I have followed International Totalizer (ITSI OTC BB .50/.78) for years. They used to be a significant high flyer. I have always thought they could get back on top again. This second qtr (3 months ended Oct 31, 2001)certainly helps matters. Also, going forward they will continue to ship on one very large and several smaller contracts for the remainder of the year so I expect continued good numbers.
Rev was $6.3m against $1.06m and net inc was $1.28m against loss of ($1.8m). Per sh was plus 12 cents against loss of 14 cents. That's a swing of $3m loss to profit in comparable qtrs.
Their contracts historically come in as large as $15 to $20m or as small as $500k or so. This can cause uneven performance. But for now the road looks straight. This q came out last nite and there is no press release yet or indication of the filing at Yahoo. I would imagine they will want to release this qtr as they historically do release results. You can get the filing at edgar. Some of the buying today was mine.
Results of Operations
Second Quarter
Product sales in the three month period ending October 31, 2001 were $6.3 million compared to $1.1 million for the same period in 2000. In the three months ended October 31, 2001, contract revenue of $5.9 million was recognized from four different customers, including $3.9 million from one $16.6 million contract. The prior period included $0.7 million in contract revenue primarily from one customer. Sales from terminal spares for the three months ended October 31, 2001 was $0.5 million from 7 customers compared to $0.4 million from 11 customers for the three months ended October 31, 2000.
Service revenues decreased from $884,000 for the three months ended October 31, 2000 to $25,000 for the comparable three month period in 2001. This decrease resulted from revenues generated through the Company’s UK subsidiary for facilities management to GTL that were discontinued in October 2000.
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Table of Contents
Gross profit on product sales for the three month period ending October 31, 2001 was $2.7 million compared with a gross profit on product sales of $0.6 million for the same period in 2000. The improvement was due to a better mix of larger contracts in the current period. Gross profit on service revenues for the three month period ending October 31, 2001 was $19,000 compared to a gross profit of $542,000 for the same period in 2000. This decrease resulted from revenues generated through the Company’s UK subsidiary for facilities management to GTL that were discontinued in October 2000.
Engineering, research and development expenses for the three month period ending October 31, 2001 were $513,000 compared to $444,000 for the comparable three month period in 2000. Selling, general and administrative expenses for the three month period ending October 31, 2001 decreased $1.6 million compared to 2000 expenses of $2.5 million. The prior period included estimated bad debt expense of $1.7 million related to the GTL contract which was reversed in a subsequent period.
Other income (expense), net was $34,000 for the 2001 three month period compared to $50,000 for the 2000 period. In both periods, other income (expense) consists primarily of interest income. The reduction relates to decreases in the interest rate.
The provision for income taxes is based on minimum tax requirements. A minimal provision has been recorded in the three month period ending October 31, 2001.
Liquidity and Capital Resources
During the six month period ended October 31, 2001, the Company generated $0.7 million of cash from operations. Investment in equipment used $0.1 million leaving an increase in cash and cash equivalents for the period of $0.6 million.
The accounts receivable increased $2.1 million to $3.3 million during the six month period ended October 31, 2001 due to invoicing on new contracts. During the same period, inventory decreased $1.9 million primarily due to the use of finished goods for current contracts. The accounts payable decrease of $0.8 million reflects timing between major contracts and associated costs. The net of Costs and estimated earnings in excess of billings on uncompleted contracts and Billings in excess of costs and estimated earnings on uncompleted contracts was $0.2 million. Changes between the accounts are based on old contracts near completion and new contracts starting up.
The Company will deliver a large number of terminals and software related to the $16.6 million contract signed in August 2001 over the next four months. This will provide significant cash flow over the next six months. |
