ImageWare® Systems, Inc. (OTCQB: IWSY), a leader in identity management software, today reported financial results for the fourth quarter and year ended December 31, 2019.
Q4 Summary of Results
- Revenue for the fourth quarter ended December 31, 2019 was $979,000 compared with $1,067,000 in the same period 2018.
- Gross profit for the fourth quarter 2019 was $816,000 (or 83%) versus $906,000 (85%) in the fourth quarter ended 2019.
- Net loss narrowed to ($2,755,000) for the fourth quarter 2019 compared with a loss of ($3,127,000) in the same period last year
- Net loss per share was flat at $0.05 for the years ended 2019 and 2018.
Year End Summary of Results
- Revenue for the year end was $3,506,000 compared with $4,404,000 for the year ended 2018.
- Gross profit for the year was $2,863,000 (82%) versus $3,528,000 (80%) in the prior year.
- Net loss narrowed to ($11,581,000) from a loss of ($12,550,000) in the prior year.
- Loss per share was unchanged at $0.17 per share for the years ended 2019 and 2018.
Q4 Significant Event
- In December, we completed SOC-2 audit to validate security compliance, an important confirmation of the security and data protection of our biometric identity management platform.
Kristin A. Taylor, President and CEO, said that, “Although we are reporting year end results, first it’s important that I acknowledge today’s reality of the global COVID-19 pandemic and the sudden, dramatically negative impacts it continues to have on our lives and the global economy. Keeping everyone healthy and safe is a top priority. I’m incredibly proud of our team and everyone’s hard work which enabled us to swiftly and successfully transition to work-from-home – all while continuing to seamlessly serve our customers and provide flawless service.”
Taylor continued, “I joined ImageWare at the end of February, assuming day-to-day leadership to build upon a foundation of incredible intellectual property and its great potential. I immediately began work toward my goals to increase revenues and expand our products and platforms. I launched an essential review and assessment of all of our products, services, divisions and departments. We’re actively building our team – including the appointment two weeks ago of Jonathan Morris as our new CFO. Those endeavors are ongoing and I look forward to updating you on progress when we report Q1 results later in June.
“As previously reported in filings, we have made important progress with the completion of financings which strengthened our balance sheet at the end of Q1,” concluded Taylor.
2019 Year-End Results Investor Update Call
The Company will host an investor update call on Friday, May 15, 2020 at 1:30pm PT (4:30pm ET). The Participant Dial-In Number for the conference call is Domestic/International 1-631-891-4304. Participants should dial in to the call at least five minutes before 1:30pm PT (4:30pm ET) on May 15, 2020. The call can also be accessed “live” online at http://public.viavid.com/index.php?id=139838. A replay of the recorded call will be available for 90 days on the Company’s website (https://www.iwsinc.com/corporate-updates/). You can also listen to a replay of the call by dialing toll-free 1-844-512-2921 (international only – 1-412-317-6671) starting May 15, 2020, at 7:30pm ET through May 22, 2020 at 11:59 pm ET. Please use PIN Number 10009613.
About ImageWare® Systems, Inc.
In 1987, ImageWare was founded to innovate imaging. After a bold start evolving silver halide photography into digital images, ImageWare built the first statewide digital booking platform for the United States law enforcement in 1998. Since then, ImageWare has evolved into the largest holder of multimodal biometrics, managing over 100 million identities daily. With vast experience in the government sector, ImageWare is democratizing biometrics by offering defense-grade identity and authentication solutions to the masses. By identifying the person, not a device, and never disclosing Personally Identifiable Information (PII), ImageWare is giving populations around the globe access to their important data.
Forward-Looking Statements
Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “if,” “should” and “will” and similar expressions as they relate to ImageWare Systems, Inc. are intended to identify such forward-looking statements. ImageWare may from time to time update publicly announced projections, but it is not obligated to do so. Any projections of future results of operations should not be construed in any manner as a guarantee that such results will in fact occur. These projections are subject to change and could differ materially from final reported results. For a discussion of such risks and uncertainties, see “Risk Factors” in ImageWare’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and its other reports filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.
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ImageWare Systems, Inc. |
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SELECTED COMPARATIVE FINANCIAL HIGHLIGHTS |
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|
In thousands, except share and per share amounts |
|||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||||||
| Revenues | |||||||||||||||||||
| Product |
$ |
331 |
|
$ |
404 |
|
$ |
923 |
|
$ |
1,761 |
|
|||||||
| Maintenance |
|
648 |
|
|
663 |
|
|
2,583 |
|
|
2,643 |
|
|||||||
| Total Revenues |
|
979 |
|
|
1,067 |
|
|
3,506 |
|
|
4,404 |
|
|||||||
| Cost of Revenue | |||||||||||||||||||
| Product |
|
60 |
|
|
30 |
|
|
218 |
|
|
205 |
|
|||||||
| Maintenance |
|
103 |
|
|
131 |
|
|
425 |
|
|
671 |
|
|||||||
| Gross Profit |
|
816 |
|
|
906 |
|
|
2,863 |
|
|
3,528 |
|
|||||||
|
|
83 |
% |
|
85 |
% |
|
82 |
% |
|
80 |
% |
||||||||
| Operating Expenses | |||||||||||||||||||
| General & administrative |
|
822 |
|
|
1,113 |
|
|
3,614 |
|
|
4,285 |
|
|||||||
| Sales and marketing |
|
1,013 |
|
|
971 |
|
|
3,937 |
|
|
3,571 |
|
|||||||
| Research and development |
|
1,974 |
|
|
1,868 |
|
|
7,488 |
|
|
7,351 |
|
|||||||
| Depreciation and amortization |
|
18 |
|
|
17 |
|
|
71 |
|
|
51 |
|
|||||||
| Total Operating Expenses |
|
3,827 |
|
|
3,969 |
|
|
15,110 |
|
|
15,258 |
|
|||||||
| Loss from operations |
|
(3,011 |
) |
|
(3,063 |
) |
|
(12,247 |
) |
|
(11,730 |
) |
|||||||
| Interest (income) expense, net |
|
(10 |
) |
|
(34 |
) |
|
(90 |
) |
|
463 |
|
|||||||
| Change in fair value of derivative liabilities |
|
(251 |
) |
|
46 |
|
|
(696 |
) |
|
232 |
|
|||||||
| Other components of net periodic pension expense |
|
(4 |
) |
|
46 |
|
|
109 |
|
|
118 |
|
|||||||
| Other expense |
|
– |
|
|
(4 |
) |
|
1 |
|
|
(4 |
) |
|||||||
| Loss from continuing operations before income taxes |
|
(2,746 |
) |
|
(3,117 |
) |
|
(11,571 |
) |
|
(12,539 |
) |
|||||||
| Income taxes |
|
9 |
|
|
10 |
|
|
10 |
|
|
11 |
|
|||||||
| Loss from continuing operations |
|
(2,755 |
) |
|
(3,127 |
) |
|
(11,581 |
) |
|
(12,550 |
) |
|||||||
| Net loss |
$ |
(2,755 |
) |
$ |
(3,127 |
) |
$ |
(11,581 |
) |
$ |
(12,550 |
) |
|||||||
| Preferred dividends |
|
(1,703 |
) |
|
(1,476 |
) |
|
(5,670 |
) |
|
(3,913 |
) |
|||||||
| Net loss available to common shareholders |
$ |
(4,458 |
) |
$ |
(4,603 |
) |
$ |
(17,251 |
) |
$ |
(16,463 |
) |
|||||||
| Per share data – basic | |||||||||||||||||||
| Basic income (loss) per share available to common shareholders |
$ |
(0.05 |
) |
$ |
(0.05 |
) |
$ |
(0.17 |
) |
$ |
(0.17 |
) |
|||||||
| Basic weighted-average common shares |
|
108,946,982 |
|
|
96,793,088 |
|
|
104,372,048 |
|
|
95,210,572 |
|
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| ImageWare Systems, Inc. | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
|
December 31, |
December 31, |
|||||||||
|
|
2019 |
|
|
2018 |
|
|||||
| Assets: | ||||||||||
| Cash |
$ |
1,030 |
|
$ |
5,694 |
|
||||
| Accounts receivable, net |
|
657 |
|
|
968 |
|
||||
| Inventories |
|
615 |
|
|
29 |
|
||||
| Other current assets |
|
243 |
|
|
233 |
|
||||
| Property and equipment, net |
|
216 |
|
|
244 |
|
||||
| Other assets |
|
257 |
|
|
332 |
|
||||
| Operating lease right-of-use assets |
|
1,906 |
|
|
– |
|
||||
| Intangible assets, net |
|
70 |
|
|
82 |
|
||||
| Goodwill |
|
3,416 |
|
|
3,416 |
|
||||
| Total Assets |
$ |
8,410 |
|
$ |
10,998 |
|
||||
| Liabilities and Shareholders’ Deficit: | ||||||||||
| Current liabilities |
$ |
4,198 |
|
$ |
3,846 |
|
||||
| Pension obligation |
|
2,256 |
|
|
1,876 |
|
||||
| Lease liabilities |
|
1,716 |
|
|
– |
|
||||
| Other long-term liabilities |
|
118 |
|
|
147 |
|
||||
| Mezzanine equity |
|
8,884 |
|
|
8,156 |
|
||||
| Shareholders’ deficit |
|
(8,762 |
) |
|
(3,027 |
) |
||||
| Total Liabilities and Shareholders’ Deficit |
$ |
8,410 |
|
$ |
10,998 |
|
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