ImageWare Systems Reports 2004 Fourth Quarter Results

Company significantly narrows losses over same quarter a year earlier


ImageWare Systems, Inc., a provider of identity management solutions, has reported financial results for the company's fourth quarter, which ended Dec. 31, 2004.

Revenues for the fourth quarter were $3.5 million compared to $3.4 million in the year ago quarter. The net loss for the fourth quarter was $0.9 million or $0.08 per share, compared with a net loss of $6.4 million, or $0.88 per share, for the same period a year ago. In the third and fourth quarter of 2003 the company took actions to reposition its foreign sales offices in Germany and Singapore to lower fixed costs and pursue significant international ID projects utilizing the company's software technologies as our primary differentiator. These offices had historically emphasized the resale of third-party merchandise (hardware and consumables) which generated lower gross margins than software (as a percentage of revenue) and required significant fixed costs for sales, service and support. Revenues in the quarter from these two locations were $1.08 million below their levels in the same quarter of 2003. This decrease was offset by fourth quarter sales of the company's IWS Biometric Engine software of approximately $978,000.

The loss from operations totaled $1,066,000 in the fourth quarter 2004 as compared to $1,822,000 in Q4 of 2003.