This press release contains statements that may relate to expected future results and business trends that are based upon AuthenTec’s current estimate, expectations, and projections about the industry, and upon management’s beliefs, and certain assumptions it has made that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995, including, without limitation, statements relating to integration of our TrueSuite identity management software on additional consumer notebook models by year end, the timing of volume production from design wins for 2011 and 2012, our growth opportunities in the NFC market, revenue, operating expenses and non-GAAP net income in our third quarter, growth opportunities for our technologies and software, annual cost-savings from the UPEK acquisition and revenue growth, profitability and continued success in the second half of 2011. Words such as “anticipates,” “guidance,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “should,” “will,” “prospects,” “outlook,” “forecast,” and variations of these words or similar expressions are intended to identify “forward-looking statements.” In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances, including any underlying assumptions, are “forward-looking statements.” Such statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict. Therefore, the Company’s actual results may differ materially and adversely from those expressed in any “forward-looking statement” as a result of various factors. These factors include, but are not limited to: the Company’s ability to integrate the UPEK business, the Company’s ability to operate the acquired business profitably, demand for, and market acceptance of, new and existing fingerprint sensors, identity management software and embedded security products, the Company’s ability to secure design wins for enterprise and consumer laptops, wireless devices and products aimed at Government markets, customer design wins materializing into production programs, the timely introduction of new products, the rate at which the Company increases its activity and opportunities in the wireless market, and additional opportunities in various markets for applications that might use AuthenTec’s products, the Company’s ability to develop and capitalize on its NFC solutions and changes in product mix, as well as other risks detailed from time to time in its SEC filings, including those described in AuthenTec’s annual report on Form 10-K filed with the SEC on March 17, 2011. These “forward-looking statements” are made only as of the date hereof, and the Company undertakes no obligation to update or revise the “forward-looking statements,” whether as a result of new information, future events or otherwise.
About AuthenTec
AuthenTec is the world’s #1 provider of fingerprint sensors, identity management software, and embedded security solutions. AuthenTec solutions address enterprise, consumer and government applications for a growing base of top tier global customers. Already shipped on hundreds of millions of devices, the Company's smart sensor products, software and embedded security solutions are used virtually everywhere, from the PC on your desk to the mobile device in your hand to the server in the cloud. AuthenTec offers developers and users secure and convenient ways to manage today's rapidly evolving digital identities and security needs. For more information, visit www.authentec.com or follow us at twitter.com/authentecnews.
AuthenTec, Inc. | |||||||||||||||||||||||||
Consolidated Statements of Operations | |||||||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||
Table 1 | |||||||||||||||||||||||||
Three months ended | Six months ended | ||||||||||||||||||||||||
July 1, | April 1, | July 2, | July 1, | July 2, | |||||||||||||||||||||
2011 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||
Revenue | $ | 16,211 | $ | 15,476 | $ | 10,721 | $ | 31,687 | $ | 19,897 | |||||||||||||||
Cost of revenue | 8,464 | 8,051 | 5,210 | 16,515 | 9,936 | ||||||||||||||||||||
Gross profit | 7,747 | 7,425 | 5,511 | 15,172 | 9,961 | ||||||||||||||||||||
47.8 | % | 48.0 | % | 51.4 | % | 47.9 | % | 50.1 | % | ||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||
Research and development | 6,477 | 5,887 | 4,742 | 12,364 | 8,728 | ||||||||||||||||||||
Selling and marketing | 4,077 | 3,990 | 3,306 | 8,067 | 5,572 | ||||||||||||||||||||
General and administrative | 1,740 | 2,457 | 2,073 | 4,198 | 5,026 | ||||||||||||||||||||
Restructuring and impairment related charges | 39 | 283 | - | 322 | - | ||||||||||||||||||||
Total operating expenses | 12,333 | 12,617 | 10,121 | 24,951 | 19,326 | ||||||||||||||||||||
Operating loss | (4,586 | ) | (5,192 | ) | (4,610 | ) | (9,779 | ) | (9,365 | ) | |||||||||||||||
Other income (expense): | |||||||||||||||||||||||||
Other expenses | (146 | ) | (303 | ) | - | (449 | ) | - | |||||||||||||||||
Earnout adjustment | - | - | 729 | - | 729 | ||||||||||||||||||||
Interest income | 29 | 29 | 44 | 58 | 84 | ||||||||||||||||||||
Total other income (expense), net | (117 | ) | (274 | ) | 773 | (391 | ) | 813 | |||||||||||||||||
Provision for income taxes | 141 | 136 | 63 | 276 | 63 | ||||||||||||||||||||
Net Loss | $ | (4,844 | ) | $ | (5,602 | ) | $ | (3,900 | ) | $ | (10,446 | ) | $ | (8,615 | ) | ||||||||||
Net loss per share: | |||||||||||||||||||||||||
Basic | $ | (0.11 | ) | $ | (0.13 | ) | $ | (0.13 | ) | $ | (0.24 | ) | $ | (0.29 | ) | ||||||||||
Diluted | $ | (0.11 | ) | $ | (0.13 | ) | $ | (0.13 | ) | $ | (0.24 | ) | $ | (0.29 | ) | ||||||||||
Shares used in computing net loss per common share: | |||||||||||||||||||||||||
Basic | 43,753 | 43,600 | 29,912 | 43,677 | 29,532 | ||||||||||||||||||||
Diluted | 43,753 | 43,600 | 29,912 | 43,677 | 29,532 | ||||||||||||||||||||
Three months ended | Six months ended | ||||||||||||||||||||||||
July 1, | April 2, | July 2, | July 1, | July 2, | |||||||||||||||||||||
2011 | 2010 | 2010 | 2011 | 2010 | |||||||||||||||||||||
Other Financial Metrics: | |||||||||||||||||||||||||
Stock-based compensation expense: | |||||||||||||||||||||||||
Cost of revenue | 21 | 153 | 50 | 174 | 114 | ||||||||||||||||||||
Research and development | 164 | 339 | 173 | 503 | 402 | ||||||||||||||||||||
Selling and marketing | 135 | 274 | 200 | 409 | 448 | ||||||||||||||||||||
General and administrative | 90 | 378 | 202 | 468 | 447 | ||||||||||||||||||||
Costs related to reduction in workforce | |||||||||||||||||||||||||
Cost of revenue | 50 | - | - | 50 | - | ||||||||||||||||||||
Research and development | 370 | - | - | 370 | - | ||||||||||||||||||||
Selling and marketing | 102 | - | 415 | 102 | 415 | ||||||||||||||||||||
Legal and acquisition related costs | |||||||||||||||||||||||||
Selling and marketing | 72 | 83 | 155 | ||||||||||||||||||||||
General and administrative | 309 | 249 | 601 | 558 | 1,937 | ||||||||||||||||||||
Amortization of purchased tangible and intangible assets | |||||||||||||||||||||||||
Cost of revenue | 895 | 569 | 291 | 1,464 | 380 | ||||||||||||||||||||
Research and development | 234 | 236 | 65 | 470 | 96 | ||||||||||||||||||||
Selling and marketing | 464 | 465 | 130 | 929 | 155 | ||||||||||||||||||||
Restructuring and impairment related charges | 39 | 283 | - | 322 | - | ||||||||||||||||||||
Earnout adjustment | - | - | (729 | ) | - | (729 | ) |
AuthenTec, Inc. | ||||||||||||||||||||
Non-GAAP Financial Information - Consolidated | ||||||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Table 2 | ||||||||||||||||||||
Three months ended | Six months ended | |||||||||||||||||||
July 1, | April 1, | July 2, | July 1, | July 2, | ||||||||||||||||
2011 | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
Net loss on GAAP basis: | $ | (4,844 | ) | $ | (5,602 | ) | $ | (3,900 | ) | $ | (10,446 | ) | $ | (8,615 | ) | |||||
Stock-based compensation expense | 410 | 1,144 | 625 | 1,554 | 1,411 | |||||||||||||||
Costs related to reduction in workforce | 522 | - | 415 | 522 | 415 | |||||||||||||||
Legal and acquisition related costs | 381 | 332 | 601 | 713 | 1,937 | |||||||||||||||
Amortization of purchased tangible and intangible assets | 1,593 | 1,270 | 486 | 2,863 | 631 | |||||||||||||||
Earnout adjustment | - | - | (729 | ) | - | (729 | ) | |||||||||||||
Restructuring and impairment related charges | 39 | 283 | - | 322 | - | |||||||||||||||
Net loss on non-GAAP basis: | $ | (1,899 | ) | $ | (2,573 | ) | $ | (2,502 | ) | $ | (4,472 | ) | $ | (4,950 | ) | |||||
Non-GAAP basic earnings per share | $ | (0.04 | ) | $ | (0.06 | ) | $ | (0.08 | ) | $ | (0.10 | ) | $ | (0.17 | ) | |||||
Non-GAAP diluted earnings per share | $ | (0.04 | ) | $ | (0.06 | ) | $ | (0.08 | ) | $ | (0.10 | ) | $ | (0.17 | ) | |||||
Three months ended | Six months ended | |||||||||||||||||||
July 1, | April 1, | July 2, | July 1, | July 2, | ||||||||||||||||
2011 | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
Gross profit on GAAP basis: | $ | 7,747 | $ | 7,425 | $ | 5,511 | $ | 15,172 | $ | 9,961 | ||||||||||
Stock-based compensation expense | 21 | 153 | 50 | 174 | 114 | |||||||||||||||
Costs related to reduction in workforce | 50 | - | - | 50 | - | |||||||||||||||
Amortization of purchased tangible and intangible assets | 895 | 569 | 291 | 1,464 | 380 | |||||||||||||||
Gross profit on non-GAAP basis: | $ | 8,713 | $ | 8,147 | $ | 5,852 | $ | 16,860 | $ | 10,455 | ||||||||||
Non-GAAP gross margin | 53.7 | % | 52.6 | % | 54.6 | % | 53.2 | % | 52.5 | % | ||||||||||
Three months ended | Six months ended | |||||||||||||||||||
July 1, | April 1, | July 2, | July 1, | July 2, | ||||||||||||||||
2011 | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
Operating expenses on GAAP basis: | $ |
12,333 |
$ | 12,617 | $ | 10,121 | $ | 24,951 | $ | 19,326 | ||||||||||
Stock-based compensation expense | (389 | ) | (991 | ) | (575 | ) | (1,380 | ) | (1,297 | ) | ||||||||||
Costs related to reduction in workforce | (472 | ) | - | (415 | ) | (472 | ) | (415 | ) | |||||||||||
Legal and acquisition related costs | (381 | ) | (332 | ) | (601 | ) | (713 | ) | (1,937 | ) | ||||||||||
Amortization of purchased tangible and intangible assets | (698 | ) | (701 | ) | (195 | ) | (1,399 | ) | (251 | ) | ||||||||||
Restructuring and impairment related charges | (39 | ) | (283 | ) | - | (322 | ) | - | ||||||||||||
Operating expenses on non-GAAP basis: | $ |
10,354 |
$ | 10,310 | $ | 8,335 | $ | 20,665 | $ | 15,426 |
AuthenTec, Inc. | ||||||||||
Consolidated Balance Sheets | ||||||||||
(In thousands) | ||||||||||
(Unaudited) | ||||||||||
Table 3 | ||||||||||
As of | ||||||||||
July 1, | December 31, | |||||||||
2011 | 2010 | |||||||||
Assets | ||||||||||
Current assets | ||||||||||
Cash and cash equivalents | $ | 6,965 | $ | 13,280 | ||||||
Short-term investments | 9,875 | 15,176 | ||||||||
Accounts receivable, net of allowances of $276 and $150, respectively | 11,539 | 9,678 | ||||||||
Inventory | 7,054 | 5,460 | ||||||||
Other current assets | 1,932 | 1,993 | ||||||||
Total current assets | 37,365 | 45,587 | ||||||||
Long-term investments | 3,393 | 3,323 | ||||||||
Purchased intangible assets | 21,245 | 24,033 | ||||||||
Goodwill | 2,729 | 2,729 | ||||||||
Property and equipment, net | 4,083 | 4,430 | ||||||||
Total assets | $ | 68,815 | $ | 80,102 | ||||||
Liabilities and stockholders’ equity | ||||||||||
Current liabilities | ||||||||||
Accounts payable | $ | 7,277 | $ | 6,907 | ||||||
Accrued compensation and benefits | 3,546 | 3,640 | ||||||||
Accrued litigation related legal fees | 1,078 | 1,802 | ||||||||
Other accrued liabilities | 2,988 | 4,002 | ||||||||
Deferred revenue | 3,382 | 4,678 | ||||||||
Total current liabilities | 18,271 | 21,029 | ||||||||
Deferred rent | 472 |
|
546 | |||||||
Total liabilities | 18,743 | 21,575 | ||||||||
Stockholders’ equity | ||||||||||
Common stock | 438 | 436 | ||||||||
Additional paid-in capital | 190,802 | 189,205 | ||||||||
Other comprehensive income | 446 | 54 | ||||||||
Accumulated deficit | (141,614 | ) | (131,168 | ) | ||||||
Total stockholders’ equity | $ | 50,072 | $ | 58,527 | ||||||
Total liabilities and stockholders’ equity | $ | 68,815 | $ | 80,102 |