-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OSqGP1LmWpi97RTzNKgS0MckuZi/7OlZx55lG61tMDtn94vyzupeB3zy17DgI5M4 TjVcRLuJfKjy68SJRfI9+Q== 0000891092-04-004002.txt : 20040810 0000891092-04-004002.hdr.sgml : 20040810 20040810143457 ACCESSION NUMBER: 0000891092-04-004002 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040809 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20040810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTELLIGENT SYSTEMS CORP CENTRAL INDEX KEY: 0000320340 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 581964787 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09330 FILM NUMBER: 04964154 BUSINESS ADDRESS: STREET 1: 4355 SHACKLEFORD RD CITY: NORCROSS STATE: GA ZIP: 30093 BUSINESS PHONE: 4043812900 MAIL ADDRESS: STREET 1: 4355 SHACKLEFORD ROAD CITY: NORCROSS STATE: GA ZIP: 30093 8-K 1 e18795_8k.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): August 9, 2004 INTELLIGENT SYSTEMS CORPORATION - -------------------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) Georgia 1-9330 5 8-1964787 (State or other jurisdiction Commission (I.R.S. Employer of incorporation or organization) file number Identification No.) 4355 Shackleford Road, Norcross, Georgia 30093 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (770) 381-2900 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS Exhibits 99.1 Press release issued by Intelligent Systems Corporation on August 9, 2004. ITEM 9. REGULATION FD DISCLOSURE On August 9, 2004, Intelligent Systems Corporation issued a press release announcing its financial results for the quarter ended June 30, 2004. A copy of the press release is attached as Exhibit 99.1 The information contained in this "Item 9. Regulation FD Disclosure" is being furnished pursuant to "Item 12. Results of Operations and Financial Condition" of Form 8-K. The information in this Form 8-K and the attached Exhibit shall not be deemed "filed" for purposes of Section 18 of the Securities and Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: August 9, 2004 INTELLIGENT SYSTEMS CORPORATION (Registrant) By: /s/ Bonnie L. Herron --------------------------- Bonnie L. Herron Chief Financial Officer Exhibit Index Exhibit Number Description - -------------- ----------- 99.1 Press release issued by Intelligent Systems Corporation on August 9, 2004 EX-99.1 2 e18795ex99_1.txt PRESS RELEASE Exhibit 99.1 Intelligent Systems Announces Second Quarter 2004 Results *** Earnings Conference Call at 11 AM Today *** NORCROSS, Ga., Aug. 9 /PRNewswire-FirstCall/ -- Intelligent Systems Corporation (Amex: INS) ( http://www.intelsys.com ) announced today its financial results for the second quarter and year-to-date periods ended June 30, 2004. For the three months ended June 30, 2004, the company recorded revenue of $3.3 million, a 19 percent increase compared to revenue of $2.8 million for the same period in 2003. Net loss from continuing operations for the three-month period in 2004 was $2.2 million or $0.49 per share, which is equal to the net loss reported in the second quarter of 2003. For the six-month period ended June 30, 2004, the company recorded revenue of $8.0 million, a 33 percent increase compared to the same period last year. Net loss from continuing operations was $3.0 million or $0.68 per share compared to a net loss of $1.2 million or $0.28 per share for the six month period in 2003. The increase in revenue in the second quarter of 2004 compared to the same period last year reflects an increase in professional services and software maintenance revenue at the company's VISaer, QS Technologies and CoreCard software subsidiaries as well as a higher volume of product sales at the company's ChemFree subsidiary. In the year-to-date period ended June 30, 2004, the company also benefited from the first significant license revenue generated by the CoreCard subsidiary. The loss from operations reported in the three and six month periods in 2004 was lower by 28 percent and 48 percent, respectively, compared to the loss from operations in the same periods in 2003 as a result of growing revenue while reducing the cost of sales as a percentage of revenue and holding expenses constant. The second quarter results reflect a continued deferral of approximately $7.4 million in revenue and $4.9 million in profit contribution related to completion of a significant software contract at the company's VISaer subsidiary. Revenue recognition on that contract was deferred until the third quarter of 2004 due to the delivery of an optional specified upgrade right in July 2004. Recognition of this revenue is expected to have a significant positive impact on the company's results of operations for the third quarter ended September 30, 2004. According to J. Leland Strange, President and Chief Executive Officer, "During the quarter, our operating units made important progress in booking future business, delivering new software releases, and meeting contract requirements and customer expectations while maintaining expense control. While our second quarter financial results do not reflect all of these underlying achievements, we continue to make our business decisions based on the realities of the market, our customer requirements and the long-term best interests of the company, and not on the expected accounting treatments, which in some cases, for example, result in significant deferrals of revenue." During the second quarter, the company was informed of a recently completed transaction that is expected to make a positive contribution to income and cash in subsequent quarters. The company expects to receive a distribution of cash from a minority investment in a U.K. company that has realized a significant gain from the sale of stock in another U.K. based company. We have been informed that the cash distribution over the next several quarters is expected to total between $3.5 million and $4.5 million depending on the current business needs of the U.K. investment. The company's minority investment is carried on the balance sheet at the company's cost basis of $31,000. In the second quarter and year-to-date periods ended June 30, 2004, the company recorded an investment loss of $371,000 reflecting the net effect of a gain on the sale of the company's investment in privately-held Cirronet, Inc. offset by a write down of the carrying value of the company's minority investment in a start-up technology company, Ardext Technologies, Inc. By contrast, the results for the year-to-date period ended June 30, 2003 were bolstered by net investment income of $3.7 million reflecting mainly the previously disclosed settlement of an escrow fund related to the sale in April 2001 of an affiliate company, PaySys International, Inc. Conference Call Information As announced last week, Intelligent Systems has scheduled a conference call for today at 11 AM EDT to discuss the results of the second quarter and year-to-date periods for 2004. The call-in number is 877-226-7144. An archived audio replay of the conference call will be available by the end of business today by logging onto http://www.intelsys.com and clicking on the webcast icon. The replay will be available for twelve months. About Intelligent Systems Corporation For thirty years, Intelligent Systems Corporation (Amex: INS) has identified, created, operated and grown early stage technology companies. The company has operations and investments, principally in the information technology industry. The company's consolidated subsidiaries include VISaer, Inc. ( http://www.visaer.com ), QS Technologies, Inc. ( http://www.qsinc.com ), CoreCard Software, Inc. ( http://www.corecard.com ), (all software companies) and ChemFree Corporation ( http://www.chemfree.com ), (an industrial products company). Since 1990, the company has operated the Intelligent Systems Incubator, an award-winning pioneer in privately sponsored incubators. Further information is available on the company's website at http://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 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 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. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands, except share amounts) Three Months Ended Six Months Ended June 30, June 30, 2004 2003 2004 2003 Revenue Products $ 1,786 $ 1,801 $ 5,013 $ 3,505 Services 1,557 1,020 2,942 2,486 Total revenue 3,343 2,821 7,955 5,991 Cost of revenue Products 804 906 1,789 1,665 Services 707 792 1,517 1,842 Total cost of revenue 1,511 1,698 3,306 3,507 Expenses Marketing 687 681 1,347 1,452 General & administrative 914 951 1,809 2,034 Research & development 2,102 2,100 4,202 4,181 Loss from operations (1,871) (2,609) (2,709) (5,183) Other income Interest expense (5) -- (8) (5) Investment income (loss), net (371)(a) 205 (371)(a) 3,669(b) Equity in earnings (losses) of affiliate companies 51 34 13 (33) Other income, net (9) 187 50 214 Loss before income tax provision (benefit) (2,205) (2,183) (3,025) (1,338) Income tax benefit -- -- -- (104) Net loss from continuing operations $(2,205) $(2,183) $(3,025) $(1,234) Basic and diluted net loss per share $(0.49) $(0.49) $(0.68) $(0.28) Basic and diluted weighted average shares 4,478,971 4,485,540 4,478,971 4,487,945 (a). Includes $256,000 gain on investment offset by $627,000 investment write-down. (b). Includes $4.5 million gain on escrow settlement and $795,000 write-down on investments. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) June 30, December 31, 2004 2003 ASSETS (unaudited) Current assets: Cash $547 $1,133 Accounts receivable, net 2,670 1,543 Notes and interest receivable -- 142 Inventories 708 766 Other current assets 227 614 Total current assets 4,152 4,198 Long-term investments 4,848 6,275 Property and equipment, at cost less accumulated depreciation 695 746 Goodwill 2,035 2,039 Intangibles, net 320 476 Other assets, net 20 8 Total assets $12,070 $13,742 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term borrowings $370 $250 Accounts payable 982 932 Deferred revenue 8,947 2,586 Deferred gain 258 291 Accrued expenses and other current liabilities 1,972 2,037 Total current liabilities 12,529 6,096 Deferred revenue, net of current portion -- 5,060 Minority interest 1,516 1,516 Total stockholders' equity (1,975) 1,070 Total liabilities and stockholders' equity $12,070 $13,742 For further information, call Bonnie Herron, 770/564-5504 or email to bherron@intelsys.com SOURCE Intelligent Systems Corporation -0- 08/09/2004 /CONTACT: Bonnie Herron of Intelligent Systems Corporation, +1-770-564-5504, or bherron@intelsys.com / /Web site: http://www.intelsys.com http://www.visaer.com http://www.corecard.com http://www.chemfree.com http://www.qsinc.com / (INS) CO: Intelligent Systems Corporation; Cirronet, Inc.; Ardext Technologies, Inc.; PaySys International, Inc.; VISaer, Inc.; QS Technologies, Inc.; CoreCard Software, Inc.; ChemFree Corporation ST: Georgia IN: CPR STW SU: ERN CCA MAV -----END PRIVACY-ENHANCED MESSAGE-----