©2000-2010 Intelligent Systems
   All Rights Reserved
   Contact Webmaster here

      
  

FOR IMMEDIATE RELEASE

For further information, call
Bonnie Herron, 770/564-5504
or email to bherron@intelsys.com

INTELLIGENT SYSTEMS ANNOUNCES SECOND QUARTER 2002 RESULTS

 ***Earnings Conference Call and Webcast at 11:00 AM Today ***

 Norcross, GA – August 7, 2002 – Intelligent Systems Corporation [AMEX:INS; www.intelsys.com] announced today its financial results for the second quarter and year-to-date periods ended June 30, 2002.

                 The 2002 results are not directly comparable to the prior periods because this year the company consolidates two information technology subsidiaries that were not consolidated in the second quarter and year-to-date periods of 2001.  As previously announced, the company acquired a controlling interest in VISaer, Inc., a software firm, in July 2001 and acquired a controlling interest in CoreCard Software, Inc. (formerly Delos Payment Systems, Inc.), a development stage software company, in early 2002.  The company also reported significant non-recurring investment income in the second quarter of 2001 that distorts period-to-period comparisons.

                 For the second quarter of 2002, Intelligent Systems recorded revenue of $2,213,000 compared to $1,519,000 in the second quarter of 2001.  Net loss in the second quarter of 2002 was $4,708,000 or $1.05 per basic share as compared to net income of $17,931,000 or $3.19 per basic share for the same period in 2001.  For the six month period ended June 30, 2002, revenue was $4,381,000 compared to $3,213,000 in the same period last year.  Net loss for the six month period of 2002 was $6,830,000 or $1.52 per basic share compared to net income of $18,680,000 or $3.32 per basic share in the year-to-date period in 2001. As noted above, the second quarter and year-to-date results last year were impacted positively by a one-time investment gain of $17.8 million related to the sale of PaySys, a former affiliate company, to First Data Corporation. 

                 Revenue grew 46 and 36 percent in the three and six month periods in 2002 compared to the same periods in 2001 mainly due to the consolidation of VISaer revenue in 2002 and revenue growth at the company’s ChemFree subsidiary in the second quarter of 2002.  The company’s reported losses from operations of $3.5 million and $7.1 million in the three and six month periods, respectively, of 2002 are in line with expectations.  The increased operating loss compared to prior periods reflects the inclusion of expenses of VISaer and CoreCard Software in 2002, mainly for significant software development expense at both new subsidiaries. 

                 J. Leland Strange, President and Chief Executive Officer of Intelligent Systems Corporation, said, “VISaer is developing a new Web-native version of its maintenance repair and overhaul (MRO) software and has accrued over $3.2 million in deferred revenue that is expected to grow during 2002 and be recognized when the completed software is delivered to customers in 2003.  Our CoreCard Software subsidiary expects to have its first customer live on its card transaction processing software in the fourth quarter this year.  Meanwhile, we are consolidating their losses and providing the main source of funding.”

                 Results for the second quarter this year include a net investment loss of $1,339,000 that reflects primarily a write-down totaling $1,246,000 to reduce the carrying value of the company’s holdings in Daw Technologies’ stock which was acquired in a prior period sale of a subsidiary.  Year-to-date 2002, the company’s investment loss of $542,000 includes other investment gains that offset in part the investment reserves recorded in the period.  The year-to-date 2002 results also include $902,000 of other income, mainly related to the recognition of deferred gain from the sale of a VISaer subsidiary in 2000.

 Conference Call and Webcast Information

                Intelligent Systems has scheduled a conference call for today at 11 AM EDT to discuss the results of the second quarter and year-to-date periods.  The call-in number is 1-800-946-0722.  A live webcast will be available at the same time by logging onto www.intelsys.com and clicking on the webcast icon. An archived version of the webcast will be available for 30 days.

About Intelligent Systems Corporation

For more than twenty-five years, Intelligent Systems Corporation [AMEX: INS] has identified, created, operated and grown early stage technology companies.  The company has operations and investments, principally in the information technology industry.  The company’s consolidated subsidiaries in 2002 include VISaer (www.visaer.com), QS Technologies, (www.qsinc.com), CoreCard Systems (www.corecard.com), all of which are software companies, and ChemFree (www.chemfree.com), an industrial products company.  Since 1990, the company has operated the Intelligent Systems Incubator, an award-winning pioneer in privately sponsored incubators.  Further information is available on the company’s website at www.intelsys.com, or by calling the company’s headquarters at 770/381-2900.

In addition to historical information, this news release contains forward-looking statements relating to Intelligent Systems and its affiliated companies.  Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements and the company does not undertake to update or revise any forward-looking statements whether as a result of new developments or otherwise.  Among the factors that could cause actual results to differ materially are changes in financial market conditions, actions of third parties, delays or changes of intent by third parties, delays in product development, competitive pressures, technical difficulties, changes in customer requirements, market acceptance of products and services, availability of capital, availability of qualified personnel, financial results and valuation of affiliate companies, and general economic conditions.

   SUMMARY OF RESULTS

Three Months Ended June 30,

                              2002

                          2001

Revenue

                     $2,213,000

                 $1,519,000

Loss From Operations

                      (3,512,000)

                     (588,000)

Interest Income

                            53,000

                      287,000

Investment Income (Loss), net

                      (1,339,000)a

                 18,798,000b

Equity in Affiliates

                           (60,000)

                     (183,000)

Other Income, net

                          151,000c

                          1,000

Income Tax

                              1,000

                      384,000

Net Income (Loss)

                    $(4,708,000)

               $17,931,000

Average Shares Outstanding – Basic

                       4,495,530

                   5,620,845

Average Shares Outstanding – Diluted

                       4,495,530

                   5,625,443

Basic and Diluted Share Income (Loss)

                            $(1.05)

                         $3.19

 

 

 

Six Months Ended June 30,

                              2002

                          2001

Revenue

                     $4,381,000

                 $3,213,000

Loss From Operations

                      (7,129,000)

                     (822,000)

Interest Income

                            77,000

                      724,000

Investment Income (Loss), net

                         (542,000)d

                 19,643,000b

Equity in Affiliates

                         (126,000)

                     (489,000)

Other Income, net

                          902,000c

                          8,000

Income Tax

                            12,000

                      384,000

Net Income (Loss)

                    $(6,830,000)

               $18,680,000

Average Shares Outstanding – Basic

                       4,495,530

                   5,622,315

Average Shares Outstanding – Diluted

                       4,495,530

                   5,625,501

Basic and Diluted Share Income (Loss)

                            $(1.52)

                         $3.32

 

 

 

a.  Includes principally $1.25 million write-down of investment.

b.  Includes principally gain of $17.8 million on sale of affiliate company, PaySys.

c.  Includes principally recognition of deferred gain.

d.  Includes $1.7 million write-down of investments and investment gains of $1.1 million. 

# # # #