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ISC8 Reports First Quarter Fiscal 2013 Results
COSTA MESA, CA, Feb 14, 2013 (MARKETWIRE via COMTEX) --
ISC8(R) Inc. (OTCBB: ISCI), ("ISC8" or the "Company"), a provider of
intelligent cybersecurity solutions, today reported unaudited
operating results for its fiscal 2013 first quarter ended December
30, 2012.
"Having completed the majority of our transformation to
commercialization, we are now focused on aggressively marketing our
three key cybersecurity products and have received very positive
feedback in the market," said Bill Joll, President and CEO of ISC8
Inc. "With our acquisition of key assets from Bivio Networks last
October, we now have the products that address many of the
cybersecurity issues facing enterprise, service provider and
government networks. Our global business pipeline for Cyber
NetFalcon(TM) and Cyber NetControl continues to grow and Cyber
adAPT(TM) product trials are progressing well. We are encouraged with
the trial findings and the ability of these products to detect
Advanced Persistent Threats, which right out of the box includes
threats that we believe are not immediately detectible by existing
cybersecurity platforms in the marketplace."
Recent Business Highlights:
-- Completed acquisition of two cybersecurity software products from
Bivio Networks. The acquisition provided ISC8 with advanced products
and technologies for Security Intelligence, Incident Response, Content
Control and mitigation of Advanced Persistent Threats (APTs) in
enterprise, service provider and government networks.
-- ISC8 now has three leading edge technology Cybersecurity products:
-- Cyber adAPT capable of detecting targeted attacks such as APTs in
larger corporate enterprise networks (with beta trials that began
in January 2013)
-- Cyber NetFalcon capable of identifying perpetrators (currently
available), and
-- Cyber NetControl capable of providing more user control and
security to service operators, such as Mobile Carriers (currently
available).
-- Selected by a Middle Eastern service provider to deploy Cyber
NetControl, ISC8's carrier grade, policy-based content control and
traffic enforcement solution to provide advanced parental control
functionality to their subscribers.
Financial Results:
Total revenues for the first quarter of fiscal 2013 were $875,000,
compared to total revenues of $1,297,000 for the first quarter of
fiscal 2012. Net loss in the first quarter of fiscal 2013 was
$2,164,000, compared to a net loss of $8,250,000 in the first quarter
of fiscal 2012. The decrease in net loss in the first quarter of
fiscal 2013 compared to the prior year quarter was substantially
attributable to the change in fair value of the derivative liability.
Excluding non-cash charges for changes in fair value of derivative
liability, non-cash interest expense, stock-based compensation,
depreciation and amortization and net loss from discontinued
operations, non-GAAP net loss for the first quarter of fiscal 2013
was approximately $5.0 million, compared to non-GAAP net loss of
approximately $3.2 million in the same quarter last year. See "Use of
Non-GAAP Financial Information" below for important information
regarding the Company's use of non-GAAP financial measures.
Use of Non-GAAP Financial Information - 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 www.ISC8.com.
About ISC8(R)
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
www.isc8.com.
ISC8 Inc.
UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS
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.
13 Weeks Ended
------------------------------------
December 30, 2012 January 1, 2012
----------------- -----------------
GAAP net loss attributable to ISC8 $ (2,164,000) $ (8,250,000)
Plus (Minus):
Change in fair value of derivative
instrument (4,947,000) 2,310,000
Non-cash interest expense 1,674,000 1,465,000
Non- cash stock-based compensation 235,000 836,000
Depreciation and amortization 184,000 174,000
Loss from discontinued operations - 223,000
----------------- -----------------
Non-GAAP net loss attributable to ISC8 $ (5,018,000) $ (3,242,000)
================= =================
SOURCE: ISC8, Inc.
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