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©2000 Intelligent Systems |
FOR IMMEDIATE RELEASE For further
information, call INTELLIGENT SYSTEMS ANNOUNCES SECOND QUARTER 2003 RESULTS ***Earnings Conference Call and Webcast at 11 AM Today *** Norcross,
GA – August 6, 2003 –
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, 2003. For
the six-month period ended June 30, 2003,
Intelligent Systems recorded revenue of $6.0
million, a 36 percent increase compared to the
same period last year.
Net loss was $1.2 million or $0.28 per
share compared to a net loss of $6.8 million or
$1.52 for the six month period in 2002. For
the three months ended June 30, 2003, the
company recorded revenue of $2.8 million, a 27
percent increase compared to revenue of $2.2
million for the same period in 2002.
Net loss for the three-month period in
2003 was $2.2 million or $0.49 per share
compared to a net loss of $4.7 million or $1.05
per share for the second quarter of 2002.
The
increase in revenue in the second quarter and
year-to-date periods of 2003 compared to last
year reflects an increase in service revenue
(which includes professional services and
software maintenance revenue) at the company’s
VISaer and QS Technologies subsidiaries as well
as a higher volume of product sales at the
company’s ChemFree subsidiary.
The
results for the year-to-date period ended June
30, 2003 were bolstered by net investment income
of $3.7 million.
In the first quarter of 2003, the company
recognized investment income of $4.2 million on
the settlement of an escrow fund related to the
sale in April 2001 of an affiliate company,
PaySys International, Inc. to First Data
Corporation.
In the second quarter, the company
recognized additional income of $281,000
reflecting the final disbursement from the
escrow fund.
In the aggregate, ISC received $4.5
million cash and recognized an equal amount of
investment income on the escrow settlement in
the six-month period in 2003.
Offset against this income was a
first-quarter write-down aggregating $719,000
against the carrying value of the company’s
equity and debt investment in a private
technology company in which Intelligent Systems
held a minority interest and a second-quarter
charge of $76,000 to reduce the carrying value
of another minority owned start-up company.
The write-downs were based on the
valuations and terms of recently completed
transactions involving the minority-held
businesses.
The
overall improvement in results in the second
quarter and year-to-date periods in 2003
compared to the same periods in 2002 is the net
effect of an increase in revenue and gross
margin contribution, a reduction in consolidated
operating expenses of more than 15 percent in
each period, and the non-recurring investment
gain on the escrow settlement. The
loss from operations in the three and six month
periods ended June 30, 2003 was $2.6 million and
$5.2 million, respectively, which is more than
25 percent lower than the operating loss in each
of the comparable periods of 2002. The company continues to support investment in product development activities at both its CoreCard Software and VISaer subsidiaries for new software products scheduled for release in 2003. While the company is incurring development costs in 2003, most of the license revenue related to these products will not be recognized until 2004 when customer installations are complete. According to J. Leland Strange, President and Chief Executive Officer, “In the second quarter, our operating subsidiaries continued to make progress on achieving their product development and sales plans for 2003. Despite the general weakness in enterprise software sales and the aviation industry in particular as well as the recent SARS epidemic, which contributed to delays on contracts with certain of our international prospects and customers, our software companies continue to win contracts for their new products and to position themselves for improved profitability in the future. In addition, our ChemFree subsidiary has benefited from strong European market demand for its parts washer systems.” Conference
Call and Webcast Information
As
announced last week, 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 period for 2003.
The call-in number is 877-226-7144
(domestic) and 706-679-3941 (international).
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 12 months. About
Intelligent Systems Corporation
For
thirty 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
include VISaer, Inc. (www.visaer.com), QS
Technologies, Inc. (www.qsinc.com),
CoreCard Software, Inc. (www.corecard.com),
(all software companies) and ChemFree
Corporation (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 at 770/381-2900. In addition to historical information, this news release may contain forward-looking statements relating to Intelligent Systems and its subsidiary and affiliated companies. These statements include all statements that are not statements of historical fact regarding the intent, belief or expectations of Intelligent Systems and its management with respect to, among other things, results of operations, product plans, and financial condition. The words "may," "will," "anticipate," "believe," "intend," "expect," "estimate," "plan," "strategy" and similar expressions are intended to identify forward-looking statements. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those contemplated by such forward-looking statements. 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 from those indicated by such forward-looking statements are delays in product development, undetected software errors, competitive pressures (including pricing), changes in customers’ requirements or financial condition, market acceptance of products and services, changes in financial markets, changes in the performance, financial condition or valuation of affiliate companies, the risks associated with investments in privately-held early stage companies, the impact of events such as the war against IRAQ and the SARS epidemic, on the worldwide commercial aviation industry, other geopolitical or military actions, and general economic conditions, particularly those that cause business or government to delay or cancel purchase decisions. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited,
in thousands, except share amounts)
a.
Includes $4.5 million gain on escrow
settlement and $795,000 write-down on
investments. CONDENSED
CONSOLIDATED BALANCE SHEETS (in
thousands)
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