Intrusion Inc. Announces Second Quarter Results RICHARDSON, Texas,
Aug. 12 /PRNewswire-FirstCall/ -- Intrusion Inc. (NASDAQ:INTZ),
("Intrusion") today announced financial results for the three
months ended June 30, 2004. Revenue for the second quarter 2004 was
$1.1 million compared to $1.5 million for the second quarter 2003.
Net loss was $1.5 million in the second quarter 2004 compared to
$2.9 million in the second quarter 2003. Gross profit margin was
48% of revenue in the second quarter of 2004 compared to 26% of
revenue in the second quarter of 2003, and operating expenses were
$2.1 million in the second quarter of 2004, compared to $3.4
million in the second quarter of 2003. As of June 30, 2004,
Intrusion reported cash, cash equivalents and short- term
investments of $4.7 million, working capital of $4.3 million and no
debt and the cash used in operations in the second quarter was $1.5
million. "We were disappointed with the delay of some new and very
important business," stated G. Ward Paxton. "Our business pipeline
is growing and we expect growth to resume in the third quarter. The
highlights of the quarter were clearly the development of several
new important products, and the initial reporting on the new
Regulated Information Compliance System (RICS) market by the trade
media," Paxton concluded. Intrusion added many new features and
products to its SecureNet Intrusion Prevention/Detection product
family that will have significant impact in the future. Included in
the new products developed is a product that blocks Spyware from
entering the network and also blocks the Spyware from "phoning-
home" (communicating back to its originating site). During the
quarter, Intrusion announced a new product designed to eliminate
the Internet theft of intellectual property. The new product,
Intellectual Property Monitor (IPM), monitors the flow of
intellectual property data and stops the unauthorized flow of this
data from the customer network. The IPM is added to two other RICS
products that were announced earlier this year which were the HIPAA
Compliance Monitor (HCM) and the Classified Information Leak
Prevention System (LPS). Intrusion recently announced the Regulated
Information Monitor (RIM). The RIM is Intrusion's fourth product in
the RICS product family. The RIM is focused on insuring compliance
to the Gramm-Leach-Bliley Act (GLBA) requirements and safeguarding
against the loss of valuable company assets such as financial
information, and customer lists and information. The RIM product
uses our new Dynamic Data Dictionary (D3) technology, which results
in near zero false positives and false alarms. Intrusion expects
initial sales of the RICS products in the third quarter.
Intrusion's management will host its regularly scheduled quarterly
conference call to discuss the Company's financial and operational
progress at 4:00 P.M., CDT today. Interested investors can access
the call at 1-800-399-2043 (if outside the United States,
1-706-634-5518). For those unable to participate in the live
conference call, a replay will be accessible beginning today at
7:00 P.M., CDT until August 19, 2004 by calling 1-800-642-1687 (if
outside the United States, 1-706-645-9291). At the replay prompt,
enter conference identification number 9068213. Additionally, a
live and archived audio webcast of the conference call will be
available at http://www.intrusion.com/ . About Intrusion Inc.
Intrusion Inc. is a leading global provider of the Intrusion
SecureNet(TM) line of leading network intrusion prevention,
intrusion detection and regulated information compliance products,
as well as deployment technologies and security services for the
information-driven economy. The Intrusion SecureNet(TM) family of
network security products for governments and enterprises help
protect critical information assets by quickly detecting, analyzing
and responding to attacks and the misuse of classified and
regulated information. Associated Intrusion SecureNet(TM) Intrusion
Detection(R) services provide unique value to governments and
enterprises in protecting information assets. For more information,
please visit http://www.intrusion.com/ . This release, other than
historical information, may include forward- looking statements
regarding future events or the future financial performance of the
Company. These statements are made under the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995
and involve risks and uncertainties which could cause actual
results to differ materially from those in the forward-looking
statements, including but not limited to the following: the
difficulties in forecasting future sales caused by current economic
and market conditions, the effect of military actions on government
and corporate spending on information security products, spending
patterns of, and appropriations to, U.S. government departments,
the impact of our cost reduction programs and our refocused product
line, the difficulties and uncertainties in successfully developing
and introducing new products, our ability to continue to meet
operating expenses through current cash flow or additional
financings, our ability to obtain additional financing on
acceptable terms, the highly competitive market for our products,
difficulties in accurately estimating market growth, the
consolidation of the information security industry, the impact of
changing economic conditions, business conditions in the
information security industry, our ability to manage acquisitions
effectively, our ability to manage discontinued operations
effectively, the impact of market peers and their products as well
as risks concerning future technology and others identified in our
Annual Report on Form 10-K, as amended, and other Securities and
Exchange Commission filings. These filings can be obtained by
contacting Intrusion Investor Relations. INTRUSION INC. CONDENSED
CONSOLIDATED BALANCE SHEETS (In thousands except par value amounts)
June 30, December 31, 2004 2003 ASSETS (Unaudited) (Audited)
Current Assets: Cash and cash equivalents $1,636 $974 Short-term
investments 3,100 1,705 Accounts receivable, net of allowance for
doubtful accounts of $574 in 2004 and $574 in 2003 588 972
Inventories, net 1,382 1,286 Other current assets 253 449 Total
current assets 6,959 5,386 Property and equipment, net 234 297
Other assets 77 77 TOTAL ASSETS $7,270 $5,760 LIABILITIES AND
STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable and
accrued expenses $1,692 $2,188 Deferred revenue 919 788 Total
current liabilities 2,611 2,976 Stockholders' Equity: Preferred
stock, $.01 par value: Authorized shares 5,000 - 1,000 shares
issued and outstanding 3,534 --- Common stock, $.01 par value:
Authorized shares 80,000 Issued shares - 5,176 in 2004 and 5,173 in
2003 Outstanding shares - 5,166 in 2004 and 5,163 in 2003 52 52
Common stock held in Treasury, at cost: 10 shares (362) (362)
Additional paid-in capital 48,661 47,526 Accumulated deficit
(46,998) (44,204) Accumulated other comprehensive loss (228) (228)
Total stockholders' equity 4,659 2,784 TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $7,270 $5,760 INTRUSION INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per
share amounts) (Unaudited) Three Months Ended Six Months Ended June
30, June 30, 2004 2003 2004 2003 Total revenue $1,103 $1,483 $2,370
$2,959 Total cost of revenue 577 1,091 1,213 2,095 Gross profit 526
392 1,157 864 Operating expenses: Sales and marketing 1,013 1,923
1,973 3,786 Research and development 732 901 1,334 1,824 General
and administrative 315 446 579 848 Severance costs 34 118 130 244
Operating loss (1,568) (2,996) (2,859) (5,838) Interest income, net
7 53 26 114 Other income 40 10 40 10 Loss before income taxes
(1,521) (2,933) (2,793) (5,714) Income tax provision --- --- ---
--- Net loss (1,521) (2,933) (2,793) (5,714) Preferred stock
dividends accrued (62) --- (62) --- Beneficial conversion feature
on preferred stock --- --- (938) --- Net loss attributable to
common stockholders $(1,583) $(2,933) $(3,793) $(5,714) Net loss
per share attributable to common stockholders (basic and diluted)
$(0.31) $(0.57) $(0.73) $(1.11) Weighted average shares outstanding
(basic and diluted) 5,166 5,162 5,165 5,162 Financial Contact
Michael L. Paxton, VP, CFO 972.301.3658, Media Contact Ben Bittle,
Product Manager 972.664.8107,
http://www.newscom.com/cgi-bin/prnh/20030703/INTRUSIONLOGO
http://photoarchive.ap.org/ DATASOURCE: Intrusion Inc. CONTACT:
financial, Michael L. Paxton, VP, CFO, +1-972-301-3658, or , or
media, Ben Bittle, Product Manager, +1-972-664-8107, or , both of
Intrusion Inc. Web site: http://www.intrusion.com/
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