KIRKLAND, Wash., May 15 /PRNewswire-FirstCall/ -- Saflink(R)
Corporation (OTC:SFLK) (BULLETIN BOARD: SFLK) , a leading provider
of solutions that verify identity, secure access and increase
productivity, today reported its financial results for its first
quarter ending March 31, 2007. Revenue for the first quarter of
2007 was $504,000, compared to $702,000 for the fourth quarter of
2006, and $857,000 for the first quarter of 2006. Saflink reported
a net loss attributable to common stockholders of $3.5 million, or
$0.03 per share, for the first quarter of 2007. This is compared to
a net loss attributable to common stockholders of $24.8 million, or
$0.27 per share, for the fourth quarter of 2006, which included
non-cash impairment charges on goodwill and intangible assets of
$15.5 million and $1.7 million, respectively, and a net loss
attributable to common stockholders of $36.8 million, or $0.42 per
share, for the first quarter of 2006, which included non-cash
charges of $29.7 million related to the impairment of goodwill and
$509,000 for the modification of outstanding warrants. Non-GAAP
operating loss for the first quarter of 2007 was $1.4 million,
which excludes stock-based compensation expense. This loss is
compared to a non-GAAP operating loss of $5.6 million for the first
quarter of 2006, which excludes certain non-cash charges such as
amortization of intangible assets, impairment of goodwill, and
stock-based compensation expense. Saflink believes that
supplementary non-GAAP measures for operating results enhance an
investor's overall understanding of the financial performance of
Saflink by reconciling more closely the actual cash expenses of
Saflink in its operations, as well as excluding expenses that, in
management's view, are unrelated to the core operations of Saflink.
A reconciliation of non-GAAP operating loss and non-GAAP net loss
attributable to common stockholders to reported GAAP operating loss
and net loss attributable to common stockholders is provided below.
"During the first quarter, we addressed several of our corporate
objectives, which included licensing or selling technologies,
bringing in necessary capital and further reducing our monthly burn
rate," said Steven M. Oyer, Saflink's Interim Chief Executive
Officer. "We continue to work toward strengthening our financial
situation in order to implement growth plans for our core
technologies group and our efforts related to the Registered
Traveler program." Saflink plans to announce a conference call in
the coming weeks to provide a general business update and discuss
recent business activities for Saflink and its wholly-owned
subsidiary FLO Corporation. About Saflink Saflink Corporation
offers biometric security, smart card and cryptographic
technologies that help protect intellectual property and control
access to secure facilities. Saflink security technologies are key
components in identity assurance management solutions that allow
administrators and security personnel to positively confirm a
person's identity before access is granted. Saflink cryptographic
technologies help to ensure that sensitive information is accessed
only by the intended recipient(s). Saflink Corporation is also the
founding member of the FLO(TM) (Fast Lane Option) Alliance, which
is a consortium of industry-leading companies that contribute their
respective expertise to develop, market, sell and deploy an
end-to-end solution for the U.S. government's Registered Traveler
Program. For more information, please visit http://www.saflink.com/
or call 800-762-9595. NOTE: "Saflink" is a registered trademark and
"FLO" is a trademark of Saflink Corporation. This release contains
information about management's view of our future expectations,
plans and prospects that constitute forward-looking statements for
purposes of the safe harbor provisions under The Private Securities
Litigation Reform Act of 1995. Actual results may differ materially
from historical results or those indicated by these forward-looking
statements as a result of a variety of factors including, but not
limited to, risks and uncertainties associated with our financial
condition, our ability to sell our products, our ability to compete
with competitors and the growth of the security market. In
addition, our success will depend in part on our ability to keep
pace with a changing marketplace, integrate new technology into our
core software and hardware and introduce new products and product
enhancements that build off of our existing technologies to address
the changing needs of the marketplace. Various technical problems
and resource constraints may impede the development, production,
distribution and marketing of our products and services. Also,
laws, rules, regulations or industry standards may be adopted in
response to these technological changes, which in turn, could
materially and adversely affect how we will do business. We
encourage you to review other factors that may affect our future
results in our Annual Report on Form 10-K, as well as other
documents we file periodically with the Securities and Exchange
Commission. Contact: investor relations, Tony Schor,
+1-847-945-2222, or http://www.investorawareness.com/; or press,
Katie James of Sterling Communications, +1-206-388-5758, or .
SAFLINK CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (In thousands, except per share data) Three months
ended March 31, 2007 2006 Revenue: Product $375 $756 Service 129
101 Total revenue 504 857 Cost of revenue: Product 127 327 Service
53 126 Amortization of intangible assets - 671 Total cost of
revenue 180 1,124 Gross profit (loss) 324 (267) Operating expenses:
Product development 186 2,419 Sales and marketing 418 1,878 General
and administrative 1,242 2,057 Impairment loss on goodwill - 29,700
Total operating expenses 1,846 36,054 Operating loss (1,522)
(36,321) Interest expense (2,026) (39) Other income, net 5 112 Loss
before income taxes (3,543) (36,248) Income tax provision - 13 Net
loss (3,543) (36,261) Modification of outstanding warrants - (509)
Net loss attributable to common stockholders $(3,543) $(36,770)
Basic and diluted loss per common share $(0.03) $(0.42) Weighted
average number of common shares outstanding 112,253 88,095 SAFLINK
CORPORATION Supplemental Non-GAAP Information (Unaudited) (In
thousands, except per share data) Three months ended March 31, 2007
2006 Operating loss $(1,522) $(36,321) Adjustments to reconcile
operating loss in the financial statements to non-GAAP operating
loss: Amortization of intangible assets - cost of sales - 671
Amortization of intangible assets - general and administrative - 25
Impairment loss on goodwill - 29,700 Stock-based compensation 126
302 Non-GAAP operating loss $(1,396) $(5,623) Net loss attributable
to common stockholders $(3,543) $(36,770) Adjustments to reconcile
net loss attributable to common stockholders in the financial
statements to non-GAAP net loss attributable to common
stockholders: Amortization of intangible assets - cost of sales -
671 Amortization of intangible assets - general and administrative
- 25 Impairment loss on goodwill - 29,700 Non-cash interest expense
1,987 - Stock-based compensation 126 302 Modification of
outstanding warrants - 509 Deferred income tax associated with
acquisition - 13 Non-GAAP net loss attributable to common
stockholders $(1,430) $(5,550) Non-GAAP basic and diluted net loss
per share $(0.01) $(0.06) Weighted average number of common shares
outstanding 112,253 88,095 Statement Regarding Non-GAAP
Disclosures: To supplement the financial information that is
presented in accordance U.S. generally accepted accounting
principles (GAAP), we present certain financial measures that
exclude certain non-cash charges, including charges related to
acquisitions such as amortization of intangible assets, impairments
of goodwill and intangible assets, and stock-based compensation
expense which would otherwise be required by GAAP. We believe that
these non-GAAP measures facilitate evaluation by management and
investors of our ongoing operating business and enhance overall
understanding of our financial performance by reconciling more
closely our actual cash expenses in operations as well as excluding
expenses that in management's view are unrelated to our core
operations, the inclusion of which may make it more difficult for
investors to compare our results from period to period. Non-GAAP
financial measures should not be considered in isolation from, as a
substitute for, or superior to, financial information presented in
compliance with GAAP, and non-GAAP financial measures we report may
not be comparable to similarly titled items reported by other
companies. SAFLINK CORPORATION CONDENSED CONSOLIDATED BALANCE
SHEETS (Unaudited) (In thousands) ASSETS March 31, December 31,
2007 2006 Current assets: Cash and cash equivalents $820 $1,407
Accounts receivable, net 157 390 Inventory 121 86 Prepaid expenses
and other current assets 637 601 Total current assets 1,735 2,484
Furniture and equipment, net 357 420 Debt issuance costs 327 550
Total assets $2,419 $3,454 LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities: Accounts payable $ 985 $1,186 Accrued expenses
1,310 1,308 Current portion of convertible debt, net of discount
3,630 4,619 Current portion of notes payable to related party 1,350
1,250 Other current obligation - 213 Deferred revenue 845 229 Total
current liabilities 8,120 8,805 Long-term note payable to related
party 300 - Total liabilities 8,420 8,805 Stockholders' deficit:
Common stock 1,230 975 Common stock subscribed - 163 Additional
paid-in capital 278,222 275,421 Accumulated deficit (285,453)
(281,910) Total stockholders' deficit (6,001) (5,351) Total
liabilities and stockholders' deficit $2,419 $3,454 DATASOURCE:
Saflink Corporation CONTACT: investor relations, Tony Schor,
+1-847-945-2222, or http://www.investorawareness.com/; or press,
Katie James of Sterling Communications, +1-206-388-5758, or Web
site: http://www.saflink.com/
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