Intellicheck Mobilisa Announces 2012 Second Quarter Financial Results

Intellicheck Mobilisa (NYSE Amex: IDN), a leader in ID Verification and Wireless Technology, has released its financial results for the second quarter ended June 30, 2012.

Revenues for the quarter ended June 30, 2012, increased 9% to $3.441 million compared to $3.165 million in the same period of the previous year. Net income for the three months ended June 30, 2012 was $61,000 or $0.00 per diluted share compared to a net income of $125,000 or $0.00 per diluted share for the three months ended June 30, 2011. Adjusted EBITDA was $355,000 for the second quarter of 2012 compared to $337,000 for the second quarter of 2011. A reconciliation of GAAP net income to adjusted EBITDA is provided below. The Company’s backlog, which represents non-cancelable sales orders for products not yet shipped and services to be performed, was approximately $900,000 at June 30, 2012, compared to $800,000 at June 30, 2011.

Steve Williams, CEO of Intellicheck Mobilisa, commented, “Our priority is on growing revenue. We will continue to make this our focus throughout the rest of 2012 and beyond. I look forward to speaking with investors during our conference call later today.”

Q2 2012 and Recent Highlights:
  • Fifth consecutive quarter of positive EBITDA
  • Executed $1 million contract with a major seaport
  • Entered into software licensing agreement for Intellicheck Mobilisa’s ID Check software with a prominent hardware manufacturer
  • ATO (authority to operate) issued by the U.S. Marine Corps

Conference Call Information

IDN will host a conference call for members of the investment community today at 1:00 p.m. Eastern / 10:00 a.m. Pacific Time. Interested parties should dial (877) 407-8037 approximately 10 minutes before the scheduled beginning. For callers outside the U.S., please dial (201) 689-8037. The slides may be viewed at: http://www.investorcalendar.com/IC/CEPage.asp?ID=169074 and will also be available on our website www.icmobil.com under Investor Relations. For those unable to participate in the live conference, a recording will be available for 48 hours after the call. The recording can be accessed by dialing (877) 660-6853 and (201) 612-7415 for international callers. The account access code is 327 and the replay ID is 397199. After the 48-hour window, please visit the Investor Relations portion of our website at www.icmobil.com for rebroadcast.

About Intellicheck Mobilisa

Intellicheck Mobilisa (ICMOBIL) is a leading technology company that is engaged in developing and marketing wireless technology and identity systems for various applications, including mobile and handheld access control and security systems for the government, military and commercial markets. ICMOBIL’s products include the Fugitive Finder system, an advanced ID card access control product currently protecting approximately 100 military and federal locations; ID Check, a patented technology that instantly reads, analyzes, and verifies encoded data in magnetic stripes and barcodes on government-issued IDs from U.S. and Canadian jurisdictions, designed to improve the Customer Experience for the financial, hospitality and retail sectors; and Aegeus, a wireless security buoy system for the government, military and oil industry.

For more news and information on ICMOBIL, please visit  www.icmobil.com.

Safe Harbor Statement

Certain statements in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. When used in this press release, words such as “will,” “believe,” “expect,” “anticipate,” “encouraged,” and similar expressions, as they relate to the company or its management, as well as assumptions made by and information currently available to the company’s management identify forward-looking statements. Actual results may differ materially from the information presented here. Additional information concerning forward-looking statements is contained under the heading of risk factors listed from time to time in the company’s filings with the SEC. We do not assume any obligation to update the forward-looking information.

Adjusted EBITDA

Intellicheck Mobilisa uses Adjusted EBITDA as a non-GAAP financial performance measurement. Adjusted EBITDA is calculated by adding back to net income (loss) interest, income taxes, impairments of long-lived assets and goodwill, depreciation, amortization and stock-based compensation expense. Adjusted EBITDA is provided to investors to supplement the results of operations reported in accordance with GAAP. Management believes that Adjusted EBITDA provides an additional tool for investors to use in comparing Intellicheck Mobilisa financial results with other companies that also use Adjusted EBITDA in their communications to investors. By excluding non-cash charges such as impairments of long-lived assets and goodwill, amortization, depreciation and stock-based compensation, as well as non-operating charges for interest and income taxes, investors can evaluate the Company's operations and can compare its results on a more consistent basis to the results of other companies. In addition, adjusted EBITDA is one of the primary measures management uses to monitor and evaluate financial and operating results.

Intellicheck Mobilisa considers Adjusted EBITDA to be an important indicator of the Company's operational strength and performance of its business and a useful measure of the Company's historical operating trends. However, there are significant limitations to the use of Adjusted EBITDA since it excludes interest income and expense, impairments of long lived assets and goodwill, stock based compensation expense, all of which impact the Company's profitability, as well as depreciation and amortization related to the use of long term assets which benefit multiple periods. Intellicheck Mobilisa believes that these limitations are compensated by providing Adjusted EBITDA only with GAAP net income (loss) and clearly identifying the difference between the two measures. Consequently, Adjusted EBITDA should not be considered in isolation or as a substitute for net income (loss) presented in accordance with GAAP. Adjusted EBITDA as defined by the Company may not be comparable with similarly named measures provided by other entities. A reconciliation of Adjusted EBITDA to GAAP net income or loss is included in the enclosed schedule.

INTELLICHECK MOBILISA, INC.

CONSOLIDATED BALANCE SHEETS

ASSETS
         
June 30, December 31,
2012 2011
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 1,593,409 $ 1,394,148

Accounts receivable, net of allowance of $4,884 and $4,884 as of June 30, 2012 and December 31, 2011, respectively
3,704,024 3,058,788
Inventory 36,097 11,894
Other current assets   132,813     108,770  
Total current assets 5,466,343 4,573,600
 
PROPERTY AND EQUIPMENT, net 407,716 439,736
GOODWILL 12,308,661 12,308,661
INTANGIBLE ASSETS, net 5,088,133 5,551,149
OTHER ASSETS   70,666     72,006  
 
Total assets $ 23,341,519   $ 22,945,152  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
CURRENT LIABILITIES:
Accounts payable $ 628,833 $ 221,019
Accrued expenses 701,431 675,907
Deferred revenue, current portion   1,504,821     1,692,881  
Total current liabilities 2,835,085 2,589,807
 
OTHER LIABILITIES
Deferred revenue, long-term portion 430,090 405,190
Deferred rent   191,583     194,759  
Total liabilities 3,456,758 3,189,756
 
STOCKHOLDERS’ EQUITY:

Common stock - $.001 par value; 40,000,000 shares authorized; 27,488,792 and 27,462,504 shares issued and outstanding, respectively
27,488 27,462
Additional paid-in capital 100,752,498 100,699,156
Accumulated deficit   (80,895,225 )   (80,971,222 )
Total stockholders’ equity   19,884,761     19,755,396  
 
Total liabilities and stockholders’ equity $ 23,341,519   $ 22,945,152  
 
INTELLICHECK MOBILISA, INC.
 
CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)
 
     

Three Months Ended June 30,
     

Six Months Ended June 30,

2012
   

2011

2012
   

2011
 
REVENUES $ 3,440,652 $ 3,165,342 6,151,438 $ 6,020,997
COST OF REVENUES   (1,210,561 )   (1,017,212 )   (1,963,488 )   (2,137,014 )
Gross profit 2,230,091 2,148,130 4,187,950 3,883,983
 
OPERATING EXPENSES
Selling 461,513 473,955 861,358 988,083
General and administrative 1,139,613 948,095 2,028,323 2,109,498
Research and development   568,047     598,761     1,222,272     1,364,347  
Total operating expenses   2,169,173     2,020,811     4,111,953     4,461,928  
 
Income (loss) from operations 60,918 127,319 75,997 (577,945 )
 
OTHER INCOME (EXPENSE)
Interest income - 13 - 28
Interest expense   -     (2,500 )   -     (5,000 )
  -     (2,487 )   -     (4,972 )
 
Net income (loss) $ 60,918   $ 124,832   $ 75,997   $ (582,917 )
 
PER SHARE INFORMATION
Net income (loss) per common share -
Basic $ 0.00   $ 0.00   $ 0.00   $ (0.02 )
Diluted $ 0.00   $ 0.00   $ 0.00   $ (0.02 )

Weighted average common shares used in computing per share amounts -
Basic   27,475,792     27,091,227     27,469,148     27,059,049  
Diluted   27,778,840     27,530,215     27,738,763     27,059,049  
 
INTELLICHECK MOBILISA, INC.
 
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

For the six months ended June 30, 2012

(Unaudited)
 
          Additional    

Common Stock
Paid-in Accumulated    

Shares
   

Amount

Capital

Deficit

Total
 
BALANCE, January 1, 2012 27,462,504 $ 27,462 $ 100,699,156 $ (80,971,222 ) $ 19,755,396
 
Stock-based compensation expense - - 41,276 - 41,276
Exercise of stock options 26,288 26 12,066 - 12,092
Net income -   -   -   75,997     75,997
 
BALANCE, June 30, 2012 27,488,792 $ 27,488 $ 100,752,498 $ (80,895,225 ) $ 19,884,761
 

INTELLICHECK MOBILISA, INC.
 

CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)
 
     

Six Months Ended June 30,

2012
   

2011
 
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 75,997 $ (582,917 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 551,464 566,706
Provision for doubtful accounts - 3,233
Noncash stock-based compensation expense 41,276 (7,585 )
Amortization of debt discount - 5,000
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (645,236 ) 557,249
Increase in inventory (24,203 ) (7,275 )
Increase in other current assets (24,043 ) (10,298 )
Decrease in other assets 1,340 522
Increase in accounts payable and accrued expenses 433,338 31,375
Decrease in deferred revenue (163,160 ) (638,721 )
(Decrease) increase in deferred rent   (3,176 )   69,624  
Net cash provided by (used in) operating activities   243,597     (13,087 )
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment   (56,428 )   (33,137 )
Net cash used in investing activities   (56,428 )   (33,137 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:

Net proceeds from issuance of common stock from exercise of stock options
  12,092     32,200  
Net cash provided by financing activities   12,092     32,200  
 
Increase (decrease) in cash and cash equivalents 199,261 (14,024 )
 
CASH AND CASH EQUIVALENTS, beginning of period   1,394,148     1,488,904  
 
CASH AND CASH EQUIVALENTS, end of period $ 1,593,409   $ 1,474,880  
 
SUPPLEMENTAL CASH FLOW INFORMATION
 
Cash paid during the period for:
Income taxes $ 6,000   $ 9,850  
Interest $ -   $ -  
 
INTELLICHECK MOBILISA, INC.
 

A reconciliation of GAAP net income (loss) to Adjusted EBITDA follows:
 
      (Unaudited)
Three Months Ended       Six Months Ended
June 30, June 30,

2012
   

2011

2012
   

2011
Net income (loss) $ 60,918 $ 124,832 $ 75,997 $ (582,917 )
Reconciling items:
Interest - net - 2,487 - 4,972
(Benefit) provision for income taxes - - - -
Depreciation and amortization 275,780 283,039 551,464 566,706
Stock-based compensation costs   18,058   (72,868 )   41,276   (7,585 )
Adjusted EBITDA $ 354,756 $ 337,490   $ 668,737 $ (18,824 )

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