Information Systems Associates Reports Results for Its Second Quarter Ending June 30, 2010
Second Quarter 2010 Revenue Totals $235 Thousand, Up 72% Compared to Second Quarter 2009 Revenue of $136 Thousand
PALM CITY, Fla., Aug. 17, 2010 (GLOBE NEWSWIRE) -- Information Systems Associates, Inc. (OTCBB:IOSA), a datacenter optimization software, services and solutions company, today announces its financial results for the period ended June 30, 2010.
Second Quarter 2010 and First Half 2010 Highlights:
- Revenues totaled $235 thousand for the quarter ended June 30, 2010, up 72% from $136 thousand for the quarter ended June 30, 2009.
- Gross profit was $221 thousand for the quarter ended June 30, 2010, up 114% from $103 thousand for the quarter ended June 30, 2009.
- Revenues totaled $492 thousand for the first six months ended June 30, 2010, up 46% from $335 thousand for the first six months ended June 30, 2009.
- Gross profit was $477 thousand for the first six months ended June 30, 2010, up 59% from $300 thousand for the first six months ended June 30, 2009.
Joe Coschera, Information Systems Associates' CEO, stated: "We are very pleased to report significant improvements in our financial results for 2010 compared to its respective period for 2009. Most significantly, the Company's cash flows from operations were nearly breakeven for the second quarter ended June 30, 2010 with a loss of only $13 thousand for the period. We made a number of changes in the first quarter ended March 31, 2010 to improve cash flows and they were effective. So far the third quarter 2010 has shown continued improvement as evidenced by a number of recent contract announcements. Furthermore, our OSPI version 2 continues to perform well in the field and gain momentum with additional clients."
Revenues
Gross revenues were $234,986 and $491,140 for the three and six months ended June 30, 2010, respectively, compared to gross revenues of $136,248 and $335,332 for the three and six months ended June 30, 2009. The increased 2010 revenue is due primarily to the increased sale of professional services, maintenance contracts and time and materials arrangements primarily to two new customers.
Income / Loss
The Company reported a net loss of $233,970 and $443,591 from operations for the three and six months ended June 30, 2010, respectively. ISA had a net loss of $304,457 and $510,896 from operations for the three and six months ended June 30, 2009, respectively. ISA began the amortization of the software development costs in 2010 and has taken on additional consulting expenses. This will add to the Company's overhead in the near future. ISA also needed to take on additional administrative costs in order to position sales growth for the balance of 2010.
Expenses
Operating expenses for the three and six months ended June 30, 2010 were $438,362 and $904,667, respectively. Operating expenses for the three and six months ended June 30, 2009 were $407,199 and $812,008, respectively. The higher operating expenses during 2010 were due primarily to administrative and general expenses, which were $291,948 and $119,036 for the six months ended June 30, 2010 and 2009 respectively. This increase in administrative and general expenses is primarily due to the increase in travel and entertainment of $72,996 and the increase of amortization of software of $81,173.
Income Taxes
There was no income tax benefit or expense recorded for the six months ended June 30, 2010 and 2009.
Impact of Inflation
The Company believes that inflation has had a negligible effect on operations during the six months ended June 30, 2010 and 2009. Management believes that it can offset inflationary increases in the cost of revenue by increasing revenue and improving operating efficiencies.
Liquidity and Capital Resources
ISA had cash on hand of $1,396 and net working capital of $143,375 as of June 30, 2010. Cash flows used in operations were $77,836 and $71,157 during the six months ended June 30, 2010 and 2009. Cash flows used in operations during the six months ended June 30, 2010 were primarily attributable to a net loss of $443,591, and partially offset with an increase in accounts payable of $48,226 and issuance of stock for services of $202,854. Cash flows used in operations during the six months ended June 30, 2009 were primarily attributable to a net loss of $510,896 and partially offset by the increase in accounts receivable of $30,381 and the issuance of stock for services of $403,688.
Cash flows provided by investing activities were $9,334 as compared to cash flows used in investing activities of $211,074 during the six months ended June 30, 2010 and 2009, respectively. Cash flows provided by investing activities in 2010 were attributable primarily to the sale of an investment. Cash flows used in investing activities in 2009 were attributable to $128,389 in costs incurred for software development (OSPI, v2) and web page design and $73,958 used in the purchase of an investment.
Cash flows provided by financing activities were $48,851 and $100,000 for the six months ended June 30, 2010 and 2009. Cash flows provided by financing activities were attributable to additional borrowing on the line of credit and borrowing from a shareholder. Cash flows provided for from financing activities for the six months ended June 30, 2009 were attributable to the issuance of common stock.
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About Information Systems Associates
Information Systems Associates, Inc. (IOSA) is a leading provider of data center optimization software, services and solutions based out of Palm City, FL. Its core technology OSPI (On Site Physical Inventory(R)) provides a tool set allowing customers to create a highly accurate data set of their current IT assets. This information can be utilized to enable businesses to make meaningful decisions on Data Center Management that lead to optimization of resources, cost reductions and significant ROI.
For more information, please visit: www.isa-inc.net
Safe Harbor
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Additionally, words such as "seek," "intend," "believe," "plan," "estimate," "expect," "anticipate" "project" and other similar expressions are forward-looking statements within the meaning of the Act. Some or all of the events or results anticipated by these forward- looking statements may not occur. Factors that could cause or contribute to such differences include the ability of Information System Associates to attract customers for its services, and continue developing innovative datacenter optimization solutions. Further information on Information Systems Associates' risk factors is contained in its filings with the Securities and Exchange Commission, including the Form 10-KSB for the year ended December 31, 2009 and the Form 10-QSB filed August 13, 2010. Information Systems Associates does not undertake any duty nor does it intend to update the results of these forward-looking statements.
| INFORMATION SYSTEMS ASSOCIATES, INC. | ||
| BALANCE SHEETS | ||
| ASSETS | ||
| June 30, | December 31, | |
| 2010 | 2009 | |
| (Unaudited) | (Audited) | |
| Current Assets | ||
| Cash and cash equivalents | $1,396 | $21,047 |
| Accounts receivable | 28,816 | 34,809 |
| Prepaid consulting | 267,646 | 190,500 |
| Prepaid expenses | 6,299 | 7,689 |
| Total Current Assets | 304,157 | 254,045 |
| Property and Equipment (net) | 90,052 | 174,288 |
| Other Assets | ||
| Investments | -- | 60,559 |
| TOTAL ASSETS | $394,209 | $488,892 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current Liabilities | ||
| Note payable - line of credit | $39,682 | $20,055 |
| Note payable - insurance | -- | 3,276 |
| Accounts payable | 115,136 | 66,910 |
| Accrued expenses and other liabilities | 12,171 | 21,196 |
| Deferred revenue | 529 | 1,879 |
| Total Current Liabilities | 167,518 | 113,316 |
| Long-Term Liabilities | ||
| Long-term debt | 32,500 | -- |
| Total Liabilities | 200,018 | 113,316 |
| Stockholders' Equity | ||
|
Common stock--$.001 par value, 50,000,000 shares authorized, 19,766,084 and 18,266,084 issued and outstanding for 2010 and 2009, respectively |
19,766 | 18,266 |
| Additional paid in capital | 2,457,713 | 2,179,213 |
| Accumulated deficit | (2,252,095) | (1,808,504) |
| Accumulated other comprehensive (loss) | (31,193) | (13,399) |
| Total Stockholders' Equity | 194,191 | 375,576 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $394,209 | $488,892 |
| The accompanying unaudited notes are an integral part of these financial statements. | ||
| INFORMATION SYSTEM ASSOCIATES, INC. | ||||
| STATEMENTS OF OPERATIONS | ||||
| FOR THE THREE AND SIX MONTHS ENDED JUNE 30, | ||||
| (UNAUDITED) | ||||
| For the Three Months Ended | For the Six Months Ended | |||
| June 30, | June 30, | |||
| 2010 | 2009 | 2010 | 2009 | |
| Revenue | $234,986 | $136,248 | $491,640 | $335,332 |
| Cost of Sales | 14,440 | 33,520 | 14,440 | 35,045 |
| Gross Profit | 220,546 | 102,728 | 477,200 | 300,287 |
| Operating Expenses | ||||
| Administrative and general | 124,537 | 58,842 | 291,948 | 119,036 |
| Payroll and payroll taxes | 67,740 | 51,344 | 135,791 | 102,771 |
| Professional | 246,085 | 297,013 | 476,928 | 590,201 |
| Total Operating Expenses | 438,362 | 407,199 | 904,667 | 812,008 |
| (Loss) Income Before Other Income and (Expense) | (217,816) | (304,471) | (427,467) | (511,721) |
| Other Income (Expense) | ||||
| Interest Income | -- | 14 | -- | 825 |
| Loss on sale of security | (16,154) | -- | (16,154) | -- |
| Miscellaneous income | -- | -- | 30 | -- |
| Total other income (expense) | (16,154) | 14 | (16,124) | 825 |
| Net (Loss) | (233,970) | (304,457) | (443,591) | (510,896) |
| Other Comprehensive (Loss) | ||||
| Unrealized gain/(loss) on securities: | ||||
| Arising during the quarter | (4,673) | 13,842 | (17,794) | 13,842 |
| Total other comprehensive (loss) | (4,673) | 13,842 | (17,794) | 13,842 |
| Comprehensive (Loss) | $(238,643) | $(290,615) | $(461,385) | $(497,054) |
| Basic and Fully Diluted Earnings (Loss) per Share: | ||||
| Basic and diluted | $(0.01) | $(0.02) | $(0.02) | $(0.03) |
| Weighted average common shares outstanding | 18,532,751 | 16,443,167 | 18,532,751 | 16,443,167 |
| The accompanying unaudited notes are an integral part of these financial statements. | ||||
| INFORMATION SYSTEMS ASSOCIATES, INC. | ||
| STATEMENTS OF CASH FLOWS | ||
| FOR THE SIX MONTHS ENDED JUNE 30, | ||
| (UNAUDITED) | ||
| 2010 | 2009 | |
| Cash Flows from Operating Activities | ||
| Net (Loss) | $(443,591) | $(510,896) |
|
Adjustments to reconcile net (loss) to net cash provided from operating activities: |
||
| Depreciation and amortization | 84,902 | 2,268 |
| Loss on sale of investment | 16,154 | -- |
| Common stock for services | 202,854 | 403,688 |
| (Increase) decrease in: | ||
| Accounts receivable | 5,993 | 30,381 |
| Prepaid expenses | 1,390 | -- |
| Increase (decrease) in: | ||
| Accounts payable | 48,226 | 1,014 |
| Accrued expenses and other liabilities | 7,586 | 3,388 |
| Deferred revenue | (1,350) | (1,000) |
| Net Cash (Used in) Operating Activities | (77,836) | (71,157) |
| Cash Flows from Investing Activities | ||
| Computer software development costs | -- | (128,389) |
| Purchase of property and equipment | (666) | (8,727) |
| Proceeds from sale of investment | 10,000 | -- |
| Purchase of Investment | -- | (73,958) |
| Net Cash (Used In) Provided by Investing Activities | 9,334 | (211,074) |
| Cash Flows from Financing Activities | ||
| Proceeds from note payable - line of credit | 19,627 | -- |
| Payments made on note payable - insurance | (3,276) | -- |
| Proceeds from issuance of stock | -- | 100,000 |
| Proceeds from note payable -shareholder | 32,500 | -- |
| Net Cash Provided by Financing Activities | 48,851 | 100,000 |
| Net Change in Cash and Cash Equivalents | (19,651) | (182,231) |
| Cash and Cash Equivalents at | ||
| Beginning of period | 21,047 | 204,768 |
| End of Period | $1,396 | $22,537 |
| The accompanying unaudited notes are an integral part of these financial statements. | ||
Contact:
The WSR Group
Investor Contact:
Gerald Kieft
772-219-7525
772-219-3579 (fax)
InformationSystemsIR@WallStreetResources.net
http://www.wallstreetresources.net/informationsystems.asp
Released August 17, 2010