Image Sensing Systems Announces Second Quarter Financial Results
Contacts: Greg Smith, Chief Financial Officer
Image Sensing Systems, Inc., Phone: 651.603.7700
Saint Paul, MN, July 31, 2007 - Image Sensing Systems, Inc. (ISS) (NASDAQ: ISNS) announced today that its net income for the quarter ended June 30, 2007 was $702,000 ($0.18 per diluted share) compared to net income of $711,000 ($0.18 per diluted share) for the same period in 2006. Net income for the first half of 2007 was $1.3 million ($0.32 per diluted share) compared to $1.2 million ($0.31 per diluted share) for the same period in 2006.
Revenue for the second quarter was $3.0 million compared to $3.4 million for the same period in 2006, while revenue for the first half of 2007 was $5.7 million compared to $6.0 million for the same period a year ago. Revenue from royalty income decreased to $2.3 million in the quarter from $2.5 million in the second quarter of 2006 and to $4.6 million in the first half from $4.7 million in the first half of 2006. International sales decreased to $736,000 in the quarter from $898,000 for the same quarter in 2006 and decreased to $1.1 million in the first half from $1.3 million in the same period of 2006. The revenue decreases reflect certain manufacturing and end customer purchase timing impacts, in both domestic and international markets, related to the company’s transition to the Autoscope® Terra product line announced this past April. Operating expenses for the quarter were $2.0 million, a 5% increase from $1.9 million in the same period of 2006, while operating expenses for the first half increased 8% to $3.8 million from $3.5 million in the first half of 2006.
Ken Aubrey, CEO, commented, “Coordinating the Terra transition has not been without its share of challenges. As is often the case with major product line transitions, there are unplanned situations to overcome. While we cannot predict how long the transition will impact end customer decisions, we do not expect the impact to be long-term in nature. The majority of our products are now Terra based and we expect to continue the product transition over the next 9 to 12 months.”
Headquartered in St. Paul, Minnesota, Image Sensing Systems, Inc. combines expertise in image processing, hardware and software engineering and communications to develop Autoscope® video detection systems for advanced traffic management and control applications. With equipment supplied for over 50,000 cameras in more than 55 countries, we are a global leader in video detection for management and safety systems for highways, bridges, tunnels and intersections. Autoscope products provide transportation managers the means to reduce roadway congestion, improve safety and security, gain cost efficiencies and assist in roadway planning. http://imagesensing.com
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; unanticipated delays, costs and expenses inherent in the development and marketing of new products and services; the impact of governmental laws and regulations; 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 Form 10-K for the year ended December 31, 2006.
|
Image Sensing Systems, Inc. Unaudited Consolidated Statement of Income (in thousands, except per share information) |
||||||||
|
Three-Month Periods Ended June 30 |
Six-Month Periods Ended
June 30 |
|||||||
2007 |
2006 |
2007 |
2006 |
|||||
| Revenue | ||||||||
| Royalty income | $2,304 |
$2,508 |
$4,595 |
$4,684 |
||||
| International sales | 736 |
898 |
1,089 |
1,311 |
||||
3,040 |
3,406 |
5,684 |
5,995 |
|||||
| Cost of revenue | ||||||||
| Royalty fee | - |
116 |
- |
219 |
||||
| Cost of sales | 288 |
368 |
415 |
545 |
||||
288 |
484 |
415 |
764 |
|||||
| Gross Profit | 2,752 |
2,922 |
5,269 |
5,231 |
||||
| Operating expenses | ||||||||
| Selling, marketing and product support | 876 |
792 |
1,561 |
1,414 |
||||
| General and administrative | 552 |
571 |
1,122 |
1,133 |
||||
| Research and development | 534 |
510 |
1,128 |
992 |
||||
1,962 |
1,873 |
3,811 |
3,539 |
|||||
| Income from operations | 790 |
1,049 |
1,458 |
1,692 |
||||
| Other income | 142 |
(75) |
280 |
22 |
||||
| Income before income taxes | 932 |
974 |
1,738 |
1,714 |
||||
| Income taxes | 230 |
263 |
480 |
500 |
||||
| Net income | $702 |
$711 |
$1,258 |
$1,214 |
||||
| Net income per common share | ||||||||
| Basic | $0.18 |
$0.19 |
$0.33 |
$0.33 |
||||
| Diluted | $0.18 |
$0.18 |
$0.32 |
$0.31 |
||||
| Weighted average shares outstanding | ||||||||
| Basic | 3,779 |
3,717 |
3,776 |
3,711 |
||||
| Diluted | 3,874 |
3,881 |
3,880 |
3,886 |
||||
|
Image Sensing Systems, Inc. Unadudited Condensed Consolidated Balance Sheet (in thousands) |
|||||
June 30, 2007 |
December 31, 2006 |
||||
| Assets | |||||
| Current assets | |||||
| Cash and cash equivalents | $11,608 |
$11,626 |
|||
| Investments | 3,100 |
4,100 |
|||
| Receivables | 3,900 |
2,957 |
|||
| Inventories | 1,423 |
670 |
|||
| Prepaid expenses and deferred taxes | 374 |
299 |
|||
20,405 |
19,652 |
||||
| Property and equipment, net | 421 |
522 |
|||
| Goodwill and capitalized software development costs | 1,050 |
1,050 |
|||
$21,876 |
$21,224 |
||||
| Liabilities and Shareholders' Equity | |||||
| Current liabilities | |||||
| Accounts payable and accrued expenses | $1,016 |
$1,652 |
|||
| Income taxes payable | 119 |
231 |
|||
1,135 |
1,883 |
||||
| Deferred income taxes | 28 |
8 |
|||
| Shareholders' equity | 20,713 |
19,333 |
|||
$21,876 |
$21,224 |
||||
|
Image Sensing Systems, Inc. Unaudited Condensed Consolidated Statement of Cash Flows (in thousands) |
||||
|
Six-Month Period Ended June 30 |
||||
2007 |
2006 |
|||
| Operating activities | ||||
| Net income | $1,258 |
$1,214 |
||
| Adjustments to reconcile net income to net cash provided by operations | ||||
| Depreciation and amortization | 123 |
195 |
||
| Stock option expense | 73 |
137 |
||
| Changes in operating assets and liabilities | (2,483) |
1,103 |
||
| Net cash provided by operating activities | (1,029) |
2,649 |
||
| Ivesting activities | ||||
| Purchase of property and equipment | (22) |
(253) |
||
| Maturities (purchases) of investments, net | 1,000 |
(1,800) |
||
| Net cash provided by (used in) investing activities | 978 |
(2,053) |
||
| Financing activity - proceeds from exercise of stock options | 33 |
59 |
||
| Increase in cash and cash equivalents | (18) |
655 |
||
| Cash and cash equivalents, beginning of period | 11,626 |
9,006 |
||
| Cash and cash equivalents, end of period | $11,608 |
$9,661 |
||
