Drexler Profits Fall, Restates Results

Border security and biometrics card maker Drexler Technology(DRXR - Cramer's Take - Stockpickr) posted a drop in fourth-quarter revenue and profits, and said it was restating four years worth of results due to changes in revenue recognition.

Drexler's fourth-quarter net income was $988,000, or 9 cents a share, in line with the consensus analyst estimate compiled by Thomson Financial/First Call, but lower than last year's restated $2.5 million, or 25 cents a share.

Quarterly revenue dropped to $4.9 million from $7.8 million last year, falling short of estimates of $5.5 million for the quarter. For the full year, the company sold 5.6 million LaserCard optical memory cards and 450 read/write drives, down from 5.9 million cards and 1,280 drives last year.

The company also said it was restating its previously reported results for 1998 to 2001, along with the first three quarters of 2002. Total revenue for the four years and nine months has been reduced by $4.3 million, and the revenue is now being reported as deferred revenue to be recognized in later periods.

In a press release, Drexler said the restatement is caused by changes in the timing of revenue recognition of shipments to comply with security regulations under a U.S. government subcontract, and the company said the decision to restate was the result of a review conducted by the company and its accountants, not by any government agency.

Shares of Drexler closed at $23.50 before the news on Tuesday.