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