WHEAT RIDGE, Colo.--(BUSINESS WIRE)--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, 2020.
First Quarter Financial Highlights
We posted quarterly net revenue of $2.018 million resulting in a quarterly net loss of $165 thousand, or $(0.07) per diluted share. These results compare to net revenue of $2.069 million for the first quart of 2019. and quarterly net income of $31 thousand, or $0.01 per diluted share in the first quarter of 2019. Revenue for the quarter declined 2% versus the first quarter last year.
This sales decline appears to be a direct result of the global Covid-19 pandemic. Sales in January were higher than the prior year but declined in February and March when many important markets began imposing travel bans and social lockdowns. The quarter resulted in a loss as a result of the reduced sales and ongoing expenses including the cost of product launches and investment in our workforce in the form of option grants to key employees.
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 strongly in product development to achieve this vision, focusing on a few major product developments that we expect to have a significant impact on our performance. We believe we are now at the point where we will start to reap the benefit of these investments.
Some of our new products are entering the market now. Our new breath alcohol testers, the LX9 and LT7 have been released and are starting to find adoption both in the U.S. and internationally. These units are on the U.S. Department of Transportation Conforming Products List. With a highly flexible configuration, multiple language capability and a wide temperature use range these units are expected to facilitate future sales growth. Our automated calibration has been broadened with the Easycal® G2, which is compatible with our existing installed base of professional breathalyzers as well as the new platform units. The G2 model includes RFID (Radio Frequency Identification) reading of calibration standard data, which further automates the calibration process.
Likewise, the R.A.D.A.R.® (Real-time Alcohol Detection and Reporting) model 200 has been released to manufacturing. This new model has updated communication, improved GPS accuracy and mechanical reliability and is currently in final testing. 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 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.
“Our new products have been gaining traction and the availability of the R.A.D.A.R. model 200 will be very timely because of the greater need for more automated offender supervision,” reports CEO Dr. Wayne Willkomm. “At Lifeloc, like at most small Colorado companies, we have been strongly impacted by the COVID-19 pandemic. We are an essential business and, as such, have remained open throughout the COVID-19 outbreak to support public safety and the transportation industry. While our sales have suffered, our overhead has remained constant. In response to this downturn we have applied for and received funding from the Paycheck Protection Program. It is important to note that while Lifeloc is a publicly traded company, we are also significantly smaller with a smaller market capitalization than most publicly traded companies. In the face of our narrowing margins, we believe the PPP loan is necessary to help us continue to support our 36 full-time workers and keep good manufacturing jobs here in the U.S. Lifeloc is currently in the middle of two major product launches and is also investing substantially in developing a marijuana breathalyzer, which, if successful, will contribute powerfully to societal needs for safety. With the help of the PPP loan, we are grateful to be able to keep our full workforce employed and fully engaged in our mission during this difficult time.”
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, |
|
|
|
|||
2020 |
|
|
December 31, |
|||
| CURRENT ASSETS: | (Unaudited) |
|
|
2019 |
||
| Cash | $ |
2,913,332 |
$ |
3,185,996 |
||
| Accounts receivable, net | 638,038 |
641,239 |
||||
| Inventories, net | 2,236,331 |
1,986,299 |
||||
| Income taxes receivable | 41,305 |
6,750 |
||||
| Prepaid expenses and other | 139,772 |
18,857 |
||||
| Total current assets | 5,968,778 |
5,839,141 |
||||
| 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 |
976,621 |
||||
| Training courses | 432,375 |
432,375 |
||||
| Office equipment, software and space modifications | 218,074 |
208,986 |
||||
| Sales and marketing equipment and space modifications | 232,600 |
232,600 |
||||
| Research and development equipment, software and space modifications | 172,429 |
172,429 |
||||
| Less accumulated depreciation | (2,053,197) |
(1,959,541) |
||||
| Total property and equipment, net | 2,795,077 |
2,879,645 |
||||
| OTHER ASSETS: | ||||||
| Patents, net | 160,823 |
145,323 |
||||
| Deposits and other | 74,027 |
74,027 |
||||
| Deferred taxes | 96,007 |
86,658 |
||||
| Total other assets | 330,857 |
306,008 |
||||
| Total assets | $ |
9,094,712 |
$ |
9,024,794 |
||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| CURRENT LIABILITIES: | ||||||
| Accounts payable | $ |
480,361 |
$ |
261,798 |
||
| Term loan payable, current portion | 45,494 |
44,879 |
||||
| Customer deposits | 184,332 |
214,031 |
||||
| Accrued expenses | 319,366 |
290,458 |
||||
| Deferred revenue, current portion | 42,849 |
45,874 |
||||
| Reserve for warranty expense | 46,000 |
45,000 |
||||
| Total current liabilities | 1,118,402 |
902,040 |
||||
| TERM LOAN PAYABLE, net of current portion and | ||||||
| debt issuance costs | 1,312,732 |
1,324,467 |
||||
| DEFERRED REVENUE, net of current portion | 4,552 |
6,066 |
||||
| Total liabilities | 2,435,686 |
2,232,573 |
||||
| COMMITMENTS AND CONTINGENCIES | ||||||
| STOCKHOLDERS' EQUITY: | ||||||
| Common stock, no par value; 50,000,000 shares | ||||||
| authorized, 2,454,116 shares outstanding | 4,635,415 |
4,603,304 |
||||
| Retained earnings | 2,023,611 |
2,188,917 |
||||
| Total stockholders' equity | 6,659,026 |
6,792,221 |
||||
| Total liabilities and stockholders' equity | $ |
9,094,712 |
$ |
9,024,794 |
||
| LIFELOC TECHNOLOGIES, INC. | ||||||
| Condensed Statements of Income (Unaudited) | ||||||
Three Months Ended March 31, |
||||||
| REVENUES: | 2020 |
2019 |
||||
| Product sales | $ |
1,937,866 |
$ |
1,970,101 |
||
| Royalties | 59,281 |
72,838 |
||||
| Rental income | 21,189 |
25,822 |
||||
| Total | 2,018,336 |
2,068,761 |
||||
| COST OF SALES | 1,240,260 |
1,136,559 |
||||
| GROSS PROFIT | 778,076 |
932,202 |
||||
| OPERATING EXPENSES: | ||||||
| Research and development | 296,897 |
245,799 |
||||
| Sales and marketing | 326,564 |
316,383 |
||||
| General and administrative | 356,887 |
325,175 |
||||
| Total | 980,348 |
887,357 |
||||
| OPERATING INCOME (LOSS) | (202,272) |
44,845 |
||||
| OTHER INCOME (EXPENSE): | ||||||
| Interest income | 7,176 |
9,422 |
||||
| Interest expense | (14,131) |
(14,423) |
||||
| Total other income (expense) | (6,955) |
(5,001) |
||||
| NET INCOME (LOSS) BEFORE PROVISION FOR TAXES | (209,227) |
39,844 |
||||
| BENEFIT FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES | 43,921 |
(8,880) |
||||
| NET INCOME (LOSS) | $ |
(165,306) |
$ |
30,964 |
||
| NET INCOME (LOSS) PER SHARE, BASIC | $ |
(0.07) |
$ |
0.01 |
||
| NET INCOME (LOSS) PER SHARE, DILUTED | $ |
(0.07) |
$ |
0.01 |
||
| WEIGHTED AVERAGE SHARES, BASIC | 2,454,116 |
2,454,116 |
||||
| WEIGHTED AVERAGE SHARES, DILUTED | 2,454,116 |
2,504,116 |
||||
Lifeloc Technologies, Inc. |
||||||
Statements of Stockholders' Equity (Unaudited) |
||||||
|
||||||
Three Months Ended March 31, |
||||||
2020 |
2019 |
|||||
| Total stockholders' equity, beginning balances | $ |
6,792,221 |
$ |
6,160,737 |
||
| Common stock (no shares issued during periods): | ||||||
| Beginning balances | 4,603,304 |
4,597,646 |
||||
| Stock based compensation expense related | ||||||
| to stock options | 32,111 |
2,162 |
||||
| Ending balances | 4,635,415 |
4,599,808 |
||||
| Retained earnings: | ||||||
| Beginning balances | 2,188,917 |
1,563,091 |
||||
| Net income (loss) | (165,306) |
30,964 |
||||
| Ending balances | 2,023,611 |
1,594,055 |
||||
| Total stockholders' equity, ending balances | $ |
6,659,026 |
6,193,863 |
|||
LIFELOC TECHNOLOGIES, INC. |
|||||||
Condensed Statements of Cash Flows (Unaudited) |
|||||||
Three Months Ended March 31, |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | 2020 |
2019 |
|||||
| Net income (loss) | $ |
(165,306) |
$ |
30,964 |
|||
| Adjustments to reconcile net income to net cash | |||||||
| provided from (used in) operating activities- | |||||||
| Depreciation and amortization | 97,199 |
103,047 |
|||||
| Provision for doubtful accounts, net change | 2,000 |
- |
|||||
| Provision for inventory obsolescence, net change | 36,765 |
- |
|||||
| Deferred taxes, net change | (9,349) |
(54,608) |
|||||
| Reserve for warranty expense, net change | 1,000 |
- |
|||||
| Stock based compensation expense related to | |||||||
| stock options | 32,111 |
2,162 |
|||||
| Changes in operating assets and liabilities- | |||||||
| Accounts receivable | 1,201 |
127,128 |
|||||
| Inventories | (286,797) |
(383,133) |
|||||
| Income taxes receivable | (34,555) |
55,107 |
|||||
| Prepaid expenses and other | (120,915) |
(99,989) |
|||||
| Deposits and other | - |
86,485 |
|||||
| Accounts payable | 218,563 |
310,840 |
|||||
| Customer deposits | (29,699) |
2,248 |
|||||
| Accrued expenses | 28,908 |
(34,254) |
|||||
| Deferred revenue | (4,539) |
4,544 |
|||||
| Net cash provided from (used in) | |||||||
| operating activities | (233,413) |
150,541 |
|||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
| Purchases of property and equipment | (9,088) |
(128,614) |
|||||
| Patent filing expense | (18,772) |
- |
|||||
| Net cash (used in) investing activities | (27,860) |
(128,614) |
|||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
| Principal payments made on term loan | (11,391) |
(11,101) |
|||||
| Net cash (used in) financing | |||||||
| activities | (11,391) |
(11,101) |
|||||
| NET INCREASE (DECREASE) IN CASH | (272,664) |
10,826 |
|||||
| CASH, BEGINNING OF PERIOD | 3,185,996 |
2,788,327 |
|||||
| CASH, END OF PERIOD | $ |
2,913,332 |
$ |
2,799,153 |
|||
| SUPPLEMENTAL INFORMATION: | |||||||
| Cash paid for interest | $ |
13,860 |
$ |
14,152 |
|||
| Cash paid for income tax | $ |
20,063 |
$ |
- |
|||
