Published on February 13, 2008
TO
BUSINESS AND TECHNOLOGY EDITORS:
SCM
Microsystems Announces Expected Fourth Quarter 2007 Results Including Operating
and Net Profit
25%
to
35% Revenue Growth Forecast for 2008
ISMANING,
Germany, Feb. 13 /PRNewswire-FirstCall/ -- SCM Microsystems, Inc. (Nasdaq:
SCMM,
Prime Standard: SMY), a leading provider of solutions that open the Digital
World, today announced expected results for the fourth quarter ended December
31, 2007. Highlights of the 2007 fourth quarter are expected to
include:
| -- |
Revenue
above the high end of management's previous guidance of $7.5 million
to $9.0 million;
|
| -- |
Gross
margin above management's previous guidance of 40%;
|
| -- |
Operating
expenses at the low end of management's previous guidance of $4.0
million to $4.5 million; and
|
| -- |
GAAP
operating and net profit.
|
Revenue
from continuing operations in the fourth quarter of 2007 is expected to be
between $9.1 million and $9.8 million, above previous guidance of $7.5 million
to $9.0 million. The expected improvement in revenue for the 2007 fourth quarter
versus previous guidance was due to additional sales of the Company's PC
Security products for U.S. government security programs and larger orders of
Flash Media Reader products from a major customer. Revenue for the fourth
quarter of 2006 was $9.4 million.
By
product segment, fourth quarter 2007 PC Security revenue, which includes sales
of smart card readers and other products for secure network and physical access,
is expected to be approximately flat with sales of $7.3 million in the fourth
quarter of 2006. Flash Media Reader revenue, which includes sales of OEM digital
media reader technology, is expected to be up more than 10% compared with
revenue of $2.1 million in the year ago quarter.
For
the
year as a whole, the Company expects that sales of its PC Security products
will
be up slightly in 2007 versus 2006, and that sales of its Flash Media Readers
will be down significantly as a result of lower sales levels in the first half
of 2007 due to the loss of a major customer, which higher sales in the second
half of the year did not offset. The Company therefore expects total revenue
for
the year ended December 31, 2007 will be between $29.8 million and $30.5
million, down 9% to 11% from revenue of $33.6 million for the year ended
December 31, 2006, compared with management's previous guidance of 2007 revenue
10% to 15% below 2006 levels.
"Sales
and operational execution were both strong in the fourth quarter, resulting
in
expected positive operating and net income for the quarter," said Stephan
Rohaly, chief financial officer of SCM Microsystems. "Our U.S. smart card reader
business has remained healthy as government agencies continue to implement
and
expand card-based security programs. Sales of our digital media readers returned
to levels not seen for over a year as one of two major customers experienced
increased demand from their end markets. And revenue from our CHIPDRIVE(R)
small
office solutions exceeded $1 million for the first time, just months after
expanding our sales activities across Europe. Higher sales further supported
gross margin in the quarter, which has continued to strengthen over the past
year due in part to ongoing product cost cutting measures."
Gross
margin in the fourth quarter of 2007 is expected to be above previous guidance
of 40%, due both to higher than anticipated sales of the Company's digital
media
readers in the quarter and continued margin integrity in the Company's PC
Security business. Gross margin in the fourth quarter of 2006 was
42%.
Operating
expenses in the fourth quarter of 2007, as reported in accordance with GAAP,
are
expected to be at the low end of previous guidance of $4.0 million to $4.5
million for the quarter. GAAP operating expenses were $3.3 million in the fourth
quarter of 2006, which included amortization of intangibles and restructuring
and other charges of $0.2 million.
As
reported in accordance with GAAP, the Company expects to realize operating
income for the fourth quarter of 2007 of breakeven to a small operating profit.
GAAP operating income was $0.6 million in the fourth quarter of 2006.
The
Company further expects that, as in past quarters, interest income will have
a
positive effect on its financial results, and that as a result, the Company
expects to record positive net income in the fourth quarter of 2007. Income
from
continuing operations for the same quarter of 2006, as reported in accordance
with GAAP, was $0.7 million.
The
Company also expects cash and cash equivalents at December 31, 2007 will be
down
slightly compared with cash and cash equivalents of $33.1 million at September
30, 2007.
"SCM
is
focused on developing and delivering smart card readers and terminals to address
some of the world's largest card-based security and identification programs
--
from electronic passports, to ehealth cards, to government-mandated PIV and
CAC
cards for U.S. Homeland Security," said Felix Marx, chief executive officer
of
SCM. "Over the last two quarters we have begun the process of defining a plan
for accelerating growth -- a plan that includes broadening SCM's participation
in the contactless and epayment markets. While it will take time to implement
our growth plan, we believe we have already put in place much of what is
required, with significant additions to our management team, enhanced sales
resources and increased attention on strategic industry
partnerships."
Guidance
for 2008
For
the
full year fiscal 2008, the Company expects revenue growth between 25% and 35%
from expected 2007 levels, resulting in total revenue of $37 million to $41
million. Gross margin, as reported in accordance with GAAP, is expected to
be
between 44% and 46% in 2008. The Company further expects operating expenses
between $17 million and $20 million in 2008, including anticipated further
investments in sales resources and development activities to address strategic
growth initiatives. Within these ranges, the Company currently expects to record
both operating and net profit for the year as a whole.
SCM
has
not yet completed the review of its results for the fourth quarter or full
year
of fiscal 2007 and the Company's auditors have not completed their audit of
such
results. Therefore the expected results set forth in this press release are
based only on a preliminary review by the Company of its results for the fourth
quarter. Accordingly, the Company's actual results may differ from those set
forth herein. SCM expects to announce full results for its fourth quarter and
fiscal year 2007 following the completion of its annual audit and the filing
of
the Company's Annual Report on Form 10-K with the SEC, which is due on or before
March 31, 2008.
About
SCM
Microsystems
SCM
Microsystems is a leading supplier of solutions that open the Digital World
by
enabling people to conveniently access digital content and services. The company
develops, markets and sells the industry's broadest range of smart card reader
technology for secure PC, network and physical access and digital media readers
for transfer of digital content to OEM customers in the government, financial,
enterprise, consumer electronics and photographic equipment markets worldwide.
Global headquarters are in Ismaning, Germany. For additional information, visit
the SCM Microsystems web site at http://www.scmmicro.com.
NOTE:
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These include, without limitation,
the statements by Felix Marx and Stephan Rohaly; our statements contained above
regarding our expectations for the company's fourth quarter and fiscal year
2007
revenue, gross margin, operating expenses, interest income and cash and
equivalents; and our statements contained above regarding our expectations
for
the company's fiscal year 2008 revenue growth, gross margin, operating expenses
and expected operating and net income. These statements are based on current
expectations or beliefs, as well as a number of preliminary assumptions about
future events that are subject to risks and uncertainties that may cause actual
results to differ materially from those contemplated herein. Our financial
results may not meet expectations. Readers should not unduly rely on these
forward-looking statements, which are not a guarantee of future performance
and
are subject to a number of risks and uncertainties, many of which are outside
our control, that could cause our actual business and operating results to
differ, including, but not limited to, our ability to grow market share and
revenues based on a strategy of participating in specific early stage markets;
our ability to successfully develop and introduce new products that satisfy
the
evolving and increasingly complex requirements of customers; the markets in
which we participate or target may not grow, converge or standardize at
anticipated rates or at all, including the government and enterprise security
markets which we are targeting; we may not successfully compete in the markets
in which we participate or target; competitors could take market share or create
pricing pressure; and we may not be successful in maintaining operating expenses
at current or lower levels. For a discussion of further risks and uncertainties
related to our business, please refer to our public company reports filed with
the U.S. Securities and Exchange Commission, including our Annual Report on
Form
10-K and our amended Annual Report on Form 10-K/A for the year ended December
31, 2006, and the company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2007.
All
trade
names are trademarks or registered trademarks of their respective
holders.
SOURCE
SCM Microsystems, Inc.
-0-
02/13/2008
/CONTACT:
Stephan Rohaly, Chief Financial Officer, +49 89 95 95 5101, srohaly@scmmicro.de,
or Darby Dye, Investor Relations -- US, +1-510-249-4883, ddye@scmmicro.com,
both
of SCM Microsystems, Inc./
/First
Call Analyst: /
/FCMN
Contact: /
/Web
site: http://www.scmmicro.com /
(SCMM)