SAFLINK Corp. Reports Second Quarter 2003 Financial Results.Business EditorsBELLEVUE Bellevue (bĕl`vy  ).1 City (1990 pop. 30,982), Sarpy co., E Nebr., a suburb of Omaha, on the Missouri River; inc. 1855. , Wash.--(BUSINESS WIRE)--Aug. 14, 2003 SAFLINK(R) Corporation (Nasdaq:SFLK), a leading developer, marketer, and integrator (1) In electronics, a device that combines an input with a variable, such as time, and provides an analog output; for example, a watt-hour meter. (2) See systems integrator. of biometric bi·o·met·rics n. (used with a sing. verb) The statistical study of biological phenomena. bi security solutions, today reported its financial results for the second quarter of 2003. Revenue for the second quarter of 2003 was $167,000 compared to $597,000 in the first quarter of 2003 and $364,000 in the second quarter of 2002. The Company reported a net loss attributable to common stockholders of $3.4 million, or $0.13 per share, in the second quarter of 2003 compared to a net loss attributable to common stockholders of $2.0 million, or $0.09 per share, in the first quarter of 2003, and a net loss attributable to common stockholders of $1.6 million, or $0.12 per share, in the second quarter of 2002. For the six months ended June June: see month. 30, 2003, revenue was $764,000 compared to $560,000 in the first six months of 2002. The Company reported a net loss attributable to common stockholders of $5.4 million, or $0.22 per share compared to a net loss attributable to common stockholders of $8.0 million, or $0.68 per share, in the first six months of 2002. "The second quarter was marked by our investment in our sales and distribution infrastructure that we believe will help to significantly improve our sales results in the coming quarters. During the second quarter we hired and trained a new direct sales team; signed up and trained the second largest Citrix distributor in the U.S.; became compliant with a key U.S. Food and Drug Administration regulation to allow us to pursue sales opportunities in the pharmaceutical industry and reached an agreement with a major PC manufacturer to provide our products to its customers. Building this infrastructure required a significant amount of effort and focus by management and our employees, but we believe it was a prudent investment in our future." said Glenn Argenbright, SAFLINK's President and Chief Executive Officer. Argenbright continued, "We were able to make this investment while maintaining a healthy cash balance on our balance sheet of over $12 million. In addition to the increased traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. we're seeing in the healthcare vertical, we are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the sales initiatives we are engaged in at several leading pharmaceutical companies, as we continue to stay focused on the opportunities with the Department of Defense's Common Access Card (CAC See Consumer Advisory Council. ) program and the Transportation Security Administration's TWIC TWIC Transportation Worker Identification Credential (US Transportation Security Administration) TWIC This Week In Chess TWIC This Week in Common (Earlham School of Religion) TWIC Transportation Worker Identity Card initiative. We are also very pleased with our participation on the teams that recently won contract awards from the Office of the Secretary of Defense The Office of the Secretary of Defense (OSD) is part of the United States Department of Defense and includes the entire staff of the Secretary of Defense. It is the principal staff element of the Secretary of Defense in the exercise of policy development, planning, resource (OSD (1) (On-Screen Display) An on-screen control panel for adjusting monitors and TVs. The OSD is used for contrast, brightness, horizontal and vertical positioning and other monitor adjustments. ) and the Defense Information Systems Agency (DISA 1. (body) DISA - Defense Information Systems Agency. 2. (standard) DISA - Data Interchange Standards Association. ). We view these contract awards as encouraging signs that the Federal government is continuing its support for the adoption of biometric technologies." The Company will hold an earnings conference call today at 5:00 PM EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . The Company may provide forward-looking information on this call. To listen to the conference, please call 1-800-992-7413 (international callers dial +1-801-303-7424). About SAFLINK SAFLINK Corporation brings "The Power of Biometric Authentication See biometrics. (TM)" to workstations and enterprise networks through biometrics The biological identification of a person. Examples are face, iris and retinal patterns, hand geometry and voice. Increasingly built into laptop computers, fingerprint readers have become popular as a secure method for identification. . The Company provides cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. multi-biometric software solutions to verify (1) To prove the correctness of data. (2) In data entry operations, to compare the keystrokes of a second operator with the data entered by the first operator to ensure that the data were typed in accurately. See validate. individual identity, protect valuable information, and replace text-based passwords. These solutions are designed to safeguard and simplify access to electronic systems and online services. Further information is available through the Company's web site at www.saflink.com. NOTE: "SAFLINK," "SAFsolution," and "The Power of Biometric Authentication" are registered trademarks of SAFLINK Corporation. This release contains information about management's view of the company's future expectations, plans and prospects that constitute 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. for purposes of 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. provisions under 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. Actual results may differ materially from historical results or those indicated by these forward-looking statements as a result of a variety of factors including, but not limited to, risks and uncertainties associated with the company's financial condition, its ability to complete new sales contracts Sales Contract Contract between a seller and buyer for the sale of goods, services, or both. entered into this quarter, its ability to convert any backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. or potential sales opportunities into definitive agreements and revenue-producing relationships, its ability to sell its products, its ability to compete with competitors and the growth of the biometrics market as well as other factors that are discussed in the company's 424(b)(3) Prospectus filed with the SEC August 16, 2002 as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. and supplemented, and in its 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. , as well as other documents periodically filed with the Securities and Exchange Commission.
SAFLINK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three months Six months
ended June 30, ended June 30,
----------------- -----------------
2003 2002 2003 2002
-------- -------- -------- --------
Revenue:
Product $ 87 $ 121 $ 357 $ 257
Service 80 243 407 303
-------- -------- -------- --------
Total revenue 167 364 764 560
Cost of revenue:
Product 36 168 91 279
Service 79 96 163 123
-------- -------- -------- --------
Total cost of revenue 115 264 254 402
-------- -------- -------- --------
Gross profit 52 100 510 158
Operating expenses:
Product development 705 406 1,186 808
Sales and marketing 1,482 369 2,485 728
General and administrative 1,251 942 2,247 1,903
-------- -------- -------- --------
Total operating expenses 3,438 1,717 5,918 3,439
-------- -------- -------- --------
Operating loss (3,386) (1,617) (5,408) (3,281)
Interest expense (5) - (5) (38)
Other income, net 21 (4) 31 4
-------- -------- -------- --------
Net loss (3,370) (1,621) (5,382) (3,315)
Preferred stock dividend - - - 4,731
-------- -------- -------- --------
Net loss attributable to
common stockholders $(3,370) $(1,621) $(5,382) $(8,046)
======== ======== ======== ========
Basic and diluted loss per common
share:
Net loss $ (0.13) $ (0.12) $ (0.22) $ (0.28)
Preferred stock dividend - - - (0.40)
-------- -------- -------- --------
Net loss attributable to common
stockholders $ (0.13) $ (0.12) $ (0.22) $ (0.68)
======== ======== ======== ========
Weighted average number of common
shares outstanding 26,074 13,036 23,986 11,836
SAFLINK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
ASSETS June 30, December 31,
2003 2002
------------ ------------
Current assets:
Cash and cash equivalents $ 12,179 $ 7,447
Accounts receivable, net 240 143
Inventory 132 39
Other current assets 574 790
------------ ------------
Total current assets 13,125 8,419
Furniture and equipment, net 563 199
------------ ------------
$ 13,688 $ 8,618
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 448 $ 758
Accrued expenses 449 467
Deferred revenue 47 130
------------ ------------
Total current liabilities 944 1,355
Stockholders' equity:
Preferred stock - -
Common stock 267 196
Additional paid-in capital 103,108 92,316
Accumulated deficit (90,631) (85,249)
------------ ------------
Total stockholders' equity 12,744 7,263
------------ ------------
$ 13,688 $ 8,618
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