Intellicheck Announces Fourth Quarter and Full-Year 2020 Financial Results

Intellicheck, Inc. (Nasdaq: IDN), an industry leader in identification authentication solutions, today announced its financial results for the fourth quarter and full-year ended December 31, 2020. Total revenue for the fourth quarter ended December 31, 2020 grew 6% to $3,078,000 versus $2,896,000 in the prior year comparable period. Quarter over Quarter SaaS revenue for the fourth quarter grew 18% and totaled $3,012,000 versus $2,557,000 in the prior year comparable period and grew 23% sequentially over the third quarter of 2020.

CEO Bryan Lewis said, “We continued to show solid growth with total revenue for fiscal year 2020 up 40% over 2019 and SaaS revenue up 54% during the same period. During the fourth quarter, total revenue was up 6% over fourth quarter 2019, but more importantly, SaaS revenue was up 18% over the same period. Sequentially, fourth quarter SaaS revenue was up 23% versus third quarter 2020. We believe that given COVID-19, and the impact on store traffic, those numbers bode well for the future.”

Lewis noted that the COVID-19 pandemic has served to fuel what were already surging rates of identity theft and fraud raising consumer and market awareness of the toll it takes. “In the past year, one in five Americans fell victim to identity theft or attempted identity theft. According to a new Harris Research Poll, identity theft has become top-of-mind for 3 in 5 Americans this year and 60% expect that they will suffer financial loss as victims of identity theft. The need is there, and we remain confident that we have an important role to play in meeting that need.”

Gross profit as a percentage of revenues was 92.6% for the three months ended December 31, 2020 versus 88.8% in the prior year comparable period.

Net income for the three months ended December 31, 2020 was $1,260,000 or $0.07 per diluted share versus $106,000 or $0.01 per diluted share for the comparable prior year period.

Adjusted EBITDA (earnings before gains on debt forgiveness, interest and other income, income taxes, depreciation, amortization, stock-based compensation expense and certain non-recurring charges) was $635,000 for the fourth quarter of 2020 as compared to $216,000 in the prior year comparable period. A reconciliation of adjusted EBITDA to net income (loss) is provided elsewhere in this release.

Total revenue for the full year ended December 31, 2020 grew 40% to $10,735,000 versus $7,664,000 in the prior year comparable period. Year over year SaaS revenue grew 54% and totaled $9,373,000 versus $6,102,000 in the prior year comparable period.

Gross profit as a percentage of revenue was 86.7% for the year ended December 31, 2020 versus 87.0% in the prior year comparable period.

Net income for the fiscal year ended December 31, 2020 improved to $558,000 or $0.03 per diluted share versus a net loss of ($2,549,000) or ($0.16) per diluted share in the prior year comparable period. Adjusted EBITDA (earnings before gains on debt forgiveness, interest and other income, income taxes, depreciation, amortization, stock-based compensation expense and certain non-recurring charges) improved by approximately $2.1 million to of $329,000 for fiscal 2020 versus a loss of ($1,813,000) for fiscal 2019. A reconciliation of adjusted EBITDA to net income (loss) is provided elsewhere in this release.

Cash at December 31, 2020 totaled $13.1 million and stockholders’ equity totaled $22.2 million at the end of the 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 audit process and should be considered preliminary until Intellicheck files its Form 10-K for the fiscal year ended December 31, 2020.

Conference Call Information

The Company will hold an earnings conference call on March 16 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.

A replay of the conference call will be available shortly after completion of the live event. To listen to the replay, please dial 877-660-6853 and use conference identification number 13717133. For callers outside the U.S., please dial 201-612-7415 and use conference identification number 13717133. The replay will be available beginning approximately two hours after the completion of the live event and will remain available until March 30, 2021.

Adjusted EBITDA

We use Adjusted EBITDA as a non-GAAP financial performance measurement. Adjusted EBITDA is calculated by adjusting net income (loss) for certain reductions such as gains on debt forgiveness and interest and other income and certain addbacks such as income taxes, impairments of long-lived assets and goodwill, depreciation, amortization and stock-based compensation expense. Adjusted EBITDA is provided to investors to supplement the results of operations reported in accordance with GAAP. Management believes that Adjusted EBITDA provides an additional tool for investors to use in comparing our financial results with other companies that also use Adjusted EBITDA in their communications to investors. By excluding non-cash charges such as impairments of long-lived assets and goodwill, amortization, depreciation and stock-based compensation, as well as non-operating charges for interest and income taxes, investors can evaluate our operations and can compare the results on a more consistent basis to the results of other companies. In addition, Adjusted EBITDA is one of the primary measures management uses to monitor and evaluate financial and operating results.

We consider Adjusted EBITDA to be an important indicator of our operational strength and performance of our business and a useful measure of our historical operating trends. However, there are significant limitations to the use of Adjusted EBITDA since it excludes gains on debt forgiveness, interest and other income, impairments of long-lived assets and goodwill, stock-based compensation expense, all of which impact our profitability, as well as depreciation and amortization related to the use of long-term assets which benefit multiple periods. We believe that these limitations are compensated by providing Adjusted EBITDA only with GAAP net income (loss) and clearly identifying the difference between the two measures. Consequently, Adjusted EBITDA should not be considered in isolation or as a substitute for net income (loss) presented in accordance with GAAP. Adjusted EBITDA as defined by us may not be comparable with similarly named measures provided by other entities.

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

About Intellicheck Nasdaq: IDN

Intellicheck (Nasdaq: IDN) is a trusted industry leader in technology solutions that stop identity theft and fraud with real-time identification authentication and age verification. We make it possible for our clients to increase revenues, improve customer service, and increase operational efficiencies. The company is focused on partnering with banks, credit card issuers and retailers to prevent fraud. Intellicheck also serves law enforcement agencies, national defense clients and diverse state and federal government agencies. For more information on Intellicheck, visit us on the web and follow us on follow us on LinkedIn, Twitter, Facebook, and YouTube.

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, whether there will be any impact on sales and revenues due to an epidemic, pandemic or other public health issue 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 release and use words like “anticipate,” “assume,” “believe,” “continue,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “potential,” “predict,” “project,” “sense”, “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 our products and the presently anticipated growth in the commercial adoption of our products and services; our ability to successfully transition pilot programs into formal commercial scale programs; continued adoption of our SaaS product offerings; changing levels of demand for our current and future products; our ability to reduce or maintain expenses while increasing sales; our ability to successfully expand the sales of our products and services into new areas including health care and auto dealerships; customer results achieved using our products in both the short and long term; success of future research and development activities; uncertainties around the duration and severity of the COVID-19 outbreak and its ultimate impact on our business and results of operations; our ability to successfully market and sell our products, any delays or difficulties in our supply chain coupled with the typically long sales and implementation cycle for our products; our ability to enforce our intellectual property rights; changes in laws and regulations applicable to the our products; our 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, together with other risks detailed from time to time in our reports filed with the SEC. We do not assume any obligation to update the forward-looking information.

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