Lifeloc Reports Second Quarter 2020 Results
WHEAT RIDGE, Colo., Aug. 13, 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 second quarter and for the six months ended June 30, 2020.
Second Quarter Financial Highlights
Lifeloc posted quarterly net revenue of $1.320 million resulting in a quarterly net loss of $350 thousand, or $(0.14) per diluted share. These results compare to net revenue of $2.338 million and net income of $219 thousand, or $0.09 per diluted share, in the second quarter of 2019. Revenue for the current quarter declined 44% versus the second quarter last year. Net revenue of $3,338 million and a net loss of $515 thousand, or $0.20 per diluted share, compare to net revenue of $4.406 million and net income of $250 thousand, or $0.10 per diluted share, for the same six months of 2019.
This sales decline and the resulting loss are primarily a result of the global Covid-19 pandemic. 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 during this time. To encourage demand and assure users of the safety of Lifeloc brand breath alcohol testers, we commissioned an independent laboratory study to assess the risk of viral cross contamination between users. As previously reported, this study showed no risk of viral cross contamination between users of Lifeloc brand breath alcohol testers.
We have implemented structural cost savings throughout the company. Lifeloc is complying with all currently published SBA guidance on loan forgiveness, and we are hopeful that the Paycheck Protection loan obtained in May of $465 thousand will be forgiven.
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. We continue to invest strongly in product development, and are currently focused on R.A.D.A.R. and SpinDx, which we expect to significantly impact performance.
Our new breath alcohol testers, the LX9 and LT7 have been released and are on the U.S. Department of Transportation Conforming Products List, 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.
Likewise, the R.A.D.A.R.(®) (Real-time Alcohol Detection and Reporting) model 200 has been released to manufacturing and is in final testing. 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 towards 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.
"COVID-19 and the impact of this pandemic dominate the current business environment," said CEO Dr. Wayne Willkomm. "But we remain committed to accomplishing our vision of growing the monitoring portion of our business and developing products for real-time drug testing. The Lifeloc board of directors endorses our commitment to research and development, even if losses persist until the release of the SpinDx and marijuana breathalyzer products."
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(TM) is a trademark of Sandia Corporation.
Kristie LaRose
Lifeloc Technologies, Inc.
http://www.lifeloc.com
(303) 431-9500
LIFELOC TECHNOLOGIES, INC.
Condensed Balance Sheets
ASSETS
---
June 30,
2020
December 31,
CURRENT ASSETS:
(Unaudited) 2019
Cash $
2,625,098 $
3,185,996
Accounts receivable, net 539,672 641,239
Inventories, net 2,430,448 1,986,299
Income taxes receivable 153,557 6,750
Prepaid expenses and other 107,777 18,857
Total current assets 5,856,552 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 (2,144,016) (1,959,541)
Total property and equipment, net 2,704,258 2,879,645
OTHER ASSETS:
Patents, net 157,619 145,323
Deposits and other 132,850 74,027
Deferred taxes 98,174 86,658
Total other assets 388,643 306,008
Total assets $
8,949,453 $
9,024,794
LIABILITIES AND STOCKHOLDERS' EQUITY
---
CURRENT LIABILITIES:
Accounts payable $
358,482 $
261,798
Term loan payable, current portion 45,966 44,879
Paycheck Protection loan payable 465,097
Customer deposits 166,080 214,031
Accrued expenses 210,484 290,458
Deferred revenue, current portion 44,409 45,874
Reserve for warranty expense 45,000 45,000
Total current liabilities 1,335,518 902,040
TERM LOAN PAYABLE, net of current
portion and
debt issuance costs 1,301,023 1,324,467
DEFERRED REVENUE, net of current portion 3,166 6,066
Total liabilities 2,639,707 2,232,573
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, no par value;
50,000,000 shares
authorized, 2,454,116 shares
outstanding 4,635,727 4,603,304
Retained earnings 1,674,019 2,188,917
Total stockholders' equity 6,309,746 6,792,221
Total liabilities and stockholders'
equity $
8,949,453 $
9,024,794
LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Income (Unaudited)
Three Months Ended June 30,
REVENUES: 2020 2019
Product sales $
1,265,698 $
2,166,634
Royalties 32,851 150,146
Rental income 21,489 20,942
Total 1,320,038 2,337,722
COST OF SALES 991,969 1,182,588
GROSS PROFIT 328,069 1,155,134
OPERATING EXPENSES:
Research and development 182,485 243,369
Sales and marketing 274,780 315,539
General and administrative 324,041 295,618
Total 781,306 854,526
OPERATING INCOME (LOSS) (453,237) 300,608
OTHER INCOME (EXPENSE):
Interest income 3,242 7,850
Interest expense (14,016) (14,468)
Total (10,774) (6,618)
NET INCOME (LOSS) BEFORE PROVISION FOR
TAXES (464,011) 293,990
BENEFIT FROM (PROVISION FOR) FEDERAL AND
STATE INCOME TAXES 114,419 (75,270)
NET INCOME (LOSS) $
(349,592) $
218,720
NET INCOME (LOSS)PER SHARE,
BASIC $
(0.14) $
0.09
NET INCOME (LOSS) PER SHARE,
DILUTED $
(0.14) $
0.09
WEIGHTED AVERAGE SHARES, BASIC 2,454,116 2,454,116
WEIGHTED AVERAGE SHARES, DILUTED 2,454,116 2,454,116
LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Income (Unaudited)
Six Months Ended June 30,
REVENUES: 2020 2019
Product sales $
3,203,564 $
4,136,735
Royalties 92,132 222,984
Rental income 42,678 46,764
Total 3,338,374 4,406,483
COST OF SALES 2,232,229 2,319,147
GROSS PROFIT 1,106,145 2,087,336
OPERATING EXPENSES:
Research and development 479,382 489,168
Sales and marketing 601,344 631,922
General and administrative 680,928 620,793
Total 1,761,654 1,741,883
OPERATING INCOME (LOSS) (655,509) 345,453
OTHER INCOME (EXPENSE):
Interest income 10,418 17,272
Interest expense (28,147) (28,891)
Total (17,729) (11,619)
NET INCOME (LOSS) BEFORE PROVISION
FOR TAXES (673,238) 333,834
BENEFIT FROM (PROVISION FOR) FEDERAL
AND STATE INCOME TAXES 158,340 (84,150)
NET INCOME (LOSS) $
(514,898) $
249,684
NET INCOME (LOSS) PER
SHARE, BASIC $
(0.20) $
0.10
NET INCOME (LOSS) PER
SHARE, DILUTED $
(0.20) $
0.10
WEIGHTED AVERAGE SHARES, BASIC 2,454,116 2,454,116
WEIGHTED AVERAGE SHARES, DILUTED 2,454,116 2,454,116
Lifeloc Technologies, Inc.
Condensed Statements of Stockholders' Equity (Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Total shareholders' equity,
beginning balances $
6,659,026 $
6,193,863 $
6,792,221 $
6,160,737
Common stock (no shares issued during
periods):
Beginning balances 4,635,415 4,599,808 4,603,304 4,597,646
Stock based compensation expense
related
to stock
options
312 1,059 32,423 3,221
Ending balances 4,635,727 4,600,867 4,635,727 4,600,867
Retained earnings:
Beginning balances 2,023,611 1,594,055 2,188,917 1,563,091
Net income (loss) (349,592) 218,720 (514,898) 249,684
Ending balances 1,674,019 1,812,775 1,674,019 1,812,775
Total shareholders' equity,
ending balances $
6,309,746 $
6,413,642 $
6,309,746 $
6,413,642
LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Cash Flows (Unaudited)
Six Months Ended June 30,
CASH FLOWS FROM OPERATING
ACTIVITIES: 2020 2019
---
Net income
(loss) $
(514,898) $
249,684
Adjustments to
reconcile net
income (loss) to
net cash
provided by
(used in)
operating
activities-
Depreciation
and
amortization 191,493 207,725
Provision for
doubtful
accounts, net
change 5,000 -
Provision for
inventory
obsolescence,
net change 42,265 7,500
Deferred
taxes, net
change (11,516) (7,616)
Stock based
compensation
expense
related to
stock options 32,423 3,221
Changes in
operating
assets and
liabilities-
Accounts
receivable 96,567 (230,626)
Inventories (486,414) (662,940)
Income taxes
receivable (146,807) 90,629
Prepaid expenses and other (88,920) (94,426)
Deposits and
other (58,823) 62,883
Accounts
payable 96,684 109,760
Customer deposits (47,951) 120,330
Accrued
expenses (79,974) 24,770
Deferred
revenue (4,365) 16,657
Net cash (used in)
operating activities (975,236) (102,449)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of
property and
equipment (9,088) (128,614)
Patent filing
expense (18,772) -
Net cash (used in)
investing activities (27,860) (128,614)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal
payments made
on term loan (22,899) (22,156)
Proceeds from
Paycheck
Protection
loan 465,097 -
Net cash provided from
(used in)
financing activities 442,198 (22,156)
NET (DECREASE) IN CASH (560,898) (253,219)
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD 3,185,996 2,788,327
CASH AND CASH EQUIVALENTS, END
OF PERIOD $
2,625,098 $
2,535,108
SUPPLEMENTAL INFORMATION:
Cash paid for
interest $
27,605 $
28,349
Cash paid for
income tax $
20,063
$ -
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SOURCE Lifeloc Technologies
