ID Watchdog Announces 4th Quarter and Full Year 2014 Results
DENVER, April 28, 2015 /PRNewswire/ --
- Total revenues increased 39.8%
- Gross profit increased 47.1%
- Adjusted EBITDA of $186,606
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 final results for the 4th quarter and year ended December 31, 2014. All amounts are in U.S. dollars.
4th Quarter 2014 Highlights:
- Revenue: Revenue totaled $948,836 for the fourth quarter of 2014, an increase of $269,925, or 39.8%, from the fourth quarter of 2013. During the fourth quarter of 2014, revenue from our employee benefit and tech support channels contributed $112,736 and $114,847, respectively, to the total increase in revenues, while revenues from our other identity theft protection customers contributed $42,342 to the total increase in revenues.
- Gross Profit: Gross profit increased by $222,113, or 47.1%, from $472,017 during the fourth quarter of 2013 to $694,130 during the fourth quarter of 2014. The gross margin rates for the fourth quarter of 2014 and 2013 were 73.2% and 69.5%, respectively.
- Adjusted EBITDA: For the fourth quarter of 2014, Adjusted EBITDA improved by $171,256 to $186,606 as compared with $15,350 for the similar period in 2013.
- Cash Balances: Cash and cash equivalents as of December 31, 2014, totaled $886,476, an increase of $333,782 from our cash balances at December 31, 2013.
Full Year 2014 Highlights:
- Revenue: Revenue increased $1,111,193, or 47.1%, from $2,358,275 for the year ended December 31, 2013 to $3,469,468 for the year ended December 31, 2014. Revenue from our employee benefits and tech support channels contributed $431,143 and $604,959, respectively, to the total increase in revenues. In addition, revenues from our other identity theft protection customers contributed $75,091 to the total increase in revenues.
- Gross Profit: Gross profit increased by $1,010,450, or 68.7%, from $1,469,982 in 2013 to $2,480,432 in 2014. The gross margin rates for the 2014 and 2013 were 71.5% and 62.3%, respectively.
- Adjusted EBITDA: For 2014, Adjusted EBITDA improved by $777,444 to $463,755 as compared with $(313,689) in 2013. The improvement in EBITDA is due primarily to a significant improvement in gross margin as noted above.
ID Watchdog CEO, Michael Greene, stated, "We are pleased to close out a very successful 2014, a year in which our revenues grew by over 47%, we delivered record Adjusted EBITDA of $463,755 and we made great strides in expanding our network of employee benefit brokers."
| ID Watchdog, Inc |
||||||||
| Consolidated Statements of Operations |
||||||||
| Three Months Ended December 31, |
Years Ended December 31, |
|||||||
| 2014 |
2013 |
2014 |
2013 |
|||||
| Revenue |
$ 948,836 |
$ 678,911 |
$ 3,469,468 |
$ 2,358,275 |
||||
| Cost of revenue |
254,706 |
206,894 |
989,036 |
888,293 |
||||
| Gross profit |
694,130 |
472,017 |
2,480,432 |
1,469,982 |
||||
| Operating expense: |
||||||||
| General and administrative expense |
268,340 |
278,421 |
1,265,555 |
1,198,268 |
||||
| Sales and marketing expense |
239,184 |
178,246 |
751,122 |
585,403 |
||||
| Share-based compensation expense |
18,154 |
246,315 |
137,121 |
376,536 |
||||
| Depreciation and amortization expense |
11,513 |
17,182 |
59,476 |
85,243 |
||||
| 537,191 |
720,164 |
2,213,274 |
2,245,450 |
|||||
| Operating income (loss) |
156,939 |
(248,147) |
267,158 |
(775,468) |
||||
| Other income (expense): |
||||||||
| Gain (loss) on warrant liability |
439,249 |
(618,942) |
399,317 |
(698,805) |
||||
| Interest expense, net |
(205,782) |
(211,651) |
(845,537) |
(800,080) |
||||
| 233,467 |
(830,593) |
(446,220) |
(1,498,885) |
|||||
| Net income (loss) and comprehensive income (loss) applicable to ordinary shares |
$ 390,406 |
$ (1,078,740) |
$ (179,062) |
$ (2,274,353) |
||||
| Basic and diluted net income (loss) per share applicable to ordinary shares |
$ (0.00) |
$ (0.01) |
$ (0.00) |
$ (0.02) |
||||
| Weighted average number of shares outstanding - basic and diluted |
121,834,997 |
121,834,997 |
121,834,997 |
120,796,641 |
||||
| Reconciliation of Net Income (Loss) to Adjusted EBITDA |
|||||||
| Three Months Ended December 31, |
Years Ended December 31, |
||||||
| 2014 |
2013 |
2014 |
2013 |
||||
| Net income (loss) |
$ 390,406 |
$ (1,078,740) |
$ (179,062) |
$ (2,274,353) |
|||
| Depreciation and amortization expense |
11,513 |
17,182 |
59,476 |
85,243 |
|||
| Interest expense, net |
205,782 |
211,651 |
845,537 |
800,080 |
|||
| EBITDA |
607,701 |
(849,907) |
725,951 |
(1,389,030) |
|||
| Loss (gain) on warrant liability |
(439,249) |
618,942 |
(399,317) |
698,805 |
|||
| Share-based compensation expense |
18,154 |
246,315 |
137,121 |
376,536 |
|||
| Adjusted EBITDA |
$ 186,606 |
$ 15,350 |
$ 463,755 |
$ (313,689) |
|||
| ID Watchdog, Inc. Consolidated Statements of Financial Position |
||||||||||||
| December 31, |
December 31, |
|||||||||||
| ASSETS |
||||||||||||
| Cash and cash equivalents |
$ |
886,476 |
$ |
552,694 |
||||||||
| Accounts receivable, net |
168,602 |
173,042 |
||||||||||
| Prepaid expenses and other |
123,617 |
97,177 |
||||||||||
| Total current assets |
1,178,695 |
822,913 |
||||||||||
| Property and equipment, net |
79,879 |
80,168 |
||||||||||
| Customer agreements, net |
22,482 |
29,184 |
||||||||||
| Total Assets |
$ |
1,281,056 |
$ |
932,265 |
||||||||
| LIABILITIES |
||||||||||||
| Accounts payable, accrued liabilities and other |
$ |
977,657 |
$ |
486,357 |
||||||||
| Current portion of credit facility |
84,422 |
119,986 |
||||||||||
| Deferred revenue |
439,794 |
568,224 |
||||||||||
| Total current liabilities |
1,501,873 |
1,174,567 |
||||||||||
| Credit facility, net |
99,500 |
283,923 |
||||||||||
| Deferred rent |
28,440 |
86,524 |
||||||||||
| Finance lease obligations, net of current portion |
14,876 |
30,807 |
||||||||||
| Series C Preferred mandatorily redeemable preferred shares, net of discount and conversion feature |
4,334,395 |
3,613,214 |
||||||||||
| Warrants liability |
399,318 |
798,635 |
||||||||||
| Total Liabilities |
6,378,402 |
5,987,670 |
||||||||||
| Total Shareholders' Deficit |
(5,097,346) |
(5,055,405) |
||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT |
$ |
1,281,056 |
$ |
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 income (loss) before deducting net interest expense, income tax expense, depreciation and amortization, share-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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