ID Watchdog Announces Results for Second Quarter 2014

DENVER, Aug. 6, 2014 /PRNewswire/ --

• Revenues from core distribution channels increased 85.0%
• Total revenues increased 59.5%
• Gross profit increased 109.4%
• Positive EBITDA of $115,087

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 2nd quarter ended June 30, 2014. All amounts are in U.S. dollars.

2nd Quarter 2014 Highlights:

• Revenue: Revenue totaled $842,320 for the second quarter of 2014, an increase of $314,124, or 59.5%, from the second quarter of 2013.  During the second quarter of 2014, revenue from our employee benefits and tech support increased by 85.0% and contributed $283,092 to the total increase in revenues, while revenues from our iSekurity and anti-virus customers contributed $60,066 and $16,783, respectively, to the total increase in revenues.  These increases were partially offset by a $45,817 decrease in revenues from our consumer marketing channel.
• Gross Profit: Gross profit increased by $307,584, or 109.4%, from $281,174 during the second quarter of 2013 to $588,758 during the second quarter of 2014.  The gross margin rates for the second quarter of 2014 and 2013 were 69.9% and 53.2%, respectively.
• EBITDA:  For the second quarter of 2014, EBITDA improved by $256,325 to $115,087 as compared with $(141,238) for the similar period in 2013.  The improvement in EBITDA is due primarily to the $307,584 improvement in gross profit as described above.
• Cash Balances: Cash and cash equivalents as of June 30, 2014, totaled $868,412, an increase of $315,718 from our cash balances at December 31, 2013.

ID Watchdog CEO, Michael Greene, stated, "We are pleased to report another quarter of solid revenue growth in our Employee Benefit and Tech Support Channels, our core distribution channels, which increased 85.0%  in the second quarter of 2014.  Also, during the first half of 2014, we added a number of product enhancements including $1 million in expense reimbursement insurance, Instant Identity Monitoring^™, which detects potentially fraudulent new accounts at the instant of application, enhanced non-credit loan monitoring, solicitation reduction features as well as a number of other product enhancements.  We believe these enhancements add significant value for our customers and will serve to advance our competitive position in the marketplace."

Mr. Jay Lewis, ID Watchdog's CFO, commented, "As we look forward to the quarter ending September 30, 2014, we expect core distribution revenue growth and total revenue growth of approximately 80% and 45%, respectively, with continued sequential growth in EBITDA.   

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 EBITDA (net income (loss) before depreciation and amortization, stock-based compensation, gain (loss) on warrant liability and net interest expense) and uses this metric to measure the performance of our business.  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.  EBITDA does not have a standardized meaning and is therefore not likely to be comparable with similar measures used by other publically traded companies.  EBITDA should not be used as an exclusive measure of cash flow since it does not account for the impact of working capital changes, 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.