Intelligent Systems Corporation [NYSE American: INS], the leading
provider of innovative credit technology solutions and processing
services to the financial technology and services market, announced
today its financial results for the quarter ended June 30, 2020.
“Second quarter results were in-line with
expectations and continued to demonstrate the adaptability of our
business model and our ability to uniquely service our customers,”
said Leland Strange, CEO of Intelligent Systems. “We achieved
revenues of $8.1 million, representing a 7% increase over the prior
year period. As anticipated, our year-over-year, top-line growth
was driven by both professional services and processing and
maintenance, with no license revenue as we did not see any
customers achieve new tiers. Our customers and accounts increased
in number and value for professional services during the second
quarter. Our income from operations and net income were also up
slightly from the same quarter the previous year.
“Throughout the quarter, we continued to provide
high-quality, on-time delivery for our clients despite the
challenging environment and our team maintained their focus in
positioning Intelligent Systems for continued growth in a
post-pandemic world. We continued to advance on our strategic
objectives, making investments in talent and technology while
innovating new products and services that help our clients reduce
complexity as well as increase efficiencies.”
Mr. Strange continued, “Looking to the second
half of the year, we are cautiously optimistic regarding the
trajectory of top-line growth. Longer-term, we view the current
pandemic as a temporary pause on our growth momentum and anticipate
returning to growth in Fiscal 2021. While demand is subject to
market fluctuations outside of our control, our margins allow us to
continue to invest in the business and I am confident our agile and
innovative model, combined with our solid financial position, will
enable us to overcome these current challenges and regain our
momentum.”
Financial Highlights for the three
months ended June 30, 2020
Total revenues– Total revenue
in the three-month period ended June 30, 2020 was $8,053,000, which
represents an increase of 7 percent compared to the comparable
period in 2019.
In the following table, revenue is disaggregated by type of
revenue for the three months ended June 30, 2020:
Three months ended June 30, (in
thousands) |
|
2020 |
|
|
2019 |
License |
$ |
- |
|
$ |
700 |
Professional services |
|
5,156 |
|
|
4,663 |
Processing and maintenance |
|
2,673 |
|
|
1,724 |
Third party |
|
224 |
|
|
425 |
Total |
$ |
8,053 |
|
$ |
7,512 |
Income from operations was
$2,703,000 for the second quarter compared to income from
operations of $2,601,000 in the comparable prior year quarter.
Net income was $2,200,000 for
the second quarter compared to net income of $2,108,000 in the
comparable prior year quarter.
Earnings per diluted share was
$0.24 for the second quarter compared to $0.23 in the comparable
prior year quarter.
Liquidity and Capital
ResourcesCash balance at the quarter ended June 30, 2020
was $32,316,000 compared to $26,415,000 at December 31, 2019. For
the six months ended June 30, 2020, cash provided by operations was
$9,714,000 compared to cash provided by operations of $5,954,000
for the comparable prior year period.
Investor Conference Call
Today
The company is holding an investor conference
call today, August 4, 2020, at 11 A.M. Eastern Standard Time.
Interested investors are invited to attend the conference call by
dialing (855) 766-6518 and entering conference ID 7497490. As
part of the conference call Intelligent Systems will be conducting
a question and answer session where participants are invited to
email their questions to fax@intelsys.com prior to the call. A
transcript of the call will be posted on the company’s website at
www.intelsys.com as soon as available after the call.
The company will file its Form 10-Q for the
period ended June 30, 2020 with the Securities and Exchange
Commission today. For additional information about reported
results, investors will be able to access the Form 10-Q on the
company’s website at www.intelsys.com or on the SEC site,
www.sec.gov.
About Intelligent Systems
CorporationFor over thirty-five years, Intelligent Systems
Corporation [NYSE American: INS] has identified, created, operated
and grown technology companies. The company’s principal operations
are CoreCard Software, Inc. (www.corecard.com) and its affiliate
companies. CoreCard provides prepaid and credit card processing
services using its proprietary software solutions that it also
licenses to others. CoreCard has designed and developed a
comprehensive suite of software solutions that corporations,
financial institutions, retailers and processors use to manage
credit and debit cards, prepaid cards, private label cards, fleet
cards, loyalty programs, and accounts receivable and small loan
transactions. CoreCard's flexible and proven processing platform is
being utilized in many countries in addition to the United States
including Australia, Canada, China, the United Arab Emirates,
France, Italy, Mexico, New Zealand, Singapore, South Africa and the
United Kingdom. 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 Corporation 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 Corporation 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,
except as required by law. Among the factors that could cause
actual results to differ materially from those indicated by such
forward-looking statements are instability in the financial
markets, delays in product development, undetected software errors,
competitive pressures, changes in customers’ requirements or
financial condition, market acceptance of products and services,
the impact of new or changes in current laws, regulations or other
industry standards, risks relating to unauthorized access to
confidential information due to criminal conduct, attacks by
hackers, employee or insider malfeasance and/or human error and
declines in general economic and financial market conditions,
particularly those that cause businesses to delay or cancel
purchase decisions.
For further information, callMatt White, 770-564-5504 or email
to matt@intelsys.com
|
|
Intelligent Systems
CorporationCONSOLIDATED STATEMENTS OF
OPERATIONS(unaudited, in thousands, except share and per
share amounts) |
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
|
Six Months Ended June 30, |
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
2019 |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
Services |
$ |
8,053 |
|
$ |
6,812 |
|
$ |
|
15,946 |
|
$ |
12,978 |
Products |
|
- |
|
|
700 |
|
|
|
- |
|
|
1,500 |
Total net revenue |
|
8,053 |
|
|
7,512 |
|
|
|
15,946 |
|
|
14,478 |
Cost of revenue |
|
|
|
|
|
|
|
|
|
|
|
|
Services |
|
3,694 |
|
|
2,899 |
|
|
|
7,201 |
|
|
5,433 |
Products |
|
- |
|
|
- |
|
|
|
- |
|
|
- |
Total cost of revenue |
|
3,694 |
|
|
2,899 |
|
|
|
7,201 |
|
|
5,433 |
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Marketing |
|
31 |
|
|
51 |
|
|
|
63 |
|
|
89 |
General and administrative |
|
704 |
|
|
1,100 |
|
|
|
1,762 |
|
|
1,694 |
Research and development |
|
921 |
|
|
861 |
|
|
|
1,838 |
|
|
2,059 |
Income from operations |
|
2,703 |
|
|
2,601 |
|
|
|
5,082 |
|
|
5,203 |
Investment (loss) income |
|
(95) |
|
|
(21) |
|
|
|
(1,145) |
|
|
4 |
Other income |
|
117 |
|
|
146 |
|
|
|
253 |
|
|
249 |
Income before Income taxes |
|
2,725 |
|
|
2,726 |
|
|
|
4,190 |
|
|
5,456 |
Income taxes |
|
525 |
|
|
618 |
|
|
|
943 |
|
|
1,276 |
Net income |
$ |
2,200 |
|
$ |
2,108 |
|
$ |
|
3,247 |
|
$ |
4,180 |
Earnings per share attributable to Intelligent Systems
Corporation: |
|
|
|
|
|
|
Basic |
$ |
0.25 |
|
$ |
0.24 |
|
$ |
|
0.36 |
|
$ |
0.47 |
Diluted |
$ |
0.24 |
|
$ |
0.23 |
|
$ |
|
0.36 |
|
$ |
0.46 |
Basic weighted average common shares outstanding |
|
8,924,988 |
|
|
8,850,988 |
|
|
|
8,924,988 |
|
|
8,846,155 |
Diluted weighted average common shares outstanding |
|
9,019,025 |
|
|
9,004,664 |
|
|
|
9,020,470 |
|
|
9,015,669 |
|
Intelligent Systems
CorporationCONSOLIDATED BALANCE SHEETS(in
thousands, except share and per share amounts) |
|
|
|
As of |
June 30, 2020 |
December 31, 2019 |
ASSETS |
(unaudited) |
(audited) |
Current assets: |
|
|
|
|
|
|
Cash |
$ |
32,316 |
|
$ |
26,415 |
|
Accounts receivable, net |
|
8,136 |
|
|
8,759 |
|
Notes and interest receivable |
|
1,063 |
|
|
− |
|
Other current assets |
|
1,058 |
|
|
905 |
|
Total current assets |
|
42,573 |
|
|
36,079 |
|
Investments |
|
2,155 |
|
|
3,081 |
|
Notes and interest receivable, net of current portion |
|
1,543 |
|
|
1,795 |
|
Property and equipment, at cost less accumulated depreciation |
|
4,253 |
|
|
2,177 |
|
Other long-term assets |
|
3,497 |
|
|
1,108 |
|
Total assets |
$ |
54,021 |
|
$ |
44,240 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
$ |
431 |
|
$ |
403 |
|
Deferred revenue, current portion |
|
4,801 |
|
|
689 |
|
Accrued payroll |
|
1,649 |
|
|
2,503 |
|
Accrued expenses |
|
238 |
|
|
153 |
|
Income tax payable |
|
1,965 |
|
|
1,100 |
|
Other current liabilities |
|
1,728 |
|
|
1,345 |
|
Total current liabilities |
|
10,812 |
|
|
6,193 |
|
Noncurrent liabilities: |
|
|
|
|
|
|
Deferred revenue, net of current portion |
|
9 |
|
|
23 |
|
Deferred tax liability |
|
275 |
|
|
275 |
|
Long-term lease obligation |
|
2,312 |
|
|
460 |
|
Total noncurrent liabilities |
|
2,596 |
|
|
758 |
|
Intelligent Systems Corporation stockholders’ equity: |
|
|
|
|
|
|
Common stock, $0.01 par value, 20,000,000 shares authorized,
8,924,988 |
|
|
|
|
|
|
issued and outstanding at June 30, 2020 and December 31,
2019, respectively |
|
89 |
|
|
89 |
|
Additional paid-in capital |
|
15,573 |
|
|
15,450 |
|
Accumulated other comprehensive loss |
|
(140 |
) |
|
(94 |
) |
Accumulated income |
|
25,091 |
|
|
21,844 |
|
Total Intelligent Systems Corporation stockholders’ equity |
|
40,613 |
|
|
37,289 |
|
Total liabilities and stockholders’ equity |
$ |
54,021 |
|
$ |
44,240 |
|
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