Image Sensing Systems, Inc. (ISNS) stock prices were up a monumental 73.47% as of market close on May 3rd, 2021, bringing the price per share up to USD$11.31 at the end of the trading day. Subsequent pre-market fluctuations have seen the price drop by 17.86%, bringing it down to USD$9.29.
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Disclosure of Fiscal Reports
The tidal movement came hot the heels of the disclosure of the company’s financial reports for the first quarter of the fiscal year 2021. Of the USD$3 million reported in revenue for Q1 2021, revenue from royalties comprised USD$1.8 million of the total amount. This is compared to USD$2.1 million being from revenue out of the total revenue of USD$3.2 million in Q1 2020.
Product sales were up USD$1.2 million, an 11% increase over the numbers reported for the same quarter of the previous year. Videos product sales and royalties from Autoscope were USD$76,000 and USD$1.8 million respectively, while RTMS radar product sales generated USD$1.1 million in revenue for Q1 2021.
Comparative Gross Margins
Accordingly, gross margin was reported at 76%, a 5% decrease from the gross margin of 80% for Q1 2020. This reduction is primarily attributable to the reduction in warranty reserve in the first quarter of the fiscal year 2020. Gross margin from royalties went from 96% in Q1 2020 to 95% in Q1 2021, while product sales gross margin was down to 47% from 49% in the prior-year period.
Diminished Operating Costs
Operating expenses of USD$1.9 million for Q1 2021 were 34% lower than those reported in Q1 2020. The difference is attributable to the company’s efforts to explore strategic alternatives to ensure increases in shareholder value, which saw ISNS allocate USD$294,000 towards legal and external consulting costs. The difference in operating expenses is also due in part to lower headcount and increased costs of capitalized software development in Q1 2021 as compared to the prior-year quarter.
Transformative Year for ISNS
With the forgiveness of USD$931,000 in PPP loans and accrued interest, the company enjoyed a massive boost to their income. Net income for the first quarter of 2021 was reported at USD$1.1 million, representing USD$0.21 income per diluted share. These numbers are a very substantial increase from the net loss of USD$111,000 reported for Q1 2020, with net loss per diluted share coming out to USD$0.02.
Future Outlook for ISNS
With such an impressive shift in net income over the course of the year, the government’s stimulation plans for businesses has clearly worked in ISNS’s favor. With the forgiveness of such a sizeable debt, the costless leveraging of those addition resources in a pandemic context could be just the boost the company needed to continue its growth and profitability. Current and potential investors hope for continued upward trend in stock prices reflecting significant and sustained increases in shareholder value.