ST. PAUL, Minn. , Oct. 30 /PRNewswire-FirstCall/ -- Image Sensing Systems,
Inc. (Nasdaq: ISNS), announced today its financial results for the third
quarter ended September 30, 2008 .
Net income for the quarter ended September 30, 2008 was $1.2 million
($0.29 per fully diluted share) compared to $1.3 million ($0.34 per fully
diluted share) for the same period in 2007. Net income for the first nine
months of 2008 was $3.4 million ($0.86 per diluted share) compared to $2.6
million ($0.66 per diluted share) for the same period in 2007.
Revenue for the third quarter was $6.1 million compared to $4.2 million
for the same period a year ago, while revenue for the first nine months of
2008 was $18.7 million compared to $9.9 million for the same period a year
ago. Revenue from royalties increased 23% to $3.7 million from $3.0 million
in the third quarter of 2007 and 31% to $10.0 million from $7.6 million in the
first nine months of 2007, reflecting the continued success of our North
American distributor, Econolite Control Products, Inc. (ECPI), in selling
Autoscope(R) products in the United States and Canada . North American sales,
which are sales of RTMS(R) in North America , were $920,000 for the third
quarter and $4.5 million for the first nine months of 2008. International
sales, which include both Autoscope and RTMS sales outside of North America ,
were $1.4 million in the third quarter, a 24% increase over $1.1 million in
the same period in 2007, and $4.2 million in the first nine months, an 89%
increase over $2.2 million in the same period of 2007. Sales of RTMS world-
wide for the quarter were $1.2 million. We acquired the RTMS family of
products in December 2007 .
On a non-GAAP basis for the third quarter, excluding intangible asset
amortization and withdrawn offering expenses, each net of tax, net income was
$1.4 million ($0.36 per fully diluted share) and operating income was $2.1
million. On a non-GAAP basis for the first nine months, net income increased
55% to $4.0 million ($0.99 per fully diluted share) and operating income
increased 85% to $5.7 million as compared to the same period of 2007.
Ken Aubrey , CEO, said, "We noted continued increasing demand for our
products in the quarter with the exception of our North American RTMS
business. We believe the RTMS results underperformed due to a number of
disparate reasons. Again, we believe the integration of the EIS asset
purchase and final Terra transition matters are progressing on schedule and
are beginning to show signs of bearing fruit. We're also advancing a number
of product initiatives, including video/radar hybrid solutions, that are
Follow-on Offering Update
Given our recent share price range, unfavorable market conditions and the
lack of need for increased working capital at present, we believe that
proceeding with an offering at this time is not in the best interests of our
shareholders and therefore, we have decided to withdraw the follow-on
offering. As such, we have expensed offering costs incurred of $221,000
($146,000 net of tax or $0.04 per share) in the third quarter of 2008. The
costs are included in general and administrative expense in the income
Auction Rate Security Update
We hold $5.4 million in face value of student loan backed auction rate
securities (ARS), substantially all of which are Federal government backed.
The ARS were purchased through, and are still held in, accounts at UBS and
Credit Suisse. Recently, both UBS and Credit Suisse announced settlements
with governmental authorities under which the banks have agreed to repurchase
our ARS at face value (par) by January 2009 . This is a positive development
and we are optimistic about the outcome. However, because of the uncertainty
of collection under the agreements, we have continued to account for the ARS
as we have the previous two quarters with a temporary impairment reflected.
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