IBSS Integrated Business Systems and Services Inc (CE)

Integrated Business Systems and Services, Inc. (IBSS) (OTCBB:IBSS) today announced its second quarter financial results for the three- and six-month periods ended June 30, 2005. Highlights for the three months ended June 30, 2005 compared to the three months ended June 30, 2004: -- Revenues were $604,998, representing a 21.5% increase over revenues of $497,839. -- Services revenues increased slightly to $393,580 from $381,139. -- Revenue from Licenses jumped 681% to $125,038 from $16,000. -- Maintenance and Support Revenues nearly doubled to $55,763 from $28,428. -- Gross Profit Margins greatly improved, rising to 61.4% from 44.1%. -- Operating expenses dropped 22% to $593,382 from $761,066. -- Loss from operations decreased 59% to $221,912 from $541,385. -- Net loss declined 54.2% to $264,742, or $0.01 loss per basic and diluted share, from a net loss of $577,996, or $0.02 loss per basic and diluted share. Highlights for the six months ended June 30, 2005 compared to the six months ended June 30, 2004: -- Revenues were $1,148,279, down 9.1% from revenues of $1,263,519. -- Although revenues from Services declined 23% to $854,642 from $1,109,985, revenues from Licenses were up 832% to $149,266 from $16,000. -- Maintenance and Support Revenues increased 78.8% to $101,671 from $56,855. -- Gross Profit Margins increased to 61.5% from 55.7%. -- Operating expenses fell 20.1% to $1,210,958 from $1,515,281. -- Loss from operations decreased 37.8% to $504,879 from $811,073. -- Net loss decreased 35.1% to $584,038, or $0.02 loss per basic and diluted share, from a net loss of $900,197, or $0.03 loss per basic and diluted share. George Mendenhall, Chief Executive Officer of IBSS, noted, "The power of RFID tracking systems, and the countless benefits they engender, are serving to generate a great deal of excitement about IBSS' Synapse(TM) technology platform. Consequently, the entire IBSS team has been working diligently towards capitalizing on a number of opportunities to firmly establish IBSS as an industry leader in this space. After years of committed effort, it appears that we are well on our way to achieving this primary objective." Continuing, Mendenhall stated, "We are very pleased with the strong improvements we are seeing in several key areas of our operations. During the second quarter, we saw revenues and gross profit margins markedly rise, while operating costs and losses materially decreased. Moreover, the early success of our proprietary Synapse(TM)-based PDS Express system, developed for and in collaboration with Prospect Airport Services, is fast winning attention among the major airlines as a highly effective tool for managing the special needs of disabled, elderly and other special needs air travelers. IBSS continues to face serious financial concerns including extremely limited cash flow and liquidity. However, we expect that the Prospect/IBSS relationship, in addition to other focused areas of growth, coupled with our continued expense discipline, will continue to strengthen IBSS' financial outlook through the end of this year and beyond." -0- *T Integrated Business Systems and Services, Inc. Condensed Balance Sheets (Unaudited) ASSETS: June 30, 2005 Dec. 31, 2004 ---------------------------- Current assets: Cash and cash equivalents $ 9,029 $105,084 Accounts receivable, trade 291,397 66,637 Interest receivable - 3,065 Notes receivable - 75,000 Prepaid expenses 86,246 19,646 ---------------------------- Total current assets 386,672 269,432 Capitalized software costs, net 5,474 10,948 Property and equipment, net 210,006 256,911 Interest receivable, non current 40,916 37,331 Other assets 50,000 50,000 ---------------------------- Total assets $ 693,068 $624,622 ============================ LIABILITIES AND SHAREHOLDERS' DEFICIENCY: Current liabilities: Convertible notes payable, net of discount $ 630,152 $558,439 Shareholder advances 956,000 601,000 Current portion of long-term debt 309,619 309,131 Accounts payable 178,877 52,510 Accrued liabilities: Accrued compensation and benefits 190,381 160,166 Accrued payroll taxes 7,296 29,649 Accrued professional fees 414,853 326,241 Accrued interest 69,977 55,857 Accrued rent 14,000 15,000 Other 6,691 7,090 Deferred revenue 110,511 134,873 ---------------------------- Total current liabilities 2,888,357 2,249,956 Long-term debt, net of current portion 2,867,096 2,872,251 ---------------------------- Total liabilities 5,755,453 5,122,207 ---------------------------- Shareholders' deficiency: Preferred stock, undesignated par value, 10,000,000 shares, none authorized or issued - - Common stock, no par value, 200,000,000 shares authorized, 32,544,202 and 32,506,144 shares outstanding at June 30, 2005 and December 31, 2004, respectively 21,702,733 21,683,495 Notes receivable officers/directors (131,080) (131,080) Accumulated deficit (26,634,038) (26,050,000) ---------------------------- Total shareholders' deficiency (5,062,385) (4,497,585) ---------------------------- Total liabilities and shareholders' deficiency $693,068 $624,622 ============================ Integrated Business Systems and Services, Inc. Condensed Statements of Operations (Unaudited) Three Months Six Months Ended June 30, Ended June 30, -------------- --------------- 2005 2004 2005 2004 -------------------------------------------- Revenues Services $393,580 $381,139 $854,642 $1,109,985 Licenses 125,038 16,000 149,266 16,000 Maintenance and support 55,763 28,428 101,671 56,855 Product resales 30,617 72,272 42,700 80,679 -------------------------------------------- Total revenues 604,998 497,839 1,148,279 1,263,519 Cost of revenues 233,528 278,158 442,200 559,311 -------------------------------------------- Gross profit 371,470 219,681 706,079 704,208 -------------------------------------------- Operating expenses General and administrative 334,286 393,032 681,409 774,699 Sales and marketing 140,494 204,653 299,861 433,822 Research and development 118,602 163,381 229,688 306,760 -------------------------------------------- Total operating costs 593,382 761,066 1,210,958 1,515,281 -------------------------------------------- Loss from operations (221,912) (541,385) (504,879) (811,073) -------------------------------------------- Other income (loss and expenses) Other income (expenses) 1,877 959 4,035 (10,497) Interest expense (44,707) (37,570) (83,194) (78,627) -------------------------------------------- Total other expenses (42,830) (36,611) (79,159) (89,124) -------------------------------------------- Net Loss $(264,742) $(577,996) $(584,038) $(900,197) ============================================ Loss per share Basic and diluted $(0.01) $(0.02) $(0.02) $(0.03) Diluted weighted average shares outstanding 32,527,487 29,102,952 32,518,074 28,187,865 *T About IBSS IBSS is the creator of Synapse(TM), a groundbreaking software technology. Synapse(TM) is a complete framework and methodology used to create, implement and manage a wide variety of dynamic, distributed, networked, and real-time enterprise applications including RFID, quickly and efficiently. Global enterprises utilizing Synapse(TM) leverage the power of its single, flexible framework to enjoy tremendous time and cost advantages, in the development, deployment and on-going management of customized applications. Enabled by Synapse(TM) to take competitive advantage of cutting-edge technologies such as wireless networking, mobile computing and RFID, IBSS and its strategic partners bring solutions to customers for mission-critical applications in manufacturing, distribution, healthcare, finance, insurance, retail, education, and government. IBSS is headquartered in Columbia, South Carolina. For more information about IBSS and its Synapse(TM) technologies and services, call 803-736-5595 or 800-553-1038, or visit www.ibss.net. Except for historical information, the matters discussed in this news release include forward-looking statements that involve a number of risks and uncertainties. Actual results may vary significantly as a result of a number of factors, including, but not limited to, risks associated with the Company's ability to satisfy its obligations incurred in recent private placements of secured debt, risks in product and technology development and integration, market acceptance of new products and continuing product demand, the impact of competitive products and pricing, changing economic conditions, and other risk factors detailed in Exhibit 99.1 of our Annual Report on Form 10-KSB for the year ended December 31, 2004 and in other filings the Company makes with the Securities and Exchange Commission. Copies of these filings may be obtained from the Securities and Exchange Commission at its principal office in Washington, DC at prescribed rates by calling 1-800-SEC-0330. These filings are also available electronically through the Internet World Wide Web site maintained by the Securities and Exchange Commission at the Internet address: http://www.sec.gov.