Lifeloc Reports Second Quarter 2020 Results

News provided by

Lifeloc Technologies

Aug 13, 2020, 18:51 ET

WHEAT RIDGE, Colo., Aug. 13, 2020 /PRNewswire/ -- Lifeloc Technologies, Inc. (OTC: LCTC), a global leader in the development and manufacturing of breath alcohol and drug testing devices, has announced financial results for the second quarter and for the six months ended June 30, 2020.

Second Quarter Financial Highlights

Lifeloc posted quarterly net revenue of $1.320 million resulting in a quarterly net loss of $350 thousand, or $(0.14) per diluted share.  These results compare to net revenue of $2.338 million and net income of $219 thousand, or $0.09 per diluted share, in the second quarter of 2019.  Revenue for the current quarter declined 44% versus the second quarter last year.  Net revenue of $3,338 million and a net loss of $515 thousand, or $0.20 per diluted share, compare to net revenue of $4.406 million and net income of $250 thousand, or $0.10 per diluted share, for the same six months of 2019. 

This sales decline and the resulting loss are primarily a result of the global Covid-19 pandemic.  Travel bans, governmental orders, and social distancing guidelines continue to force severe contractions in demand in both domestic and international markets.  As an essential part of transportation and public safety, Lifeloc has continued operations during this time.  To encourage demand and assure users of the safety of Lifeloc brand breath alcohol testers, we commissioned an independent laboratory study to assess the risk of viral cross contamination between users.  As previously reported, this study showed no risk of viral cross contamination between users of Lifeloc brand breath alcohol testers.

We have implemented structural cost savings throughout the company.  Lifeloc is complying with all currently published SBA guidance on loan forgiveness, and we are hopeful that the Paycheck Protection loan obtained in May of $465 thousand will be forgiven.

Current market conditions do not change our vision that Lifeloc is becoming the world's leading provider of real-time alcohol and drug abuse detection and monitoring equipment. In fact, current conditions highlight the urgency of achieving this vision.  We continue to invest strongly in product development, and are currently focused on R.A.D.A.R. and SpinDx, which we expect to significantly impact performance.

Our new breath alcohol testers, the LX9 and LT7 have been released and are on the U.S. Department of Transportation Conforming Products List, are starting to find adoption both domestically and internationally. With highly flexible configuration, multiple language capability and a wide temperature use range, these breathalyzers are expected to facilitate future sales growth.  Additionally, our Easycal® G2 has broadened our automated calibration capability and is compatible with our existing installed base of professional breathalyzers as well as the new LX9 and LT7.  The G2 model also includes RFID (Radio Frequency Identification) reading of calibration standard data, which further automates the calibration process.

Likewise, the R.A.D.A.R.® (Real-time Alcohol Detection and Reporting) model 200 has been released to manufacturing and is in final testing.  This new model has updated communication, improved GPS accuracy and mechanical reliability. These devices have alcohol monitoring capability and onboard biometrics that automatically verify the identity of the test subject and are intended as a tool for supervising offenders.  This alternative to incarceration represents a critical step in moving our business towards a recurring monitoring revenue model and is expected to contribute to an increase in revenue and earnings this year and in the future.

Our SpinDx-based marijuana breathalyzer remains a key product of interest in attempts to address the broadening legalization of marijuana. Legalization and decriminalization of marijuana only increases the need for a rapid, quantitative roadside test to identify drivers under the influence of marijuana.  The ability of our technology to detect delta-9-THC down to a concentration of 5 nanograms per milliliter and to collect a testable sample from a vapor stream has been demonstrated in our laboratories, and we continue the development work needed to convert this technology into a simple-to-operate device that is suitable for roadside testing.  Detection of THC is accomplished through the SpinDx technology, licensed exclusively by Lifeloc Technologies for drugs of abuse from Sandia National Laboratory.  We are targeting the end of 2021 for the first product release from this platform.

"COVID-19 and the impact of this pandemic dominate the current business environment," said CEO Dr. Wayne Willkomm.  "But we remain committed to accomplishing our vision of growing the monitoring portion of our business and developing products for real-time drug testing.  The Lifeloc board of directors endorses our commitment to research and development, even if losses persist until the release of the SpinDx and marijuana breathalyzer products."

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/investor.

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.

Easycal® and R.A.D.A.R.® are registered trademarks of Lifeloc Technologies, Inc.

SpinDx™ is a trademark of Sandia Corporation.

Kristie LaRose 
Lifeloc Technologies, Inc. 
http://www.lifeloc.com
(303) 431-9500

LIFELOC TECHNOLOGIES, INC.

Condensed Balance Sheets


ASSETS




June 30,







2020



December 31,

CURRENT ASSETS:


(Unaudited)



2019


Cash

$

2,625,098


$

3,185,996


Accounts receivable, net


539,672



641,239


Inventories, net


2,430,448



1,986,299


Income taxes receivable


153,557



6,750


Prepaid expenses and other


107,777



18,857


      Total current assets


5,856,552



5,839,141








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



569,448


Production equipment, software and space modifications


976,621



976,621


Training courses


432,375



432,375


Office equipment, software and space modifications


218,074



208,986


Sales and marketing equipment and space modifications


232,600



232,600


Research and development equipment, software and space modifications


172,429



172,429


Less accumulated depreciation


(2,144,016)



(1,959,541)


     Total property and equipment, net


2,704,258



2,879,645








OTHER ASSETS:







Patents, net


157,619



145,323


Deposits and other


132,850



74,027


Deferred taxes


98,174



86,658


     Total other assets


388,643



306,008









     Total assets

$

8,949,453


$

9,024,794








LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:







Accounts payable

$

358,482


$

261,798


Term loan payable, current portion


45,966



44,879


Paycheck Protection loan payable


465,097



-


Customer deposits


166,080



214,031


Accrued expenses


210,484



290,458


Deferred revenue, current portion


44,409



45,874


Reserve for warranty expense


45,000



45,000


      Total current liabilities


1,335,518



902,040








TERM LOAN PAYABLE, net of current portion and







debt issuance costs


1,301,023



1,324,467








DEFERRED REVENUE, net of current portion


3,166



6,066


      Total liabilities


2,639,707



2,232,573








COMMITMENTS AND CONTINGENCIES













STOCKHOLDERS' EQUITY:







Common stock, no par value; 50,000,000 shares







  authorized, 2,454,116 shares outstanding


4,635,727



4,603,304


Retained earnings


1,674,019



2,188,917


      Total stockholders' equity


6,309,746



6,792,221









      Total liabilities and stockholders' equity

$

8,949,453


$

9,024,794








LIFELOC TECHNOLOGIES, INC.

Condensed Statements of Income (Unaudited)






Three Months Ended June 30,

REVENUES:


2020



2019


Product sales

$

1,265,698


$

2,166,634


Royalties


32,851



150,146


Rental income


21,489



20,942


Total


1,320,038



2,337,722








COST OF SALES


991,969



1,182,588








GROSS PROFIT


328,069



1,155,134








OPERATING EXPENSES:







Research and development


182,485



243,369


Sales and marketing


274,780



315,539


General and administrative


324,041



295,618


Total


781,306



854,526








OPERATING INCOME (LOSS)


(453,237)



300,608








OTHER INCOME (EXPENSE):







Interest income


3,242



7,850


Interest expense


(14,016)



(14,468)


Total 


(10,774)



(6,618)








NET INCOME (LOSS) BEFORE PROVISION FOR TAXES


(464,011)



293,990








BENEFIT FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES


114,419



(75,270)








NET INCOME (LOSS)

$

(349,592)


$

218,720








NET INCOME (LOSS)PER SHARE, BASIC

$

(0.14)


$

0.09








NET INCOME (LOSS) PER SHARE, DILUTED

$

(0.14)


$

0.09








WEIGHTED AVERAGE SHARES, BASIC


2,454,116



2,454,116








WEIGHTED AVERAGE SHARES, DILUTED


2,454,116



2,454,116

LIFELOC TECHNOLOGIES, INC.

Condensed Statements of Income (Unaudited)



Six Months Ended June 30,

REVENUES:


2020



2019


Product sales

$

3,203,564


$

4,136,735


Royalties


92,132



222,984


Rental income


42,678



46,764


Total


3,338,374



4,406,483








COST OF SALES


2,232,229



2,319,147








GROSS PROFIT


1,106,145



2,087,336








OPERATING EXPENSES:







Research and development


479,382



489,168


Sales and marketing


601,344



631,922


General and administrative


680,928



620,793


Total


1,761,654



1,741,883








OPERATING INCOME (LOSS)


(655,509)



345,453








OTHER INCOME (EXPENSE):







Interest income


10,418



17,272


Interest expense


(28,147)



(28,891)


Total 


(17,729)



(11,619)








NET INCOME (LOSS) BEFORE PROVISION FOR TAXES


(673,238)



333,834








BENEFIT FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES  


158,340



(84,150)








NET INCOME (LOSS)

$

(514,898)


$

249,684








NET INCOME (LOSS) PER SHARE, BASIC

$

(0.20)


$

0.10








NET INCOME (LOSS) PER SHARE, DILUTED

$

(0.20)


$

0.10








WEIGHTED AVERAGE SHARES, BASIC


2,454,116



2,454,116








WEIGHTED AVERAGE SHARES, DILUTED


2,454,116



2,454,116

Lifeloc Technologies, Inc.

Condensed Statements of Stockholders' Equity (Unaudited)










































Three Months Ended June 30,


Six Months Ended June 30,



2020


2019


2020


2019

Total shareholders' equity, beginning balances

$

6,659,026


$

6,193,863


$

6,792,221


$

6,160,737














Common stock (no shares issued during periods):













Beginning balances


4,635,415



4,599,808



4,603,304



4,597,646


Stock based compensation expense related to stock options














312



1,059



32,423



3,221


Ending balances


4,635,727



4,600,867



4,635,727



4,600,867














Retained earnings:













Beginning balances


2,023,611



1,594,055



2,188,917



1,563,091


Net income (loss)


(349,592)



218,720



(514,898)



249,684


Ending balances


1,674,019



1,812,775



1,674,019



1,812,775














Total shareholders' equity, ending balances

$

6,309,746


$

6,413,642


$

6,309,746


$

6,413,642

LIFELOC TECHNOLOGIES, INC.

Condensed Statements of Cash Flows (Unaudited)












Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

2020


2019


Net income (loss)

$

(514,898)


$

249,684


Adjustments to reconcile net income (loss) to net cash






 provided by (used in) operating activities-







   Depreciation and amortization


191,493



207,725


   Provision for doubtful accounts, net change


5,000



-


   Provision for inventory obsolescence, net change


42,265



7,500


   Deferred taxes, net change


(11,516)



(7,616)


   Stock based compensation expense related to







     stock options


32,423



3,221


Changes in operating assets and liabilities-







   Accounts receivable


96,567



(230,626)


   Inventories 


(486,414)



(662,940)


   Income taxes receivable 


(146,807)



90,629



  Prepaid expenses and other 


(88,920)



(94,426)


   Deposits and other 


(58,823)



62,883


   Accounts payable 


96,684



109,760



  Customer deposits 


(47,951)



120,330


   Accrued expenses 


(79,974)



24,770


   Deferred revenue 


(4,365)



16,657



           Net cash (used in)








            operating activities


(975,236)



(102,449)









CASH FLOWS FROM INVESTING ACTIVITIES:







Purchases of property and equipment


(9,088)



(128,614)


Patent filing expense


(18,772)



-



           Net cash (used in) investing activities


(27,860)



(128,614)









CASH FLOWS FROM FINANCING ACTIVITIES:







Principal payments made on term loan


(22,899)



(22,156)


Proceeds from Paycheck Protection loan


465,097



-



           Net cash provided from (used in) 








            financing activities


442,198



(22,156)









NET (DECREASE) IN CASH


(560,898)



(253,219)









CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD


3,185,996



2,788,327









CASH AND CASH EQUIVALENTS, END OF PERIOD

$

2,625,098


$

2,535,108









SUPPLEMENTAL INFORMATION:







Cash paid for interest

$

27,605


$

28,349










Cash paid for income tax

$

20,063


$

-

SOURCE Lifeloc Technologies