Lifeloc Technologies, Inc. (OTC: LCTC), a global leader in the development and manufacturing of breath alcohol and drug testing devices, has announced financial results for the first quarter ended March 31, 2019, as well as the results for the 2019 annual shareholder meeting.
First Quarter Financial Highlights
We posted quarterly net revenue of $2.07 million resulting in quarterly net income after taxes of $31 thousand, or $0.01 per diluted share. These results compare to net revenue of $2.20 million and quarterly net income of $11 thousand, or $0.00 per diluted share in the first quarter of 2018. Revenue for the quarter declined 6% versus the first quarter last year. This decline appears to have coincided with the federal government shutdown which adversely affected buying in regulated testing areas as well as local law enforcement purchases. Even though revenue declined, earnings improved through lower operating expenses. Gross margin on total revenue remained unchanged in the current quarter 45% versus 45% in the same quarter last year.
Shareholder Meeting
Lifeloc conducted its annual shareholder meeting May 6th at the company’s headquarters in Wheat Ridge, CO. The proposed slate of directors was elected with over 99% of the votes cast and the appointment of auditors was ratified, also by more than 99% of the votes cast. Following the business portion of the meeting, a brief company status report was presented, and these slides are available on our website, www.lifeloc.com/shareholderMeeting.
Product Pipeline
Our vision is that Lifeloc becomes the world’s leading company in real-time alcohol and drug abuse detection and monitoring. We have been investing aggressively in product development to achieve this vision, focusing on a few major product developments that are expected to have a significant impact on our performance. We are now at the point where we will start to reap the benefit of these investments.
The premier breathalyzer model of our new platform, the Lifeloc LX9, went into production during the quarter. The LX9 satisfies many market needs for performance and connectivity and combines these features in one easy to use package. To support the new platform, our patented Easycal® calibration station has been upgraded to the Easycal G2 second generation calibration station. This model is compatible with our existing installed base of professional breathalyzers as well as the new platform. The G2 model includes RFID (Radio Frequency Identification) reading of calibration standard data, which further automates the calibration process.
Likewise, the new model of the R.A.D.A.R.® (Real-time Alcohol Detection and Reporting) device is moving forward. Prototype devices are in testing, with production expected later this year. R.A.D.A.R. devices are alcohol monitoring units which can be used as a tool to supervise offenders as an alternative to incarceration. Onboard biometrics automatically verify the identity of the test subject. R.A.D.A.R. devices are a critical step in moving our business towards a recurring revenue model.
Our marijuana breathalyzer remains a key target for product development. The continued broader legalization of marijuana only increases the need for a rapid, quantitative roadside test to identify drivers under the influence of marijuana. The completion of other projects will allow resources to be redirected towards accelerating this effort. The ability of our technology to detect delta-9-THC down to a concentration of 5 nanograms per milliliter and to collect a testable sample from a vapor stream has already been demonstrated in our laboratories. Detection of THC is accomplished through the SpinDx technology, licensed exclusively by Lifeloc Technologies for drugs of abuse from Sandia National Laboratory. More work is needed to convert this technology into a simple-to-operate device suitable for roadside testing.
About Lifeloc Technologies
Lifeloc Technologies, Inc. (OTC: LCTC) is a trusted U.S. manufacturer of evidential breath alcohol testers and related training and supplies for Workplace, Law Enforcement, Corrections and International customers. Lifeloc stock trades over-the-counter under the symbol LCTC. We are a fully reporting Company with our SEC filings available on our web site, www.lifeloc.com/investor.
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which involve substantial risks and uncertainties that may cause actual results to differ materially from those indicated by the forward-looking statements. All forward-looking statements expressed or implied in this press release, including statements about our strategies, expectations about new and existing products, market demand, acceptance of new and existing products, technologies and opportunities, market size and growth, and return on investments in products and market, are based on information available to us on the date of this document, and we assume no obligation to update such forward-looking statements. Investors are strongly encouraged to review the section titled “Risk Factors” in our SEC filings.
Easycal® and R.A.D.A.R.® are registered trademarks of Lifeloc Technologies, Inc.
SpinDx™ is a trademark of Sandia Corporation.
| LIFELOC TECHNOLOGIES, INC. | ||||||||
Condensed Balance Sheets ASSETS | ||||||||
| March 31, | ||||||||
| 2019 | December 31, | |||||||
| CURRENT ASSETS: | (Unaudited) | 2018 | ||||||
| Cash | $ | 2,799,153 | $ | 2,788,327 | ||||
| Accounts receivable, net | 548,008 | 675,136 | ||||||
| Inventories, net | 1,673,740 | 1,290,607 | ||||||
| Income taxes receivable | 35,522 | 90,629 | ||||||
| Prepaid expenses and other | 135,144 | 35,155 | ||||||
| Total current assets | 5,191,567 | 4,879,854 | ||||||
| PROPERTY AND EQUIPMENT, at cost: | ||||||||
| Land | 317,932 | 317,932 | ||||||
| Building | 1,941,414 | 1,928,795 | ||||||
| Real-time Alcohol Detection And Recognition equipment and software | 569,448 | 569,448 | ||||||
| Production equipment and software | 911,454 | 800,569 | ||||||
| Training courses | 432,375 | 432,375 | ||||||
| Office equipment and software | 246,946 | 241,836 | ||||||
| Sales and marketing equipment | 219,797 | 219,797 | ||||||
| Research and development equipment and software | 159,810 | 159,810 | ||||||
| Less accumulated depreciation | (1,748,775 | ) | (1,649,203 | ) | ||||
| Total property and equipment, net | 3,050,401 | 3,021,359 | ||||||
| OTHER ASSETS: | ||||||||
| Patents, net | 154,943 | 158,147 | ||||||
| Deposits and other | 53,967 | 140,452 | ||||||
| Deferred taxes | 134,477 | 79,869 | ||||||
| Total other assets | 343,387 | 378,468 | ||||||
| Total assets | $ | 8,585,355 | $ | 8,279,681 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 654,623 | $ | 343,783 | ||||
| Term loan payable, current portion | 43,498 | 43,207 | ||||||
| Customer deposits | 21,513 | 19,265 | ||||||
| Accrued expenses | 216,658 | 250,912 | ||||||
| Deferred revenue, current portion | 49,047 | 44,218 | ||||||
| Reserve for warranty expense | 40,000 | 40,000 | ||||||
| Total current liabilities | 1,025,339 | 741,385 | ||||||
| TERM LOAN PAYABLE, net of current portion and | ||||||||
| debt issuance costs | 1,358,226 | 1,369,347 | ||||||
| DEFERRED REVENUE, net of current portion | 7,927 | 8,212 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Common stock, no par value; 50,000,000 shares | ||||||||
| authorized, 2,454,116 shares outstanding | 4,599,808 | 4,597,646 | ||||||
| Retained earnings | 1,594,055 | 1,563,091 | ||||||
| Total stockholders' equity | 6,193,863 | 6,160,737 | ||||||
| Total liabilities and stockholders' equity | $ | 8,585,355 | $ | 8,279,681 | ||||
LIFELOC TECHNOLOGIES, INC. | ||||||||
| Condensed Statements of Income (Unaudited) | ||||||||
| Three Months Ended September 30, | ||||||||
| REVENUES: | 2018 | 2017 | ||||||
| Product sales | $ | 1,970,101 | $ | 2,122,243 | ||||
| Royalties | 72,838 | 65,065 | ||||||
| Rental income | 25,822 | 14,601 | ||||||
| Total | 2,068,761 | 2,201,909 | ||||||
| COST OF SALES | 1,136,559 | 1,201,746 | ||||||
| GROSS PROFIT | 932,202 | 1,000,163 | ||||||
| OPERATING EXPENSES: | ||||||||
| Research and development | 245,799 | 338,326 | ||||||
| Sales and marketing | 316,383 | 335,401 | ||||||
| General and administrative | 325,175 | 297,333 | ||||||
| Total | 887,357 | 971,060 | ||||||
| OPERATING INCOME | 44,845 | 29,103 | ||||||
| OTHER INCOME (EXPENSE): | ||||||||
| Interest income | 9,422 | 2,184 | ||||||
| Interest expense | (14,423 | ) | (14,714 | ) | ||||
| Total | (5,001 | ) | (12,530 | ) | ||||
| NET INCOME (LOSS) BEFORE PROVISION FOR TAXES | 39,844 | 16,573 | ||||||
| (PROVISION FOR) BENEFIT FROM FEDERAL AND STATE INCOME TAXES | (8,880 | ) | (5,373 | ) | ||||
| NET INCOME | $ | 30,964 | $ | 11,200 | ||||
| NET INCOME PER SHARE, BASIC | $ | 0.01 | $ | - | ||||
| NET INCOME PER SHARE, DILUTED | $ | 0.01 | $ | - | ||||
| WEIGHTED AVERAGE SHARES, BASIC | 2,454,116 | 2,454,116 | ||||||
| WEIGHTED AVERAGE SHARES, DILUTED | 2,504,116 | 2,510,699 | ||||||
Lifeloc Technologies, Inc. Condensed Statement of Stockholders' Equity (Unaudited) | |||||||||||||||||
| Common Stock | Retained | ||||||||||||||||
| Shares | Amount | Earnings | Total | ||||||||||||||
| BALANCES, DECEMBER 31, 2018 | 2,454,116 | $ | 4,597,646 | $ | 1,563,091 | $ | 6,160,737 | ||||||||||
| Net income | - | - | 30,964 | 30,964 | |||||||||||||
| Stock based compensation expense | |||||||||||||||||
| related to stock options | - | 2,162 | - | 2,162 | |||||||||||||
| BALANCES, MARCH 31, 2019 | 2,454,116 | $ | 4,599,808 | $ | 1,594,055 | $ | 6,193,863 | ||||||||||
| Common Stock | Retained | ||||||||||||||||
| Shares | Amount | Earnings | Total | ||||||||||||||
| BALANCES, DECEMBER 31, 2017 | 2,454,116 | $ | 4,580,177 | $ | 1,345,927 | $ | 5,926,104 | ||||||||||
| Net income | - | - | 11,200 | 11,200 | |||||||||||||
| Stock based compensation expense | |||||||||||||||||
| related to stock options | - | 5,714 | - | 5,714 | |||||||||||||
| BALANCES, MARCH 31, 2018 | 2,454,116 | $ | 4,585,891 | $ | 1,357,127 | $ | 5,943,018 | ||||||||||
LIFELOC TECHNOLOGIES, INC. Condensed Statements of Cash Flows (Unaudited) | |||||||||
| Three Months Ended March 31, | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | 2019 | 2018 | |||||||
| Net income | $ | 30,964 | $ | 11,200 | |||||
| Adjustments to reconcile net income to net cash | |||||||||
| provided from (used in) operating activities- | |||||||||
| Depreciation and amortization | 103,047 | 107,878 | |||||||
| Provision for doubtful accounts, net change | - | 1,500 | |||||||
| Provision for inventory obsolescence, net change | - | 27,500 | |||||||
| Deferred taxes, net change | (54,608 | ) | 935 | ||||||
| Reserve for warranty expense, net change | - | 1,500 | |||||||
| Stock based compensation expense related to | |||||||||
| stock options | 2,162 | 5,714 | |||||||
| Changes in operating assets and liabilities- | |||||||||
| Accounts receivable | 127,128 | (165,780 | ) | ||||||
| Inventories | (383,133 | ) | (34,908 | ) | |||||
| Income taxes receivable | 55,107 | 4,438 | |||||||
| Prepaid expenses and other | (99,989 | ) | (82,032 | ) | |||||
| Deposits and other | 86.485 | 256,853 | |||||||
| Accounts payable | 310,840 | 242,673 | |||||||
| Customer deposits | 2,248 | (4,144 | ) | ||||||
| Accrued expenses | (34,254 | ) | 36,406 | ||||||
| Deferred revenue | 4,544 | (6,648 | ) | ||||||
| Net cash provided from (used in) operating activities | 150,541 | 403,085 | |||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||
| Purchases of property and equipment | (128,614 | ) | (355,512 | ) | |||||
| Net cash (used in) investing activities | (128,614 | ) | (355,512 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||
| Principal payments made on term loan | (11,101 | ) | (10,673 | ) | |||||
| Net cash (used in) financing activities | (11,101 | ) | (10,673 | ) | |||||
| NET (DECREASE) IN CASH | 10,826 | 36,900 | |||||||
| CASH, BEGINNING OF PERIOD | 2,788,327 | 2,669,455 | |||||||
| CASH, END OF PERIOD | 2,799,153 | $ | 2,706,355 | ||||||
| SUPPLEMENTAL INFORMATION: | |||||||||
| Cash paid for interest | $ | 14,152 | $ | 14,579 | |||||
| Cash paid for income tax | $ | - | $ | - | |||||
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Contacts:
Lifeloc Technologies, Inc.
http://www.lifeloc.com
(303)
431-9500
