SOURCE: ImageWare Systems, Inc.

ImageWare Systems, Inc.

November 17, 2014 16:05 ET

ImageWare Systems Issues Corporate Update

SAN DIEGO, CA--(Marketwired - Nov 17, 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 third quarter ended September 30, 2014, as well as provided a corporate update to highlight the company's progress since its last update on August 11, 2014.

Operational Highlights

  • Unveiled GoMobile Interactive™ platform running GoVerifyID™ at the CTIA "Super Mobility Week" trade show. GoMobile Interactive took first place in the Mobile Money, Payments, Banking & Commerce category.

  • Partnered with TransUnion to offer biometric authentication for fraud prevention.

  • Awarded $1.5 million contract for Baja California Driver's License in August, which became operational in October.

  • Fujitsu to demonstrate ImageWare's GoVerifyID™ for retail transaction processing at Fujitsu Forum 2014.

Third Quarter 2014 Financial Results

Total revenues in the third quarter of 2014 were $919,000 compared to $2.5 million in the same year-ago quarter. The decrease was due to the approximate $1.5 million received in the third quarter of 2013 for software licenses in connection with a U.S. Department of Veterans Affairs contract.

Gross margin in the third quarter of 2014 was 73.0% compared to 88.0% in the year-ago quarter. The decrease was primarily due to the lower software license revenue as compared to the third quarter of 2013.

Net loss in the third quarter of 2014 was $2.2 million or ($0.02) per basic share, compared to net income of $326,000 or $0.00 per basic share in the year-ago quarter.

At September 30, 2014, cash and cash equivalents totaled $488,000 compared to $2.4 million at December 31, 2013, and the company continued to carry no debt and had an available line of credit totaling $3.5 million.

Management Commentary

"The third quarter was a transition period for our organization, as several of our partners and new agreements remain in the testing and implementation process," said Jim Miller, chairman and CEO of ImageWare. "While there was timing delays associated with the launch of our major international retailer agreement, the project is well under way and is currently in the hardware implementation process. Our customer has communicated that the enrollment of identities will now begin in December.

"Our new breed of turn-key ImageWare products continues to gain traction in both the government and commercial markets. In fact, we debuted our GoVerifyID solution in September at one of the industry's leading wireless tradeshows, the CTIA 'Super Mobility Week,' and it was selected as the best mobile payment product in its class. This new turn-key solution was recently validated by our new alliance with Transunion. TransUnion's ID Manager solution will be integrated with GoVerifyID, allowing ImageWare and Transunion to deliver advanced fraud-prevention capabilities and help accelerate consumer adoption of biometric authentication. We expect the joint offering to roll out during the first quarter of 2015."

Miller continued: "We firmly believe the advancements of our products and partnerships over the last several quarters are positioning our company to capitalize on the fast-growing biometric market. With the increasing concern of identity security across every industry, including retail, banking, and other financial services, our patented identity management solutions are well-positioned to make us the leader in multi-modal biometrics."

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 third quarter 2014 results. The company's Chairman and CEO Jim Miller, CTO David Harding and CFO Wayne Wetherell will host the conference call, followed by a question and answer period.

Date: Monday, November 17, 2014
Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
Toll-free dial-in number: 1-888-256-9022
International dial-in number: 1-913-312-1483
Conference ID: 3766280

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=111839 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 on the same day through December 17, 2014.

Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 3766280

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.

 
 
IMAGEWARE SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, except share and per share data)
 
 
    September 30,   December 31,
    2014   2013
Assets:            
  Cash   $ 488   $ 2,363
  Accounts receivable, net     261     302
  Inventories     780     505
  Other current assets     318     148
  Property and equipment, net     232     245
  Other assets     31     395
  Intangible assets, net     151     172
  Goodwill     3,416     3,416
Total Assets   $ 5,677   $ 7,546
             
Liabilities and Shareholders' Equity:            
  Current liabilities   $ 3,478   $ 3,127
  Derivative liabilities     -     57
  Pension obligation     1,040     1,031
  Shareholders' equity     1,159     3,331
Total Liabilities and Shareholders' Equity   $ 5,677   $ 7,546
             
             

 

 
IMAGEWARE SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, except share and per share amounts)
(Unaudited)
 
                         
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2014     2013     2014     2013  
Revenues                                
  Product   $ 362     $ 1,842     $ 1,077     $ 2,413  
  Maintenance     557       654       1,842       1,962  
Total Revenues     919       2,496       2,919       4,375  
                                 
Cost of Revenue                                
  Product     77       90       195       249  
  Maintenance     171       209       536       585  
                                 
Gross Profit     671       2,197       2,188       3,541  
      73 %     88 %     75 %     81 %
Operating Expenses                                
  General & administrative     971       888       2,861       2,560  
  Sales and marketing     567       512       1,781       1,497  
  Research and development     1,210       946       3,391       2,861  
  Depreciation and amortization     45       29       134       77  
    Total Operating Expenses     2,793       2,375       8,167       6,995  
                                 
Loss from operations     (2,122 )     (178 )     (5,979 )     (3,454 )
                                 
Interest (income) expense, net     104       73       288       148  
Change in fair value of derivative liabilities     -       (470 )     -       4,679  
Other (income) expense, net     (1 )     (123 )     (289 )     (231 )
                                 
Income (loss) from continuing operations before income taxes     (2,225 )     342       (5,978 )     (8,050 )
                                 
Income taxes     3       3       15       5  
                                 
Income (loss) from continuing operations     (2,228 )     339       (5,993 )     (8,055 )
                                 
Net income (loss)   $ (2,228 )   $ 339     $ (5,993 )   $ (8,055 )
Preferred dividends     (13 )     (13 )     (38 )     (38 )
Net income (loss) available to common shareholders   $ (2,241 )   $ 326     $ (6,031 )   $ (8,093 )
                                 
Per share data - basic                                
  Net income (loss) from continuing operations   $ (0.02 )   $ -     $ (0.07 )   $ (0.10 )
  Preferred dividends     -       -       -       -  
  Basic income (loss) per share available to common shareholders   $ (0.02 )   $ -     $ (0.07 )   $ (0.10 )
                                 
Basic weighted-average common shares     93,162,548       83,750,636       91,260,530       79,751,523  
                                 

Contact Information

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