UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549


FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report: January 25, 2007
  (Date of earliest event reported)
 
LaserCard Corporation
(Exact Name of Registrant as Specified in its Charter)

Delaware
 
0-06377
 
77-0176309
(State or Other Jurisdiction
of Incorporation)
 
(Commission File Number )
 
(I.R.S. Employer
Identification Number )

1875 N. Shoreline Boulevard, Mountain View, California 94043
(Addresses of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (650) 969-4428

N/A
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
 
 
o
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




TABLE OF CONTENTS
 
Item 2.02 Results of Operations and Financial Condition

Item 9.01 Financial Statements and Exhibits

Signatures

Exhibit Index
 
 
 

 
 
Table of Contents
 
Item 2.02. Results of Operations and Financial Conditions.

On January 25, 2007, Registrant announced via news release its results for its third quarter of fiscal year 2007, ended December 31, 2006. The full text of the news release issued in connection with that announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K.

The information contained in this Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

      Exhibit 99.1 Registrant’s News Release dated January 25, 2007, is furnished pursuant to Item 2.02 of Form 8-K.
 
 
 

 

 
SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned, hereunto duly authorized on the 25 th day of January, 2007.

LaserCard Corporation
(Registrant)

By: /s/ STEVEN G. LARSON                       
      Steven G. Larson
      Vice President, Finance and Chief Financial Officer
 
 
 

 
 
TABLE OF CONTENTS

EXHIBIT INDEX


Exhibit
Number     Description

99.1                       Registrant’s News Release dated January 25, 2007, is furnished pursuant to Item 2.02 of Form 8-K


 
Exhibit 99.1

LaserCard Corporation Reports Financial Results for FY07 Third Quarter


Mountain View, Calif. - Jan. 25, 2007   - LaserCard Corporation (NASDAQ:LCRD), a   leading supplier of ID credentials used in biometric identification, today announced the financial results for its fiscal 2007 third quarter ended December 31, 2006.

Revenues for the third quarter of fiscal 2007 were $6.2 million, compared with $6.3 million in the prior quarter and $10.1 million in the same quarter a year ago. The net loss for the third quarter of fiscal 2007 was $3.0 million, or ($0.25) per diluted share, compared with a net loss of $2.7 million or ($0.23) per diluted share in the prior quarter, and net earnings of $1.2 million or $0.10 per diluted share in the same quarter a year ago.

LaserCard ® optical memory card revenues for the quarter were $3.1 million compared with $3.3 million in the second quarter of fiscal 2007 and $7.7 million in the third quarter last year. Revenues from specialty cards and printers were $2.9 million for the third quarter of fiscal 2007 compared with $2.9 million in the prior quarter and $2.2 million in the same quarter a year ago.

LaserCard Corporation’s cash, cash equivalents, and short-term investments were $18.3 million at December 31, 2006 compared with $21.6 million at September 30, 2006.

“The decrease in quarterly revenue from a year ago and the associated loss is largely due to a delay in implementation of the Italian government’s national ID card program (Carta d’Identità Elettronica) and the resulting fall-off in orders and shipments,” said Richard Haddock, CEO of LaserCard. “We recorded no revenue for this program in the third quarter of this fiscal year versus $3.3 million for this program in the third quarter of last year. For the first nine months of this fiscal year, we recorded revenue on this program of $0.4 million versus $4.5 million for the same period last fiscal year. We expect that the work done by a special governmental commission over the past six months, including determining the price an Italian citizen will pay when issued a card, will lead to resumption of the program during calendar 2007. We continue to anticipate that the Italian government will become our largest customer as this program grows.

“We also expect to see progress on each of our other major programs in the coming months,” said Haddock. “Activity has been increasing in the national ID card program of our Middle Eastern country customer. We have delivered on orders totaling $4.2 million this fiscal year although all corresponding revenue has been deferred. We anticipate being able to begin to record revenue for these orders in our fourth quarter ending March 31, 2007.

“Regarding our U.S. government business, recent actions lead us to believe that the follow-on government contract and our resulting subcontract will be issued during February 2007 for U.S. government Green Cards and Laser Visas.

“We expect to see a rebound in our core programs during the coming months and a return to profitability next fiscal year. Our fourth quarter could be bolstered with initial shipments of orders placed under the follow-on U.S. government subcontract and the beginning of revenue recognition for our past year’s efforts in the Middle East. It is our belief that in the fourth quarter the remaining issues in Italy should be resolved clearing the path for the Company to receive additional orders for this cornerstone program with shipments beginning in either our March or June 2007 quarter,” said Haddock.
 

 
“We appreciate the hard work by our staff in the successful conversion to our new ERP management system during the third quarter, which enhances our infrastructure to support our future growth opportunities.

“Significantly, we have decided to engage a corporate strategy consulting firm to assist the Company in leveraging the success we anticipate during fiscal 2008 in order to maximize our future growth potential. As part of this effort, we will explore courses of action to identify significant new growth opportunities. In addition to seeking expansion in our optical card-based secure government ID business, we will evaluate options to develop commercial opportunities, add complementary products and enter adjacent markets," said Haddock.


Earnings Results Conference Call
LaserCard will hold a conference call to discuss the company's fiscal 2007 third quarter results today, January 25, 2007, at approximately 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time. For access to the conference call, please call 517-308-9001 by 1:50 p.m. Pacific Time. A taped replay of the call will be available for one week. To access the replay, please call 203-369-3813. You will need to reference the passcode “LaserCard” and the conference leader “Richard Haddock.” To listen to the call via the Internet, please log on to: www.lasercard.com or www.vcall.com. The Internet Webcast will be archived for one year.

About LaserCard Corporation
LaserCard Corporation, a leader in secure ID solutions, manufactures and markets LaserCard® optical memory cards with Optical IDLock™, chip-ready Optical/Smart™ cards and other advanced-technology secure identification cards. The Company has sold over 35 million secure ID cards to meet the demanding requirements for border security, immigration and national identification in countries around the world, including the United States, Canada, and Italy. In addition, the Company manufactures optical card read/write drives and develops optical card system software, card-related ID subsystems and peripherals. The Company operates a wholly owned German subsidiary, Challenge Card Design Plastikkarten GmbH, which manufactures advanced-technology cards and also markets cards, system solutions, and card personalization printers under the Cards & More brand.
 
Forward-Looking Statements: All statements contained in this press release that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are not historical facts or guarantees of future performance or events. Rather, they are based on current expectations, estimates, beliefs, assumptions, and goals and objectives and are subject to uncertainties that are difficult to predict. As a result, our actual results may differ materially from the statements made. Often such statements can be identified by their use of words such as may, will, intends, plans, believes, anticipates, visualizes, expects, and estimates. Examples of forward-looking statements in this release include the expectations that the U.S. government will enter into a contract with its prime contractor which will in turn subcontract with the Company during February, 2007; that the Italian national citizen ID card program will resume in calendar 2007, with initial shipments occurring in the first six months of calendar 2007 and that Italy will become our largest customer; that we will begin to record revenue from our Middle Eastern customer in the fiscal 2007 fourth quarter; that we will see a rebound in our core programs and become profitable in fiscal 2008; and that we will engage a corporate strategy consulting firm to identify significant new growth opportunities   to develop commercial opportunities, add complementary products and enter adjacent markets. 
 

 
These forward-looking statements are based upon our assumptions about and assessment of the future, which may or may not prove true, and involve a number of risks and uncertainties including, but not limited to whether the U.S. government prior to year end commits to continue these programs, decides to have a long-term contract rather than operate on purchase orders, and chooses to retain the Company’s optical card technology and whether the prime contractor selects the Company as a subcontractor should it be awarded the U.S. government contract; the extent to which the Italian national citizen card program is fully implemented as we envision with the Company as the card vendor; whether the Middle Eastern country activates enough card issuance sites and satisfies other conditions for revenue recognition or restructures its contract so that such conditions are met; whether as a result of the foregoing we receive during fiscal 2008 significant new card orders under our Italian, U.S., and Middle Eastern country programs; whether we will be able to timely make and deliver quality cards when ordered with high yields in order to obtain solid gross margins; whether we are able to limit our operating expenses; whether there are significant new growth opportunities in our core and adjacent markets, whether we engage a strategic planning consulting firm, and, if so, whether such firm is able to identify such opportunities as well as the risk factors detailed in the Company's Form 8-K, 10-K, and 10-Q filings with the Securities and Exchange Commission. Due to these and other risks, future actual results could differ materially from the Company’s expectations. These forward-looking statements speak only as to the date of this release, and, except as required by law, the Company undertakes no obligation to publicly release updates or revisions to these statements whether as a result of new information, future events, or otherwise.
 


LASERCARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
 

   
Three Months Ended
 
Nine Months Ended
 
   
December 31
 
December 31
 
   
2006
 
2005
 
2006
 
2005
 
                   
Revenues
 
$
6,184
 
$
10,077
 
$
23,032
 
$
25,770
 
Cost of product sales (includes $90 and $257 stock-based
                         
compensation in the three and nine month periods
                         
ended December 31, 2006)
   
5,397
   
5,890
   
17,252
   
17,250
 
Gross profit
   
787
   
4,187
   
5,780
   
8,520
 
                           
Operating expenses:
                         
Selling, general, and administrative expenses (includes
                         
$334 and $805 stock-based compensation in the three
                         
and nine month periods ended December 31, 2006 and
                         
$34 and $101 in the three and nine month periods ended
                         
December 31, 2005, respectively)
   
3,294
   
2,517
   
9,712
   
8,260
 
Research and development expenses (includes $83 and $291
                         
stock-based compensation in the three and nine month
                         
periods ended December 31, 2006)
   
763
   
557
   
2,308
   
1,608
 
Total operating expenses
   
4,057
   
3,074
   
12,020
   
9,868
 
Operating income (loss)
   
(3,270
)
 
1,113
   
(6,240
)
 
(1,348
)
                           
Other income, net
   
267
   
109
   
706
   
313
 
                           
Income (loss) before income taxes
   
(3,003
)
 
1,222
   
(5,534
)
 
(1,035
)
                           
Income tax expense (benefit)
   
(25
)
 
68
   
(96
)
 
69
 
                           
Net income (loss)
 
$
(2,978
)
$
1,154
 
$
(5,438
)
$
(1,104
)
                           
Net income (loss) per share:
                         
Basic
 
$
(0.25
)
$
0.10
 
$
(0.46
)
$
(0.10
)
Diluted
 
$
(0.25
)
$
0.10
 
$
(0.46
)
$
(0.10
)
                           
Weighted-average shares of common stock
                         
used in computing net loss per share:
                         
Basic
   
11,827
   
11,375
   
11,803
   
11,358
 
Diluted
   
11,827
   
11,577
   
11,803
   
11,358
 



LASERCARD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
 
   
December
     
   
31, 2006
 
March
 
   
(Unaudited)
 
31, 2006*
 
ASSETS
         
Current assets:
         
Cash and cash equivalents
 
$
3,470
 
$
2,121
 
Short-term investments
   
14,800
   
21,350
 
Accounts receivable, net of allowance
   
2,147
   
4,920
 
Inventories, net of reserve
   
10,598
   
8,874
 
Deferred contract costs
   
2,305
   
1,041
 
Prepaid and other current assets
   
1,618
   
1,268
 
Total current assets
   
34,938
   
39,574
 
               
Property and equipment, net
   
13,022
   
12,306
 
Deferred long-term contract costs
   
709
   
 
Equipment held for resale
   
6,248
   
5,877
 
Patents and other intangibles, net
   
893
   
889
 
Goodwill
   
3,321
   
3,321
 
Notes receivable
   
223
   
205
 
Other non-current assets
   
114
   
163
 
Total assets
 
$
59,468
 
$
62,335
 
               
LIABILITIES AND STOCKHOLDERS' EQUITY
             
Current liabilities:
             
Accounts payable
 
$
1,783
 
$
3,311
 
Accrued liabilities
   
2,283
   
3,118
 
Deferred tax liabilities
   
561
   
568
 
Advance payments from customers
   
3,904
   
1,772
 
Deferred revenue
   
697
   
459
 
Total current liabilities
   
9,228
   
9,228
 
               
Advance payments from customer
   
18,500
   
18,500
 
Deferred revenue
   
2,000
   
2,000
 
Long-term deferred rent
   
781
   
590
 
Total liabilities
   
30,509
   
30,318
 
               
Stockholders' equity:
             
Common stock
   
118
   
117
 
Additional paid-in capital
   
60,474
   
58,255
 
Accumulated deficit
   
(31,789
)
 
(26,351
)
Accumulated other comprehensive income (loss)
   
156
   
(4
)
Total stockholders' equity
   
28,959
   
32,017
 
               
Total liabilities and stockholders' equity
 
$
59,468
 
$
62,335
 
               
*Amounts derived from audited financial statements at the date indicated.