EX-99.1 2 a06-18323_1ex99d1.htm EX-99

Exhibit 99.1

Contact:

Wayne Wetherell

 

 

ImageWare Systems, Inc.

 

 

858-673-8600

 

 

For Immediate Release

ImageWare Systems Reports 2006 Second Quarter Results

- Company increases sales, narrows losses -

SAN DIEGO, August 15, 2006 – ImageWare® Systems, Inc. (AMEX: IW), a world leading developer and provider of identity management solutions, today reported financial results for the second quarter ended June 30, 2006.

For the quarter ended June 30, 2006, total revenues were $2.9 million, an increase of 45% from $2.0 million reported for the second quarter of 2005. The revenue growth reflects increased shipments of the company’s IWS™ Biometric Engine™, IWS™ Desktop security and IWS™ Law Enforcement products.

Gross profit improved to $2.0 million or 69% of sales in the quarter from $1.1 million or 58% of sales in the second quarter of 2005. The company’s loss from operations narrowed to $1.2 million in the quarter compared to $1.9 million in the second quarter of 2005. Loss per share improved to $0.10 per share in the second quarter compared to $0.16 per share in 2005.

“We have spent much of the past 12 months getting in front of prime integrators and end-users worldwide, demonstrating the strength of our revolutionary software-based and open-architected technology approach,” stated Jim Miller, ImageWare’s chairman and CEO. “These efforts are now beginning to bear fruit as we are being sought out for our expertise in biometric identity management, complimenting a multitude of global opportunities such as TSA (Transportation Security Administration) Registered Traveler program, TSA Transportation Worker Identification Credential (TWIC), electronic Passports and Visas (ePassports and eVisas) and Personal Identity Verification (PIV) systems. We continued to innovate, execute and gain momentum as partners and users alike recognize the value of our identity management product offerings.”



ImageWare has seen continued validation of its products and capabilities through the following achievements:

·                  The release of IWS™ Disaster Management solution suite which incorporates the company’s Biometric Engine and Identity Management technologies for the secure credentialing of first responders and volunteers, biographical and biometric identification of displaced victims, as well as the ability to conduct comprehensive biometric and text-based searches to help identify missing and deceased victims.

·                  Selection of the company’s IWS™ Biometric Engine™ Border Management solution by the Citizenship and Immigration Canada for biometrics field trials. The IWS Biometric Engine Border Management solution includes facial and fingerprint biometric capabilities for identification and verification purposes at designated ports in Canada, including U.S./Canada border stations in British Columbia, Vancouver International Airport, a refugee processing center in Etobicoke, Ontario, and Canadian immigration offices in Seattle and Hong Kong.

·                  Selection of the company’s IWS Law Enforcement Web-enabled investigative solution by the Kansas Bureau of Investigation to provide statewide Web-based investigative capabilities as part of the state’s new AFIS (Automated Fingerprint Identification System).

·                  The release of a complete PIV solution in compliance with the National Institute of Standards and Technology (NIST) Federal Information Processing 201 (PIV-I and II) requirements of the Homeland Security Presidential Directive 12. The solution is in response to the strict requirements set forth by the Federal government and contains enhancements of the IWS Biometric Engine and secure credentialing products including the integration of card management and card printing modules which provide end-to-end support for PIV-I and PIV-II business processes and technical requirements.

Conference call information

A conference call on ImageWare’s second-quarter earnings will be conducted today at 8 a.m. Pacific Time (11 a.m. ET) and available to all interested parties by dialing 877-407-9210 in the U.S. or 201-689-8049, if outside of the U.S.  The call will also be available through a live audio Web broadcast at www.iwsinc.com/investors.cfm and http://www.vcall.com/IC/CEPage.asp?ID=107947. A replay of the call will be available from the investor relations page of ImageWare’s Web site at www.iwsinc.com or at www.vcall.com, until August 15, 2007.  The call will also be available for replay via the phone until August 16, 2006 by calling 877-660-6853 in the U.S. or 201-612-7415, if outside of the U.S.  To access the call, all parties will need the following replay pass codes:  Account #286 and Conference ID #211396.

- more -



About ImageWare Systems, Inc.

ImageWare Systems, Inc. (AMEX:IW) is a leading developer and provider of identity management solutions, providing biometric, secure credential, law enforcement and digital imaging technologies. Scalable for worldwide deployment, the Company’s biometric product line includes a multi-biometric engine that is hardware and algorithm independent, enabling the enrollment and management of unlimited population sizes. ImageWare’s identification products are used to manage and issue secure credentials including national IDs, passports, driver licenses, smart cards and access control credentials. ImageWare’s digital booking products provide law enforcement with integrated mug shot, fingerprint Livescan and investigative capabilities. The Company also provides comprehensive digital workflow solutions for the professional photography industry. ImageWare is headquartered in San Diego, with offices in Washington DC and Canada. For more information visit www.iwsinc.com.

Safe Harbor Statement

Statements in this press release that are not strictly historical in nature are forward-looking statements. These statements include, but are not limited to references to the proposed financing, the anticipated use of the net proceeds of the proposed financing, and expectations regarding future operating results. Forward-looking statements involve known or unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements, or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include but are not limited to: the risk that the equity investment does not close as anticipated; the risk that the Company’s target markets will not grow as expected; risks related to our ability to achieve and sustain profitability and generate cash internally or to obtain adequate capital for operations from outside sources; risks related to our acquisition strategies and the integration of acquired companies; risks associated with our dependence on a small number of large sales to customers with political purchasing constraints; risks related to our lengthy sales cycle; our reliance on third-party systems integrators and on third-party technology licenses; fluctuations in our operating results; continued new product introductions and market acceptance of our new products; new product introductions by competitors; technological changes in the our industry; uncertainties regarding intellectual property rights. For a discussion of these and other factors which may cause our actual events or results to differ from those projected, please refer to the Company’s most recent annual report on Form 10-KSB and quarterly reports on Form 10-QSB, as well as other subsequent filings with the Securities and Exchange commission.

# # #



 

SELECTED COMPARATIVE FINANCIAL HIGHLIGHTS

In thousands, except share and per share amounts

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2006

 

2005

 

2006

 

2005

 

Revenues

 

 

 

 

 

 

 

 

 

Product

 

$

2,343

 

$

1,448

 

$

4,641

 

$

3,763

 

Maintenance

 

556

 

527

 

1,067

 

1,022

 

Total Revenues

 

2,899

 

1,975

 

5,708

 

4,785

 

 

 

 

 

 

 

 

 

 

 

Cost of Revenue

 

 

 

 

 

 

 

 

 

Product

 

667

 

610

 

1,194

 

1,455

 

Maintenance

 

224

 

227

 

505

 

495

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

2,008

 

1,138

 

4,009

 

2,835

 

 

 

69

%

58

%

70

%

59

%

Operating Expenses

 

 

 

 

 

 

 

 

 

General & administrative

 

1,172

 

1,279

 

2,410

 

2,362

 

Sales and marketing

 

1,012

 

823

 

2,105

 

1,764

 

Research and development

 

965

 

796

 

1,899

 

1,487

 

Depreciation and amortization

 

64

 

154

 

189

 

313

 

Total Operating Expenses

 

3,213

 

3,052

 

6,603

 

5,926

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

(1,205

)

(1,914

)

(2,594

)

(3,091

)

 

 

 

 

 

 

 

 

 

 

Interest (income) expense, net

 

157

 

(5

)

184

 

(11

)

Other income, net

 

(37

)

(5

)

(106

)

(49

)

 

 

 

 

 

 

 

 

 

 

Loss from contining operations before income taxes

 

(1,325

)

(1,904

)

(2,672

)

(3,031

)

 

 

 

 

 

 

 

 

 

 

Income taxes

 

0

 

0

 

0

 

0

 

 

 

 

 

 

 

 

 

 

 

Loss from continuing operations

 

(1,325

)

(1,904

)

(2,672

)

(3,031

)

 

 

 

 

 

 

 

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

Gain (loss) from operations of discontinued Digital Imaging Asia Pacific Component (including gain of $233 in 2005)

 

—

 

—

 

0

 

223

 

Income tax benefit (expense)

 

—

 

—

 

0

 

0

 

Gain (loss) on discontinued operations

 

—

 

—

 

—

 

223

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(1,325

)

$

(1,904

)

$

(2,672

)

$

(2,808

)

 

 

 

 

 

 

 

 

 

 

Per share data - basic and diluted

 

 

 

 

 

 

 

 

 

Net loss from continuing operations

 

$

(0.10

)

$

(0.16

)

$

(0.20

)

$

(0.25

)

Discontinued operations

 

$

—

 

$

—

 

$

—

 

$

0.02

 

Net loss per common share

 

$

(0.10

)

$

(0.16

)

$

(0.20

)

$

(0.23

)

 

 

 

 

 

 

 

 

 

 

Basic and diluted common shares

 

13,571,525

 

12,109,723

 

13,559,659

 

12,071,861

 

 

CONSOLIDATED BALANCE SHEETS

In thousands

 

 

 

June, 30

 

Dececember, 31

 

 

 

2006

 

2005

 

Assets:

 

 

 

 

 

Cash

 

$

480

 

$

741

 

Accounts receivable, net

 

2,235

 

1,340

 

Inventories

 

162

 

208

 

Other current assets

 

278

 

219

 

Property and equipment, net

 

383

 

424

 

Other assets

 

768

 

738

 

Intangible assets, net

 

149

 

218

 

Goodwill

 

3,416

 

3,416

 

Total Assets

 

$

7,871

 

$

7,304

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity:

 

 

 

 

 

Current liabilities

 

$

5,033

 

$

2,809

 

Pension obligation

 

1,192

 

1,130

 

Stockholders’ equity

 

1,646

 

3,365

 

Total Liabilities and Shareholders’ Equity

 

$

7,871

 

$

7,304