Some earnings numbers: SCM, HSCC

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11/16/2009
For all of the promise of the security industry, not many of the public companies reporting lately have been reporting profits. A couple more came in today. First, SCM Microsystems put out their second earnings report since the merge with Hirsch. Not surprisingly, they've doubled their revenues (they added Hirsch, after all), but they're still not making money, and they only have more cash on hand because they sold off a building in India. I don't have a link because it's a password-protected press release I'm looking at, but here are the details:
Revenue from the Security and Identity Solutions business was $12.5 million in the third quarter of 2009, up 113% from $5.9 million in the third quarter of 2008. The primary reason for this increase was the inclusion of revenue from the Hirsch subsidiary. ... In aggregate, total revenue in the third quarter of 2009 was $13.3 million, up 109% from $6.4 million in the third quarter of 2008.
So, they're now about a $50-$55 million company. Unfortunately,
Operating loss was $(1.6) million in the third quarter of 2009, compared with operating loss of $(2.0) million in the third quarter of 2008. Loss from continuing operations in the third quarter of 2009 was $(2.3) million, or $(0.09) per share, compared with loss from continuing operations of $(3.3) million, or $(0.21) per share in the third quarter of 2008. Cash and cash equivalents at the end of the third quarter of 2009 were $6.2 million, up from $5.3 million at the end of the previous quarter. The increase in cash in the 2009 third quarter resulted from the gain on the sale of SCM's office building in India during the quarter.
So, they're losing $2 million a quarter and they've got $6.2 million in the bank. Anybody want to buy some stock? The economy's bad, but SCM has to find a way to get closer to profitability in a hurry to make the Hirsch and Blue Hill deals make sense. Also losing money is Homeland Security Capital Corp., Tom McMillen's holding company that owns Safety & Ecology Holdings Corporation, Nexus Technologies Group, Inc., and Polimatrix, Inc. Here's a link to their latest earnings report. The company is losing money, but seems to be edging toward a cash-flow-positive position:
Revenue for the quarter was $20.8 million compared to $17.7 million for the same period last year. EBITDA (earnings before interest, taxes, depreciation and amortization) for the quarter was $0.4 million compared to a negative $0.9 million last year, and EBITDAS (EBITDA after stock based compensation) was $0.7 million compared to $0.1 million last year. Operating loss for the quarter was $0.1 million compared to $1.3 million last year. Net loss attributable to common stockholders for the quarter of was $1.2 million, or $0.02 per share compared to $2.3 million, or $0.05 per share, for the same period last year. The Company's net loss attributable to common stockholders includes $0.4 million in preferred stock dividends in each year's first quarter. At September 30, 2009 there were 49,699,729 common shares outstanding.
The piece of HSCC I care most about is Nexus, which is an integrator. Funnily, according to the home page, Nexus is a privately held company, but when you go to the about us page, it says, "A member of the elite family of Homeland Security Capital Fund." They may have a different definition of "privately held" than I do.