First-quarter revenue dropped at American Bank Note Holographics Inc. due to problems with a magnetic stripe product that has hampered its payment card business since it reached a sales peak in the first quarter of 2006.
The Robbinsville, N.J., company said Monday that sales fell 27% in the quarter, to $7.3 million, compared with the year earlier. Net income was flat at $1 million, though earnings slipped from 6 cents per share to 5 cents.
The company's HoloMag product, which lets issuers put holographic images on a payment card's magnetic stripe, was initially well received, but some merchants have reported problems authorizing payments on the cards. The stripe apparently stores static electricity, which can, in rare instances, interfere with the transactino authorization process.
Visa U.S.A., for example, introduced cards with the HoloMag stripe in January 2006 but said that March that it would revert to the standard magnetic stripe.
In its quarterly report, American Bank Note said that the drop in sales was due mainly to "the cessation of its Gen 1 HoloMag programs that peaked in the first quarter of 2006."
Mark J. Bonney, the company's chief financial officer and an executive vice president, said in a press release: "With no debt, and over $16 million in cash, the company's financial condition remains strong."
