Lifeloc Reports Third Quarter 2017 Results

WHITE RIDGE, Colo.--()--Lifeloc Technologies Inc. (LCTC), a global leader in the development and manufacturing of breath alcohol testing devices, has announced financial results for its third quarter of 2017 that ended September 30, 2017.

“While we are disappointed to see any sales drop and only break even profitability, these current short-term results are reflective of our strategic plan to invest significantly in the growth of the business and directing those resources to focus on transformative technologies rather than line extensions”

The Company posted quarterly net revenue of $2.00 million for a quarterly net income of $190, or $0.00 per diluted share. These results compare to net revenue of $2.03 million for a quarterly gain of $91 thousand, or $0.04 per diluted share, in the year-ago quarter. Gross margin on products was 45% in the 2017 third quarter and 48% in the 2016 third quarter. Gross margin on net revenue was lower in the current quarter as a result of product mix, decreased sales volume, lower royalties and costs associated with the Remote Alcohol Detection and Recognition or R.A.D.A.R.® device business acquired earlier this year. R.A.D.A.R. devices are alcohol monitoring units with biometrics which can be used as a tool to supervise offenders as an alternative to incarceration.

For the nine months ending September 30, 2017 the Company posted net revenue of $6.03 million for a nine months net income of $146 thousand, or $0.06 per diluted share. These results compare to net revenue of $6.54 million for a nine months net income of $410 thousand, or $0.16 per diluted share, in the year-ago nine months. Gross margin on products was 46% in the first nine months of 2017 and 48% in the first nine months of 2016. Gross margin on products was lower in the current nine months as a result of product mix, decreased sales volume, lower royalties and costs associated with R.A.D.A.R. device business acquired earlier this year.

Net cash declined by $1.06 million in the first nine months of 2017 due to investments in the business, of which the largest was the acquisition of the R.A.D.A.R. device product line, which contributed to a significant growth in both assets and inventory. Even so, total debt was reduced by $31 thousand through regular mortgage payments.

“While we are disappointed to see any sales drop and only break even profitability, these current short-term results are reflective of our strategic plan to invest significantly in the growth of the business and directing those resources to focus on transformative technologies rather than line extensions,” said CEO Dr. Wayne Willkomm. “There have been few incremental product line extensions released in the last 12 months to contribute to short-term sales. Instead we look to the future for some significant product launches. We expect to introduce a completely new breathalyzer with the features that customers have been seeking. Likewise, we expect to reintroduce the R.A.D.A.R. device with better communications and a more robust mechanical design, improving service life. Development work continues on the real time, quantitative analysis for a panel of drugs including THC utilizing the SpinDx™ technology licensed from Sandia Corporation and the closely related THC breathalyzer. This work has demonstrated the detection of very low quantities of THC, but more work is needed to reduce this to a practical device. The Lifeloc commitment to innovation remains as strong as ever.”

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, http://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 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, available free of charge at the SEC’s website (http://www.sec.gov).

R.A.D.A.R.® is a registered trademark of Lifeloc Technologies, Inc.

SpinDx™ is a trademark of Sandia Corporation.

 
Condensed Balance Sheets
 

ASSETS

 
September 30,    
2017 December 31,
CURRENT ASSETS: (Unaudited) 2016
Cash $ 2,708,924 $ 3,772,064
Accounts receivable, net 724,063 495,397
Inventories, net 1,212,757 835,609
Income taxes receivable 98,539 114,673
Prepaid expenses and other 52,276 52,072
Total current assets 4,796,559 5,269,815
 
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 -
Production equipment and software 531,325 456,005
Training courses 432,375 432,375
Office equipment and software 219,235 193,332
Sales and marketing equipment 228,908 228,908
Research and development equipment and software 116,670 78,157
Less accumulated depreciation (1,329,234) (1,112,498)
Total property and equipment, net 3,015,454 2,523,006
 
OTHER ASSETS:
Patents, net 180,959 71,909
Deposits and other 244,001 98,991
Deferred taxes 96,891 109,727
Total other assets 521,851 280,627
 
Total assets $ 8,333,864 $ 8,073,448
 

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable $ 380,938 $ 284,590
Term loan payable, current portion 41,655 40,218
Customer deposits 66,034 51,611
Accrued expenses 260,722 239,833
Deferred revenue, current portion 55,811 64,283
Reserve for warranty expense 41,000 40,000
Total current liabilities 846,160 720,535
 
TERM LOAN PAYABLE, net of current portion and
debt issuance costs 1,424,239 1,455,604
 
DEFERRED REVENUE, net of current portion 10,276 8,665
 
COMMITMENTS AND CONTINGENCIES
 
STOCKHOLDERS' EQUITY:
Common stock, no par value; 50,000,000 shares
authorized, 2,454,116 shares outstanding 4,575,814 4,557,320
Retained earnings 1,477,375 1,331,324
Total stockholders' equity 6,053,189 5,888,644
 
Total liabilities and stockholders' equity $ 8,333,864 $ 8,073,448
 
 
Condensed Statements of Income (Unaudited)
 
Three Months Ended September 30,
REVENUES: 2017     2016
Product sales $ 1,944,734 $ 1,960,610
Royalties 43,785 48,070
Rental income 12,160 21,725
Total 2,000,679 2,030,405
 
COST OF SALES 1,118,203 1,039,810
 
GROSS PROFIT 882,476 990,595
 
OPERATING EXPENSES:
Research and development 242,005 208,085
Sales and marketing 367,101 380,448
General and administrative 268,667 251,234
Total 877,773 839,767
 
OPERATING INCOME 4,703 150,828
 
OTHER INCOME (EXPENSE):
Interest income 1,036 1,896
Bad debt recovery - -
Interest expense (15,261) (15,438)
Total (14,225) (13,542)
 
NET (LOSS) INCOME BEFORE PROVISION FOR TAXES (9,522) 137,286
 
BENEFIT FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES 9,712 (46,501)
 
NET INCOME $ 190 $ 90,785
 
NET INCOME PER SHARE, BASIC $ - $ 0.04
 
NET INCOME PER SHARE, DILUTED $ - $ 0.04
 
WEIGHTED AVERAGE SHARES, BASIC 2,454,116 2,454,116
 
WEIGHTED AVERAGE SHARES, DILUTED 2,511,925 2,527,150
 
 
Condensed Statements of Income (Unaudited)
 
    Nine Months Ended September 30,
2017     2016
REVENUES:
Product sales $ 5,706,328 $ 6,086,605
Royalties 268,127 373,958
Rental income 57,075 77,289
Total 6,031,530 6,537,852
 
COST OF SALES 3,171,449 3,214,271
 
GROSS PROFIT 2,860,081 3,323,581
 
OPERATING EXPENSES:
Research and development 690,198 740,486
Sales and marketing 1,074,219 1,075,191
General and administrative 858,987 858,980
Total 2,623,404 2,674,657
 
OPERATING INCOME 236,677 648,924
 
OTHER INCOME (EXPENSE):
Interest income 4,682 9,789
Bad debt recovery - 4,500
Interest expense (45,572) (50,404)
Total (40,890) (36,115)
 
NET INCOME BEFORE PROVISION FOR TAXES 195,787 612,809
 
PROVISION FOR FEDERAL AND STATE INCOME TAXES (49,736) (202,702)
 
NET INCOME $ 146,051 $ 410,107
 
NET INCOME PER SHARE, BASIC $ 0.06 $ 0.17
 
NET INCOME PER SHARE, DILUTED $ 0.06 $ 0.16
 
WEIGHTED AVERAGE SHARES, BASIC 2,454,116 2,454,116
 
WEIGHTED AVERAGE SHARES, DILUTED 2,520,414 2,532,301
 
 
Condensed Statements of Cash Flows (Unaudited)
       
  Nine Months Ended September 30,
CASH FLOWS FROM OPERATING ACTIVITIES: 2017     2016
Net income $ 146,051 $ 410,107
Adjustments to reconcile net income to net cash 295,140 241,457
provided by (used in) operating activities
Changes in operating assets and liabilities (647,595) (356,390)
Net cash provided from (used in) operating activities (206,404) 295,174
 
CASH FLOWS FROM INVESTING ACTIVITIES (826,401) (44,333)
 
CASH FLOWS FROM FINANCING ACTIVITIES: (30,335) (28,062)

NET INCREASE (DECREASE) IN CASH

(1,063,140) 222,779
 
CASH, BEGINNING OF PERIOD 3,772,064 3,227,190
 
CASH, END OF PERIOD $ 2,708,924 $ 3,449,969
 

Contacts

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

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Release Summary

Lifeloc Technologies releases third quarter 2017 results

Lifeloc Technologies, Inc.