InVision Technologies Reports Strong Third-quarter Results; Net Income More Than Doubles Previous Quarter
Business Editors/High-Tech Writers
NEWARK, Calif.--(BUSINESS WIRE)--Oct. 22, 2002--InVision
Technologies, Inc. (Nasdaq: INVN) today reported results for the third
quarter ended September 29, 2002. For the quarter, InVision reported
total revenues of $117.1 million compared to revenues of $16.4 million
in the third quarter of 2001 and $68.4 million in the second quarter
of 2002.
Third quarter net income was $21.5 million, or $1.17 per diluted
share, compared to $447,000, or $0.03 per diluted share, for the third
quarter of 2001, and compared to $9.6 million, or $0.52 per diluted
share, for the second quarter of 2002.
Gross margin in the third quarter was 43% of revenues compared to
33% in the same period last year, and 42% of revenues in the second
quarter of 2002.
For the third quarter, operating expenses were $14.7 million, or
13% of revenues, compared with $5.2 million, or 32% of revenues, in
the third quarter of 2001. In the second quarter of 2002, InVision's
operating expenses were $11.4 million, or 17% of revenues.
For the first nine months of fiscal 2002, InVision reported
revenues of $218.7 million compared with revenues of $51.3 million in
the first nine months of fiscal 2001. The company reported net income
of $33.9 million, or $1.93 per diluted share, for the first nine
months of fiscal 2002, versus $680,000 or $0.05 per diluted share, in
the first nine months of fiscal 2001.
As of September 29, 2002, total company backlog was $471.5
million, of which $457.2 million was for explosives detection systems
(EDS) products and services, including $87.7 million in orders
announced on October 3, 2002 from the U.S. Transportation Security
Administration (TSA). Of the EDS backlog, 82% was from the TSA, with
the remainder from international customers. The backlog of TSA orders
is not subject to ongoing federal budget negotiations, as these funds
have already been appropriated.
"Third quarter revenues actually exceeded the sum of revenues for
the first six months of this year and for the full year 2001," said
Sergio Magistri, Ph.D., InVision's president and chief executive
officer. "In addition to successfully managing the logistical
challenges of rapid growth, we are very pleased with our ability to
leverage our existing infrastructure and increase profitability," he
said.
"Looking forward, we expect fourth-quarter revenues of at least
$140 million and earnings of at least $1.30 per diluted share. With
our current backlog, and the indications we are seeing from the U.S.
government for continued spending on explosives detection systems next
year, we anticipate 2003 revenues of $400 million or better. We
believe that strong demand for our in-line EDS is sustainable through
2004, and possibly longer, depending on how quickly in-line EDS is
integrated into the baggage handling systems of larger U.S. airports,"
he said. "Based on the evolution of EDS demand worldwide, the time
required for implementing in-line EDS systems, and our expectations
for increasing service revenues, we expect 2004 revenues to be at our
estimate of revenues for 2003 or better."
He added, "Through the year 2003, quarterly revenues may be uneven
quarter-over-quarter as we work with our customers to accommodate
their requirements on timing of deliveries and legislative deadlines."
"We base our outlook on several factors, most importantly the line
item in current proposed House appropriations bills for EDS spending
in 2003 of $452 million, our current firm and funded backlog, and the
strong statements made by many large U.S. airports in favor of
integrated baggage handling systems using EDS like our CTX 9000 DSi
model," he said. "In order to achieve the goal of 100% baggage
screening, these airports have already begun to design in-line systems
and to petition the TSA for the EDS that will make them work," Dr.
Magistri indicated that the 2003 federal budget is not approved and
that results could vary materially from current projections.
At the end of the quarter, InVision's cash balance was
approximately $111.7 million, down from $187.0 million in cash at the
end of the second quarter. The decrease in the cash balance is
primarily attributable to the timing of collections from the TSA and
increases in receivables and inventories during the quarter. Cash
balances normally fluctuate in the regular course of InVision's
business.
Current highlights
-- Since March, InVision has announced TSA orders for 625
complete systems across InVision's full product line. Orders
from that agency total $512.9 million for the first nine
months of the year;
-- InVision continues to see solid indications of strong
international demand. Year to date, $72.1 million in orders
have been received from customers outside of the U.S.;
-- During the third quarter, InVision's manufacturing
subcontractor, CoorsTek, manufactured CTX 2500 and CTX 5500 DS
model EDS units in its own facility. In addition, CoorsTek
continued to manage the flow of materials from components
vendors for production in its factory and in InVision's
factory on these two CTX EDS models;
-- CoorsTek took over management of materials for the CTX 9000
DSi EDS. This move supports expanded production for the CTX
9000 DSi, InVision's fastest EDS used principally for
integrated airport solutions;
-- During the quarter the total headcount related to EDS products
and service went to 493 from 425, an increase of 16%;
-- During the quarter, InVision increased the headcount of its
EDS service organization by 23%. Several parts depots are
being established to support systems deployed globally; and
-- Phil Tusa joined the management team as Vice President of
Marketing, a new position. Subsequent to the end of the third
quarter, Don Francis joined InVision as Chief Information
Officer, also a new position.
InVision Technologies, Inc. will webcast a presentation regarding
these results and InVision's outlook for the future over the Internet
at 1:45 pm (PT) today. To listen, please log on to
www.InVision-tech.com, and follow the link that will be posted on the
front page. A replay of the webcast will be available shortly after
the presentation and will remain available through midnight (ET) on
October 29, 2002.
InVision Technologies develops, manufactures, markets and supports
explosives detection systems based on advanced Computed Tomography
(CT) technology for civil aviation security. InVision's wholly owned
subsidiary Quantum Magnetics develops weapons, narcotics, explosives
and other detection systems based on quadrupole resonance and other
proprietary magnetic sensing technologies. InVision's wholly owned
subsidiary Inovec develops, manufactures, markets and supports
scanning, optimization and control systems for the forest products
industry. Additional information about InVision can be obtained on the
company's web site at invision-tech.com.
This news release contains forward-looking statements including
statements regarding InVision's projected future financial results,
InVision's expectations that U.S. demand for the CTX 9000 DSi EDS will
continue beyond this year, that international demand for InVision's
EDS will remain strong, InVision's expectation of increasing service
revenues, and InVision's belief that quarterly revenues in 2003 will
be uneven. Investors are cautioned to consider the important risk
factors that could cause actual results to differ materially from
those in the forward-looking statements in this news release. These
risk factors include: the risk that InVision may not be able to obtain
in a timely manner components necessary to build the number of EDS
units it expects to build; the risk that the U.S. government
terminates or decreases any of its orders either for its convenience
or if InVision defaults by failing to perform in accordance with the
contract schedule and terms; the risk that InVision may not be able to
sustain or increase its manufacturing capacity due to unanticipated
staffing or other problems; the risk that InVision's manufacturing
subcontractors cannot perform as anticipated; the risk that the 2003
federal budget will be approved at a level below the current House
proposal of $452 million for EDS purchases; the risk that U.S.
airports will not implement plans to build automated baggage handling
systems incorporating InVision's CTX 9000 DSi EDS; the risk that
service revenues do not increase as expected, and other risks detailed
under the captions "Business Risks" or "Risk Factors" in InVision's
most recent reports on Forms 10-Q and 10-K/A filed with the Securities
and Exchange Commission. InVision is under no obligation, and
expressly disclaims any obligation, to update or alter its
forward-looking statements whether as a result of new information,
future events or otherwise.
Note to Editors: CTX, CTX 2500, CTX 5500 DS and CTX 9000 DSi are
trademarks of InVision Technologies, Inc.
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InVision Technologies, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
--------------------------------------
Sept. 29, Sept. 30, Sept. 29, Sept. 30,
2002 2001 2002 2001
-------- -------- -------- --------
Revenues:
Product revenues $111,159 $ 8,806 $199,255 $ 30,614
Service revenues 3,567 3,037 10,456 8,441
Government contract revenues 2,334 4,561 8,973 12,246
-------- -------- -------- --------
Total revenues 117,060 16,404 218,684 51,301
-------- -------- -------- --------
Cost of revenues:
Product costs 62,860 5,647 112,784 19,003
Service costs 2,598 1,694 7,906 5,393
Government contract costs 1,559 3,710 6,091 9,787
-------- -------- -------- --------
Total cost of revenues 67,017 11,051 126,781 34,183
-------- -------- -------- --------
Gross profit 50,043 5,353 91,903 17,118
-------- -------- -------- --------
Operating expenses:
Research and development 5,762 1,927 14,219 6,684
Selling, general and
administrative 8,897 3,278 20,931 9,889
-------- -------- -------- --------
Total operating expenses 14,659 5,205 35,150 16,573
-------- -------- -------- --------
Income from operations 35,384 148 56,753 545
Interest expense (107) (76) (316) (224)
Interest and other income, net 510 388 373 493
-------- -------- -------- --------
Income before provision
for income taxes 35,787 460 56,810 814
Provision for income taxes 14,314 13 22,912 134
-------- -------- -------- --------
Net income $ 21,473 $ 447 $ 33,898 $ 680
======== ======== ======== ========
Net income per share:
Basic $ 1.28 $ 0.03 $ 2.16 $ 0.05
======== ======== ======== ========
Diluted $ 1.17 $ 0.03 $ 1.93 $ 0.05
======== ======== ======== ========
Weighted average shares outstanding:
Basic 16,740 13,046 15,671 12,871
Diluted 18,430 13,992 17,561 13,856
InVision Technologies, Inc.
Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)
September 29, December 31,
2002 2001
--------- --------
Assets
Current assets:
Cash and cash equivalents $ 111,711 $ 11,386
Short-term investments -- 1,992
Accounts receivable, net 90,164 27,239
Inventories 82,921 27,104
Deferred income taxes 9,396 4,082
Other current assets 29,044 5,464
--------- ---------
Total current assets 323,236 77,267
Property and equipment, net 6,648 5,713
Deferred income taxes 1,288 2,237
Intangible assets, net 3,782 4,011
Other assets 158 505
--------- ---------
Total assets $ 335,112 $ 89,733
========= =========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 27,352 $ 8,375
Accrued liabilities 41,191 12,822
Deferred revenue 76,753 4,377
Short-term debt 567 1,880
Current maturities of
long-term obligations 155 179
--------- ---------
Total current liabilities 146,018 27,633
Long-term obligations 658 680
--------- ---------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value,
5,000,000 shares authorized; no
shares issued and outstanding -- --
Common stock, $0.001 par value,
60,000,000 and 20,000,000 shares
authorized; 17,034,000 and 13,730,000
shares issued; 16,799,000 and
13,539,000 shares outstanding 17 14
Additional paid-in capital 161,598 66,011
Deferred stock compensation expense (440) --
Accumulated other comprehensive loss (985) --
Retained earnings (accumulated
deficit) 30,440 (3,458)
Treasury stock, at cost (235,000
and 191,000 shares) (2,194) (1,147)
--------- ---------
Total stockholders' equity 188,436 61,420
--------- ---------
Total liabilities and
stockholders' equity $ 335,112 $ 89,733
========= =========
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CONTACT: InVision Technologies, Inc.
Jordan Goldstein, 510/739-2448
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: AEROSPACE/DEFENSE COMPUTERS/ELECTRONICS EARNINGS
SOURCE: InVision Technologies, Inc.
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Oct-22-2002 20:16 GMT
Symbols:
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