EX-99.1 2 image100829_ex99-1.htm PRESS RELEASE DATED FEBRUARY 24, 2010 image100829_ex99-1.htm - Generated by SEC Publisher for SEC Filing

 

Exhibit 99.1

 

500 Spruce Tree Centre
1600 University Avenue West
St. Paul, Minnesota 55104-3825 USA
651.603.7700 Fax:  651.305.6402
www.imagesensing.com

 

 

NEWS RELEASE

 

Contacts:

Greg Smith, Chief Financial Officer
Image Sensing Systems, Inc. Phone: 651.603.7700

 

 

FOR IMMEDIATE RELEASE

 

Image Sensing Systems Announces Fourth Quarter Financial Results

 

Saint Paul, Minn. , February 24, 2010-- Image Sensing Systems, Inc. (NASDAQ: ISNS), announced today the results for its fiscal year and fourth quarter ended December 31, 2009.

 

Net income for fiscal year 2009 was $3.9 million ($0.95 per diluted share) compared to $5.0 million ($1.24 per diluted share) for fiscal 2008.  Net income for our fourth quarter, which ended December 31, 2009, was $874,000 ($0.21 per diluted share) compared to $1.5 million ($0.39 per diluted share) for the same period in 2008. 

 

Revenue for fiscal year 2009 was $24.6 million compared to $26.5 million for fiscal 2008, while revenue for the fourth quarter of 2009 was $6.7 million compared to $7.8 million for the same period a year ago.  Revenue from royalties was $12.1 million in fiscal year 2009 compared to $13.3 million in 2008 and $3.0 million in the fourth quarter of 2009 compared to $3.3 million in the same period of 2008.  North American sales, which are sales of RTMS® in North America, were $6.3 million for fiscal year 2009 compared to $5.7 million in 2008 and were $1.6 million in the fourth quarter of 2009 compared to $1.2 million in the same period of 2008.  International sales, which include both Autoscope and RTMS sales outside of North America, were $6.2 million for fiscal year 2009 compared to $7.5 million in the same period of 2008 and were $2.1 million in the fourth quarter of 2009 compared to $3.2 million in the same period in 2008.  Sales of RTMS world-wide for the fourth quarter were $2.2 million.

 

On a non-GAAP basis, excluding intangible asset amortization net of tax and unusual foreign tax credits recognized in the third quarter, net income for the year was $4.1 million ($1.01 per diluted share) and for the quarter was $1.0 million ($0.24 per diluted share).

 

 

 

 

Based on the 2009 results for RTMS, the sellers of the RTMS business, also known as the EIS assets, are entitled to receive a $1.5 million earnout payment.  This liability has been recorded on our balance sheet as of December 31, 2009 with an offsetting entry to increase goodwill.

 

Ken Aubrey, CEO, said, “Our results for fiscal 2009 and the fourth quarter continued to reflect a difficult selling environment brought on by the worldwide recession.  Making a direct comparison to the 2008 fourth quarter is difficult due to an uneven upturn in international sales experienced in late 2008.  For fiscal 2009, our international business was especially impacted by a mid-year slow down in road construction in the Asian markets.  This has since shown signs of recovery.  In our domestic business, the RTMS segment demonstrated resiliency for the year after a very difficult second half of 2008 and royalties were down approximately 10% from 2008 but continued to stabilize after a weak first quarter of 2009.

 

“At the beginning of 2009, we were faced with a difficult decision not knowing how deep the recession might be.  We elected in March to cut back on expenses, but only to a level that would allow us to remain profitable and still preserve our most important initiatives.  We therefore did not advance or were slowed in other significant but less critical areas.  In 2010, we plan to reengage in these lagging initiatives but we are cognizant of the economic reality that domestic tax revenues, and hence funding available for our products, remain under stress.  We are comparatively more optimistic about international markets.”

 

Non-GAAP Information

 

We provide certain non-GAAP financial information as supplemental information to GAAP amounts. This non-GAAP information excludes the impact, net of tax, of amortizing the intangible assets from the EIS asset purchase and may include other non-recurring items.  Management believes that this presentation facilitates the comparison of our current operating results to historical operating results. Management uses this non-GAAP information to evaluate short-term and long-term operating trends in our core operations. Non-GAAP information is not prepared in accordance with GAAP and should not be considered a substitute for or an alternative to GAAP financial measures and may not be computed the same as similarly titled measures used by other companies.

 

About Image Sensing

 

Image Sensing Systems, Inc. is a technology company focused in infrastructure productivity improvement through the development of software-based detection solutions for the Intelligent Transportation Systems (ITS) sector and adjacent overlapping markets. ISS’ industry leading computer-enabled detection (CED) products, including the Autoscope® machine-vision family and the RTMS® radar family, combine embedded software signal processing with sophisticated sensing technologies for use in transportation, environmental and safety/surveillance management. CED is a group of technologies in which software, rather than humans, examines the outputs of complex sensors to determine what is happening in the field of view in real-time. With more than 100,000 instances sold in over 60 countries worldwide, our depth of experience coupled with breadth of product portfolio uniquely positions us to provide powerful hybrid technology solutions and to exploit the convergence of the traffic, security and environmental management markets. We are headquartered in St. Paul, Minnesota. Visit us on the web at 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, except as may be required by law, 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 Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2008 as updated by Form 10-Q filings made in 2009.

 

 

 

 

Image Sensing Systems, Inc.

Condensed Consolidated Statements of Income

(in thousands, except per share information)

(unaudited)

 

 

 

Three-Month Period
Ended December 31,

 

Year Ended
December 31,

 

 

 

2009

 

2008

 

2009

 

2008

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

   

Royalties

      

$

3,042

      

$

3,314

      

$

12,110

      

$

13,321

 

North American sales

 

 

1,592

 

 

1,221

 

 

6,321

 

 

5,689

 

International sales

 

 

2,066

 

 

3,234

 

 

6,162

 

 

7,455

 

 

 

 

6,700

 

 

7,769

 

 

24,593

 

 

26,465

 

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

1,350

 

 

1,444

 

 

4,297

 

 

4,912

 

Gross profit

 

 

5,350

 

 

6,325

 

 

20,296

 

 

21,553

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, marketing and product support

 

 

1,929

 

 

1,992

 

 

7,201

 

 

6,680

 

General and administrative

 

 

1,205

 

 

1,186

 

 

3,779

 

 

4,069

 

Research and development

 

 

795

 

 

741

 

 

3,336

 

 

2,908

 

Amortization of intangible assets

 

 

192

 

 

192

 

 

768

 

 

768

 

 

 

 

4,121

 

 

4,111

 

 

15,084

 

 

14,425

 

Income from operations

 

 

1,229

 

 

2,214

 

 

5,212

 

 

7,128

 

Other income (expense), net

 

 

(11

)

 

(15

)

 

7

 

 

43

 

Income before income taxes

 

 

1,218

 

 

2,199

 

 

5,219

 

 

7,171

 

Income tax expense

 

 

344

 

 

668

 

 

1,354

 

 

2,207

 

Net income

 

$

   874

 

$

1,531

 

 

$3,865

 

$

4,964

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share

 

$

0.22

 

$

0.39

 

$

0.97

 

$

1.26

 

Diluted net income per share

 

$

0.21

 

$

0.39

 

$

0.95

 

$

1.24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted shares – basic

 

 

3,986

 

 

3,974

 

 

3,985

 

 

3,943

 

Weighted shares – diluted

 

 

4,127

 

 

3,974

 

 

4,081

 

 

4,001

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of GAAP to non-GAAP basis

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP operating expenses  (1,2)

 

 

3,929

 

 

3,919

 

 

14,316

 

 

13,436

 

Non-GAAP income from operations

 

 

1,421

 

 

2,406

 

 

5,980

 

 

8,117

 

Other income (expense), net

 

 

(11

)

 

(15

)

 

7

 

 

43

 

Non-GAAP income before income taxes

 

 

1,410

 

 

2,391

 

 

5,987

 

 

8,160

 

Non-GAAP income taxes  (3)

 

 

409

 

 

733

 

 

1,851

 

 

2,543

 

Non-GAAP net income

 

$

1,001

 

$

1,658

 

$

4,136

 

$

5,617

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP basic net income per share

 

$

0.25

 

$

0.42

 

$

1.04

 

 

$1.42

 

Non-GAAP diluted net income per share

 

$

0.24

 

$

0.42

 

$

1.01

 

 

$1.40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes to non-GAAP adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Amortization of intangible asset for period as shown above is removed

 

 

 

 

 

 

 

 

 

 

 

 

 

(2) Withdrawn offering expense of $221 is removed in 2008 year

 

 

 

 

 

 

 

 

 

 

 

 

 

(3) Income taxes are increased by impact of (1,2) at ISS’ marginal tax rate of 34% and by $236 for foreign tax credits for 2009 year

 

 

 

 

 

 

 

Image Sensing Systems, Inc.

Condensed Consolidated Balance Sheet

(in thousands)

(unaudited)

 

 

 

December 31,
2009

 

December 31,
2008

 

Assets

      

 

 

      

 

 

 

Current assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

14,084

 

$

10,289

 

Investments

 

 

3,935

 

 

4,000

 

Receivables, net

 

 

5,660

 

 

6,620

 

Inventories

 

 

2,734

 

 

1,608

 

Prepaid expenses and deferred taxes

 

 

916

 

 

752

 

 

 

 

27,329

 

 

23,269

 

Property and equipment, net

 

 

998

 

 

728

 

Deferred income taxes

 

 

1,485

 

 

1,575

 

Goodwill and intangible assets, net

 

 

11,338

 

 

10,536

 

 

 

$

41,150

 

$

36,108

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

2,454

 

$

2,135

 

Bank debt

 

 

4,000

 

 

3,750

 

EIS earnout payable

 

 

1,541

 

 

1,164

 

Income taxes payable

 

 

234

 

 

283

 

 

 

 

8,229

 

 

7,332

 

Income taxes payable

 

 

208

 

 

246

 

Shareholders’ equity

 

 

32,713

 

 

28,530

 

 

 

$

41,150

 

$

36,108

 

 

 

 

 

Image Sensing Systems, Inc.

Condensed Consolidated Statement of Cash Flows

(in thousands)

(unaudited)

 

 

 

Year Ended
December 31,

 

 

 

2009

 

2008

 

Operating activities

 

 

 

 

 

 

 

Net income

      

$

3,865

      

$

4,964

 

Adjustments to reconcile net income to net cash provided by

 

 

 

 

 

 

 

operations

 

 

 

 

 

 

 

Depreciation and amortization

 

 

1,192

 

 

1,124

 

Stock option expense

 

 

341

 

 

339

 

Changes in operating assets and liabilities

 

 

(33

)

 

(1,552

)

Net cash provided by operating activities

 

 

5,365

 

 

4,875

 

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

Purchases of property and equipment, net of disposals

 

 

(694

)

 

(385

)

Payment of EIS earnout

 

 

(1,192

)

 

-

 

Sales (purchases) of investments, net

 

 

65

 

 

(4,000

)

Net cash used in investing activities

 

 

(1,821

)

 

(4,385

)

 

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

1

 

 

173

 

Proceeds from (repayment of) bank debt, net

 

 

250

 

 

(1,250

)

Net cash provided by (used in) financing activities

 

 

251

 

 

(1,077

)

 

 

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

 

 

3,795

 

 

(587

)

Cash and cash equivalents, beginning of period

 

 

10,289

 

 

10,876

 

Cash and cash equivalents, end of period

 

$

14,084

 

$

10,289

 

 

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