Intelligent Systems Corporation (NYSE American:INS) announced today
its financial results for the three and twelve month periods ended
December 31, 2017.
For the twelve month period ended December 31,
2017, the company recorded net income attributable to Intelligent
Systems Corporation of $473,000 ($0.05 per basic and diluted
share), compared to a net loss attributable to Intelligent Systems
of $1,112,000 ($0.13 per basic and diluted share) in the same
period in 2016. Included in the 2017 year-to-date income is a
previously reported one-time gain in investment income of
$1,466,000 on the sale of a majority of the company’s minority
equity ownership in a privately-held technology company in the
FinTech industry.
Revenue was $2,546,000 and $9,302,000 in the
three and twelve month periods ended December 31, 2017,
respectively, representing growth of nine percent and fourteen
percent, respectively, as compared to the same periods in
2016. The growth for the quarter and the year is attributable
to an increase in our processing services customer base, an
increase in the volume of transaction processing services and an
increase in our maintenance technical and software support
services, partially as a result of an increase in our license
customer base.
Loss from operations was $704,000 and $1,403,000
in the three month and twelve month periods ended December 31,
2017, respectively, compared to losses of $136,000 and $687,000,
respectively, in the same periods in 2016. Although revenue
increased nine percent and fourteen percent for the quarter and
year-to-date periods of 2017, as compared to the same periods in
2016, the company recorded a greater loss from operations in both
2017 periods, compared to the comparable 2016 periods, primarily
due to a planned increase in R&D expenditures as the company
continues expanding its development efforts via offshore staff
additions, as well as, opening an office location in Mumbai, India
to house key technical resources to enable continued enhancements
to the features and functionality of its product offerings.
“2017 unfolded about where we expected it to be.
We made continued solid progress in several areas that support our
effort to achieve the scale we need to realize returns expected of
FinTech companies,” commented Leland Strange, CEO of Intelligent
Systems. “I believe we will continue to grow revenue in 2018
at a minimum to be on par with last year’s growth. We have on-going
efforts that could result in significant revenue and profit
increases; however, there is no certainty that these efforts will
be successful and expenses may increase prior to our ability to
recognize revenues. It will take time for some of our recent
relationships to mature and their growth may not make a real impact
until next year. We expect to continue growing while not taking
risks that could hurt over the long haul as reputation is critical
for financial software enterprises.”
Investor Conference Call
TodayThe company is holding an investor conference call
today, March 15, 2018, at 11 AM Eastern Time. Interested
investors are invited to attend the conference call by dialing
(855) 766-6518 and entering conference ID code 7699684. A
transcript of the call will be posted on our website at
www.intelsys.com as soon as available after the call.
The company expects to file its 2017 Form 10-K
with the Securities and Exchange Commission on March 15, 2018. For
additional information about reported results, investors will be
able to access the Form 10-K, when filed, on our company’s website
at www.intelsys.com or on the SEC site, www.sec.gov.
About Intelligent Systems
Corporation
For 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 designs, develops, and markets a comprehensive
suite of software solutions to corporations, financial
institutions, retailers and processors to manage their credit and
debit cards, prepaid cards, private label cards, fleet cards,
loyalty programs, and accounts receivable and small loan
transactions. CoreCard also offers prepaid and credit card
processing services using its proprietary software solutions.
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,
and declines in general economic and financial market conditions,
particularly those that cause businesses to delay or cancel
purchase decisions.
| |
| CONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except share and per share
amounts) |
| |
| |
Three Months Ended Dec. 31, |
Twelve Months Ended Dec. 31, |
| |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
| |
|
(unaudited) |
|
|
(unaudited) |
|
|
(audited) |
|
|
(audited) |
|
| Revenue |
|
|
|
|
| Products |
$ 166 |
|
$241 |
|
$ 849 |
|
$ 1,137 |
|
| Services |
|
2,380 |
|
|
2,093 |
|
|
8,453 |
|
|
7,041 |
|
| Total net revenue |
|
2,546 |
|
|
2,334 |
|
|
9,302 |
|
|
8,178 |
|
| Cost of revenue |
|
|
|
|
| Products |
|
62 |
|
|
55 |
|
|
320 |
|
|
626 |
|
| Services |
|
1,372 |
|
|
1,010 |
|
|
4,175 |
|
|
3,352 |
|
| Total cost of revenue |
|
1,434 |
|
|
1,065 |
|
|
4,495 |
|
|
3,978 |
|
| Expenses |
|
|
|
|
| Marketing |
|
43 |
|
|
76 |
|
|
255 |
|
|
350 |
|
| General and administrative |
|
367 |
|
|
482 |
|
|
1,588 |
|
|
1,797 |
|
| Research and development |
|
1,406 |
|
|
847 |
|
|
4,367 |
|
|
2,740 |
|
| Loss from operations |
|
(704 |
) |
|
(136 |
) |
|
(1,403 |
) |
|
(687 |
) |
| Investment income (loss) |
|
(10 |
) |
|
1 |
|
|
1,738 b. c. |
|
|
(713) a. |
|
| Other income |
|
72 |
|
|
40 |
|
|
166 |
|
|
148 |
|
| Income (loss) before income taxes |
|
(642 |
) |
|
(95 |
) |
|
501 |
|
|
(1,252 |
) |
| Income taxes |
|
8 |
|
|
-- |
|
|
28 |
|
|
(3 |
) |
| Net income (loss) |
$ (650 |
) |
$ (95 |
) |
|
473 |
|
|
(1,249 |
) |
| Net loss attributable to noncontrolling interest |
|
-- |
|
|
15 |
|
|
-- |
|
|
137 |
|
| Net income (loss) attributable to Intelligent
Systems |
$ (650 |
) |
$ (80 |
) |
$ 473 |
|
$ (1,112 |
) |
| Earnings (loss) per share attributable to Intelligent
Systems: |
|
|
|
|
|
|
|
|
|
|
|
| Basic earnings (loss) per share |
$ (0.07 |
) |
$ (0.01 |
) |
$ 0.05 |
|
$ (0.13 |
) |
| Diluted earnings (loss) per share |
$ (0.07 |
) |
$ (0.01 |
) |
$ 0.05 |
|
$ (0.13 |
) |
| Basic weighted average common shares outstanding |
|
8,777,988 |
|
|
8,743,299 |
|
|
8,766,425 |
|
|
8,736,299 |
|
| Diluted weighted average common shares outstanding |
|
8,777,988 |
|
|
8,743,299 |
|
|
8,881,814 |
|
|
8,736,299 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
a. Includes write-down of $750,000 on carrying
value of investment in early stage technology company.b. Includes
gain of $1.466 million on sale of minority equity interest in a
privately-held technology company in FinTech industry.c. Includes
gain of $372,000 on final payment after escrow period on prior
minority investment sale.
| |
| |
| CONSOLIDATED BALANCE SHEETS(audited,
in thousands) |
| |
|
As of December 31, |
|
2017 |
|
2016 |
|
|
ASSETS |
|
|
|
Current assets: |
|
|
| Cash |
$ |
14,024 |
$ |
17,724 |
|
|
Marketable securities |
|
438 |
|
418 |
|
| Accounts
receivable, net |
|
1,208 |
|
1,329 |
|
| Notes and
interest receivable, current portion |
|
16 |
|
-- |
|
|
Other current assets |
|
2,373 |
|
1,160 |
|
|
Total current assets |
|
18,059 |
|
20,631 |
|
|
Investments |
|
1,035 |
|
1,272 |
|
|
Notes and interest receivable, net of current portion |
|
1,250 |
|
-- |
|
|
Property and equipment, at cost less accumulated depreciation |
|
1,262 |
|
700 |
|
|
Other long-term assets |
|
173 |
|
101 |
|
|
Total assets |
$ |
21,779 |
$ |
22,704 |
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
| Accounts
payable |
$ |
321 |
$ |
301 |
|
| Deferred
revenue, current portion |
|
853 |
|
1,474 |
|
| Accrued
payroll |
|
595 |
|
515 |
|
| Accrued
expenses |
|
98 |
|
43 |
|
|
Other current liabilities |
|
408 |
|
1,338 |
|
|
Total current liabilities |
|
2,275 |
|
3,671 |
|
|
Deferred revenue, net of current portion |
|
51 |
|
85 |
|
|
Other long-term liabilities |
|
-- |
|
18 |
|
|
Total Intelligent Systems Corporation stockholders’ equity |
|
19,453 |
|
21,946 |
|
|
Noncontrolling interest |
|
-- |
|
(3,016 |
) |
|
Total stockholders’ equity |
|
19,453 |
|
18,930 |
|
|
Total liabilities and stockholders’ equity |
$ |
21,779 |
$ |
22,704 |
|
| |
|
|
|
|
|
For further information, callKaren Reynolds, 770-564-5503or
email to karen@intelsys.com
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