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 10, 2017
Intelligent Systems Corporation
(Exact Name of Registrant as Specified in Charter)
| Georgia | 001-09330 | 581964787 |
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
| 4355 Shackleford Road, Norcross, Georgia 30093 |
| (Address of Principal Executive Offices) (Zip Code) |
(770) 381-2900
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | ||
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 2.02. Results of Operations and Financial Condition.
On August 10, 2017, the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
Exhibit 99.1. Press release dated August 10, 2017
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.
| Intelligent Systems Corporation | ||
| Date: August 10, 2017 | By: | /s/ Karen J. Reynolds |
| Karen J. Reynolds | ||
| CFO | ||
EXHIBIT INDEX
| Exhibit Number | Description | |
| 99.1 | Press Release dated August 10, 2017 |
EXHIBIT 99.1
Intelligent Systems Announces Second Quarter and Year-To-Date 2017 Results
NORCROSS, Ga., Aug. 10, 2017 (GLOBE NEWSWIRE) -- Intelligent Systems Corporation [NYSE American:INS] announced today its financial results for the three and six month periods ended June 30, 2017.
Revenue was $3,136,000 and $4,888,000 in the three and six month periods of 2017, respectively, representing growth of 102 percent and 53 percent, respectively, as compared to the same periods in 2016. The growth is attributable to an increase in the number of software licenses, an increase in the volume of transaction processing services and an upswing in our professional services.
For the three month period ended June 30, 2017, the company recorded net income attributable to Intelligent Systems of $203,000 ($0.02 per basic and diluted share) compared to net loss attributable to Intelligent Systems of $217,000 ($0.02 per basic and diluted share) in the second quarter of 2016. The strong revenue growth for the quarter offset, to a lesser degree, by an increase in operating expenses primarily in R&D expenditures, resulted in significantly greater income from continuing operations for the second quarter of 2017 as compared to the same period last year.
For the year-to-date period ended June 30, 2017, the company recorded net loss attributable to Intelligent Systems Corporation of $262,000 ($0.03 per basic and diluted share), compared to net loss attributable to Intelligent Systems of $1,155,000 ($0.13 per basic share and diluted share) in the six month period in 2016. The positive change between periods is due to both the revenue growth experienced for the year resulting in a lesser loss from operations year over year and less investment write-downs in 2017 as compared to 2016. Impacting the prior year-to-date period was a non-cash investment write-down charge of $750,000 included in the line item Other Income (Loss) to reduce the carrying value of an investment in a development stage technology company in which the company owned a minority equity stake.
“Revenue increases are usually a good thing and it certainly is in this case,” commented J. Leland Strange, CEO of Intelligent Systems. “Profits (or less losses) are not always good if the business should be increasing investment in resources in anticipation of greater revenue in the future. At this point for CoreCard, we are constantly trying to balance these competing interests (make a profit or keep investing) amid the larger competitive landscape as well as anticipated new customer engagements. The bottom line from a business growth standpoint is things are good and look good going forward although the bottom line from a profit view will depend on other longer term tactical decisions.”
Investor Conference Call Today
The company is holding an investor conference call today, August 10, 2017, at 11 AM Eastern time. Interested investors are invited to attend the conference call by dialing 855.766.6518 and entering conference ID code 64718354. 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 June 30, 2017 with the Securities and Exchange Commission today, August 10, 2017. 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 site, 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 continuing operations include CoreCard Software, Inc. (www.corecard.com) and its affiliate companies. CoreCard designs, develops, and markets a comprehensive suite of software solutions to corporations, financial institutions, retailers and processors to manage their credit and debit cards, prepaid cards, private label cards, fleet cards, loyalty programs, and accounts receivable and small loan transactions. CoreCard is a unique partner for FinTech innovators by providing them a comprehensive platform for their payment and processing solutions. CoreCard also offers prepaid and credit card processing services using its proprietary software solutions. 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, and declines in general economic and financial market conditions, particularly those that cause businesses to delay or cancel purchase decisions.
| Intelligent Systems Corporation | ||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
| (unaudited, in thousands, except share and per share amounts) | ||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||
| Revenue | ||||||||||||
| Products | $ | 302 | $ | 149 | $ | 504 | $ | 378 | ||||
| Services | 2,834 | 1,401 | 4,384 | 2,818 | ||||||||
| Total net revenue | 3,136 | 1,550 | 4,888 | 3,196 | ||||||||
| Cost of revenue | ||||||||||||
| Products | 147 | 58 | 203 | 122 | ||||||||
| Services | 1,199 | 719 | 2,046 | 1,367 | ||||||||
| Total cost of revenue | 1,346 | 777 | 2,249 | 1,489 | ||||||||
| Expenses | ||||||||||||
| Marketing | 69 | 99 | 148 | 195 | ||||||||
| General and administrative | 397 | 383 | 878 | 939 | ||||||||
| Research and development | 1,042 | 611 | 1,829 | 1,256 | ||||||||
| Income (loss) from operations | 282 | (320 | ) | (216 | ) | (683 | ) | |||||
| Other income (loss) | (59 | ) | 21 | (26 | ) | (642 | )a | |||||
| Income (loss) before Income taxes | 223 | (299 | ) | (242 | ) | (1,325 | ) | |||||
| Income taxes | 20 | (2 | ) | 20 | (3 | ) | ||||||
| Net income (loss) | 203 | (297 | ) | (262 | ) | (1,322 | ) | |||||
| Net loss attributable to noncontrolling interest | -- | 80 | -- | 167 | ||||||||
| Net income (loss) attributable to Intelligent Systems Corporation | $ | 203 | $ | (217 | ) | $ | (262 | ) | $ | (1,155 | ) | |
| Earnings (loss) per share attributable to Intelligent Systems Corporation: | ||||||||||||
| Basic | $ | 0.02 | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.13 | ) | |
| Diluted | $ | 0.02 | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.13 | ) | |
| Basic weighted average common shares outstanding | 8,766,425 | 8,731,299 | 8,754,862 | 8,731,299 | ||||||||
| Diluted weighted average common shares outstanding | 8,878,266 | 8,731,299 | 8,754,862 | 8,731,299 | ||||||||
| a. Includes write-down of $750,000 on carrying value of investment in an early stage technology company. | ||||||||||||
| Intelligent Systems Corporation | |||||
| CONSOLIDATED BALANCE SHEETS | |||||
| (in thousands, except share and per share amounts) | |||||
| As of | June 30, 2017 | December 31, 2016 | |||
| ASSETS | (unaudited) | (audited) | |||
| Current assets: | |||||
| Cash | $ | 15,917 | $ | 17,724 | |
| Marketable securities | 436 | 418 | |||
| Accounts receivable, net | 1,677 | 1,329 | |||
| Other current assets | 930 | 1,160 | |||
| Total current assets | 18,960 | 20,631 | |||
| Investments | 1,150 | 1,272 | |||
| Property and equipment, at cost less accumulated depreciation | 609 | 700 | |||
| Other long-term assets | 69 | 101 | |||
| Total assets | $ | 20,788 | $ | 22,704 | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
| Current liabilities: | |||||
| Accounts payable | $ | 121 | $ | 301 | |
| Deferred revenue, current portion | 936 | 1,474 | |||
| Accrued payroll | 538 | 515 | |||
| Accrued expenses | 74 | 43 | |||
| Other current liabilities | 345 | 1,338 | |||
| Total current liabilities | 2,014 | 3,671 | |||
| Deferred revenue, net of current portion | 54 | 85 | |||
| Other long-term liabilities | 18 | 18 | |||
| Total Intelligent Systems Corporation stockholders’ equity | 18,702 | 21,946 | |||
| Noncontrolling interest | -- | (3,016 | ) | ||
| Total stockholders’ equity | 18,702 | 18,930 | |||
| Total liabilities and stockholders’ equity | $ | 20,788 | $ | 22,704 | |
For further information, call
Karen J. Reynolds, 770.564.5503
or email to karen@intelsys.com