News
InCard DisplayCard Developer Reaches $1 Million in Revenue Year-to-Date
Innovative Card Technologies, Inc, developers of the breakthrough InCard DisplayCardTM security device for e-banking, e-commerce and data access, today announced second quarter financial results. The company reported its strongest quarterly revenue performance to date, taking in $800,209 in the second quarter of 2008, compared with $1,089 in the second quarter of 2007. This revenue increase was driven by strong quarter-to-quarter sales performance; second quarter sales revenues quadrupled first quarter results.
The company achieved a 9% reduction in operating expense over the comparable 2007 period, at $2.1 million. After accounting for the revaluation of warrant liability and interest, InCard lost $800,715 in the second quarter, or $0.03 per diluted share, as compared with $0.09 per diluted share in the second quarter of 2007. The backlog at June 30, 2008 was $1.2 million.
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InCard also achieved the strongest six-month revenue numbers in its history. For the six months ended June 30, 2008, InCard reported revenue of $1 million, a dramatic increase versus the $2,509 revenue in the first half of 2007.
The company was also able to cut its operating expenses year over year by 12% for the first half. Cash on hand at June 30, 2008 was $1.7 million, up from $339,600 at year-end 2007. Working capital was $3.3 million at June 30, 2008, up from a deficit of $2 million at year-end 2007.
"In the past three consecutive quarters, we delivered more than 100,000 InCard DisplayCards to satisfied customers. Through our blue chip list of credit card manufacturers and digital security providers dedicated to marketing and distributing the InCard DisplayCard, we have many live consumer deployments globally including some of the largest banks in the world,” said Steven R. Delcarson, President and CEO of InCard Technologies. "We are encouraged by our progress, but are also mindful of challenges yet to be overcome.
Our sales team is targeting ever larger orders and our technical people are working tirelessly to reduce scrap in an effort to improve our gross margin. In addition, we continue to work on second-sourcing our components to reduce manufacturing lead times. We are making progress with these issues, and expect to beat our second quarter performance in the third quarter of 2008, despite a month-long summer shut down by one of our key suppliers. Overall, we are in a much stronger position than at the same time a year ago, and I am confident that we are moving quickly and steadily in the right direction.”
The success of the InCard DisplayCard parallels several strong global trends; 33% of adults bank online in the United States alone, and online transaction volume is growing 27% annually. Fraudsters are taking advantage of the online channel; phishing attacks cost American consumers $3.2 billion in 2007 according to Gartner. With annual identity theft costs pegged at $45 billion, and established payment account fraud accounting for 5.4 million victims in 2007 according to Javelin, government regulations and consumer concern are driving widespread adoption of dual-factor authentication to protect against online account fraud.
The InCard DisplayCard blends an ultra-portable form factor and strong one-time passcode security to offer a unique security opportunity that is a win-win for both the financial institution and the consumer. According to an Associated Press report in January of 2008, 61% of Americans are ‘very’ or ‘extremely’ concerned with online security. Implementing stronger security will drive adoption of online banking, the most profitable transaction channel for banks.
Each online transaction costs $0.01 versus $0.27 for ATM transactions and $1.07 for in-person branch transactions. For high-income professionals, the banks’ most profitable customer segment, the need for a convenient new security measure is especially high. VIPs are three times more likely to be targeted by fraudsters than other customers according to a recent study on fraud victims by Experian. Additionally, InCard DisplayCard artwork is fully customizable, allowing financial institutions to brand valuable in-hand real estate, unlike traditional, bulky keyfob tokens.
Add this branding capability to the unique one-time passcode function, and the result is a product that is completely singular among the very competitive field of VIP payment card product offerings.
About Innovative Card Technologies
Innovative Card Technologies, Inc, was founded in 1993 to add functionalities to payment cards. The company’s InCard DisplayCard enables dual-factor authentication in a convenient card form. The cards can be configured to offer RFID physical access or payment capabilities, and feature a screen powered by an integrated battery, circuit, and switch. This screen displays a one-time password to verify the presence of the card during online and voice transactions or data systems login. www.incard.com.