News

Minneapolis, Minn., May 9, 2024--Autoscope Technologies Corporation (OTCQX: AATC) today announced results for its quarter ended March 31, 2024. The Board of Directors has authorized and declared a quarterly cash dividend of $0.13 per share of its common stock. The dividend is payable on May 28, 2024 to the shareholders of record at the close of business on May 20, 2024.

First Quarter 2024 Financial Summary

• Royalties increased 4 percent to $3.1 million compared to $3.0 million in the same period in the prior year.
• Operating expenses from continuing operations were comparable at $1.9 million in the first quarter of 2024 and in the same period in the prior year.  
• Income from operations for the first quarter of 2024 totaled $1.1million compared to $0.9 million for the same period in the prior year.

First-Quarter Results

Revenue from continuing operations for Autoscope Technologies Corporation (“AATC” or the “Company”), which includes the results of Image Sensing Systems, Inc., a wholly owned subsidiary of AATC (“ISNS”), was comparable at $3.1 million in the first quarter of 2024 and in the same period of 2023. Revenue from royalties was $3.1 million in the first quarter of 2024 compared to $3.0 million in the first quarter of 2023, a 4 percent increase. The increase in royalties resulted from continued strong demand for Autoscope Vision in North America primarily due to continued project awards and increased funding through the Bipartisan Infrastructure Law (BIL) that established the Safe Streets and Roads for All (SS4A) discretionary program with $5 billion in appropriated funds over five years, from 2022 to 2026.

Gross margin for the first quarter of 2024 was 96 percent, a 2-percentage point increase from a gross margin of 94 percent for the same period in 2023. Royalty gross margin for the first quarter of 2024 was 97 percent compared to 96 percent in the same period in 2023. The increase in royalty gross margin percent for the first quarter of 2024 is primarily due to higher sales of video detection products yielding higher royalty revenues. As a percent of revenue, product sales gross margins decreased from (26) percent in the first quarter of 2023 to (94) percent in the first quarter of 2024. The decrease in the product sales gross margin percent was the result of lower product sales and the amortization of costs associated with capitalized software development which are fixed.

The Company recognized tax expense of $263,000 in the first quarter of 2024, compared to a tax expense of $223,000 in the prior year period. The increased tax expense is primarily due to the higher pre-tax net income from continuing operations.

The Company reported net income from continuing operations for the first quarter of 2024 of $0.9 million or $0.16 per basic and diluted share, compared to a net income of $0.8 million or $0.14 per basic and diluted share in the prior year period. This increase is primarily due to increased profit margins and a decrease in operating expenses during the first quarter of 2024 compared to the same period in 2023.

Liquidity and Capital Resources

As of March 31, 2024, we had $1.6 million in cash and cash equivalents compared to $6.5 million on December 31, 2023. 

Net cash used by operating activities of continuing operations was $34,000 in the first three months of 2024 compared to net cash provided by operating activities of continuing operations of $1.0 million in the same period in 2023.  Net cash used by operating activities of continuing operations increased in the first three months of 2024 compared to the same period in 2023 primarily due to increased cash used for accounts payable in 2024 compared to 2023 relating to inventory purchases.

Net cash provided by investing activities of continuing operations was $3.1 million in the first quarter of 2024 compared to net cash provided by investing activities of continuing operations of $0.1 million in the same period in 2023. The increase in net cash provided by investing activities of continuing operations in the first three months of 2024 compared to the same period in the prior year is primarily the result of higher sales of debt securities. Sales of debt securities were $5.7 million in the first quarter of 2024 compared to $2.1 million in the first quarter of 2023. Proceeds from the sale of debt securities were used to fund the special one-time dividend paid in February 2024. 

Net cash used by financing activities of continuing operations was $7.9 million in the first quarter of 2024 compared to net cash used by financing activities of continuing operations of $15,000 in the first three months of 2023. The increase in net cash used for financing activities of continuing operations in 2024 is primarily due to cash dividend payments. The Company made cash dividend payments of $7.9 million in the first quarter of 2024, consisting of a special cash dividend payment of $1.32 per share, totaling $7.2 million, and a quarterly cash dividend payment of $0.13 per share, totaling $0.7 million. There were no dividend payments made in the first quarter of 2023. The Company delayed the payment of a dividend during the first quarter of 2023 due to activities related to a change in trading venue and to comply with the OTCQX reporting requirements. The dividend for the first quarter of 2023 was paid during the second quarter of 2023.

“We are confident in the sustained strong market demand for Autoscope Vision, with ongoing opportunities in the North America market for video detection and data analytics. Our strategic objectives align with market trends, emphasizing our commitment to fostering safer and more efficient roads for all,” said Andy Markese, Interim CEO of Autoscope Technologies and President and CEO of Image Sensing Systems. “Following the sale of our RTMS business, we have completed a planned reduction in our workforce in April, incurring a one-time cost of approximately $37,000, and estimate annualized savings of $660,000 relating to the reduction. Autoscope Technologies Corporation remains robust, and we are committed to further enhancing our technological capabilities and operational efficiencies,” concluded Mr. Markese.

About Autoscope Technologies Corporation

Autoscope Technologies Corporation is a global company dedicated to helping improve safety and efficiency for cities and highways by developing and delivering above-ground detection technology, applications and solutions. We give Intelligent Transportation Systems (ITS) professionals more precise and accurate information – including real-time reaction capabilities and in-depth analytics – to make more confident and proactive decisions. We are headquartered in Minneapolis, Minnesota. Visit us on the web at www.autoscope.com.

Forward-Looking Statements

Certain statements and information included in this Annual Report constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange of 1934, as amended. Forward looking statements represent our expectations or beliefs concerning future events and can be identified by the use of forward-looking words such as “believes,” “may,” “will,” “should,” “intends,” “plans,” “estimates,” “expects,” “anticipates” or other comparable terminology. Forward-looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from the results discussed in the forward-looking statements. Some factors that might cause these differences include the factors listed below. Although we have attempted to list these factors comprehensively, we wish to caution investors that other factors may prove to be important in the future and may affect our operating results. New factors may emerge from time to time, and it is not possible to predict all of these factors, nor can we assess the effect each factor or combination of factors may have on our business.

Those risks and uncertainties may include, but are not limited to, our historical dependence on a single product for most of our revenue; competition; potential changes in government spending on transportation technology; acceptance of our product offerings and designs; budget constraints by governmental entities that purchase our products, including constraints caused by declining tax revenue; the continuing ability of Econolite Control Products, Inc. to sell our products and pay royalties owed to us; the mix of and margins on the products we sell; our dependence on third parties for manufacturing and marketing our products; our dependence on single-source suppliers to meet manufacturing needs; our failure to secure adequate protection for our intellectual property rights; our inability to develop new applications and product enhancements; the potential disruptive effect on the markets we serve of new and emerging technologies and applications, including vehicle-to-vehicle communications and autonomous vehicles; unanticipated delays, costs and expenses inherent in the development and marketing of new products; our inability to respond to low-cost local competitors; our inability to properly manage any growth in revenue and/or production requirements; the influence over our voting stock by affiliates; our inability to hire and retain key scientific and technical personnel; the effects of legal matters in which we may become involved; our inability to achieve and maintain effective internal controls; our inability to successfully integrate any acquisitions; tariffs and other trade barriers; our operating results fluctuate from quarter to quarter due to, among other reasons, the fact that our operating costs tend to be fixed, while our revenue tends to be seasonal; any significant variations between actual amounts and the amounts estimated for those matters identified as our critical accounting estimates and other significant accounting estimates made in the preparation of our financial statements; political and economic instability, including continuing volatility in the economic and political environment of the European Union and the war in Ukraine, and the conflict between Israel and Hamas; our inability to comply with international regulatory restrictions over hazardous substances and electronic waste; the impact of international supply chain disruptions and delays; the impact of changes in U.S. federal and state income tax regulations; the impact of inflation and our ability to pass on rising prices to its customers; and conditions beyond our control such as war, terrorist attacks, health epidemics (including the COVID-19 pandemic caused by the coronavirus) and economic recession.

We further caution you not to unduly rely on any forward-looking statements because they reflect our views only as of the date the statements were made. We undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise.