Fingerprint Cards AB (publ) initiates further cost reduction measures and announces write-downs
Fingerprints takes additional measures to strengthen its competitiveness and meet the challenging market conditions for capacitive sensors for smartphones. The cost reduction initiatives are estimated to yield additional savings of some SEK 350 million on an annual basis. Fingerprints also announces a non-cash inventory write-down of approximately SEK 336 million and a non-cash write-off of capitalized R&D projects amounting to approximately SEK 143 million.
As previously communicated, Fingerprints' sales and earnings have been impacted by a weak market development and a continued negative price development for capacitive sensors. The company has therefore taken resolute measures in order to adapt its costs. During the first quarter of 2018, a previously disclosed cost reduction program was implemented, which will generate cost savings of SEK 360 million in 2018.
In view of the continued weakening of sales and gross margin in the first quarter, and the shift in demand in favor of smaller and cheaper fingerprint sensors, Fingerprints is now initiating additional cost savings measures. The implementation of these actions is estimated to be finalized during the third quarter of 2018.
The initiatives are estimated to result in additional cost savings of some SEK 350 million on an annual basis with full effect at the end of the fourth quarter of 2018, resulting in an OPEX level below SEK 400 million on an annual basis, and before capitalization of R&D expenses. The number of positions will be reduced by approximately 179. Restructuring costs are currently estimated at SEK 65 million and will mainly be recorded in the third quarter of 2018.
Fingerprints today also announces that it will record a non-cash inventory write-down of approximately SEK 336 million in the second quarter of 2018. The carrying value of some of the company's products in inventory is estimated to exceed the current market value, as the shift towards smaller and cheaper fingerprint sensors has had an adverse impact on the average selling price. In addition, a non-cash write-off of capitalized R&D projects amounting to approximately SEK 143 million will be recorded in the second quarter of 2018.
"We are continuing to adapt our operations to the fundamental and rapid change in business conditions, with the objective of returning to profitable growth. The cost reduction measures we are communicating today are important in order to strengthen our competitiveness", commented Christian Fredrikson, President and CEO of Fingerprints.
For further information, please contact:
Christian Fredrikson, CEO and President
Hassan Tabrizi, Chief Financial Officer
+46(0)10-172 00 10, email@example.com
+46(0)10-172 00 20, firstname.lastname@example.org
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 persons set out above, at 07:00 CET on June 4, 2018.
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). Fingerprints is listed on Nasdaq Stockholm (FING B).