Applied Digital Solutions Reports First Quarter 2002 Results - Company is EBITDA Positive for First Quarter.Business Editors/High Tech Writers PALM BEACH, Fla.--(BUSINESS WIRE)--May 21, 2002 Applied Digital Solution's first quarter results were in compliance with the Company's senior lender financial debt covenants Applied Digital Solutions, Inc. (Nasdaq: ADSX ADSX Applied Digital Solutions, Inc. (stock symbol) ), an advanced technology development company, today released financial results for the first quarter ended March 31, 2002. As a result of the company changing auditors, the first quarter results have not yet been reviewed by auditors. The company is in the process of selecting an auditor and a subsequent review will be performed when the new auditor is appointed. Yesterday's first quarter 10-Q filing reflects a one-time non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. related to the merger of Digital Angel Corporation with Medical Advisory Systems, Inc. As previously announced, the Company has requested an interpretation from the Securities and Exchange Commission related to the charge. The Company expects to file a Form 10-Q/A following a review by the new auditor and any interpretation by the SEC. For the three months ended March 31, 2002, Applied Digital Solutions was EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become positive on a consolidated basis. EBITDA is consolidated earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis, the 10-Q as filed reflects a net loss for the first quarter of 2002 of $17.0 million, or $.07 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , compared to a net loss of $11.2 million, or $.13 cents per share for the first quarter of 2001. Revenue 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 in the first quarter of 2002 was $29.2 million. For the same three-month period in 2001, the company recorded revenue from continuing operations of $47.4 million. The decrease in comparative quarterly revenues was primarily the result of the sale or closure of business units in 2001. Commenting on the first quarter financial results, Scott R. Silverman, President of Applied Digital Solutions stated: "We are pleased with our first quarter financial results, primarily because we believe it reflects a turning point in the operating performance of the Company. The results demonstrate the early success of our new business model and corporate restructuring. Since we are retaining new auditors and asking the SEC for an interpretation of one-time non-cash items related to the Digital Angel merger, we will be filing a 10-Q/A. Regardless of the interpretation by the SEC, we were in compliance with our financial covenants contained in our senior credit facility. Some highlights of the first quarter are as follows: -- The company reported positive EBITDA. -- SG&A expenses, excluding one-time, non-cash gains and charges related to the Digital Angel merger, are now 29% of revenue compared to 37% for the same quarter last year. -- During the first quarter the Company was in compliance with its senior lender financial debt covenants. As we continue to develop our new business strategy as an advanced technology development company, we look forward to continued improvement in operating results and increased shareholder value. We look to create new sources of revenue as we roll out new, life-enhancing technologies like VeriChip(TM) and Thermo Life(TM) and others in the months and years ahead." About VeriChip(TM) VeriChip, first announced on December 19, 2001, was successfully launched in the U.S. market on May 10, 2002. VeriChip is a miniaturized, implantable, radio frequency identification See RFID. device (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. ) that can be used in a variety of security, emergency and healthcare applications. About the size of a grain of rice, each VeriChip contains a unique verification number. That number is captured by briefly passing a proprietary, external scanner over the VeriChip. A small amount of radio frequency energy passes through the skin energizing energizing, adj giving energy to; revitalizing; rejuvenating. the dormant VeriChip, which then emits a radio frequency signal transmitting the verification number. The company believes its first-mover advantage First-mover advantage is the advantage gained by the initial occupant of a market segment. This advantage may stem from the fact that the first entrant can gain control of resources that followers may not be able to match. will enable it to gain significant market share in the emergency information and verification market that is estimated to exceed $15 billion. VeriChip Corporation is a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Applied Digital Solutions. About Digital Angel(TM) Digital Angel(TM) technology represents the first-ever combination of advanced biosensors and Web-enabled wireless telecommunications linked to the Global Positioning System Global Positioning System: see navigation satellite. Global Positioning System (GPS) Precise satellite-based navigation and location system originally developed for U.S. military use. (GPS). By utilizing advanced biosensor A device that detects and analyzes body movement, temperature or fluids and turns it into an electronic signal. See lab on a chip and data glove. Biosensor capabilities, Digital Angel will be able to monitor key body functions - such as temperature and pulse - and transmit that data, along with accurate emergency location information, to a ground station or monitoring facility. Digital Angel Corporation (Amex: DOC) was formed on March 27, 2002, in a merger between Digital Angel Corporation and Medical Advisory Systems, a global leader in telemedicine that has operated a 24/7, physician-staffed call center in Owings, Maryland, for two decades. Prior to the merger, Digital Angel Corporation was a wholly owned subsidiary of Applied Digital Solutions. Applied Digital Solutions is the beneficial owner Beneficial Owner A person who enjoys the benefits of ownership even though title is in another name. Notes: For example, when shares of a mutual fund are held by a custodian bank or when securities are held by a broker in street name, the true owner is the beneficial of 19.6 million shares of Digital Angel Corporation. For more information about Digital Angel, visit www.digitalangel.net. About Thermo Life(TM) Thermo Life is a proprietary, thermoelectric ther·mo·e·lec·tric also ther·mo·e·lec·tri·cal adj. Characteristic of, resulting from, or using electrical phenomena occurring in conjunction with a flow of heat. generator powered by body heat. Thermo Life is intended to provide a miniaturized power source for a wide range of consumer electronic devices, including attachable or implantable medical devices and wristwatches. About Computer Equity, Inc. and Government Telecommunications, 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 ) Computer Equity, Inc. (Compec) - including its subsidiary, GTI - is a wholly owned subsidiary of Applied Digital Solutions. With a revenue base that exceeds $30 million, Compec specializes in providing a full array of telecommunications, wireless and network integration services to government agencies. Compec's customers include major agencies of the Federal government such as the Social Security Administration, the Department of Justice and the Department of Defense. About Applied Digital Solutions, Inc. Applied Digital Solutions (Nasdaq: ADSX) is an advanced technology development company that focuses on a range of early warning alert, miniaturized power sources and security monitoring systems combined with the comprehensive data management services required to support them. Through its Advanced Technology Group, the company specializes in security-related data collection, value-added data intelligence and complex data delivery systems for a wide variety of end users including commercial operations, government agencies and consumers. For more information, visit the company's website at http://www.adsx.com. 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" 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. |
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