Intelligent Systems Reports Third Quarter 2020 Results
Intelligent Systems Corporation (NYSE American: INS) reported financial results for Q3 2020, achieving revenues of $10.3 million, an 8% increase from Q3 2019. This growth was driven by a rise in professional services and processing fees. License revenue, however, decreased to $1.6 million from $2.2 million. Operating income dropped to $3.5 million, down from $4.2 million year-over-year, while net income was $2.8 million compared to $3.1 million previously. The company anticipates that strategic investments will enhance future growth despite current margin pressures.
- Total revenue increased by 8% year-over-year, reaching $10.3 million.
- Cash balance improved to $34.4 million, up from $26.4 million at year-end 2019.
- Cash provided by operations for the nine months was $15.2 million, significantly higher than $7.7 million for the same period last year.
- License revenue declined to $1.6 million, down from $2.2 million in Q3 2019.
- Operating income fell to $3.5 million compared to $4.2 million in the prior year.
- Net income decreased to $2.8 million, down from $3.1 million year-over-year.
NORCROSS, Ga., Nov. 03, 2020 (GLOBE NEWSWIRE) -- Intelligent Systems Corporation [NYSE American: INS], the leading provider of innovative credit technology solutions and processing services to the financial technology and services market, announced today its financial results for the quarter ended September 30, 2020.
“Third-quarter results were a little better than we expected, specifically for license revenue, and demonstrated the continued resilience of our business, our strong financial position, and our unique product offering,” said Leland Strange, CEO of Intelligent Systems. “We recorded revenues of
“During the quarter we substantially completed the anticipated investments in our infrastructure needed to ensure CoreCard exceeds current and future customer needs. These investments will place near-term pressure on margins but are needed to achieve our long-term strategic vision. As we stated earlier in the year, we anticipate these investments will translate to incremental revenue opportunities and drive growth for fiscal 2021 and beyond.”
Mr. Strange continued, “The momentum we built upon in the third quarter reaffirms our optimism for growth in 2021. Given the third quarter 2020 license revenue, we are not anticipating any additional license revenue for the remainder of 2020. As we look into next year, we now expect to receive license revenues in both the first and the second half of the next fiscal year. As we have commented before, it is difficult to project quarter by quarter license revenues. We do believe that the second half license revenue will be much larger than what we report in the first 6 months. I am confident that our unique position, strong management team, and solid financial position will enable us to continue with growth in fiscal 2021 despite the challenges of the COVID-19 pandemic.”
Financial Highlights for the three months ended September 30, 2020
Total revenues – Total revenue in the three-month period ended September 30, 2020 was
In the following table, revenue is disaggregated by type of revenue for the three months ended September 30, 2020:
| Three months ended September 30, (in thousands) | 2020 | 2019 | ||||
| License | $ | 1,600 | $ | 2,225 | ||
| Professional services | 5,392 | 4,579 | ||||
| Processing and maintenance | 2,950 | 2,235 | ||||
| Third party | 362 | 483 | ||||
| Total | $ | 10,304 | $ | 9,522 | ||
Income from operations was
Net income was
Earnings per diluted share was
Liquidity and Capital Resources
Cash balance as of September 30, 2020 was
Investor Conference Call Today
The company is holding an investor conference call today, November 3, 2020, at 11 A.M. Eastern Standard Time. Interested investors are invited to attend the conference call by dialing (855) 766-6518 and entering conference ID 6013159. As part of the conference call Intelligent Systems will be conducting a question and answer session where participants are invited to email their questions to fax@intelsys.com prior to the call. A transcript of the call will be posted on the company’s website at www.intelsys.com as soon as available after the call.
The company will file its Form 10-Q for the period ended September 30, 2020 with the Securities and Exchange Commission today. For additional information about reported results, investors will be able to access the Form 10-Q on the company’s website at www.intelsys.com or on the SEC website, www.sec.gov.
About Intelligent Systems Corporation
For over thirty-five years, Intelligent Systems Corporation [NYSE American: INS] has identified, created, operated and grown technology companies. The company’s principal operations are CoreCard Software, Inc. (www.corecard.com) and its affiliate companies. CoreCard provides prepaid and credit card processing services using its proprietary software solutions that it also licenses to others. CoreCard has designed and developed a comprehensive suite of software solutions that corporations, financial institutions, retailers and processors use to manage credit and debit cards, prepaid cards, private label cards, fleet cards, loyalty programs, and accounts receivable and small loan transactions. CoreCard's flexible and proven processing platform is being utilized in many countries in addition to the United States including Australia, Canada, China, the United Arab Emirates, France, Italy, Mexico, New Zealand, Singapore, South Africa and the United Kingdom. Further information is available on the company’s website at 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 Corporation 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 Corporation 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, except as required by law. Among the factors that could cause actual results to differ materially from those indicated by such forward-looking statements are instability in the financial markets, delays in product development, undetected software errors, competitive pressures, changes in customers’ requirements or financial condition, market acceptance of products and services, the impact of new or changes in current laws, regulations or other industry standards, risks relating to unauthorized access to confidential information due to criminal conduct, attacks by hackers, employee or insider malfeasance and/or human error and declines in general economic and financial market conditions, particularly those that cause businesses to delay or cancel purchase decisions.
For further information, call
Matt White, 770-564-5504 or
email to matt@intelsys.com
| Intelligent Systems Corporation | ||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
| (unaudited, in thousands, except share and per share amounts) | ||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Revenue | ||||||||||||
| Services | $ | 8,704 | $ | 7,297 | $ | 24,650 | $ | 20,275 | ||||
| Products | 1,600 | 2,225 | 1,600 | 3,725 | ||||||||
| Total net revenue | 10,304 | 9,522 | 26,250 | 24,000 | ||||||||
| Cost of revenue | ||||||||||||
| Services | 4,217 | 3,012 | 11,418 | 8,445 | ||||||||
| Products | − | − | − | − | ||||||||
| Total cost of revenue | 4,217 | 3,012 | 11,418 | 8,445 | ||||||||
| Expenses | ||||||||||||
| Marketing | 31 | 35 | 94 | 124 | ||||||||
| General and administrative | 936 | 700 | 2,698 | 2,394 | ||||||||
| Research and development | 1,639 | 1,575 | 3,477 | 3,634 | ||||||||
| Income from operations | 3,481 | 4,200 | 8,563 | 9,403 | ||||||||
| Investment (loss) income | (92 | ) | (109 | ) | (1,237 | ) | (105 | ) | ||||
| Other income (loss) | 59 | 104 | 312 | 353 | ||||||||
| Income before Income taxes | 3,448 | 4,195 | 7,638 | 9,651 | ||||||||
| Income taxes | 653 | 1,103 | 1,596 | 2,379 | ||||||||
| Net income | $ | 2,795 | $ | 3,092 | $ | 6,042 | $ | 7,272 | ||||
| Earnings per share attributable to Intelligent Systems Corporation: | ||||||||||||
| Basic | $ | 0.31 | $ | 0.35 | $ | 0.68 | $ | 0.82 | ||||
| Diluted | $ | 0.31 | $ | 0.34 | $ | 0.67 | $ | 0.81 | ||||
| Basic weighted average common shares outstanding | 8,927,908 | 8,886,321 | 8,925,961 | 8,859,544 | ||||||||
| Diluted weighted average common shares outstanding | 9,022,996 | 9,013,459 | 9,021,314 | 8,977,501 | ||||||||
| Intelligent Systems Corporation | ||||||
| CONSOLIDATED BALANCE SHEETS | ||||||
| (in thousands, except share and per share amounts) | ||||||
| As of | September 30, 2020 | December 31, 2019 | ||||
| ASSETS | (unaudited) | (audited) | ||||
| Current assets: | ||||||
| Cash | $ | 34,391 | $ | 26,415 | ||
| Accounts receivable, net | 4,045 | 8,759 | ||||
| Other current assets | 1,217 | 905 | ||||
| Total current assets | 39,653 | 36,079 | ||||
| Investments | 2,063 | 3,081 | ||||
| Notes and interest receivable | 2,643 | 1,795 | ||||
| Property and equipment, at cost less accumulated depreciation | 6,890 | 2,177 | ||||
| Other long-term assets | 3,304 | 1,108 | ||||
| Total assets | $ | 54,553 | $ | 44,240 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 465 | $ | 403 | ||
| Deferred revenue, current portion | 3,475 | 689 | ||||
| Accrued payroll | 2,016 | 2,503 | ||||
| Accrued expenses | 107 | 153 | ||||
| Income tax payable | 792 | 1,100 | ||||
| Other current liabilities | 1,582 | 1,345 | ||||
| Total current liabilities | 8,437 | 6,193 | ||||
| Noncurrent liabilities: | ||||||
| Deferred revenue, net of current portion | 3 | 23 | ||||
| Deferred tax liability | 279 | 275 | ||||
| Long-term lease obligation | 2,208 | 460 | ||||
| Total noncurrent liabilities | 2,490 | 758 | ||||
| Intelligent Systems Corporation stockholders’ equity: | ||||||
| Common stock, respectively | 89 | 89 | ||||
| Additional paid-in capital | 15,780 | 15,450 | ||||
| Accumulated other comprehensive loss | (129 | ) | (94 | ) | ||
| Accumulated income | 27,886 | 21,844 | ||||
| Total Intelligent Systems Corporation stockholders’ equity | 43,626 | 37,289 | ||||
| Total liabilities and stockholders’ equity | $ | 54,553 | $ | 44,240 | ||
FAQ
What were the total revenues for Intelligent Systems Corporation in Q3 2020?
How did license revenue perform for Intelligent Systems in Q3 2020?
What is the net income for Intelligent Systems for the third quarter of 2020?
What is the cash balance of Intelligent Systems as of September 30, 2020?
What factors contributed to the revenue increase for Intelligent Systems in Q3 2020?
