Applied Digital Solutions (NASDAQ:ADSXD)
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Digital Angel Corporation Announces First-Quarter 2004 Results
SO. ST. PAUL, Minn., May 3 /PRNewswire-FirstCall/ -- Digital Angel Corporation
, an advanced technology company in the field of rapid and accurate
identification, location tracking, and condition monitoring of high-value
assets, today announced results for its first quarter ended March 31, 2004.
First-quarter 2004 total revenues were $11.1 million, down slightly from
first-quarter 2003 revenues of $11.4 million. Net loss per basic and diluted
share for the first quarter of 2004 was $0.12, versus a break-even result for
the first quarter of 2003.
First-quarter 2004 results were negatively affected by a non-operating charge
of $2.6 million to recognize realized and unrealized losses on an investment in
common shares of Applied Digital Solutions, Inc. (NASDAQ:ADSXD), made pursuant
to a share exchange transaction with Applied Digital agreed to in August of
2003, and that became effective in February 2004. Applied Digital Solutions is
a majority owner of Digital Angel Corporation.
Digital Angel CEO Kevin McGrath stated, "I'm pleased by our results for the
quarter. Operationally, we are performing well and, despite the negative
financial impact of the Applied Digital share exchange described above, that
transaction allows us to continue to strengthen our balance sheet and fund our
requirements for the year ahead. Moreover, I can say that the entire management
team is focused on growing revenue in areas with good near term margin
opportunity."
McGrath continued, "We also completed the sale of the Medical Advisory Services
assets in April. This transaction reflects our commitment to focus on our core
revenue generating units and activities."
Chief Financial Officer Jim Santelli commented, "Our first-quarter operating
results were in line with our plan and our balance sheet strengthened
considerably during the quarter, primarily as a result of an increase in our
cash as we began to sell the Applied Digital shares. The sale of the Medical
Advisory Services assets is expected to have a favorable impact on our income
statement for the fiscal year, but will have a modestly negative effect in the
second quarter as we record shutdown expenses related to that operation. We
are maintaining our focus on balance sheet improvements and we believe we have
adequate working capital to continue to execute our strategic plan for the
balance of 2004."
Results Conference Call
A conference call for institutional investors to discuss the results for the
first quarter of fiscal year 2004 will take place today at 3:00 PM EDT, and
will be broadcast live over the Internet. The live webcast may be accessed by
visiting the Company's site at http://www.digitalangelcorp.com/ or by going to
http://www.vcall.com/. Web participants are encouraged to go to these sites at
least 15 minutes prior to the start of the call to register, download, and
install any necessary audio software. An online archive will be available
immediately following the call and will continue to be available for ninety
days thereafter.
About Digital Angel Corporation
Digital Angel Corporation develops and deploys sensor and communications
technologies that enable rapid and accurate identification, location tracking,
and condition monitoring of high-value assets. Applications for the Company's
products include identification and monitoring of pets, fish and livestock
through its patented implantable microchips; location tracking and message
monitoring of vehicles and aircraft in remote locations through systems that
integrate GPS and geosynchronous satellite communications; and monitoring of
asset conditions such as temperature and movement, through advanced miniature
sensors.
Digital Angel Corporation is majority-owned by Applied Digital Solutions, Inc.
(NASDAQ:ADSXD). For more information about Digital Angel, please visit
http://www.digitalangelcorp.com/.
For further information please contact: investors, Jay F. McKeage,
+1-212-691-8087, , or media, Len Hall, +1-949-474-4300, , both of Allen & Caron
Inc, for Digital Angel Corporation.
The statements in this press release that are not strictly historical, are
"forward-looking" statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934
and are intended to be covered by the safe harbors created by these sections.
The forward-looking statements are subject to risks and uncertainties and the
actual results that the Company achieves may differ materially from these
forward-looking statements due to such risks and uncertainties, including, but
not limited to, that recent changes in the Company's senior management could
have an adverse effect on the Company's financial results that the Company's
stockholders will experience dilution if certain debt owned by the Company is
converted into common stock; the risk of foreclosure on substantially all of
the Company's assets; that the Company's majority stockholder, Applied Digital
Solutions, Inc. is able to completely control the board of directors and may
support actions that conflict with the interests of other stockholders; that
the Company's earnings will decline if it writes off additional goodwill and
other intangible assets; that exercises of the Company's options and warrants
outstanding and available for issuance may adversely affect the market price of
the Company's common stock, the Company's inability to generate income, the
Company's ability to maintain patent and trade secret protection, domestic and
foreign government regulation, the Company's sales to government contractors of
animal identification products, dependence on a single production arrangement
for its patented syringe-injectable microchips, dependence on principal
customers, competition in the visual and electronic identification markets,
foreign currency rate fluctuation, dependence on a small team of senior
management and the Company's ability to develop, integrate, miniaturize and
market the Digital Angel TM technology. A detailed statement of risks and
uncertainties is contained in the Company's reports to the Securities and
Exchange Commission, including in particular the Company's Form 10-K for the
fiscal year ended December 31, 2003. Investors and stockholders are urged to
read this document carefully. The Company can offer no assurances that any
projections, assumptions or forecasts made or discussed in this release will be
met, and investors should understand the risks of investing solely due to such
projections. The Company undertakes no obligation to revise any
forward-looking statements in order to reflect events or circumstances that may
arise after the date of this press release.
DIGITAL ANGEL CORPORATION AND SUBSIDIARIES
Condensed Balance Sheets (in thousands)
March 31, December 31,
2004 2003
(Unaudited)
Total Current Assets $19,769 $12,929
Property and Equipment, net 7,544 7,665
Goodwill and Other Intangible Assets, net 53,865 45,608
Other Assets, net 1,204 1,105
Total Assets $82,382 $67,307
Current Liabilities $17,516 $16,006
Long-Term Debt and Notes Payable 2,543 2,818
Deferred Revenue 347 --
Minority Interest 6 --
Stockholders' Equity 61,970 48,483
Total Liabilities and Stockholders' Equity $82,382 $67,307
Statement of Operations Data (in thousands, except per share amounts)
For the quarter ended
March 31,
(Unaudited)
2004 2003
Total net revenue $11,126 $11,398
Gross profit 4,583 5,364
Net (loss) income (3,744) 110
Net (loss) income per common share
(basic and diluted) ($ 0.12) $0.00
Weighted average common shares outstanding:
Basic 30,468 26,663
Diluted 30,468 30,638
Selected Cash Flow Data (in thousands)
For the quarter ended
March 31,
(Unaudited)
2004 2003
Net Cash Used in Operating Activities $(2,274) $(3,089)
Net Cash Provided by (Used in)
Investing Activities 1,280 (241)
Net Cash Provided by Financing Activities 1,848 3,155
Net Increase (Decrease) in Cash 796 (214)
DATASOURCE: Digital Angel Corporation
CONTACT: investors, Jay F. McKeage, +1-212-691-8087, ,
or media, Len Hall, +1-949-474-4300, , both of Allen & Caron
Inc, for Digital Angel Corporation
Web site: http://www.digitalangelcorp.com/