Intelligent Systems Corporation [NYSE American: INS], the leading
provider of innovative credit technology solutions and processing
services to the financial technology and services market, announced
today its financial results for the third fiscal quarter ended
September 30, 2019.
“Our third quarter results reflect the continued success of our
proven platform and unique services that translated into another
quarter of significant growth for both revenue and profitability,”
said Leland Strange, CEO of Intelligent Systems. “We are pleased
with our third quarter revenue of $9.5 million, which was up 76
percent, matching our previously reported preliminary estimate.
Income from operations was $4.2 million, within our preliminary
range of $4.0 to $4.3 million. Revenue was driven by an increase in
the number of customers and accounts, as well as an increase in the
number and value of professional services contracts completed
during the third quarter. The step up in income from operations was
in line with our expectations as license revenue contributed
significantly more to total revenue for the third quarter.”
“We continue to make the needed investments in
research and development as we grow our Processing Services
business and build infrastructure that will allow us to scale in
future years. We are adding new processing customers at a faster
pace than we are adding new license customers, resulting in steady
growth in the processing revenue stream although it is still
relatively small. As we head into the final months of the year, we
remain optimistic that the momentum we’ve experienced to date will
carry into 2020.”
Financial Highlights for the Third
Quarter of 2019
Total revenues of $9,522,000 in
the three-month period represented growth of 76 percent compared to
the same period in 2018.
In the following table, revenue is disaggregated by type of
revenue for the three months ended September 30, 2019 and 2018:
|
Three Months Ended September 30, (in
thousands) |
|
|
2019 |
|
|
2018 |
License |
$ |
2,225 |
|
$ |
129 |
Professional services |
|
4,579 |
|
|
3,178 |
Processing and maintenance |
|
2,235 |
|
|
1,678 |
Third party |
|
483 |
|
|
430 |
Total |
$ |
9,522 |
|
$ |
5,415 |
|
|
|
|
|
|
Income from operations was
$4,200,000 for the quarter compared to income from operations of
$1,736,000 in the comparable prior year quarter.
Net income was $3,092,000 for
the quarter compared to net income of $1,866,000 in the comparable
prior year quarter.
Earnings per diluted share was
$0.34 for the quarter ended September 30, 2019.
Investor Conference Call
Today
The company is holding an investor conference
call today, November 1, 2019, at 11:00 A.M. Eastern Standard Time.
Interested investors are invited to attend the conference call by
dialing (855) 766-6518 and entering conference ID 9246629. As
part of the conference call Intelligent Systems will be conducting
a question and answer session where participants are invited to
email their questions to fax@intelsys.com prior to the call. 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, 2019 with the Securities and Exchange
Commission today, November 1, 2019. 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
CorporationFor 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 provides prepaid and credit card processing
services using its proprietary software solutions that it also
licenses to others. CoreCard has designed and developed a
comprehensive suite of software solutions that corporations,
financial institutions, retailers and processors use to manage
credit and debit cards, prepaid cards, private label cards, fleet
cards, loyalty programs, and accounts receivable and small loan
transactions. CoreCard's flexible and proven processing platform is
being utilized in many countries in addition to the United States
including Australia, Canada, China, the United Arab Emirates,
France, Italy, Mexico, New Zealand, Singapore, South Africa and the
United Kingdom. Further information is available on the company’s
website at 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.
|
|
Intelligent Systems Corporation |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(unaudited, in thousands, except share and per share amounts) |
|
|
Three Months Ended September
30, |
Nine Months EndedSeptember
30, |
|
|
2019 |
|
|
|
2018 |
|
|
2019 |
|
|
2018 |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
Services |
$ |
7,297 |
|
|
$ |
5,286 |
|
$ |
20,275 |
|
$ |
13,757 |
Products |
|
2,225 |
|
|
|
129 |
|
|
3,725 |
|
|
289 |
Total net revenue |
|
9,522 |
|
|
|
5,415 |
|
|
24,000 |
|
|
14,046 |
Cost of
revenue |
|
|
|
|
|
|
|
|
|
|
|
|
Services |
|
3,012 |
|
|
|
2,323 |
|
|
8,445 |
|
|
5,972 |
Products |
|
− |
|
|
|
− |
|
|
− |
|
|
136 |
Total cost of revenue |
|
3,012 |
|
|
|
2,323 |
|
|
8,445 |
|
|
6,108 |
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Marketing |
|
35 |
|
|
|
85 |
|
|
124 |
|
|
240 |
General and administrative |
|
700 |
|
|
|
466 |
|
|
2,394 |
|
|
1,357 |
Research and development |
|
1,575 |
|
|
|
805 |
|
|
3,634 |
|
|
2,467 |
Income from operations |
|
4,200 |
|
|
|
1,736 |
|
|
9,403 |
|
|
3,874 |
Other income (loss) |
|
(5 |
) |
|
|
245 |
|
|
248 |
|
|
128 |
Income
before Income taxes |
|
4,195 |
|
|
|
1,981 |
|
|
9,651 |
|
|
4,002 |
Income
taxes |
|
1,103 |
|
|
|
115 |
|
|
2,379 |
|
|
185 |
Net income |
$ |
3,092 |
|
|
$ |
1,866 |
|
$ |
7,272 |
|
$ |
3,817 |
Earnings per share
attributable to Intelligent Systems Corporation: |
|
|
|
Basic |
$ |
0.35 |
|
|
$ |
0.21 |
|
$ |
0.82 |
|
$ |
0.43 |
Diluted |
$ |
0.34 |
|
|
$ |
0.21 |
|
$ |
0.81 |
|
$ |
0.43 |
Basic
weighted average common shares outstanding |
|
8,886,321 |
|
|
|
8,797,988 |
|
|
8,859,544 |
|
|
8,789,099 |
Diluted weighted average common shares outstanding |
|
9,013,459 |
|
|
|
8,976,415 |
|
|
8,977,501 |
|
|
8,943,652 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intelligent Systems Corporation |
CONSOLIDATED BALANCE SHEETS |
(in thousands, except share and per share amounts) |
|
As of |
September 30, 2019 |
December 31, 2018 |
ASSETS |
(unaudited) |
(audited) |
Current
assets: |
|
|
Cash |
$ |
23,676 |
|
$ |
18,919 |
|
Marketable securities |
|
370 |
|
|
349 |
|
Accounts receivable, net |
|
6,059 |
|
|
3,731 |
|
Notes and interest receivable, current portion |
|
‒ |
|
|
581 |
|
Other current assets |
|
1,039 |
|
|
1,202 |
|
Total current assets |
|
31,144 |
|
|
24,782 |
|
Investments |
|
3,309 |
|
|
760 |
|
Notes
and interest receivable, net of current portion |
|
1,272 |
|
|
1,745 |
|
Property
and equipment, at cost less accumulated depreciation |
|
2,336 |
|
|
1,513 |
|
Other
long-term assets |
|
1,469 |
|
|
504 |
|
Total assets |
$ |
39,530 |
|
$ |
29,304 |
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts payable |
$ |
280 |
|
$ |
272 |
|
Deferred revenue, current portion |
|
442 |
|
|
781 |
|
Accrued payroll |
|
2,049 |
|
|
1,145 |
|
Accrued expenses |
|
98 |
|
|
71 |
|
Income tax payable |
|
1,504 |
|
|
284 |
|
Other current liabilities |
|
1,154 |
|
|
719 |
|
Total current liabilities |
|
5,527 |
|
|
3,272 |
|
Noncurrent liabilities: |
|
|
Deferred revenue, net of current portion |
|
41 |
|
|
111 |
|
Long-term lease obligation |
|
509 |
|
|
‒ |
|
Total noncurrent liabilities |
|
550 |
|
|
111 |
|
Intelligent Systems Corporation stockholders’ equity: |
|
|
Common stock, $0.01 par value, 20,000,000 shares authorized,
8,897,988 and 8,817,988 |
|
issued and outstanding at September 30, 2019 and December 31,
2018, |
|
|
|
|
|
|
respectively |
|
89 |
|
|
88 |
|
Additional paid-in capital |
|
15,341 |
|
|
15,050 |
|
Accumulated other comprehensive loss |
|
(124 |
) |
|
(92 |
) |
Accumulated income |
|
18,147 |
|
|
10,875 |
|
Total Intelligent Systems Corporation stockholders’ equity |
|
33,453 |
|
|
25,921 |
|
Total liabilities and stockholders’ equity |
$ |
39,530 |
|
$ |
29,304 |
|
|
|
|
|
|
|
|
For further information, callMatt White,
770-564-5504 or email to matt@intelsys.com
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