Lifeloc Reports Second Quarter 2018 Results

11:36 EDT 10 Aug 2018 | Businesswire
Lifeloc Technologies, Inc.

Lifeloc Technologies, Inc. (OTC: LCTC), a global leader in the development and manufacturing of breath alcohol testing devices, has announced financial results for the second quarter ended June 30, 2018.

Second Quarter Financial Highlights

We posted quarterly net revenue of $2.13 million resulting in quarterly net income after taxes of $78 thousand, or $0.03 per diluted share. These results compare to net revenue of $2.05 million for quarterly net income of $68 thousand, or $0.03 per diluted share, in the second quarter of 2017. Revenue for the quarter grew 4% versus the second quarter last year and for the first half grew 7% versus the first half last year. Gross margin was 47% as compared to 49% in the second quarter of 2017.

Gross margin on net revenue was lower in the current quarter versus the same quarter last year primarily due to lower royalties received and start up and depreciation costs of the newly implemented enterprise resource planning (ERP) software system.

“We are pleased to report some modest growth, even without any new product introduction during this quarter,” said President and CEO Dr. Wayne Willkomm. “We have engaged some new sales distribution channels both domestically and internationally, which are starting to yield results. This is our third consecutive quarter of year-over-year growth, and we are hoping that with upcoming product introductions there will be many more quarters showing growth.”

Strategic Highlights

Research and development is focused directly on our vision of being the leader in professional breath alcohol testing devices and expanding that leadership to alcohol monitoring and real time drug testing. This drives product development to large projects intended to have a significant impact on our business. Our commitment to market leadership is demonstrated by the continued strong investment of more than 13% of revenue for the first two quarters into research and development. Lifeloc has focused product development on three specific fronts.

As part of the preparation for the product launches, we have invested in our information infrastructure with a new ERP system. “This new tool will be a critical part of effectively managing an increasingly broad product offering and global supply chain,” commented Dr. Willkomm. “And this system has already driven ecommerce revenue higher through a more robust and versatile customer interface.”

Lifeloc’s vision will be presented by Dr. Willkomm at the Sidoti Emerging Growth Conference in New York on September 27, 2018.

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.
Condensed Balance Sheets

 
ASSETS
    June 30, 2018   December 31,
CURRENT ASSETS: (Unaudited) 2017
Cash $ 2,588,304 $ 2,669,455
Accounts receivable, net 659,749 593,326
Inventories, net 1,272,384 1,175,103
Income taxes receivable 81,413 121,401
Prepaid expenses and other   84,308   21,804
Total current assets 4,686,158 4,581,089
 
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 and software 783,490 556,025
Training courses 432,375 432,375
Office equipment and software 270,241 204,282
Sales and marketing equipment 273,433 216,330
Research and development equipment and software 154,611 131,770
Less accumulated depreciation   (1,566,631 )   (1,349,499 )
Total property and equipment, net 3,163,694 3,007,458
 
OTHER ASSETS:
Patents, net 170,629 177,244
Deposits and other 5,144 259,037
Deferred taxes   76,936   66,531
Total other assets   252,709   502,812
Total assets $ 8,102,561 $ 8,091,359
 
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 329,607 $ 297,096
Term loan payable, current portion 42,312 42,101
Customer deposits 15,052 48,763
Accrued expenses 198,405 264,290
Deferred revenue, current portion 51,320 53,137
Reserve for warranty expense   40,000   40,000
Total current liabilities 676,696 745,387
 
TERM LOAN PAYABLE, net of current portion and
debt issuance costs 1,390,941 1,410,185
 
DEFERRED REVENUE, net of current portion 10,757 9,683
 
COMMITMENTS AND CONTINGENCIES
 
STOCKHOLDERS' EQUITY:
Common stock, no par value; 50,000,000 shares
authorized, 2,454,116 shares outstanding 4,588,911 4,580,177
Retained earnings   1,435,256   1,345,927
Total stockholders' equity   6,024,167   5,926,104
Total liabilities and stockholders' equity $ 8,102,561 $ 8,091,359
 
   

LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Income (Unaudited)

 
Three Months Ended June 30,
REVENUES: 2018   2017
Product sales $ 2,013,790 $ 1,879,405
Royalties 96,358 144,517
Rental income   19,101   22,458
Total 2,129,249 2,046,380
 
COST OF SALES   1,133,779   1,033,654
 
GROSS PROFIT 995,470 1,012,726
 
OPERATING EXPENSES:
Research and development 253,229 251,825
Sales and marketing 330,657 367,474
General and administrative   296,124   286,726
Total   880,010   906,025
 
OPERATING INCOME 115,460 106,701
 
OTHER INCOME (EXPENSE):
Interest income 4,253 2,230
Interest expense   (17,374 )   (15,187 )
Total   (13,121 )   (12,957 )
 
NET INCOME BEFORE PROVISION FOR TAXES 102,339 93,744
 
(PROVISION FOR) FEDERAL AND STATE INCOME TAXES   (24,210 )   (25,876 )
 
NET INCOME $ 78,129 $ 67,868
 
NET INCOME PER SHARE, BASIC $ 0.03 $ 0.03
 
NET INCOME PER SHARE, DILUTED $ 0.03 $ 0.03
 
WEIGHTED AVERAGE SHARES, BASIC   2,454,116   2,454,116
 
WEIGHTED AVERAGE SHARES, DILUTED   2,509,221   2,512,183
 
 

LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Income (Unaudited)

 
Six Months Ended June 30,
REVENUES: 2018   2017
Product sales $ 4,136,033 $ 3,761,594
Royalties 161,423 224,342
Rental income   33,702   44,915
Total 4,331,158 4,030,851
 
COST OF SALES   2,335,525   2,053,246
 
GROSS PROFIT 1,995,633 1,977,605
 
OPERATING EXPENSES:
Research and development 591,555 448,193
Sales and marketing 666,058 707,118
General and administrative   593,457   590,320
Total   1,851,070   1,745,631
 
OPERATING INCOME 144,563 231,974
 
OTHER INCOME (EXPENSE):
Interest income 6,437 3,646
Interest expense   (32,088 )   (30,311 )
Total   (25,651 )   (26,665 )
 
NET INCOME BEFORE PROVISION FOR TAXES 118,912 205,309
 
(PROVISION FOR) FEDERAL AND STATE INCOME TAXES   (29,583 )   (59,448 )
 
NET INCOME $ 89,329 $ 145,861
 
NET INCOME PER SHARE, BASIC $ 0.04 $ 0.06
 
NET INCOME PER SHARE, DILUTED $ 0.04 $ 0.06
 
WEIGHTED AVERAGE SHARES, BASIC   2,454,116   2,454,116
 
WEIGHTED AVERAGE SHARES, DILUTED   2,509,697   2,524,663
 
     

LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Cash Flows (Unaudited)

 
Six Months Ended June 30,
CASH FLOWS FROM OPERATING ACTIVITIES: 2018 2017
Net income $ 89,329 $ 145,861
Adjustments to reconcile net income to net cash
provided from (used in) operating activities-
Depreciation and amortization 226,007 143,426
Provision for doubtful accounts, net change 1,000 -
Provision for inventory obsolescence, net change 32,500 42,500
Deferred taxes, net change (10,405 ) 14,897
Reserve for warranty expense, net change - -
Stock based compensation expense related to
stock options 8,734 12,329
Changes in operating assets and liabilities-
Accounts receivable (67,423 ) (140,371 )
Inventories (129,781 ) (215,065 )
Income taxes receivable 39,988 30,707
Prepaid expenses and other (62,504 ) (7,480 )
Deposits and other 253,893 (57,121 )
Accounts payable 32,511 (25,825 )
Customer deposits (33,711 ) 19,500
Accrued expenses (65,885 ) (70,725 )
Deferred revenue   (743 )   (3,284 )
Net cash provided from (used in)
operating activities 313,510 (110,651 )
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (373,368 ) (139,736 )
Cash paid for software acquired in asset acquisition - (396,948 )
Cash paid for equipment acquired in asset acquisition - (351,250 )
Cash paid for patents and patent applications acquired
in asset acquisition - (100,000 )
Patent filing expense   -   (17,217 )
Net cash (used in) investing activities (373,368 ) (1,005,151 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments made on term loan   (21,293 )   (23,697 )
Net cash (used in) financing
activities   (21,293 )   (23,697 )
 
NET INCREASE (DECREASE) IN CASH (81,151 ) (1,139,499 )
 
CASH, BEGINNING OF PERIOD   2,669,455   3,772,064
 
CASH, END OF PERIOD $ 2,588,304 $ 2,632,565
 
SUPPLEMENTAL INFORMATION:
Cash paid for interest $ 29,828 $ 30,040
 
Cash paid for income tax $ - $ 13,844
 

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

More From BioPortfolio on "Lifeloc Reports Second Quarter 2018 Results"