SAINT PAUL, Minn., Feb. 28 /PRNewswire-FirstCall/ -- Image Sensing
Systems, Inc. (ISS) (Nasdaq: ISNS) announced today its sixth consecutive year
of record financial results. On a comparative non-GAAP basis to 2006, without
taking into account the impact of the operations related to the assets
purchased from EIS Electronic Integrated Systems Inc. ("EIS") from December 7,
2007 through year-end or the impact of EIS purchase price allocation
accounting, which are required under U.S. generally accepted accounting
principles, consistently applied ("GAAP"), non-GAAP net income for fiscal year
end December 31, 2007 was $3.9 million or $1.02 per share ($1.00 per diluted
share) versus net income of $3.1 million or $.83 per share ($.80 per diluted
share) for 2006. On a similar basis, non-GAAP net income for the fourth
quarter of 2007 was $1.3 million or $.34 per share ($.34 per diluted share)
versus net income of $1.2 million or $.30 per share ($.30 per diluted share)
for the same period in 2006. On a comparative non-GAAP basis, non-GAAP income
from operations in fiscal year 2007 was $4.7 million versus $3.5 million in
2006 and for the fourth quarter of 2007 was $1.6 million versus $1.1 million
for the same period in 2006.
On a GAAP basis, net income for fiscal year 2007 was $872,000 or $.23 per
share ($.22 per diluted share) and the net loss for the fourth quarter of 2007
was $1.7 million or $.44 per share. As part of the purchase price allocation
of the EIS asset purchase, the Company recognized an in-process research and
development charge of $4.5 million ($3.0 million net of tax) in the fourth
quarter of 2007. Income (loss) from operations in fiscal year 2007 and in the
fourth quarter of 2007 were $130,000 and $(3.0) million, respectively.
For fiscal year 2007, revenue was $15.1 million compared to $13.1 million
in fiscal year 2006, an increase of 15%. Royalty income was $10.7 million in
2007 compared to $10.1 million in 2006, while international sales were $4.1
million compared to $3.0 million in 2006. The Company's North American
distributor and international subsidiaries both rebounded from slower sales in
the first half of 2007, which the Company believes was related in part to its
transition to the Autoscope(R) Terra platform.
For the fourth quarter of 2007, revenue was $5.2 million versus $4.1
million for the same period in 2006, an increase of 26%. For the quarter,
royalty income was $3.1 million in 2007 compared to $2.8 million in 2006,
while international sales were $1.8 million in 2007 compared to $1.3 million
in 2006. Gross margins in the fourth quarter of 2007 were negatively impacted
by approximately $200,000 in inventory reserves recorded on non-Terra product.
The Company's research and development expense decreased in fiscal year
2007 compared to 2006 due to certain one-time expenses for the Terra
development that occurred in 2006 and because the Company did not meet its
goals for engineering headcount additions in 2007.
Ken Aubrey , CEO, commented, "We are gratified by these encouraging
results, especially given the dip in financial performance early in the Terra
platform transition. On a comparative basis, revenue and income improved
solidly across the board, with revenue growth internationally being
particularly noteworthy. We believe results for the second half of 2007 have
confirmed that the market is enthusiastically accepting our Terra offerings.
Our Terra transition activities continue and we anticipate introducing new
general and country-specific features in the first half of 2008.
"We're also excited about our purchase of the assets of EIS and the
RTMS(TM) radar-based CED product set. EIS posted revenue of $8.7 million in
its fiscal year 2007 and was solidly profitable. We expect the purchase to add
in excess of 50% to our total revenue in 2008 compared to 2007 and with the
RTMS portfolio we are positioned to make the eventual leap to hybrid detection
offerings, which we see as strategically pivotal."
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