Fingerprints predicts lower than expected earnings in the fourth quarter

Fingerprint Cards AB (Fingerprints(TM)) predicts fourth quarter 2017 earnings to be lower than market expectations, and estimates revenues to decline 62% compared to the same quarter last year to SEK 615.3 M (1,618.7). Fingerprints estimates that the operating profit (EBIT) declines to SEK -40.6 M (520.0). Excluding the inventory provision of SEK -58.9 M and a non-recurring item of SEK 28.2 M, the company estimates the operating profit (EBIT) to SEK -9.9 M.

Revenues have been impacted by a weak market development and a continued negative price development in capacitive sensors. The company estimates that the Chinese smartphone market has weakened further during the quarter and predicts that the company`s revenues will remain weak during the first quarter of 2018.

Fingerprints expects gross margin to decline to 21% (44). The decline in gross margin is primarily attributable to a weakened product mix and to an inventory provision of SEK -58.9 M. The inventory provision affects the gross margin negatively by 10 percentage points.

Fingerprints estimates operating expenses to SEK 170.7 M (194.9). The estimate is that the quarterly operating profit (EBIT) declines to SEK -40.6 M (520.0). In addition to the inventory provision which has a negative impact on operating profit of SEK 58.9 M, the company predicts that the operating profit also includes a non-recurring item of SEK 28.2 M, which has a positive impact on the results. Excluding these two items the company estimates the operating profit (EBIT) to SEK -9.9 M.

The company estimates cash flow from operations to SEK -1.7 M, and that cash and cash equivalents amount to SEK 920.2 M.

As previously communicated in conjunction with the third quarter report 2017, the company has implemented a number of initiatives to restore growth and improve profitability. To structurally improve profitability Fingerprints has initiated a cost reduction program and as part of this approximately 185 positions are made redundant. The company is reducing external costs, mostly consultants, but also costs related to own employees.

The aggregated initiatives are estimated to result in cost savings of some SEK 360 M during 2018. Restructuring costs are currently estimated to SEK 40 M and will mainly be reported during the first half of 2018.

Besides capacitive sensors in smartphones, Fingerprints continues to develop new innovative products and strengthen the company`s established position in smart cards and multimodal solutions for fingerprint and iris recognition and in next generation biometric security solutions.

Earnings figures are preliminary and have not been reviewed by the company`s auditor.

Fingerprints will publish its Year-end Report for 2017 as planned on 9 February 2018.

Due to the above, a telephone and web conference will be held today at 09:00 - 09:30 CET. The conference is recorded and will be published on Fingerprints` website. Media, analysts and institutional investors are welcome to connect to the conference call. To participate, please dial +46 (0) 8 506 921 86 (Sweden) or +44 (0) 1 452 560 304 (international calls). State conference ID 587 3989 when dialing in. Please dial in 10 minutes prior to the conference call.

The webcast is open to anyone through https://engage.vevent.com/rt/fingerprints/index.jsp?seid=122

Christian Fredrikson, CEO and President Hassan Tabrizi, Chief Financial Officer Investor Relations: +46(0)10-172 00 10 investrel@fingerprints.com Press: +46(0)10-172 00 20 press@fingerprints.com This information is information that Fingerprints is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 07:00 CET on January 25, 2018.

About Fingerprints Fingerprint Cards AB, Fingerprints, with its Swedish roots, is the leading global biometrics company, whose mission is to spearhead the development of biometric interaction that facilitates the convenience and integrity of the individual. Its value is proven daily by users in millions of devices, through billions of touches, who are their own key - quite simply, with a human touch. Fingerprints develops biometric systems comprising sensors, algorithms, software and packaging technologies. The success is based on product development at the cutting edge of technology, which results in world-leading products in terms of security, convenience and performance. The current product range consists largely of fingerprint sensors and customers are primarily manufacturers of smartphones and tablets, where the company is market leading. As the use of biometric solutions increases, Fingerprints is working to broaden its offering by using different biometric techniques, or modalities, and to identify other market segments where the solutions can be used, such as smart cards, PCs, automotive and online devices (IoT).

180125 - PReng_Q4

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The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Fingerprint Cards AB via GlobeNewswire
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