Image Sensing Systems Announces First Quarter 2017 Financial Results
May 03 2017 - 4:05PM
Image Sensing Systems, Inc. (NASDAQ:ISNS) today announced results
for its first quarter ended March 31, 2017.
First Quarter Results:
Image Sensing Systems’ (ISS) 2017 first quarter
revenue was $3.1 million, compared to $3.2 million in the first
quarter of 2016. Gross margin from operations for the first quarter
of 2017 was 79 percent, a 7 percentage point increase from a gross
margin of 72 percent for the same period in 2016. The
increase in the gross margin percent was the result of higher
percentage of revenue from royalties and improved product sales
gross margin. Revenue from royalties remained constant at
$1.6 million compared to the prior year period.
Product sales decreased to $1.4 million in the
quarter, an 11 percent decrease from the $1.6 million in the first
quarter of 2016. Lower product sales resulted from a previously
identified supply chain disruption that was not resolved until late
into the first quarter, and softer demand in the Middle East and
Europe due to suppressed oil prices and reduced European Union (EU)
funding. Autoscope Video product sales and royalties
were $260,000 and $1.6 million, respectively, and RTMS Radar
product sales were $1.2 million in the first quarter of 2017.
The Company’s net income in the first quarter
was $197,000, or $0.04 per basic share, compared to a net loss of
$292,000 or $0.06 per basic share, in the prior year period. The
first quarter 2017 net income from operations includes operating
expenses of $2.3 million, a reduction of $357,000, representing an
improvement of approximately 14 percent from the first quarter of
2016. During the first quarter of 2017, we capitalized $174,000 of
internal software development costs compared to $601,000 in the
prior year period.
On a non-GAAP basis, excluding intangible asset
amortization, depreciation, and restructuring charges for the
applicable periods, operating income from operations for the first
quarter of 2017 was $353,000 compared to an operating loss of
$88,000 in the first quarter of 2016.
“It has been seven years since the company has
posted a profitable first quarter. It is rewarding to see the hard
work and discipline of the ISS team,” said Chad Stelzig, President
and CEO for ISS. “While we are pleased with the results, we
are not satisfied. Investment into new technology
development, improved customer engagement initiatives, and
continued collaboration with our partners will continue to promote
profitable growth,” concluded Mr. Stelzig.
Non-GAAP Financial Measures:We provide certain
non-GAAP financial information as supplemental information to
financial measures calculated and presented in accordance with GAAP
(Generally Accepted Accounting Principles in the United States).
This non-GAAP information excludes the impact of amortizing
intangible assets and depreciation 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 SystemsImage 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)
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; adverse
weather conditions in our markets; the impact of governmental laws
and regulations; international presence; our success in integrating
any 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, 2016 filed on March 24, 2017.
Image Sensing Systems, Inc. |
|
Condensed Consolidated Statements of Operations |
|
(in thousands, except per share information) |
|
(unaudited) |
|
|
|
|
|
Three-Month Periods Ended March 31, |
|
|
|
|
2017 |
|
|
2016 |
|
|
Revenue |
|
|
|
|
|
Royalties |
|
$1,644 |
|
$1,624 |
|
|
Product
sales |
|
|
1,440 |
|
|
1,614 |
|
|
|
|
|
3,084 |
|
|
3,238 |
|
|
Cost of revenue |
|
|
634 |
|
|
918 |
|
|
Gross profit |
|
|
2,450 |
|
|
2,320 |
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
Selling,
general and administrative |
|
|
1,436 |
|
|
1,689 |
|
|
Research
and development |
|
|
816 |
|
|
794 |
|
|
Restructuring charges |
|
|
-- |
|
|
126 |
|
|
|
|
|
2,252 |
|
|
2,609 |
|
|
Income (loss) from
operations |
|
|
198 |
|
|
(289) |
|
|
Other income
(loss) |
|
|
3 |
|
|
(1) |
|
|
Income (loss) before
income taxes |
|
|
201 |
|
|
(290) |
|
|
Income tax expense |
|
|
4 |
|
|
2 |
|
|
Net income (loss) |
|
$197 |
|
$(292) |
|
|
|
|
|
|
|
|
Basic net income (loss)
per share |
|
$0.04 |
|
$(0.06) |
|
|
Diluted net income
(loss) per share |
|
$0.04 |
|
$(0.06) |
|
|
|
|
|
|
|
|
Weighted shares –
basic |
|
|
5,096 |
|
|
5,030 |
|
|
Weighted shares –
diluted |
|
|
5,096 |
|
|
5,030 |
|
|
Image Sensing Systems, Inc. |
Condensed Consolidated Balance Sheets |
(in thousands) |
(unaudited) |
|
|
March 31,2017 |
|
December 31,2016 |
Assets |
|
|
|
Current
assets |
|
|
|
Cash and
cash equivalents |
$2,120 |
|
$1,547 |
Receivables, net |
|
2,812 |
|
|
3,011 |
Inventories |
|
224 |
|
|
141 |
Prepaid
expenses and other current assets |
|
290 |
|
|
281 |
|
|
5,446 |
|
|
4,980 |
|
|
|
|
Property
and equipment, net |
|
352 |
|
|
371 |
Intangible assets, net |
|
2,879 |
|
|
2,795 |
Deferred
taxes |
|
58 |
|
|
58 |
|
$8,735 |
|
$8,204 |
Liabilities and
Shareholders’ Equity |
|
|
|
Current
liabilities |
|
|
|
Accounts
payable |
$641 |
|
$256 |
Warranty |
|
1,124 |
|
|
1,223 |
Accrued
compensation |
|
239 |
|
|
193 |
Other
current liabilities |
|
250 |
|
|
323 |
|
|
2,254 |
|
|
1,995 |
|
|
|
|
Deferred
tax liability |
|
1 |
|
|
-- |
|
|
2,255 |
|
|
1,995 |
|
|
|
|
Shareholders’ equity |
|
6,480 |
|
|
6,209 |
|
$8,735 |
|
$8,204 |
|
|
|
|
|
|
Image Sensing Systems, Inc. Non-GAAP Income
(Loss) from Operations (in thousands) (unaudited)
We define Non-GAAP income (loss) from operations
as income (loss) from operations before amortization of intangible
assets, depreciation and restructuring charges for the applicable
periods. Management believes Non-GAAP income (loss) from
operations is a useful indicator of our financial performance and
our ability to generate cash flows from operations. Our
definition of Non-GAAP income (loss) from operations may not be
comparable to similarly titled definitions used by other
companies. The table below reconciles Non-GAAP income (loss)
from operations, which is a non-GAAP financial measure, to
comparable GAAP financial measures:
|
|
Three-Month Periods Ended March 31, |
|
|
|
|
|
2017 |
|
|
2016 |
|
|
|
Income (loss) from
operations |
|
$198 |
|
$(289) |
|
|
|
Depreciation |
|
|
65 |
|
|
75 |
|
|
|
Amortization of
intangible assets |
|
|
90 |
|
|
-- |
|
|
|
Restructuring
charges |
|
|
-- |
|
|
126 |
|
|
|
Non-GAAP income (loss)
from operations |
|
$353 |
|
$(88) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Note – Our calculation of Non-GAAP income (loss)
from operations is considered a non-GAAP financial measure and is
not in accordance with, or preferable to, “as reported”, or GAAP
financial data. However, we are providing this information,
as we believe it facilitates analysis of the Company’s financial
performance by investors and financial analysts.
Contact:
Richard Ehrich, Chief Financial Officer
Image Sensing Systems, Inc. Phone: 651.603.7700
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