Image Sensing Systems Reports Seventh Consecutive Year of Record Financial Results; Fourth Quarter of 2008 Revenue and Earnings

SAINT PAUL, Minn. , Feb. 25 /PRNewswire-FirstCall/ -- Image Sensing Systems, Inc. (Nasdaq: ISNS), announced today our seventh consecutive year of record financial results including the best quarterly results ever in the Company's history. (Logo...


SAINT PAUL, Minn. , Feb. 25 /PRNewswire-FirstCall/ -- Image Sensing Systems, Inc. (Nasdaq: ISNS), announced today our seventh consecutive year of record financial results including the best quarterly results ever in the Company's history.

(Logo: http://www.newscom.com/cgi-bin/prnh/20050512/CGISSLOGO)

Net income for fiscal year 2008 was $5.0 million ($1.24 per diluted share) compared to $872,000 ($0.22 per diluted share) for fiscal 2007. Net income for our fourth quarter, which ended December 31, 2008 , was $1.5 million ($0.39 per diluted share) compared to a loss of $1.7 million ($0.44 per diluted share) for the same period in 2007. We recognized an in-process research and development charge of $4.5 million ($3.0 million net of tax) in the fourth quarter of 2007.

Revenue for fiscal year 2008 was $26.5 million compared to $15.1 million for fiscal 2007, while revenue for fourth quarter of 2008 was $7.8 million compared to $5.2 million for the same period a year ago. Revenue from royalties increased 24% to $13.3 million in fiscal year 2008 from $10.8 million in 2007 and 7% to $3.3 million in the fourth quarter of 2008 from $3.1 million in the same period of 2007, reflecting the continued success of our Autoscope(R) North American distribution partner, Econolite Control Products, Inc. (ECPI). North American sales, which are sales of RTMS(R) in North America , were $5.7 million for fiscal year 2008 and $1.2 million in the fourth quarter of 2008. International sales, which include both Autoscope and RTMS sales outside of North America , were $7.5 million for fiscal year 2008, an 83% increase over $4.1 million in the same period of 2007 and were $3.2 million in the fourth quarter of 2008, a 76% increase over $1.8 million in the same period in 2007. Sales of RTMS world-wide for the fourth quarter were $2.4 million. We acquired the RTMS family of products in December 2007 .

On a non-GAAP basis, excluding intangible asset amortization, in process research and development and withdrawn offering expenses, each net of tax, net income was $5.6 million ($1.40 per diluted share) and operating income was $8.1 million for fiscal year 2008 as compared to net income of $3.9 million ($1.00 per diluted share) and operating income of $4.7 million for fiscal year 2007. On a non-GAAP basis for the 2008 fourth quarter, net income was $1.7 million ($0.42 per diluted share) and operating income was $2.4 million as compared to 2007 net income of $1.3 million ($0.34 per diluted share) and operating income of $1.6 million.

Based on the 2008 results for RTMS, the sellers of the RTMS business, also known as the EIS assets, are entitled to receive a $1.2 million earnout payment. This liability has been recorded on our balance sheet as of December 31, 2008 with an offsetting entry to increase goodwill.

Ken Aubrey , CEO, said, "Our fourth quarter and year were strong in the face of deteriorating economic conditions. All of our regions finished above internal targets although our North American RTMS business underperformed. We believe the domestic RTMS results are showing signs of funding problems at the state government level as a number of projects are being deferred. This trend is likely to manifest itself in our domestic Autoscope business and the royalties earned to date and projections for our first fiscal quarter of 2009 are below 2008 levels. Some royalties anticipated to be recognized early in 2009 were instead earned in 2008 which in turn may dampen 2009 revenue. Discussions with our North American channel partners indicate the current environment is tougher than 2008. We have high hopes for the infrastructure elements of the Federal stimulus package although we would not expect to see any benefit from it in the first half of the year. Internationally, the outlook currently appears less difficult."

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