U.S. Markets closed

Lifeloc Reports Third Quarter 2019 Results

WHEAT RIDGE, Colo.--(BUSINESS WIRE)--

Lifeloc Technologies, Inc. (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. (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
September 30,

 

Nine Months Ended
September 30,

 

 

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/