Attached files
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| 8-K - FORM 8-K - Lifeloc Technologies, Inc | lifeloc_8k.htm |
Exhibit 99.1
Lifeloc Reports Second Quarter 2018 Results
WHEAT RIDGE, Colo., August 10, 2018 -- 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.
| · |
We are building a completely new breathalyzer with features that customers have demanded to further secure our market leading technology. We expect to launch this first model later this year.
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| · |
We will build our alcohol monitoring business utilizing the Remote Alcohol Detection and Recognition or R.A.D.A.R.® device product line acquired last 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. The upgraded R.A.D.A.R. device – with a more robust design and better communications – is also expected to launch later this year.
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| · |
Work continues on our development of technology for the real-time, quantitative analysis for a panel of drugs including THC, methamphetamine, cocaine, heroin, and several other drugs of abuse, utilizing the SpinDx™ technology exclusively licensed by us from Sandia National Laboratory, as well as on the closely related THC breathalyzer. The ability of our technology to detect delta-9-THC (the psychoactive agent) down to a concentration of 5 nanograms per milliliter has been demonstrated in our laboratories. More work is needed to convert this technology into a simple-to-operate device suitable for roadside testing.
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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.
Sarah Foley
Lifeloc Technologies, Inc.
http://www.lifeloc.com
(303) 431-9500
Lifeloc Technologies, Inc.
http://www.lifeloc.com
(303) 431-9500
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LIFELOC TECHNOLOGIES, INC.
|
|
Condensed Balance Sheets
|
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ASSETS
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||||||||
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June 30, 2018
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December 31,
|
|||||||
|
CURRENT ASSETS:
|
(Unaudited)
|
2017
|
||||||
|
Cash
|
$
|
2,588,304
|
$
|
2,669,455
|
||||
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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
|
||||||
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Real-time Alcohol Detection And Recognition equipment and software
|
569,448
|
569,448
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||||||
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Production equipment and software
|
783,490
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556,025
|
||||||
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Training courses
|
432,375
|
432,375
|
||||||
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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
|
||||||
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Less accumulated depreciation
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(1,566,631
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)
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(1,349,499
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)
|
||||
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Total property and equipment, net
|
3,163,694
|
3,007,458
|
||||||
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OTHER ASSETS:
|
||||||||
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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
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$
|
8,102,561
|
$
|
8,091,359
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||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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||||||||
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CURRENT LIABILITIES:
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||||||||
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Accounts payable
|
$
|
329,607
|
$
|
297,096
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||||
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Term loan payable, current portion
|
42,312
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42,101
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||||||
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Customer deposits
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15,052
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48,763
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||||||
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Accrued expenses
|
198,405
|
264,290
|
||||||
|
Deferred revenue, current portion
|
51,320
|
53,137
|
||||||
|
Reserve for warranty expense
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40,000
|
40,000
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||||||
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Total current liabilities
|
676,696
|
745,387
|
||||||
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TERM LOAN PAYABLE, net of current portion and
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||||||||
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debt issuance costs
|
1,390,941
|
1,410,185
|
||||||
|
DEFERRED REVENUE, net of current portion
|
10,757
|
9,683
|
||||||
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COMMITMENTS AND CONTINGENCIES
|
||||||||
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STOCKHOLDERS' EQUITY:
|
||||||||
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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.
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|
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
|
||||