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 quarter and year ended December
31, 2019.
“Our top-line growth was again better than
anticipated as our unique offering resonated well
with top-tier global companies seeking to partner with a
flexible and nimble credit technology provider,” said Leland
Strange, CEO of Intelligent Systems. “We achieved revenues of $10.3
million for the fourth quarter of 2019 and $34.3 million for the
fiscal year of 2019, representing growth of 70% and 71%,
respectively, over the prior year periods. I am pleased with the
strong performance the team has achieved and more importantly the
strong financial position Intelligent Systems is in as we head into
fiscal year 2020. Our strong cash position is expected to continue
to grow even though we continue to invest in the business to drive
growth and deliver sustainable shareholder value.”
Mr. Strange continued, “As we look to fiscal
year 2020, we do not anticipate the level of growth we have seen in
2019, in which we helped launch major new projects for high
visibility customers. We will focus on solidifying our
infrastructure and continuing to provide the best support possible,
doing whatever it takes, and use this year as a building period
pursuing the steps needed to ensure CoreCard exceeds current
customer expectations as they grow their card portfolios. In order
to achieve long-term sustainable growth, it is imperative we take
the needed time this year to build a strong and stable foundation
for the business. We expect our processing services business to
continue to grow and set the stage for even more growth in
2021.”
Financial Highlights for the three and
twelve months ended December 31, 2019
Total revenues of $10,303,000
and $34,303,000 for the three and twelve-month periods,
respectively. Growth represented 70%, and 71% for the three and
twelve-month periods, respectively, as compared to the same periods
in 2018.
In the following table, revenue is disaggregated by type of
revenue for the three months and twelve months ended December 31,
2019 and 2018:
|
|
Three Months
Ended |
|
Twelve
Months Ended |
|
|
|
December 31, |
|
December 31, |
|
|
(in thousands) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
License |
|
$ |
2,000 |
|
$ |
1,060 |
|
$ |
5,725 |
|
$ |
1,349 |
|
|
Professional services |
|
|
5,998 |
|
|
2,992 |
|
|
19,203 |
|
|
11,041 |
|
|
Processing and maintenance |
|
|
1,879 |
|
|
1,632 |
|
|
7,650 |
|
|
6,394 |
|
|
Third party |
|
|
426 |
|
|
370 |
|
|
1,725 |
|
|
1,316 |
|
|
Total |
|
$ |
10,303 |
|
$ |
6,054 |
|
$ |
34,303 |
|
$ |
20,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations was
$3,979,000 for the fourth quarter compared to income from
operations of $2,268,000 in the comparable prior year quarter. Full
year 2019 income from operations was $13,382,000 compared to
$6,142,000 in the comparable prior year.
Net income was $3,697,000 for
the fourth quarter compared to net income of $2,427,000 in the
comparable prior year quarter. Full year 2019 net income was
$10,969,000 compared to $6,244,000 in the comparable prior
year.
Earnings per diluted share was
$0.41 for the quarter ended December 31, 2019. Full year 2019
earnings per diluted share was $1.22 compared to $0.70 in the
comparable prior year.
Investor Conference Call
Today
The company is holding an investor conference
call today, February 11, 2020, 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 2061606. 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-K for the
period ended December 31, 2019 with the Securities and Exchange
Commission in early March. For additional information about
reported results, investors will be able to access the Form 10-K 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
CorporationCONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except share and per share
amounts) |
|
|
|
|
Three Months Ended December
31, |
Twelve Months EndedDecember
31, |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
Services |
$ |
8,303 |
|
$ |
4,994 |
|
$ |
28,578 |
|
$ |
18,751 |
Products |
|
2,000 |
|
|
1,060 |
|
|
5,725 |
|
|
1,349 |
Total net revenue |
|
10,303 |
|
|
6,054 |
|
|
34,303 |
|
|
20,100 |
Cost of revenue |
|
|
|
|
|
|
|
|
|
|
|
Services |
|
3,314 |
|
|
2,416 |
|
|
11,759 |
|
|
8,388 |
Products |
|
− |
|
|
− |
|
|
− |
|
|
136 |
Total cost of revenue |
|
3,314 |
|
|
2,416 |
|
|
11,759 |
|
|
8,524 |
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Marketing |
|
27 |
|
|
15 |
|
|
151 |
|
|
255 |
General and administrative |
|
1,101 |
|
|
469 |
|
|
3,495 |
|
|
1,826 |
Research and development |
|
1,882 |
|
|
886 |
|
|
5,516 |
|
|
3,353 |
Income from operations |
|
3,979 |
|
|
2,268 |
|
|
13,382 |
|
|
6,142 |
Other income (loss) |
|
(115 |
) |
|
(22 |
) |
|
133 |
|
|
106 |
Income before Income taxes |
|
3,864 |
|
|
2,246 |
|
|
13,515 |
|
|
6,248 |
Income taxes |
|
167 |
|
|
(181 |
) |
|
2,546 |
|
|
4 |
Net income |
$ |
3,697 |
|
$ |
2,427 |
|
$ |
10,969 |
|
$ |
6,244 |
Earnings per share attributable
to Intelligent Systems Corporation: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.41 |
|
$ |
0.28 |
|
$ |
1.24 |
|
$ |
0.71 |
Diluted |
$ |
0.41 |
|
$ |
0.27 |
|
$ |
1.22 |
|
$ |
0.70 |
Basic weighted average common
shares outstanding |
|
8,913,655 |
|
|
8,817,988 |
|
|
8,873,071 |
|
|
8,796,321 |
Diluted weighted average common shares outstanding |
|
9,014,032 |
|
|
8,984,804 |
|
|
8,967,901 |
|
|
8,948,518 |
|
|
|
Intelligent Systems
CorporationCONSOLIDATED BALANCE SHEETS(in
thousands, except share and per share amounts) |
|
|
|
|
|
|
|
|
|
As of |
December 31, 2019 |
|
|
December 31, 2018 |
ASSETS |
(unaudited) |
|
|
(audited) |
Current assets: |
|
|
|
|
|
|
|
|
Cash |
$ |
26,415 |
|
|
|
$ |
18,919 |
|
Marketable securities |
|
‒ |
|
|
|
|
349 |
|
Accounts receivable, net |
|
8,759 |
|
|
|
|
3,731 |
|
Notes and interest receivable, current portion |
|
‒ |
|
|
|
|
581 |
|
Other current assets |
|
905 |
|
|
|
|
1,202 |
|
Total current assets |
|
36,079 |
|
|
|
|
24,782 |
|
Investments |
|
3,081 |
|
|
|
|
760 |
|
Notes and interest receivable,
net of current portion |
|
1,795 |
|
|
|
|
1,745 |
|
Property and equipment, at cost
less accumulated depreciation |
|
2,177 |
|
|
|
|
1,513 |
|
Other long-term assets |
|
1,108 |
|
|
|
|
504 |
|
Total assets |
$ |
44,240 |
|
|
|
$ |
29,304 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
Accounts payable |
$ |
403 |
|
|
|
$ |
272 |
|
Deferred revenue, current portion |
|
689 |
|
|
|
|
781 |
|
Accrued payroll |
|
2,503 |
|
|
|
|
1,145 |
|
Accrued expenses |
|
153 |
|
|
|
|
71 |
|
Income tax payable |
|
1,100 |
|
|
|
|
284 |
|
Other current liabilities |
|
1,345 |
|
|
|
|
719 |
|
Total current liabilities |
|
6,193 |
|
|
|
|
3,272 |
|
Noncurrent liabilities: |
|
|
Deferred revenue, net of current portion |
|
23 |
|
|
|
|
111 |
|
Long-term lease obligation |
|
460 |
|
|
|
|
‒ |
|
Deferred tax liability |
|
275 |
|
|
|
|
‒ |
|
Total noncurrent liabilities |
|
758 |
|
|
|
|
111 |
|
Intelligent Systems
Corporation stockholders’ equity: |
|
|
Common stock, $0.01 par value, 20,000,000 shares authorized,
8,924,988 and 8,817,988 issued and outstanding at December 31,
2019 and December 31, 2018, respectively |
|
89 |
|
|
|
|
88 |
|
Additional paid-in capital |
|
15,450 |
|
|
|
|
15,050 |
|
Accumulated other comprehensive loss |
|
(94 |
) |
|
|
|
(92 |
) |
Accumulated income |
|
21,844 |
|
|
|
|
10,875 |
|
Total Intelligent Systems Corporation stockholders’ equity |
|
37,289 |
|
|
|
|
25,921 |
|
Total liabilities and stockholders’ equity |
$ |
44,240 |
|
|
|
$ |
29,304 |
|
|
|
|
|
|
|
|
|
|
For further information, callMatt White,
770-564-5504 or email to matt@intelsys.com
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