Autoscope Technologies Corporation (Nasdaq: AATC) today
announced results for its quarter and six months
ended June 30, 2022 and 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 August
31, 2022 to the shareholders of record at the close of business on
August 25, 2022.
Second Quarter 2022 Financial Summary
- Second quarter royalties
decreased to $1.4 million compared to $2.5 million in the same
period in the prior year due to global supply chain
disruptions.
- Second quarter product sales were
$1.4 million, an increase of 10 percent from the
same period in the prior year due to the continued adoption of
Image Sensing Systems, Inc. RTMS Echo product line.
- Operating expenses totaled $1.9
million in the second quarter of 2022, a decrease of 10
percent from the prior year period.
- Net income for the second
quarter of 2022 totaled $74,000, a decrease of $722,000 when
compared to a net income of $752,000 for the same period in
the prior year.
First Half 2022 Financial Summary
- Royalties for the first half
of 2022 decreased to $3.2 million compared to
$4.3 million the same period in the prior year due to global supply
chain disruptions.
- Product sales for the first
half of 2022 were $2.4 million,
a decrease of 4 percent from the same period in
the prior year due to labor shortages and project delays.
- Operating expenses totaled
$4.0 million in the first half of 2022,
an increase of 1 percent from the prior year
period.
- Capitalized software costs in the
first half of 2022 were $534,000 compared to
$178,000 in the prior year period.
- The Company recognized other income
of $931,000 for the forgiveness of the Paycheck Protection
Program loan during the first half of 2021, and there were no
comparable items in the same period in 2022.
- Net income for the first half
of 2022 totaled $92,000 compared to net income of
$1.9 million for the same period in the prior year.
- To generate a greater return on our
cash position, the company purchased various securities during the
first six months of 2022, totaling $4.3 million. The Company
also paid out $1.3 million to shareholders compared to $644,000
during the first six months of 2021. This resulted in a decreased
cash balance of $1.9 million at June 30, 2022, compared to $8.3
million at December 31, 2021.
- Cash & cash equivalents and
investment in debt and equity securities totaling $6.1 million as
of June 30, 2022, are readily available and will satisfy our
projected working capital needs, investing activities, and other
cash requirements for at lease one year from June 30,
2022.
Second-Quarter Results:
Second quarter 2022 revenue for
Autoscope Technologies Corporation ("AATC," the "Company,"
"us," "we," or "our"), which includes the results of Image Sensing
Systems, Inc., a wholly-owned subsidiary of AATC ("ISS"), was
$2.8 million compared to $3.8 million in the second quarter
of 2021. Revenue from royalties decreased to
$1.4 million in the second quarter
of 2022 compared to $2.5 million during
the second quarter of 2021. The decrease in royalty
revenue is primarily due to component shortages during the second
quarter of 2022, which resulted in the purchase of
higher costing alternative components and a slowdown in
production that resulted in delayed order fulfillment. Product
sales increased to $1.4 million in
the second quarter of 2022, a 10
percent increase from $1.3 million in
the second quarter of 2021. The increase in product
sales in the second quarter of 2022 compared to the second quarter
of 2021 is due to the increased adoption of our RTMS Echo
line. Autoscope video product sales and royalties were
$69,000 and $1.4 million, respectively, and RTMS radar
product sales were $1.4 million in
the second quarter of 2022.
Gross margin for the second quarter of
2022 was 71 percent, a 10 percent or 7 percentage
point decrease from a gross margin of 78 percent for
the same period in 2021. Gross margin from royalties decreased to
92 percent in the second quarter of 2022 compared to 96 percent in
the second quarter of 2021. The decrease in gross margin from
royalties was primarily due to lower sales of Autoscope Vision
and higher component costs. Product sales gross margin for
the second quarter of 2022 was 50 percent
compared to 44 percent in the prior year period. The
increase in the gross margin percent was primarily the result of
increased total product sales and a significant increase in
warranty expense in 2021 with no comparable items in
2022.
The 2022 second quarter net
income includes operating expenses of $1.9 million,
a 10 percent decrease from
the second quarter of 2021. The decrease in
operating expenses is primarily due to the increased
capitalized software development costs in the second quarter of
2022 compared to the second quarter of 2021. The
Company's net income for the 2022 second quarter was
$74,000, or $0.01 per diluted share, compared to net income of
$752,000 or $0.14 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 second quarter of 2022 was
$395,000 compared to operating income of $1.1 million in
the prior year period.
Year-to-Date Results:
AATC’s revenue for the
first six months of 2022 was
$5.6 million, an 18 percent decrease from
revenue of $6.8 million in the
first six months of 2021. Revenue from
royalties decreased to $3.2 million in the
first six months of 2022 compared to
$4.3 million in the same period in 2021. Product sales
were $2.4 million in the
first six months of 2022,
a 4 percent decrease from $2.5 million in
the first six months of 2021. Sales gross
margin for the
first six months of 2022 was 74 percent,
a 3 percentage point or 4 percent decrease from the prior year
period. The decrease in gross margin is mainly attributable to
a lower percentage of revenue from royalties in the first
half of 2022.
The first six months of revenue
for 2022 included Autoscope video product sales and
royalties of $233,000 and $3.2 million, respectively, and
RTMS radar product sales of $2.1 million. Product sales gross
margin for the
first six months of 2022 was 48 percent, a
2 percentage point or 4 percent increase compared to the same
period in the prior year. The increase in product gross
margin percent was primarily the result of an increase in total
product sales and an increase in warranty reserve in the first six
months of 2021 with no comparable items in 2022.
The Company’s net income for the
first six months of 2022 was $92,000, or
$0.02 per diluted share, compared to a net income of
$1.9 million, or $0.35 per diluted share, in the
first six months of 2021. The
first six months of 2022 net income
includes operating expenses of $4.0 million,
a 1 percent increase from the same period in 2021.
During the first six months of 2022, the
Company capitalized $534,000 of software development costs
compared to $178,000 in the
first six months of 2021. Other
income of $931,000 was recorded during the first six months
of 2021 when the Company received forgiveness of the
Paycheck Protection Program loan, including accrued interest, and
there were no comparable items in the first half of 2022.
On a non-GAAP basis, excluding the amortization
of intangible assets and depreciation for the applicable periods,
operating income for the second quarter
of 2022 was $667,000 compared to operating income of
$1.8 million in the prior year period.
“Our results for the quarter reflect the
challenging operating environment that ISS and our partners are
facing. Although product order demand remained solid, global
supply chain disruptions led to component shortages and reduced
royalties. I am pleased with our team's efforts to work with
our partners to secure necessary critical components to meet our
Autoscope Vision customer's needs. I am also pleased with the
rebound of our direct product sales due to expanding market
acceptance of our Echo product line,” said Andrew Berger, CEO of
Autoscope Technologies Corporation. “For the remainder
of the year, ISS gross margins will be lower than in recent years
due to continuing supply chain component issues and inflationary
pressures that will not be recovered through previously announced
price increases. While difficult market conditions are expected to
continue in the near term, we remain focused on launching our
new video detection product line which will drive growth,
continued investment in critical components to ensure stability of
our supply chain, and continued cost management,” 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 Minneapolis,
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, 2021 filed on March 22, 2022.
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 June 30, |
|
Six-Month Period Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
2022 |
|
|
2021 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
Product sales |
|
$ |
1,432 |
|
|
$ |
1,305 |
|
$ |
2,366 |
|
|
$ |
2,468 |
|
Royalties |
|
|
1,387 |
|
|
|
2,483 |
|
|
3,205 |
|
|
|
4,299 |
|
|
|
|
2,819 |
|
|
|
3,788 |
|
|
5,571 |
|
|
|
6,767 |
|
Cost of revenue |
|
|
824 |
|
|
|
827 |
|
|
1,440 |
|
|
|
1,533 |
|
Gross profit |
|
|
1,995 |
|
|
|
2,961 |
|
|
4,131 |
|
|
|
5,234 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
1,324 |
|
|
|
1,516 |
|
|
3,009 |
|
|
|
2,882 |
|
Research and development |
|
|
526 |
|
|
|
541 |
|
|
954 |
|
|
|
1,037 |
|
|
|
|
1,850 |
|
|
|
2,057 |
|
|
3,963 |
|
|
|
3,919 |
|
Income from operations |
|
|
145 |
|
|
|
904 |
|
|
168 |
|
|
|
1,315 |
|
Investment loss |
|
|
(30 |
) |
|
|
- |
|
|
(25 |
) |
|
|
- |
|
Interest expense |
|
|
(18 |
) |
|
|
- |
|
|
(36 |
) |
|
|
- |
|
Other income |
|
|
10 |
|
|
|
- |
|
|
21 |
|
|
|
925 |
|
Income from operations before income taxes |
|
|
107 |
|
|
|
904 |
|
|
128 |
|
|
|
2,240 |
|
Income tax expense |
|
|
33 |
|
|
|
152 |
|
|
36 |
|
|
|
357 |
|
Net income |
|
$ |
74 |
|
|
$ |
752 |
|
$ |
92 |
|
|
$ |
1,883 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per share |
|
$ |
0.01 |
|
|
$ |
0.14 |
|
$ |
0.02 |
|
|
$ |
0.35 |
|
Diluted net income per share |
|
$ |
0.01 |
|
|
$ |
0.14 |
|
$ |
0.02 |
|
|
$ |
0.35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted shares - basic |
|
|
5,381 |
|
|
|
5,341 |
|
|
5,371 |
|
|
|
5,332 |
|
Weighted shares - diluted |
|
|
5,387 |
|
|
|
5,350 |
|
|
5,373 |
|
|
|
5,343 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Autoscope Technologies CorporationCondensed
Consolidated Balance Sheets(in thousands)(unaudited)
|
June 30, 2022 |
|
December 31,2021 |
Assets |
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
1,933 |
|
$ |
8,229 |
Receivables, net |
|
2,762 |
|
|
2,369 |
Inventories |
|
1,475 |
|
|
1,429 |
Short-term investments in available-for-sale debt
securities |
|
425 |
|
|
- |
Investments in equity securities |
|
247 |
|
|
- |
Due
from broker |
|
481 |
|
|
- |
Prepaid expenses and other current assets |
|
913 |
|
|
355 |
|
|
8,236 |
|
|
12,382 |
Property and equipment, net |
|
2,176 |
|
|
2,237 |
Operating lease asset, net |
|
9 |
|
|
58 |
Intangible assets, net |
|
2,996 |
|
|
2,866 |
Deferred income taxes |
|
4,811 |
|
|
4,824 |
Long-term investments in available-for-sale debt securities |
|
3,011 |
|
|
- |
|
$ |
21,239 |
|
$ |
22,367 |
Liabilities and Shareholders’
Equity |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Accounts payable |
$ |
479 |
|
$ |
236 |
Short-term debt |
|
57 |
|
|
56 |
Warranty and other current liabilities |
|
433 |
|
|
607 |
|
|
969 |
|
|
899 |
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
Long-term debt |
|
1,645 |
|
|
1,674 |
|
|
1,645 |
|
|
1,674 |
|
|
|
|
|
|
Shareholders’ equity |
|
18,625 |
|
|
19,794 |
|
$ |
21,239 |
|
$ |
22,367 |
Autoscope Technologies CorporationCondensed
Consolidated Statements of Cash Flows(in thousands)(unaudited)
|
Six-Month Periods Ended June 30, |
|
|
2022 |
|
|
2021 |
|
Operating activities |
|
|
|
|
|
|
|
Net
income |
$ |
92 |
|
|
$ |
1,883 |
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
499 |
|
|
|
462 |
|
Amortization of deferred finance fees |
|
1 |
|
|
|
- |
|
Stock option expense |
|
268 |
|
|
|
107 |
|
Deferred income tax expense |
|
30 |
|
|
|
348 |
|
Forgiveness income from PPP Loan |
|
- |
|
|
|
(931 |
) |
Loss on disposal of assets |
|
5 |
|
|
|
1 |
|
Realized loss of sale of equity investments |
|
53 |
|
|
|
- |
|
Unrealized gain on equity investments |
|
3 |
|
|
|
- |
|
Investment loss |
|
6 |
|
|
|
- |
|
Changes in operating assets and liabilities |
|
(878 |
) |
|
|
(1,161 |
) |
Net cash used for operating
activities |
|
79 |
|
|
|
709 |
|
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
|
Capitalized software development costs |
|
(534 |
) |
|
|
(178 |
) |
Purchases of property and equipment |
|
(41 |
) |
|
|
(8 |
) |
Purchase of equity securities |
|
(795 |
) |
|
|
- |
|
Sale of equity securities |
|
10 |
|
|
|
- |
|
Purchase of debt securities |
|
(3,521 |
) |
|
|
- |
|
Net cash used for investing
activities |
|
(4,881 |
) |
|
|
(186 |
) |
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
|
Stock
for tax withholding |
|
(15 |
) |
|
|
(35 |
) |
Dividends paid |
|
(1,291 |
) |
|
|
(644 |
) |
Proceeds from exercise of stock options |
|
32 |
|
|
|
8 |
|
Proceeds from PPP Loan |
|
(29 |
) |
|
|
- |
|
Net cash used for financing
activities |
|
(1,303 |
) |
|
|
(671 |
) |
|
|
|
|
|
|
|
|
Effect of exchange rate changes
on cash |
|
(191 |
) |
|
|
(30 |
) |
Decrease in cash and cash
equivalents |
|
(6,296 |
) |
|
|
(178 |
) |
|
|
|
|
|
|
|
|
Cash and cash equivalents at
beginning of period |
|
8,229 |
|
|
|
8,605 |
|
Cash and cash equivalents at end
of period |
$ |
1,933 |
|
|
$ |
8,427 |
|
|
|
|
|
|
|
|
|
Non-Cash investing and
financing activities: |
|
|
|
|
|
|
|
Sale of equity securities
included in due from broker |
|
481 |
|
|
|
- |
|
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 June 30, |
|
Six-Month Periods Ended June 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Income from operations |
|
$ |
145 |
|
$ |
904 |
|
$ |
168 |
|
$ |
1,315 |
Amortization of intangible assets |
|
|
204 |
|
|
195 |
|
|
404 |
|
|
382 |
Depreciation |
|
|
46 |
|
|
40 |
|
|
95 |
|
|
80 |
Non-GAAP income from operations |
|
$ |
395 |
|
$ |
1,139 |
|
$ |
667 |
|
$ |
1,777 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
Autoscope Technologies (NASDAQ:AATC)
Historical Stock Chart
From Apr 2024 to May 2024
Autoscope Technologies (NASDAQ:AATC)
Historical Stock Chart
From May 2023 to May 2024