Autoscope Technologies Corporation (Nasdaq: AATC) today
announced results for its quarter and nine months
ended September 30, 2021, and that its Board of Directors
has authorized and declared a quarterly cash dividend of $0.12 per
share of its common stock. The dividend is payable on
November 29, 2021 to shareholders of record at the close of
business on November 22, 2021.
Third Quarter 2021 Financial Summary
- Third quarter royalties were
$2.5 million, an increase of 12 percent from the same period
in the prior year.
- Third quarter product sales were
$805,000, a decrease of 48 percent from the same period
in the prior year.
- Operating expenses totaled $2.0
million in the third quarter of 2021, a decrease of 11
percent from the prior year period.
- Net income for the third
quarter of 2021 totaled $613,000 compared to a net income of
$659,000 for the same period in the prior year.
- The cash balance increased to $8.5
million at September 30, 2021, up from $8.4 million at the end of
the second quarter of 2021.
2021 Year-to-Date Financial Summary
- Royalties for the first nine months
of 2021 increased to $6.8 million compared to
$6.5 million for the same period in the prior year.
- Product sales for the first
nine months of 2021 were $3.3 million,
a decrease of 13 percent from the same period
in the prior year.
- Operating expenses totaled
$5.9 million in the first nine months of 2021,
a decrease of 21 percent from the prior year
period.
- Capitalized software costs in the
first nine months
of 2021 were $178,000 compared to $22,000 in
the prior year period.
- The Company recognized other income
of $931,000 for the forgiveness of the Paycheck Protection
Program loan principal and accrued interest during the first nine
months of 2021, and there were no comparable items in the same
period in 2020.
- Net income for the first nine
months of 2021 totaled $2.5 million compared to
net income of $698,000 for the same period in the prior
year.
- The cash balance decreased to
$8.5 million at September 30, 2021, down from
$8.6 million when compared to the cash balance at December
31, 2020.
Third-Quarter Results:
Third quarter 2021 revenue for
Autoscope Technologies Corporation ("ATC," the "Company,"
"us," "we," or "our"), which includes the results of Image Sensing
Systems, Inc., a wholly owned subsidiary of ATC ("ISS"), was
$3.3 million compared to $3.8 million in the third
quarter of 2020. Revenue from royalties was $2.5 million
in the third quarter of 2021 compared to
$2.2 million the third quarter
of 2020. Product sales decreased to $805,000 in
the third quarter of 2021,
a 48 percent decrease from $1.5 million in
the third quarter of 2020. Autoscope video
product sales and royalties were $210,000 and
$2.5 million, respectively, and RTMS radar product sales were
$595,000 in the third quarter of 2021.
Gross margin for the third quarter of
2021 was 82 percent, a 6 percentage point or 8
percent increase from a gross margin of 76 percent
for the same period in 2020. Gross margin from royalties remained
constant at 96 percent in the third quarter of 2021
compared to the third quarter of 2020. Product sales
gross margin for the third quarter
of 2021 was 40 percent compared
to 49 percent in the prior year period. The increase
in the gross margin percent was primarily the result of a higher
portion of revenues from royalties compared to the
third quarter of 2020.
The 2021 third quarter net income
includes operating expenses of $2.0 million,
an 11 percent decrease from
the third quarter of 2020. The decrease in operating
expenses is due to the decreased headcount in the
third quarter of 2021 compared to the third quarter of
2020. The Company's net income for the third
quarter was $613,000, or $0.11 per diluted share, compared to net
income of $659,000 or $0.12 per diluted share in the
prior year period.
On a non-GAAP basis, excluding the amortization
of intangible assets and depreciation for the applicable periods,
operating income for the third quarter of 2021 was
$941,000 compared to operating income of $886,000 in the
prior year period.
“We are very pleased with progress made in the
ISS royalty business during the last quarter, which was driven in
part by the introduction of pedestrian detection within our
Autoscope Vision product line earlier in the year,” said Andrew
Berger, CEO of ATC. “ISS third quarter product sales were
negatively impacted by labor shortages in highway construction,
which caused delays in sale of ISS’s radar products. We
expect labor shortages in the highway market to continue into the
fourth quarter of 2021. As a result, we adjusted ISS
operating expenses to align with sales while continuing to invest
in new products and services,” concluded Mr. Berger.
Year-to-Date Results:
ATC’s revenue for the first nine
months of 2021 was $10.0 million, a
2 percent decrease from revenue of
$10.3 million in the first nine months of 2020.
Sales gross margin for the first nine months of
2021 remained constant at 79 percent compared to the
prior year period. Revenue from royalties increased to
$6.8 million in the first nine months of
2021 compared to $6.5 million in the same period in 2020.
Product sales were $3.3 million in the first nine
months of 2021, a 13 percent decrease from
$3.8 million in the first nine months of 2020.
The first nine months of revenue for
2021 included Autoscope video product sales and royalties
of $440,000 and $6.8 million, respectively, and RTMS radar
product sales of $2.8 million. Product sales gross margin for
the first nine months of
2021 was 44 percent, a 7 percentage point or 14
percent decrease compared to the same period in the prior
year. The decrease in product gross margin percent was
primarily the result of a reduction in warranty reserve in the
third quarter of 2020.
The Company’s net income for the first nine
months of 2021 was $2.5 million, or $0.47 per
diluted share, compared to a net income of $698,000, or
$0.13 per diluted share, in the first nine months of
2020. The first nine months of 2021 net income
includes operating expenses of $5.9 million, a
21 percent decrease from the same period in 2020.
During the first nine months of 2021, the Company
capitalized $178,000 of software development costs compared to
$22,000 in the first nine months of 2020.
Other income of $931,000 was recorded during the first quarter
of 2021 when the Company received forgiveness of the
Paycheck Protection Program loan principal and accrued interest,
and there were no comparable items in the first nine months of
2020.
On a non-GAAP basis, excluding intangible asset
amortization and depreciation for the applicable periods, operating
income for the first nine months of 2021 was
$2.7 million compared to an operating income of
$1.5 million in the first nine months of 2020.
"We continue to question everything in our
business to ensure we build strong teams who produce winning
products, while running a growing, efficient, and profitable
operation to enable us to build an exceptional company and provide
excellent results to stockholders," said Andrew Berger, CEO of
ATC. "Although we experienced supply chain delays within our
highway segment, which will continue in the near term, we expect
the adoption rate of the RTMS Echo product to continue to
accelerate. We are working with our customers to overcome the
supply chain delays in our highway market and returning to organic
growth,” concluded Mr. Berger.
Non-GAAP Financial Measures:
We provide certain non-GAAP financial
information as supplemental information to financial measures
calculated and presented in accordance with GAAP (Generally
Accepted Accounting Principles in the United States). This non-GAAP
information excludes the impact of amortizing intangible assets and
depreciation and may exclude other non-recurring items. Management
believes that this presentation facilitates the comparison of our
current operating results to historical operating results.
Management uses this non-GAAP information to evaluate short-term
and long-term operating trends in our core operations. Non-GAAP
information is not prepared in accordance with GAAP and should not
be considered a substitute for or an alternative to GAAP financial
measures and may not be computed the same as similarly titled
measures used by other companies. About
Autoscope Technologies Corporation
Autoscope Technologies Corporation is
a global company dedicated to helping improve safety and efficiency
for cities and highways by developing and delivering above-ground
detection technology, applications and solutions. We give
Intelligent Transportation Systems (ITS) professionals more precise
and accurate information – including real-time reaction
capabilities and in-depth analytics – to make more confident and
proactive decisions. We are headquartered in St. Paul, Minnesota.
Visit us on the web at imagesensing.com.
Safe Harbor
Statement: Statements made in this release
concerning the Company’s or management’s intentions, expectations,
or predictions about future results or events are “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements reflect management’s current
expectations or beliefs, and are subject to risks and uncertainties
that could cause actual results or events to vary from stated
expectations, which variations could be material and adverse.
Factors that could produce such a variation include, but are not
limited to, the following: the inherent unreliability of earnings,
revenue and cash flow predictions due to numerous factors, many of
which are beyond the Company’s control; developments in the demand
for the Company’s products and services; relationships with the
Company’s major customers and suppliers; the mix of and margins on
the products we sell; unanticipated delays, costs and expenses
inherent in the development and marketing of new products and
services; adverse weather conditions in our markets; the impact of
governmental laws, regulations, and orders, including as a result
of the COVID-19 pandemic caused by the coronavirus;
international presence; tariffs and other trade barriers; our
success in integrating any acquisitions; potential disruptions to
our supply chains (including disruptions caused by geopolitical
events, military actions, work stoppages, nature disasters, or
international health emergencies, such as the COVID-19 pandemic);
and competitive factors. Our forward-looking statements speak only
as of the time made, and we assume no obligation to publicly update
any such statements. Additional information concerning these and
other factors that could cause actual results and events to differ
materially from the Company’s current expectations are contained in
the Company’s reports and other documents filed with the Securities
and Exchange Commission, including its Annual Report on Form 10-K
for the year ended December 31, 2020 filed on March 11, 2021.
Contact:
|
Frank
Hallowell, Chief Financial Officer |
|
Autoscope Technologies
Corporation Phone: 612.438.2363 |
Autoscope Technologies CorporationCondensed
Consolidated Statements of Operations(in thousands, except per
share information)(unaudited)
|
|
Three-Month Periods Ended September 30, |
|
Nine-Month Periods Ended September 30, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
Product sales |
|
$ |
805 |
|
$ |
1,538 |
|
$ |
3,273 |
|
$ |
3,760 |
Royalties |
|
|
2,467 |
|
|
2,212 |
|
|
6,766 |
|
|
6,536 |
|
|
|
3,272 |
|
|
3,750 |
|
|
10,039 |
|
|
10,296 |
Cost of revenue |
|
|
585 |
|
|
883 |
|
|
2,118 |
|
|
2,117 |
Gross profit |
|
|
2,687 |
|
|
2,867 |
|
|
7,921 |
|
|
8,179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
1,334 |
|
|
1,422 |
|
|
4,216 |
|
|
4,894 |
Research and development |
|
|
644 |
|
|
804 |
|
|
1,681 |
|
|
2,548 |
|
|
|
1,978 |
|
|
2,226 |
|
|
5,897 |
|
|
7,442 |
Income from operations |
|
|
709 |
|
|
641 |
|
|
2,024 |
|
|
737 |
Other income, net |
|
|
- |
|
|
- |
|
|
925 |
|
|
- |
Income from operations before
income taxes |
|
|
709 |
|
|
641 |
|
|
2,949 |
|
|
737 |
Income tax expense
(benefit) |
|
|
96 |
|
|
(18 |
) |
|
453 |
|
|
39 |
Net income |
|
$ |
613 |
|
$ |
659 |
|
$ |
2,496 |
|
$ |
698 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
share |
|
$ |
0.11 |
|
$ |
0.12 |
|
$ |
0.47 |
|
$ |
0.13 |
Diluted net income per
share |
|
$ |
0.11 |
|
$ |
0.12 |
|
$ |
0.47 |
|
$ |
0.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted shares - basic |
|
|
5,349 |
|
|
5,306 |
|
|
5,338 |
|
|
5,290 |
Weighted shares - diluted |
|
|
5,361 |
|
|
5,311 |
|
|
5,351 |
|
|
5,306 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Autoscope Technologies CorporationCondensed
Consolidated Balance Sheets(in thousands)(unaudited)
|
September 30, 2021 |
|
December 31,2020 |
Assets |
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
8,502 |
|
$ |
8,605 |
Receivables, net |
|
2,497 |
|
|
2,261 |
Inventories |
|
1,485 |
|
|
770 |
Prepaid expenses and other current assets |
|
567 |
|
|
480 |
|
|
13,051 |
|
|
12,116 |
Property and equipment, net |
|
192 |
|
|
303 |
Operating lease asset, net |
|
111 |
|
|
136 |
Intangible assets, net |
|
2,759 |
|
|
3,161 |
Deferred income taxes |
|
5,222 |
|
|
5,708 |
|
$ |
21,335 |
|
$ |
21,424 |
Liabilities and Shareholders’
Equity |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Accounts payable |
$ |
167 |
|
$ |
547 |
Short-term debt |
|
- |
|
|
349 |
Warranty and other current liabilities |
|
552 |
|
|
576 |
|
|
719 |
|
|
1,472 |
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
Operating lease obligation |
|
1 |
|
|
8 |
Long-term debt |
|
- |
|
|
574 |
|
|
1 |
|
|
582 |
|
|
|
|
|
|
Shareholders’ equity |
|
20,615 |
|
|
19,370 |
|
$ |
21,335 |
|
$ |
21,424 |
Autoscope Technologies CorporationCondensed
Consolidated Statements of Cash Flows(in thousands)(unaudited)
|
Nine-Month Periods Ended September 30, |
|
|
2021 |
|
|
2020 |
|
Operating activities |
|
|
|
|
|
|
|
Net
income |
$ |
2,496 |
|
|
$ |
698 |
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
691 |
|
|
|
725 |
|
Stock option expense |
|
164 |
|
|
|
168 |
|
Deferred income tax expense |
|
486 |
|
|
|
- |
|
Forgiveness income from PPP Loan |
|
(931 |
) |
|
|
- |
|
Loss on disposal of assets |
|
1 |
|
|
|
5 |
|
Changes in operating assets and liabilities |
|
(1,418 |
) |
|
|
(76 |
) |
Net cash provided by operating
activities |
|
1,489 |
|
|
|
1,520 |
|
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
|
Capitalized software development costs |
|
(178 |
) |
|
|
(22 |
) |
Purchases of property and equipment |
|
(8 |
) |
|
|
(112 |
) |
Net cash used for investing
activities |
|
(186 |
) |
|
|
(134 |
) |
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
|
Stock
for tax withholding |
|
(35 |
) |
|
|
(6 |
) |
Dividend distribution |
|
(1,288 |
) |
|
|
- |
|
Proceeds from exercise of stock options |
|
8 |
|
|
|
- |
|
Proceeds from PPP Loan |
|
- |
|
|
|
924 |
|
Net cash provided by (used for)
financing activities |
|
(1,315 |
) |
|
|
918 |
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes
on cash |
|
(91 |
) |
|
|
48 |
|
Increase (decrease) in cash and
cash equivalents |
|
(103 |
) |
|
|
2,352 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at
beginning of period |
|
8,605 |
|
|
|
5,118 |
|
Cash and cash equivalents at end
of period |
$ |
8,502 |
|
|
$ |
7,470 |
|
|
|
|
|
|
|
|
|
Autoscope Technologies CorporationNon-GAAP
Income from Continuing Operations(in thousands)(unaudited)
We define non-GAAP income from operations as
income from operations before amortization of intangible assets and
depreciation for the applicable periods. Management believes
non-GAAP income from operations is a useful indicator of our
financial performance and our ability to generate cash flows from
operations. Our definition of non-GAAP income from operations may
not be comparable to similarly titled definitions used by other
companies. The table below reconciles non-GAAP income from
operations, which is a non-GAAP financial measure, to comparable
GAAP financial measures:
|
|
Three-Month Periods Ended September 30, |
|
Nine-Month PeriodsEnded September 30, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Income from operations |
|
$ |
709 |
|
$ |
641 |
|
$ |
2,024 |
|
$ |
737 |
Amortization of intangible
assets |
|
|
200 |
|
|
187 |
|
|
579 |
|
|
549 |
Depreciation |
|
|
32 |
|
|
58 |
|
|
112 |
|
|
176 |
Non-GAAP income from
operations |
|
$ |
941 |
|
$ |
886 |
|
$ |
2,715 |
|
$ |
1,462 |
Note – Our calculation of non-GAAP income from
operations is considered a non-GAAP financial measure and is not in
accordance with, or preferable to, “as reported”, or GAAP financial
data. However, we are providing this information, as we
believe it facilitates analysis of the Company’s financial
performance by investors and financial analysts.
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