Intellicheck Announces First Quarter Financial Results

Year over year first quarter revenues increased 49% and SaaS revenues increased 120%

MELVILLE, N.Y.--()--Intellicheck, Inc. (NYSE American: IDN), an industry leader in identification authentication solutions, today announced its financial results for the first quarter ended March 31, 2018.

Revenue for the first quarter ended March 31, 2018 grew 49% to $1,062,062 versus $712,660 in the prior year comparable period. SaaS revenue in the first quarter grew 120% and totaled $595,000 versus $270,000 in the quarter ending March 31, 2017. Gross profit as a percentage of revenues improved to 90.5% for the three months ended March 31, 2018 versus 84.6% in the prior year comparable period.

Intellicheck CEO Bryan Lewis said, “While I am encouraged by our progress, I am committed to refocusing our efforts to realize greater revenue growth of our SaaS based products in our key markets. To that end, I have initiated a complete reorganization of the sales force, which includes bringing in new sales people to work within a revamped operational structure. These operational changes reflect my belief that significant adjustments needed to be made to support our sales goals and allow us to manage the business in real time on a daily basis.”

Lewis explained that the actions he has taken in the first ninety days of his tenure make his intentions clear. “I am going to continue taking what I believe are the necessary steps to build momentum, drive consistent growth and position the Company on a well-defined path for success,” he concluded.

The net loss for the three months ended March 31, 2018 was ($1,067,957) or ($0.07) per diluted share versus ($936,757) or ($0.09) per diluted share in the comparable prior year period. Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, stock-based compensation expense and certain non-recurring charges) was a loss of ($961,969) for the first quarter of 2018 versus a loss of ($738,636) in the prior year comparable period. A reconciliation of adjusted EBITDA to net loss is provided elsewhere in this release.

Cash at March 31, 2018 totaled $7.8 million and stockholders’ equity totaled $15.7 million at the end of period.

The financial results reported today do not take into account any adjustments that may be required in connection with the completion of the Company’s review process and should be considered preliminary until Intellicheck files its Form 10-Q for the fiscal quarter ended March 31, 2018.

Conference Call Information:

The Company will hold an earnings conference call today, May 14, at 4:30 p.m. ET/1:30 p.m. PT to discuss operating results. To listen to the earnings conference call, please dial 877-407-8037. For callers outside the U.S., please dial 201-689-8037.

The conference call will also be webcast simultaneously and can be accessed at http://www.investorcalendar.com/event/29079 by clicking on the link to the webcast.

The webcast will be available for 14 days following the conference call.

PART I – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

 
INTELLICHECK, INC.
CONSOLIDATED BALANCE SHEETS
 
ASSETS
   
March 31, December 31,
2018 2017
(Unaudited)
CURRENT ASSETS:
Cash $ 7,765,692 $ 8,010,161

Accounts receivable, net of allowance of $18,750 at March 31, 2018 and December 31, 2017, respectively

703,016 652,627
Inventory 81,964 85,321
Other current assets 240,662   218,835  
Total current assets 8,791,334 8,966,944
 
NOTE RECEIVABLE, net of current portion 60,764 71,138
PROPERTY AND EQUIPMENT, net 269,102 211,602
GOODWILL 8,101,661 8,101,661
INTANGIBLE ASSETS, net 424,327 463,578
OTHER ASSETS 67,808   67,181  
 

Total assets

$ 17,714,996   $ 17,882,104  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
CURRENT LIABILITIES:
Accounts payable $ 123,052 $ 71,578
Accrued expenses 930,405 815,350
Deferred revenue, current portion 810,361   739,980  
Total current liabilities 1,863,818 1,626,908
 
OTHER LIABILITIES:
Deferred revenue, long-term portion 82,650 87,736
Other long-term liabilities 79,203   158,407  
 
Total liabilities 2,025,671 1,873,051
 
COMMITMENTS AND CONTINGENCIES (Note 11)
 
STOCKHOLDERS’ EQUITY:

Common stock - $.001 par value; 40,000,000 shares authorized;15,608,943 and 15,009,246 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively

15,609 15,009
Additional paid-in capital 127,164,498 126,416,869
Accumulated deficit (111,490,782 ) (110,422,825 )
Total stockholders' equity 15,689,325   16,009,053  
 
Total liabilities and stockholders' equity $ 17,714,996   $ 17,882,104  
 
 
INTELLICHECK, INC.
 
CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 
 

Three Months Ended March 31,

2018

 

2017

 
REVENUES $ 1,062,062 $ 712,660
COST OF REVENUES (100,469 ) (109,436 )
Gross profit 961,593 603,224
 
OPERATING EXPENSES
Selling, general and administrative 1,415,384 1,172,883
Research and development 628,036   370,597  

Total operating expenses

2,043,420   1,543,480  
 
Loss from operations (1,081,827 ) (940,256 )
 
OTHER INCOME
Interest and other income 13,870   3,499  
 
Net loss $ (1,067,957 ) $ (936,757 )
 
PER SHARE INFORMATION
Loss per common share -
Basic/Diluted $ (0.07 ) $ (0.09 )
 
 

Weighted average common shares used in computing per share amounts -

Basic/Diluted 15,271,213   10,731,856  
 
 
INTELLICHECK, INC.
 
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

For the three months ended March 31, 2018

(Unaudited)

 
    Additional     Total

Common Stock

Paid-in Accumulated Stockholders’

Shares

 

Amount

Capital

Deficit

Equity

 
BALANCE, January 1, 2018 15,009,246 $ 15,009 $ 126,416,869 $ (110,422,825 ) $ 16,009,053
 
Stock-based compensation expense - - 60,708 - 60,708
Exercise of stock options 593,838 594 686,927 - 687,521
Vesting of restricted stock 5,859 6 (6 ) - -
Net loss - - -   (1,067,957 ) (1,067,957 )
 
BALANCE, March 31, 2018 15,608,943 $ 15,609 $ 127,164,498   $ (111,490,782 ) $ 15,689,325  
 
 

INTELLICHECK, INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 
 

 

Three Months Ended March 31,

2018

 

2017

 
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,067,957 ) $ (936,757 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization 59,150 104,820
Noncash stock-based compensation expense 60,708 96,800
Deferred rent (13,505 ) (11,108 )
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (50,389 ) 141,438
Decrease (increase) in inventory 3,357 (5,230 )
(Increase) in other current assets (21,421 ) (112,436 )
(Increase) decrease in other assets (627 ) 1,500
Increase in accounts payable and accrued expenses 180,034 61,797
Increase (decrease) in deferred revenue 65,295 (157,787 )
(Decrease) in other long-term liabilities (79,204 ) -  

Net cash used in operating activities

(864,559 ) (816,963 )
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (77,399 ) (9,534 )
Collection of note receivable 9,968   13,267  
Net cash (used in) provided by investing activities (67,431 ) 3,733  
 
CASH FLOWS FROM FINANCING ACTIVITIES:

Net proceeds from issuance of common stock from exercise of stock options

687,521 10,100

Net proceeds from issuance of common stock from exercise of warrants

-   14,300  
Net cash provided by financing activities 687,521   24,400  
 
Net decrease in cash (244,469 ) (788,830 )
 
CASH, beginning of period 8,010,161   3,092,172  
 
CASH, end of period $ 7,765,692   $ 2,303,342  
 

A reconciliation of GAAP net loss to Non-GAAP Adjusted EBITDA follows:

 
  (Unaudited)

Three Months Ended
March 31,

2018

 

2017

Net loss $ (1,067,957 ) $ (936,757 )
Reconciling items:
Interest and other income (13,870 ) (3,499 )
Depreciation and amortization 59,150 104,820
Stock-based compensation expense 60,708   96,800  
Adjusted EBITDA (Non-GAAP) $ (961,969 ) $ (738,636 )
 

About Intellicheck NYSE American: IDN Intellicheck is a trusted industry leader in technology solutions that provide real-time identification authentication and age verification. We make it possible for our clients to enhance safety and awareness, increase revenues, improve customer service, and increase operational efficiencies. Founded in 1994, Intellicheck has grown to serve dozens of Fortune 500 companies including retail and financial industry clients, police departments, national defense clients at agencies, major seaports, and military bases, and diverse state and federal government agencies. For more information on Intellicheck, visit http://www.intellicheck.com/ and follow Intellicheck on Twitter @IntellicheckIDN, on Facebook https://www.facebook.com/intellicheckidn/, on Instagram @IntellicheckIDN, on LinkedIn https://www.linkedin.com/company/intellicheck-inc- and on YouTube https://www.youtube.com/user/ICMOBIL,

Safe Harbor Statement

Statements in this news release about Intellicheck’s future expectations, including: the advantages of our products, future demand for Intellicheck’s existing and future products, whether revenue and other financial metrics will improve in future periods, whether Intellicheck will be able to execute its turn-around plan or whether successful execution of the plan will result in increased revenues, whether sales of our products will continue at historic levels or increase, whether brand value and market awareness will grow, whether the Company can leverage existing partnerships or enter into new ones, and all other statements in this release, other than historical facts, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA). These statements, which express management’s current views concerning future events, trends, contingencies or results, appear at various places in this website and use words like “anticipate,” “assume,” “believe,” “continue,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “potential,” “predict,” “project,” “strategy,” “target” and similar terms, and future or conditional tense verbs like “could,” “may,” “might,” “should,” “will” and “would” are forward-looking statements within the meaning of the PSLRA. This statement is included for the express purpose of availing Intellicheck, Inc. of the protections of the safe harbor provisions of the PSLRA. It is important to note that actual results and ultimate corporate actions could differ materially from those in such forward-looking statements based on such factors as market acceptance of Intellicheck’s products and the presently anticipated growth in the commercial adoption of the Company’s products and services, changing levels of demand for Intellicheck’s current and future products, Intellicheck’s ability to reduce or maintain expenses while increasing sales, customer results achieved using our products in both the short and long term, success of future research and development activities, Intellicheck’s ability to successfully manufacture, market and sell its products, Intellicheck’s ability to manufacture its products in sufficient quantities to meet demand within required delivery time periods while meeting its quality control standards, any delays or difficulties in the Company’s supply chain, the success of the Company’s sales and marketing efforts coupled with the typically long sales and implementation cycle for its products, Intellicheck’s ability to enforce its intellectual property rights, changes in laws and regulations applicable to the Company’s products, the Company’s continued ability to access government-provided data, the risks inherent in doing business with the government including audits and contract cancellations, liability resulting from any security breaches or product failure, and other risks detailed from time to time in Intellicheck’s reports filed with the SEC. We do not assume any obligation to update the forward-looking information.

Contacts

Intellicheck, Inc.
Investor Relations:
Gar Jackson, 949-873-2789
or
Media and Public Relations:
Sharon Schultz, 302-539-3747

Release Summary

Intellicheck, Inc. (NYSE American: IDN) today announced its financial results for the first quarter ended March 31, 2018.

Contacts

Intellicheck, Inc.
Investor Relations:
Gar Jackson, 949-873-2789
or
Media and Public Relations:
Sharon Schultz, 302-539-3747