Third Quarter 2020 Financial Summary
- Third quarter royalties were
$2.2 million , a decrease of 7 percent from the same period in the prior year. - Third quarter product sales were
$1.5 million , an increase of 18 percent from the same period in the prior year. - Operating expenses totaled
$2.2 million in the third quarter of 2020, a decrease of 1 percent from the prior year period. - There were no capitalized software costs in the third quarter of 2020 compared to
$281,000 in the prior year period. - Net income for the third quarter of 2020 totaled
$659 ,000 compared to net income of$6.1 million for the same period in the prior year. - A non-recurring, non-cash
$5.2 million tax benefit was recorded during the third quarter of 2019. - Cash balance increased to
$7.5 million atSeptember 30, 2020 , up from$6 .8 million at the end of the second quarter of 2020.
2020 Year-to-Date Financial Summary
- Royalties for the first nine months of 2020 were
$6 .5 million, an increase of 3 percent from the same period in the prior year. - Product sales for the first nine months of 2020 were
$3 .8 million, a decrease of 24 percent from the same period in the prior year. - Operating expenses totaled
$7 .4 million in the first nine months of 2020, an increase of 8 percent from the prior year period. - Capitalized software costs in the first nine months of 2020 were $22,000 compared to
$1.0 million in the prior year period. - Net income for the first nine months of 2020 totaled
$698,000 compared to net income of$7.1 million for the same period in the prior year. - The Company received funding of
$924 ,000 under the Paycheck Protection Program in the form of a loan inApril 2020 . - Cash balance increased to
$7.5 million atSeptember 30, 2020 , up from$5.1 million when compared to the cash balance atDecember 31, 2019 .
Third-Quarter Results:
Third quarter revenue for
Gross margin for the third quarter of 2020 was 76 percent, a 10 percentage point or 12 percent decrease from a gross margin of 86 percent for the same period in 2019. Gross margin from royalties was consistent at 96 percent in the third quarter of 2020 compared to 96 percent in the third quarter of 2019. Product sales gross margin for the third quarter of 2020 was 49 percent compared to 68 percent in the prior year period. The decrease in the gross margin percent was primarily the result of a reduction in warranty reserve and revenues related to consulting services in the third quarter of 2019.
The 2020 third quarter net income includes operating expenses of
On a non-GAAP basis, excluding the amortization of intangible assets and depreciation for the applicable periods, the operating income for the third quarter of 2020 was
Year-to-Date Results:
ISS’ revenue for the first nine months of 2020 was
The first nine months of revenue for 2020 included Autoscope video product sales and royalties of
The Company’s net income for the first nine months of 2020 was
On a non-GAAP basis, excluding intangible asset amortization, depreciation and restructuring charges for the applicable periods, operating income for the first nine months of 2020 was
During the second quarter of 2020, ISS received funding of
"During the COVID-19 pandemic, agencies continue to recognize the importance of safety and efficiency at the intersection and the value provided by Autoscope. Advancement of new projects and maintenance of established systems has driven year over year growth into our royalty revenue during these challenging times," said
"The improvement in product revenue was driven by winning several opportunities previously delayed by COVID-19 and the sales team’s focused market engagement with partners and end customers. Additionally, through aggressive promotion, webinar content, and roundtables with industry experts, we have created a sizable pipeline of opportunities for our latest product, RTMS Echo. This trend reinforces our belief that Echo will become the foundation for organic growth in the coming years," concluded
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
About
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, regulations, and orders, including as a result of the COVID-19 pandemic caused by the coronavirus; international presence; tariffs and other trade barriers; our success in integrating any acquisitions; potential disruptions to our supply chains (including disruptions caused by geopolitical events, military actions, work stoppages, nature disasters, or international health emergencies, such as the COVID-19 pandemic); 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
Condensed Consolidated Statements of Operations | |||||||||||||||
(in thousands, except per share information) | |||||||||||||||
(unaudited) | |||||||||||||||
Three-Month Periods Ended | Nine-Month Period Ended | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Revenue | |||||||||||||||
Product sales | $ | 1,538 | $ | 1,299 | $ | 3,760 | $ | 4,940 | |||||||
Royalties | 2,212 | 2,390 | 6,536 | 6,346 | |||||||||||
3,750 | 3,689 | 10,296 | 11,286 | ||||||||||||
Cost of revenue | 883 | 513 | 2,117 | 2,489 | |||||||||||
Gross profit | 2,867 | 3,176 | 8,179 | 8,797 | |||||||||||
Operating expenses | |||||||||||||||
Selling, general and administrative | 1,422 | 1,560 | 4,894 | 4,909 | |||||||||||
Research and development | 804 | 691 | 2,548 | 2,008 | |||||||||||
2,226 | 2,251 | 7,442 | 6,917 | ||||||||||||
Income from operations before income taxes | 641 | 925 | 737 | 1,880 | |||||||||||
Income tax expense (benefit) | (18 | ) | (5,205 | ) | 39 | (5,205 | ) | ||||||||
Net income | $ | 659 | $ | 6,130 | $ | 698 | $ | 7,085 | |||||||
Basic net income per share | $ | 0.12 | $ | 1.17 | $ | 0.13 | $ | 1.35 | |||||||
Diluted net income per share | $ | 0.12 | $ | 1.16 | $ | 0.13 | $ | 1.35 | |||||||
Weighted shares - basic | 5,306 | 5,252 | 5,290 | 5,240 | |||||||||||
Weighted shares - diluted | 5,311 | 5,270 | 5,306 | 5,259 | |||||||||||
Condensed Consolidated Balance Sheets | |||||
(in thousands) | |||||
(unaudited) | |||||
2020 | 2019 | ||||
Assets | |||||
Current assets | |||||
Cash and cash equivalents | $ | 7,470 | $ | 5,118 | |
Receivables, net | 3,220 | 3,126 | |||
Inventories | 415 | 781 | |||
Prepaid expenses and other current assets | 499 | 463 | |||
11,604 | 9,488 | ||||
Property and equipment, net | 339 | 419 | |||
Intangible assets, net | 3,348 | 3,875 | |||
Deferred taxes | 5,219 | 5,220 | |||
Operating lease asset, net | 191 | 181 | |||
$ | 20,701 | $ | 19,183 | ||
Liabilities and Shareholders’ Equity | |||||
Current liabilities | |||||
Accounts payable | $ | 276 | $ | 373 | |
Short-term debt | 556 | - | |||
Warranty and other current liabilities | 657 | 858 | |||
1,489 | 1,231 | ||||
Non-current liabilities | |||||
Operating lease obligation | 10 | 19 | |||
Long-term debt | 367 | - | |||
377 | 19 | ||||
Shareholders’ equity | 18,835 | 17,933 | |||
$ | 20,701 | $ | 19,183 |
Image Sensing Systems, Inc. | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
Nine-Month Periods Ended | |||||||
2020 | 2019 | ||||||
Operating activities | |||||||
Net income | $ | 698 | $ | 7,085 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 725 | 597 | |||||
Stock option expense | 168 | 162 | |||||
Deferred income tax benefit | - | (5,200 | ) | ||||
Loss on disposal of assets | 5 | - | |||||
Changes in operating assets and liabilities | (76 | ) | (765 | ) | |||
Net cash provided by operating activities | 1,520 | 1,879 | |||||
Investing activities | |||||||
Capitalized software development costs | (22 | ) | (1,042 | ) | |||
Purchases of property and equipment | (112 | ) | (239 | ) | |||
Net cash used for investing activities | (134 | ) | (1,281 | ) | |||
Financing activities | |||||||
Stock for tax withholding and options exercised | (6 | ) | (21 | ) | |||
Proceeds from PPP Loan | 924 | - | |||||
Proceeds from exercise of stock options | - | 4 | |||||
Net cash provided by (used for) financing activities | 918 | (17 | ) | ||||
Effect of exchange rate changes on cash | 48 | (94 | ) | ||||
Increase in cash and cash equivalents | 2,352 | 487 | |||||
Cash and cash equivalents at beginning of period | 5,118 | 4,236 | |||||
Cash and cash equivalents at end of period | $ | 7,470 | $ | 4,723 | |||
Non-Cash investing and financing activities: | |||||||
Purchase of property and equipment in accounts payable | $ | 7 | $ | 20 |
Image Sensing Systems, Inc.
Non-GAAP Income from Continuing Operations
(in thousands)
(unaudited)
We define non-GAAP income from operations as income from operations before amortization of intangible assets, depreciation, and restructuring charges for the applicable periods. Management believes non-GAAP income 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 from operations may not be comparable to similarly titled definitions used by other companies. The table below reconciles non-GAAP income from operations, which is a non-GAAP financial measure, to comparable GAAP financial measures:
Three-Month Periods Ended | Nine-Month Period Ended | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Income from operations | $ | 641 | $ | 925 | $ | 737 | $ | 1,880 | |||
Amortization of intangible assets | 187 | 149 | 549 | 448 | |||||||
Depreciation | 58 | 50 | 176 | 149 | |||||||
Restructuring charges | - | - | - | 2 | |||||||
Non-GAAP income from operations | $ | 886 | $ | 1,124 | $ | 1,462 | $ | 2,479 |
Note – Our calculation of non-GAAP income 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: Frank Hallowell, Chief Financial Officer |
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Source:
2020 GlobeNewswire, Inc., source