Exhibit 99.1
INTELLIGENT SYSTEMS ANNOUNCES 4TH QUARTER AND FISCAL 2004 RESULTS
*** Earnings Conference Call and Webcast at 11 AM Today ***
NORCROSS, Ga., March 17 /PRNewswire-FirstCall/ -- Intelligent Systems
Corporation (Amex: INS) ( http://www.intelsys.com ) announced today its
financial results for the fourth quarter and fiscal year ended December 31,
2004.
For the fiscal year ended December 31, 2004, the company recorded revenue of
$22.3 million, a 67 percent increase compared to revenue of $13.3 million for
the twelve-month period in 2003. Net income for the twelve-month period in 2004
was $2.6 million or $0.57 per basic share, compared to a net loss of $4.8
million or $1.07 per basic share recorded in 2003.
For the fourth quarter ended December 31, 2004, Intelligent Systems recorded
revenue of $4.0 million compared to revenue of $4.6 million in the same period
last year. Net income for the three months ended December 31, 2004 was $572,000
or $0.13 per share compared to a net loss of $1.2 million or $0.26 per share for
the same three-month period in 2003.
Compared to 2003, annual revenue from product sales grew 34 percent in 2004,
whereas annual revenue from services increased 125 percent in 2004. The
year-to-year increase in product revenue reflects primarily the impact of a $7.5
million software license earned by the company's VISaer subsidiary upon
completion of a significant multi-year contract in the third quarter of 2004, as
reported in the previously announced third quarter results. The increase in
revenue from services reflects not only the contribution of various professional
services delivered under the major VISaer contract but also a larger installed
base of customers that purchased maintenance and support services at all three
of the company's software subsidiaries. Additionally, the company reduced
consolidated operating expenses by nine percent in 2004 compared to 2003.
The results for the twelve-month period ended December 31, 2004 include $2.5
million in net investment income comprised of $2.7 million related to
distributions from minority-owned ISC Guernsey, an entity that realized a
significant gain from the sale of stock in a U.K. based company, and investment
gains aggregating $513,000 on transactions involving three other minority owned
technology companies, offset in part by a write-off of $639,000 on the company's
minority ownership in an early stage technology company. The company also
recognized $392,000 in other income in 2004, almost all of which reflects the
final net gain on the sale of a VISaer product line in July 2000. By comparison,
in 2003, the company recorded net investment income of $3.0 million related to a
gain of $4.5 million on the settlement of an escrow fund related to an earlier
sale of an affiliate company, offset in part by write-downs aggregating $1.5
million against the carrying values of investments in certain minority-owned
companies.
During 2004, the company continued to support investment in important
product development activities at both its CoreCard Software and VISaer
subsidiaries for new software products, although such expenses were lower in
both the fourth quarter and annual periods of 2004 compared to the same periods
in 2003. As previously noted, the VISaer software contract that contributed to
the sales and profit increase in 2004 was significantly larger than the typical
software sale recorded by any of the company's software subsidiaries and is not
expected to represent a trend. Typically, software sales and installations take
12 to 24 months to complete, during which time milestone payments are generally
recorded as deferred revenue until the software is delivered and customer
acceptance occurs. At December 31, 2004, the company has recorded $4.9 million
in current net deferred revenue comprised of amounts recorded by its four
consolidated subsidiaries, net of associated costs, that is expected to be
recognized in 2005.
Conference Call and Webcast Information
As announced previously, Intelligent Systems has scheduled a conference call
for today at 11 AM EST to discuss the results of the fourth quarter and annual
periods for 2004. The call-in number is (877) 226-7144 (domestic) and (706)
679-3941 (local and international). A transcript of the conference call will be
available by the end of the day and will be archived on the company's website at
http://www.intelsys.com for 12 months.
About Intelligent Systems Corporation
For over 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 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. Among the factors that could cause actual results to
differ materially from those indicated by such forward- looking statements are
delays in product development, undetected software errors, competitive pressures
(including pricing), changes in customers' requirements or financial condition,
market acceptance of products and services, changes in financial markets,
changes in the performance, financial condition or valuation of affiliate
companies, the risks associated with investments in privately-held early stage
companies, the impact of events, such as the war against IRAQ and the SARS
epidemic, on the company's worldwide market opportunity, other geopolitical or
military actions, and general economic conditions, particularly those that cause
business or government to delay or cancel purchase decisions.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share amounts)
Three Months Ended Twelve Months Ended
Dec. 31, Dec. 31,
------------------------------ -------------------------------
2004 2003 2004 2003
------------- ------------- ------------- -------------
Revenue
Products $ 2,082 $ 3,235 $ 11,386 $ 8,466
Services 1,879 1,360 10,946 4,868
Total revenue 3,961 4,595 22,332 13,334
Cost of revenue
Products 856 804 3,699 3,324
Services 885 783 5,177 3,380
Total cost of revenue 1,741 1,587 8,876 6,704
Expenses
Marketing 577 645 2,558 2,811
General & administrative 738 978 3,542 3,895
Research & development 1,744 2,060 7,630 8,316
Loss from operations (839) (675) (274) (8,392)
Other income
Interest income (expense), net 6 (2) -- 2
Investment income (loss), net 1,167 (604) 2,524(a) 3,040(b)
Equity in earnings
(losses) of affiliate companies (135) 137 (76) 184
Other income, net 375 40 392 328
Income (loss) before
income tax provision (benefit) 574 (1,104) 2,566 (4,838)
Income tax provision (benefit) 2 64 3 (40)
Net income (loss) $ 572 $ (1,168) $ 2,563 $ (4,798)
Basic net income (loss) per share $ 0.13 $ (0.26) $ 0.57 $ (1.07)
Diluted net income (loss) per share $ 0.12 $ (0.26) $ 0.56 $ (1.07)
Basic weighted average shares 4,478,971 4,478,971 4,478,971 4,483,458
Diluted weighted average shares 4,610,043 4,493,640 4,607,641 4,483,458
a. Includes $3.2 million investment gains, offset in part by $639,000
write-off of investment.
b. Includes $4.5 million gain on escrow settlement, offset in part by $1.5
million in reserves/losses on investments.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, December 31,
2004 2003
------------- -------------
ASSETS
Current assets:
Cash $ 670 $ 1,133
Accounts receivable, net 2,931 1,543
Notes and interest receivable -- 142
Inventories 653 766
Other current assets 217 614
Total current assets 4,471 4,198
Long-term investments 4,879 6,275
Property and equipment, at cost less
accumulated depreciation 781 746
Goodwill 2,049 2,039
Intangibles, net 699 476
Other assets, net 25 8
Total assets $ 12,904 $ 13,742
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 867 $ 932
Short-term borrowings 267 250
Deferred revenue 4,895 2,586
Deferred gain -- 291
Accrued expenses and other current liabilities 1,480 2,037
Total current liabilities 7,509 6,096
Deferred revenue, net of current portion -- 5,060
Other long-term liabilities 310 --
Total long term liabilities 310 5,060
Minority interest 1,516 1,516
Redeemable preferred stock of subsidiary -- --
Total stockholders' equity 3,569 1,070
Total liabilities and stockholders' equity $ 12,904 $ 13,742
For further information, call
Bonnie Herron, 770/564-5504
or email to bherron@intelsys.com
SOURCE Intelligent Systems Corporation
-0- 03/17/2005
/CONTACT: Bonnie Herron of Intelligent Systems Corporation,
+1-770-564-5504, or bherron@intelsys.com /
/Web site: http://www.intelsys.com
http://www.visaer.com
http://www.qsinc.com
http://www.corecard.com
http://www.chemfree.com /