Image Sensing Systems announced results for its second quarter ended June 30, 2016.
Second-Quarter Results:
Image Sensing System’s (ISS) 2016 second quarter revenue from continuing operations was $4.7 million, compared to continuing operations of $4.4 million in the second quarter of 2015. Gross margin from continuing operations for the second quarter of 2016 was 79 percent, a 2 percent decrease from a gross margin of 81 percent for the same period in 2015. The decrease in the gross margin percent was the result of a higher percentage of revenue from product sales. Revenue from royalties was $2.4 million in the second quarter of 2016 compared to $2.6 million in the second quarter of 2015, an 10 percent decline.
Product sales from continuing operations increased to $2.3 million in the quarter, a 29 percent increase from $1.8 million in the second quarter of 2015. The increase in product sales resulted from widening market acceptance of the company’s RTMS Sx-300 product. Autoscope video product sales and royalties were $341,000 and $2.3 million, respectively, and RTMS radar product sales were $2.0 million in the second quarter of 2016. Product sales gross margin for the second quarter of 2016 was 58 percent, a 6 percentage point increase from prior year period 2015.
The company’s net income from continuing operations in the second quarter was $1.2 million, or $0.24 per basic share, compared to a net income from the continuing operations of $655,000, or $0.13 per basic share, in the prior year period. The second quarter 2016 net income from continuing operations includes operating expenses of $2.5 million, a $399,000 or 14 percent improvement from the second quarter of 2015. During the quarter, we capitalized $523,000 of internal software development costs related to the development of our next generation video detection product.
On a non-GAAP basis, excluding intangible asset amortization, depreciation, and restructuring charges for the applicable periods, operating income from continuing operations for the second quarter of 2016 was $1.3 million compared to an operating income of $828,000 in the second quarter of 2015.
“While we will continue to be impacted by the timing of individually significant sales we are pleased to see second quarter product sales and product sales margins increase year over year due to the market adoption and quality of the Sx-300 radar product,” said Chad Stelzig, Interim CEO for ISS. “Royalties related to our Econolite relationship continued to decline year over year. We are working hard at ISS on ways to improve our video product sales over the long run, which includes finalizing the release of our next generation video detection product in the upcoming quarter.”
“We are in the preliminary stage of a business transformation and new technology innovation. We continue to drive down operational costs and identify opportunities to operate within a leaner, more agile corporate structure focused on technology and engineering opportunities essential to our growth. We are also evaluating alternatives to further enhance our credit and liquidity position,” concluded Stelzig.