Lifeloc Technologies, Inc. (OTC: LCTC), a global leader in the development and manufacturing of breath alcohol testing devices, has announced financial results for the 2019 fiscal year ended December 31, 2019.
2019 Financial Highlights
Lifeloc Technologies posted annual net revenue of $8.752 million resulting in 2019 after tax net income of $626 thousand, or $0.26 per diluted share. These results compare to net revenue of $8.438 million for 2018, with net income of $217 thousand, or $0.09 per diluted share. The 2019 results include a one-time gain of $225 thousand from a licensing settlement. Without this one-time gain, pretax net income would have been $462 thousand. Without this one-time gain, revenue for 2019 grew 4% over the prior year. Our balance sheet grew stronger as well, with a growth in cash of $398 thousand and debt reduction of $43 thousand.
In 2019 Lifeloc released its second generation, patent protected EasyCal® calibration station. This new model is now capable of calibrating the entire line of Lifeloc professional breath alcohol testers. New features of our automated calibration station include RFID (radio frequency identification) registration of calibration gas standards. These features further automate the calibration process and increase the separation between Lifeloc and its competitors.
Also in 2019, Lifeloc began the targeted release of our new platform breath alcohol testers, the LX9 and LT7. The LX9 adds new modes of communication while both the LX9 and LT7 have wide temperature use ranges and are readily configurable for custom usages. Both the LX9 and LT7 models were added to the U.S. Department of Transportation’s conforming product list in November 2019. Both models are receiving positive customer reviews.
The release of these new products represents the completion of multiyear research and development investments to offer leading technology to our industry. With these projects winding down, our R&D decreased to 12% of revenue in 2019. However, we expect R&D spending to increase in 2020 as we invest for the significant growth opportunities of alcohol monitoring and drug detection. In the first quarter of 2020, we expect to release the redesigned Real-Time Alcohol Detection and Reporting (R.A.D.A.R.®) device. We also plan to deploy additional resources toward the development of our rapid drug detection system based on the SpinDx™ technology. It is anticipated that our rapid drug detection system will include a rapid, quantitative marijuana breathalyzer. This remains our most critical goal, but there is still substantial work to be done.
“Our new product releases contributed to the growth experienced in 2019 and are expected to continue to drive growth in 2020. We proceed toward our strategic objectives, which are to gain market share with superior products, add value to our breath alcohol testers via automation and monitoring capability, and ultimately leverage the ease-of-use of our breath testers to develop drug testing devices,” commented Dr. Wayne Willkomm, President and CEO. “Looking forward, we see the Coronavirus COVID-19 as a significant risk and disruption for early 2020, both for the supply chain and customer demand. We have taken steps intended to keep our workers safe and to secure the necessary raw materials to keep production running. We hope the broader adoption of the new LX platform as well as the release of the redesigned R.A.D.A.R devices will outweigh the short-term demand disruption during this early 2020 challenge.”
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.
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. | ||||||||
| Balance Sheets | ||||||||
| ASSETS | ||||||||
December 31, | ||||||||
| CURRENT ASSETS: | 2019 | 2018 | ||||||
| Cash | $ | 3,185,996 | $ | 2,788,327 | ||||
| Accounts receivable, net | 641,239 | 675,136 | ||||||
| Inventories, net | 1,986,299 | 1,290,607 | ||||||
| Income taxes receivable | 6,750 | 90,629 | ||||||
| Prepaid expenses and other | 18,857 | 35,155 | ||||||
| Total current assets | 5,839,141 | 4,879,854 | ||||||
| PROPERTY AND EQUIPMENT, at cost: | ||||||||
| Land | 317,932 | 317,932 | ||||||
| Building | 1,928,795 | 1,928,795 | ||||||
| Real-time Alcohol Detection And Recognition equipment and software | 569,448 | 569,448 | ||||||
| Production equipment, software and space modifications | 976,621 | 800,569 | ||||||
| Training courses | 432,375 | 432,375 | ||||||
| Office equipment, software and space modifications | 208,986 | 241,836 | ||||||
| Sales and marketing equipment, and space modifications | 232,600 | 219,797 | ||||||
| Research and development equipment, software and space modifications | 172,429 | 159,810 | ||||||
| Less accumulated depreciation | (1,959,541 | ) | (1,649,203 | ) | ||||
| Total property and equipment, net | 2,879,645 | 3,021,359 | ||||||
| OTHER ASSETS: | ||||||||
| Patents, net | 145,323 | 158,147 | ||||||
| Deposits and other | 74,027 | 140,452 | ||||||
| Deferred taxes | 86,658 | 79,869 | ||||||
| Total other assets | 306,008 | 378,468 | ||||||
| Total assets | $ | 9,024,794 | $ | 8,279,681 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 261,798 | $ | 343,783 | ||||
| Term loan payable, current portion | 44,879 | 43,207 | ||||||
| Customer deposits | 214,031 | 19,265 | ||||||
| Accrued expenses | 290,458 | 250,912 | ||||||
| Deferred revenue, current portion | 45,874 | 44,218 | ||||||
| Reserve for warranty expense | 45,000 | 40,000 | ||||||
| Total current liabilities | 902,040 | 741,385 | ||||||
| TERM LOAN PAYABLE, net of current portion and | ||||||||
| debt issuance costs | 1,324,467 | 1,369,347 | ||||||
| DEFERRED REVENUE, net of current portion | 6,066 | 8,212 | ||||||
| Total liabilities | 2,232,573 | 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 | 2,188,917 | 1,563,091 | ||||||
| Total stockholders' equity | 6,792,221 | 6,160,737 | ||||||
| Total liabilities and stockholders' equity | $ | 9,024,794 | $ | 8,279,681 | ||||
| LIFELOC TECHNOLOGIES, INC. | ||||||||
| Statements of Income | ||||||||
Years Ended December 31, | ||||||||
| REVENUES: | 2019 | 2018 | ||||||
| Product sales | $ | 8,251,570 | $ | 8,104,003 | ||||
| Royalties | 411,111 | 247,765 | ||||||
| Rental income | 89,142 | 85,886 | ||||||
| Total | 8,751,823 | 8,437,654 | ||||||
| COST OF SALES | 4,815,820 | 4,628,403 | ||||||
| GROSS PROFIT | 3,936,003 | 3,809,251 | ||||||
| OPERATING EXPENSES: | ||||||||
| Research and development | 1,038,227 | 1,121,827 | ||||||
| Sales and marketing | 1,240,773 | 1,251,388 | ||||||
| General and administrative | 1,175,788 | 1,165,413 | ||||||
| Total | 3,454,788 | 3,538,628 | ||||||
| OPERATING INCOME | 481,215 | 270,623 | ||||||
| OTHER INCOME (EXPENSE): | ||||||||
| Settlement proceeds | 225,199 | - | ||||||
| Interest income | 38,750 | 25,624 | ||||||
| Interest expense | (57,802 | ) | (61,650 | ) | ||||
| Total | 206,147 | (36,026 | ) | |||||
| NET INCOME BEFORE PROVISION FOR TAXES | 687,362 | 234,597 | ||||||
| (PROVISION FOR) FEDERAL AND STATE INCOME TAXES | (61,536 | ) | (17,433 | ) | ||||
| NET INCOME | $ | 625,826 | $ | 217,164 | ||||
| NET INCOME PER SHARE, BASIC | $ | 0.26 | $ | 0.09 | ||||
| NET INCOME PER SHARE, DILUTED | $ | 0.26 | $ | 0.09 | ||||
| WEIGHTED AVERAGE SHARES, BASIC | 2,454,116 | 2,454,116 | ||||||
| WEIGHTED AVERAGE SHARES, DILUTED | 2,454,116 | 2,512,445 | ||||||
| LIFELOC TECHNOLOGIES, INC. | |||||||||
| Statements of Cash Flows | |||||||||
Years Ended December 31, | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | 2019 | 2018 | |||||||
| Net income | $ | 625,826 | $ | 217,164 | |||||
| Adjustments to reconcile net income to net cash | |||||||||
| provided from operating activities- | |||||||||
| Depreciation and amortization | 412,529 | 416,896 | |||||||
| Provision for doubtful accounts, net change | - | (5,000 | ) | ||||||
| Provision for inventory obsolescence, net change | 20,000 | 60,000 | |||||||
| Deferred taxes, net change | (6,789 | ) | (13,338 | ) | |||||
| Reserve for warranty expense, net change | 5,000 | - | |||||||
| Stock based compensation expense related to | |||||||||
stock options | 5,658 | 17,469 | |||||||
| Changes in operating assets and liabilities- | |||||||||
| Accounts receivable | 33,897 | (76,810 | ) | ||||||
| Inventories | (715,692 | ) | (175,504 | ) | |||||
| Income taxes receivable | 83,879 | 30,772 | |||||||
| Prepaid expenses and other | 16,298 | (13,351 | ) | ||||||
| Deposits and other | 66,425 | 118,585 | |||||||
| Accounts payable | (81,985 | ) | 46,687 | ||||||
| Customer deposits | 194,766 | (29,498 | ) | ||||||
| Accrued expenses | 39,546 | (13,378 | ) | ||||||
| Deferred revenue | (490 | ) | (10,390 | ) | |||||
| Net cash provided from | |||||||||
| operating activities | 698,868 | 570,304 | |||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||
| Purchases of property, equipment and space modifications | (256,906 | ) | (402,147 | ) | |||||
| Patent filing expense | - | (6,750 | ) | ||||||
| Net cash (used in) investing activities | (256,906 | ) | (408,897 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||
| Principal payments made on term loan | (44,293 | ) | (42,535 | ) | |||||
| Net cash (used in) financing | |||||||||
| activities | (44,293 | ) | (42,535 | ) | |||||
| NET INCREASE IN CASH | 397,669 | 118,872 | |||||||
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 2,788,327 | 2,669,455 | |||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 3,185,996 | $ | 2,788,327 | |||||
| SUPPLEMENTAL INFORMATION: | |||||||||
| Cash paid for interest | $ | 56,717 | $ | 58,847 | |||||
| Cash paid for income tax | $ | 38,000 | $ | - | |||||
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Contacts:
Lifeloc Technologies, Inc.
http://www.lifeloc.com
(303) 431-9500
