Identix Announces 4th-Quarter Results
Identix Inc. reported financial results for its fiscal 2003 fourth quarter and year ended June 30, 2003. Fiscal 2003 fourth-quarter revenue was $23.1 million, with a net loss in accordance with generally accepted accounting principles (GAAP) of $159.1 million, or $1.86 loss per share, which includes a noncash impairment charge totaling $154.8 million, or $1.81 per share, from the write down of goodwill related primarily to the company’s merger with Visionics Corp. in June 2002. The fiscal 2003 fourth quarter net loss under GAAP also includes $629,000 of restructuring and merger-related expense related to a one-time severance payment to a former officer of the company and an additional charge related to a higher sublease reserve taken against the company’s Dublin, Ireland and Los Gatos, Calif., facilities due to a continuing slow real estate market in northern California, as well as $278,000 in amortization expense of stock-based compensation for Visionics employees now employed by Identix. These results compare to fiscal 2002 fourth quarter revenue of $17.7 million, with a net loss in accordance with GAAP of $33.3 million, or 72 cents loss per share.
In April 2003, the company provided quarterly financial expectations for a net loss of between 6 cents and 8 cents based on pro forma results that did not include a potential impairment charge or additional restructuring, merger-related expense and noncash amortization of stock-based compensation for former employees of Visionics now employed by Identix. For its fiscal 2003 fourth quarter, Identix’s pro forma net loss was $3.4 million, or 4 cents loss per share, which is better than the range of previously provided expectations by Identix.
Product revenue for the fiscal 2003 fourth quarter was $13.2 million, compared to product revenue of $6.6 million in the fiscal 2002 fourth quarter. Product revenue consists of revenue from the company’s biometric products and solutions, as well as maintenance and service revenues related to its products. Product gross margin for the fiscal 2003 fourth quarter was approximately 35.4 percent, up from product gross margin of 25.8 percent the year earlier.
Services revenue, which is made up solely of the Company’s Identix public sector government services business, for the fiscal 2003 fourth quarter was $9.9 million, down as expected from services revenue of $11.1 million in 2002. Fiscal 2003 fourth quarter services gross margin was approximately 14.4 percent, an improvement over fiscal 2002 fourth quarter services gross margin of 5.9 percent.
In accordance with GAAP, SFAS 142 requires goodwill to be tested for impairment annually and when an event occurs indicating that possible impairment exists. As previously communicated, the company performed its annual goodwill impairment assessment as of June 30, 2003. The company hired an independent valuation firm to perform an extensive analysis as part of the impairment assessment. Based on the results of the assessment, Identix recorded a noncash goodwill impairment charge of $154.8 million. The charge does not affect the company’s operations, cash flow or cash position. After this impairment, Identix’s goodwill balance is approximately $140.9 million as of June 30, 2003.
Revenue for the fiscal year 2003 was $92.5 million with a net loss of $187.4 million, or $2.20 loss per share, in accordance with GAAP, which includes a noncash charge totaling $154.8 million, or $1.82 per share, related to the write down of goodwill and restructuring and merger-related expense of $10.2 million, or 12 cents per share, and amortization charges for stock based compensation for Visionics employees now employed by Identix of $1.7 million, or 2 cents per share. This compares to fiscal year 2002 revenue of $73.2 million with a net loss of $55.4 million, or $1.33 loss per share, in accordance with GAAP, which includes $25.2 million, or 61 cents per share, in restructuring and merger related charges and acquired in-process research and development charges.
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