Autoscope Technologies Corporation (NASDAQ: AATC) today
announced results for its fourth quarter and year ended
December 31, 2021.
Fourth Quarter 2021 Financial
Summary
- Fourth quarter royalties were $1.8 million,
a decrease of 2 percent from the same period in the
prior year.
- Fourth quarter product sales were $1.4
million, an increase of 34 percent from the same
period in the prior year.
- Operating expenses totaled $2.1 million in the fourth quarter
of 2021, a decrease of 12 percent from the prior year period.
- Capitalized software costs in the fourth quarter of 2021
were $307,000 compared to no costs in the prior year period.
- Net loss for the fourth quarter of 2021 totaled
$201,000 compared to net income of $365,000 for the same
period in the prior year.
- Cash balance decreased to $8.2 million, down from $8.5 million
at the end of the third quarter of 2021.
2021 Full Year Financial
Summary
- 2021 royalties increased to
$8.5 million compared to $8.3 million in the prior year.
- 2021 product sales were
$4.7 million, a decrease of 2 percent from
the prior year.
- 2021 operating expenses of
$8.0 million remained the same as in the prior
year.
- Capitalized software costs in 2021
were $485,000 compared to $22,000 in the prior year.
- Income tax expense in 2021 was
$905,000 compared to a $462,000 income tax benefit in the prior
year.
- Net income for 2021 totaled
$2.3 million, a $1.2 million increase from the prior
year.
- The Company received funding of
$924,000 under the Paycheck Protection Program in the form of a
loan in April 2020, all of which was forgiven in the first quarter
of 2021.
- Cash balance decreased to
$8.2 million at December 31, 2021, down from $8.6 million
at the end of 2020.
Fourth-Quarter Results
The 2021 fourth quarter 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, was
$3.2 million compared to $2.9 million in the fourth
quarter of 2020. Revenue from royalties was
$1.8 million in the fourth quarter of 2021 compared
to $1.8 million in the fourth quarter of 2020,
a 2 percent decrease. Product sales were
$1.4 million in the 2021 fourth quarter compared to
$1.1 million in the fourth quarter of 2020, a 34 percent
increase.
Gross margin for the fourth quarter
of 2021 was 72 percent, a 5-percentage
point decrease from a gross margin
of 77 percent for the same period in 2020.
Product sales gross margin for the fourth quarter of 2021 was 45
percent compared to 46 percent in the prior year period. The
decrease in the gross margin percent was primarily the result of a
higher portion of revenues being from product sales which have a
lower gross margin than royalties.
The Company had a net loss in the fourth quarter
of $(201,000), or $(0.04) per diluted share, compared to net
income of $365,000, or $0.07 per diluted share, in the prior year
period. The fourth quarter 2021 net income includes
operating expenses of $2.1 million, a 12 percent
decrease from the fourth quarter of 2020 and income tax
expense of $453,000, a 190 percent increase from the fourth quarter
of 2020. The decrease in operating expenses is primarily due
to the increase in capitalized software development
costs compared to the prior year. During the fourth
quarter of 2021, the Company capitalized $307,000 internal software
development costs compared to capitalizing $22,000 in internal
software development costs in the prior year period. Income tax
expense was $954,000 higher compared to the prior year due to
higher pre-tax income and increased valuation allowances on certain
deferred tax assets that the Company does not expect to realize in
the future.
On a non-GAAP basis, excluding the amortization
of intangible assets and depreciation for the applicable periods,
operating income for the fourth quarter of 2021 was
$517,000 compared to $106,000 in the prior year
period.
Full Year Results
The Company's 2021 revenue remained
constant at $13.2 million compared to the prior year. Gross margin
for 2021 was 77 percent compared to 79 percent in 2020.
Revenue from royalties increased to $8.5 million in 2021 compared
to $8.3 million 2020.
Product sales decreased to $4.7 million in
2021, a 2 percent decrease from $4.8 million
in 2020. The decrease in product sales was the result of
project timing and global COVID-19 related challenges. The
Company's video product sales and royalties were
$8.5 million and $791,000, respectively, in 2021, and RTMS
radar product sales were $3.9 million in 2021. Product sales gross
margin for 2021 decreased to 45 percent compared to
50 percent in 2020.
The Company’s net income in 2021 was
$2.3 million, or $0.43 per diluted share, compared to
$1.1 million, or $0.20 per diluted share, in the prior year.
The 2021 net income includes operating expenses of
$8.0 million, which decreased when compared
to 2020 operating expenses of $9.8 million. During 2021,
the Company capitalized $485,000 of internal software development
costs compared to $22,000 in 2020. Other income of
$931,000 was recorded during the first quarter
of 2021 when the Company received forgiveness of its
Paycheck Protection Program loan principal and accrued interest,
and there were no comparable items in 2020.
On a non-GAAP basis, excluding the amortization
of intangible assets, depreciation, and restructuring charges for
the applicable periods, operating income for 2021 was
$3.2 million compared to $1.6 million in the prior
year.
During the second quarter of 2020, the
Company received funding of $924,000 from the United States
Small Business Administration (SBA) in the form of a Paycheck
Protection Program ("PPP") loan. The Company applied for
forgiveness of the loan because the proceeds were used for payroll
related costs, rent, and utilities. On February 2, 2021, the
Company was granted forgiveness for the full amount of the PPP loan
by the SBA. Other income of $931,000 was recorded during
the first quarter of 2021 when the Company received
forgiveness of the PPP loan principal and accrued interest, and
there were no comparable items in 2020.
"We are pleased with the recovery of ISS product
sales during the last quarter, which have been hampered by labor
shortages in highway construction and supply chain component
delays. Video product royalties for the year have increased due to
the release of new pedestrian detection capabilities,” said Andrew
Berger, CEO of ATC. "We are investing in new products and expect to
bring these to market in 2022. However, we expect labor
shortages and supply chain component delays to continue throughout
the year and remain focused on controlling operating expenses,"
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 that creates value through owning and supporting
operating subsidiaries and investments, anchored in the fields of
technology and engineering. Autoscope Technologies
Corporation's main subsidiary, Image Sensing Systems, Inc., is
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 autoscope.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 and regulations; 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.
Autoscope Technologies CorporationCondensed
Consolidated Statements of Operations(in thousands, except per
share information)(unaudited)
|
|
Three-Month PeriodsEnded December 31, |
|
Years EndedDecember 31, |
|
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product sales |
|
$ |
1,437 |
|
|
$ |
1,069 |
|
|
$ |
4,710 |
|
|
$ |
4,829 |
|
Royalties |
|
|
1,766 |
|
|
|
1,808 |
|
|
|
8,532 |
|
|
|
8,344 |
|
|
|
|
3,203 |
|
|
|
2,877 |
|
|
|
13,242 |
|
|
|
13,173 |
|
Cost of revenue |
|
|
889 |
|
|
|
668 |
|
|
|
3,007 |
|
|
|
2,785 |
|
Gross profit |
|
|
2,314 |
|
|
|
2,209 |
|
|
|
10,235 |
|
|
|
10,388 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
1,532 |
|
|
|
1,550 |
|
|
|
5,748 |
|
|
|
6,444 |
|
Research and development |
|
|
532 |
|
|
|
788 |
|
|
|
2,214 |
|
|
|
3,336 |
|
|
|
|
2,064 |
|
|
|
2,338 |
|
|
|
7,962 |
|
|
|
9,780 |
|
Income from operations |
|
|
250 |
|
|
|
(129 |
) |
|
|
2,273 |
|
|
|
608 |
|
Interest income (expense) |
|
|
- |
|
|
|
(7 |
) |
|
|
- |
|
|
|
(7 |
) |
Other income |
|
|
2 |
|
|
|
- |
|
|
|
927 |
|
|
|
- |
|
Income (loss) before income
taxes |
|
|
252 |
|
|
|
(136 |
) |
|
|
3,200 |
|
|
|
601 |
|
Income tax expense
(benefit) |
|
|
453 |
|
|
|
(501 |
) |
|
|
905 |
|
|
|
(462 |
) |
Net income (loss) |
|
$ |
(201 |
) |
|
$ |
365 |
|
|
$ |
2,295 |
|
|
$ |
1,063 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per share |
|
$ |
(0.04 |
) |
|
$ |
0.07 |
|
|
$ |
0.43 |
|
|
$ |
0.20 |
|
Diluted net income (loss) per share |
|
$ |
(0.04 |
) |
|
$ |
0.07 |
|
|
$ |
0.43 |
|
|
$ |
0.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted shares - basic |
|
|
5,355 |
|
|
|
5,314 |
|
|
|
5,342 |
|
|
|
5,296 |
|
Weighted shares -
diluted |
|
|
5,369 |
|
|
|
5,328 |
|
|
|
5,358 |
|
|
|
5,316 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Autoscope Technologies CorporationCondensed
Consolidated Balance Sheets(in thousands)(unaudited)
|
December 31,2021 |
|
December 31,2020 |
Assets |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
8,229 |
|
|
$ |
8,605 |
|
Receivables, net |
|
2,369 |
|
|
|
2,261 |
|
Inventories |
|
1,429 |
|
|
|
770 |
|
Prepaid expenses and other current assets |
|
355 |
|
|
|
480 |
|
|
|
12,382 |
|
|
|
12,116 |
|
Property and equipment, net |
|
2,237 |
|
|
|
303 |
|
Intangible assets, net |
|
2,866 |
|
|
|
3,161 |
|
Deferred taxes |
|
4,824 |
|
|
|
5,708 |
|
Operating lease asset, net |
|
58 |
|
|
|
136 |
|
|
$ |
22,367 |
|
|
$ |
21,424 |
|
Liabilities and Shareholders’
Equity |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Accounts payable |
$ |
236 |
|
|
$ |
547 |
|
Short-term debt |
|
56 |
|
|
|
349 |
|
Warranty and other current liabilities |
|
607 |
|
|
|
576 |
|
|
|
899 |
|
|
|
1,472 |
|
|
|
|
|
|
|
|
|
Non-Current liabilities |
|
|
|
|
|
|
|
Operating lease obligation |
|
- |
|
|
|
8 |
|
Long-term debt |
|
1,674 |
|
|
|
574 |
|
|
|
1,674 |
|
|
|
582 |
|
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
19,794 |
|
|
|
19,370 |
|
|
$ |
22,367 |
|
|
$ |
21,424 |
|
|
Autoscope Technologies CorporationCondensed
Consolidated Statements of Cash Flows(in thousands)(unaudited)
|
Years EndedDecember 31, |
|
|
2021 |
|
2020 |
Operating activities |
|
|
|
|
|
|
|
Net income |
$ |
2,295 |
|
|
$ |
1,063 |
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
928 |
|
|
|
960 |
|
Stock option expense |
|
226 |
|
|
|
224 |
|
Loss on disposal of assets |
|
4 |
|
|
|
5 |
|
Deferred income tax benefit |
|
884 |
|
|
|
(489 |
) |
Changes in operating assets and liabilities |
|
(844 |
) |
|
|
797 |
|
Net cash
provided by operating activities |
|
2,562 |
|
|
|
2,560 |
|
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
|
Capitalized software development costs |
|
(485 |
) |
|
|
(22 |
) |
Purchases of property and equipment |
|
(2,087 |
) |
|
|
(129 |
) |
Net cash
used for investing activities |
|
(2,572 |
) |
|
|
(151 |
) |
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
|
Stock for tax withholding |
|
(35 |
) |
|
|
(6 |
) |
Dividend distribution |
|
(1,932 |
) |
|
|
- |
|
Proceeds from exercise of stock options |
|
8 |
|
|
|
- |
|
Proceeds from Coulee Bank loan |
|
1,743 |
|
|
|
- |
|
Deferred finance fees |
|
(13 |
) |
|
|
- |
|
Proceeds from PPP Loan |
|
- |
|
|
|
924 |
|
Net cash
provided by (used for) financing activities |
|
(229 |
) |
|
|
918 |
|
|
|
|
|
|
|
|
|
Effect
of exchange rate changes on cash |
|
(137 |
) |
|
|
160 |
|
Increase
(decrease) in cash and cash equivalents |
|
(376 |
) |
|
|
3,487 |
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents at beginning of period |
|
8,605 |
|
|
|
5,118 |
|
Cash and
cash equivalents at end of period |
$ |
8,229 |
|
|
$ |
8,605 |
|
|
|
|
|
|
|
|
|
Non-Cash investing and financing activities: |
|
|
|
|
|
|
|
Purchase
of property and equipment in accounts payable |
$ |
- |
|
|
$ |
1 |
|
|
|
|
|
|
|
|
|
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,
depreciation, and other non-recurring items 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 December 31, |
|
Years Ended December 31, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Income (loss) from operations |
|
$ |
250 |
|
|
$ |
(129 |
) |
|
$ |
2,273 |
|
|
$ |
608 |
|
Amortization of intangible assets |
|
|
231 |
|
|
|
187 |
|
|
|
780 |
|
|
|
736 |
|
Depreciation |
|
|
36 |
|
|
|
48 |
|
|
|
148 |
|
|
|
224 |
|
Non-GAAP income from operations |
|
$ |
517 |
|
|
$ |
106 |
|
|
$ |
3,201 |
|
|
$ |
1,568 |
|
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.
Contact: |
Frank Hallowell, Chief
Financial Officer |
|
Autoscope Technologies Corporation
Phone: 612.438.2363 |
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