- Product sales increased 28 percent year-over-year to
$4.3 million
- Company continues to invest in research, development
and marketing for future growth
Image Sensing Systems, Inc. (Nasdaq:ISNS), today announced results
for its 2013 third quarter, ended September 30, 2013.
Image Sensing's 2013 third quarter revenue was $7.7 million, a
7.9 percent increase from revenue of $7.2 million in the third
quarter of 2012. Revenue from royalties was $3.4 million in the
quarter, compared to $3.8 million in the third quarter of 2012.
Product sales were $4.3 million in the quarter, including $1.4
million of worldwide sales for Autoscope® License Plate Recognition
(LPR) products. Autoscope Video product sales and royalties were
495,000 and $3.1 million, respectively. Autoscope Radar product
sales and royalties were $2.5 million and $309,000, respectively,
in the quarter.
"We are generally pleased with our performance in the quarter
and believe that we are on the right trajectory to return to
historical profitability levels and create long-term shareholder
value," said Kris Tufto, CEO. "Our confidence is the result of the
activity we are seeing across all of our businesses and our
best-in-class product offering that is recognized throughout the
industry. Yet our business, like others, continues to be subject to
economic conditions, varying order sizes, and seasonal factors. As
we approach the seasonally slow winter months we remain confident
that revenues will accelerate as we make our way through 2014."
The Company's net loss for the quarter was $1.9 million, or
$(0.39) per share, compared to net income of $1.0 million, or $0.20
per diluted share, in the third quarter of 2012. The third quarter
2013 net loss includes operating expenses of $6.7 million, a $2.2
million increase from 2012. Included in the third quarter 2013 are
expenses totaling $476,000 related to the previously disclosed
investigation. Third quarter 2013 operating expenses include
research and development costs of $1.7 million, a $700,000
year-over-year increase, reflecting higher investment levels. On a
non-GAAP basis, excluding intangible asset amortization, impairment
and the costs of the previously disclosed investigation, net of
tax, the net loss for the third quarter was $1.0 million or $(0.21)
per share, compared to net income of $831,000 or $0.17 per diluted
share, in the same period a year ago.
Product sales gross margin for the third quarter of 2013 was 32
percent, which includes charges related to a write-off of an
obsolete finished product. Also negatively impacting third-quarter
product sales gross margin were additional expenses related to the
transition of the company's warranty repair service for Autoscope
Radar products to its contract manufacturer. Management believes
margins will trend toward historical levels over time.
Said Tufto, "We remained focused on research and development,
and our sales activity during the third quarter reflects the
investments we have made. We are excited to introduce new products
and unveil new data analytic software platforms to enhance license
plate recognition and monitoring in the fourth quarter. We are
already seeing results from our efforts and are pleased with the
progress we've made in building our sales pipeline."
In the first nine months of 2013, revenues increased to $19.8
million, up 9 percent from $18.1 million in the same period in
2012. Revenue from royalties was flat year-over-year at $9.2
million, and product sales were $10.7 million in the first nine
months, including $5.1 million of worldwide ALPR products.
Autoscope Radar product sales and royalties were $3.4 million and
$981,000, respectively, for the nine-month period. The year-to-date
net loss totals $5.1 million, or $(1.04) per share, compared to a
net loss of $3.3 million, or $(0.68) per share, in 2012.
On a non-GAAP basis, excluding intangible asset amortization and
costs of the investigation, net of tax, net loss for the first nine
months was $2.0 million, or $(0.40) per share, compared to a net
income of $735,000, or $0.15 per share, in the first nine months of
2012. The previously disclosed investigation is ongoing and the
Company is cooperating with authorities. The Company is presently
unable to determine the likely outcome or range of loss, if any, or
predict with certainty the timeline for resolution of these
matters.
"We continue to manage our expenses, while making the necessary
investments in areas of the business that will drive our future
growth. We look forward to continued product development as a
result of our R&D investments, and are exploring new prospects
domestically and abroad. We are excited as we approach 2014, and
are seeing increased traction from our product launches and
development efforts. I look forward to updating you over the next
few quarters as we restore historical profitability and sustained
growth levels," concluded Tufto.
The Company will hold a live conference call of its 2013
third-quarter results today, Nov. 6, 2013, at 3:45 p.m. CST. To
access the call, dial 877-941-2332 and reference conference ID
4646858. Please dial in at least 10 minutes prior to the call and
wait for assistance, or dial "0" for the operator.
A replay of the conference call will be available beginning at
5:45 p.m. CST on Nov. 6, 2013 and is available until 5:45 p.m. CST
on Nov. 13, 2013. To listen to the replay, dial 800-406-7325,
access code 4646858.
Non-GAAP Information
We provide certain non-GAAP financial information as
supplemental information to GAAP amounts. This non-GAAP information
excludes the impact, net of tax, of amortizing the intangible
assets from acquisitions and may exclude other non-recurring
items. Management believes that this presentation facilitates
the comparison of our current operating results to historical
operating results. Management uses this non-GAAP information to
evaluate short-term and long-term operating trends in our core
operations. Non-GAAP information is not prepared in accordance with
GAAP and should not be considered a substitute for or an
alternative to GAAP financial measures and may not be computed
the same as similarly titled measures used by other companies.
About Image Sensing Systems
Image Sensing Systems, Inc. is a global company dedicated to
helping improve safety and efficiency for cities and highways by
developing and delivering above-ground detection technology,
applications and solutions. We give Intelligent Transportation
Systems (ITS), security, police and parking professionals more
precise and accurate information – including real-time reaction
capabilities and in-depth analytics to make more confident and
proactive decisions. We are headquartered in St. Paul, Minnesota.
Visit us on the web at imagesensing.com.
Safe Harbor Statement: Statements made in
this release concerning the Company's or management's intentions,
expectations, or predictions about future results or events are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements reflect
management's current expectations or beliefs, and are subject to
risks and uncertainties that could cause actual results or events
to vary from stated expectations, which variations could be
material and adverse. Factors that could produce such a variation
include, but are not limited to, the following: the inherent
unreliability of earnings, revenue and cash flow predictions due to
numerous factors, many of which are beyond the Company's control;
developments in the demand for the Company's products and services;
relationships with the Company's major customers and suppliers; the
mix of and margins on the products we sell; unanticipated delays,
costs and expenses inherent in the development and marketing of new
products and services, including LPR products; adverse weather
conditions in our markets; the impact of governmental laws and
regulations; increased international presence; our success in
integrating acquisitions; and competitive factors. Our
forward-looking statements speak only as of the time made, and we
assume no obligation to publicly update any such statements.
Additional information concerning these and other factors that
could cause actual results and events to differ materially from the
Company's current expectations are contained in the Company's
reports and other documents filed with the Securities and Exchange
Commission, including its Annual Report on Form 10-K for the year
ended December 31, 2012 filed in March 2013.
| |
|
|
|
|
| Image Sensing Systems,
Inc. |
| Condensed Consolidated
Statements of Operations |
| (in thousands, except per share
information) |
| (unaudited) |
| |
|
|
|
|
| |
Three-Month Period |
Nine-Month Period |
| |
Ended
September 30, |
Ended
September 30, |
| |
2013 |
2012 |
2013 |
2012 |
| Revenue |
|
|
|
|
| Royalties |
$3,440 |
$3,774 |
$9,167 |
$9,159 |
| Product sales |
4,341 |
3,403 |
10,657 |
8,983 |
| |
7,741 |
7,177 |
19,824 |
18,142 |
| Cost of revenue |
2,944 |
1,861 |
6,511 |
4,493 |
| Gross profit |
4,797 |
5,316 |
13,313 |
13,649 |
| |
|
|
|
|
| Operating expenses |
|
|
|
|
| Selling, marketing and product
support |
2,792 |
1,567 |
7,545 |
5,237 |
| General and administrative |
1,464 |
1,532 |
4,426 |
4,072 |
| Research and development |
1,651 |
954 |
4,138 |
3,241 |
| Investigation matter |
476 |
-- |
3,214 |
-- |
| Amortization of intangible
assets |
328 |
409 |
1,009 |
1,227 |
| Restructuring charges |
-- |
-- |
-- |
430 |
| Goodwill impairment |
-- |
-- |
-- |
3,175 |
| |
6,711 |
4,462 |
20,332 |
17,382 |
| Income (loss) from operations |
(1,914) |
854 |
(7,019) |
(3,733) |
| Other income (loss) |
1 |
3 |
(1) |
27 |
| Income (loss) before income taxes |
(1,913) |
857 |
(7,020) |
(3,706) |
| Income tax expense (benefit) |
22 |
(132) |
(1,887) |
(369) |
| Net income (loss) |
$(1,935) |
$989 |
$(5,133) |
$(3,337) |
| |
|
|
|
|
| Basic net income (loss) per
share |
$(0.39) |
$0.20 |
$(1.04) |
$(0.68) |
| Diluted net income (loss) per
share |
$(0.39) |
$0.20 |
$(1.04) |
$(0.68) |
| |
|
|
|
|
| Weighted shares – basic |
4,970 |
4,904 |
4,949 |
4,878 |
| Weighted shares – diluted |
4,970 |
4,964 |
4,949 |
4,878 |
| |
| Reconciliation of GAAP to non-GAAP
basis |
|
|
|
|
| Non-GAAP operating expenses (1) |
$5,907 |
$4,053 |
$(16,109) |
$12,550 |
| Non-GAAP income (loss) from operations |
(1,110) |
1,263 |
(2,796) |
1,099 |
| Other income (loss) |
1 |
3 |
(1) |
27 |
| Non-GAAP income (loss) before income
taxes |
(1,109) |
1,266 |
(2,797) |
1,126 |
| Non-GAAP income tax expense
(benefit) (2) |
(63) |
435 |
(834) |
391 |
| Non-GAAP net income (loss) |
$(1,046) |
$831 |
$(1,963) |
$735 |
| |
|
|
|
|
| Non-GAAP basic net income
(loss) per share |
$(0.21) |
$0.17 |
$(0.40) |
$0.15 |
| Non-GAAP diluted net income
(loss) per share |
$(0.21) |
$0.17 |
$(0.40) |
$0.15 |
| Notes to non-GAAP adjustments |
| (1) Amortization of
intangible assets, investigation matter expense, restructuring
expenses and goodwill impairment for the applicable periods as
shown above are removed |
| (2) Income tax expense
(benefit) is increased (reduced) by impact to ISS' effective rate
after adjusting for amortization of intangible assets,
restructuring charges and goodwill impairment |
| |
|
|
| Image Sensing Systems,
Inc. |
| Condensed Consolidated Balance
Sheet |
| (in thousands) |
| (unaudited) |
| |
|
|
| |
September 30, |
December 31, |
| |
2013 |
2012 |
| Assets |
|
|
| Current assets |
|
|
| Cash and cash
equivalents |
$3,691 |
$8,334 |
| Investments |
3,883 |
4,817 |
| Receivables,
net |
5,997 |
6,722 |
| Inventories |
4,495 |
4,485 |
| Other current
assets |
3,973 |
1,797 |
| |
22,039 |
26,155 |
| Property and equipment,
net |
1,548 |
1,875 |
| Other assets |
300 |
-- |
| Deferred taxes |
4,017 |
4,017 |
| Goodwill and intangible assets,
net |
6,187 |
6,489 |
| |
$34,091 |
$38,536 |
| Liabilities and Shareholders' Equity |
|
|
| Current liabilities |
|
|
| Accounts payable
and accrued expenses |
$4,484 |
$4,129 |
| Income taxes
payable |
18 |
18 |
| |
4,502 |
4,147 |
| Income taxes payable and
other |
413 |
409 |
| Shareholders' equity |
29,176 |
33,980 |
| |
$34,091 |
$38,536 |
| |
|
|
| |
|
|
| Image Sensing Systems,
Inc. |
| Condensed Consolidated
Statement of Cash Flows |
| (in thousands) |
| (unaudited) |
| |
|
|
| |
Nine-Month Period Ended |
| |
September
30, |
| |
2013 |
2012 |
| Operating activities |
|
|
| Net loss |
$(5,133) |
$(3,337) |
| Adjustments to reconcile net loss to net cash
provided by (used in) operations |
|
|
| Goodwill impairment |
-- |
3,175 |
| Depreciation and
amortization |
1,674 |
1,778 |
| Stock option expense |
149 |
186 |
| Changes in operating assets and
liabilities |
(1,106) |
1,372 |
| Net cash provided by (used in) operating
activities |
(4,416) |
3,174 |
| |
|
|
| Investing activities |
|
|
| Purchases of property and
equipment, net of disposals |
(302) |
(293) |
| Purchase of other
investments |
(300) |
-- |
| Capitalized software
development costs |
(714) |
-- |
| Sales (purchases) of marketable
securities |
934 |
(1,062) |
| Net cash used in investing activities |
(382) |
(1,355) |
| |
|
|
| Financing activities |
|
|
| Proceeds from exercise of
stock options |
9 |
121 |
| Net cash provided by financing
activities |
9 |
121 |
| |
|
|
| Effect of exchange rate changes on cash |
146 |
302 |
| |
|
|
| Increase (decrease) in cash and cash
equivalents |
(4,643) |
2,242 |
| Cash and cash equivalents, beginning of
period |
8,334 |
5,224 |
| Cash and cash equivalents, end of period |
$3,691 |
$7,466 |
CONTACT: Dale Parker, Chief Financial Officer
Image Sensing Systems, Inc. Phone: 651.603.7700
Image Sensing Systems (NASDAQ:ISNS)
Historical Stock Chart
From Jun 2024 to Jul 2024
Image Sensing Systems (NASDAQ:ISNS)
Historical Stock Chart
From Jul 2023 to Jul 2024
