Business News
InkSure Technologies Releases 2008 Results
Tuesday 07. April 2009 - InkSure Technologies Inc. (BULLETIN BOARD: INKS) , a leading provider of covert machine-readable security solutions for the prevention of counterfeiting, fraud and diversion, and an important developer of a unique low cost chipless RFID technology reported its operating results for the year ended December 31, 2008.
Although total revenues decreased 25% to $ 2.158 million our gross profit margins increased to 77% and our overall operating loss decreased by 13% to $2.184 million. We spent $1.7 million on research and development that primarily went to our unique next generation SARcode(TM) chipless RFID technology and we continued our penetration into international markets for our legacy security solutions and authentication technologies. Including R&D expenditures and certain accounting adjustments, the Company reported a loss of $3.5 million.
Philip M. Getter, Chairman of the Board, observed that the Company made significant progress during the year on many fronts but is disappointed with this final report. “Although we continued to grow our international business we were not immune to the economic downturn. In this very difficult climate a number of our customers indicated postponement of their plans and programs causing us to miss our expectations. “Mr. Getter noted that from an accounting point of view, InkSure took significant non-cash write-offs on both goodwill and the change in valuation of our Convertible notes. He stated that “InkSure continues its commitment to the development of its unique SARcode (TM) chipless RFID system.” Mr. Getter further stated that “We believe we are well ahead of others in developing this ‘tag’ costing under a penny and having many uses including closed-loop high speed work flow systems and item level identification. We believe that our non-line of sight chipless RFID tag is a true competitor to barcodes – in price, accuracy and information. Management is dedicated to bringing its RFID product to market in 2010.”
2008 Results
Revenues for the year decreased by $732,000, or 25%, to $2,158,000 from $ 2,890,000 in 2007. An important new project from a European customer was offset by reductions and postponements from several customers. Cost of revenues decreased 55% to $504,000 compared to $1,108,000 in 2007 as a result of improved raw material costs and the overall reduction in sales. Overall Gross Margins improved to 77% versus 62% in 2007.
Operating Loss for the year was reduced by 13% reaching $2,184,000 compared to $2,498,000 in 2007. Significant reductions to our Selling and Marketing and Administrative expenditures were offset by increased spending on Research & Development on the development and implementation of our chipless RFID technology and an impairment of goodwill expense.
Net Loss for the year totaled $3,528,000, and a loss per share of $0.21 compared to a net loss of $3,078,000, and a loss per share of $0.19. The increase in net loss in 2008 when compared to 2007 is due in part to an increase of $819,000 in non-cash financial expenses as a result of changes in the fair market value of the Convertible Notes calculated under SFAS No. 133.
The company ended 2008 with $1,826,000 in cash, cash equivalents, and short term deposits, compared with $820,000 in 2007.
Yaron Meerfeld, Acting CEO, noted that “We worked very diligently and I am pleased with our efforts in managing operations during this very difficult business climate. Although we maintain our cautious attitude, we are optimistic regarding our new RFID products and continue our efforts to realize our business plan and our long term potential.”