##### 



Exhibit 99.1
 Contacts:
 Scott M. Tsujita
SVP Finance, Treasury & Investor Relations
Hypercom Corporation
Phone: 602-504-5161
Email: stsujita@hypercom.com
 HYPERCOM CORPORATION ANNOUNCES FIRST
QUARTER 2006 FINANCIAL RESULTS
 PHOENIX, May 4, 2006




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®
   
    
    Catuity, a leading gift and loyalty card provider, has integrated its product with
Hypercoms multi-application Optimum T4100 giving merchants the
ability to use a
single device to support payment, gift, and loyalty cards
    
    EVO Merchant Services, the nations sixth largest non-bank credit card processor, has
Class A certified the Optimum T4100, will market the
multi-application device to its merchant base, and provide full support for
the promotion of this high-speed IP-enabled terminal
    
    U.S Bankcard Services Inc., a leading merchant service provider for credit card
processing, has entered into an exclusive software agreement to offer U.S. retailers the
first multi-language card payment terminal featuring Chinese and English graphics and text




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##### 




    
    Communications Intelligence Corp., the leader in biometric signature verification and a
leading supplier of signature solutions, will license its
SignatureOne suite of biometric and signature capture products
to Hypercom, initially for incorporation into the 32-bit Optimum L4100 and L4250
products
 Financial Measures
  Conference Call
  About Hypercom ( www.hypercom.com )
  Forward-Looking Statements




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##### 



Hypercom
and Optimum and design are registered trademarks of Hypercom Corporation. All other
trademarks are the property of their respective owners. HYCF




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##### 



HYPERCOM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
 Three Months Ended March 31,(Amounts in thousands, except per share data)
    
    2006
    
    
    2005Net revenue:Product and other
    
    $
    51,041
    
    
    $
    43,654Services
    
    
    9,928
    
    
    
    6,779Total net revenue
    
    
    60,969
    
    
    
    50,433Costs of revenue:Product and other
    
    
    30,329
    
    
    
    28,609Services
    
    
    7,121
    
    
    
    5,287Total costs of revenue
    
    
    37,450
    
    
    
    33,896Gross profit
    
    
    23,519
    
    
    
    16,537Operating expenses:Research and development
    
    
    5,994
    
    
    
    7,258Selling, general and administrative
    
    
    14,615
    
    
    
    20,187Total operating expenses
    
    
    20,609
    
    
    
    27,445Income (loss) from continuing operations
    
    
    2,910
    
    
    
    (10,908
    )Interest income
    
    
    947
    
    
    
    557Interest expense
    
    
    (169
    )
    
    
    (174
    )Other expense
    
    
    (16
    )
    
    
    (45
    )Foreign currency loss
    
    
    (224
    )
    
    
    (272
    )Income (loss) before income taxes and discontinued operations
    
    
    3,448
    
    
    
    (10,842
    )Provision for income taxes
    
    
    (659
    )
    
    
    (805
    )Income (loss) before discontinued operations
    
    
    2,789
    
    
    
    (11,647
    )Income from discontinued operations
    
    
    349
    
    
    
    2,007Net income (loss)
    
    $
    3,138
    
    
    $
    (9,640
    )Basic income (loss) per share:Income (loss) before discontinued operations
    
    $
    0.05
    
    
    $
    (0.22
    )Income from discontinued operations
    
    
    0.01
    
    
    
    0.04Basic income (loss) per share
    
    $
    0.06
    
    
    $
    (0.18
    )Diluted income (loss) per share:Income (loss) before discontinued operations
    
    $
    0.05
    
    
    $
    (0.22
    )Income from discontinued operations
    
    
    0.01
    
    
    
    0.04Diluted income (loss) per share
    
    $
    0.06
    
    
    $
    (0.18
    )Weighted average common shares:Basic
    
    
    52,804,000
    
    
    
    52,391,115Diluted
    
    
    53,730,873
    
    
    
    52,391,115EBITDA from continuing operations
    
    $
    4,601
    
    
    $
    (9,528
    )




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##### 



HYPERCOM CORPORATION
CONSOLIDATED BALANCE SHEETS
 March 31
    
    
    December 31,(Amounts in thousands)
    
    2006
    
    
    2005(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    46,911
    
    
    $
    35,940Marketable securities
    
    
    61,107
    
    
    
    57,951Accounts receivable, net
    
    
    46,240
    
    
    
    48,852Inventories
    
    
    39,139
    
    
    
    39,414Prepaid expenses and other current assets
    
    
    6,159
    
    
    
    8,946Deferred tax assets
    
    
    598
    
    
    
    122Assets of discontinued operations held for sale
    
    
    10,153
    
    
    
    12,613Total current assets
    
    
    210,307
    
    
    
    203,838Property, plant and equipment, net
    
    
    28,237
    
    
    
    27,746Intangible assets, net
    
    
    3,129
    
    
    
    3,503Other long-term assets
    
    
    4,193
    
    
    
    3,827Total assets
    
    $
    245,866
    
    
    $
    238,914LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    19,715
    
    
    $
    17,721Accrued payroll and related expenses
    
    
    8,054
    
    
    
    8,460Accrued sales and other taxes
    
    
    8,959
    
    
    
    9,479Accrued other liabilities
    
    
    12,263
    
    
    
    12,371Deferred revenue
    
    
    2,390
    
    
    
    2,762Income taxes payable
    
    
    2,410
    
    
    
    1,651Current portion of long-term debt
    
    
    8,261
    
    
    
    8,355Total current liabilities
    
    
    62,052
    
    
    
    60,799Long-term debt
    
    
    18
    
    
    
    22Deferred tax liabilities, net
    
    
    785
    
    
    
    341Other long-term liabilities
    
    
    5,840
    
    
    
    6,978Total liabilities
    
    
    68,695
    
    
    
    68,140Stockholders equity
    
    
    177,171
    
    
    
    170,774Total liabilities and stockholders equity
    
    $
    245,866
    
    
    $
    238,914




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##### 



HYPERCOM CORPORATION
STATEMENTS OF CASH FLOWS
 Three Months Ended March 31,(Amounts in thousands)
    
    2006
    
    
    2005Cash flows from continuing operations:Net income
(loss) from continuing operations
    
    $
    2,789
    
    
    $
    (11,647
    )Adjustments
to reconcile net income (loss) from continuing
operations to net cash provided by operating activities:Depreciation/amortization
    
    
    1,931
    
    
    
    1,697Amortization of deferred financing costs
    
    
    4
    
    
    
    4Amortization
of discount on short-term investments
    
    
    (308
    )
    
    
    (172
    )Provision for bad debts
    
    
    400
    
    
    
    474Write-down of excess and obsolete inventory
    
    
    707
    
    
    
    2,323Provision for warranty and other product charges
    
    
    181
    
    
    
    1,026Deferred income taxes
    
    
    (34
    )
    
    
    Non-cash stock compensation
    
    
    867
    
    
    
    215Foreign currency (gain) loss
    
    
    (359
    )
    
    
    1,121Other
    
    
    32
    
    
    
    441Changes in operating assets and liabilities, net
    
    
    3,715
    
    
    
    6,923Net cash provided by operating activities
    
    
    9,925
    
    
    
    2,405Cash flows from investing activities:Purchase of property, plant and equipment
    
    
    (2,055
    )
    
    
    (1,281
    )Software development costs capitalized
    
    
    
    
    
    
    (468
    )Purchase of marketable securities
    
    
    (66,848
    )
    
    
    (32,318
    )Proceeds from the sale or maturity of marketable securities
    
    
    64,000
    
    
    
    32,400Net cash used in investing activities
    
    
    (4,903
    )
    
    
    (1,667
    )Cash flows from financing activities:Repayments of bank notes payable and other debt instruments
    
    
    (92
    )
    
    
    (161
    )Proceeds from issuance of common stock
    
    
    3,211
    
    
    
    752Purchase of treasury stock
    
    
    (671
    )
    
    
    Net cash provided by financing activities
    
    
    2,448
    
    
    
    591Effect of exchange rate changes on cash
    
    
    255
    
    
    
    (76
    )Net increase in cash flows from continuing operations
    
    
    7,725
    
    
    
    1,253Net operating activities cash flows from discontinued operations
    
    
    3,246
    
    
    
    3,848Cash and cash equivalents, beginning of period
    
    
    35,940
    
    
    
    23,445Cash and cash equivalents, end of period
    
    $
    46,911
    
    
    $
    28,546




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##### 



HYPERCOM CORPORATION
NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
 ThreeMonthsEndedMarch
31,2006
    
    
Three
Months Ended March 31, 2005(Amounts in thousands, except per share data)
    
    GAAP
    
    
    GAAP
    
    
    Adjustments
    
    
    Non-GAAPNet revenue:Product and other
    
    $
    51,041
    
    
    $
    43,654
    
    
    $
    148
    
    
    $
    43,802Services
    
    
    9,928
    
    
    
    6,779
    
    
    
    
    
    
    
    6,779Total net revenue
    
    
    60,969
    
    
    
    50,433
    
    
    
    148
    
    
    
    50,581Costs of revenue:Product and other
    
    
    30,329
    
    
    
    28,609
    
    
    
    (2,838
    )
    
    
    25,771Services
    
    
    7,121
    
    
    
    5,287
    
    
    
    
    
    
    
    5,287Total costs of revenue
    
    
    37,450
    
    
    
    33,896
    
    
    
    (2,838
    )
    
    
    31,058Gross profit
    
    
    23,519
    
    
    
    16,537
    
    
    
    2,986
    
    
    
    19,523Operating expenses:Research and development
    
    
    5,994
    
    
    
    7,258
    
    
    
    (456
    )
    
    
    6,802Selling, general and administrative
    
    
    14,615
    
    
    
    20,187
    
    
    
    (1,673
    )
    
    
    18,514Total operating expenses
    
    
    20,609
    
    
    
    27,445
    
    
    
    (2,129
    )
    
    
    25,316Income (loss) from continuing operations
    
    
    2,910
    
    
    
    (10,908
    )
    
    
    5,115
    
    
    
    (5,793
    )Interest income
    
    
    947
    
    
    
    557
    
    
    
    
    
    
    
    557Interest expense
    
    
    (169
    )
    
    
    (174
    )
    
    
    
    
    
    
    (174
    )Other expense
    
    
    (16
    )
    
    
    (45
    )
    
    
    
    
    
    
    (45
    )Foreign currency loss
    
    
    (224
    )
    
    
    (272
    )
    
    
    
    
    
    
    (272
    )Income (loss) before income taxes and
discontinued operations
    
    
    3,448
    
    
    
    (10,842
    )
    
    
    5,115
    
    
    
    (5,727
    )Provision for income taxes
    
    
    (659
    )
    
    
    (805
    )
    
    
    (61
    )
    
    
    (866
    )Income (loss) before discontinued operations
    
    
    2,789
    
    
    
    (11,647
    )
    
    
    5,054
    
    
    
    (6,593
    )Income from discontinued operations
    
    
    349
    
    
    
    2,007
    
    
    
    
    
    
    
    2,007Net income (loss)
    
    $
    3,138
    
    
    $
    (9,640
    )
    
    $
    5,054
    
    
    $
    (4,586
    )Basic income (loss) per share:Income (loss) before discontinued operations
    
    $
    0.05
    
    
    $
    (0.22
    )
    
    $
    0.09
    
    
    $
    (0.13
    )Income from discontinued operations
    
    
    0.01
    
    
    
    0.04
    
    
    
    
    
    
    
    0.04Basic income (loss) per share
    
    $
    0.06
    
    
    $
    (0.18
    )
    
    $
    0.09
    
    
    $
    (0.09
    )Diluted income (loss) per share:Income (loss) before discontinued operations
    
    $
    0.05
    
    
    $
    (0.22
    )
    
    $
    0.09
    
    
    $
    (0.13
    )Income from discontinued operations
    
    
    0.01
    
    
    
    0.04
    
    
    
    
    
    
    
    0.04Basic income (loss) per share
    
    $
    0.06
    
    
    $
    (0.18
    )
    
    $
    0.09
    
    
    $
    (0.09
    )Weighted average common shares:Basic
    
    
    52,804,000
    
    
    
    52,391,115
    
    
    
    52,391,115
    
    
    
    52,391,115Diluted
    
    
    53,730,873
    
    
    
    52,391,115
    
    
    
    52,391,115
    
    
    
    52,391,115




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##### 



Note 1: Reconciliation of Non-GAAP Measures and EBITDA Presentation
     2005 FirstQuarterRevenues and cost of revenues:Warranty charges and product return accruals
    
    $
    706Inventory write-downs, primarily for product end-of-life decisions
    
    
    2,132Other
    
    
    148Revenues and cost of revenues total
    
    
    2,986Operating expenses and income taxes:One-time termination benefits and related employment costs
    
    
    1,543Other
    
    
    525Operating expenses and income taxes total
    
    
    2,068$
    5,054




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##### 



Three Months Ended March 31,2006
    
    
    2005Income (loss) before income taxes and discontinued operations
    
    $
    3,448
    
    
    $
    (10,842
    )Depreciation and amortization
    
    
    1,931
    

    
    
    1,697Interest, net
    
    
    (778
    )
    
    
    (383
    )EBITDA from continuing operations
    
    $
    4,601
    
    
    $
    (9,528
    )