Improved result – despite lower sales. An interview with President & CEO of Precise Biometrics – Thomas Marschall

Interim Report for the period January – June 2010

  • The group’s net sales for the interim period amounted to SEK 26.4 million (21.9) and for the second quarter SEK 7.1 million (9.7).
  • The group’s income for the interim period amounted to SEK -5.1 million (-11.6) and for the second quarter SEK -4.7 million (-9.0).
  • Earnings per share for the interim period amounted to SEK -0.04 (-0.11) and for the second quarter SEK -0.04 (-0.09).
  • Liquid assets at the end of the interim period amounted to SEK 34.8 million (1.5).

Important events during the quarter

  • Precise Biometrics released the product Precise BioMatch™ ANSI 378, an integration tool for standardized fingerprint recognition for both PC and Mac. The technology uses Precise Biometrics’ fingerprint extractor which was top ranked in Ongoing MINEX.
  • Precise Biometrics released Precise BioMatch™ Logon for Windows 7, a biometric logon solution for Microsoft’s new operating system Windows 7.

Thomas Marschall – What are your comments on the last quarter?

Sales for the quarter were lower than the same period last year. Considering the number of business opportunities we work on, not being able to present a larger number of orders during the quarter is not satisfactory. At the same time, I am pleased with our continuous efforts in cost control. This enables us to present a result that has improved compared to the same period in 2009 despite the lower sales volume.

How would you summarize the first half of 2010?

Sales during the first half of 2010 were at about the same level as the same period last year. The activity level on the market picked up in the spring and we are currently working with several interesting sales projects. We are also in negotiations regarding significant commercial partnerships. Because of turbulence in the capital markets, that has intensified during the second quarter, decision‐making on investments has taken more time with effect that resolutions of projects has been shifted into the second half of the year. However, I think the state of the market is becoming increasingly positive and that Precise Biometrics’ market is on the rise.

How far have you come with the organizational change?

Our new organization has now been implemented as of July 1st. As part of the change, we are also strengthening our sales organization through new recruitment. The new organization is more customer‐oriented than before and focuses on packaging and marketing our world leading technology in a manner that solves complex problems for our customers. Do you have any comments on standardization of biometrics? The standardization process that is underway is based on different elements of the technology and its usage being made uniform in accordance with an international standard. This facilitates interoperability between different suppliers. Standardization is positive since it shows both that the technology has reached a level of maturity that makes the world ready to use it and that there is an expressed need. With our leading global position, we have the best opportunities in the market to capitalize on this acceptance.

What do you think about the company’s financial position?

We have a good financial position with a strong cash balance. An increasing number of running orders from existing customers combined with lower costs gives Precise Biometrics good staying power and allows us to be on the offensive in our marketing activities.

How would you summarize the current situation?

The business plan we adopted for the next 5 years is ambitious and opportunities in all market segments have continued to grow in a positive direction over the last six months. As I indicated previously – most recently in the last quarterly report – we are still dependent on the timing of individual orders. This causes sales figures to fluctuate between different quarters. To make a meaningful assessment of the companyʹs development, it is therefore necessary to look at the full year developments rather than shifts between specific quarters.

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