DENVER, Nov. 4, 2014 /PRNewswire/ --
- Revenues from Core Distribution Channels increased 81.3%
- Total revenues increased 48.8%
- Gross profit increased 84.6%
- Positive adjusted EBITDA of $103,319
ID Watchdog, Inc. (TSX VENTURE: IDW) (PINKSHEETS: IDWAF) ("ID Watchdog" or the "Company"), provider of consumer-facing identity theft protection and resolution services, today announced its results for the 3rd quarter ended September 30, 2014. All amounts are in U.S. dollars.
3rd Quarter 2014 Highlights:
- Revenue: Revenue totaled $887,685 for the third quarter of 2014, an increase of $291,005, or 48.8%, from the third quarter of 2013. During the third quarter of 2014, revenue from our employee benefits and tech support channels ("Core Distribution Channels") increased by 81.3% and contributed $295,694 to the total increase in revenues, while revenues from our anti-virus customers contributed $26,664 to the total increase in revenues. These increases were partially offset by decreases of $25,981 and $5,372 in revenue from our consumer marketing channel and iSekurity customers, respectively.
- Gross Profit: Gross profit increased by $300,498, or 84.6%, from $355,249 during the third quarter of 2013 to $655,747 during the third quarter of 2014. The gross margin rates for the third quarter of 2014 and 2013 were 73.9% and 59.5%, respectively.
- Adjusted EBITDA: For the third quarter of 2014, adjusted EBITDA improved by $187,073 to $103,319 as compared with $(83,754) for the similar period in 2013.
- Cash Balances: Cash and cash equivalents as of September 30, 2014, totaled $819,518, an increase of $266,824 from our cash balances at December 31, 2013.
ID Watchdog CEO, Michael Greene, stated, "We are pleased to report revenue growth from our Core Distribution Channels of 81.3% for the third quarter of 2014. During the quarter we continued to expand our network of benefit broker and private benefit exchanges and we are already seeing terrific new customer additions through these relationships. We recently received commitments from a significant number of new customers, the largest of which employs approximately 63,000 employees, who will begin offering our identity theft protection services to their employees beginning in January 2015, enhancing our position as a leading service provider to Fortune rated customers. Mr. Greene continued, "We estimate that Core Distribution Channel revenue and total revenue will increase in the ranges of 45% to 50% and 25% to 30%, respectively, in the 4th quarter of 2014 over 2013 levels. Further, we anticipate that our revenue growth will accelerated in the first quarter of 2015 from these levels, as we roll-out our identity theft protection services to the new customers noted above."
ID Watchdog, Inc. Consolidated Interim Condensed Statements of Operations |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||
2014 |
2013 |
2014 |
2013 |
|||||
Revenue |
$ 887,685 |
$ 596,680 |
$ 2,520,632 |
$ 1,679,364 |
||||
Cost of revenue |
231,938 |
241,431 |
734,330 |
681,399 |
||||
Gross profit |
655,747 |
355,249 |
1,786,302 |
997,965 |
||||
Operating expense: |
||||||||
General and administrative expense |
356,122 |
275,018 |
997,215 |
919,847 |
||||
Sales and marketing expense |
196,306 |
163,985 |
511,938 |
407,157 |
||||
Stock-based compensation expense |
24,029 |
29,166 |
118,967 |
130,221 |
||||
Depreciation and amortization expense |
14,597 |
23,479 |
47,963 |
68,061 |
||||
591,054 |
491,648 |
1,676,083 |
1,525,286 |
|||||
Operating income (loss) |
64,693 |
(136,399) |
110,219 |
(527,321) |
||||
Other income (expense): |
||||||||
Gain (loss) on warrant liability |
(79,863) |
19,966 |
(39,932) |
(79,863) |
||||
Interest expense, net |
(210,021) |
(203,710) |
(639,755) |
(588,429) |
||||
(289,884) |
(183,744) |
(679,687) |
(668,292) |
|||||
Net income (loss) and comprehensive |
$ (225,191) |
$ (320,143) |
$ (569,468) |
$ (1,195,613) |
||||
Basic and diluted net income (loss) per share applicable to ordinary shares |
$ (0.00) |
$ (0.00) |
$ (0.00) |
$ (0.01) |
||||
Weighted average number of shares outstanding - basic and diluted |
121,834,997 |
121,498,040 |
121,834,997 |
120,446,719 |
Reconciliation of Net Loss to Adjusted EBITDA |
|||||||
Three Months Ended |
Nine Months Ended September 30, |
||||||
2014 |
2013 |
2014 |
2013 |
||||
Net loss |
$ (225,191) |
$ (320,143) |
$ (569,468) |
$ (1,195,613) |
|||
Depreciation and amortization expenses |
14,597 |
23,479 |
47,963 |
68,061 |
|||
Interest expense, net |
210,021 |
203,710 |
639,755 |
588,429 |
|||
EBITDA |
(573) |
(92,954) |
118,250 |
(539,123) |
|||
Loss (gain) on warrant liability |
79,863 |
(19,966) |
39,932 |
79,863 |
|||
Stock-based compensation expense |
24,029 |
29,166 |
118,967 |
130,221 |
|||
Adjusted EBITDA |
$ 103,319 |
$ (83,754) |
$ 277,149 |
$ (329,039) |
ID Watchdog, Inc. |
|||||||||
September 30, |
December 31, |
||||||||
ASSETS |
|||||||||
Cash and cash equivalents |
$ |
819,518 |
$ |
552,694 |
|||||
Accounts receivable, net |
291,548 |
173,042 |
|||||||
Prepaid expenses and other |
73,503 |
97,177 |
|||||||
Total current assets |
1,184,569 |
822,913 |
|||||||
Property and equipment, net |
63,452 |
80,168 |
|||||||
Customer agreements, net |
24,157 |
29,184 |
|||||||
Total Assets |
$ |
1,272,178 |
$ |
932,265 |
|||||
LIABILITIES |
|||||||||
Accounts payable, accrued liabilities and other |
$ |
719,666 |
$ |
486,357 |
|||||
Current portion of credit facility |
159,980 |
119,986 |
|||||||
Deferred revenue |
647,479 |
568,224 |
|||||||
Total current liabilities |
1,527,125 |
1,174,567 |
|||||||
Credit facility, net |
158,750 |
283,923 |
|||||||
Deferred rent |
80,493 |
86,524 |
|||||||
Finance lease obligations, net of current portion |
19,047 |
30,807 |
|||||||
Series C Preferred mandatorily redeemable preferred shares, net of discount and conversion feature |
4,154,102 |
3,613,214 |
|||||||
Warrants liability |
838,567 |
798,635 |
|||||||
Total Liabilities |
6,778,084 |
5,987,670 |
|||||||
Total Shareholders' Deficit |
(5,505,906) |
(5,055,405) |
|||||||
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT |
$ |
1,272,178 |
$ |
932,265 |
|||||
About Non-IFRS Financial Measure
To supplement the Company's consolidated financial results presented in accordance with International Financial Reporting Standards ("IFRS"), the Company reports adjusted EBITDA (net loss before deducting net interest expense, income tax expense, depreciation and amortization, stock-based compensation, and gain (loss) on warrant liability) and uses this metric to measure the performance of our business. Adjusted EBITDA is not a performance measure defined under IFRS and is not considered an alternative to income (loss) from operations or net earnings (loss) in the context of measuring the Company's performance. Adjusted EBITDA does not have a standardized meaning and is therefore not likely to be comparable with similar measures used by other publically traded companies. Adjusted EBITDA should not be used as an exclusive measure of cash flow since it does not account for the impact of working capital changes, income taxes, interest payments, capital expenditures, debt principal reductions and other sources and uses of cash, and is not meant to be considered in isolation or as a substitute for financial information prepared in accordance with IFRS.
Financial information contained in this press release should be read in conjunction with the consolidated financial statements and notes thereto included in our most recent quarterly reports and our annual report. These documents are available online at www.sedar.com and in the "Company Overview" section of our website at www.IDWatchdog.com.
About ID Watchdog, Inc.
ID Watchdog was founded in 2005 and is headquartered in Denver, Colorado. The Company provides three-tiered comprehensive monitoring, detection and resolution for identity theft. ID Watchdog proactively detects identity theft problems at their source and provides immediate resolution services to ensure complete peace of mind for individuals. All the Company's services have been developed with input from industry experts; national consumer advocacy groups; federal, state, and local law enforcement agencies; consumer protection agencies; and adhere to guidelines published by the Consumer Federation of America. For more information, please visit www.IDWatchdog.com.
Forward-Looking Statement
This news release includes certain "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 which address future events and conditions which are subject to various risks and uncertainties. The actual results could differ materially from those anticipated in such forward-looking statements as a result of numerous factors, some of which may be beyond the Company's control. Although the Company believes that its expectations reflected in these forward-looking statements are reasonable, no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements are disclosed in the company's filings with Canadian regulators at www.sedar.com. ID Watchdog assumes no obligation to update the forward-looking statements of management beliefs, opinions, projections, or other factors should they change.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Company Contact:
Jay B. Lewis
Chief Financial Officer
ID Watchdog, Inc.
303-339-8099
[email protected]
www.idwatchdog.com
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SOURCE ID Watchdog, Inc.
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