EX-1 3 dex1.txt PRESS RELEASE DATED 10/30/2001 Exhibit 1 I.I.S. Intelligent Information Systems Reports Second-Quarter 2001 Financial Results RAMAT GAN, Israel, Oct. 30 /PRNewswire/ -- I.I.S. Intelligent Information Systems Ltd. (Nasdaq: IISL - news) today announced its financial results for the ---- ---- second-quarter 2001. For the quarter, IIS recorded revenues of US$84,000 compared to no revenues in the same period last year. The loss for the quarter was US$544,000 or US$0.06 per share compared to a loss of US$305,000 or US$0.03 per share in the comparable quarter last year. This loss reflects the continued focus on R&D for storage networking applications and the Company's participation in the losses of StoreAge, amounting to $160,000. IIS's financial statements are no longer consolidated with StoreAge. During the past six months, IIS continued to place major emphasis on its R&D activity, developing storage networking applications and testing tools for the enterprise market, with a focus on the IP storage environment. This past July, IIS introduced the iSWAT software solution (http://www.swattest.com), an IP storage networking-enabler and a powerful testing and validation tool for the iSCSI environment. With iSWAT, vendors can integrate IP storage support (based on the industry standard iSCSI protocol) into their storage product offerings, and storage developers can test, monitor and analyze IP storage networking applications in a simulated iSCSI environment. "The iSWAT technology solution provides vendors with both a testing environment and an iSCSI-enabling driver," explained Robi Hartman, Chairman and CEO of IIS. "It enables real end-to-end connectivity of SCSI over IP in storage networks, designed for any storage vendor wishing to integrate native iSCSI support in its storage product line. Implementing an iSWAT testing environment provides for simulation of an iSCSI network. It also provides a tool for storage vendors to test internally and demonstrate externally iSCSI functionality in their products." iSWAT is being demonstrated and tested this week at the second iSCSI Plugfest held in the Interoperability Laboratory at University of New Hampshire. This Plugfest gives IIS the opportunity to interoperate with other iSCSI vendors and effectively demonstrate a real life solution for iSCSI storage networks. During this past quarter, StoreAge Networking Technologies ("StoreAge"), a 39% held subsidiary of IIS, strengthened its management team and US presence by hiring Mark Spowart, former VP of Sales and Customer Service at QLogic Corporation, as President. StoreAge also opened a sales office in California in order to increase revenues and take advantage of the high demand for the Company's Virtualization technology in the Storage Area Network market. "StoreAge had major business developments take place during the past six months, in terms of its relations with OEM partners," added Mr. Hartman. "Some of the Company's recent deals include an agreement with Robert Bosch GmbH for StoreAge's SVM(TM) deployment in Bosch's European computing centers, and Spain's Telecinco (TV5) equipping its Video Editing System with StoreAge's technology." StoreAge was chosen by these OEMs because of its significant technological advantages. The initial phase of Bosch's project includes the networking of over 100 servers with over 15TB of storage in a fully redundant high availability configuration; and the StoreAge "out of band" solution was able to provide a uniform and centralized management view of the enterprise's installed disk systems supplied by a number of different manufacturers. Telecinco found that StoreAge's "out of band" virtualization technology, enabled the aggregation of not just the capacity of the storage devices but also the performance of several RAID controllers at a fraction of the cost of alternative solutions which had to include extremely powerful RAID devices. "StoreAge is also involved in additional large installations of SAN worldwide," he concluded. Today, October 30, 2001 at 12:00 PM EST, IIS will hold a conference call to provide investors with additional information about the Company's quarterly performance. Investors can call the conference center (approximately 15 minutes prior to conference time) at (800) 406 - 6465 (domestic), or (913) 981 - 5574 (international). Please refer to the code #585543. Investors can also participate via the Internet. Please refer to Company's web site (http://www.iislf.com) for details on on-line participation. -------------------- About IIS I.I.S. Intelligent Information Systems Ltd. (IIS) is focused on R&D investments and operations within the technology sector of Storage Networking. The Company develops and markets SWAT (http://www.swattest.com), an innovative line of software applications for iSCSI testing and validation. The Company also owns a 39% interest in StoreAge Networking Technologies, Ltd. (http://www.store-age.com), a provider of SVM(TM) (Storage Virtualization ------------------------ Manager) and a leader in Storage Virtualization technology, which provides storage networking solutions to the enterprise market with a focus on Storage Area Network (SAN) architecture. This release contains historical information and forward-looking statements. Statements looking forward in time are included in this release pursuant to the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995. They involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to be materially different from any future performance suggested herein. Further, the Company operates in an industry sector where securities values may be volatile and may be influenced by economic and other factors beyond the Company's control. In the context of the forward-looking information provided in this release and in other releases and reports by the Company, please refer to the discussions of risk factors detailed in, as well as the other information contained in, the Company's filings with the Securities and Exchange Commission during the past 12 months. IIS Intelligent Information Systems Ltd CONSOLIDATED BALANCE SHEETS (In thousands)
June 30, ------------------------ December 31, 2001 2000 2000 ---- ---- ---- Unaudited ASSETS CURRENT ASSETS: Cash and Cash Equivalents $ 2,487 $ 6,515 $ 3,077 Restricted Cash -- -- 600 Trade Receivables 32 -- 43 Other Accounts Receivable 263 358 124 Total Current Assets 2,782 6,873 3,844 SEVERANCE PAY FUND 2 2 32 INVESTMENT IN AFFILIATE 1,743 -- 2,127 PROPERTY, PLANT AND EQUIPMENT, NET 87 572 63 WORK FORCE, NET 235 -- 283 TOTAL ASSETS $ 4,849 $ 7,447 $ 6,349 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short Term Bank Debt $ 10 $ 83 $ 10 Trade Payables 85 359 177 Other Accounts Payable 829 1,708 1,403 Total Current Liabilities 924 2,150 1,590 LONG TERM LIABILITIES: Banks 6 100 11 Convertible Loan 2,846 -- 2,828 Accrued Severance Pay 11 43 38
Total Long Term Liabilities 2,863 143 2,877 MINORITY INTEREST -- 550 -- PREFERRED SHARES OF SUBSIDIARY -- 2,236 -- SHAREHOLDERS' EQUITY: Share Capital 54 54 54 Additional Paid in Capital 37,586 36,874 37,435 Receivables on account of shares -- -- (16) Deferred Compensation (152) -- (222) Accumulated Deficit (36,426) (34,560) (35,369) TOTAL SHAREHOLDERS' EQUITY 1,062 2,368 1,882 $ 4,849 $ 7,447 $ 6,349
IIS Intelligent Information Systems Ltd SUMMARY OF CONSOLIDATED STATEMENT OF OPERATION (In thousands except per share amounts)
Three months ended Six Months ended June 30, June 30, Year Ended ----------------------- ----------------------- December 31, 2001 2000 2001 2000 2000 ---- ---- ---- ---- ---- Unaudited Revenues Sales $ 84 $-- $ 159 $-- $ 96 Maintenance Services -- -- -- -- -- 84 -- 159 -- 96 Cost of revenues Sales 3 -- 25 -- 27 Maintenance Services -- -- -- -- -- 3 -- 25 -- 27 Gross profit 81 -- 134 -- 69 Operating expenses R&D, net 183 138 315 378 925 Selling & Marketing Expenses 7 120 7 218 639 General & Administrative Expenses 234 243 383 429 891 Amortization of other assets 24 -- 48 -- 8 Total operating expenses 448 501 753 1,025 2,463 Operating Loss (367) (501) (619) (1,025) (2,394)
Financial income (expenses), net (18) 71 (35) 132 277 Other Income (expenses) 1 (1) 1 20 (12) Loss After income taxes (384) (431) (653) (873) (2,129) Minority interest in loss -- 126 -- 292 740 Equity losses in subsidiary (160) -- (404) -- -- Net loss $ (544) $ (305) $(1,057) $ (581) $(1,389) Loss per share $ (0.06) $ (0.03) $ (0.12) $ (0.07) $ (0.16) Weighted AVG No. of shares outstanding 9,028 8,903 9,008 8,887 8,901