SOURCE: ImageWare Systems, Inc.

ImageWare Systems, Inc.

August 11, 2014 16:12 ET

ImageWare Systems Issues Corporate Update

SAN DIEGO, CA--(Marketwired - Aug 11, 2014) - ImageWare Systems, Inc. (OTCQB: IWSY) (ImageWare), a leader in mobile and cloud-based, multi-modal biometric identity management solutions, has issued financial results for the second quarter ended June 30, 2014, as well as provided a corporate update to highlight the company's progress since its last update on May 12, 2014.

Operational Highlights

  • Awarded $1.0 million contract to implement multi-modal biometric driver license system for state of Baja California, Mexico
  • Reached a three-year agreement in principle with major international retailer to provide multi-modal biometric identity management on the Fujitsu Cloud

Second Quarter 2014 Financial Results
Total revenues in the second quarter of 2014 were $937,000, compared to $1.0 million in the same year-ago quarter.

Gross margin in the second quarter of 2014 increased by 410 basis points to 75.2%, compared to 71.1% the year-ago quarter. The increase was primarily due to a higher percentage of software license revenues as a component of product revenue.

Net loss in the second quarter of 2014 was $2.1 million or ($0.02) per basic share, compared to a net loss of $5.6 million or ($0.07) per basic share in the year-ago quarter. The $5.6 million loss in the second quarter of 2013 included a $4.0 million charge for changes in the fair value of derivative liabilities.

At June 30, 2014, cash and cash equivalents totaled $1.4 million compared to $2.4 million at December 31, 2013. The company had no debt and maintains a $3.5 million line of credit that remains fully available.

Management Commentary
"The second quarter was highlighted by the signing of a $1.0 million contract to implement a multi-modal biometric driver license system for state of Baja California, Mexico," said Jim Miller, chairman and CEO of ImageWare. "This contract represents the introduction of a new breed of turn-key ImageWare products available to governments with features that require very little customization and allow us to secure a significant payment upfront. Using this new approach in pursuing government contracts, the deal flow can proceed more quickly and profitability for ImageWare, while providing a faster ROI for our government customers. It also allows for greater scalability of our product delivery teams.

"Retail remains a fertile market for our solutions, and we remain active with our technology partners to build a healthy pipeline of potential customers. In fact, we recently reached a three-year agreement in principle with a major international retailer to provide our cloud-based, multi-modal biometric identity management product suite, CloudID.

"Our opportunities in the commercial and consumer marketplaces continue to expand, and we continue to gain traction with our IT service providers. We expect a new recurring revenue stream to come on line in third quarter of 2014 from our partnerships with Fujitsu and T-Systems, and believe the steps we are taking to advance our cloud, SaaS and mobile offerings will continue to build shareholder value."

Conference Call
ImageWare will hold a conference call today at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to discuss its second quarter 2014 results. The company's Chairman and CEO Jim Miller and CFO Wayne Wetherell will host the conference call, followed by a question and answer period.

Date: Monday, August 11, 2014
Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
Toll-free dial-in number: 1-888-708-5689
International dial-in number: 1-913-312-1496
Conference ID: 8562173

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.

The conference call will be broadcast live and available for replay at http://public.viavid.com/index.php?id=110318 and via the investor relations section of ImageWare's website at www.iwsinc.com.

A replay of the conference call will be available after 8:00 p.m. Eastern time today through September 11, 2014.

Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 8562173

About ImageWare Systems, Inc.
ImageWare Systems, Inc. (OTCQB: IWSY) is a leading developer of mobile and cloud-based identity management solutions, providing biometric, secure credential and law enforcement technologies. Scalable for worldwide deployment, ImageWare's biometric product line includes a multi-biometric engine that is hardware and algorithm independent, enabling the enrollment and management of unlimited population sizes. ImageWare's identification products are used to manage and issue secure credentials, including national IDs, passports, driver's licenses, smart cards and access control credentials. ImageWare's digital booking products provide law enforcement with integrated mug shot, fingerprint livescan and investigative capabilities. ImageWare is headquartered in San Diego, CA, with offices in Portland, OR, Washington, D.C., and Ottawa, Ontario. For more information on ImageWare Systems, Inc., please visit www.iwsinc.com.

Forward Looking Statements
Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "believe," "estimate," "expect," "forecast," "intend," "may," "plan," "project," "predict," "if", "should" and "will" and similar expressions as they relate to ImageWare Systems, Inc. ("ImageWare") are intended to identify such forward-looking statements. ImageWare may from time to time update these publicly announced projections, but it is not obligated to do so. Any projections of future results of operations should not be construed in any manner as a guarantee that such results will in fact occur. These projections are subject to change and could differ materially from final reported results. For a discussion of such risks and uncertainties, see "Risk Factors" in ImageWare's Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and its other reports filed with the Securities and Exchange Commission under the Securities 3 Exchange Act of 1934, as amended. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.

   
   
SELECTED COMPARATIVE FINANCIAL HIGHLIGHTS  
In thousands, except share and per share amounts  
   
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2014     2013     2014     2013  
Revenues                        
  Product   $ 281     $ 364     $ 715     $ 571  
  Maintenance     656       660       1,285       1,309  
Total Revenues     937       1,024       2,000       1,880  
                                 
Cost of Revenue                                
  Product     48       114       118       158  
  Maintenance     184       182       365       376  
                                 
Gross Profit     705       728       1,517       1,346  
      75 %     71 %     76 %     72 %
Operating Expenses                                
  General & administrative     873       775       1,890       1,667  
  Sales and marketing     596       510       1,214       985  
  Research and development     1,152       995       2,181       1,914  
  Depreciation and amortization     46       26       88       55  
      Total Operating Expenses     2,667       2,306       5,373       4,621  
                                 
Loss from operations     (1,962 )     (1,578 )     (3,856 )     (3,275 )
                                 
Interest (income) expense, net     105       73       184       75  
Change in fair value of derivative liabilities     -       3,973       -       5,148  
Other (income) expense, net     (5 )     (4 )     (289 )     (108 )
                                 
Income (loss) from continuing operations before income taxes     (2,062 )     (5,620 )     (3,751 )     (8,390 )
                                 
Income taxes     12       (1 )     12       2  
                                 
Income (loss) from continuing operations     (2,074 )     (5,619 )     (3,763 )     (8,392 )
                                 
Net income (loss)   $ (2,074 )   $ (5,619 )   $ (3,763 )   $ (8,392 )
Preferred dividends     (13 )     (13 )     (25 )     (25 )
Net income (loss) available to common shareholders   $ (2,087 )   $ (5,632 )   $ (3,788 )   $ (8,417 )
                                 
Per share data - basic                                
    Net income (loss) from continuing operations   $ (0.02 )   $ (0.07 )   $ (0.04 )   $ (0.11 )
    Preferred dividends     -       -       -       -  
    Basic income (loss) per share available to common shareholders   $ (0.02 )   $ (0.07 )   $ (0.04 )   $ (0.11 )
                                 
Basic weighted-average common shares     91,930,400       78,581,502       90,293,758       77,718,825  
 
 
CONSOLIDATED BALANCE SHEETS
 
    June 30,   December 31,
    2014   2013
Assets:        
  Cash   $ 1,415   $ 2,363
  Accounts receivable, net     400     302
  Inventories     603     505
  Other current assets     522     148
  Property and equipment, net     241     245
  Other assets     30     395
  Intangible assets, net     158     172
  Goodwill     3,416     3,416
Total Assets   $ 6,785   $ 7,546
             
Liabilities and Shareholders' Equity:            
  Current liabilities   $ 2,653   $ 3,127
  Derivative liabilities     -     57
  Pension obligation     1,058     1,031
  Shareholders' equity     3,074     3,331
Total Liabilities and Shareholders' Equity   $ 6,785   $ 7,546

Contact Information

  • Investor Relations:
    Liolios Group, Inc.
    Cody Slach or Greg Falesnik
    Tel 1-949-574-3860
    Email Contact