Exhibit 99.1
PRESS RELEASE
For Immediate Release
For more information, contact: For ICOP Investor/Media Relations:
Laura E. Owen, COO & President Elite Financial Communications Group/Elite Media Group
16801 West 116th Street Dodi Handy, President and CEO
Lenexa, KS 66219 USA Phone: (407) 585-1080
Phone: (913) 338-5550 ICOP@efcg.net
Fax: (913) 312-0264
Lowen@ICOP.com
www.ICOP.com
ICOP DIGITAL REPORTS RECORD REVENUE OF $3.75 MILLION
FOR 2007 THIRD QUARTER
Expanded Development of Global Manufacturers Rep/Dealer Network Fueling Growth
Investor Teleconference and Webcast to Begin at 4:15 PM ET
LENEXA, KS - (PR NEWSWIRE) - November 8, 2007 - ICOP Digital, Inc.
(Nasdaq:ICOP), an industry-leading company engaged in advancing digital
surveillance solutions, today announced its financial results for the three and
nine months ended September 30, 2007.
Financial highlights for the three months ended September 30, 2007 compared to
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the three months ended September 30, 2006:
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o Revenues climbed 140% to $3.75 million, up from $1.56 million, marking
a new quarterly revenue record for the Company.
o Gross profit margin on sales improved to 48% from 44%.
o Adjusted EBITDA (see definition and reconciliation of Adjusted EBITDA
below) decreased 39% to $(386,000), when compared to Adjusted EBITDA
of $(634,000) in the comparable three month period ended September 30,
2006.
o Net loss was $1.39 million, or $0.19 per basic and diluted share, a
55% increase over a net loss of approximately $896,000, or $0.15 per
basic and diluted share. The increase was largely due to non-cash
stock-based compensation expense of $907,000, as well as an increase
of $121,000 in research and development expense over the comparable
three month period ended September 30, 2006.
Financial highlights for the nine months ended September 30, 2007 compared to
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the nine months ended September 30, 2006:
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o Revenues jumped to $8.55 million, a 129% increase over $3.73 million.
o Gross profit margin on sales rose to 46% from 43%.
o Net loss increased 30% to $3.53 million, or $0.48 per basic and
diluted share, from $2.70 million, or $0.47 per basic and diluted
share, mainly as the result of accounting for non-cash stock-based
compensation of approximately $1.40 million (compared to $610,000 for
the nine months ended September 30, 2006), as well as an increase of
$890,000 in research and development expense over the same nine month
period in 2006.
o Adjusted EBITDA was $(2.05 million) compared to $(1.98 million).
As of September 30, 2007, the Company had $4.3 million in cash; accounts
receivables of $3.2 million; $4.5 million in inventory and working capital of
$10.8 million. Total shareholders' equity was $12.4 million. During the 2007
third quarter period, ICOP received approximately $933,000 in proceeds from the
issuance of stock under our employee stock purchase plan and the exercise of
warrants and employee stock options.
Commenting on the results, Dave Owen, Chairman and CEO, noted, "We are very
proud of the sales traction that ICOP continues to enjoy, which resulted in
another new record for quarterly revenue performance. During the third quarter,
ICOP processed customer orders for the ICOP Model 20/20-W (and related ancillary
products) from more than 99 law enforcement agencies in 40 states, with
approximately 30% of these orders representing re-orders from existing
customers, and 70% from agencies that have only recently chosen ICOP for their
respective fleet deployments. In addition, we are very pleased to have won our
first customer for ICOP Guardian IP cameras - a sale resulting from our joint
marketing collaboration with Sprint/Nextel."
Owen continued, "Also in the third quarter, ICOP successfully launched an
exciting new initiative designed to expand and enhance our global sales and
marketing platform. Through focused outreach targeting professional sales
organizations and systems integrators with specialized expertise in advanced
security and digital surveillance products, we expanded our construction of a
Manufacturers Rep and Independent Dealer network to help us enhance and
accelerate our market penetration efforts - both domestically and abroad. As a
result, we have quickly amassed an impressive group of high-end independent reps
and dealers that are now working in close coordination with our direct sales
teams to pursue and win a number of prevailing sales opportunities in a wide
range of industries."
"With the anticipated soft market launch of the ICOP Model 4000 later this
quarter, we are anxious to begin addressing a sizable backlog of prospective new
customers for our new transit system solution. Moreover, with this impending
product release, we will have succeeded in bringing to market the full
complement of products that comprise the total ICOP Solution, ICOP's visionary
answer to protecting and securing our nation's communities in times of crisis,"
added Owen.
Concluding, Owen stated, "Over the last two years, ICOP has fought hard to earn
its reputation as the preferred provider of digital surveillance solutions
widely deemed as the industry gold standard for law enforcement. Aided by our
growing list of world class strategic partners and supporters, we intend to
pursue with even greater diligence our goal of winning ICOP global distinction
as the gold standard for every industry where security is at issue."
Adjusted EBITDA is defined as operating loss excluding depreciation and
amortization and stock-based compensation expenses. While depreciation and
amortization are considered operating costs under U.S. GAAP, these expenses
primarily represent a non-cash current period allocation of costs associated
with long-lived assets acquired in prior periods. Similarly, the expense
recorded for stock-based compensation does not represent a current or future
period cash cost.
We believe that Adjusted EBITDA is an important measure of operating
performance, leverage capacity, its ability to service its debt, and its ability
to make capital expenditures for its stockholders. These calculations are
commonly used as a basis for investors, analysts and credit rating agencies to
evaluate and compare the operating performance and value of companies within the
digital surveillance industry.
Management believes the use of this non-U.S. GAAP measure provides a useful
basis for evaluating underlying business unit performance, but should not be
considered in isolation and is not a substitute for evaluating business unit
performance utilizing U.S. GAAP financial information. Management uses non-U.S.
GAAP measures in its budgeting and forecasting processes and to further analyze
its financial trends and "operational run-rate," as well as making financial
comparisons to prior periods presented on a similar basis. The Company believes
that providing such adjusted results allows investors and other users of ICOP's
financial statements to better understand ICOP's recurring comparative operating
performance for the periods presented.
ICOP's management uses non-U.S. GAAP financial measures, such as Adjusted
EBITDA, in its own evaluation of the Company's performance, particularly when
comparing performance to past periods. ICOP's non-U.S. GAAP measures may differ
from similar measures by other companies, even if similar terms are used to
identify such measures. Although ICOP's management believes non-U.S. GAAP
measures are useful in evaluating the performance of its business, ICOP
acknowledges that items excluded from such measures may have a material impact
on the Company's income from operations, pretax income, net income and earnings
per share calculated in accordance with U.S.GAAP. Therefore, management
typically uses non-U.S. GAAP measures in conjunction with U.S. GAAP results.
Investors and users of our financial information should also consider the above
factors when evaluating ICOP's results.
The attached schedule provides a full reconciliation of this non-U.S. GAAP
financial measure to the most directly comparable corresponding U.S. GAAP
financial measure.
ICOP will host a teleconference today beginning at 4:15 PM Eastern, and invites
all interested parties to join management in a discussion regarding the
Company's third quarter financial results, corporate progression and other
meaningful developments. The conference call can be accessed via telephone by
dialing toll free 1-800-240-4186 or via the web at www.ICOP.com. For those
unable to participate at that time, a replay of the webcast will be available
for 90 days at www.ICOP.com.
ICOP DIGITAL, INC.
Condensed Balance Sheet (Unaudited)
September 30, 2007
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Assets
Current Assets
Cash $ 4,312,196
Accounts receivable,net 3,182,782
Inventory, at cost 4,503,655
Prepaid expenses 247,774
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Total current assets 12,246,407
Property and equipment, at cost, net of accumulated depreciation of $608,077 1,279,910
Other Assets:
Investment in marketing company, at cost 25,000
Deferred patent costs 77,620
Deposits 18,258
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Total Assets $ 13,647,195
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Liabilities and Shareholders' Equity
Current liabilities
Accounts payable $ 426,042
Accrued liabilities 485,838
Unearned revenue 351,594
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Total current liabilities 1,263,474
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Shareholders' Equity:
Preferred stock,no par value; 5,000,000 shares authorized, no shares issued
and outstanding -
Common stock, no par value; 50,000,000 shares authorized, 7,455,054 shares
issued and outstanding 29,594,334
Accuulated other comprehensive gain, net of tax 5,006
Accumulated deficit (17,215,619)
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Total Shareholders' Equity 12,383,721
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Total Liabilities and Shareholders' Equity $ 13,647,195
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ICOP DIGITAL, INC.
Condensed Statements of Operations (Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
------------- ------------- ------------- -------------
2007 2006 2007 2006
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Sales, net of returns $ 3,751,834 $ 1,564,240 $ 8,553,027 $ 3,731,999
Cost of sales 1,961,710 878,029 4,605,608 2,141,279
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Gross profit 1,790,124 686,211 3,947,419 1,590,720
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Operating expenses:
Selling, general and administrative 2,834,615 1,349,200 6,290,363 3,898,717
Research and development 366,786 245,730 1,355,858 465,660
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Total operating expenses 3,201,401 1,594,930 7,646,221 4,364,377
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Operating loss (1,411,277) (908,719) (3,698,802) (2,773,657)
Other income (expenses):
Foreign currency translation - 2,823 11,691 29,982
Interest income 55,051 18,645 185,662 61,795
Interest expense (29,466) (8,339) (37,802) (22,893)
Loss on disposal of property and
equipment (7,155) - (7,155) -
Other income 5,000 - 20,000 -
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Loss before income taxes (1,387,847) (895,590) (3,526,406) (2,704,773)
Income tax provision - - - -
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Net loss $ (1,387,847) $ (895,590) $ (3,526,406) $ (2,704,773)
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Basic and diluted loss per share $ (0.19) $ (0.15) $ (0.48) $ (0.47)
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Basic and diluted weighted average
common shares outstanding 7,346,828 5,905,784 7,275,422 5,715,785
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ICOP DIGITAL, INC.
Reconciliation of Operating Loss to Adjusted EBITDA
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
2007 2006 2007 2006
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Operating Loss $ (1,411,277) $ (908,719) $ (3,698,802) $ (2,773,657)
Add: Depreciation and amortization 117,657 66,703 254,764 180,108
Add: Stock-based compensation 907,364 208,000 1,397,662 610,000
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Earnings (Loss) before interest, taxes,
depreciation, amortization and
stock-based compensation (Adjusted
EBITDA) $ (386,256) $ (634,016) $ (2,046,376) $ (1,983,549)
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ABOUT ICOP DIGITAL, INC.
ICOP Digital, Inc. protects people, assets and profits, providing a Veil of
Protection(TM) for our nation's communities with innovative, mission-critical
security, surveillance and communication solutions. The Company engineers,
manufactures and markets mobile and stationary surveillance products for use in
the public and private sectors, and facilitates the delivery of live video to
first responders. The ICOP Model 20/20(R)-W, ICOP's flagship product, is the
leading digital in-car video recorder system for law enforcement. The ICOP
Guardian(TM) is a stationary IP camera that records high quality video images on
a local server, and is capable of activation through several triggers. ICOP
LIVE(TM) delivers live streaming video to and from first responder vehicles and
headquarters, empowering first responders with enhanced situational awareness,
helping to optimize the outcome of a crisis. (GSA Contractor)
For more information, please view the following video presentations at
http://www.icopdigital.com/why_icop.html and www.ICOP.com/veil.html, or visit
www.ICOP.com.
SAFE HARBOR STATEMENT
This document contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Such statements are subject to risks and
uncertainties that could cause actual results to vary materially from those
projected in the forward-looking statements. The Company may experience
significant fluctuations in future operating results due to a number of
economic, competitive, and other factors, including, among other things, our
reliance on third-party manufacturers and suppliers, government agency budgetary
and political constraints, new or increased competition, changes in market
demand, and the performance or reliability of our products. These factors and
others could cause operating results to vary significantly from those in prior
periods, and those projected in forward-looking statements. Additional
information with respect to these and other factors, which could materially
affect the Company and its operations, are included in certain forms the company
has filed with the Securities and Exchange Commission.