InkSure Technologies Reports Second Quarter Operating Results Revenues From Largest Equipment Order in Company's History Anticipated in Second Half of 2005 8/2/2005 8:30:56 AM
FT. LAUDERDALE, Fla., Aug 02, 2005 /PRNewswire-FirstCall via COMTEX/ -- InkSure Technologies Inc. (INKS), a leading provider of covert machine-readable security solutions for the prevention of counterfeiting, fraud and diversion, today announced its operating results for the second quarter and first half of 2005, when compared with the prior-year periods.
For the three months ended June 30, 2005, revenues approximated $287,000 and the Company reported a net loss of $591,000, or $0.04 per share. These results compared with revenues of approximately $369,000 and a net loss of $369,000, or $0.03 per share, in the second quarter of 2004. The weighted average number of common shares outstanding totaled 15,011,579 in the quarter ended June 30, 2005, compared with 13,886,578 in the prior-year period. The increase was due to additional shares that were issued in a private placement capital raise in July 2004.
For the six months ended June 30, 2005, the Company's revenues increased 45% to $781,000, compared with revenues of $539,000 in the corresponding period of 2004. The Company reported a net loss of $1,045,000, or $0.07 per share, in the first half of 2005, versus a net loss of $933,000, or $0.07 per share, in the prior-year period. The weighted average number of common shares outstanding totaled 15,011,579 in the six months ended June 30, 2005, compared with 12,997,155 in the first half of 2004. The increase was due to additional shares that were issued in two private placement capital raises during 2004.
"Revenues for the second quarter trailed management's earlier expectations, primarily due to the timing of partial shipments of our electro- optic authentication readers," noted Elie Housman, Chief Executive Officer of InkSure Technologies Inc. "We initially expected a significant number of readers to be shipped to a new customer during the month of June, but such shipments were delayed to the third quarter. Therefore, shipments of these readers and initial shipments of SmartInks to the international customer will benefit operating results in the second half of 2005, when we expect to report record revenues and a significant reduction in net loss when compared with the prior-year."
"Strategically, a number of accomplishments were noteworthy in the most recent quarter. We introduced our revolutionary TrackSure handheld electro-optic reader, which performs barcode reading, authentication and validation against an on-board database with the push of a single button. This new reader allows investigators and field agents to retrieve on-the-spot detailed information from a scanned item, including product identification, product origin and distribution area, and it can determine immediately whether the barcode has been copied or tampered with. We believe this expansion in reader capabilities will open the door to significant new market opportunities for our Company in the future."
"We were also awarded two new U.S. patents related to InkSure's ongoing development of 'chipless' RFID (Radio Frequency Identification) tags during the second quarter," said Housman. "Our goal is to develop multi-bit 'chipless' RFID tags that can be manufactured and applied to product labels at a cost of well below one cent (US) each. If we can accomplish this, InkSure should be well-positioned to participate in the predicted shift away from traditional barcodes in the areas of brand protection and supply chain management. We are encouraged by estimates from IDTechEx Ltd., a leading independent consultant in smart labels and smart packaging, that global revenues from RFID systems should exceed $10 billion (US) by 2010, with 'chipless RFID' accounting for at least 30% of the total."
"In June we received the largest equipment order in our Company's history, from our strategic partner Sun Chemical Group B.V., for authentication readers and covert security inks to be used in a number of projects involving the packaging of consumer products. While we were disappointed that no reader shipments occurred in the second quarter, we expect all of the readers to be delivered during the second half of 2005. We should also begin receiving recurring revenues from the sale of SmartInks for these projects well before the end of the year."
"After the end of the second quarter, we announced our first contract in the ethical (prescription-based) pharmaceuticals industry, where counterfeiting poses a huge risk in terms of both lost revenues and product liability issues. We will continue to focus on the pharmaceutical industry as a priority market, and we are currently involved in tests with a number of additional pharma companies and their suppliers," concluded Housman.
The Company will host a conference call today, August 2, 2005 at 11:00 a.m. EDT to discuss second quarter results. The dial-in number for the conference call is 800-370-0898 (international/local participants dial 973-409-9260). Parties interested in participating in the conference call should dial in approximately five minutes prior to 11:00 a.m. EDT. A replay of the call will be available through August 9, 2005 by dialing 877-519-4471 (international callers dial 973-341-3080), and the replay Access Code is 6310608.
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