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Lifeloc Reports Third Quarter 2020 Results

·10 min read

WHEAT RIDGE, Colo., Nov. 11, 2020 /PRNewswire/ -- 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 and for the nine months ended September 30, 2020.

(PRNewsfoto/Lifeloc Technologies)
(PRNewsfoto/Lifeloc Technologies)

Third Quarter Financial Highlights

Lifeloc posted quarterly net revenue of $1.555 million resulting in a quarterly net loss of $213 thousand, or $(0.09) per diluted share. These results compare to net revenue of $2.258 million and net income of $151 thousand, or $0.06 per diluted share, in the third quarter of 2019. Revenue for the current quarter declined 31% versus the third quarter last year. For the first nine months of 2020, net revenue was $4.893 million with a net loss of $728 thousand, or $(0.30) per diluted share, compared to net revenue of $6.664 million and net income of $401 thousand, or $0.16 per diluted share, for the same nine months of 2019.

The global Covid-19 pandemic continues to suppress purchasing activities of many of our customers. Travel bans, governmental orders, and social distancing guidelines continue to force severe contractions in demand in both domestic and international markets. As an essential part of transportation and public safety, Lifeloc has continued operations, while taking important steps to mitigate the financial impact of the pandemic. Lifeloc has received a Paycheck Protection Program (PPP) loan and has complied with all currently published SBA guidance on loan forgiveness and is hopeful that the PPP loan obtained in May of $465 thousand will be forgiven. Following use of the PPP loan funds, structural costs savings were achieved through measures including staff reduction.

Current market conditions do not change our vision that Lifeloc is becoming the world's leading provider of real-time alcohol and drug abuse detection and monitoring equipment. In fact, current conditions highlight the urgency of achieving this vision. To achieve this, we will continue to grow our research and development investment required to move our developments into the market. Growing research and development spending could result in continued short term losses, even when sales return to pre-pandemic levels.

Our new breath alcohol testers, the LX9 and LT7, have been released and are on the U.S. Department of Transportation Conforming Products List, and are starting to find adoption both domestically and internationally. With highly flexible configuration, multiple language capability and a wide temperature use range, these breathalyzers are expected to facilitate future sales growth. Additionally, our Easycal® G2 has broadened our automated calibration capability and is compatible with our existing installed base of professional breathalyzers as well as the new LX9 and LT7. The G2 model also includes RFID (Radio Frequency Identification) reading of calibration standard data, which further automates the calibration process.

Additionally, several manufacturing runs of the R.A.D.A.R.® (Real-time Alcohol Detection and Reporting) model 200 have been produced. Evaluation is beginning with key customers. Recently added, the automated enrollment assistant application is providing real-time enrollment coaching, streamlining this process for customer productivity. Additionally, this new model has updated communication, improved GPS accuracy and mechanical reliability. These devices have alcohol monitoring capability and onboard biometrics that automatically verify the identity of the test subject and are intended as a tool for supervising offenders. This alternative to incarceration represents a critical step in moving our business closer to a recurring monitoring revenue model and is expected to contribute to an increase in revenue and earnings this year and in the future.

Our SpinDx-based marijuana breathalyzer remains a key product of interest in attempts to address the broadening legalization of marijuana. Legalization and decriminalization 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 been demonstrated in our laboratories, and we continue the development work needed to convert this technology into a simple-to-operate device that is suitable for roadside testing. Detection of THC is accomplished through the SpinDx technology, licensed exclusively by Lifeloc Technologies for drugs of abuse from Sandia National Laboratory. We are targeting the end of 2021 for the first product release from this platform.

"We are very excited to have some R.A.D.A.R. 200 units in customer's hands for evaluation," said CEO Dr. Wayne Willkomm. "This is a critical step to enable a recurring revenue stream through a monitoring business."

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.

Amy Evans
Lifeloc Technologies, Inc.
http://www.lifeloc.com
(303) 431-9500

LIFELOC TECHNOLOGIES, INC.

Condensed Balance Sheets


ASSETS















September 30,

2020



December 31,

CURRENT ASSETS:


(Unaudited)



2019


Cash

$

2,264,887


$

3,185,996


Accounts receivable, net


517,618



641,239


Inventories, net


2,518,996



1,986,299


Income taxes receivable


223,404



6,750


Prepaid expenses and other


67,916



18,857


Total current assets


5,592,821



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


-2,220,032



-1,959,541


Total property and equipment, net


2,628,242



2,879,645








OTHER ASSETS:







Patents, net


154,415



145,323


Deposits and other


163,480



74,027


Deferred taxes


97,846



86,658


Total other assets


415,741



306,008









Total assets

$

8,636,804


$

9,024,794








LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:







Accounts payable

$

257,743


$

261,798


Term loan payable, current portion


46,128



44,879


Paycheck Protection loan payable


465,097



0


Customer deposits


182,810



214,031


Accrued expenses


212,359



290,458


Deferred revenue, current portion


37,494



45,874


Reserve for warranty expense


46,500



45,000


Total current liabilities


1,248,131



902,040








TERM LOAN PAYABLE, net of current portion and







debt issuance costs


1,289,659



1,324,467








DEFERRED REVENUE, net of current portion


1,723



6,066


Total liabilities


2,539,513



2,232,573








COMMITMENTS AND CONTINGENCIES













STOCKHOLDERS' EQUITY:







Common stock, no par value; 50,000,000 shares







authorized, 2,454,116 shares outstanding


4,636,038



4,603,304


Retained earnings


1,461,253



2,188,917


Total stockholders' equity


6,097,291



6,792,221









Total liabilities and stockholders' equity

$

8,636,804


$

9,024,794








LIFELOC TECHNOLOGIES, INC.

Condensed Statements of Income (Unaudited)






Three Months Ended September 30,

REVENUES:


2020



2019


Product sales

$

1,502,034


$

2,083,044


Royalties


31,395



153,922


Rental income


21,639



21,189


Total


1,555,068



2,258,155








COST OF SALES


957,964



1,193,088








GROSS PROFIT


597,104



1,065,067








OPERATING EXPENSES:







Research and development


335,075



253,716


Sales and marketing


235,733



329,824


General and administrative


297,128



287,814


Total


867,936



871,354








OPERATING INCOME (LOSS)


-270,832



193,713








OTHER INCOME (EXPENSE):







Interest income


2,598



10,454


Interest expense


-14,051



-14,513


Total


-11,453



-4,059








NET INCOME (LOSS) BEFORE (PROVISION FOR) BENEFIT FROM TAXES


-282,285



189,654








BENEFIT FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES


69,519



-38,129








NET INCOME (LOSS)

$

-212,766


$

151,525








NET INCOME (LOSS) PER SHARE, BASIC

$

(0.09)


$

0.06








NET INCOME (LOSS) PER SHARE, DILUTED

$

(0.09)


$

0.06








WEIGHTED AVERAGE SHARES, BASIC


2,454,116



2,454,116








WEIGHTED AVERAGE SHARES, DILUTED


2,454,116



2,456,105

Lifeloc Technologies, Inc.

Condensed Statements of Stockholders' Equity (Unaudited)










































Three Months Ended September 30,


Nine Months Ended September 30,



2020


2019


2020


2019

Total shareholders' equity, beginning balances

$

6,309,746


$

6,413,642


$

6,792,221


$

6,160,737














Common stock (no shares issued during periods):











Beginning balances


4,635,727



4,600,867



4,603,304



4,597,646


Stock based compensation expense related to stock options














311



2,437



32,734



5,658


Ending balances


4,636,038



4,603,304



4,636,038



4,603,304














Retained earnings:













Beginning balances


1,674,019



1,812,775



2,188,917



1,563,091


Net income (loss)


-212,766



151,525



-727,664



401,209


Ending balances


1,461,253



1,964,300



1,461,253



1,964,300














Total shareholders' equity, ending balances

$

6,097,291


$

6,567,604


$

6,097,291


$

6,567,604

LIFELOC TECHNOLOGIES, INC.

Condensed Statements of Cash Flows (Unaudited)












Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

2020


2019


Net income (loss)

$

-727,664


$

401,209


Adjustments to reconcile net income (loss) to net cash






provided by (used in) operating activities-







Depreciation and amortization


270,984



316,150


Provision for doubtful accounts, net change


3,899



-


Provision for inventory obsolescence, net change


48,943



7,500


Deferred taxes, net change


-11,188



-10,192



Reserve for warranty expense, net change


1,500



1,000


Stock based compensation expense related to







stock options


32,734



5,658


Changes in operating assets and liabilities-







Accounts receivable


119,722



-79,544


Inventories


-581,640



-768,790


Income taxes receivable


-216,654



90,629



Prepaid expenses and other


-49,059



-62,178


Deposits and other


-89,453



62,884


Accounts payable


-4,055



45,355



Customer deposits


-31,221



145,341



Accrued federal and state income tax


-



105,346


Accrued expenses


-78,099



49,430


Deferred revenue


-12,723



23,706



Net cash provided from (used in)








operating activities


-1,323,974



333,504









CASH FLOWS FROM INVESTING ACTIVITIES:







Purchases of property and equipment


-9,088



-166,488


Patent filing expense


-18,772



-



Net cash (used in) investing activities


-27,860



-166,488









CASH FLOWS FROM FINANCING ACTIVITIES:







Principal payments made on term loan


-34,372



-33,167


Proceeds from Paycheck Protection loan


465,097



-



Net cash provided by (used in)








financing activities


430,725



-33,167









NET INCREASE (DECREASE) IN CASH


-921,109



133,849









CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD


3,185,996



2,788,327









CASH AND CASH EQUIVALENTS, END OF PERIOD

$

2,264,887


$

2,922,176









SUPPLEMENTAL INFORMATION:







Cash paid for interest

$

41,384


$

42,590










Cash paid for income tax

$

20,063


$

-

Cision
Cision

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SOURCE Lifeloc Technologies