Intelligent Systems Corporation [NYSE American: INS;
www.intelsys.com] announced today its financial results for the
quarter ended September 30, 2018 and a share repurchase plan.
“Our revenue is derived from a mix of licenses,
processing, and professional services and the third quarter
reflected nice increases in each. While license and
professional services revenue varies quarter to quarter and often
does not actually reflect the work or progress of the quarter due
to revenue recognition guidance, everything seemed to come together
this quarter. That being said, we manage to, and I think we are
best measured, because of our enterprise size on an annual basis
rather than quarter to quarter,” commented Leland Strange, CEO
of Intelligent Systems.
“Some of our newer customers are keeping our
team working almost around the clock to rapidly customize
CoreCard’s software for their innovative and complex card
functions. We see no real let up in overall demand although the
work may vary quarter-to-quarter from different customers and we
may see a license revenue “pop” in the first or second quarter if
some of our customers achieve their expected volume targets. We
also added a new processing customer with a conversion from a major
processor to the CoreCard platform. All in all, we are pleased with
our progress and will continue on the path to be a world class
processor for all types of cards, loans and receivables in 2019
while always aware, that in rolling out new technology programs,
unexpected problems may occur,” stated Strange.
Strange added, “Our directors felt a portion of our cash could
best be used in a share repurchase plan while also keeping the door
open for cash to be used for an acquisition or development of
CoreCard program management capabilities.”
Financial Highlights for the Third
Quarter of 2018
Total revenues of $5,415,000 in the three month
period represented growth of 193 percent compared to the same
period in 2017.
Income (loss) from operations was $1,736,000
for the quarter compared to a loss from operations of $496,000 in
the comparable prior year quarter.
Net income was $1,866,000 for the quarter
compared to net income of $1,372,000 in the comparable prior year
quarter.
Earnings per diluted share was $0.21 for the
quarter and $0.43 for the nine month period ended September 30,
2018.
Share repurchase program – In November
2018, our Board of Directors authorized a share repurchase program
to purchase up to $5,000,000 of common stock. The timing and actual
number of shares repurchased will depend on a variety of factors,
including price, general business and market conditions, and
alternative investment opportunities. The repurchase program will
be executed consistent with the company's capital allocation
strategy of prioritizing investment to grow the business over the
long term. Under the repurchase program, repurchases can be made
from time to time using a variety of methods, including open market
purchases, all in compliance with the rules of the United States
Securities and Exchange Commission and other applicable legal
requirements. The repurchase program does not obligate the company
to acquire any particular number of shares, and while the program
has no expiration date the repurchase program may be suspended or
discontinued at any time at the company's discretion.
Investor Conference Call
Today
The company is holding an investor conference
call today, November 8, 2018, at 11 A.M. Eastern Standard
Time. Interested investors are invited to attend the
conference call by dialing (855) 766-6518 and entering conference
ID 7655509. A transcript of the call will be posted on the
company’s website at www.intelsys.com as soon as available after
the call.
The company will file its Form 10-Q for the
period ended September 30, 2018 with the Securities and Exchange
Commission today, November 8, 2018. For additional information
about reported results, investors will be able to access the Form
10-Q on the company’s website at www.intelsys.com or on the SEC
site, www.sec.gov.
About Intelligent Systems
Corporation
For over thirty-five years, Intelligent Systems
Corporation [NYSE American: INS] has identified, created, operated
and grown technology companies. The company’s principal
operations are CoreCard Software, Inc. (www.corecard.com) and its
affiliate companies. CoreCard designs, develops, and markets a
comprehensive suite of software solutions to corporations,
financial institutions, retailers and processors to manage their
credit and debit cards, prepaid cards, private label cards, fleet
cards, loyalty programs, and accounts receivable and small loan
transactions. CoreCard also offers prepaid and credit card
processing services using its proprietary software solutions.
Further information is available on the company’s website at
http://www.intelsys.com or by calling the company at
770-381-2900.
In addition to historical information, this news
release may contain forward-looking statements relating to
Intelligent Systems Corporation and its subsidiary and affiliated
companies. These statements include all statements that are not
statements of historical fact regarding the intent, belief or
expectations of Intelligent Systems Corporation and its management
with respect to, among other things, results of operations, product
plans, and financial condition. The words "may," "will,"
"anticipate," "believe," "intend," "expect," "estimate," "plan,"
"strategy" and similar expressions are intended to identify
forward-looking statements. Prospective investors are
cautioned that any such forward-looking statements are not
guarantees of future performance and involve risks and
uncertainties and that actual results may differ materially from
those contemplated by such forward-looking statements. The company
does not undertake to update or revise any forward-looking
statements whether as a result of new developments or otherwise,
except as required by law. Among the factors that could cause
actual results to differ materially from those indicated by such
forward-looking statements are instability in the financial
markets, delays in product development, undetected software errors,
competitive pressures, changes in customers’ requirements or
financial condition, market acceptance of products and services,
the impact of new or changes in current laws, regulations or other
industry standards, risks relating to unauthorized access to
confidential information due to criminal conduct, attacks by
hackers, employee or insider malfeasance and/or human error and
declines in general economic and financial market conditions,
particularly those that cause businesses to delay or cancel
purchase decisions.
|
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(unaudited, in thousands, except share and per share
amounts) |
|
|
Three Months Ended September
30, |
Nine Months Ended September 30, |
|
2018 |
2017 |
|
2018 |
2017 |
|
Revenue |
|
|
|
|
Services |
$ |
5,286 |
$ |
1,851 |
|
$ |
13,757 |
$ |
6,543 |
|
Products |
|
129 |
|
− |
|
|
289 |
|
90 |
|
Total net revenue |
|
5,415 |
|
1,851 |
|
|
14,046 |
|
6,633 |
|
Cost of
revenue |
|
|
|
|
Services |
|
2,323 |
|
808 |
|
|
5,972 |
|
2,950 |
|
Products |
|
− |
|
− |
|
|
136 |
|
87 |
|
Total cost of revenue |
|
2,323 |
|
808 |
|
|
6,108 |
|
3,037 |
|
Expenses |
|
|
|
|
Marketing |
|
85 |
|
64 |
|
|
240 |
|
212 |
|
General and administrative |
|
466 |
|
343 |
|
|
1,357 |
|
1,221 |
|
Research and development |
|
805 |
|
1,132 |
|
|
2,467 |
|
2,961 |
|
Income (loss) from operations |
|
1,736 |
|
(496 |
) |
|
3,874 |
|
(798 |
) |
Other income (loss) |
|
245 |
|
1,868 |
|
|
128 |
|
1,842 |
|
Income
(loss) before Income taxes |
|
1,981 |
|
1,372 |
|
|
4,002 |
|
1,044 |
|
Income
taxes |
|
115 |
|
− |
|
|
185 |
|
20 |
|
Net income (loss) |
$ |
1,866 |
$ |
1,372 |
|
$ |
3,817 |
$ |
1,024 |
|
Earnings (loss) per share attributable to Intelligent Systems
Corporation: |
|
|
|
Basic |
$ |
0.21 |
$ |
0.16 |
|
$ |
0.43 |
$ |
0.12 |
|
Diluted |
$ |
0.21 |
$ |
0.15 |
|
$ |
0.43 |
$ |
0.12 |
|
Basic
weighted average common shares outstanding |
|
8,797,988 |
|
8,777,988 |
|
|
8,789,099 |
|
8,762,571 |
|
Diluted weighted average common shares outstanding |
|
8,976,415 |
|
8,894,864 |
|
|
8,943,652 |
|
8,883,241 |
|
|
CONSOLIDATED BALANCE SHEETS |
(in thousands) |
|
As of |
September 30, 2018 |
December 31, 2017 |
ASSETS |
(unaudited) |
(audited) |
Current
assets: |
|
|
Cash |
$ |
17,350 |
$ |
14,024 |
Marketable securities |
|
410 |
|
438 |
Accounts receivable, net |
|
3,019 |
|
1,208 |
Notes and interest receivable, current portion |
|
580 |
|
16 |
Other current assets |
|
1,124 |
|
2,373 |
Total current assets |
|
22,483 |
|
18,059 |
Investments |
|
760 |
|
1,035 |
Notes and
interest receivable, net of current portion |
|
1,742 |
|
1,250 |
Property
and equipment, at cost less accumulated depreciation |
|
1,496 |
|
1,262 |
Other
long-term assets |
|
246 |
|
173 |
Total assets |
$ |
26,727 |
$ |
21,779 |
LIABILITIES AND STOCKHOLDERS’
EQUITY |
|
|
Current
liabilities: |
|
|
Accounts payable |
$ |
269 |
$ |
321 |
Deferred revenue, current portion |
|
923 |
|
853 |
Accrued payroll |
|
1,319 |
|
595 |
Accrued expenses |
|
71 |
|
98 |
Other current liabilities |
|
749 |
|
408 |
Total current liabilities |
|
3,331 |
|
2,275 |
Deferred
revenue, net of current portion |
|
67 |
|
51 |
Total stockholders’ equity |
|
23,329 |
|
19,453 |
Total liabilities and stockholders’ equity |
$ |
26,727 |
$ |
21,779 |
|
For further information, callKaren Reynolds, 770-564-5503or
email to karen@intelsys.com
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