WHEAT RIDGE, Colo.--(BUSINESS WIRE)--Lifeloc Technologies, Inc. (OTC: LCTC), a global leader in the development and manufacturing of breath alcohol testing devices, has announced financial results for the first quarter ended March 31, 2018.
“This was a very productive first quarter for Lifeloc,” said President and CEO Dr. Wayne Willkomm. “We saw an 11% growth in revenue over the first quarter last year. Earnings fell to just a small profit, but this is not surprising, as Lifeloc has been in a season of heavy investment for future growth.”
First Quarter Financial Highlights
The Company posted quarterly net revenue of $2.20 million resulting in a quarterly net income of $11 thousand, or less than $0.01 per diluted share. These results compare to net revenue of $1.98 million for a quarterly net income of $78 thousand, or $0.03 per diluted share, in the first quarter of 2017. Net cash increased by $37 thousand in the first quarter of 2018, and total debt was reduced by $11 thousand through regular mortgage payments. Gross margin was 45% as compared to 49% in the first quarter of 2017.
Gross margin on net revenue was lower in the current quarter primarily as a result of implementation costs for a new enterprise resource planning (ERP) software system, lower royalties received, and costs associated with the Remote Alcohol Detection and Recognition or R.A.D.A.R. ® device business acquired last year. R.A.D.A.R. devices are alcohol monitoring units with biometrics which can be used as a tool to supervise offenders as an alternative to incarceration.
New product development through research and development investment is up over $140 thousand from the first quarter of last year. Lifeloc has focused product development on three specific fronts.
- We are building a completely new breathalyzer with features that customers have demanded, which we expect to launch later this year.
- The upgraded R.A.D.A.R. device – with a more robust design and better communications – is expected to launch later this year.
- Work continues on our development of technology for the real-time, quantitative analysis for a panel of drugs including THC, methamphetamine, cocaine, heroin, and several other drugs of abuse, utilizing the SpinDx™ technology exclusively licensed by us from Sandia Corporation, as well as on the closely related THC breathalyzer. The ability of our technology to detect very low quantities of THC has been demonstrated in our laboratories, but more work is needed to build a practical, portable device.
Additionally, Lifeloc has invested heavily in its information infrastructure with the implementation of a new ERP system, which went live on February 2. “Our team rallied to pull off an extraordinary transition, minimizing customer disruption and not missing a day’s shipping,” commented Dr. Willkomm. “This system includes integrated materials management, customer relations management and a faster, more robust e-commerce platform to better serve our customers.”
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.
R.A.D.A.R.® is a registered trademark of Lifeloc Technologies, Inc.
SpinDx™ is a trademark of Sandia Corporation.
LIFELOC TECHNOLOGIES, INC.
|March 31,||December 31,|
|Accounts receivable, net||757,606||593,326|
|Income taxes receivable||116,963||121,401|
|Prepaid expenses and other||103,836||21,804|
|Total current assets||4,867,271||4,581,089|
|PROPERTY AND EQUIPMENT, at cost:|
|Real-time Alcohol Detection And Recognition equipment and software||569,448||569,448|
|Production equipment and software||774,490||556,025|
|Office equipment and software||261,385||204,282|
|Sales and marketing equipment||273,433||216,330|
|Research and development equipment and software||154,611||131,770|
|Less accumulated depreciation||(1,454,418||)||(1,349,499||)|
|Total property and equipment, net||3,258,051||3,007,458|
|Deposits and other||2,184||259,037|
|Total other assets||241,715||502,812|
LIABILITIES AND STOCKHOLDERS' EQUITY
|Term loan payable, current portion||42,541||42,101|
|Deferred revenue, current portion||47,908||53,137|
|Reserve for warranty expense||41,500||40,000|
|Total current liabilities||1,017,033||745,387|
TERM LOAN PAYABLE, net of current portion and debt issuance costs
|DEFERRED REVENUE, net of current portion||8,264||9,683|
|COMMITMENTS AND CONTINGENCIES|
|Common stock, no par value; 50,000,000 shares|
|authorized, 2,454,116 shares outstanding||4,585,891||4,580,177|
|Total stockholders' equity||5,943,018||5,926,104|
|Total liabilities and stockholders' equity||$||8,367,037||$||8,091,359|
|LIFELOC TECHNOLOGIES, INC.|
|Condensed Statements of Income (Unaudited)|
|Three Months Ended March 31,|
|COST OF SALES||1,201,746||1,019,592|
|Research and development||338,326||196,368|
|Sales and marketing||335,401||339,644|
|General and administrative||297,333||303,594|
|OTHER INCOME (EXPENSE):|
|NET INCOME BEFORE PROVISION FOR TAXES||16,573||111,565|
|(PROVISION FOR) FEDERAL AND STATE INCOME TAXES||(5,373||)||(33,572||)|
|NET INCOME PER SHARE, BASIC||$||-||$||0.03|
|NET INCOME PER SHARE, DILUTED||$||-||$||0.03|
|WEIGHTED AVERAGE SHARES, BASIC||2,454,116||2,454,116|
|WEIGHTED AVERAGE SHARES, DILUTED||2,510,699||2,536,710|
LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Cash Flows (Unaudited)
|Three Months Ended March 31,|
|CASH FLOWS FROM OPERATING ACTIVITIES:||2018||2017|
|Adjustments to reconcile net income to net cash|
|provided from (used in) operating activities-|
|Depreciation and amortization||107,878||61,752|
|Provision for doubtful accounts, net change||1,500||1,500|
|Provision for inventory obsolescence, net change||27,500||(43,417||)|
|Deferred taxes, net change||935||17,200|
|Reserve for warranty expense, net change||1,500||1,500|
|Stock based compensation expense related to|
|Changes in operating assets and liabilities-|
|Income taxes receivable||4,438||12,823|
|Prepaid expenses and other||(82,032||)||(49,585||)|
|Deposits and other||256,853||(1,557||)|
|Net cash provided from (used in)|
|CASH FLOWS FROM INVESTING ACTIVITIES:|
|Purchases of property and equipment||(355,512||)||(48,795||)|
|Cash paid for software acquired in asset acquisition||-||(396,948||)|
|Cash paid for equipment acquired in asset acquisition||-||(363,052||)|
|Cash paid for patents and patent applications acquired|
|in asset acquisition||-||(100,000||)|
|Patent filing expense||-||(7,717||)|
|Net cash (used in) investing activities||(355,512||)||(916,512||)|
|CASH FLOWS FROM FINANCING ACTIVITIES:|
|Principal payments made on term loan||(10,673||)||(13,496||)|
|Net cash (used in) financing|
|NET INCREASE (DECREASE) IN CASH||36,900||(1,178,340||)|
|CASH, BEGINNING OF PERIOD||2,669,455||3,772,064|
|CASH, END OF PERIOD||$||2,706,355||$||2,593,724|
|Cash paid for interest||$||14,579||$||14,988|
|Cash paid for income tax||$||-||$||12,408|