First-Quarter Sales Increase 97% Over First Quarter 2002 to Record $5.5 Million
PROVO, Utah--(BUSINESS WIRE)--May 20, 2003--Innovative Software Technologies, Inc. INIV reported its first-quarter results for the period ended March 31, 2003.
Sales for the three months ended March 31, 2003 and 2002 were $5,493,208, a 97% increase over the prior year's first-quarter sales of $2,794,296. Net income was $99,897 versus $196,308 for the comparable year ago period. Net cash provided by/(used in) operating activities (cash flow) increased to $303,572 in the first quarter of 2003, from a deficit of ($106,350) in the first quarter of 2002.
"We are pleased with our top-line growth and increased cash flow for the first three months of the year," explained Linda Haslem, Chief Financial Officer, Innovative Software Technologies. "Several factors accounted for the decline in net income in our first quarter, including: start-up costs associated with bringing most of our technical support and coaching services in-house (as opposed to outsourcing these services); a higher than expected refund rate, which led us to consolidate our technical and coaching services in-house in the first place; increased advertising expenses associated with higher sales volume; increased management expenses and, some non-cash expenses." Ms. Haslem went on to add, "We expect that consolidating our technical support and coaching services will reduce our refund rate, which should have a positive long-term effect on net income in the coming quarters."
"We've seen solid growth in the small business product lines with the Enterprise Management System (EMS) and the related technical and coaching services," explained D. Shane Hackett, President and CEO. "Looking toward the upcoming quarters, we plan to roll out our new email encryption products as well as continuing to expand on the success of EMS and our eLearning product series."
Innovative Software Technologies, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
For the Three Months
Ended March 31,
2003 2002
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Sales $ 5,493,208 $ 2,794,696
Cost of Sales 2,546,892 1,122,455
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Gross Profit 2,946,316 1,672,241
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Operating Expenses
Selling 1,225,118 600,891
General and Administrative 1,682,800 742,070
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Total Operating Expenses 2,907,918 1,342,961
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Income/(Loss) From Operations 38,398 329,280
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Other Income (Expense)
Other Income 44,112 1,702
Interest Expense 17,387 -
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Total Other Income (Expense) 61,499 1,702
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Net Income Before Income Taxes 99,897 330,982
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Income Tax Expense - 134,674
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Net Income $ 99,897 $ 196,308
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Basic and Diluted Income Per Share $ 0.00 $ 0.00
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Weighted Average Number of Common
Shares Outstanding Used in Per Share
Calculation - Basic and Diluted 52,675,733 48,287,416
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Innovative Software Technologies, Inc.
Selected Balance Sheet
Information:
December 31,
2002 2001
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Cash $ 1,462,821 $ 1,338,345
Accounts Receivable, Net of Allowance for
Doubtful Accounts 6,678 14,700
Total Current Assets 2,570,411 2,186,482
Property and Equipment, Net 438,436 379,349
Total Assets $ 4,140,189 $ 3,703,215
Total Current Liabilities 1,837,375 1,505,992
Total Stockholders' Equity 2,302,814 2,110,000
Total Liabilities and Stockholders' Equity $ 4,140,189 $ 3,703,215
