©2000-2010 Intelligent Systems
FOR IMMEDIATE RELEASE
SYSTEMS ANNOUNCES SECOND QUARTER 2004 RESULTS
Conference Call at 11 AM Today ***
GA – August 9, 2004 –
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, 2004.
For the three months ended June 30, 2004,
the company recorded revenue of $3.3 million, a
19 percent increase compared to revenue of $2.8
million for the same period in 2003.
Net loss from continuing operations for
the three-month period in 2004 was $2.2 million
or $0.49 per share, which is equal to the net
loss reported in the second quarter of 2003.
For the six-month period ended June 30,
2004, the company recorded revenue of $8.0
million, a 33 percent increase compared to the
same period last year.
Net loss from continuing operations was
$3.0 million or $0.68 per share compared to a
net loss of $1.2 million or $0.28 per share for
the six month period in 2003.
The increase in revenue in the second
quarter of 2004 compared to the same period last
year reflects an increase in professional
services and software maintenance revenue at the
company’s VISaer, QS Technologies and CoreCard
software subsidiaries as well as a higher volume
of product sales at the company’s ChemFree
subsidiary. In the year-to-date period ended June 30, 2004, the company
also benefited from the first significant
license revenue generated by the CoreCard
The loss from operations reported in the
three and six month periods in 2004 was lower by
28 percent and 48 percent, respectively,
compared to the loss from operations in the same
periods in 2003 as a result of growing revenue
while reducing the cost of sales as a percentage
of revenue and holding expenses constant.
The second quarter results reflect a
continued deferral of approximately $7.4 million
in revenue and $4.9 million in profit
contribution related to completion of a
significant software contract at the company’s
Revenue recognition on that contract was
deferred until the third quarter of 2004 due to
the delivery of an optional specified upgrade
right in July 2004.
Recognition of this revenue is expected
to have a significant positive impact on the
company’s results of operations for the third
quarter ended September 30, 2004.
According to J. Leland Strange, President
and Chief Executive Officer, “During the
quarter, our operating units made important
progress in booking future business, delivering
new software releases, and meeting contract
requirements and customer expectations while
maintaining expense control.
While our second quarter financial
results do not reflect all of these underlying
achievements, we continue to make our business
decisions based on the realities of the market,
our customer requirements and the long-term best
interests of the company, and not on the
expected accounting treatments, which in some
cases, for example, result in significant
deferrals of revenue.”
During the second quarter, the company
was informed of a recently completed transaction
that is expected to make a positive contribution
to income and cash in subsequent quarters.
The company expects to receive a
distribution of cash from a minority investment
in a U.K. company that has realized a
significant gain from the sale of stock in
another U.K. based company.
We have been informed that the cash
distribution over the next several quarters is
expected to total between $3.5 million and $4.5
million depending on the current business needs
of the U.K. investment.
The company’s minority investment is
carried on the balance sheet at the company’s
cost basis of $31,000.
In the second quarter and year-to-date
periods ended June 30, 2004, the company
recorded an investment loss of $371,000
reflecting the net effect of a gain on the sale
of the company’s investment in privately-held
Cirronet, Inc. offset by a write down of the
carrying value of the company’s minority
investment in a start-up technology company,
Ardext Technologies, Inc.
By contrast, the results for the
year-to-date period ended June 30, 2003 were
bolstered by net investment income of $3.7
million reflecting mainly the previously
disclosed settlement of an escrow fund related
to the sale in April 2001 of an affiliate
company, PaySys International, Inc.
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 periods for
call-in number is 877-226-7144.
An archived audio replay of the
conference call will be available by the end of
business today by logging onto www.intelsys.com
and clicking on the webcast icon.
The replay will be available for twelve
About Intelligent Systems Corporation
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
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
(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.
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,"
"plan," "strategy" and
similar expressions are intended to identify
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.
CONSOLIDATED STATEMENTS OF OPERATIONS
in thousands, except share amounts)
CONSOLIDATED BALANCE SHEETS
# # #