Applied Digital Reports First Quarter Financial Results for 2005; Company Reports Net Income of $0.03 Per Share and Positive Income from Continuing Operations of $1.6 Million.DELRAY BEACH Delray Beach, resort city (1990 pop. 47,181), Palm Beach co., SE Fla., on the Atlantic coast; settled 1895, inc. 1911. Mostly residential, Delray Beach is also the trade center for a citrus-fruit and vegetable-growing region. , Fla. -- Applied Digital (Nasdaq: ADSX ADSX Applied Digital Solutions, Inc. (stock symbol) ), a provider of Security Through Innovation(TM), today reported financial results for the first-quarter ended March 31, 2005. The Company's consolidated financial results include the balance sheets, operating results and cash flows of its majority-owned subsidiaries majority-owned subsidiary A firm in which more than 50% of outstanding voting stock is owned by the parent company. , Digital Angel Corporation (AMEX AMEX See: American Stock Exchange : DOC See doc file and docs. 1. Doc - Directed Oc 2. doc - /dok/ Common spoken and written shorthand for "documentation". Often used in the plural "docs" and in the construction "doc file" (i.e. documentation available on-line). ) and InfoTech USA, Inc. (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). : IFTH IFTH Institut Français Textile-Habillement (French Textile and Apparel Institute) ). Revenue for the first quarter of 2005 was $21.9 million, a 17.4% decrease from the $26.5 million in revenue in the first quarter of 2004. The decrease in comparative quarterly revenue was primarily attributable to a decrease in revenue for the Company's wholly-owned subsidiary Government Telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , Inc., ("GTI GTI Gas Technology Institute GTI Global Taxonomy Initiative GTI Good Time Interval GTI Guelph Turfgrass Institute GTI Green Theme International GTI Gordon Training International GTI Georgia Transportation Institute GTI Group Travel Insurance "). The termination of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Postal Service postal service, arrangements made by a government for the transmission of letters, packages, and periodicals, and for related services. Early courier systems for government use were organized in the Persian Empire under Cyrus, in the Roman Empire, and in medieval contract in January 2005 contributed approximately $4.0 million of the decrease. Gross profit increased to approximately $8.2 million in the first quarter of 2005 compared to approximately $8.1 million in the first quarter of 2004, and gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. increased to 37.4% in the first quarter of 2005 compared to gross profit margins of 30.7% in the first quarter of 2004. Income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the first quarter of 2005 was $1.6 million, or $0.03 per share, compared to a loss from continuing operations of $(0.4) million or $(0.01) per share for the first quarter of 2004. Net income was $1.6 million, or $0.03 per share, compared to net income of $1.5 million, or $0.03 per share in the first quarter of 2004. Included in the results for the first quarters of 2005 and 2004 was an interest reduction of $2.3 million and $0.6 million, respectively, as a result of the quarter-to-quarter revaluation Revaluation A calculated adjustment to a country's official exchange rate relative to a chosen baseline. The baseline can be anything from wage rates to the price of gold to a foreign currency. In a fixed exchange rate regime, only a decision by a country's government (i.e. of certain of the Company's warrants, which are settleable in shares of the Digital Angel common stock owned by the Company. During the first quarters of 2005 and 2004, the Company also realized income of $1.3 million and $0.2 million, respectively, attributable primarily to the increase in the Company's ownership percentage of Digital Angel during each of these quarters. Commenting on the results, Scott R. Silverman, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. stated, "The highlight of the first quarter is clearly the evolution of VeriChip Corporation VeriChip Corporation, a wholly owned subsidiary of Applied Digital (Nasdaq: ADSX), markets a line of Radio Frequency Identification (RFID) Devices (including VeriChip) used in security, financial, emergency identification, and other applications. . In the six months since receiving clearance from the FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. to market VeriChip for medical applications, we have signed a leading distributor in Henry Schein Henry Schein Inc. is a Fortune 500 company based in Melville, New York. It is a distributor of healthcare products and services primarily to office-based healthcare practitioners in the North American and European markets. The Company operates in two business segments. Inc., supplied two high-profile hospitals with infrastructure for the VeriChip System, and completed the acquisition of eXI Wireless Since 1980, eXI Wireless Systems has developed and manufactured Radio Frequency IDentification (RFID) wireless systems. eXI's RFID products include HALO, RoamAlert, and Assetrac. eXI Wireless was acquired by VeriChip Corporation in April 2005. , which will dramatically increase VeriChip Corporation's revenue and access to distributors for VeriChip's implantable product. With this acquisition, VeriChip Corporation has become an RFID (Radio Frequency IDentification) A data collection technology that uses electronic tags for storing data. The tag, also known as an "electronic label," "transponder" or "code plate," is made up of an RFID chip attached to an antenna. company for people and their environments, which is a clear differentiator in the RFID sector." Silverman continued, "With a strong balance sheet containing over $26 million in cash at the end of the quarter, Applied Digital is well-positioned to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. many opportunities for VeriChip in both the healthcare and security sectors." Some of the highlights of the first quarter included: --Completion of eXI Wireless acquisition. Transaction enhances Company's product offerings and positions VeriChip as the first RFID company for people. --Expanded Hospital infrastructure: Hackensack University Medical University, based in New Jersey, agreed to initiate a clinical evaluation clinical evaluation Medtalk An evaluation of whether a Pt has symptoms of a disease, is responding to treatment, or is having adverse reactions to therapy program of the VeriChip System in its emergency department. CareGroup Healthcare Systems, the parent company of Beth Israel Deaconess Medical Center Both an international and regional referral center, Beth Israel Deaconess Medical Center (BIDMC) in Boston, Massachusetts is a major teaching hospital of Harvard Medical School. It was formed out of the 1996 merger of Beth Israel Hospital (founded in 1916) and , a Harvard Medical School Harvard Medical School (HMS) is one of the graduate schools of Harvard University. It is a prestigious American medical school located in the Longwood Medical Area of the Mission Hill neighborhood of Boston, Massachusetts. affiliate, has also agreed to install a VeriChip(TM) System in its emergency room. --Growing acceptance of VeriChip. Joseph E. Krull, CPP cpp - C preprocessor. , CISSP (Certified Information Systems Security Professional) The award for successful completion of an examination in computer security administered by the International Information Systems Security Certification Consortium (ISC)2. , IAM IAM - Interactive Algebraic Manipulation. Interactive symbolic mathematics for PDP-10. ["IAM, A System for Interactive Algebraic Manipulation", C. Christensen et al, Proc Second Symp Symb Alg Manip, ACM Mar 1971]. , an internationally recognized security and privacy authority, who received a VeriChip in the fourth quarter of 2004 has been joined by such high-profile individuals as John Halamka, M.D., Chief Information Officer, Harvard Medical School & CareGroup Health System and Jack Schmidig, Bergen County Chief of Police, as recipients. --Increased ownership position in Digital Angel the Company's majority-owned subsidiary: Applied Digital increased its ownership to 24.3 million shares, or 55.1%, from 23.6 million shares, or 54.5%, at the end of fiscal 2004. --Strong operating results at Digital Angel. Due to strength in its Animal Applications and GPS and Radio Communications businesses, Digital Angel's total revenue for the first quarter rose 24.1% to $13.4 million from $10.8 million in last year's first quarter. Net loss in the first quarter of this year declined to $0.5 million or a loss per share of $0.01, versus a net loss for the first quarter of 2004 of $3.7 million, or $0.12 loss per share on a separate company basis. The Company will host a conference call today at 4:30 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . Mr. Silverman, Michael Krawitz, Executive Vice President and General Counsel, Evan McKeown, Chief Financial Officer and Kevin H. McLaughlin, Chief Executive Officer of VeriChip Corporation, will host the call. Interested participants should call (800) 472-8309 when calling from the United States or (706) 643-9561 when calling internationally. Please reference Conference I.D. Number 5959467. There will be a playback Playback could mean:
This call is being webcast and can be accessed at Applied Digital's Web site at www.adsx.com until June 5, 2005. The conference call can be found under the subheadings, "Investor Relations Investor relations The process by which the corporation communicates with its investors. " and then "Audio Archives." About Applied Digital Applied Digital develops innovative security products for consumer, commercial, and government sectors worldwide. The Company's unique and often proprietary products provide security for people, animals, the food supply, government/military arena, and commercial assets. Included in this diversified diversified (di·verˑ·s product line are RFID applications, end-to-end food safety systems, GPS/Satellite communications, and telecomm and security infrastructure, positioning Applied Digital as the leader of Security Through Innovation. Applied Digital is the owner of a majority position in Digital Angel Corporation (AMEX: DOC). Statements about the Company's future expectations, including future revenues and earnings, and all other statements in this press release other than historical facts are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Reform Act of 1995. Such forward-looking statements involve risks and uncertainties and are subject to change at any time, and the Company's actual results could differ materially from expected results. The Company undertakes no obligation to update forward-looking statements to reflect subsequently occurring events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or .
APPLIED DIGITAL SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS DATA
(In thousands, except par value)
Assets
March 31, December 31,
2005 2004
----------------------
Current Assets (unaudited)
Cash and cash equivalents $26,162 $30,839
Restricted cash 182 327
Accounts receivable and unbilled receivables
(net of allowance for doubtful accounts of
$975 in 2005 and $810 in 2004) 16,767 16,553
Inventories 11,161 8,115
Notes receivable 320 621
Other current assets 7,483 2,237
----------------------------------------------------------------------
Total Current Assets 62,075 58,692
Property And Equipment, net 10,585 7,864
Notes Receivable, net 300 263
Goodwill, net 78,825 68,194
Other Assets, net 10,633 5,175
----------------------------------------------------------------------
$162,418 $140,188
======================================================================
Liabilities and Stockholders' Equity
Current Liabilities
Notes payable and current maturities of
long-term debt $2,201 $2,044
Accounts payable 12,658 9,318
Other accrued expenses 16,801 20,811
Net liabilities of Discontinued Operations 5,580 5,495
----------------------------------------------------------------------
Total Current Liabilities 37,240 37,668
Long-Term Debt and Notes Payable 3,971 2,288
Other Long-Term Liabilities 2,624 5,075
----------------------------------------------------------------------
Total Liabilities 43,835 45,031
----------------------------------------------------------------------
Commitments And Contingencies
----------------------------------------------------------------------
Minority Interest 54,489 54,313
----------------------------------------------------------------------
Stockholders' Equity
Preferred shares: Authorized 5,000 shares in
2005 and 2004 of $10 par value; special voting,
no shares issued or outstanding in 2005 and
2004, Class B voting, no shares issued or
outstanding in 2005 and 2004 - -
Common shares: Authorized 125,000 shares in
2005 and 2004, of $.01 par value; 62,498
shares issued and 62,398 shares outstanding in
2005 and 56,541 shares issued and 56,441
shares outstanding in 2004 625 565
Common and preferred additional paid-in capital 492,850 471,271
Accumulated deficit (429,613) (431,222)
Common stock warrants 2,427 2,882
Treasury stock (carried at cost, 100 shares in
2005 and 2004) (1,777) (1,777)
Accumulated other comprehensive income 310 402
Notes received from shares issued (728) (1,277)
----------------------------------------------------------------------
Total Stockholders' Equity 64,094 40,844
----------------------------------------------------------------------
$162,418 $140,188
======================================================================
APPLIED DIGITAL SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS DATA
(In thousands, except per share data)
(Unaudited)
For The Three
Months
Ended March 31,
----------------
2005 2004
----------------
Product revenue $18,134 $23,039
Service revenue 3,804 3,464
----------------------------------------------------------------------
Total revenue 21,938 26,503
Cost of products sold 12,184 16,740
Cost of services sold 1,555 1,625
----------------------------------------------------------------------
Gross profit 8,199 8,138
Selling, general and administrative expense 8,907 8,290
Research and development 1,300 925
Depreciation and amortization 426 452
Interest and other income (312) (466)
Interest expense reduction (2,160) (342)
----------------------------------------------------------------------
Income (loss) from continuing operations before taxes,
minority interest and gain (loss) attributable to
capital
transactions of subsidiary 38 (721)
Benefit (provision) for income taxes 13 (92)
----------------------------------------------------------------------
Income (loss) from continuing operations before
minority interest and gain (loss) attributable to
capital transactions of subsidiary 51 (813)
Minority interest 280 252
Net gain (loss) on capital transactions of subsidiary 380 (1,963)
Gain attributable to changes in minority interest as a
result of capital transactions of subsidiary 902 2,150
----------------------------------------------------------------------
Income (loss) from continuing operations 1,613 (374)
Loss from discontinued operations - (252)
Change in estimate on loss on disposal of discontinued
operations and operating losses during the phase out
period (4) 2,102
----------------------------------------------------------------------
Net income $1,609 $1,476
======================================================================
Income per common share - basic
Income (loss) from continuing operations $0.03 $(0.01)
Income from discontinued operations - 0.04
----------------------------------------------------------------------
Net income per common share - basic $0.03 $0.03
======================================================================
Income per common share - diluted
Income (loss) from continuing operations $0.03 $(0.01)
Income from discontinued operations - 0.04
----------------------------------------------------------------------
Net income per common share - diluted $0.03 $0.03
======================================================================
Weighted average number of common shares outstanding -
basic 56,871 48,580
Weighted average number of common shares outstanding -
diluted 56,871 48,580
======================================================================
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion