Record sales and pole position in a multi-billion market, which is just opening

Fingerprint Cards AB (publ), Corp. Reg. No. 556154-2381, (FPC), Third quarter
2013:

  · Sales totaled SEK 31.6 M (2.6).
  · Gross profit amounted to SEK 15.5 M (loss: 0.9).
  · Profit after financial items amounted to a loss of SEK 1.3 M (loss: 9.7).
  · Gross margin was 49% (neg: 34).
  · The loss per share was SEK 0.03 (loss: 0.22).
  · Cash and cash equivalents at the end of the period amounted to SEK 142.3 M
(25.9).
  · The order backlog at the end of the period was SEK 38.9 M (0.0).
  · FPC published a new forecast for 2013 on September 23 as well as forecasts
for 2014 and 2015.

  · Fujitsu, in cooperation with DoCoMo, launched the first mobile phone
incorporating FPC’s fingerprint technology.
  · Konka launched its first smartphone with the FPC1080A fingerprint sensor in
China.
  · WWTT launched FingerQ products with FPC’s 1080A sensor.
  · Pantech in South Korea launched a new mobile phone incorporating FPC’s
fingerprint technology.
  · FPC secured a new DW* from a major Tier 2 OEM in China.
  · FPC, in partnership with a leading US operator, won a smartphone DW* from an
existing OEM customer in Asia.
  · FPC secured a new major DW* for three new smartphones from a prominent
existing customer in Asia.
  · FPC won new DWs* for smartphones and tablet devices from existing Tier 2
customers in Asia.

  · FPC secured a Chinese order for area sensors valued at SEK 24 M.
  · FPC won an order for slightly more than 3 million swipe sensors for Asian
smartphones.
  · FPC announced that Mats Svensson was moving on to new assignments.
  · FPC recruited a Customer Support Director for Asia, a Country Manager for
Japan and Jan Johannesson as Vice President Strategic Planning and Portfolio
Management.
  · FPC chose Precise Biometrics’ fingerprint algorithm as one of a number of
algorithms in our portfolio.
  · FPC acquired some 100 patents from a world-leading patent holder.

Interim period January – September 2013:

  · Sales totaled SEK 61.3 M (8.4).
  · Gross profit was SEK 24.2 M (loss: 4.2).
  · After financial items, a loss of SEK 18.2 M (loss: 28.5) was reported.
  · Gross margin was 40% (neg: 50).
  · The loss per share was SEK 0.35 (loss: 0.65).
  · Cash and cash equivalents at the end of the period totaled SEK 142.3 M
(25.9).
  · The order backlog at the end of the period was SEK 38.9 M (0.0).

Notable events after the close of the reporting period:

  · FPC recruited Jonas Spannel as Vice President Sourcing and Supply.
  · FPC received an order for approximately 1 million sensors for Asian
smartphones.
  · UINT & Mereal Biometrics launched a biometric smartcard with embedded
fingerprint sensors and processors from FPC.
  · Official denial: Fingerprint Cards has NOT been acquired. Swedish Financial
Supervisory Authority and Swedish Economic Crime Authority are investigating.

*FPC’s definition of a Design Win (DW): The decision by a manufacturer to start
developing one or more commercial products that will contain FPC’s technology as
an integrated element of the manufacturer’s product(s).
For further information, contact: Johan Carlström, President and CEO,
Fingerprint Cards AB (publ), +46 31-60 78 20, investrel@fingerprints.com

Fingerprint Cards AB (publ) discloses this information pursuant to the Swedish
Securities Market Act (2007:528) and the Swedish Financial Instruments Trading
Act (1991:980). The information was issued for publication at 8:00 a.m., on
October 17, 2013.

Important information
Issuing, publishing or distributing this press release may be subject to
restrictions in certain jurisdictions. The recipient of this press release is
responsible for using this press release and the constituent information in
accordance with the rules and regulations prevailing in the particular
jurisdiction. This press release does not constitute an offer or an offering to
acquire or subscribe for any of the company’s securities in any jurisdiction.

CEO’s comments – Apple opens a very large market in Android and Windows for FPC
A new, very large market is about to be born, in which hundreds of millions of
sensors will be integrated into consumer electronics in 2014 and billions of
sensors in 2015. As a result of Apple’s market launch of the iPhone 5S
incorporating a Touch ID fingerprint sensor on September 10, the market for
embedded fingerprint sensors in smartphones and tablet devices was blown wide
open. According to information published in the Wall Street Journal, Apple sold
nine million new iPhones in the first three days of the launch, of which 88%
comprised the new fingerprint sensor equipped iPhone 5S. The fingerprint sensor,
or Touch ID as Apple has elected to call it, was given as the main reason for
customers choosing to buy the iPhone 5S.
During the quarter, we significantly bolstered our intellectual property (IP)
situation through the acquisition of a patent portfolio comprising some 100
patents in markets including the US, Europe and Asia, of which several are
considered essential for wireless communication. This acquisition provides us
with an extremely strong IP position, which can be used both defensively and
aggressively moving forward.
Normally, we would never speak about our competitors, since we prefer to focus
on items that we can affect; namely, the development of our own technology and
organization to become the world’s best in our field. However, we are making an
exception since Synaptics’ recently announced acquisition of Validity makes a
few interesting points about the future very clear:
Synaptics’ acquisition of Validity sends a clear message that a supplier such as
Synaptics, which is active in smartphones and tablet devices, has an acute need
to include fingerprint technology in its offering. Accordingly, it is likely
that touchscreen technology and fingerprint recognition will comprise a key
combination in the future for these high-volume segments. FPC is focusing on
ensuring that FPC’s fingerprint sensors remain consistently at the forefront of
development, an area where we are currently a leader with three smartphone
models launched in Asia. The discussions we have had with leading manufacturers
of smartphones and tablet devices pertaining to requirements, needs and
adaptation of products and technology provide us with a pole position today and
for the future.
The market for fingerprint sensors is growing fast and will become very large by
2015. Furthermore, FPC already held a leading market position prior to
Synaptics’ acquisition. The decisive factors for market share will be
technology, patents, pricing, production capacity and local customer support
primarily in Asia. It is FPC’s assessment that competition will be limited over
the coming year, which will be beneficial to FPC’s ability to rapidly build a
strong market-leading position.

Sales in the third quarter totaled SEK 31.6 M, which is the highest figure to
date. Earnings amounted to a loss of SEK 1.3 M, which exceeded the budget. We
are currently implementing a recruitment plan aimed at building a world-leading
company in a market segment that will shortly become enormous.

The third quarter can be summed up as the best quarter in the company's history
with the highest sales to date. In addition, Apple has left the door wide open
to a new market in Android and Windows for FPC. Active capacitive touch is a
technology that FPC was part of inventing and, which the company has more or
less dominated over the last five-ten years.

This technology can be considered the most tried and tested, as confirmed by the
launch of the iPhone 5S with capacitive sensors, thereby substantially boosting
market interest in FPC’s mobile touch offering. Even if the really major income
streams will start in the second half of 2014, income will now start to rise and
FPC’s leading market position gain in strength. Accordingly, we are looking
forward to the next few quarters and years with abundant confidence.