Fargo to Supply the New HDP600-LC Card Printer/Encoder to a U.S. Federal Agency

Business Wire, Oct 7, 2004

MINNEAPOLIS -- Fargo Electronics, Inc. (Nasdaq:FRGO), a global leader in secure technologies for card identity systems, today announced that it has been selected to supply its new HDP600-LC card printer/encoder to a major U.S. government agency who requested that it not be specifically identified. The agency's enterprise-wide initiative will provide state-of-the-art smart cards for employees and contractors to securely access facilities and information systems.

The order includes 240 of Fargo's new HDP600-LC card printer/encoders and is expected to ship in the 2004 calendar year.

"We're thrilled to be adding this project to our growing portfolio of government business around the world and proud that our card identity systems can help secure this particular federal agency and its many facilities," said Gary Holland, Fargo's President and CEO. "We are driven to improve the authenticity of identity credentials worldwide, and are particularly pleased to be able to do that for our federal government at these types of critical locations."

The HDP600 is a new dual-sided, full-color printer/encoder that utilizes Fargo's patented High Definition Printing(TM) (HDP(R)) technology. HDP technology was designed for the personalization of RFID proximity, laser and smart cards with computer chips. By printing onto the underside of a special film, which is then fused into the surface of the card through heat and pressure, the HDP600 can print over the edge of cards, tightly around smart chips and on a variety of card surfaces. In addition, its inline encoding module provides seamless integration of encoding and printing on technology cards. The model chosen in this project also includes a built-in laminator that automatically transfers Fargo's patented PolyGuard(TM) overlaminate to the card, for increased security and durability.

The Fargo systems will be incorporated into the card project by MPC Computers of Nampa, Idaho, a government contractor specializing in mid-sized businesses, government agencies and education organizations, and TransTech Systems, a value-added distributor of ID badging and access control products.

"This order not only represents the dedication and hard work of our integration partners, but also testifies to the market acceptance of High Definition Printing," said Kathleen Phillips, Fargo's Vice President of Sales and Marketing. "With more government agencies and large corporations integrating electronic cards into their employee badging, our High Definition Printing series can add both security and functionality to their programs."

Earlier this year, the new HDP600 was also chosen by the U.S. Department of Defense (DoD) for its Common Access Card Project. The DoD is using the HDP600 for its deployable installations including shipboard, guard reserve and other mobile platforms. Several other agencies of the U.S. government, in addition to foreign governments, are currently testing and evaluating the HDP600 technology for the personalization of ID credentials.

Forward-looking Statements

Statements made in this release concerning the company's expectations about future results or events are "forward-looking statements". Such statements are subject to the safe harbor created by the Private Securities Reform Act of 1995, and are necessarily subject to risks and uncertainties. Actual results may differ materially from those reflected in these forward-looking statements. These statements are based on current expectations, forecasts and assumptions, and are subject to the risks and uncertainties inherent in general industry and market conditions, general domestic and international economic conditions, and other factors. These risks and uncertainties include: product acceptance and customer demand for Fargo's card personalization systems and proprietary supplies; actions taken and alternative products marketed by Fargo's competitors; supplier relationships, including reliance on sole and single-source suppliers; manufacturing or design defects that we may discover after shipment; lack of inventories of component parts or finished goods; our focus on the identification card personalization market; continuing technological changes in our industry; our dependence on a distribution network and the reaction of this network to changes in distribution programs; domestic and international regulations and standards; our dependence on international sales; material changes in orders placed by large end users; challenges in effectively managing growth; our dependence on technologies we do not own; complex design and manufacturing delays; protecting and enforcing intellectual property rights; inadequate protection against infringement claims; adverse economic and business conditions, including conditions resulting from the terrorist attack on the U.S. on September 11, 2001 and the resulting hostilities and the war with Iraq commenced in March 2003. For more detail, see the Company's Annual Report on Form 10-K for the year ended December 31, 2003.