re: Gemplus Q3
Obviously dated but not posted here back when
>> Gemplus Reports Third Quarter 2001 Results
Tuesday November 6, 2001
Press Release
Gemplus
Luxembourg
Revenue down 10% compared to Q2 2001: early indications of stabilizing GSM SIM card business, continued progress of Financial Services, strong performance of the Americas region.
Substantial improvements in operating expenses, accounts receivable DSO and inventory levels.
Encouraging mid-to-long term prospects strengthened by recent developments in both Telecommunications and Financial Services.
Gemplus International S.A. (Euronext: Sicovam 5768 and NASDAQ:GEMP) today reported results for the third quarter ended September 30, 2001.
Revenue for the third quarter was 226 million Euros, which is down 27% from the same quarter a year ago, and down 10% compared to the second quarter 2001. Telecommunications declined 37% from year ago levels and accounted for 64% of group revenues. Network Systems grew 22% and accounted for 24% of group revenues. Excluding the SkiData business, which was divested during the quarter, Network Systems grew 44% over the third quarter of last year. Other revenue, which consists of Plastic Magnetic Striped Cards, Contactless Cards and TAG declined.
Operating loss was 55.3 million Euros, compared with an operating profit of 32 million Euros for the same quarter a year ago. Excluding the 18.1 million Euro charge for the Humetrix lawsuit, the operating loss was 37.2 million Euros.
Net income for the third quarter was 6.6 million Euros, or 0.01 Euro per fully diluted share. Net income includes a combined after tax capital gain of 58.4 million Euros from the divestitures of SkiData and the TAGs business as well as an 18.1 million Euro charge for the Humetrix lawsuit. Net loss for the quarter, excluding these exceptional items, was 29.7 million Euros, or a 0.05 Euro loss per diluted share.
According to the company, the third quarter results reflect three key themes: the unfavorable impact of the continuing weak SIM market, a substantial reduction in the level of operating expenses, and encouraging mid-to-long term prospects strengthened by recent developments in both its Telecommunications and Financial Services businesses.
``Early signs that the SIM card market may be stabilizing encourage us,'' said Antonio Perez, President and CEO. ``This is an extremely important segment for Gemplus. We are also pleased with the continued progress of our Financial Services business, although we are watching the US economy very closely. Furthermore, the recent heightened interest in Security and National ID cards could be a major growth engine for us over the intermediate and longer term.'' He noted, however, ``Business conditions in our specific markets and the added uncertainty in the world economic environment make it too difficult to provide meaningful guidance for the fourth quarter or for 2002.''
Stabilizing GSM SIM Card Business, Continued Progress Of Financial Services, Strong Performance Of The Americas:
The company noted that it is seeing early indications of stabilization in the GSM SIM market. The company also expects operator inventory levels to be in balance with end user demand at the end of the year. While this is unlikely to cause a dramatic increase in GSM SIM card orders this fourth quarter, this can be viewed as a positive development for 2002.
Regional growth rates were down across all geographies with the exception of the Americas region, where the 32% increase in revenue was fueled by progress in the Financial Services multi-application (MAP) card business.
Despite the delay of some shipments into the fourth quarter, as we anticipated in our September 27 announcement, the Financial Services multi-application card (MAP) business still grew 44%. Although the weakening US economy could further impact growth rates, Gemplus continues to believe that it is gaining market share in the very important U.S. market.
Substantial Improvement In Operating Expenses And Asset Performance:
The actions taken this year to improve financial competitiveness and enhance strategic corporate focus enabled the company to reduce operating expenses by 15% from the second quarter. This is the lowest level of expenses since Q3 of last year. Perez stressed, ``In addition to the divestiture of the SkiData and TAG businesses, earlier this year, the continuing implementation of the restructuring program is well on its way to achieving our 40 million Euros in annual cost savings objective.''
Furthermore, inventory levels declined 21% during the quarter, as shipments exceeded receipt of material and as a result of the SkiData divestiture. Accounts Receivable Days Sales Outstanding (DSO) also declined. The company finished the third quarter with a 503 million Euro cash balance. Perez noted, ``A full-fledged competitive advantage in itself, our strong cash position provides enormous flexibility during challenging market environments such as these.''
Encouraging Mid-To-Long Term Prospects Strengthened By Recent Developments In Both The Telecommunications And Financial Services:
Perez cited plans by two major US mobile operators to offer GSM and GPRS service in the U.S. ``These developments combined with recent indications that GPRS service will be available in several regions of the world by mid-2002 signal a potential return to much healthier SIM card sales growth rates next year. Furthermore, our MAP business continues to grow, particularly in the US.'' In closing, Perez stated, ``With this as a backdrop, we have been able to reduce our level of operating expenses, improve our asset performance and enhance our strategic focus. These combined actions should help us speed our return to profitability as the market improves.'' <<
- Eric - |
