Exhibit 99.1
Applied Digital Solutions Reports First Quarter 2003 Financial Results
PALM BEACH, Fla.--(BUSINESS WIRE)--May 15, 2003--Applied Digital
Solutions, Inc. (Nasdaq: ADSX), an advanced technology development
company, today reported its consolidated results for the first quarter
ended March 31, 2003. The Company's consolidated financial results
include the balance sheets, operating results and cash flows of its
majority-owned subsidiaries, Digital Angel Corporation (AMEX: DOC),
and InfoTech USA, Inc., formerly SysComm International Corporation
(OTC: SYCM).
Revenue from continuing operations for the first quarter of 2003
was $25.1 million, compared with revenue from continuing operations of
$28.2 million for the first quarter of 2002. The decrease in
comparative quarterly revenues was due to the Company's restructuring
through the sale or closure of business units in 2002 and lower sales
for InfoTech USA. On a comparative quarterly basis, revenue in the
first quarter of 2003 for Digital Angel Corporation and for the
Company's wholly owned subsidiary, Computer Equity Corporation,
improved.
Net loss from continuing operations for the three-months ended
March 31, 2003, was $26.8 million, or $0.10 per share, compared to a
net loss from continuing operations of $24.7 million, or $0.10 per
share, for the first quarter of 2002.
Included in the results for the first quarter of 2003 is a charge
of $22.0 million related to the severance agreements with certain
former executive officers and directors of the Company. Included in
the results for the first quarter of 2002 is a non-cash charge of
$18.7 million resulting from the conversion of options to acquire
Digital Angel Corporation common stock into options to acquire Medical
Advisory Systems, Inc.'s (MAS) common stock as a result of the merger
of Digital Angel Corporation and MAS on March 27, 2002.
Commenting on developments in the first quarter, Scott R.
Silverman, Chairman and CEO, said: "The first quarter of 2003 saw a
number of significant developments at Applied Digital. With a new
management team in place and an encouraging new arrangement with our
senior lender, I am optimistic about Applied Digital's future
prospects. The Company is committed to communicating more effectively
with our shareholders, executing on our business plan, and building
long-term shareholder value."
A number of important developments occurred during the first
quarter of 2003, including:
-- Shipment of VeriChip products to the Company's distributor in
Mexico and to US-based Authorized VeriChip Centers;
-- Announcement by Digital Angel Corporation that it had received
clearances from the Food and Drug Administration and the US
Department of Agriculture to market Bio-Thermo(TM), a new
temperature-sensing implantable microchip for use in pets,
livestock, and other animals;
-- Announcement in March by Applied Digital's Computer Equity/GTI
subsidiary that it was one of several companies awarded
multi-year contracts by the General Services Administration's
Federal Technology Service (FTS) as part of the agency's
CONNECTIONS program;
-- Forbearance Agreement with IBM Credit, announced on March 27,
2003. Under the terms of that agreement, the Company has the
right to purchase all of its debt of approximately $95 million
(including accrued interest) with a payment of $30 million by
June 30, 2003, subject to continued compliance with the terms
of the Forbearance Agreement. If this payment is made on or
before June 30, 2003, Applied Digital would satisfy its full
obligation to IBM Credit. As of this date, the Company is in
compliance with all terms of the Forbearance Agreement.
About VeriChip(TM)
VeriChip is a miniaturized radio frequency identification device
(RFID) that can be used in a variety of security, financial, emergency
identification and other applications. About the size of a grain of
rice, each VeriChip product contains a unique verification number and
will be available in several formats, some of which will be insertable
under the skin. The verification number is captured by briefly passing
a proprietary scanner over the VeriChip. A small amount of radio
frequency energy passes from the scanner energizing the dormant
VeriChip, which then emits a radio frequency signal transmitting the
verification number. In October 2002, the US Food and Drug
Administration (FDA) ruled that VeriChip was not a regulated device
with regard to its security, financial, personal identification/safety
applications but that VeriChip's healthcare information applications
are regulated by the FDA. VeriChip Corporation is a wholly owned
subsidiary of Applied Digital Solutions.
About Digital Angel Corporation (AMEX:DOC)
On March 27, 2002, Digital Angel Corporation completed a merger
with Medical Advisory Systems, Inc., which for two decades has
operated a 24/7, physician-staffed response center in Owings,
Maryland. Prior to the merger, Digital Angel Corporation was a 93%
owned subsidiary of Applied Digital Solutions, Inc. (Nasdaq: ADSX),
which now is a beneficial owner of the company. Digital Angel(TM)
technology represents the first-ever combination of advanced sensors
and Web-enabled wireless telecommunications linked to Global
Positioning Systems (GPS). By utilizing advanced sensor capabilities,
Digital Angel is able to monitor key functions - such as ambient
temperature and physical movement - and transmit that data, along with
accurate emergency location information, to a ground station or
monitoring facility. The company also invented, manufactures and
markets implantable identification microchips the size of a grain of
rice for use in humans, companion pets, fish, and livestock. Digital
Angel Corp. owns the patents for its inventions in all applications of
the implantable microchip technology for humans and animals. For more
information about Digital Angel Corp., visit www.DigitalAngelCorp.com.
About Thermo Life(TM)
Thermo Life is a miniaturized, thermoelectric generator powered by
body heat. On July 9, 2002, the Company announced that it had achieved
an important breakthrough: 3.0-volts of electrical power successfully
generated by Thermo Life in laboratory tests. The Company believes
Thermo Life technology has a wide variety of potential uses, including
the powering of various electronic devices, wristwatches, medical
devices, smoke detectors and other heat-related sensors. If Thermo
Life performs as expected in commercial applications, this technology
could effectively eliminate the need to periodically replace the power
source of these devices. Thermo Life technology can also provide an
independent, heat-generated power source for security related sensors.
Thermo Life Energy Corporation is a wholly owned subsidiary of Applied
Digital Solutions.
About Applied Digital Solutions, Inc.
Applied Digital Solutions is an advanced technology development
company that focuses on a range of life-enhancing, personal safeguard
technologies, early warning alert systems, miniaturized power sources
and security monitoring systems combined with the comprehensive data
management services required to support them. Through its Advanced
Technology Group, the company specializes in security-related data
collection, value-added data intelligence and complex data delivery
systems for a wide variety of end users including commercial
operations, government agencies and consumers. Applied Digital
Solutions is the beneficial owner of a majority position in Digital
Angel Corporation (AMEX:DOC). For more information, visit the
company's website at http://www.adsx.com.
Statements about the Company's future expectations, including
future revenues and earnings, and all other statements in this press
release other than historical facts are "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933,
Section 21E of the Securities Exchange Act of 1934, and as that term
is defined in the Private Litigation Reform Act of 1995. Such
forward-looking statements involve risks and uncertainties and are
subject to change at any time, and the Company's actual results could
differ materially from expected results. The Company undertakes no
obligation to update forward-looking statements to reflect
subsequently occurring events or circumstances.
CONTACT: Applied Digital Solutions, Inc.
Investor Contact:
Lori Alexander, 561/805-8013
investor@adsx.com
or
Media Contact:
Matthew Cossolotto, 914/245-9721
matthew@ovations.com