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 third quarter ended September 30, 2019.
Third Quarter Highlights
Lifeloc posted quarterly net revenue of $2.258 million resulting in quarterly net income after taxes of $152 thousand, or $0.06 per diluted share. These results compare to net revenue of $2.056 million and quarterly net income of $58 thousand, or $0.02 per diluted share in the third quarter of 2018. Gross margin on total revenue grew to 47% versus 46% in the same quarter last year. Revenue for the quarter increased nearly 10% versus the third quarter last year. For the first nine months of 2019, net revenue was $6.665 million and net income was $401 thousand, versus revenue of $6.387 million and net income of $147 thousand the same period last year ($0.16 vs. $0.06 per diluted share).
The third quarter performance benefited from the release and shipments of the second generation of our patent protected EasyCal® automated calibration station, as well as increased royalties. This updated calibration station has expanded capabilities to calibrate our entire line of professional breathalyzers as well as RFID (Radio Frequency Identification) registration of calibration standards to further automate the process, representing a further advance of an already unique product.
“It was another strong quarter, both in top line revenue growth and bottom line earnings versus last year,” said CEO Dr. Wayne Willkomm. He added, “We are hopeful for further growth versus last year, with the DOT (Department of Transportation) approval of our newest breathalyzers, which happened in the fourth quarter. These new breathalyzers are packed with features and power that make these top performers while still offering excellent value to our customers. But with the completion of these products, research and development expenses are not expected to drop. We continue to expect research spending to ramp up as we redirect existing resources and even add more resources to deploy against our top priority, which is the development and commercialization of our real-time drug testing, including the marijuana breathalyzer based on the SpinDx lab on a disc detection platform.”
Real-time drug testing remains Lifeloc’s brightest growth opportunity. Lifeloc and Sandia National Laboratory in cooperation have developed trace analysis technologies for drugs of abuse. Getting rapid, quantitative results for a panel of drugs of abuse, including marijuana, heroin, cocaine and methamphetamine, is a critical tool needed by law enforcement to ensure safety on our roads and in the workplace. We have demonstrated SpinDx to perform trace analysis from liquid and vapor samples in the laboratory. Our work ahead is to complete the conversion of SpinDx from a laboratory test to simple-to-operate devices ready for deployment in the field.
Likewise, alcohol monitoring is another critical path to growth. Alcohol monitoring is accomplished through our R.A.D.A.R.® (Real-time Alcohol Detection and Reporting) device, which is a tool to supervise offenders as an alternative to incarceration. The R.A.D.A.R. device calls for random alcohol tests, and stores the results for later retrieval by the probation officer, while onboard biometrics automatically verify the identity of the test subject. The second generation R.A.D.A.R. devices are in development with production expected in the first quarter of 2020. R.A.D.A.R. devices and their associated monitoring services are a critical step in moving our business towards a recurring revenue model.
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 | ||||||||
September 30, | ||||||||
2019 | December 31, | |||||||
(Unaudited) | 2018 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 2,922,176 | $ | 2,788,327 | ||||
Accounts receivable, net | 754,680 | 675,136 | ||||||
Inventories, net | 2,051,897 | 1,290,607 | ||||||
Income taxes receivable | — | 90,629 | ||||||
Prepaid expenses and other | 97,333 | 35,155 | ||||||
Total current assets | 5,826,086 | 4,879,854 | ||||||
PROPERTY AND EQUIPMENT, at cost: | ||||||||
Land | 317,932 | 317,932 | ||||||
Building | 1,952,347 | 1,928,795 | ||||||
Real-time Alcohol Detection And Reporting 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 | 246,738 | 219,797 | ||||||
Research and development equipment and software | 159,810 | 159,810 | ||||||
Less accumulated depreciation | (1,954,927 | ) | (1,649,203 | ) | ||||
Total property and equipment, net | 2,882,123 | 3,021,359 | ||||||
OTHER ASSETS: | ||||||||
Patents, net | 148,535 | 158,147 | ||||||
Deposits and other | 77,568 | 140,452 | ||||||
Deferred taxes | 90,061 | 79,869 | ||||||
Total other assets | 316,164 | 378,468 | ||||||
Total assets | $ | 9,024,373 | $ | 8,279,681 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | $ | 389,138 | $ | 343,783 | ||||
Term loan payable, current portion | 44,413 | 43,207 | ||||||
Customer deposits | 164,606 | 19,265 | ||||||
Accrued federal and state income tax | 105,346 | — | ||||||
Accrued expenses | 300,342 | 250,912 | ||||||
Deferred revenue, current portion | 67,199 | 44,218 | ||||||
Reserve for warranty expense | 41,000 | 40,000 | ||||||
Total current liabilities | 1,112,044 | 741,385 | ||||||
TERM LOAN PAYABLE, net of current portion and | ||||||||
debt issuance costs | 1,335,788 | 1,369,347 | ||||||
DEFERRED REVENUE, net of current portion | 8,937 | 8,212 | ||||||
Total liabilities | 2,456,769 | 2,118,944 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
STOCKHOLDERS' EQUITY: | ||||||||
Common stock, no par value; 50,000,000 shares | ||||||||
authorized, 2,454,116 shares outstanding | 4,603,304 | 4,597,646 | ||||||
Retained earnings | 1,964,300 | 1,563,091 | ||||||
Total stockholders' equity | 6,567,604 | 6,160,737 | ||||||
Total liabilities and stockholders' equity | $ | 9,024,373 | $ | 8,279,681 | ||||
LIFELOC TECHNOLOGIES, INC. Condensed Statements of Income (Unaudited) | ||||||||
Three Months Ended September 30, | ||||||||
REVENUES: | 2019 | 2018 | ||||||
Product sales | $ | 2,083,044 | $ | 1,985,520 | ||||
Royalties | 153,922 | 46,417 | ||||||
Rental income | 21,189 | 23,822 | ||||||
Total | 2,258,155 | 2,055,759 | ||||||
COST OF SALES | 1,193,088 | 1,111,067 | ||||||
GROSS PROFIT | 1,065,067 | 944,692 | ||||||
OPERATING EXPENSES: | ||||||||
Research and development | 253,716 | 249,092 | ||||||
Sales and marketing | 329,824 | 331,505 | ||||||
General and administrative | 287,814 | 271,172 | ||||||
Total | 871,354 | 851,769 | ||||||
OPERATING INCOME | 193,713 | 92,923 | ||||||
OTHER INCOME (EXPENSE): | ||||||||
Interest income | 10,454 | 7,676 | ||||||
Interest expense | (14,513 | ) | (14,957 | ) | ||||
Total | (4,059 | ) | (7,281 | ) | ||||
NET INCOME BEFORE PROVISION FOR TAXES | 189,654 | 85,642 | ||||||
PROVISION FOR FEDERAL AND STATE INCOME TAXES | (38,129 | ) | (27,478 | ) | ||||
NET INCOME | $ | 151,525 | $ | 58,164 | ||||
NET INCOME PER SHARE, BASIC | $ | 0.06 | $ | 0.02 | ||||
NET INCOME PER SHARE, DILUTED | $ | 0.06 | $ | 0.02 | ||||
WEIGHTED AVERAGE SHARES, BASIC | 2,454,116 | 2,454,116 | ||||||
WEIGHTED AVERAGE SHARES, DILUTED | 2,456,105 | 2,454,116 | ||||||
LIFELOC TECHNOLOGIES, INC. Condensed Statements of Income (Unaudited) | ||||||||
Nine Months Ended September 30, | ||||||||
2019 | 2018 | |||||||
REVENUES: | ||||||||
Product sales | $ | 6,219,779 | $ | 6,121,553 | ||||
Royalties | 376,906 | 207,840 | ||||||
Rental income | 67,953 | 57,524 | ||||||
Total | 6,664,638 | 6,386,917 | ||||||
COST OF SALES | 3,512,235 | 3,446,592 | ||||||
GROSS PROFIT | 3,152,403 | 2,940,325 | ||||||
OPERATING EXPENSES: | ||||||||
Research and development | 742,884 | 840,647 | ||||||
Sales and marketing | 961,746 | 997,563 | ||||||
General and administrative | 908,607 | 864,629 | ||||||
Total | 2,613,237 | 2,702,839 | ||||||
OPERATING INCOME | 539,166 | 237,486 | ||||||
OTHER INCOME (EXPENSE): | ||||||||
Interest income | 27,726 | 14,113 | ||||||
Interest expense | (43,404 | ) | (47,045 | ) | ||||
Total | (15,678 | ) | (32,932 | ) | ||||
NET INCOME BEFORE PROVISION FOR TAXES | 523,488 | 204,554 | ||||||
PROVISION FOR FEDERAL AND STATE INCOME TAXES | (122,279 | ) | (57,061 | ) | ||||
NET INCOME | $ | 401,209 | $ | 147,493 | ||||
NET INCOME PER SHARE, BASIC | $ | 0.16 | $ | 0.06 | ||||
NET INCOME PER SHARE, DILUTED | $ | 0.16 | $ | 0.06 | ||||
WEIGHTED AVERAGE SHARES, BASIC | 2,454,116 | 2,454,116 | ||||||
WEIGHTED AVERAGE SHARES, DILUTED | 2,454,786 | 2,454,116 | ||||||
Lifeloc Technologies, Inc. Condensed Statements of Stockholders' Equity | ||||||||||||||||
Three Months Ended
|
Nine Months Ended
| |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Total shareholders' equity, beginning balances | $ | 6,413,642 | $ | 6,024,167 | $ | 6,160,737 | $ | 5,926,104 | ||||||||
Common stock (no shares issued during periods): | ||||||||||||||||
Beginning balances | 4,600,867 | 4,588,911 | 4,597,646 | 4,580,177 | ||||||||||||
Stock based compensation expense related | ||||||||||||||||
to stock options | 2,437 | 4,368 | 5,658 | 13,102 | ||||||||||||
Ending balances | 4,603,304 | 4,593,279 | 4,603,304 | 4,593,279 | ||||||||||||
Retained earnings: | ||||||||||||||||
Beginning balances | 1,812,775 | 1,435,256 | 1,563,091 | 1,345,927 | ||||||||||||
Net income | 151,525 | 58,164 | 401,209 | 147,493 | ||||||||||||
Ending balances | 1,964,300 | 1,493,420 | 1,964,300 | 1,493,420 | ||||||||||||
Total shareholders' equity, ending balances | $ | 6,567,604 | $ | 6,086,699 | $ | 6,567,604 | $ | 6,086,699 | ||||||||
LIFELOC TECHNOLOGIES, INC. Condensed Statements of Cash Flows (Unaudited) | ||||||||
Nine Months Ended September 30, | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | 2019 | 2018 | ||||||
Net income | $ | 401,209 | $ | 147,493 | ||||
Adjustments to reconcile net income to net cash | ||||||||
provided by operating activities- | ||||||||
Depreciation and amortization | 316,150 | 320,983 | ||||||
Provision for inventory obsolescence, net change | 7,500 | 42,500 | ||||||
Deferred taxes, net change | (10,192 | ) | (11,251 | ) | ||||
Reserve for warranty expense, net change | 1,000 | 1,000 | ||||||
Stock based compensation expense related to | ||||||||
stock options | 5,658 | 13,102 | ||||||
Changes in operating assets and liabilities- | ||||||||
Accounts receivable | (79,544 | ) | (130,895 | ) | ||||
Inventories | (768,790 | ) | (222,165 | ) | ||||
Income taxes receivable | 90,629 | 68,312 | ||||||
Prepaid expenses and other | (62,178 | ) | (63,682 | ) | ||||
Deposits and other | 62,884 | 253,893 | ||||||
Accounts payable | 45,355 | 18,123 | ||||||
Customer deposits | 145,341 | (32,822 | ) | |||||
Accrued federal and state income tax | 105,346 | — | ||||||
Accrued expenses | 49,430 | 7,795 | ||||||
Deferred revenue | 23,706 | (7,439 | ) | |||||
Net cash provided from | ||||||||
operating activities | 333,504 | 404,947 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchases of property and equipment | (166,488 | ) | (378,567 | ) | ||||
Patent filing expense | — | (6,648 | ) | |||||
Net cash (used in) investing activities | (166,488 | ) | (385,215 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Principal payments made on term loan | (33,167 | ) | (31,859 | ) | ||||
Net cash (used in) financing | ||||||||
activities | (33,167 | ) | (31,859 | ) | ||||
NET INCREASE (DECREASE) IN CASH | 133,849 | (12,127 | ) | |||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 2,788,327 | 2,669,455 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 2,922,176 | $ | 2,657,328 | ||||
SUPPLEMENTAL INFORMATION: | ||||||||
Cash paid for interest | $ | 42,590 | $ | 44,270 | ||||
Cash paid for income tax | $ | — | $ | — | ||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20191112006110/en/
Contacts:
Lifeloc Technologies, Inc.
http://www.lifeloc.com
(303) 431-9500
