Intrusion Inc. Reports Fourth Quarter and Full Year 2023 Results
- Improved full year EPS to $(0.57) per share from $(0.82) per share in 2022.
- Revenue for Q4 2023 was $1.4 million, a 7% sequential decrease and 5% year-over-year decline.
- Gross profit margin for Q4 was 79%, with operating expenses at $3.5 million.
- Net loss for Q4 was $(2.8) million, or $(0.09) per share.
- Full year 2023 revenue was $5.6 million, with a gross profit margin of 78% and operating expenses of $16.4 million.
- Net loss for the full year was $13.9 million, or $(0.57) per share.
- Cash and cash equivalents were $0.1 million as of December 31, 2023, down from $3.0 million in 2022.
- Entered into an exchange agreement to reduce debt and announced a 1-for-20 reverse stock split to regain Nasdaq compliance.
- Revenue declines for Q4 and full year 2023 compared to previous periods.
- Net loss reported for both Q4 and full year 2023.
- Cash and cash equivalents decreased significantly from 2022 to 2023.
- Continuing resolution negatively impacted consulting revenues.
Insights
The recent financial disclosure by Intrusion Inc. indicates a mixed performance with notable strategic initiatives aimed at improving the company's standing. A reduction in net losses from $(0.82) per share to $(0.57) per share year-over-year suggests a positive trajectory in cost management and operational efficiency. The expansion of Intrusion Shield SaaS services into the Philippines represents a strategic move to tap into new markets, potentially diversifying revenue streams and mitigating the impact of domestic challenges such as federal budget constraints on consulting revenues.
However, the decrease in cash and cash equivalents from $3.0 million to $0.1 million raises liquidity concerns, potentially affecting the company's ability to fund operations and invest in growth initiatives. The exchange agreement with Streeterville Capital to convert senior debt into Series A Preferred Stock is a critical step towards improving the balance sheet, although it may dilute existing shareholders' equity. Investors should monitor the company's ability to maintain Nasdaq listing compliance, as failure to do so could impact stock market perception and liquidity.
The cybersecurity sector continues to grow, driven by increasing digital threats and the adoption of remote work practices. Intrusion Inc.'s focus on cyberattack prevention places it within a high-demand industry. The reported increase in gross profit margin from 55% to 78% year-over-year is a strong indicator of the company's pricing power and cost control measures. However, the sequential and year-over-year decline in revenue warrants attention, as it may reflect competitive pressures or market saturation.
The announcement of new contracts and the intent of customers to increase their use of Shield products in 2024 provides a positive outlook for future revenue growth. Yet, it's important for Intrusion to convert these opportunities into tangible financial improvements to reassure stakeholders. The company's strategic focus on product innovation and market expansion could be pivotal in driving long-term growth, but execution and customer retention will be key determinants of success.
The conversion of senior debt into Series A Preferred Stock is a significant restructuring move that could have implications for Intrusion's debt profile and cost of capital. By reducing senior debt, the company may lower its interest obligations, potentially improving net income margins. However, the specifics of the preferred stock terms, such as dividend rights and conversion features, will influence the long-term financial impact.
Investors in the debt market should assess the creditworthiness of Intrusion in light of these changes, especially considering the company's reduced cash position. The ability to regain compliance with Nasdaq's listing requirements through the reverse stock split and debt exchange could enhance investor confidence and stabilize the company's stock price, which is essential for maintaining access to capital markets.
PLANO, TX / ACCESSWIRE / March 26, 2024 / Intrusion Inc. (NASDAQ:INTZ), a leader in cyberattack prevention solutions, announced today financial results for the fourth quarter and full year ended December 31, 2023.
Recent Financial & Business Highlights:
- Improved full year EPS to
$(0.57) per share from$(0.82) per share in 2022. - Announced the expansion of Intrusion Shield SaaS services in the Philippines.
- Made additional progress toward regaining compliance with the Nasdaq minimum bid price and equity standard requirements.
- Continuing resolution negatively impacts consulting revenues.
Fourth Quarter Financial Results
Revenue for the fourth quarter of 2023 was
The gross profit margin was
Operating expenses in the fourth quarter of 2023 were
The net loss for the fourth quarter of 2023 was
Full Year 2023 Financial Results
Revenue for the full year ended December 31, 2023, was
The gross profit margin was
Operating expenses for the full year ended December 31, 2023, were
The net loss for the full year ended December 31, 2023, was
As of December 31, 2023, cash and cash equivalents were
"We continue to see strong momentum for our suite of Shield products, with the fourth quarter being our best quarter to date with the addition of seven new logos, including the
Mr. Scott continued, "Last week, we implemented two key steps in our plan to regain compliance with the minimum bid price and equity standard requirement for continued listing on the Nasdaq Capital Markets with the announcement of a 1-for-20 reverse stock split of our issued and outstanding shares and an exchange agreement with Streeterville Capital to exchange an aggregate of
Conference Call
Intrusion's management will host a conference call today at 4:00 P.M., CDT. Interested investors can access the live call by dialing 1-888-506-0062, or 1-973-528-0011 for international callers, and providing the following access code: 147933. The call will also be webcast live (LINK). For those unable to participate in the live conference call, a replay will be accessible beginning tonight at 6:00 P.M. CDT until April 9, 2024, by dialing 1-877-481-4010, or 1-919-882-2331 for international callers, and entering the following access code: 49940. Additionally, a live and archived audio webcast of the conference call will be available at www.intrusion.com.
About Intrusion Inc.
Intrusion Inc. is a cybersecurity company based in Plano, Texas. The Company offers its customers access to its exclusive threat intelligence database containing the historical data, known associations, and reputational behavior of over 8.5 billion IP addresses. After years of gathering global internet intelligence and working with government entities, the company released its first commercial product in 2021. Intrusion Shield allows businesses to incorporate a Zero Trust, reputation-based security solution into their existing infrastructure. Intrusion Shield observes traffic flow and instantly blocks known or unknown malicious connections from entering or exiting a network to help protect against zero-day and ransomware attacks. Incorporating Intrusion Shield into a network elevates an organization's overall security posture by enhancing the performance and decision-making of other solutions in its cybersecurity architecture.
Cautionary Statement Regarding Forward-Looking Information
This release may contain certain forward-looking statements, including, without limitations, comments about the performance of protections provided by our Intrusion Shield product and any other words that react to management's expectations regarding future events and operating performance. These forward-looking statements speak only as of the date hereof. They involve several risks and uncertainties, including, without limitation, the chances that our products and solutions do not perform as anticipated or do not meet with widespread market acceptance. These statements are made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, including risks that we have detailed in the Company's most recent reports on Form 10-K and Form 10-Q, particularly under the heading "Risk Factors."
IR Contact:
Alpha IR Group
Mike Cummings or Josh Carroll
INTZ@alpha-ir.com
INTRUSION INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||||||||||
Revenue | $ | 1,366 | $ | 1,444 | $ | 5,611 | $ | 7,529 | ||||||||
Cost of Revenue | 290 | 540 | 1,257 | 3,354 | ||||||||||||
Gross Profit | 1,076 | 904 | 4,354 | 4,175 | ||||||||||||
Operating Expenses: | ||||||||||||||||
Sales and marketing | 1,152 | 2,025 | 5,670 | 6,510 | ||||||||||||
Research and development | 1,138 | 1,873 | 5,556 | 6,465 | ||||||||||||
General and administrative | 1,174 | 1,522 | 5,174 | 7,483 | ||||||||||||
Operating Loss | (2,388 | (4,516 | ) | (12,046 | ) | (16,283 | ) | |||||||||
Interest and Other Income | 24 | 43 | 2,028 | |||||||||||||
Interest Expense | (429 | (702 | ) | (1,888 | ) | (2,359 | ) | |||||||||
Gain on Lease Termination | - | - | - | 385 | ||||||||||||
Net Loss | $ | (2,817 | ) | $ | (5,194 | ) | $ | (13,891 | ) | $ | (16,229 | ) | ||||
Net loss per share: | ||||||||||||||||
Basic | $ | (0.09 | ) | $ | (0.25 | ) | $ | (0.57 | ) | $ | (0.82 | ) | ||||
Diluted | $ | (0.09 | ) | $ | (0.25 | ) | $ | (0.57 | ) | $ | (0.82 | ) | ||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 31,223 | 20,854 | 24,241 | 19,791 | ||||||||||||
Diluted | 31,223 | 20,854 | 24,241 | 19,791 | ||||||||||||
INTRUSION INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value amounts)
| December 31 | ||||||||
| 2023 | 2022 | |||||||
| (unaudited) | ||||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 139 | $ | 3,015 | ||||
Accounts receivable, net | 364 | 530 | ||||||
Prepaid expenses and other assets | 635 | 1,877 | ||||||
Total current assets | 1,138 | 5,422 | ||||||
Noncurrent Assets: | ||||||||
Property and equipment: | ||||||||
Equipment | 2,069 | 2,865 | ||||||
Capitalized software development | 2,791 | 1,380 | ||||||
Furniture and fixtures | - | 43 | ||||||
Leasehold improvements | 15 | 78 | ||||||
Property and equipment, gross | 4,875 | 4,366 | ||||||
Accumulated depreciation and amortization | (1,955 | ) | (2,208 | ) | ||||
Property and equipment, net | 2,920 | 2,158 | ||||||
Finance leases, right-of-use assets, net | 382 | 1,048 | ||||||
Operating leases, right-of-use assets, net | 1,637 | 504 | ||||||
Other assets | 171 | 143 | ||||||
Total noncurrent assets | 5,110 | 3,853 | ||||||
TOTAL ASSETS | $ | 6,248 | $ | 9,275 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
Current Liabilities: | ||||||||
Accounts payable, trade | $ | 2,215 | $ | 1,273 | ||||
Accrued expenses | 222 | 446 | ||||||
Finance lease liabilities, current portion | 384 | 667 | ||||||
Operating lease liabilities, current portion | 178 | 294 | ||||||
Notes payable | 10,823 | 10,114 | ||||||
Deferred revenue | 439 | 455 | ||||||
Total current liabilities | 14,261 | 13,249 | ||||||
Noncurrent Liabilities: | ||||||||
Finance lease liabilities, noncurrent portion | 3 | 10 | ||||||
Operating lease liabilities, noncurrent portion | 1,539 | 231 | ||||||
Total noncurrent liabilities | 1,542 | 241 | ||||||
Commitments and Contingencies | ||||||||
Stockholders' Deficit: | ||||||||
Preferred stock, | - | - | ||||||
Common stock, | ||||||||
Common stock held in treasury, at cost - 10 shares | 359 | 212 | ||||||
Additional paid-in capital | 100,708 | 92,304 | ||||||
Accumulated deficit | (110,217 | ) | (96,326 | ) | ||||
Accumulated other comprehensive loss | (43 | ) | (43 | ) | ||||
Total stockholders' deficit | (9,555 | ) | (4,215 | ) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 6,248 | $ | 9,275 | ||||
SOURCE: Intrusion, Inc.
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