Fingerprint Card — Earnings Release 2011

Feb 9, 2012

Press release, Gothenburg 9 February, 2012

Full-year profit, two design wins and record-breaking order

Fingerprint Cards AB (publ), corp. reg. no.: 556154-2381, (FPC)

Fourth quarter, 2011:

• Sales rose to SEK 18.6 M (18.2).
• Gross profit increased to SEK 9.7 M (9.1).
• Profit after financial items amounted to SEK 0.7 M (1.0).
• The gross margin increased to 52% (50%).
• Earnings per share amounted to SEK 0.02 (0.03).
• A resolution was adopted at an extraordinary general meeting concerning a private placement of warrants to existing personnel and newly recruited key personnel. The issue was fully subscribed.
• The swipe sensor FPC1080A put into mass production.
• Thomas Rex employed as Senior Vice President Sales and Marketing.
• FPC signed framework agreement with major mobile manufacturers.
• FPC signed ODM agreement for incorporation into platforms for mobiles and tablets.

Full-year January-December, 2011

• Sales rose to SEK 68.6 M (60.9).
• Gross profit for the full-year increased to SEK 38.7 M (30.8).
• Profit after financial items increased to SEK 3.4 M (2.0).
• The gross margin increased to 56% (51%).
• Earnings per share increased to SEK 0.08 (0.05).
• Cash and cash equivalents at the end of the year totaled SEK 23.0 M (30.8).
• The order backlog at December 31, 2011 totaled SEK 6.1 M (11.0).

Notable events at the close of the reporting period:

• Largest order ever of SEK 44 M received from HST, concerning area and swipe sensors for delivery in 2012.
• Full-year sales for 2012 are expected to be between SEK 70-90 M, with a continued strong gross margin and order bookings between SEK 100-140 M.

For further information contact:

Johan Carlström, President and CEO, Fingerprint Cards AB (publ), +46 31-607820, investrel@fingerprints.com Fingerprint Cards AB (publ), Box 2412, SE-403 16 GOTHENBURG, Sweden, www.fingerprints.com

Fingerprint Cards AB (FPC) is listed on Nasdaq OMX Stockholm (FING B) and has its head office in Gothenburg, Sweden. Publication pursuant to Swedish legislation: Fingerprint Cards AB (publ) discloses this information pursuant to the Securities Market Act (2007:528) and/or the Financial Instruments Trading Act (1991:980). The information was issued for publication on February 9, 2012, at. 8.00 a.m.

Important information

Issuing, publishing or distributing this press release may be subject to restrictions in certain jurisdictions. Recipients of this press release are responsible for using this press release and the information herein in accordance with applicable rules in each jurisdiction. This press release does not constitute an offer, or invitation to acquire or subscribe for new securities in Fingerprint Cards in any jurisdiction.

www.fingerprints.com

CEO's comments on the fourth quarter and full-year 2011

It is gratifying to see that FPC – for the second consecutive year – has succeeded in delivering a profit for the full-year, which is unique in FPC's history. Sales of almost SEK 69 M are the highest to date. The third and fourth quarters were the company's two strongest ever in terms of sales.

In the fourth quarter, FPC secured two design wins: one from a major mobile manufacturer (Tier1) and the other from a medium-sized Asian contract manufacturer (Tier2/ODM). We expect projects from at least one of these during 2012. In early January 2012, we received an order totaling SEK 44 M from HST for delivery of area and swipe sensors in 2012 – our largest order to date. We have a new partnership with Serial Microelecotronics in ten Asian countries which has already resulted in a handful of new prospects for major development projects for swipe sensors that are currently in a procurement and negotiation stage.

Our assessment is that 2012 will be a decisive year for the introduction of fingerprint verification for login, navigation and secure payments from mobile phones and other consumer electronic products. We have great hopes of winning a significant market share in this budding and rapidly growing market.

Sales, earnings and order backlog

The Group's net sales for the fourth quarter increased to SEK 18.6 M (18.2) and net sales for the full-year to SEK 68.6 M (60.9). Sales for the fourth quarter rose 3% year-on-year and the full-year increase was 13%. Gross profit for the fourth quarter increased to SEK 9.7 M (9.1) and the full-year increase was SEK 38.7 M (30.8). The gross margin reached 52% (50) in the fourth quarter, and a record level of 56% (51) was achieved for the full-year. In the fourth quarter, profit after financial items increased to SEK 0.7 M (1.0) and for the full-year, it increased to SEK 3.4 M (2.0). The order backlog at December 31, 2011 amounted to SEK 6.1 M (11.0).

The Parent Company's net sales for the fourth quarter increased to SEK 18.6 M (18.2) and profit after financial items amounted to SEK 0.7 M (0.9). For full-year 2011, the Parent Company's net sales rose to SEK 68.6 M (60.9) and profit after financial items to SEK 3.4 M (1.8).

Market and sales

In 2011, sales totaled SEK 68.6 M, which is in line with forecast and is FPC's highest sales figure to date for a full year. The FPC1011F area sensor continues to account for the majority of sales but volume deliveries of the company's FPC1080A swipe sensor commenced in 2011, and made a contribution to sales in the forth quarter. Sales for the fourth quarter of 2011 totaled SEK 18.6 M.

During the year, FPC appointed new or supplementary distributors and representatives in eleven countries. New countries where FPC now has a distributor are Thailand, Vietnam and the Philippines. Countries where distributors were replaced or supplemented with additional distributors are: China, Taiwan, the US, South Korea, Singapore, Japan, India, Malaysia and Indonesia. At year-end, FPC was represented by 15 distributors that combined cover 22 countries or regions. In markets where FPC is not represented, FPC sells directly to customers.

The persistent strategic efforts by FPC's distributor HST in China have led to a dominant position in capacitive area sensors for FPC. The company has thus awarded HST initial one-year exclusiveness for sales of FPC's area sensors in the Chinese market.

Serial Microelectronics, a dedicated distributor with an organization created primarily for volume deliveries, will serve the markets that demand solutions based on line sensors. Due to the agreement on exclusiveness, HST will expand its marketing organization, enabling a focus on FPC's resources for the direct cultivation of OEM customers for line sensor projects, an area in which we see good opportunities for securing additional design wins in some projects for mobile phones, smart televisions and USB keys.

In addition to extending the venture through additional distributors with greater resources and wider reach, FPC also increased its presence in the Asian market by opening a new sales office in Taipei, Taiwan.

During the spring, FPC signed a partnership agreement with OKI Semiconductor, whereby the companies will market a joint solution based on FPC's sensor and OKI's biometric processor chip.

During the year, FPC's latest version of the FPC1080A swipe sensor was launched and in July, the company secured its first volume order. In December, FPC secured two design wins and a framework agreement, which is a clear market breakthrough for swipe sensors. The first agreement is with one of the ten largest suppliers of mobile phones and the second is with a significant Asian supplier of platforms for mobile phones and tablets.

At 31 December, 2011, the order backlog was SEK 6.1 M (11.0).

Technological Development and Production

In the fourth quarter, FPC gradually increased the manufacturing pace of its new swipe sensors and successfully completed the planned deliveries within the appointed times with the promised performance. The rapid increase in the production pace brought challenges, but these were overcome by continuously improving materials and processes so that the company could gradually increase the yield. The delivered sensors have undergone comprehensive functionality and performance testing and, to date, the production loss of sensors is relatively minor. In the fourth quarter, we also completed the official launch of the new swipe sensor. In addition to the sensor, an accompanying development kit and adapter card are now available to help customers start using our technology and incorporate it into their own products and solutions.

With the launch and volume deliveries of the new swipe sensor, this development project will soon come to an end. Technically, we can confirm that the project has progressed exceedingly well – with world-leading performance delivered to the original schedule and within budget. FPC has received positive reactions from our customers for the tangibly low power consumption, in particular, which is very important for mobile applications. In the fourth quarter, we also introduced substantial improvements to the navigation function in the sensor system – meaning the function for using the sensor as a touchpad. Efforts to support customer evaluations and the integration of our technology will now continue, to ensure that the development project for swipe sensors becomes a commercial success.

As previously during the year, production of the area sensor progressed smoothly and generated a very high yield. In addition to working continuously to maximize the yield, we also worked with an updated version of the area sensor. We plan to launch the new version during the first half of 2012.

Future prospects

In early January, we received an order totaling SEK 44 M from HST, entailing an order backlog of SEK 50 M. This is an excellent start to the year. In 2012, we will primarily focus on developing the market for swipe sensors in Asia, where we plan to secure a development project during the first half-year. Since we are now making a serious attempt to enter a new market with a commercially untried product, it is difficult to make a forecast. However, we estimate that sales of between SEK 70-90M for full-year 2012 is a reasonable expectation. We anticipate growing seasonal variation in sales compared with 2011. A cautious start with a gradual increase during the year entails that most invoicing is expected to take place during the second half of 2012.

The margin on a new product such as the swipe sensor is difficult to calculate since the initial yield fluctuates. The yield will rise and stabilize over time, similar to the trend we saw for the area sensor. We thus predict that FPC's gross margin will remain strong but not as strong as the record figure in 2011. From the first quarter of 2012, recognition of the gross margin will change due to a reclassification of costs. To provide transparent information, both measurements for the gross margin will be shown parallel in 2012.

Concerning new projects and their related negotiations, the company's ambition is to provide the market with detailed and relevant information but we are limited by confidentiality agreements with partners and customers. In our opinion, the probability of signing supply agreements during the year for projects, some of them pertaining to mobile phones, is high. We also see excellent opportunities in other applications such as SMART TV and USB keys. FPC expects the order booking to be between SEK 100-140M in 2012.

Organization and Personnel

The number of employees at December 31, 2011 was 18 (17), including 1 (-) woman.

Financial position

At December 31, 2011, the Group's disposable cash and cash equivalents totaled SEK 23.0 M (30.8).

At the same date, the Group's working capital had risen to SEK 74.1 M (51.4).

On the balance-sheet date of December 31, 2011, accounts receivable amounted to a record-breaking SEK 53 M due to longer terms of payment. On February 8, 2012, SEK 15 M had been paid whereby liquidity amounted to SEK 33 M. Consolidated shareholders' equity rose to SEK 106.3 M (78,0) and the equity/assets ratio for the Group was 91% (92).

The Parent Company's disposable cash and cash equivalents at year-end totaled SEK 22.3 M (28.9).

Fixed assets, investments and depreciation

Investments in capitalized development expenditures were SEK 2.1 M (2.1) for the fourth quarter and SEK 9.4 M (16.7) for the full-year. Investments in machinery and equipment amounted to SEK 00 M (-) in the fourth quarter and SEK 1.3 M (3.7) for the full-year. Depreciation amounted to SEK 1.3 M (1.7) in the fourth quarter and to SEK 4.9 M (6.4) for the full-year.

Cash flow

Cash flow from operations, including changes in working capital, was a negative SEK 3.2 M (pos: 2.1) in the fourth quarter and a negative SEK 22.2 M (neg: 0.8) for the full-year. Cash flow to investments, which primarily pertained to the line sensor project, amounted to a negative SEK 3.1 M (neg: 5.1) in the fourth quarter and a negative SEK 11.7 M (neg: 20.4) for the full-year. Cash flow from financing activities amounted to SEK 2.0 M (1.0) for the fourth quarter and SEK 26.1 M (2.0) for the full-year. Combined, this resulted in a net change in cash and cash equivalents of a negative SEK 4.3 M (neg: 2.0) during the fourth quarter and a negative SEK 7.8 M (neg: 19.3) for the full-year.

Seasonal variations

To date, sales have not shown any clear seasonal variations. In 2011, 43% of the invoicing was generated during the first half of the year and 57% during the second half. The quarters with the highest proportion of sales were Q3 in 2011 with 30%, and Q4 in 2010 with 30%, of the year's total revenues. The quarters with the lowest proportion of sales were Q1 in 2011 with 19%, and Q2 in 2010 with 16%, of the year's total revenues.

Transactions with related parties

There were no transactions between FPC and related parties that had any material impact on the Group's or the Parent company's position and earnings.

Warrants program

An Extraordinary General Meeting on March 3, 2010 resolved to issue warrants with a term extending until August 31, 2012. The company's employees hold 3,433,000 of the program's warrants. The exercise price is SEK 7.48. On full subscription with the support of all warrants in this program, 3,433,000 new Class B shares may be issued, corresponding to 7.26% of the total number of shares and 5.94% of the total voting rights, which also entails that share capital will increase by SEK 686,000.

An Extraordinary General Meeting on November 9, 2010 resolved to issue 958,000 warrants with a term extending until February 9, 2013. The company's employees hold 938,000 of the program's warrants. The exercise price is SEK 15.74. On full subscription with the support of all warrants in this program, 958,000 new Class B shares may be issued, corresponding to 1.93% of the total number of shares and 1.63% of the total voting rights, which also entails that share capital will increase by SEK 191,600.

An Extraordinary General Meeting on November 17, 2011 resolved to issue 2,000,000 warrants with a term extending to December 18, 2014. The company's employees hold 1,800,000 of the program's warrants. The exercise price is SEK 13.64. On full subscription with the support of all warrants in this program, 2,000,000 new Class B shares may be issued, corresponding to 3.60% of the total number of shares and 3.29% of the total voting rights, which also entails that share capital will increase by SEK 400,000.

These warrants programs jointly correspond to a dilution effect of approximately 12.78% of the total number of shares and 10.51% of the total voting rights in the company.

Significant uncertainties and risks – The Group and the Parent company

FPC is exposed to risks. The Board of Directors and Executive Management work to minimize such exposure, and the impact of a triggered risk. The following description does not claim to be complete or exact, since risks and their degree of impact vary over time:

Company risk

Financing	It cannot be ruled out that in the future further capital may be needed to finance FPC's operations, development and expansion. This need may arise in an unfavorable market situation and on terms that are less favorable than the Board considers them to be today. External financing in a more difficult credit and investment climate could negatively affect FPC's operations, while borrowing, if at all possible, could entail restrictions that would limit the company's latitude. There is no guarantee that capital can be raised when needed, or raised on acceptable terms. By gradually achieving success in the market, and securing a satisfactory margin, a positive cash flow can be created, which will contribute to reducing the need for capital contributions.
Rights	The operations are heavily dependent on FPC protecting its technology through patents and intellectual property rights. In the event that patents cannot be obtained, this could have a negative impact on earnings and position. The strategy is to protect the most important areas but it is not possible to guarantee that all patent applications will be granted. FPC does not believe that its technology infringes upon any other company's intellectual property
Development	FPC's success depends largely on its ability to drive and adapt to technology developments. FPC conducts development projects in the areas of biometrics, sensor technology and their applications. The projects are conducted in cooperation with consultants and subcontractors. Since the projects are extensive and complex, delays in the time schedule cannot be ruled out. Serious delays, disruptions or unforeseen events could have a negative impact on FPC's future operations. However, these risks can be reduced by using resources based on knowledge and experience of technically advanced development projects and by improving project management systems.
Competence	Biometrics is still a relatively new area, showing high growth and requiring advanced technical knowledge from employees. FPC has a number of key persons important to the successful development of its operations. The departure of such key persons from the company could result in operational disruptions and increased costs for recruitment of replacements. To manage this risk, FPC works continuously to ensure that the necessary conditions are in place to retain competencies, while efforts are made not to link knowledge to specific individuals.
Market risk Political risks	FPC has operations in many markets with vastly differing conditions. Changes to laws and regulations regarding such areas as foreign ownership, taxes, government involvement, royalties and customs, for example, coupled with other political and economic risks, such as acts of war or terrorism, could negatively affect the company's
Exchange rates	earnings and financial position. Business intelligence and planning, where possible, mitigate the risks. Purchasing, manufacturing and sales are largely denominated in USD. Net exposure in USD is hedged to 80–90% using forward contracts to offset exchange-rate fluctuations. Fluctuations in other exchange rates have a limited impact on earnings. A 1% change in the exchange rate between the SEK and USD would have an impact of +/- SEK 0.4 M on earnings in 2011 if unhedged.
Raw material prices
	The raw materials in products that could be impacted by price fluctuations are mainly silicon and gold. The percentage of gold in the products is marginal and price fluctuations will only have a limited affect on the price of the end product. Silicon is the largest component in the products. Historically, the price of silicon has not fluctuated to any significant
Economic cycle	degree and supply is favorable. Customers are currently predominantly based in Asia. The economic turbulence in Europe and Northern America has not influenced the operation to any major degree. However, there is no guarantee that this will not occur in the future or in the Asian market.
Operational risks
Production	FPC does not conduct any proprietary production. Manufacturing, sales and delivery of FPC's technology and products depend on fulfillment of contractual requirements with respect to, for example, volume, quality and delivery time. Production and delivery problems among suppliers could have a negative impact on the company through delays or quality problems affecting deliveries to customers. Although production is planned up to six months in advance, binding orders from customers are normally not received that far in advance. Uncertainty in sales forecasts could lead to excessive stock accumulation and have an adverse effect on liquidity. The concentration of production to a few suppliers and the associated possibility of ensuring low costs must be weighed against this risk. Risk-limiting measures are to assume control of parts of the production process, such as investing in proprietary tools and machinery to eliminate bottlenecks.
Environment	FPC does not engage in any proprietary manufacturing. Components are sourced from selected suppliers that satisfy requirements in terms of function, quality, stability and environmental aspects. FPC's products have been tested and satisfy the RoHS directive in terms of limiting hazardous substances in electronic products.
Sales	FPC conducts business activities in a relatively young market, rendering it difficult to predict future trends for the operation. FPC's performance depends on the continued expansion of the biometrics market. Delayed penetration into more applications and markets will affect sales and earnings. FPC is dependent on the Chinese market, where is has an established reseller with a strong position for FPC's technology. The loss of the distributor could seriously impact revenues and profit. Measures for limiting the vulnerability of having a limited number of customers include the continuous development of the business activities, sales and marketing to penetrate more markets and fields of application.
Credit risk
Counterparty risk	The risk of non-payment is limited due to the requirement for advance payment from new customers and via credit

assurance of invoices wherever possible. Investments are also exposed to risk. FPC has limited its permitted investments of liquidity to institutions with the highest credit rating and by limiting the amount of investments with a single counterparty.

Future reporting dates

Interim report January-March 2012 April 26, 2012 Annual Report 2011 published Week 20 (May 14-18) 2012 Annual General Meeting May 31, 2012

Certification

The Board of Directors and the CEO certify that this Year-end Report provides a fair and accurate review of the operations, financial position and earnings of the Parent Company and the Group and that it describes the significant risks and uncertainties facing the Parent Company and the companies included in the Group.

Gothenburg, February 8, 2012 Board of Directors

Mats Svensson Christer Bergman Urban Fagerstedt Chairman of the Board

Anders Hultqvist Sigrun Hjelmquist Johan Carlström

President and CEO

Auditor's report concerning review of year-end report

To the Board of Directors of Fingerprint Cards AB (publ) Corp. Reg. No: 556154-2381

Introduction

We have reviewed the condensed interim financial information (interim report) concerning Fingerprint Cards AB (publ) at December 31, 2011 and the 12-month period ending on that date (year-end report). The Board of Directors and the President are responsible for the preparation and fair presentation of this report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express an opinion on the report based on our review.

Approach and scope of the review

We conducted our review in accordance with the Standard on Review Engagements SÖG 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and a substantially more limited scope than an audit conducted in accordance with International Standards on Auditing (ISA) and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the opinion expressed on the basis of a review does not provide the same level of assurance as an opinion expressed on the basis of an audit.

Opinion

Based on our review, nothing has come to our attention that causes us to believe that the appended year-end report has not, in all material aspects, been compiled in accordance with IAS 34 and the Swedish Annual Accounts Act for the Group and with the Swedish Annual Accounts Act for the Parent Company.

Stockholm, February 8, 2012

KPMG AB Johan Kratz Authorized Public Accountant

Glossary

Algorithm	A systematic procedure for how to conduct a calculation or solve a problem in a given number of steps. In FPC's specific case, the method refers to the comparison of two
Area sensor	fingerprints with each other. A sensor with the size of a fingertip that can scan an entire fingerprint simultaneously. The fingertip is simply drawn against the sensor surface; refer to swipe sensor.
ASIC	(Application Specific Integrated Circuit) An integrated circuit in the form of a silicon chip that is designed to conduct specific functions – in our case the measurement of a fingerprint.
Authentication	Control process for a particular entity; in conjunction with logging on, for example. The word is synonymous with verification.
Biometric system	A pattern recognition system that identifies or verifies a person by studying a physiological character of the person, in our case a fingerprint pattern.
Chip	A piece of silicon in which the integrated circuit is embedded, such as a sensor chip. Normally, a silicon wafer is cut into a number of chips, with each chip being essentially identical.
Dpi	Dots per inch – resolution per spacial unit (in this case inches). The higher the value, the better the resolution and degree of detail.
Enrolment	Compilation of biometric data used to create a template. The process by which information is compiled from an individual and processed and stored as a reference image.
Identification	Comparison of compiled biometric data with all stored templates for the purpose of identifying one of these templates (and thus an individual) from a multitude.
Matching	The process of comparing an image of a fingerprint with a pre-processed template, and assessing whether or not they are similar.
Packaging	The work and components, apart from the silicon chip, required for building a sensor.
Sensor platform	The silicon technology that FPC has created for the development of future sensors, meaning the basic technology.
Swipe sensor	A sensor with a width equal to a fingertip but much narrower throughout the length of the finger. The fingertip is drawn across the sensor surface and part of the fingertip is scanned step-wise; compare with area sensors. The fingerprint is thus scanned in this manner.
Template Verification	An arrangement of unique data that represents a certain fingerprint. The comparison of compiled biometric data with a given template for the purpose of verifying matching of the two. By this means, the authentication of an individual can be made with a high degree of certainty.
Wafer	A thin circular slice of silicon containing a number of integrated circuits, such as sensor chips.
Yield	The percentage of a number of approved units divided by the number of initial units. The term is used primarily in production.
Definitions
Average credit period	Average value of accounts receivable over the period in relation to net sales, multiplied by 360 days.
Average number of shares Average number of shares after dilution	The Parent Company's average weighted number of shares for the fiscal year. See "Average number of shares" plus adjustment for the potential average number of shares and share price as a result of current remuneration and personnel programs.
Earnings per share	Earnings for the period attributable to the Parent Company's shareholders divided by the Parent Company's average number of shares for the fiscal year.
Earnings per share after dilution	See "Earnings per share" plus adjustment for the potential average number of shares and share price as a result of current remuneration and personnel programs. Earnings per share after dilution can never exceed earnings per share.
EBITDA	Earnings Before Interest Taxes Depreciation and Amortization (and impairment).
Equity/assets ratio	Shareholders' equity divided by total assets.
Gross margin	Gross margin as a percentage of net sales.
Inventory turnover rate	Cost of goods sold divided by average inventories.
Net margin	Profit/loss for the period as a percentage of net sales.
Operating margin	Operating profit/loss as a percentage of net sales.
Shareholders' equity per share	Shareholders' equity attributable to the Parent Company's shareholders divided by the number of shares outstanding, before dilution, at the end of the period.
Shareholders' equity/share after dilution Working capital	See "Shareholders' equity per share" plus adjustment for the potential average number of shares and share price as a result of current remuneration and personnel programs. Current assets less current non-interest-bearing provisions and liabilities r.

About Fingerprint Cards

Fingerprint Cards AB (Fingerprint Cards) develops, produces and markets biometric components that – through analysis and matching of an individual's unique fingerprint – verify a person's identity.

The technology consists of biometric sensors, processors, algorithms and modules that can be used separately or combined. The competitive advantages offered by Fingerprint Cards' technology include unique image quality, extreme robustness, low power consumption and complete biometric systems. With these advantages and the ability to achieve extremely low manufacturing costs, the technology can be implemented in volume products, such as smart cards and mobile phones, where extremely rigorous demands are placed on these characteristics. Fingerprint Cards' technology can also be used in IT and Internet products for security and access control, etc.

Vision	FPC aims to be the leading supplier of components and systems for fingerprint verification. "Beyond keys and pin codes" – FPC makes life easy to live through secure identification.
Business concept	FPC develops and sells leading biometric products and solutions to companies that develop security and comfort systems.
Business model	FPC works with three business models – component sales, project sales and licensing. Sales are conducted via distributors, primarily to product developers/systems integrators and OEMs. (Original Equipment Manufacturers).
Strategies
Products	To be a supplier of components and systems for fingerprint verification, as well as developing and marketing components in two product categories – area sensors and swipe sensors.
Patents	To pursue an active patent strategy based on careful monitoring of the market in an effort to evaluate new opportunities for filing patents and identifying possible infringement of FPC's patents.
Production	Produce through close cooperation with selected sub-suppliers. Production-critical elements of manufacturing are to be conducted using tools owned by FPC but operated by the sub-supplier. All manufacturing is to be conducted in accordance with forecasts based on information received from customers and distributors.
Market	When marketing products, FPC intends to focus on product developers/system integrators either via distributors or directly. Sales at the producer level will occur in close cooperation with distributors. FPC will also actively pursue sales efforts.
Value-driving factors	Sales of area sensors are to be broadened above and beyond the volume segment of IT applications for banks to encompass other IT segments. Geographically, the area sensor, in terms of bank applications, will be marketed primarily in India, South Korea, Japan and Brazil, and also in Europe and the US. Swipe sensors are to be marketed to product developers/system integrators of mobile phones and other portable applications, such as Internet tablets, USB keys and smart cards. As a feature of the launch of swipe sensors, the company will participate actively in development projects together with mobile phone manufacturers. Geographically, marketing will occur in China, Korea, Taiwan, Japan, Europe and the US. The potential to use mobile phones in payment applications – with the accompanying security requirements – is a major driving force, as is the possibility to use fingerprint sensors for the next generation of charge cards. Identity theft, impersonation and stricter authentication imposed by public authorities and organizations are also driving the demand for more secure solutions. Increased requirements in terms comfort and security in connection with authentication are creating demand for alternatives to cards, pin codes and passwords. In addition to these factors, there are also cost savings, benefits of scale and the potential to facilitate greater use in, for example, emerging countries and elsewhere.

Condensed consolidated statement of comprehensive income	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
(SEK M)	2011	2010	2011	2010
Net sales	18.6	18.2	68.6	60.9
Cost of goods sold	-8.9	-9.0	-29.9	-30.1
Gross profit	9.7	9.1	38.7	30.8
Sales expenses	-4.1	-1.3	-13.6	-5.9
Administrative expenses	-3.2	-3.3	-11.2	-9.5
Development expenses	-2.3	-3.1	-9.6	-14.4
Other operating income/expenses	0.3	-0.4	-1.6	0.6
Operating profit	0.3	0.9	2.7	1.6
Net financial items	0.4	0.1	0.6	0.4
Tax	-	-	-	-
Profit for the period	0.7	1.0	3.4	2.0
Other comprehensive income	-	-	-
Total comprehensive income for the period	0.7	1.0	3.4	2.0
Profit for the period attributable to:
Parent Company shareholders	0.7	1.0	3.4	2.0
Profit for the period	0.7	1.0	3.4	2.0
Total comprehensive income for the period attributable to:
Parent Company shareholders	0.7	1.0	3.4	2.0
Total comprehensive income for the period	0.7	1.0	3.4	2.0
Earnings per share for the period
Before dilution, SEK	0.02	0.03	0.08	0.05
After dilution, SEK	0.02	0.02	0.08	0.05
Condensed consolidated statement of financial position		Dec 31	Dec 31	Dec 31
Assets		2011	2010	2009
Intangible fixed assets		28.2	22.9	12.3
Tangible fixed assets		4.2	3.7	0.3
Financial fixed assets		0.9	-	-
Total fixed assets		33.3	26.6	12.6
Inventory		4.3	7.9	9.1
Accounts receivable		53.0	17.2	9.7
Other receivables		2.3	1.0	1.7
Prepaid expenses and accrued income		0.8	2.7	0.5
Cash and cash equivalents		23.0	30.8	50.1
Total current assets		83.9	59.7	71.2
Total assets		116.8	86.3	83.7
Shareholders' equity and liabilities

Shareholders' equity 106.3 78.0 74.3 Provisions for pensions and similar obligations 1.2 - - Accounts payable 3.3 4.1 5.9 Other liabilities 0.3 0.3 0.3 Accrued expenses and deferred income 5.7 3.9 3.4 Total shareholders' equity and liabilities 116.8 86.3 83.7

Pledged assets None 15.0 None Contingent liabilities None None None

Condensed consolidated statement of changes in shareholders' equity Jan-Dec Jan-Dec

(SEK M)	2011	2010
Shareholders' equity on the opening date	78,0	74.3
Warrants payments	0,9	1,7
New share issue	24,0	-
Total comprehensive income for the period	3,4	2,0
Shareholders' equity on the closing date	106,3	78.0

Condensed consolidated cash flow statement	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
(SEK M)	2011	2010	2011	2010
Profit before tax for the period	0,7	1.0	3.4	2.0
Adjustments for non-cash items	1.3	1.5	4.9	5.6
Change in inventory	0.5	0.9	3.6	1.1
Change in current receivables	-7.5	-3.4	-35.1	-8.4
Change in current liabilities	1.3	2.0	1.0	-1.2
Cash flow from operating activities	-3.2	2.1	-22.2	-0.8
Cash flow from investing activities	-3.1	-5.1	-11.7	-20.4	-15.3
Cash flow from financing activities	2.0	1.0	26.1	2.0
Change in cash and cash equivalents	-4.3	-2.0	-7.8	-19.3
Cash and cash equivalents on the opening date	27.4	32.8	30.8	50.1
Cash and cash equivalents on the closing date	23.0	30.8	23.0	30.8

Key consolidated data	Jan-Dec	Jan-Dec	Jan-Dec
(SEK M)	2011	2010	2009
Net sales (SEK M)	68,6	60,9	38,5
Net sales growth (%)	13	58	40
Gross margin (%)	56	51	25
Operating margin (%)	4	3	Neg
Profit margin (%)	5	3	Neg
EBITDA (SEK M)	8.2	8.3	-14.7
Return on equity (%)	4	2	Neg
Cash flow from operating activities. incl. changes in working capital (SEK M)	-22.2	-0.8	-11.4
Order backlog (SEK M)	6.1	11.0	36.5
Equity/assets ratio (%)	91	92	89
Investments (SEK M)	-11.7	-20.4	-1.5
Average number of employees	18	17	12
Shareholders' equity per share (SEK)	2.44	1.97	1.87
Shareholders' equity per share after dilution (SEK) (1)	2.44	1.84	1.87
Cash flow from operating activities/share (SEK)	-0,51	-0.02	-0.50
Cash flow from operating activities/share after dilution (SEK) (1)	-0,51	-0.02	-0.50
Number of shares at period end (000s)	43 609	39 670	39 670
Average number of shares (000s)	42 461	39 670	22 159
Average number of shares after dilution (000s)(1)	42 461	42 358	22 159
Market price of FPC Class B share (SEK) at period end	9.30	8.95	3.30

1) The company has three warrant programs:

The first program from 2010 extends until August 31, 2012. The exercise price is SEK 7.48. The program has been taken into account when calculating the number of shares after conversion. On full subscription, the program would result in a maximum of 3,433,000 new Class B shares.

The second program from 2010 extends until May 11, 2013. The exercise price is SEK 15.74. The program has been taken into account when calculating the number of shares after conversion. On full subscription, the program would result in a maximum of 958,000 new Class B shares. The third program from 2011 extends until December 18, 2014. The exercise price is SEK 13.6. The program has not been taken into account when

calculating the number of shares after conversion. On full subscription, the program would result in a maximum of 2,000,000 new Class B shares. Average number of shares after dilution: The average number of shares during the period and the maximum number of shares that could arise from exercise of warrants. If the average share price is lower than the exercise price, there is no discounted share price and thus no dilution, since the discount is what constitutes dilution

www.fingerprints.com

The Group's operating segments		Sensors		Other	Group
	Jan-Sep	Jan-Sep	Jan-Sep	Jan-Sep	Jan-Sep	Jan-Sep
(SEK M)	2011	2010	2011	2010	2011	2010
Net sales	68.6	60.9	-	-	68.6	60.9
Segment earnings	2,7	1.6	-	-	2,7	1.6
Net financial items	-	-	-	-	0,6	0.4
Profit for the period					3,4	2.0

Consolidated net sales and profit/loss for the past eight quarters

(SEK M)	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar
	2011	2011	2011	2011	2010	2010	2010	2010
	6.92	6.83	6.27	6.33	6.77	7.27	7.58	7.2
Net sales	18.6	20.2	16.9	12.8	18.2	17.6	9.7	15.4
Cost of goods sold	-8.9	-8.4	-6.6	-6.0	-9.0	-8.7	-4.6	-7.7
Gross profit	9.7	11.9	10.4	6.8	9.1	8.9	5.1	7.7
Sales expenses	-4.1	-2.8	-3.8	-2.9	-1.3	-1.5	-1.6	-1.5
Administrative expenses	-3.2	2.3	-3.1	-2.5	-3.3	-1.9	-2.1	-1.9
Development expenses	-2.3	-2.5	-2.2	-2.7	-3,1	-2.7	-4.2	-4.4
Other operating income/expenses	0.3	-0.1	-1.3	-0.5	-0.4	1.0	-0.2	0.2
Operating profit	0.3	4.2	0.0	-1.8	0.9	3.8	-3	0.1
Net financial items	0.4	0.2	0.0	0.0	0.1	0.1	0.2	0.1
Tax	-	-	-	-	-	-	-	-
Profit for the period	0.7	4.3	0.1	-1.7	1.0	3.9	-2.8	0.1
Other comprehensive income	-	-	-	-	-	-	-	-
Total comprehensive income for the
period	0.7	4.3	0.1	-1.7	1.0	3.9	-2.8	0.1

Consolidated statement of financial position for the past eight quarters

	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30	Mar 31
Assets	2011	2011	2011	2011	2010	2010	2010	2010
SEK/USD, balance sheet date	6.92	6.86	6.31	6.31	6.73	6.77	7.75	7.2
Intangible fixed assets	28.2	27.1	26.0	24.6	22.9	19.8	16.7	14.2
Tangible fixed assets	4.2	4.4	4.4	4.4	3.7	3.5	1.3	1.3
Total fixed assets	0.9	31.6	30.4	29	26.6	23.3	18	15.5
Inventory	4.3	5.3	8.0	13.1	7.9	8.8	13.7	11.6
Accounts receivable	53.0	46.0	27.7	23.3	17.2	12.9	6.2	9.3
Other receivables	2.3	2.1	2.1	1.7	2.7	3.1	1.4	1.1
Prepaid expenses and accrued income	0.8	0.5	2.0	4.1	1.0	1.4	1.4	0.6
Cash and cash equivalents	23.0	27.4	37.5	14.9	30.8	32.8	43.2	47.0
Total current assets	83.9	81.3	77.3	57.1	59.7	59.1	65.9	69.7
Total assets	116.8	112.8	107.7	86.1	86.3	82.3	83.9	85.2
Shareholders' equity and liabilities
Shareholders' equity	106.3	104.8	100.5	76.4	78,0	76.1	72.5	75.2
Provisions for pensions and similar
obligations	1.2	-	-	-	-	-	-	-
Accounts payable	3.3	2.4	2.7	4.0	4.1	3.9	6.7	6.2
Other liabilities	0.3	0.3	0.4	0.3	0.3	0.7	0.7	0.3
Accrued expenses and deferred income	5.7	5.3	4.1	5.5	3.9	1.6	3.9	3.5
Total shareholders' equity and liabilities	116.8	112.8	107.7	86.1	86.3	82.3	83.9	85.2

Consolidated cash flow statement for the past eight quarters

	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar
(SEK M)	2011	2011	2011	2011	2010	2010	2010	2010
Profit/loss before tax for the period	0.7	4.3	0.1	-1.7	1.0	3.7	-3.0	0.1
Adjustments for non-cash items	1.3	1.2	1.2	1.2	1.5	1.4	1.5	1.6
Change in inventory	1,0	2.7	5.1	-5.2	0.9	4.9	-2.1	-2.5
Change in current receivables	-7.5	-16.8	-2.7	-8.1	-3.4	-8.6	2.3	0.9
Change in current liabilities	1.3	0.7	-2.5	1.5	2.0	-4.9	1.2	0.6
Cash flow from operating activities	-3.2	-7.8	1.2	-12.4	2.1	-3.5	1.0	0.5
Cash flow from investing activities	-3.1	-2.3	-2.6	-3.6	-5.1	-6.8	-4.1	-4.4
Cash flow from financing activities	2.0	-	24.1	0,0	1.0	-	0.2	0.8
Change in cash and cash equivalents	-4.3	-10.1	22.6	-15.9	-2.0	-10.4	-3.9	-3.1
Cash and cash equivalents, opening date	27.4	37.5	14.9	30.8	32.8	43.2	47	50.1
Cash and cash equivalents, closing date	23.0	27.4	37.5	14.9	30.8	32.8	43.1	47.0

Key consolidated data for the past eight quarters

	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar
	2011	2011	2011	2011	2010	2010	2010	2010
Net sales (SEK M)	18.6	20.2	16.9	12.8	18.2	17.6	9.7	15.4
Net sales growth (%)	3	15	74	-17	34	78	28	108
Gross margin (%)	52	59	62	53	50	51	53	50
Operating margin (%)	2	21	0	neg	5	21	neg	1
Profit margin (%)	4	22	0	neg	5	22	neg	1
EBITDA (SEK M)	2,0	5.4	1.3	-0.5	2.7	5.4	-1.6	1.8
Return on equity (%)	1	16	0	neg	5	19	neg	1
Cash flow fr. operating activities(SEK M)	-3.2	-7.8	1.2	-3.5	2.1	-3.5	0.1	0.5
Order backlog (SEK M)	6.1	24.4	14.9	14.3	11,0	8.3	17.4	21.4
Investments (SEK M)	-3,1	-2.3	-2.6	-3,6	-5.1	-6.8	-4.1	-4.4
Equity/assets ratio (%)	91	93	93	89	90	92	86	88
Average number of employees	18	19	19	19	17	17	16	12
Shareholders' equity / share (SEK)	2.44	2.40	2.30	1.93	1.97	1.92	1.83	1.90
Shareh. equity/share aft. dilution(SEK)(1)	2.44	2.40	2.30	1.93	1.97	1.92	1.83	1.90
Cash flow fr. operating act./share (SEK)	-0.05	-0.19	0.03	-0.09	0.05	-0.09	0.00	0.01
Cash flow fr. operating act./share after
dilution (SEK)	-0.05	-0.19	0.03	-0.09	0.05	-0.09	0.00	0.01
Number of shares, period end (000s)	43 609	43 609	43 609	39 670	39 670	39 670	39 670	39 670
Average of shares (000s)	43 609	43 609	42 515	40 019	39 670	39 670	39 670	39 670
Average of shares aft. dilution (000s) (1)	43 609	43 609	42 515	40 019	39 670	39 670	39 670	39 670
Market price of FPC Class B share (SEK)	9.30	6.15	6.00	7.40	8,95	9.40	7.15	7.50

1) The company has three warrant programs:

The first program from 2010 extends until August 31, 2012. The exercise price is SEK 7.48. The program has been taken into account when calculating the number of shares after conversion. On full subscription, the program would result in a maximum of 3,433,000 new Class B shares.

The second program from 2010 extends until May 11, 2013. The exercise price is SEK 15.74. The program has been taken into account when calculating the number of shares after conversion. On full subscription, the program would result in a maximum of 958,000 new Class B shares

The third program from 2011 extends until December 18, 2014. The exercise price is SEK 13.6. The program has not been taken into account when calculating

the number of shares after conversion. On full subscription, the program would result in a maximum of 2,000,000 new Class B shares. Average number of shares after dilution: The average number of shares during the period and the maximum number of shares that could arise from exercise of warrants. If the average share price is lower than the exercise price, there is no discounted share price and thus no dilution, since the discount is what

constitutes dilution.

Rolling 12-month key consolidated data for the past eight quarters

	Jan-Dec	Oct-Sep	Jul-Jun	Apr-Mar	Jan-Dec	Oct-Sep	Jul-Jun	Apr-Mar
	2011	2010/11	2010/11	2010/11	2010	2009/10	2009/10	2009/10
Sales rolling 12 mon. (SEK M)	68.6	68.2	65.6	58.3	60.9	56.3	48.6	46.5
Gross profit rolling 12 mon. (SEK M)	38.7	38.2	35.3	29.9	30.8	24.1	19.1	16.2
Gross margin rolling 12 mon. (%)	56	56	54	51	51	43	39	35
Operating result rolling 12 mon. (SEK M)	2.7	2.5	2.9	-0.1	1.8	-10.8	-18.7	-20.1
Operating margin rolling 12 mon. (%)	4	5	4	0	3	-19	-38	-43
EBITDA rolling 12 mon. (SEK M)	8.2	8.9	8.9	6.0	8.3	1.3	-7.3	-9.3

Condensed income statement, Parent Company	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
(SEK M)	2011	2010	2011	2010
Net sales	18.6	18.2	68.6	60.9
Cost of goods sold	-8.5	-9.0	-29.9	-30.1
Gross profit	9.7	9.1	38,7	30.8
Sales expenses	-4.1	-1.3	-13.6	-5.9
Administrative expenses	-3.2	-3.3	-11.2	-9.5
Development expenses	-2.3	-3.1	-9.6	-14.4
Other operating income/expenses	0.3	-0.4	-1.6	0.6
Operating profit	0.3	0.9	2,7	1.6
Net financial items	0.4	0.1	0.6	0.2
Tax	-	-	-	-
Profit for the period	0.7	0.9	3.4	1.8
Condensed balance sheet. Parent Company		31-Dec	31-Dec	Dec 31
(SEK M)		2011	2010	2009
Assets
Intangible fixed assets		28.2	22.9	12.3
Tangible fixed assets		4.2	3.7	0.3

Tangible fixed assets	4.2	3.7	0.3
Financial fixed assets	3.7	2.0	-
Total fixed assets	36.2	28.6	12.6
Inventory	4.3	7.9	9.1
Accounts receivable	53.0	17.2	9.7
Current receivables	2.2	0.3	1.7
Prepaid expenses accrued income	0.8	3.4	0.5
Cash and cash equivalents	22.3	28.9	50.1
Total current assets	82.7	57.7	71.1
Total assets	118.8	86.4	83.7
Shareholders' equity and liabilities
Restricted shareholders' equity	51.0	49.4	49.4
Unrestricted shareholders' equity	54.8	28.2	24.3
Total shareholders' equity	105.8	77.6	73.7
Provisions for pensions	1.2	-	-
Current liabilities	11.8	8.8	10.0
Total shareholders' equity and liabilities	118.8	86.4	83.7
Pledged assets	None	15.0	None
Contingent liabilities	None	None	None

Accounting policies

This condensed interim report for the Group was prepared in accordance with IAS 34 Interim Financial Reporting, and applying the provisions in the Annual Accounts Act. The interim report for the Parent Company was prepared in accordance with the Annual Accounts Act, Chapter 9, Interim reports. The application of these accounting policies complies with those presented in the Annual Report for the fiscal year ending December 31, 2011 and must be read together with them.

No new or revised IFRS that have become effective in 2011 have had any significant impact on the Group