SAN DIEGO, CA--(Marketwired - May 11, 2015) - ImageWare Systems, Inc. (OTCQB: IWSY) (ImageWare), a leader in mobile and cloud-based, multi-modal biometric identity management solutions, has issued financial results for the first quarter ended March 31, 2015.
"ImageWare's strategy to target large IT service providers and deliver security for their cloud customers remains on track," said Jim Miller, chairman and CEO of ImageWare. "Ultimately, our model is dependent upon our partners and we have formed very significant relationships with Fujitsu, TransUnion, CA Technologies, IBM, Deutsche Telekom and, more recently, with Agility and Extenua. All of these partners remain in the testing and implementation phase, and they have reiterated their commitment to ImageWare.
"While we certainly expected some of these agreements to be producing revenues today, it is important to note that we are dealing with large organizations that are thoughtful and methodical about the rollout of our transformational software. In some cases, they are building and refining their sales and marketing strategy, which will serve as the basis for product rollout. And in other cases, they have a plan to incorporate our software into new products that they need to still develop.
"During the first quarter, however, we completed our first SaaS installation and began to generate revenue on a per transaction basis with our on premise production version of GoCloudID. This system was deployed for the Baja California Driver's License program, providing fingerprint and facial recognition biometrics for over 80,000 current users and supporting production of additional users at the rate of 15,000-20,000 per month.
"We have also recently entered in to advanced discussions with other large, private sector organizations that would build on the seven commercial partners we have signed currently. The size of many of our partners, and their ability to touch hundreds of millions of users around the globe, is what drives our strong outlook. As such, we remain undeterred by the pace of the rollout and steadfast in our goal to transition ImageWare in to a commercial-based provider of biometrics-as-a-service -- a transition we expect to drive significant shareholder value."
First Quarter 2015 Financial Results
Total revenues in the first quarter of 2015 decreased to $1.0 million from $1.1 million in the first quarter of 2014, primarily due to lower hardware revenue and lower royalty revenue from the company's channel partners.
Gross margin in the first quarter of 2015 decreased by 530 basis points to 71.1% compared to 76.4% in the first quarter of 2014. The decrease was primarily due to lower high margin software and royalty product revenues, and higher services revenue, which have inherently lower margins.
Net loss in the first quarter of 2015 was $2.3 million or ($0.03) per basic share, compared to a net loss of $1.7 million or ($0.02) per basic share in the first quarter of 2014.
At March 31, 2015, cash and cash equivalents totaled $8.4 million compared to $0.2 million at December 31, 2014. On February 6, 2015, ImageWare completed a registered direct offering of convertible preferred stock for $12.0 million. The company used approximately $2.0 million of the proceeds to repay all outstanding debt, and will use the remaining net proceeds of approximately $9.9 million for research and development, and other general corporate purposes.
ImageWare will hold a conference call today at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to discuss its first quarter 2015 results. The company's Chairman and CEO Jim Miller and CFO Wayne Wetherell will host the conference call, followed by a question and answer period.
Date: Monday, May 11, 2015
Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
Toll-free dial-in number: 1-888-208-1427
International dial-in number: 1-913-312-0672
Conference ID: 8766137
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.
A replay of the conference call will be available after 8:00 p.m. Eastern time today through June 11, 2015.
Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 8766137
About ImageWare Systems, Inc.
ImageWare Systems, Inc. (OTCQB: IWSY) is a leading developer of mobile and cloud-based identity management solutions, providing biometric, secure credential and law enforcement technologies. Scalable for worldwide deployment, ImageWare's biometric product line includes a multi-biometric engine that is hardware and algorithm independent, enabling the enrollment and management of unlimited population sizes. ImageWare's identification products are used to manage and issue secure credentials, including national IDs, passports, driver's licenses, smart cards and access control credentials. ImageWare's digital booking products provide law enforcement with integrated mug shot, fingerprint livescan and investigative capabilities. ImageWare is headquartered in San Diego, CA, with offices in Portland, OR, Washington, D.C., and Ottawa, Ontario. For more information on ImageWare Systems, Inc., please visit www.iwsinc.com.
Forward Looking Statements
Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "believe," "estimate," "expect," "forecast," "intend," "may," "plan," "project," "predict," "if," "should" and "will" and similar expressions as they relate to ImageWare Systems, Inc. ("ImageWare") are intended to identify such forward-looking statements. ImageWare may from time to time update these publicly announced projections, but it is not obligated to do so. Any projections of future results of operations should not be construed in any manner as a guarantee that such results will in fact occur. These projections are subject to change and could differ materially from final reported results. For a discussion of such risks and uncertainties, see "Risk Factors" in ImageWare's Annual Report on Form 10-K for the fiscal year ended December 31, 2014 and its other reports filed with the Securities and Exchange Commission under the Securities 3 Exchange Act of 1934, as amended. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.
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