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ImageWare reports fall in revenue

ImageWare Systems has reported its results for the fourth quarter and year ended 31 December 2007.

Total net revenues for the fourth quarter 2007 were US$1.9 million, compared to US$2.4 million for the same period in 2006. The company says this was mainly due to lower product revenue recognition in the quarter. During 2007, the company implemented its plan to shift from a direct sales model to an indirect model through partnering, which resulted in lower sales and marketing costs. These changes, combined with lower stock based compensation expense and lower consulting and professional services expenditures, reduced operating expenses to US$2.5 million in the fourth quarter 2007, compared to US$2.8 million for the same period in 2006. This resulted in an improved net loss available to common shareholders for the fourth quarter of 2007 of US$1.4 million, compared to US$1.6 million in the fourth quarter of 2006.

For the full year 2007, total net revenues fell to US$8.5 million, compared to US$10.2 million for 2006. The company reduced operating expenses by US$1.5 million, with the largest reduction of US$920,000 in sales and marketing costs.

“In 2007, we continued our focus on building relationships with major systems integrators, which produced important wins with GE Security, Unisys, Boeing, Motorola, and others,” says Jim Miller, ImageWare’s chairman and chief executive officer. “Our efforts have begun to deliver results. Today we announced new orders totalling US$3.5 million from multiple customers, the majority of which were received in the last two weeks. We expect US$1.3 million of the related revenue to be recognised in the first quarter with the remainder recognised in the second and third quarters of 2008. However, the fourth quarter 2007 government budget freeze affected our fourth quarter and full year 2007 results and delayed the positive impact of our efforts and success.”

He adds: “We experienced more activity in the last two weeks of the first quarter of 2008 than we have in the company’s history, resulting in a 31 March 2008 backlog of US$2.9 million…We have set the stage for a stronger year, and we estimate revenues for the 2008 first quarter to be approximately US$2.3 million.”

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