COSTA MESA, CA — (Marketwired) — 05/15/13 — ISC8® Inc. (OTCBB: ISCI) (“ISC8” or the “Company”), a provider of intelligent cybersecurity solutions, today reported unaudited operating results for its fiscal 2013 second quarter ended March 31, 2013.
“We have completed the company-s transformation to commercialization, including the spinoff of our government focused business units in the second quarter, to become a pure play, global cybersecurity company solely focused on the rapidly growing market for adaptive cybersecurity products and solutions,” said Bill Joll, President and CEO of ISC8 Inc. “We now provide a comprehensive offering of solutions that address key cybersecurity requirements facing enterprise, service provider and government networks such as Big Data security analytics and detection of Advanced Persistent Threats (APTs).
“We remain focused on aggressively marketing our three key cybersecurity products to accelerate revenue and continue to see positive market reception and significant opportunities. Cyber NetFalcon® and Cyber NetControl continue to gain traction in the global market and Cyber adAPT is gaining recognition as an advanced and uniquely critical solution for prevention of sophisticated malware attacks that are not immediately detectible by existing cybersecurity platforms in the marketplace.”
Established a Malware Research Team critical to the advancement of ISC8-s Cyber adAPT solution to detect next generation threats
Continued with trial rollouts with both Cyber NetFalcon and Cyber adAPT in new markets
Accelerated development of the Company-s three leading edge technology Cybersecurity products:
Cyber adAPT, to detect advanced targeted attacks such as APTs in larger corporate enterprise
Cyber NetFalcon, capable of identifying perpetrators, and
Cyber NetControl, capable of providing more user control and security to service operators, such as Mobile Carriers
In March 2013, the Company announced that it had discontinued its government focused business, including the Secure Memory Systems, Cognitive and Microsystems business units (the “Government Business”), to focus on the Company-s cybersecurity business. The operations of the Thermal Imaging Business and Government Business are presented as discontinued operations. To provide comparability between the periods, the consolidated financial information for all periods presented has been reclassified to reflect the Company-s results of continuing operations. As a result, the business and results of operations will be materially affected in the short-term, as the Company transitions to its cybersecurity business.
Total revenues for the second quarter of fiscal 2013 were $102,000, which was primarily the result of an increase in software maintenance revenue. Software maintenance revenue did not exist in the year ago period. Net loss from continuing operations in the second quarter of fiscal 2013 was $9.6 million, compared to a net loss of $11.3 million in the same quarter last year.
For the first six months of fiscal 2013, total revenues were $196,000. Net loss for the first six months was $11.8 million, compared to a net loss of $19.6 million for the comparable year ago period.
ISC8 believes that the Company-s losses in recent years have been primarily the result of increased research and development expenditures related to the cyber technology, and efforts to productize those technologies and bring them to market. These losses were augmented by insufficient revenue to support the Company-s growth in a skilled and diverse technical staff, which is considered necessary to support commercialization of the Company-s technologies.
ISC8 is focused on managing costs in line with estimated future revenues, including contingencies for cost reductions if projected revenues are not fully realized.
– ISC8 reports net loss in accordance with accounting principles generally accepted in the United States (“GAAP”) and also on a non-GAAP basis. The Company-s presentation of non-GAAP net loss in this press release excludes the impact of changes in fair value of derivative liability, non-cash interest expense, stock-based compensation, depreciation and amortization expense and net earnings from discontinued operations. Stock-based compensation expense primarily includes the impact of stock options issued by the Company and stock contributions to the employees- retirement plan.
ISC8 believes that the presentation of non-GAAP net loss provides useful supplemental information to management and investors regarding financial and business trends related to the Company-s financial condition and results of operations. The Company also believes that examination of non-GAAP net loss can facilitate consistency and comparability among and between prior periods, as well as comparison with other companies that present similar non-GAAP financial measures. However, the Company-s presentation of non-GAAP information is not necessarily equivalent to non-GAAP measures presented by other reporting companies and should be considered in that context. The Company-s management generally uses non-GAAP loss to evaluate the Company-s operating performance because management believes that the exclusion of the non-cash items described above provides insight into the Company-s core ongoing operating results, particularly from a cash generation or use perspective, and underlying business trends affecting the Company-s performance. ISC8 has chosen to provide this non-GAAP information to investors to enable them to perform additional analyses of past, present and future operating performance and as a supplemental means to evaluate the Company-s ongoing core operations. The non-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
For more information on ISC8 and its products, visit .
ISC8 is actively engaged in the development and sale of intelligent cybersecurity solutions for commercial and government environments worldwide. ISC8-s Cyber products are aimed at detecting next-generation malware and Advanced Persistent Threats (APTs). ISC8 provides hardware, software and service offerings for Malware Threat Detection leveraging its history in anti-tamper, secure memories, high-speed processors, and miniaturized sensors — all technologies it has developed. ISC8 was founded in 1974 and is headquartered in Costa Mesa, California. For more information about ISC8 visit .
SAFE HARBOR STATEMENT
Statements in this press release that relate to future plans, objectives, expectations, performance, events and the like are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Future events, risks and uncertainties, individually or in the aggregate, could cause actual results to differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ are identified in our public filings with the Securities and Exchange Commission (SEC), and include the fact that we have disclosed that you should not rely upon our previously published financial statements and the fact that we have not filed all of our reports required by the Securities Exchange Act of 1934. More information about factors that could affect our business and financial results are included in our public filings with the SEC, which are available on the SEC-s website located at .
The words “should,” “believe,” “estimate,” “expect,” “intend,” “anticipate,” “foresee,” “plan” and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. Additionally, any statements related to future improved performance and estimates of revenues and earnings per share are forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.
The following non-GAAP adjustments are based upon the Company-s unaudited consolidated statements of operations for the periods shown. These adjustments are not in accordance with or an alternative for GAAP. The non-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. ISC8 intends to continue to assess the potential value of reporting non-GAAP results consistent with applicable rules, regulations and guidance, and may change its reporting of such non-GAAP results in the future as a result of such assessment.
John Vong
Senior Vice President and CFO
714.444.8753
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