,504 3,382 4,288
-------- -------- -------- --------
Other income (expense):
Interest expense (398) (579) (878) (1,649)
Other, net 39 33 14 60
-------- -------- -------- --------
Total other expense (359) (546) (864) (1,589)
-------- -------- -------- --------
Income before provision for income
taxes and extraordinary loss 2,023 958 2,518 2,699
Provision for income taxes 736 360 919 995
-------- -------- -------- --------
Income before extraordinary loss 1,287 598 1,599 1,704
Extraordinary loss, net of
applicable income taxes of $110
in 2000 -- -- -- 206
-------- -------- -------- --------
Net income 1,287 598 1,599 1,498
Accrued dividends on Series B,
8% redeemable preferred stock -- -- -- 350
-------- -------- -------- --------
Net income available to common
stockholders $ 1,287 $ 598 $ 1,599 $ 1,148
-------- -------- -------- --------
Net income (loss) per common
share:
Basic earnings:
Income before extraordinary
loss $ .11 $ .05 $ .14 $ .14
Extraordinary loss -- -- -- (.02)
-------- -------- -------- --------
Net income $ .11 $ .05 $ .14 $ .12
-------- -------- -------- --------
Diluted earnings:
Income before extraordinary
loss $ .11 $ .05 $ .13 $ .13
Extraordinary loss -- -- -- (.02)
-------- -------- -------- --------
Net income $ .11 $ .05 $ .13 $ .11
-------- -------- -------- --------
Weighted average common shares
outstanding:
Basic 11,758 11,767 11,753 9,514
Diluted 11,892 11,908 11,880 10,805
Note 1 - Effective April 1, 2001, the Company adopted EITF 00-14,
Accounting for Certain Sales Incentives. In accordance with the EITF,
the Company has reclassified certain sales incentives totaling $461k
for the three months ended June 30, 2000 and $847k for the six months
ended June 30, 2000 from selling, general and administrative expenses
and shown them as a reduction of net sales.
Fargo Electronics, Inc.
Condensed Balance Sheets
(In thousands)
June 30, Dec. 31,
ASSETS 2001 2000
--------- ---------
Current assets:
Cash and cash equivalents $ 3,234 $ 1,223
Accounts receivable, net 7,231 6,754
Inventories 6,598 8,118
Prepaid expenses 154 248
Deferred income taxes 3,063 3,063
--------- ---------
Total current assets 20,280 19,406
--------- ---------
Equipment and leasehold improvements, net 1,716 2,079
Other assets:
Deferred income taxes 26,281 27,200
Other assets, net 109 130
--------- ---------
Total assets $ 48,386 $ 48,815
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of notes payable, bank $ 18,000 $ --
Line of credit, bank 1,500 --
Accounts payable and accrued liabilities 5,810 4,556
--------- ---------
Total current liabilities 25,310 4,556
--------- ---------
Revolving credit facility -- 22,900
Commitments
Stockholders' equity:
Common stock, $.01 par value; 50,000 shares
authorized, 11,747 and 11,746 shares issued and
outstanding at June 30, 2001 and December 31,
2000, respectively 117 117
Additional paid-in capital 145,159 145,155
Accumulated deficit (121,517) (123,116)
Deferred compensation (58) (72)
Stock subscription receivable (625) (725)
--------- ---------
Total stockholders' equity 23,076 21,359
--------- ---------
Total liabilities and stockholders' equity $ 48,386 $ 48,815
--------- ---------
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