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Precise Biometrics — Interim / Quarterly Report 2007
Jul 19, 2007
3189_ir_2007-07-19_fdd7495e-da94-4682-89f7-e7849b87df27.pdf
Interim / Quarterly Report
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Lund, July 19, 2007
Precise Biometrics AB (publ), Corporate Identity No 556545-6596 Interim report for the period January – June 2007
- The group's net sales for the interim period amounted to SEK 11.3 million (28.9) and for the second quarter SEK 5.4 million (7.9).
- The group's income for the interim period amounted to SEK ‐18.1 million (‐18.7) and for the second quarter SEK ‐8.8 million (‐16.9).
- Earnings per share for the interim period amounted to SEK ‐0.18 (‐0.26) and for the second quarter SEK ‐0.09 (‐0.23).
- Liquid assets at the end of the interim period amounted to SEK 53.6 million (23.0).
- Precise Biometrics won the procurement for the Portuguese national identity card. This is the first ID card order in Europe which is based on a Precise Match‐on‐Card solution and a total of 14 million licenses will be rolled out.
- Fyrplus Teknik AB is integrated more clearly into the Precise Biometrics group and changed name to Precise Biometrics Solutions AB. The subsidiary will act on the market under the common group image.
- The company increased its ownership share in the Chinese company Smart Unicorn Solutions from 30 to 38 per cent. The increase was implemented through a non‐cash issue of 4 million shares in Precise Biometrics.
For further information
Thomas Marschall, President and CEO, Precise Biometrics AB Tel. +46 (0)46 31 11 10 or +46 (0) 734 35 11 10 E-mail [email protected]
Precise Biometrics AB (publ.) is an innovative security company that supplies world-leading systems for fingerprint and smart card-based authentication. The company's solutions replace keys, PIN codes and passwords and enhance the integrity of ID cards and passports. With its Precise Match-on-Card™ technology, the company is a market leader within smart ID cards. The product line includes systems for access control to buildings, computers and networks and for integration into ID cards and passports. The Precise Biometrics group has subsidiaries in Sweden, Great Britain, USA and a joint venture agreement in China. The group headquarters are in Lund, Sweden. Precise Biometrics is listed on the small cap list at the Nordic Exchange in Sweden (symbol: PREC). For more information, please visit http://www.precisebiometrics.com/
Comments on the quarterly report by the CEO, Thomas Marschall
The second quarter of the year was characterized by continued intensive efforts to build a profitability‐centered and market efficient organization which is based on strong team work and belief in the future. As a link in the process of becoming profitable the work of making necessary reductions in operating expenses continued during the quarter. Drawing up a future‐ oriented and offensive marketing and sales strategy is a difficult balancing act, while at the same time it is necessary to make reductions to expenses and personnel. The work is crucial if we are to achieve our objective of turning the company to profit in 2009 without the need for new capital.
One of the causes for rejoicing during the quarter was that together with a consortium led by our partner Gemalto, Precise Biometrics won the procurement for national ID cards in Portugal. A pilot phase has been initiated in the Azores and the Portuguese authorities will then start issuing the ID cards in 2008. The contract term is seven years and the order comprises a total of 14 million licenses for Precise Biometrics' core technology for smartcard‐based ID cards. The Precise 250 MC fingerprint reader will form part of the contract.
The Portuguese order is indicative of two factors which are of major significance for continued market progress in the national ID card segment. One is the need for a long‐term approach to sales work, as it is extremely difficult to predict when the various countries will take the definitive step in a final procurement phase. In Portugal preparatory work started just over five years ago and on one or two occasions it was slowed down by political decisions. The other factor is Precise Biometrics' ability to establish closer partnering relations. Previously in 2006, Precise Biometrics won the Qatar procurement for a national ID card together with Gemalto, and a high priority area in the ongoing work of building up Precise Biometrics' marketing and sales organization is to develop and strengthen relations with yet more partners. As a result the company will be implementing a partner program intended to advance Precise Biometrics' position in major projects. This partner program will also include the closer integration of biometry expertise, which parallel with license and hardware sales will form part of Precise Biometrics' total offer to its partners.
As a part of this work, during the second quarter we started on the task of changing the trademark Fyrplus Teknik to Precise Biometrics Solutions. Moreover, we have also embarked upon a process of drawing closer to and setting up more efficient types of cooperation between the consultants at Fyrplus, who over many years have built up unique biometry skills, and Precise Biometrics' development and marketing organization in Lund. The decision to integrate Fyrplus Teknik in Precise Biometrics' organization will result in the company in Karlstad having to face new challenges.
By underlining our biometry skills and the consultancy resources within the group to our partners Precise Biometrics is opening up opportunities to play a more active role in early phases of a number of procurement processes, thus also giving the company a more efficient way of supporting partners in their sales work.
I also view the fact that a definitive business deal now has been completed for the partly‐owned company Smart Unicorn Solutions (SUS) in China as an important market success. Under the new agreement signed Precise Biometrics will increase its holding in the company from 30 to 38 per cent through the non‐cash issue of 4,000,000 shares (PREC), and a cash loan of SEK 7
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million was also raised for the running of the company. Experience from the joint venture project which was initiated during the first quarter of 2006 shows that it can be difficult to predict the complexity of the Chinese market and Chinese business culture. About six months ago, we assessed that there was little likelihood of a final deal being completed, and thus the project was written down considerably.
It goes without saying that it is satisfactory that the Chinese deal has resulted in a future company which is of interest to Precise Biometrics with major sales potential. As China is an expanding market and interest in biometry is great, the preconditions are present for Precise Biometrics' core technology in future being found in such applications as cell phones, admission control systems and solutions for increased IT security. During the time negotiations were going on for the future of SUS they have signed an agreement and embarked upon biometry tests with China's largest energy utility company and one of the largest cell phone operators, among others. These events clearly indicate that the Chinese market is one of major potential.
Sales and net profit
Interim period; January to June 2007
Sales for the interim period amounted to SEK 11.3 million (28.9). The proportion of sold licenses during the previous year was very high and exempted from the license sales which was a part of the China investment where the sales reached SEK 21.1 million. The gross margin amounted to 31 % compared to 57 % the same period the previous year. The reason to this is the considerable lower number of licenses that has been sold during 2007 compared to 2006. The group's net loss for the interim period amounted to SEK ‐18.1 million (‐18.7). Operating expenses for the interim period, excluding costs of goods sold, amounted to SEK 22.3 million (35.0), including depreciation and write‐downs of SEK 1.9 million (3.4) and capitalization of development costs SEK 0.3 million (2.1). Earnings per share (average number of shares) for the interim period amounted to SEK ‐0.18 (‐0.26).
Second quarter; April‐June 2007
Sales for the second quarter amounted to SEK 5.4 million (7.9). The gross margin was 37% compared with 41% during the corresponding period in the previous year. The Group's net loss for the second quarter amounted to SEK ‐8.8 million (‐16.9). Operating expenses, excluding cost of goods sold, amounted to SEK 11.1 million (20.1), including depreciation and write downs of SEK 0.9 million (1.7) and capitalization development costs of SEK 0.3 million (1.7). Earnings per share (average number of shares) for the second quarter amounted to SEK ‐0.09 (‐0.23).
Financing and liquidity
As of June 30, 2007, equity amounted to SEK 87.7 million (93.5) and equity per share to SEK 0.87 (1.28).
Cash flow from current operations amounted to SEK ‐4.0 million (‐15.6). Liquid assets at the end of the interim period amounted to SEK 53.6 million (23.0).
Geographic markets and future prospects
Since the end of last year, Precise Biometrics has had a new geographical marketing and sales organization which is boosting market presence in the five geographical markets of Europe (now including Scandinavia), the Middle East & Africa, North America, Latin America and Asia.
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During the second quarter sales and marketing work continued regarding the systematic qualification of both potential projects and partners and possible distribution channels. The work was based upon two strategies: partly to create the preconditions for increasing sales volumes of hardware products, such as fingerprint readers, in a short term perspective and partly to follow a longer term licensing strategy where importance is attached to closer collaboration with a few selected partners. Our objective is to define a number of partners in each geographical market with whom we will subsequently concentrate our sales resources.
It is of great importance that the new sales organization's employees work proactively on sales and relation‐building activities. Part of the prioritized sales and marketing efforts also includes concentrating on creating conceptual solutions customized to various market needs and supporting regional sales teams through broad‐based marketing campaigns and market‐ customized sales materials.
Precise Biometrics' objective of achieving positive cash flow and drastically improve income remains. In a considerably short term perspective, the company will endeavor to boost its market presence, strengthen its partner relations and enhance the efficiency of its marketing and sales efforts in selected segments and projects.
Europe
In the European market the most important event of the second quarter was the successful procurement in Portugal. Faced with future procurement projects in other countries, it is interesting that the object of the Portuguese authorities was to comply with the requirements of EU's action plan for eGovernment (2010). Important objectives contained in this action plan include enhancing the efficiency of and modernizing administration and making it easier for citizens to communicate with various authorities under secure ID conditions. The fact that Portugal is doing this through a national ID card makes it a reference project of great value to Precise Biometrics when other EU countries are discussing various solutions for the introduction of a smartcard‐based national ID card.
As early as the time of the ID card project in Thailand, Precise Biometrics saw an important aftermarket for add‐on applications which could increase the initial order value. The Portuguese procurement has further confirmed this market assessment, since the Portuguese authorities have clearly indicated that in future the ID card will be used widely, for example for the payment of tax, voting and for social security and healthcare contacts.
Scandinavian Airlines (SAS) continued to implement Precise Biometrics' biometric system at two airports in Denmark, and implementation is now also underway in Norway. The subsidiary Precise Biometrics Solutions AB (former Fyrplus Teknik AB) is playing a central role in the SAS project, and in order to further strengthen the international competitiveness of the group, Fyrplus Teknik has changed name to Precise Biometrics Solutions AB. The pace of development within biometrics is ever faster and
it is becoming increasingly important for the Precise Biometrics group to display a common brand to the international market. In conjunction with the change in name, the company in Karlstad embarked upon a process of closer integration with the parent company in Lund intended to enhance cost effectiveness and improve opportunities for selling the consultancy services offered by Precise Biometrics Solutions.
The Middle East & Africa
In the Middle Eastern & African market, the initial process of building up a partner network has been going smoothly. A number of countries in the Middle East & Africa are at a stage which may well result in future procurements for national ID cards. For this reason, Precise Biometrics must establish strong partnership ties with locally embedded and reputable companies, which may play a key part in these projects. Side by side with this work, the Precise Biometrics brand must also establish itself as a deciding factor in decision taking at various levels in these countries. This work has been facilitated by Portugal now being added to the previous references of Qatar and Thailand. The Middle East & Africa market is a good illustration of the scope of sales activities which must be performed in 2007 in all geographical markets, but which will probably not feed through to sale figures until next year.
Establishing close partner relations with a strong distributor capable of offering a large number of sales channels around the region via his own sales network is an important sales objective for Middle East & Africa. One of the objectives of this work is to establish Precise Biometrics in the Middle East as the leading supplier of fingerprint readers for Match‐on‐Card applications. As a number of countries in the Middle East & Africa where Precise Biometrics has not previously been active have started to show an interest in biometric solutions, yet another objective is to broaden the partner network to also comprise these new markets.
North America
In the North America market we have among other things received minor initial orders from federal authorities. The company sees essential potential for future follow‐ups in this order.
Since 2006 is Precise Biometrics also participating in a HSPD‐12 consortium (Homeland Security Presidential Directive 12), which is being organized by CSC, an internationally active systems integrator. Others participating in the consortium include such major companies as Dell, Gemalto, Novell, ActivIdentity and Honeywell. The purpose is to collaborate on procurement proceedings, above all for PIV programs at government level. The solutions also fit in with other Identity Management projects.
Further more Precise Biometrics is participating in two projects organized by the American NIST (The National Institute of Standards and Technology); MINEX II and a feasibility study. MINEX II is a preliminary study to determine the possibility of a future Match‐on‐Card standard.
Latin America
Several countries have embarked upon discussions and planning for the issuing of national identity cards with biometry. During the quarter, Biometrics participated in a biometry fair with its partner Gemalto.
Asia
Following the completion of a deal during the second quarter relating to Precise Biometrics' partly‐owned company in China, Smart Unicorn Solutions (SUS), a new foundation has been laid for accommodating the increasing interest in biometry in the Chinese market. Parallel to the work of negotiating a deal, SUS continued the work of biometry testing for a number of major customers in the second quarter. The test projects shows that the Chinese market now is mature enough for the much more rapid integration of biometry solutions into a number of different applications. Four specific projects of great potential for Smart Unicorn Solutions include one for the energy company China Southern Power Grid Ltd, with some 130,000 employees, which have
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chosen SUS as sole supplier of biometric security systems to protect such aspects as technical management systems, information systems and buildings. It also includes one project in which SUS together with the Chinese authorities will develop a mobile fingerprint reader for police work in the field and a third project involving biometry tests which have been started with China Mobile and UMPay as part of a new mobile payment services initiative. The forth project is the result of an agreement which has been signed with Beijing Hanwang Technology Co. Ltd, which is one of China's largest companies in the admission control system area.
Parent company
Parent company sales for the interim period amounted to SEK 4.9 million (13.9). Operating loss before tax for the interim period amounted to SEK ‐15.4 million (‐17.8).
Parent company sales for the second quarter amounted to SEK 2.2 million (3.0). Operating loss before tax for the second quarter amounted to SEK ‐7.5 million (‐11.1).
At the end of the interim period 26 persons were employed in the parent company. Liquid assets at the end of the second quarter amounted to SEK 50.1 million (20.3). The parent company had no liabilities to banks at the end of the second quarter. Investments in tangible fixed assets amounted to SEK 0.0 million (0.4).
During the interim period development costs of SEK 0.3 million (1.7) were capitalized, SEK 0.3 million (1.4) during the second quarter.
Organization and staff
The parent company of Precise Biometrics has its head office in Lund, Sweden. The organization also consists of the subsidiaries Precise Biometrics Inc. in Washington DC, USA, Precise Biometrics UK Ltd, and Precise Biometrics Solutions AB with offices in Karlstad. The dormant companies Precise Biometrics Services AB and Loqware Sweden AB are also part of the group.
As at June 30, 2007, the group had 45 (66) employees, 42 in Sweden and 3 in the US. Of these employees, 34 (50) were men and 11 (16) were women.
Investments in tangible fixed assets
During the interim period, the group invested SEK 0.0 million (0.4) in tangible fixed assets.
In the second quarter the group invested SEK 0.0 million (0.2) in tangible fixed assets
Capitalization and depreciation of development work
Development work costs of SEK 0.3 million (2.1) were capitalized during the interim period. Depreciation of capitalized costs for development work amounted to SEK 0.9 million (2.9) during the interim period.
During the second quarter development costs of SEK 0.3 million (1.7) were capitalized. Depreciation of capitalized development costs amounted to SEK 0.4 million (1.5) during the quarter.
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Patents
The group's long‐term patent strategy focuses on rigidly safeguarding the Precise Match‐on‐Card™ core technology. The patents portfolio has been gradually expanded since 2001 and at the end of the second quarter of 2007 included 51 different patents and 35 applications for patents in 21 different product families. Precise Biometrics has twelve different patent families for the Match‐on‐Card technology alone.
The Annual General Meeting
In accordance with the recommendations of the board of directors, the stockholders' meeting resolved to authorize the board of directors to decide upon the new issue of a maximum of 4,000,000 non‐cash shares. The purpose of authorization was to enable the company to make company acquisitions through part or full payment with own stock.
The stockholders' meeting also resolved to adopt the board of directors' recommendation to implement an incentive scheme for all employees of the group through the issue of a maximum of 3,500,000 warrants with the right to subscribe to an equivalent number of shares in the company in the period between January 1 and May 1, 2010. The rate of the new subscription will be SEK 4.03.
Given full subscription and full exercise of the warrants, the capital stock could be increased by SEK 1,400,000, which is equivalent to 3.5% of the company's current capital stock and votes. This would result in a total increase of SEK 14.1 million in the company's equity. The first allocation will be made during August/September.
Lars Grönberg, Christer Fåhraeus, Jan T Jörgensen, Marc Chatel, Lisa Thorsted were re‐elected as members of the board and Eva Maria Matell and Lena Klasén were newly elected. Lars Grönberg was re‐appointed chairman of the board of directors.
The stock
The company's shares have been listed on the O‐list of the Stockholm Stock Exchange since October 3, 2000, which after October 2, 2006 was replaced by the Nordic Stock Exchange where the company is now listed on the Small Cap list.
The total number of registered shares at the end of the quarter was 97,220,600. During the interim period the average turnover per day was SEK 1,971,000 and the share price ranged from SEK 2.53 to 3.89. During the second quarter the average turnover was SEK 1,678,000 per day, and the share price ranged from SEK 2.53 to 3.89.
The five main stockholders as at June 30, 2007
| Name | Percentage of stock capital | No. of shares |
|---|---|---|
| Odin fonder | 5.0 % | 4,892,480 |
| Storebrand fonder | 5.0 % | 4,874,666 |
| Fjärde AP‐fonden | 4.6 % | 4,500,000 |
| Banco fonder | 3.4 % | 3,344,199 |
| Folksam fonder | 2.0 % | 1,900,000 |
| Source: SIS Ägarservice |
Risk factors
Technological development
The market in which the company operates is subject to rapid change. New technology and new players are constantly appearing. The company's technology must therefore to a large extent be accepted by the leading players on the market, both by suppliers and customers. The market must be mature enough to understand and accept the new technology supplied by the company. This can mean that major investment in marketing and sales may be required to achieve the expected sales volumes.
Key Personnel
There are a number of key persons in Precise Biometrics who are important for operations and they possess unique competence. Inom bolaget finns ett antal nyckelpersoner, som är viktiga för verksamheten och som besitter unik kompetens. If one or more of these key persons should leave the company this could, in the short term, have a negative impact on operations. It is also a risk that recruiting will take time and lead to costs for the company.
Partners
Today the company cooperates with several different partners. They include smart card manufacturers, chip manufacturers and suppliers of applications. The company relies on this cooperation in order to be able to offer end customers complete security solutions. There is a risk that one or more of these partners could end their cooperation or fail to achieve the expected results, which would result in a loss of expected future earnings.
Patents and intellectual property rights
It is important to protect one's technology through patents and other intellectual property rights in order to maintain one's technological advantage and open up opportunities for future license earnings. Therefore the company pursues an active patenting policy which involves applying for patents for strategically important inventions in the countries assessed as relevant.
Competitors
The company operates in the biometry market where competition is intense. The competing companies might have substantially larger financial and industrial resources at their disposal than the company, and it cannot be excluded that competition from this type of player can lead to diminished market shares and/or a reduction in profitability for Precise Biometrics.
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Lund, July 19, 2007
Forecast reliability
The company operates in a market which is in an early stage of growth and which is characterized by time‐consuming initial sales levels, which implies considerable problems with accurate forecasts. Earlier or later submissions of orders can have a significant effect on annual sales and income.
Cash flow
The company endeavors to minimize the time capital is tied up, for example in stocks and accounts receivable. To reduce the risks of tying up capital the company works actively to improve the internal process for forecasting and production planning. The company also endeavors to ensure that the long ID card projects are not an excessive burden in terms of the cash flow.
For a full report on identified risks please read the 2006 annual report.
Future report dates
Interim report Q3 October 24, 2007 Year‐end report February 8, 2008
Accounting principles
The present interim report has been prepared in accordance with IAS 34, Interim reporting and the Swedish Company Accounts Act. For information on applied accounting policies please read the 2006 annual report.
The report has not been reviewed by the company's auditors.
Lund, July 18, 2007
The Board of Directors and the President certify that the interim report gives a true and fair overview of the parent companyʹs and groupʹs operations, their financial position and results of operations, and describes significant risks and uncertainties facing the parent company and other companies in the group.
The board of directors
Lars Grönberg, chairman
Christer Fåhraeus Marc Chatel Lisa Thorsted
Jan T Jörgensen Lena Klasén Eva Maria Matell
Thomas Marschall, President and CEO
Lund, July 19, 2007
Income statement, Group
| (Figures in thousands SEK) | Q2 | Q2 | Q1-Q2 | Q1-Q2 | Full year |
|---|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | 2006 | |
| Net sales | 5,374 | 7,927 | 11,333 | 28,895 | 47,733 |
| Cost of goods sold | -3,407 | -4,719 | -7,797 | -12,474 | -28,814 |
| Gross profit/loss | 1,967 | 3,208 | 3,536 | 16,421 | 18,919 |
| Selling expenses | -6,233 | -11,343 | -12,167 | -21,511 | -55,795 |
| Administrative expenses | -3,223 | -4,152 | -5,777 | -7,344 | -14,981 |
| R&D costs | -3,979 | -3,138 | -7,742 | -6,786 | -18,304 |
| Other operating income and changes in value | 2,643 | -1,541 | 3,648 | -1,687 | -2,045 |
| Result from participations in associated companies | -285 | 68 | -285 | 2,341 | -18,266 |
| -11,077 | -20,106 | -22,323 | -34,987 | -109,391 | |
| Operating profit/loss | -9,110 | -16,898 | -18,787 | -18,566 | -90,472 |
| Financial costs | 285 | - | 693 | -151 | -326 |
| Profit/loss after financial items | -8,825 | -16,898 | -18,094 | -18,717 | -90,798 |
| Tax | 1 | 5 | - | 2 | -77 |
| Profit/loss for the period | -8,824 | -16,893 | -18,094 | -18,715 | -90,875 |
| Results per share, SEK | -0.09 | -0.23 | -0.18 | -0.26 | -1.22 |
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Balance Sheet, Group
| (Figures in thousands SEK) | 6/30/2007 | 6/30/2006 | 12/31/2006 |
|---|---|---|---|
| Assets | |||
| Intangible fixed assets | 12,935 | 24,837 | 14,018 |
| Tangible fixed assets | 1,919 | 2,231 | 2,424 |
| Financial fixed assets | 151 | 151 | 151 |
| Participations in associated companies | 23,559 | 34,101 | 13,124 |
| Receivables from associated companies | 6,879 | - | - |
| Inventories | 4,608 | 6,809 | 4,034 |
| Accounts receivable - trade | 6,752 | 18,612 | 13,537 |
| Other current receivables | 3,240 | 5,504 | 3,089 |
| Cash and bank balances | 53,617 | 23,021 | 76,302 |
| Total assets | 113,660 | 115,266 | 126,679 |
| Equity and liabilities | |||
| Equity | 87,674 | 93,545 | 95,016 |
| Current liabilities | 25,986 | 21,721 | 31,663 |
| Total equity and liabilities | 113,660 | 115,266 | 126,679 |
| Pledged assets | 9,115 | 9,115 | 9,115 |
| Contingent liabilities | - | - | - |
Cash Flow Statement, Group
| (Figures in thousands SEK) | Q2 | Q2 | Q1-Q2 | Q1-Q2 | Full year |
|---|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | 2006 | |
| Cash flow from operating activities | |||||
| before changes in working capital | -7,594 | -14,344 | -16,197 | -16,630 | -54,097 |
| Cash flow from changes in working capital | 3,555 | -1,266 | 951 | -551 | 20,006 |
| Cash flow from operating activities | -4,039 | -15,610 | -15,246 | -17,181 | -34,091 |
| Cash flow from investing activities | -7,171 | -3,580 | -7,215 | -19,028 | -22,484 |
| Cash flow from financing activities | - | 29 | -224 | - | 73,647 |
| Cash flow for the period | -11,210 | -19,161 | -22,685 | -36,209 | 17,072 |
| Liquid funds at the beginning of the period | 64,827 | 42,182 | 76,302 | 59,230 | 59,230 |
| Liquid funds at the end of the period | 53,617 | 23,021 | 53,617 | 23,021 | 76,302 |
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Lund, July 19, 2007
Key Figures, Group
| 6/30/2007 | 6/30/2006 | 12/31/2006 | 12/31/2005 | |
|---|---|---|---|---|
| Working capital (thousands SEK) | 42,231 | 32,225 | 65,299 | 67,633 |
| Liquid ratio | 245% | 217% | 293% | 377% |
| Equity/assets ratio | 77% | 81% | 75% | 83% |
| Return on average equity | - | - | neg | neg |
| Capital employed (thousands SEK) | 87,674 | 93,545 | 98,040 | 104,404 |
| Return on capital employed | - | - | neg | neg |
| Profit/loss per share (SEK) | -0.18 | -0.26 | -1.22 | -0.63 |
| EBITDA (thousands SEK) | -16,928 | -15,191 | -71,545 | -27,062 |
| Equity per share (SEK) | 0.87 | 1.28 | 0.98 | 1.45 |
| Number of shares | 101 220 600*) | 72,915,450 | 97,220,600 | 71,790,450 |
| Number of employees at the end of the period | 45 | 66 | 49 | 69 |
| Average number of employees during the period | 49 | 68 | 66 | 65 |
Definitions - Key Figures
Working capital: Current assets less current liabilities.
Liquid ratio: Current assets less inventories divided by current liabilities.
Equity/assets ratio: Equity as of the balance sheet date divided by total assets as of the balance sheet date.
Return on equity: Profit/loss for the period divided by average equity.
Capital employed: Balance sheet total minus non-interest-bearing liabilities and provisions.
The average capital employed has been calculated as initial plus outgoing capital employed divided by two
Return on capital employed: Profit/loss after financial items plus financial expenses divided by the average capital employed.
Profi/loss per share: Profit/loss after tax divided by the average number of shares. The options are not included in the calculation
since the subscription price is higher than the market rate at the 30th of June 2007.
EBITDA: Profit/loss before net financial items, depreciations, write-downs and tax.
Equity per share: Equity at the end of the period divided by the number of shares at the end of the period.
*) Including ongoing non-cash issue of 4,000,000 shares (PREC).
Changes in Equity, Group
| (Figures in thousands SEK) | Q1-Q2 | Q1-Q2 | Full year |
|---|---|---|---|
| 2007 | 2006 | 2006 | |
| Initial Equity | 95,016 | 104,404 | 104,404 |
| New share issue | 10,496 | 7,819 | 73,647 |
| Translation difference | 256 | 37 | 7,840 |
| Profit/loss for the period | -18,094 | -18,715 | -90,875 |
| Equity at the end of the period | 87,674 | 93,545 | 95,016 |
Lund, July 19, 2007
Turnover and profitability by Regions Q2 20071)
| (Figures in thousands SEK) | North America | Europe | Middle East & Africa |
|||
|---|---|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |
| Net sales | 1,093 | 2,386 | 3,733 | 5,397 | 255 | - |
| Expenses 2) | -1,545 | -3,411 | -4,832 | -7,914 | -528 | - |
| Operating profit/loss | -452 | -1,025 | -1,099 | -2,517 | -273 | - |
| Asia | Latin America | Other | |||||
|---|---|---|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | ||
| Net sales | 214 | 1,753 | 79 | - | - | -1,609 | |
| Expenses2) | -1,093 | -2,469 | -114 | - | 128 | 1,176 | |
| Operating profit/loss | -879 | -716 | -35 | - | 128 | -433 |
Turnover and profitability by Regions Q1-Q2 20071)
| (Figures in thousands SEK) | North America | Europe | Middle East & Africa |
|||
|---|---|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |
| Net sales | 2,158 | 3,336 | 8,258 | 13,975 | 424 | - |
| Expenses 2) | -3,195 | -6,318 | -9,496 | -17,723 | -1,065 | - |
| Operating profit/loss | -1,037 | -2,982 | -1,238 | -3,748 | -641 | - |
| Asia | Latin America | Other | ||||
| 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |
| Net sales | 415 | 14,013 | 79 | - | - | -2,429 |
| Expenses2) | -2,378 | -4,791 | -119 | - | -363 | 1,319 |
| Operating profit/loss | -1,963 | 9,222 | -40 | - | -363 | -1,110 |
1) Since January 2007 the Group has a regional sales organization with geographic markets. The marketing in the respective geographic markets takes place through the new business areas.
2) The above expenses in Regions include Cost of goods sold as well as operating expenses for each region.
Lund, July 19, 2007
Income statement, Parent company
| (Figures in thousands SEK) | Q1-Q2 | Q1-Q2 | Full year |
|---|---|---|---|
| 2007 | 2006 | 2006 | |
| Net sales | 4,928 | 13,860 | 25,992 |
| Cost of goods sold | -3,328 | -7,329 | -18,523 |
| Gross profit/loss | 1,600 | 6,531 | 7,469 |
| Selling expenses | -9,206 | -11,855 | -31,764 |
| Administrative expenses | -4,725 | -5,484 | -13,054 |
| R&D costs | -7,742 | -6,786 | -18,091 |
| Other operating income and changes in value | 3,689 | 6,511 | 4,784 |
| Result from participations in group companies | - | -7,145 | -9,176 |
| Result from participations in associated companies | - | - | -24,037 |
| -17,984 | -24,759 | -91,338 | |
| Operating profit/loss | -16,384 | -18,228 | -83,869 |
| Financial costs | 953 | 458 | 740 |
| Profit/loss after financial items | -15,431 | -17,770 | -83,129 |
| Tax | - | - | - |
| Profit/loss for the period | -15,431 | -17,770 | -83,129 |
| Results per share, SEK | -0.16 | -0.24 | -1.11 |
Balance Sheet, Parent company
| (Figures in thousands SEK) | 6/30/2007 | 6/30/2006 | 12/31/2006 |
|---|---|---|---|
| Assets | |||
| Intangible fixed assets | 7,325 | 12,722 | 8,408 |
| Tangible fixed assets | 1,248 | 1,356 | 1,617 |
| Participations in group companies | 7,219 | 9,249 | 7,219 |
| Participations in associated companies | 21,320 | 35,008 | 10,600 |
| Receivables from associated companies | 6,879 | - | - |
| Inventories | 4,544 | 6,565 | 3,797 |
| Accounts receivable - trade | 3,579 | 8,471 | 7,380 |
| Other current receivables | 46,916 | 44,955 | 42,380 |
| Cash and bank balances | 50,131 | 20,296 | 73,236 |
| Total assets | 149,161 | 138,622 | 154,637 |
| Equity and liabilities | |||
| Equity | 130,124 | 127,389 | 135,061 |
| Other provisions | 302 | 352 | 464 |
| Current liabilities | 18,735 | 10,881 | 19,112 |
| Total equity and liabilities | 149,161 | 138,622 | 154,637 |
| Pledged assets | 9,115 | 9,115 | 9,115 |
| Contingent liabilities | - | - | - |
Page 16 of 16
Lund, July 19, 2007
In view of today's interim report we have the pleasure to invite investors and journalists to the following informative meetings during the day
Telephone conference in Swedish
- The conference starts at 11:00 (CET)
- To participate, please call +46 (0) 8 672 81 50
- Password: Precise Biometrics
An operator will note your name and connect you to the conference. She/he will also provide you with information about what to do if you have any questions.
Telephone conference in English
- The conference starts at 12:00 (CET)
- To participate, please call +46 (0) 8 672 81 51
- Password: Precise Biometrics
An operator will note your name and connect you to the conference. She/he will also provide you with information about what to do if you have any questions.
Participating on behalf of Precise Biometrics
- Thomas Marschall, President and CEO
- Niklas Andersson, CFO
- Ann‐Sofi Höijenstam, Director IR & Communications
Please visit www.precisebiometrics.com/presentations where a presentation can be downloaded.
For further information
Thomas Marschall, President and CEO, Precise Biometrics Tel. +46 (0)46 31 11 10 or +46 (0) 734 35 11 10 E-mail [email protected]
Niklas Andersson, CFO, Precise Biometrics AB Tel. +46(0)46 31 11 02 or +46(0) 730 35 67 02 E-mail [email protected]
Ann-Sofi Höijenstam, Director IR & Communications, Precise Biometrics AB Tel. +46 (0)46 31 11 47 or +46 (0) 734 35 11 47 E-mail [email protected]
Precise Biometrics AB (Headquarters) Box 798 SE-220 07 Lund Tel.: +46 (0) 46 31 11 00 Fax: +46 (0) 46 31 11 01 E-mail: [email protected]
Precise Biometrics AB (publ.) is an innovative security company that supplies world-leading systems for fingerprint and smart card-based authentication. The company's solutions replace keys, PIN codes and passwords and enhance the integrity of ID cards and passports. With its Precise Match-on-Card™ technology, the company is a market leader within smart ID cards. The product line includes systems for access control to buildings, computers and networks and for integration into ID cards and passports. The Precise Biometrics group has subsidiaries in Sweden, Great Britain, USA and a joint venture agreement in China. The group headquarters are in Lund, Sweden. Precise Biometrics is listed on the small cap list at the Nordic Exchange in Sweden (symbol: PREC). For more information, please visit http://www.precisebiometrics.com/