NORCROSS, Ga., Aug. 11, 2005 (PRIMEZONE) -- Intelligent Systems Corporation (AMEX:INS) (www.intelsys.com) announced today its financial results for the second quarter and year-to-date periods ended June 30, 2005.
For the three months ended June 30, 2005, the company recorded revenue of $4.7 million, a 39 percent increase compared to revenue of $3.3 million for the same period in 2004. Net income for the three-month period in 2005 was $695,000 or $0.16 per basic share ($0.15 per diluted share), a significant improvement compared to a net loss of $2.2 million or $0.49 per basic and diluted share in 2004.
For the six-month period ended June 30, 2005, the company recorded revenue of $8.2 million, a 4 percent increase compared to the same period last year. Net income for the six month period in 2005 was $476,000 or $0.11 per basic share ($0.10 per diluted share), compared to a net loss of $3.0 million or $0.68 per basic and diluted share in the six-month period of 2004.
The increase in revenue in the second quarter of 2005 compared to the same period last year reflects both an increase in software license revenue as well as professional services and software maintenance revenue at the company's VISaer and QS Technologies subsidiaries. The company reduced its loss from operations by 86 percent and 43 percent in the three- and six-month periods ended June 30, 2005, respectively, compared to the loss from operations in the corresponding periods in 2004 as a result of growing revenue while reducing the company's total costs and expenses.
In the second quarter and year-to-date periods ended June 30, 2005, the company recorded investment income of $914,000 and $1,956,000, respectively, reflecting principally cash distributions from ISC Guernsey, a minority-owned entity that realized a significant gain from the sale of stock in a U.K.-based company in 2004. The company does not expect any additional cash distributions from ISC Guernsey in the future.
At June 30, 2005, the company's balance sheet includes $5.8 million in current net deferred revenue comprised of amounts recorded by its four consolidated subsidiaries, net of associated costs, that are expected to be recognized as revenue within the next twelve months.
Conference Call Information
As announced previously, Intelligent Systems has scheduled a conference call for today at 11 AM EDT to discuss the results of the second quarter and year-to-date periods for 2005. The call-in number is 877-226-7144. A transcript of the conference call is expected to be available by the end of business today by logging onto www.intelsys.com and clicking on the webcast icon. The replay will be available for twelve months.
About Intelligent Systems Corporation
For thirty years, Intelligent Systems Corporation (AMEX:INS) has identified, created, operated and grown early stage technology companies. The company has operations and investments, principally in the information technology industry. The company's consolidated subsidiaries include VISaer, Inc. (www.visaer.com), QS Technologies, Inc. (www.qsinc.com), CoreCard Software, Inc. (www.corecard.com), (all software companies) and ChemFree Corporation (www.chemfree.com), (an industrial products company). Since 1990, the company has operated the Intelligent Systems Incubator, an award-winning pioneer in privately sponsored incubators. 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 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 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.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
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Revenue
Products $ 2,820 $ 1,786 $ 4,883 $ 5,013
Services 1,842 1,557 3,358 2,942
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Total revenue 4,662 3,343 8,241 7,955
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Cost of revenue
Products 869 804 1,732 1,789
Services 980 707 1,849 1,517
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Total cost of
revenue 1,849 1,511 3,581 3,306
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Expenses
Marketing 601 687 1,142 1,347
General &
administrative 800 914 1,759 1,809
Research &
development 1,675 2,102 3,302 4,202
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Loss from
operations (263) (1,871) (1,543) (2,709)
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Other income:
Interest income
(expense) 12 (5) 18 (8)
Investment income
(loss), net 914(b) (371)(a) 1,956(c) (371)(a)
Equity in earnings
of affiliates 19 51 36 13
Other income
(losses), net 13 (9) 21 50
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Income (loss)
before income
tax provision 695 (2,205) 488 (3,025)
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Income tax
provision -- -- 12 --
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Net income
(loss) $ 695 $ (2,205) $ 476 $ (3,025)
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Basic net income
(loss) per
share $ 0.16 $ (0.49) $ 0.11 $ (0.68)
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Diluted net
income (loss)
per share $ 0.15 $ (0.49) $ 0.10 $ (0.68)
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Basic weighted
average shares 4,478,971 4,478,971 4,478,971 4,478,971
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Diluted weighted
average shares 4,628,183 4,478,971 4,638,043 4,478,971
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a. Includes $256,000 gain on investment offset by $627,000
investment write-down.
b. Includes gain of $1.1 million offset by $161,000 write-down.
c. Includes gain of $2.1 million offset by $161,000 write-down.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, December 31,
2005 2004
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ASSETS (unaudited)
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Current assets:
Cash $ 1,431 $ 670
Accounts receivable, net 3,592 2,931
Inventories 741 653
Other current assets 486 217
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Total current assets 6,250 4,471
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Long-term investments 4,659 4,879
Property and equipment,
at cost less accumulated
depreciation 879 781
Intangibles, net 2,666 2,748
Other assets, net 17 25
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Total assets $14,471 $12,904
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
Short-term borrowings $ 300 $ 267
Accounts payable 835 867
Deferred revenue 5,793 4,895
Accrued payroll 1,212 928
Accrued expenses and other
current liabilities 560 552
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Total current liabilities 8,700 7,509
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Total long-term liabilities 263 310
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Minority interest 1,516 1,516
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Total stockholders' equity 3,992 3,569
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Total liabilities and
stockholders' equity $14,471 $12,904
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