Lifeloc Reports Second Quarter 2019 Results

WHEAT RIDGE, Colo.--()--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 second quarter ended June 30, 2019.

Second Quarter Highlights

Lifeloc posted quarterly net revenue of $2.34 million resulting in quarterly net income after taxes of $219 thousand, or $0.09 per diluted share. These results compare to net revenue of $2.13 million and quarterly net income of $78 thousand, or $0.03 per diluted share in the second quarter of 2018. Gross margin on total revenue grew to 49% versus 47% in the same quarter last year. Revenue for the quarter increased nearly 10% versus the second quarter last year. For the first six months of the 2019, net revenue was $4.41 million and net income was $250 thousand, versus revenue of $4.33 million and net income of $89 thousand for the same period last year ($0.10 vs. $0.04 per diluted share).

The second quarter performance benefited from the release and shipments of the second generation of our patent protected EasyCal® automated calibration station. 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 a strong quarter, both in top line revenue growth and bottom line earnings,” said CEO Dr. Wayne Willkomm. He added, “It is great to see revenue growth and a good profit number. Both reflect the hard work that we have accomplished over the last number of years. But we are not satisfied, and we intend to continue heavy investment into our brightest growth opportunities, especially alcohol monitoring and real-time drug detection with SpinDx, the lab on a disc and the marijuana breathalyzer.”

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 later this year. R.A.D.A.R. devices and their associated monitoring services are a critical step in moving our business towards a recurring revenue model.

The brightest growth opportunity consists of our developments in real-time drug testing, including the marijuana breathalyzer and a rapid panel analysis of such drugs as heroin, cocaine, meth and others, with the SpinDx platform. Getting rapid, quantitative results for drugs of abuse, including marijuana, 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.

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

 

 

June 30,

 

 

 

 

 

 

2019

 

 

December 31,

 

CURRENT ASSETS:

 

(Unaudited)

 

 

2018

 

Cash and cash equivalents

 

$

2,535,108

 

 

$

2,788,327

 

Accounts receivable, net

 

 

905,762

 

 

 

675,136

 

Inventories, net

 

 

1,946,047

 

 

 

1,290,607

 

Income taxes receivable

 

 

-

 

 

 

90,629

 

Prepaid expenses and other

 

 

129,581

 

 

 

35,155

 

Total current assets

 

 

5,516,498

 

 

 

4,879,854

 

 

 

 

 

 

 

 

 

 

PROPERTY AND EQUIPMENT, at cost:

 

 

 

 

 

 

 

 

Land

 

 

317,932

 

 

 

317,932

 

Building

 

 

1,941,414

 

 

 

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

 

 

219,797

 

 

 

219,797

 

Research and development equipment and software

 

 

159,810

 

 

 

159,810

 

Less accumulated depreciation

 

 

(1,849,978

)

 

 

(1,649,203

)

Total property and equipment, net

 

 

2,949,198

 

 

 

3,021,359

 

 

 

 

 

 

 

 

 

 

OTHER ASSETS:

 

 

 

 

 

 

 

 

Patents, net

 

 

151,739

 

 

 

158,147

 

Deposits and other

 

 

77,569

 

 

 

140,452

 

Deferred taxes

 

 

87,485

 

 

 

79,869

 

Total other assets

 

 

316,793

 

 

 

378,468

 

Total assets

 

$

8,782,489

 

 

$

8,279,681

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Accounts payable

 

$

453,543

 

 

$

343,783

 

Term loan payable, current portion

 

 

43,951

 

 

 

43,207

 

Customer deposits

 

 

139,595

 

 

 

19,265

 

Accrued expenses

 

 

275,682

 

 

 

250,912

 

Deferred revenue, current portion

 

 

59,526

 

 

 

44,218

 

Reserve for warranty expense

 

 

40,000

 

 

 

40,000

 

Total current liabilities

 

 

1,012,297

 

 

 

741,385

 

 

 

 

 

 

 

 

 

 

TERM LOAN PAYABLE, net of current portion and

 

 

 

 

 

 

 

 

debt issuance costs

 

 

1,346,989

 

 

 

1,369,347

 

 

 

 

 

 

 

 

 

 

DEFERRED REVENUE, net of current portion

 

 

9,561

 

 

 

8,212

 

Total liabilities

 

 

2,368,847

 

 

 

2,118,944

 

 

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY:

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

authorized, 2,454,116 shares outstanding

 

 

4,600,867

 

 

 

4,597,646

 

Retained earnings

 

 

1,812,775

 

 

 

1,563,091

 

Total stockholders' equity

 

 

6,413,642

 

 

 

6,160,737

 

Total liabilities and stockholders' equity

 

$

8,782,489

 

 

$

8,279,681

 

LIFELOC TECHNOLOGIES, INC.

 

Condensed Statements of Income (Unaudited)

 

 

 

 

 

 

 

Three Months Ended June 30,

 

REVENUES:

 

2019

 

 

2018

 

Product sales

 

$

2,166,634

 

 

$

2,013,790

 

Royalties

 

 

150,146

 

 

 

96,358

 

Rental income

 

 

20,942

 

 

 

19,101

 

Total

 

 

2,337,722

 

 

 

2,129,249

 

 

 

 

 

 

 

 

 

 

COST OF SALES

 

 

1,182,588

 

 

 

1,133,779

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

1,155,134

 

 

 

995,470

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

Research and development

 

 

243,369

 

 

 

253,229

 

Sales and marketing

 

 

315,539

 

 

 

330,657

 

General and administrative

 

 

295,618

 

 

 

296,124

 

Total

 

 

854,526

 

 

 

880,010

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME

 

 

300,608

 

 

 

115,460

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

Interest income

 

 

7,850

 

 

 

4,253

 

Interest expense

 

 

(14,468

)

 

 

(17,374

)

Total

 

 

(6,618

)

 

 

(13,121

)

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) BEFORE PROVISION FOR TAXES

 

 

293,990

 

 

 

102,339

 

 

 

 

 

 

 

 

 

(PROVISION FOR) BENEFIT FROM FEDERAL AND STATE INCOME TAXES

 

 

(75,270

)

 

 

(24,210

)

 

 

 

 

 

 

 

 

 

NET INCOME

 

$

218,720

 

 

$

78,129

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE, BASIC

 

$

0.09

 

 

$

0.03

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE, DILUTED

 

$

0.09

 

 

$

0.03

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES, BASIC

 

 

2,454,116

 

 

 

2,454,116

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES, DILUTED

 

 

2,454,116

 

 

 

2,459,221

 

LIFELOC TECHNOLOGIES, INC.

 

Condensed Statements of Income (Unaudited)

 

 

 

 

 

 

 

Six Months Ended June 30,

 

REVENUES:

 

2019

 

 

2018

 

Product sales

 

$

4,136,735

 

 

$

4,136,033

 

Royalties

 

 

222,984

 

 

 

161,423

 

Rental income

 

 

46,764

 

 

 

33,702

 

Total

 

 

4,406,483

 

 

 

4,331,158

 

 

 

 

 

 

 

 

 

 

COST OF SALES

 

 

2,319,147

 

 

 

2,335,525

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

2,087,336

 

 

 

1,995,633

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

Research and development

 

 

489,168

 

 

 

591,555

 

Sales and marketing

 

 

631,922

 

 

 

666,058

 

General and administrative

 

 

620,793

 

 

 

593,457

 

Total

 

 

1,741,883

 

 

 

1,851,070

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME

 

 

345,453

 

 

 

144,563

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

Interest income

 

 

17,272

 

 

 

6,437

 

Interest expense

 

 

(28,891

)

 

 

(32,088

)

Total

 

 

(11,619

)

 

 

(25,651

)

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) BEFORE PROVISION FOR TAXES

 

 

333,834

 

 

 

118,912

 

 

 

 

 

 

 

 

 

(PROVISION FOR) BENEFIT FROM FEDERAL AND STATE INCOME TAXES

 

 

(84,150

)

 

 

(29,583

)

 

 

 

 

 

 

 

 

 

NET INCOME

 

$

249,684

 

 

$

89,329

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE, BASIC

 

$

0.10

 

 

$

0.04

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE, DILUTED

 

$

0.10

 

 

$

0.04

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES, BASIC

 

 

2,454,116

 

 

 

2,454,116

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES, DILUTED

 

 

2,454,116

 

 

 

2,459,697

 

LIFELOC TECHNOLOGIES, INC.

 

Condensed Statements of Cash Flows (Unaudited)

 

 

 

Six Months Ended June 30,

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

2019

 

 

2018

 

Net income

 

$

249,684

 

 

$

89,329

 

Adjustments to reconcile net income to net cash

 

 

 

 

 

 

 

 

provided from (used in) operating activities-

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

207,725

 

 

 

226,007

 

Provision for doubtful accounts, net change

 

 

-

 

 

 

1,000

 

Provision for inventory obsolescence, net change

 

 

7,500

 

 

 

32,500

 

Deferred taxes, net change

 

 

(7,616

)

 

 

(10,405

)

Stock based compensation expense related to

 

 

 

 

 

 

 

 

stock options

 

 

3,221

 

 

 

8,734

 

Changes in operating assets and liabilities-

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(230,626

)

 

 

(67,423

)

Inventories

 

 

(662,940

)

 

 

(129,781

)

Income taxes receivable

 

 

90,629

 

 

 

39,988

Prepaid expenses and other

 

 

(94,426

)

 

 

(62,504

)

Deposits and other

 

 

62,883

 

 

 

253,893

Accounts payable

 

 

109,760

 

 

 

32,511

Customer deposits

 

 

120,330

 

 

(33,711

)

Accrued expenses

 

 

24,770

 

 

 

(65,885

)

Deferred revenue

 

 

16,657

 

 

(743

)

Net cash provided from (used in) operating activities

 

 

(102,449

)

 

 

313,510

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(128,614

)

 

 

(373,368

)

Net cash (used in) investing activities

 

 

(128,614

)

 

 

(373,368

)

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Principal payments made on term loan

 

 

(22,156

)

 

 

(21,293

)

Net cash (used in) financing activities

 

 

(22,156

)

 

 

(21,293

)

 

 

 

 

 

 

 

 

NET (DECREASE) IN CASH

 

(253,219

)

 

 

(81,151

)

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

 

 

2,788,327

 

 

 

2,669,455

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS, END OF PERIOD

 

 

2,535,108

 

 

$

2,588,304

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL INFORMATION:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

28,349

 

 

$

29,828

 

 

 

 

 

 

 

 

 

 

Cash paid for income tax

 

$

-

 

 

$

-

 

 

Contacts

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

Release Summary

Lifeloc Technologies reports 10% growth in the second quarter of 2019.

Contacts

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