Intrusion Inc. Reports Revenue of $1.7 Million in the Third Quarter of 2017

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Wednesday, November 15th, 2017

RICHARDSON, Texas, Nov. 13, 2017 (GLOBE NEWSWIRE) -- Intrusion Inc. (OTCQB:INTZ), (“Intrusion”) announced today financial results for the three and nine months ended September 30, 2017.

Intrusion’s net income was $568 thousand in the third quarter 2017 compared to a net loss of $280 thousand in the third quarter 2016.  Included in the third quarter 2017 net income was $928 thousand of other income, which included $872 thousand from the sale of certain IP addresses that were not currently being used in the Company’s business operations and were not required for the Company’s future business plans.

Intrusion’s revenue for the third quarter 2017 was $1.7 million compared to $1.6 million in the third quarter 2016 and $1.6 million for the second quarter 2017.

Gross profit was $0.9 million or 56 percent of revenue in the third quarter of 2017 compared to $1.0 million or 62 percent of revenue in the third quarter 2016 and $0.9 million or 59% of revenue in the second quarter 2017.  The reduction of gross profit percentage is primarily due to projects having more hardware than in past orders.  A gross profit margin on these projects is lower than projects composed of software and labor only.

Intrusion’s third quarter 2017 operating expenses were $1.3 million compared to $1.2 million in the third quarter 2016 and $1.3 million in the second quarter 2017.

As of September 30, 2017, Intrusion reported cash and cash equivalents of $0.3 million, a working capital deficiency of $1.0 million and debt of $3.0 million. 

“Orders booked in the third quarter 2017 were $1.6 million; however, we have already booked $2.9 million of orders in the fourth quarter.  These fourth quarter orders are expected to increase revenue by $0.6 million per quarter,” stated G. Ward Paxton, President and CEO of Intrusion.

Intrusion’s management will host its regularly scheduled quarterly conference call to discuss the Company’s financial and operational progress at 4:00 P.M., CST today.  Interested investors can access the call at 1-877-258-4925 (if outside the United States, 1-973-500-2152).  For those unable to participate in the live conference call, a replay will be accessible beginning today at 7:00 P.M., CST until November 20, 2017 by calling 1-855-859-2056 (if outside the United States, 1-404-537-3406).  At the replay prompt, enter conference identification number 4649089.  Additionally, a live and archived audio webcast of the conference call will be available at www.intrusion.com.

About Intrusion Inc.

Intrusion Inc. is a global provider of entity identification, high speed data mining, cybercrime and advanced persistent threat detection products.  Intrusion’s product families include TraceCop™ for identity discovery and disclosure, and Savant™ for network data mining and advanced persistent threat detection.  Intrusion’s products help protect critical information assets by quickly detecting, protecting, analyzing and reporting attacks or misuse of classified, private and regulated information for government and enterprise networks.  For more information, please visit www.intrusion.com.

This release may contain certain forward-looking statements, which reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties.  Such statements include, without limitations, statements regarding future revenue growth and profitability, including significant expected future revenue from orders booked in fourth quarter of this year, forecasted future sales opportunities with potential new customers, the difficulties in forecasting future sales caused by current economic and market conditions, the effects of sales and implementation cycles for our products on our quarterly results and difficulties in accurately estimating market growth, the effect of military actions on government and corporate spending on information security products, spending patterns of, and appropriations to, U.S. government departments, as well as other statements.  These statements are made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements.  The factors that could cause actual results to differ materially from expectations are detailed in the Company's most recent reports on Form 10-K and Form 10-Q, particularly under the heading “Risk Factors.”

INTRUSION INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands except par value amounts)
           
  September 30,   December 31,
  2017   2016
ASSETS      
       
Current Assets:      
Cash and cash equivalents $ 263     $ 64  
Accounts receivable 879     745  
Inventories, net 30     45  
Prepaid expenses 37     75  
Total current assets 1,209     929  
       
Property and equipment, net 162     308  
Other assets 38     40  
TOTAL ASSETS $ 1,409     $ 1,277  
       
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
           
Current Liabilities:      
Accounts payable and accrued expenses $ 1,060     $ 896  
Dividends payable 411     303  
Obligations under capital lease, current portion 70     139  
Deferred revenue 658     395  
Total current liabilities 2,199     1,733  
       
Loan payable to officer 2,865     2,885  
Obligations under capital lease, noncurrent portion 22     61  
       
Stockholders' Deficit:      
Preferred stock, $.01 par value:      
Authorized shares – 5,000      
Series 1 shares issued and outstanding–200 in 2017 and 2016      
Liquidation preference of $1,150 in 2017 and $1,113 in 2016 707     707  
Series 2 shares issued and outstanding–460 in 2017 and 2016      
Liquidation preference of $1,313 in 2017 and $1,270 in 2016 724   724  
Series 3 shares issued and outstanding–289 in 2017 and 2016      
Liquidation preference of $720 in 2017 and $697 in 2016 412   412  
     
Common stock, $.01 par value:      
Authorized shares – 80,000      
Issued shares – 12,808 in 2017 and 12,758 in 2016      
Outstanding shares – 12,798 in 2017 and 12,748 in 2016 128   128  
Common stock held in treasury, at cost – 10 shares (362 )   (362 )
Additional paid-in capital 56,541     56,595  
Accumulated deficit (61,720 )   (61,499 )
Accumulated other comprehensive loss (107 )   (107 )
Total stockholders' deficit (3,677 )   (3,402 )
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 1,409     $ 1,277  
           

 

INTRUSION INC.  
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
(In thousands except per share amounts)  
   

 
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
 
     2017   2016   2017   2016  
Revenue   $ 1,678   $ 1,595   $ 4,780   $ 4,693  
Cost of revenue   736   610   1,951   1,677  
                   
Gross profit   942   985   2,829   3,016  
                   
Operating expenses:                  
Sales and marketing   394   429   1,169   1,276  
Research and development   617   508   1,797   1,908  
General and administrative   242   292   855   941  
                   
Operating income (loss)   (311 ) (244 ) (992 ) (1,109 )
                   
Other Income   928     928    
Interest expense, net   (49 ) (36 ) (157 ) (102 )
                   
Net income (loss)   $ 568   $ (280 ) $ (221 ) $ (1,211 )
                                     
Preferred stock dividends accrued   (35 ) (35 ) (104 ) (104 )
Net income (loss) attributable to common stockholders   $ 533   $ (315 ) $ (325 ) $ (1,315 )
                   
Net income (loss) per share attributable to common stockholders:                  
Basic   $ 0.04   $ (0.02 ) $ (0.03 ) $ (0.10 )
Diluted   $ 0.04   $ (0.02 ) $ (0.03 ) $ (0.10 )
                   
Weighted average common shares outstanding:                  
Basic   12,798   12,748   12,781   12,733  
Diluted   14,076   12,748   12,781   12,733  
                   

 

CONTACT: Financial Contact
Michael L. Paxton, VP, CFO
972.301.3658, mpaxton@intrusion.com

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