Digital Angel Corporation Announces First-Quarter 2004 Results
May 03 2004 - 10:08AM
PR Newswire (US)
Digital Angel Corporation Announces First-Quarter 2004 Results SO.
ST. PAUL, Minn., May 3 /PRNewswire-FirstCall/ -- Digital Angel
Corporation , an advanced technology company in the field of rapid
and accurate identification, location tracking, and condition
monitoring of high-value assets, today announced results for its
first quarter ended March 31, 2004. First-quarter 2004 total
revenues were $11.1 million, down slightly from first-quarter 2003
revenues of $11.4 million. Net loss per basic and diluted share for
the first quarter of 2004 was $0.12, versus a break-even result for
the first quarter of 2003. First-quarter 2004 results were
negatively affected by a non-operating charge of $2.6 million to
recognize realized and unrealized losses on an investment in common
shares of Applied Digital Solutions, Inc. (NASDAQ:ADSXD), made
pursuant to a share exchange transaction with Applied Digital
agreed to in August of 2003, and that became effective in February
2004. Applied Digital Solutions is a majority owner of Digital
Angel Corporation. Digital Angel CEO Kevin McGrath stated, "I'm
pleased by our results for the quarter. Operationally, we are
performing well and, despite the negative financial impact of the
Applied Digital share exchange described above, that transaction
allows us to continue to strengthen our balance sheet and fund our
requirements for the year ahead. Moreover, I can say that the
entire management team is focused on growing revenue in areas with
good near term margin opportunity." McGrath continued, "We also
completed the sale of the Medical Advisory Services assets in
April. This transaction reflects our commitment to focus on our
core revenue generating units and activities." Chief Financial
Officer Jim Santelli commented, "Our first-quarter operating
results were in line with our plan and our balance sheet
strengthened considerably during the quarter, primarily as a result
of an increase in our cash as we began to sell the Applied Digital
shares. The sale of the Medical Advisory Services assets is
expected to have a favorable impact on our income statement for the
fiscal year, but will have a modestly negative effect in the second
quarter as we record shutdown expenses related to that operation.
We are maintaining our focus on balance sheet improvements and we
believe we have adequate working capital to continue to execute our
strategic plan for the balance of 2004." Results Conference Call A
conference call for institutional investors to discuss the results
for the first quarter of fiscal year 2004 will take place today at
3:00 PM EDT, and will be broadcast live over the Internet. The live
webcast may be accessed by visiting the Company's site at
http://www.digitalangelcorp.com/ or by going to
http://www.vcall.com/. Web participants are encouraged to go to
these sites at least 15 minutes prior to the start of the call to
register, download, and install any necessary audio software. An
online archive will be available immediately following the call and
will continue to be available for ninety days thereafter. About
Digital Angel Corporation Digital Angel Corporation develops and
deploys sensor and communications technologies that enable rapid
and accurate identification, location tracking, and condition
monitoring of high-value assets. Applications for the Company's
products include identification and monitoring of pets, fish and
livestock through its patented implantable microchips; location
tracking and message monitoring of vehicles and aircraft in remote
locations through systems that integrate GPS and geosynchronous
satellite communications; and monitoring of asset conditions such
as temperature and movement, through advanced miniature sensors.
Digital Angel Corporation is majority-owned by Applied Digital
Solutions, Inc. (NASDAQ:ADSXD). For more information about Digital
Angel, please visit http://www.digitalangelcorp.com/. For further
information please contact: investors, Jay F. McKeage,
+1-212-691-8087, , or media, Len Hall, +1-949-474-4300, , both of
Allen & Caron Inc, for Digital Angel Corporation. The
statements in this press release that are not strictly historical,
are "forward-looking" statements within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 and are intended to be covered by the safe
harbors created by these sections. The forward-looking statements
are subject to risks and uncertainties and the actual results that
the Company achieves may differ materially from these
forward-looking statements due to such risks and uncertainties,
including, but not limited to, that recent changes in the Company's
senior management could have an adverse effect on the Company's
financial results that the Company's stockholders will experience
dilution if certain debt owned by the Company is converted into
common stock; the risk of foreclosure on substantially all of the
Company's assets; that the Company's majority stockholder, Applied
Digital Solutions, Inc. is able to completely control the board of
directors and may support actions that conflict with the interests
of other stockholders; that the Company's earnings will decline if
it writes off additional goodwill and other intangible assets; that
exercises of the Company's options and warrants outstanding and
available for issuance may adversely affect the market price of the
Company's common stock, the Company's inability to generate income,
the Company's ability to maintain patent and trade secret
protection, domestic and foreign government regulation, the
Company's sales to government contractors of animal identification
products, dependence on a single production arrangement for its
patented syringe-injectable microchips, dependence on principal
customers, competition in the visual and electronic identification
markets, foreign currency rate fluctuation, dependence on a small
team of senior management and the Company's ability to develop,
integrate, miniaturize and market the Digital Angel TM technology.
A detailed statement of risks and uncertainties is contained in the
Company's reports to the Securities and Exchange Commission,
including in particular the Company's Form 10-K for the fiscal year
ended December 31, 2003. Investors and stockholders are urged to
read this document carefully. The Company can offer no assurances
that any projections, assumptions or forecasts made or discussed in
this release will be met, and investors should understand the risks
of investing solely due to such projections. The Company undertakes
no obligation to revise any forward-looking statements in order to
reflect events or circumstances that may arise after the date of
this press release. DIGITAL ANGEL CORPORATION AND SUBSIDIARIES
Condensed Balance Sheets (in thousands) March 31, December 31, 2004
2003 (Unaudited) Total Current Assets $19,769 $12,929 Property and
Equipment, net 7,544 7,665 Goodwill and Other Intangible Assets,
net 53,865 45,608 Other Assets, net 1,204 1,105 Total Assets
$82,382 $67,307 Current Liabilities $17,516 $16,006 Long-Term Debt
and Notes Payable 2,543 2,818 Deferred Revenue 347 -- Minority
Interest 6 -- Stockholders' Equity 61,970 48,483 Total Liabilities
and Stockholders' Equity $82,382 $67,307 Statement of Operations
Data (in thousands, except per share amounts) For the quarter ended
March 31, (Unaudited) 2004 2003 Total net revenue $11,126 $11,398
Gross profit 4,583 5,364 Net (loss) income (3,744) 110 Net (loss)
income per common share (basic and diluted) ($ 0.12) $0.00 Weighted
average common shares outstanding: Basic 30,468 26,663 Diluted
30,468 30,638 Selected Cash Flow Data (in thousands) For the
quarter ended March 31, (Unaudited) 2004 2003 Net Cash Used in
Operating Activities $(2,274) $(3,089) Net Cash Provided by (Used
in) Investing Activities 1,280 (241) Net Cash Provided by Financing
Activities 1,848 3,155 Net Increase (Decrease) in Cash 796 (214)
DATASOURCE: Digital Angel Corporation CONTACT: investors, Jay F.
McKeage, +1-212-691-8087, , or media, Len Hall, +1-949-474-4300, ,
both of Allen & Caron Inc, for Digital Angel Corporation Web
site: http://www.digitalangelcorp.com/
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