KIRKLAND, Wash., Aug. 14 /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 second
quarter ended June 30, 2007. Revenue for the second quarter of 2007
was $178,000, compared to $504,000 for the first quarter of 2007
and $944,000 for the second quarter of 2006. Saflink reported a net
loss attributable to common stockholders of $3.4 million, or $0.02
per share, in the second quarter of 2007, which included non-cash
interest expense of $1.3 million. This is compared to a net loss
attributable to common stockholders of $3.5 million, or $0.03 per
share, in the first quarter of 2007, which included non-cash
interest expense of $2.0 million, and a net loss attributable to
common stockholders of $37.7 million, or $0.43 per share, in the
second quarter of 2006, which included a non-cash impairment loss
on goodwill of $30.7 million. Non-GAAP operating loss for the
second quarter of 2007 was $1.8 million, which excludes stock-based
compensation expense. This is compared to a non- GAAP operating
loss of $5.7 million for the second quarter of 2006, which excluded
certain non-cash charges such as amortization of intangible assets,
impairment losses on 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. Steve Oyer, Chief Executive Officer
of Saflink Corporation, stated, "We took several important steps
during the second quarter on our path to restructure and
recapitalize Saflink and monetize our assets and intellectual
property. As we announced last month, we concluded the sale of our
Registered Traveler business to our subsidiary, FLO Corporation,
for $6.3 million. The proceeds from this transaction provided us
the ability to begin paying our convertible debenture obligations
in cash rather than shares of common stock and, consequently, limit
the dilution of our stockholders. And with a continuing minority
ownership stake in FLO, we continue to have a vested interest in
the exciting Registered Traveler market." Oyer continued, "We feel
that our turnaround efforts are almost complete and are excited to
discuss the next steps and our plans to increase shareholder value
in our upcoming conference call." Saflink is planning to have a
conference call on Tuesday, August 28, 2007, to discuss recent
developments and its future plans. A follow-up press release will
be issued to announce the final timing and details for the call.
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 a minority stockholder in FLO Corporation, a
subsidiary focused on 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 of
Saflink Corporation and "FLO" is a trademark of FLO Corporation.
This release contains information about our 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. For example, we may not participate in or
benefit from the Registered Traveler market because we no longer
hold a majority a majority of the equity securities of FLO
Corporation. Some other factors include, but are 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, and those
included in our annual report on Form 10-K, as well as other
documents we periodically file with the Securities and Exchange
Commission. INVESTOR RELATIONS CONTACT: Tony Schor (847) 945-2222
http://www.investorawareness.com/ SAFLINK PRESS CONTACT: Sterling
Communications Katie James (206) 388-5758 SAFLINK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In
thousands, except per share data) Three months ended Six months
ended June 30, June 30, ----------------------
---------------------- 2007 2006 2007 2006 --------- ---------
--------- --------- Revenue: Product $85 $786 $460 $1,542 Service
93 158 222 259 --------- --------- --------- --------- Total
revenue 178 944 682 1,801 Cost of revenue: Product 78 366 205 693
Service 56 130 109 256 Amortization of intangible assets -- 671 --
1,342 --------- --------- --------- --------- Total cost of revenue
134 1,167 314 2,291 --------- --------- --------- --------- Gross
profit (loss) 44 (223) 368 (490) Operating expenses: Product
development 310 2,423 496 4,842 Sales and marketing 374 2,053 792
3,931 General and administrative 1,329 1,956 2,571 4,013 Impairment
loss on goodwill -- 30,700 -- 60,400 --------- --------- ---------
--------- Total operating expenses 2,013 37,132 3,859 73,186
--------- --------- --------- --------- Operating loss (1,969)
(37,355) (3,491) (73,676) Interest expense (1,394) (323) (3,420)
(362) Other income, net 2 59 7 171 --------- --------- ---------
--------- Loss before income taxes (3,361) (37,619) (6,904)
(73,867) Income tax provision -- 13 -- 26 --------- ---------
--------- --------- Net loss (3,361) (37,632) (6,904) (73,893)
Modification of outstanding warrants -- (76) -- (585) ---------
--------- --------- --------- Net loss attributable to common
stockholders $(3,361) $(37,708) $(6,904) $(74,478) =========
========= ========= ========= Basic and diluted loss per common
share attributable to common stockholders $(0.02) $(0.43) $(0.06)
$(0.85) Weighted average number of common shares outstanding
138,018 88,106 125,207 88,101 SAFLINK CORPORATION Supplemental
Non-GAAP Information (Unaudited) (In thousands, except per share
data) Three months ended Six months ended June 30, June 30,
---------------------- ---------------------- 2007 2006 2007 2006
--------- --------- --------- --------- Operating loss $(1,969)
$(37,355) $(3,491) $(73,676) Adjustments to reconcile operating
loss in the financial statements to non-GAAP operating loss:
Amortization of intangible assets - cost of sales -- 671 -- 1,342
Amortization of intangible assets - general and administrative --
25 -- 50 Impairment loss on goodwill -- 30,700 -- 60,400
Stock-based compensation 120 216 246 518 --------- ---------
--------- --------- Non-GAAP operating loss $(1,849) $(5,743)
$(3,245) $(11,366) ========= ========= ========= ========= Net loss
attributable to common shareholders $(3,361) $(37,708) $(6,904)
$(74,478) Adjustments to reconcile net loss attributable to common
shareholders in the financial statements to non-GAAP net loss
attributable to common stockholders: Amortization of intangible
assets - cost of sales -- 671 -- 1,342 Amortization of intangibles
assets - general and administrative -- 25 -- 50 Impairment loss on
goodwill -- 30,700 -- 60,400 Stock-based compensation 120 216 246
518 Non-cash interest expense 1,300 228 3,287 228 Modification of
outstanding warrants -- 76 -- 585 Deferred income tax associated
with acquisition -- 13 -- 26 --------- --------- ---------
--------- Non-GAAP net income attributable to common shareholders
$(1,941) $(5,779) $(3,371) $(11,329) ========= ========= =========
========= Non-GAAP basic and diluted net loss per share $(0.01)
$(0.07) $(0.03) $(0.13) Weighted average number of common shares
outstanding 138,018 88,106 125,207 88,101 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) June 30, December 31, ASSETS 2007
2006 ------------- ------------- Current assets: Cash and cash
equivalents $760 $1,407 Accounts receivable, net 7 390 Inventory,
net 111 86 Prepaid expenses and other current assets 611 601
------------- ------------- Total current assets 1,489 2,484
Furniture and equipment, net 181 420 Debt issuance costs, net 345
550 ------------- ------------- Total assets $2,015 $3,454
============= ============= LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities: Accounts payable $1,014 $1,186 Accrued
expenses 1,413 1,308 Convertible debt, net of discount 4,796 4,619
Current portion of notes payable to related party 1,450 1,250 Other
current obligation -- 213 Deferred revenue 708 229 -------------
------------- Total current liabilities 9,381 8,805 Long-term note
payable to related party 200 -- ------------- ------------- Total
liabilities 9,581 8,805 Stockholders' deficit: Common stock 1,502
975 Common stock subscribed -- 163 Additional paid-in capital
279,746 275,421 Accumulated deficit (288,814) (281,910)
------------- ------------- Total stockholders' deficit (7,566)
(5,351) ------------- ------------- Total liabilities and
stockholders' deficit $2,015 $3,454 ============= =============
DATASOURCE: Saflink Corporation CONTACT: Investor Relations, Tony
Schor, +1-847-945-2222, or Katie James of Sterling Communications,
+1-206-388-5758, , both for Saflink Corporation Web site:
http://www.saflink.com/ http://www.investorawareness.com/
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