Exhibit 99.1
Intelligent Systems Announces Third Quarter 2004 Results
***Earnings Conference Call at 11 AM Today ***
NORCROSS, Ga., Nov. 1 /PRNewswire-FirstCall/ -- Intelligent Systems
Corporation (Amex: INS; http://www.intelsys.com) announced today its financial
results for the third quarter and year-to-date periods ended September 30,
2004. Highlights of the third quarter of 2004 include:
-- Revenues of $10.4 million, an increase of 279% compared to revenue of
$2.7 million in the third quarter last year
-- Net income of $5.0 million ($1.09 per diluted share) compared to a loss
of $2.4 million ($0.53 per diluted share) in the same quarter last year
-- Income from operations of $3.3 million compared to a loss from
operations of $2.5 million in the third quarter last year
-- Investment income of $1.7 million compared to an investment loss of
$24,000 in the third quarter of 2003
Revenue and net income in the nine-month period ended September 30, 2004
were $18.4 million and $2.0 million ($0.43 per diluted share), respectively,
compared to revenue of $8.7 million and a loss of $3.6 million ($0.81 per
diluted share) in the nine-month period ended September 30, 2003.
The jump in revenue and income from operations in the third quarter of
2004 compared to the same period last year reflects $7.4 million in revenue
and $4.9 million in gross profit contribution related to completion of a
significant multi-year software contract at the company's VISaer subsidiary.
In the year-to-date period ended September 30, 2004, the company also
benefited from the first significant license revenue generated by its CoreCard
subsidiary. Additionally, the company reduced operating expenses by $359,000
and $669,000 in the three and nine-month periods, respectively, in 2004 as
compared to 2003.
The company does not anticipate the same level of quarterly revenue or
profits related to software sales at the VISaer or CoreCard subsidiary in the
foreseeable future as were recorded in the third quarter and year-to-date
periods of 2004. The VISaer contract was responsible for approximately 70
percent of the consolidated third quarter revenue and represents a project
that had been ongoing for over three years for which the revenue was deferred
until this quarter, although customer payments for the software project were
received in earlier periods. The VISaer contract was significantly larger
than the typical software sale made by the company's software subsidiaries.
Typically, software projects may take 12 to 18 months to complete during which
time milestone payments are generally recorded as deferred revenue until
contract completion and customer acceptance occurs.
Investment income of $1.7 million earned in the third quarter of 2004
reflects mainly a cash distribution of $1.57 million from the company's
minority investment in ISC Guernsey, an entity that realized a significant
gain from the sale of stock in a U.K. based company. Intelligent Systems
expects additional cash distributions over the next several quarters of
between $2.0 million and $3.0 million depending on the current business needs
of ISC Guernsey. The company's investment in ISC Guernsey is carried on the
balance sheet at its cost basis of $31,000. In the year-to-date period in
2003, investment income reflects the previously disclosed settlement of an
escrow fund related to the sale in April 2001 of an affiliate company, PaySys
International, Inc.
According to J. Leland Strange, President and Chief Executive Officer, "As
expected, the recognition of the VISaer contract revenue and the $1.57 million
cash distribution had a positive impact on the quarter's financial performance
and improved our balance sheet as well. However, shareholders should
understand that these results do not represent a trend and should not expect a
repeat of this quarter's performance in the near future. Our challenge and
focus in the foreseeable future is to complete and deliver our new software
products, establish more referenceable customers, and build a reasonable
pipeline of new business while managing expenses closely. "
At September 30, 2004, the company's cash balance was $1.2 million,
accounts receivable were $2.1 million, current deferred revenue was $4.7
million and stockholders' equity was $3.0 million. During the third quarter,
the company renewed its $1.5 million working capital bank line of credit.
Conference Call Information
As announced last week, Intelligent Systems has scheduled a conference
call for today at 11 AM Eastern Time to discuss the results of the third
quarter and year-to-date periods for 2004. The 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 http://www.intelsys.com and clicking
on the webcast icon. The replay will be available for twelve 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. (http://www.visaer.com), QS Technologies, Inc. (http://www.qsinc.com),
CoreCard Software, Inc. (http://www.corecard.com), (all three being software
companies) and ChemFree Corporation (http://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
http://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.
For further information, call
Bonnie Herron, 770/564-5504
or email to bherron@intelsys.com
SOURCE Intelligent Systems Corporation
-0- 11/01/2004
/CONTACT: Bonnie Herron, +1-770-564-5504, bherron@intelsys.com/
/Web site: http://www.intelsys.com /
(INS)
CO: Intelligent Systems Corporation
ST: Georgia
IN: CPR STW
SU: CCA