SCM Microsystems Announces Preliminary Results for its Fourth Quarter

SCM Microsystems, has reported preliminary revenue and gross margin results for its fourth quarter ended December 31, 2003. Revenue for the fourth quarter is expected to be $12.6 million, below managements previously reported expectation of $14 million to $17 million. The shortfall is due to lower than expected sales of the Company’s security solutions, with particular pressure on digital TV products. This was coupled with recently discovered performance issues with a new product that first shipped in the fourth quarter, which has created uncertainty as to the collectibility of $1.7 million in revenue. Consequently, SCM has decided not to recognize such revenue for this product in the fourth quarter, in accordance with its revenue recognition policy. Gross margin for the fourth quarter is expected to be at the high end of the previously-reported range of 39% to 42%. SCM will provide complete financial results for its fourth quarter and fiscal year ended December 31, 2003 on February 19, 2004. At that time, the Company will also provide guidance on management expectations for the first quarter of 2004.